Californian Defalcation Factor

Financial Difficulties Strain California’s Foster Care System
January 14, 2010
By Gerri Shih

It seems the New York Times has, once again, published a one-sided article on the financial woes of California's foster care system.

In a tale all too familiar in cash-strapped California, the foster care system has been coming apart from inadequate state financing for at least 20 years, officials at the county level say. In the past two months, a succession of key court decisions in favor of care providers lifted hopes that the judicial rulings might finally turn things around, but the lawsuits have simultaneously shed light on a system that has been cut to the bone.

The reason why California's foster care system is broke is very simple: FRAUD.

California is unique in its fiscal operations of child welfare fraud because of the defalcation factor. Administrators are financially benefiting from the funds. Beyond the traditional improper and unnecessary removals of children, and even further beyond placing children in the system for lack of medical resources, is your blatant "stuff-your-pockets" fraud.

California, just like every other state, has a Medicaid Fraud Control Unit and it does nothing to stop Medicaid fraud in foster care.

California's child welfare fraud operations are so efficient, they were approved for SSA Title IV-E waivers.

California has been known for allowing children to linger in the foster care system, for no apparent reason except for lining pockets with Medicaid and SSA Title IV funds. Keeping on its current track of slashing community and social resources, the only place left to turn to for basic assistance is the foster care system. This means there are children and parents needlessly processed in the system.

Unless California wakes up, it will implode by its own design. Child placing agencies will continue to strip the communities of its impoverished children with expensive marketing campaigns, Child placing agencies will generate horrifyingly false statistics and the State Medicaid Fraud Control Unit will see no evil, hear no evil, say no evil, in fear of the pending implosion.

The following federal audit is for only one county. Imagine what an audit of the entire state would look like.

California Title IVE Audit 2009



Everyone, pass this message on to Arnie:


Go make your Attorney General Jerry Brown and find a way of getting your Auditor General Ron Diedrich to stop Medicaid fraud in child welfare.