When fraud, waste, and abuse (FWA) are discussed in public programs, the conversation often focuses on bad actors – but in child welfare, the reality looks very different. To explore how FWA impacts child welfare and how it can be managed and minimized, we asked Bill Bott, Vimo’s Child Welfare Practice Lead and Director of Performance Improvement, to share some of his observations and insights.
Where Risk Actually Emerges: Lack of Capacity Leads to Higher Costs
From your experience working directly with state child welfare programs, where does program integrity risk most often emerge in practice – not in theory?
Bill Bott: In child welfare programs, FWA doesn’t have to involve malicious intent. In fact, more often, it’s the result of agencies not having the time or capacity they need. FWA in child welfare tends to be systemic, and incidental waste is a lot more common than intentional fraud or abuse. For example, one recurring waste issue we’ve seen is kids being placed in residential treatment centers, not because of the level of care needed, but because there are no foster beds available. In these situations, agencies can end up paying a lot – sometimes up to 200% of what they’d pay for a foster bed – for kids who do not require that level of care.
These situations typically result from capacity and resource availability. But even with no ill intent involved, sending children to residential treatment centers who don’t need that level of care can lead to additional trauma. It also means fewer available placements for children who do need that level of care. So, this isn’t just an issue because more money is being spent than necessary – it’s also an issue because children are being assigned to placements that may cause unnecessary trauma or stress.
Aside from this, true fraud and abuse are rare in child welfare. We have heard stories of foster care families who intended to abuse the system to supplement their income, but those are rare, and the only way to profit is by holding back the basic needs of a child. So, conditions have to be really bare bones to abuse the system and not be called in for neglect. There is also the possibility of Title IV-E eligibility fraud. Title IV-E offers federal reimbursements for state child welfare services provided for eligible children. However, less than a third of child removals in the U.S. tend to be IV-E eligible. So, the number of IV-E fraud cases is quite small.
Upstream vs. Downstream Controls: Capacity Grows Upstream
How does addressing risk upstream change outcomes in child welfare compared to relying primarily on downstream case review or audits?
BB: Because FWA isn’t the biggest issue for child welfare agencies, it is often left up to front-line workers to maintain program integrity. It’s on the caseworker to check for open beds and do the work of transitioning kids who don’t need to be in residential treatment centers into placements that better meet their needs. And while caseworkers would like to do this consistently, the truth is that many are already stretched thin, and this kind of follow-up takes time that often isn’t there. If we wanted to get ahead of this kind of systemic, incidental waste, what child welfare agencies really need are upstream efforts that create more capacity and give caseworkers more time.
For example, across our 14 state child welfare projects, we’ve found that, on average, 15% of children removed don’t actually need to be removed. Now, this isn’t due to bad workers, at least not in our experience. Instead, it’s typically due to workers being stretched too thin, without enough time to spend with those families who fall into that gray area between safe and unsafe. When there isn’t enough time to make a confident decision, it can feel safer to remove a child than risk leaving them in a situation that could pose serious harm. It becomes like a default switch: when assessment efforts are not clearly conclusive, we remove and let case management figure it out.
If we could switch the default from “when in doubt, remove” to “when in doubt, spend more time” and really, truly give workers the time to get the full picture, we’d likely see fewer unnecessary removals. This would create more space for the kids who need it, leaving fewer children to be placed in residential treatment centers due to overload. As a result, agencies save money and increase the chance of positive outcomes for kids. In the states we’ve partnered with to make this shift, agencies have seen a 15–27% reduction of kids in care.
We can also work upstream by trying to reduce the number of families who ever get to the point of needing child removal in the first place. How do we surround families who we can see are on the path to removal with services to help them improve conditions for their children? If preventative services work and can provide things like food security and medical benefits to families struggling, these services stand to further reduce the number of children removed, freeing up more space and time for kids who really need them.
The Role of Technology and Operations: Maximizing Time with Families
How do technology and operational practices need to work together to meaningfully reduce fraud, waste, and abuse?
BB: I think this is where there is a lot of hope. To meaningfully reduce FWA in child welfare, upstream efforts need to achieve the effect of creating more time for workers to spend with families, rather than pulling workers away to complete administrative or bureaucratic tasks. Currently, for every one hour a caseworker spends with a family, they will spend three to six hours on compliance activities, documentation, record retention, and policy alignment – which have very little to do with getting to know a family.
So far, combining innovative technology and process design seems to be our best bet at creating more time for workers to spend with families, without straining already limited budgets. For example, automating income verification services for Title IV-E families increases data integrity, reduces our reliance on families in crisis for information, and speeds up workflows. As a result, caseworkers can spend more time with families going over critical details and questions, rather than demographic details.
Additionally, while demand for foster care placements can’t always be predicted or controlled, technology and process innovations can significantly influence how effectively children move through the system. In some states, 30–40% of children remain in care for several months after a final permanency decision has been made, waiting on the agency to move. In our experience, it’s possible to reduce this. It’s also possible to improve the process of vetting foster homes, so children have more reliable placement options faster. By bringing operational and technological innovations together to optimize process flows, we can improve outcomes for agencies and the children and families they serve.
Measuring Success Beyond Dollars: Outcomes for Children
When evaluating success in program integrity, what indicators matter most beyond cost savings alone?
BB: Nearly all of child welfare is geared at helping a child escape abuse and neglect, helping a family offer a safe and loving home, or helping a child find a new forever home. Most program outcomes are measured in terms of child safety and the big-ticket items like time in care, caseloads, and repeat removals. These outcomes tend to overshadow the small fraud, waste, and abuse numbers associated with the program, and because we tend to concentrate on what we are measured by, things like program waste can easily slide under the radar.
That said, agencies are almost always struggling for resources, so there is a balance to be found. If we can reduce the average time kids spend in care by just three months, the U.S. would save approximately $612 million a year – and that’s even if we use the lower side of the national average for monthly foster care costs, which is about $600. If we can also reduce kids coming into care by the 15% noted above, that becomes $2.4 billion in savings. It is not often you can do what is best for kids and see that kind of savings by doing the right thing.
Together, with upstream time- and capacity-enhancing approaches, we can both maximize the value of our budgets and steer more resources toward helping more kids with better care.
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