Circumstances That Resulted in New York Receiving About Half of the Federal Foster Care Reimbursement to States in Fiscal Year 1978

GAO reported on why New York State, with only a quarter of the Aid to Families with Dependent Children (AFDC)-foster care population, received almost one-half of the total Federal reimbursements to the States for foster care in fiscal year 1978. GAO focused its attention on Federal foster care reimbursements to New York during fiscal 1978 and compared New York's foster care data with California's and other States' statistical data. California was selected for comparison because of its demographic similarities, program size, and large foster care expenditures.

The GAO review identified several reasons why New York's Federal foster care reimbursements were so high. Two reasons, Federal reimbursements for unallowable administrative expenses and costs attributable to ineligible foster care enrollees, were discussed in an earlier report. GAO stated that other reasons were: (1) foster family home costs were more expensive in New York than in other States; and (2) institutional care, which is more expensive than foster home care and is more expensive in New York than in other States, was used more often in New York. The Department of Health and Human Services and New York State officials stated that some of New York's foster children needed more extensive specialized care than foster children in other States. This care included treatment for behavioral problems, psychiatric disorders, and physical conditions which may require extensive supervision and attention. Because of the limited scope of its work, GAO did not determine the extent to which other States provided specialized care to foster children.