Many counties have experienced a significant rise in the cost of their foster care program over the last two years. Whether you’re a smaller county with 30 children in care or a large county with 500 children, you’ve probably noticed that costs are rising at a rate that surpasses both prior years and inflation. But why? Below, we highlight the most common factors, both internal and external, that are driving costs up based on our experiences working with counties of varying sizes and demographics.
Most Common Factors That Are Driving Foster Care Program Costs
1.) Due to OCFS’ Family First Prevention Services Act Plan, many departments have successfully implemented robust processes to identify and utilize appropriate kin as resources in a safe and efficient manner. This plan was implemented in part to decrease the number of children placed in traditional community-based foster care homes or residential facilities and keep children with family or close friends. In one county we worked with, these processes resulted with the number of children in relative placements increasing over 500%.
While this is a positive program that keeps children with relatives, those relatives are registering as foster homes and getting paid room and board rates approximately $600 more per month than the typical grantee amount and an additional $1,050 per month more for each additional child Pursuing this route is financially advantageous for relatives but also increases overall costs to the county.
2.) For several reasons, departments often rely on a combination of DSS certified (community) homes and voluntary agencies to place their population of foster care children. Administrative fees through voluntary agencies have increased approximately 50% over the past three years, according to OCFS’s Maximum State Aid Rates (MSAR). Counties that rely significantly on voluntary agencies for care have thus absorbed more of these costs than those who primarily utilize foster homes certified internally through the department.
3.) All children are assigned a Level of Care at removal with a corresponding per diem rate. While OCFS provides an official form that counties use to document, communicate, and approve the rates to foster parents, the criteria for what child’s condition qualifies as a basic, special, or exceptional condition is vague and subject to interpretation. Differing costs of these rates amounts to thousands of dollars per year per child. The frequency of re-evaluating these rates is at the discretion of the department and may not accurately reflect the child’s current condition if not periodically reviewed.
Given these drivers of increased costs in foster care programs, it is critical that Title IV-E is effectively managed to ensure the county is maximizing eligible federal reimbursement. With approximately 50% of qualifying foster care costs reimbursed, incorrect interpretations of Title IV-E rules or breakdown in internal processes can cost the county many thousands of dollars each year. This is especially important if a child is receiving a special or exceptional rate for care that is significantly higher than the basic rate.
Frequently, the responsibilities of Title IV-E procedures are assigned to a single individual or a small team within a department that may be lacking proper oversight. Given the increase in overall foster care costs, employee turnover at historical levels and unique complex case circumstances, it is critical that eligibility determinations are made by well-trained employees, include supervisory review, and that full cooperation (and education) is received from other department employees (e.g., caseworkers and legal staff) whose work directly contributes to an accurate determination Although the factors driving increased costs are frequently beyond the department’s control, optimizing Title IV-E reimbursements can empower counties to better handle the fiscal repercussions of foster care expenses.
This material has been prepared for general, informational purposes only and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. Should you require any such advice, please contact us directly. The information contained herein does not create, and your review or use of the information does not constitute, an accountant-client relationship.
