Foster home system criticized in audit

CARSON CITY -- Poor supervision by the state Division of Child and Family Services cost taxpayers more than $1 million in the placement of abused and neglected children in foster homes in 1998, a legislative audit says.

Children spent too long in high-cost emergency shelters before being placed in foster homes. And some foster parents were overpaid or underpaid thousands of dollars for the care of the children.

Quicker placement of children in traditional fosters homes is better for the youngsters and could have saved the state more than $1 million, the auditors said in the report released Friday.

Auditors said the same problems discovered during a 1993 examination existed last fiscal year. "Poor supervision and monitoring of the length of time children spend in emergency shelters and transitional care have contributed to delays in placing children in long-term care," the report said.

It found in August 1997, the division incorrectly paid about 600 group foster homes for clothing allowances. Some were either underpaid up to $14 per child or overpaid $84. In another foul-up, the division underpaid one foster parent $8,200 and another $6,600 over a period of years.

Division Administrator Stephen Shaw said he accepted all the recommendations for tightening supervision in the system. A new computer system that should be ready in January 2000 will "resolve the majority of issues raised in the audit," he said.

"Financial controls will be strengthened," with the new computer, he said, and it will provide better review of the proper placement of children.

The division runs a variety of programs, but the audit focused on the $38 million-a-year youth community services, which places abused, neglected and emotionally disturbed youths into foster care.

Clark and Washoe counties are responsible for removing mistreated children from their homes. The youngsters are placed in county facilities until a judge turns custody over to the state. When the state assumes control, it pays for the children to remain in the county emergency centers until a foster home is found.

For instance, the auditor said, the state paid Clark County $120 a day per child for an average of 27 days. If the state had more quickly placed the children in more stable foster homes, it would have saved $603,000 in payments made to Clark County.

But the audit noted the division in the first few months of fiscal 1999 started closer monitoring and has reduced costs considerably.

The report also noted different rates for similar levels of care, "increasing the need for strong controls over the rates." For instance, the state paid Clark County $120 per day per child for emergency shelter care, $25 per day for "transitional care" in foster homes and $12 to $14.40 per day for family foster care.

The audit complained the division has not limited its access to its present computer system. More than 50 people can enter the system, the report said. "As a result the system is vulnerable to the unauthorized generation of checks.

"Security controls over the system are critical because it generated over 30,000 checks totaling $9 million in fiscal 1998," the report said.

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