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Social Security Funds Being Used to Fund Child Welfare Fraud

August 24, 2010

A major concern in foster care has been the number of placements a child must experience. Children are often moved multiple times during the length of stay in foster care. There are community organizations which design programs to assist with the emotional moves of these children. Children’s Rights has advocated for a reduction in the number of foster care placements in the courts.

Now, let’s step back and take a look at other possible reasons for multiple foster care placements of children.

Fraud. Yes, fraud.

<strong>Under Title IV-E methodologies, the relocation of a foster child to another foster home is an administrative cost. These costs, rarely found outside of the eyes of the child placing agencies, are false.</strong>

<strong>Title IV-E is a Federal Entitlement program for poor and destitute children to provide these children with food and shelter.  Funding is taken from social security funds.  Yes social security funds.  Unlike other entitlement programs, this is an open ended program meaning that there are unlimited funds not subject to any cap.  So there has been a concerted effort to maximize funds from Title IV-E because it’s an endless pit of funds as deep as social security itself.</strong>

The Title IV-E a/k/a social security fraud works like this: A child is placed in a foster home, then, the child is moved, for whatever reason a case worker can conjure, and placed in a new home. That administrative placement activity is then, billed, under Title IV-E payment rates.

Children are often placed in stranger foster parent homes rather than with relatives as relative placements do not fall under foster care payment structures. In English, if a state places a child with a relative, it loses out on foster care Title IV-E aka social security money.  So the incentive is to place a child with strangers and move the child around (at least on paper) to jack up administrative costs reimbursed by the Feds (aka taxpayer) rather than place the child with family.  Thus the main reason why states have been unsuccessful in adopting policies where a child is placed with family rather than strangers is that the State makes more money placing the child with strangers.  Therefore child welfare practices is what’s good for the State’s budget, not what’s good for the child.

<strong>How States Take the Fraud Further and Maximize Their Theft of Taxpayer Monies While Failing to Provide for the Foster Child</strong>

Placing children with strangers is such a simplistic reimbursable cost activity that the administrative actors then take it to the next level. A child is placed with strangers and then the State falsifies the child’s documents by reporting that the child necessitated multiple placements thus jacking up the administrative expenses associated with placing the child, when, in actuality, the child remained in one placement.

To validate these allegations, one must possess the authority to contemporaneously review court case files and the child placing agency administrative cost filings to the state. As the court documents are, in some instances, under seal, or impossible to access due (i.e. shredding, lost, misplaced, stolen, FOIA).  Thus the massive amounts of fraud in child welfare is being shield by child secrecy and protection laws thus the laws intended to protect the child are being used to hide the fraud taking place at the expense of the child and taxpayers.

Then, layer this with the name of God and impenetrable iron curtain of child welfare destroying the innate concepts of transparency and accountability, and you have the makings of a fraud scheme in child welfare. All billing in child welfare is a secret.

Package this particular “revenue-maximization scheme” in the lack of state administrative oversight of these privatized contracts and rates (see p.4 allegation #4), and you have identified the financial incentives for multiple placements in foster care (whether true or false claims).

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