For-Profit Foster Care Industries Under Investigation

Here are the facts:
The federal government provides around $7 billion each year in funding for foster care providers around the country. Much of this is overseen by the states and local governments. What these then do is, contract out foster care to private, for-profit providers. However this leaves many gray areas. Recent reports have raised questions about the safety of the children placed into the care of some of these privatized foster networks, and now the U.S. Senate is beginning to ask questions.


In February, a BuzzFeed News investigative report looked into allegations of sexual abuse and deaths involving the country’s largest for-profit foster care provider, National Mentor. National Mentor is  responsible for about  3,800 minors in 15 states. It now trades on the NYSE as Civitas Solutions Inc. and reports more than $1 billion in annual revenue.

Just recently, the company decided to stop offering its services in Illinois. This was following a scandal that the company has placed two pre-teen girls in a house with a foster mother who had previously committed fraud by adopting two children then sending them to live with a relative while still saying they were caring for the kids.

“Rather than ensuring their actions were in the best interest of the children and the families they are enlisted to serve, agency staff cultivated a culture of incompetence and lack of forthrightness,” reads the investigators’ report. ”The absence of good faith demonstrated by the private agency undermined any faith the Department or the public would be able to place in the organization.”

The Senate Finance Committee recently sent letters [PDF] to the governors of each of the 50 states.

“When children are removed from the custody of their parents due to abuse or neglect, as lawmakers, we have an obligation to ensure their safety and well-being,” begins the letter, which describes the way the foster system operates as “a complex structure consisting of overlapping, Federal, State, County and Tribal laws and practices carried out by a mix of public and private entities.”


“We are aware that states are increasingly contracting with private entities or organizations to administer some or all of their foster care programs. However, the extent and structure of these arrangements are less clear,”

The letter then  asks each state to provide detailed information about their foster care programs, including:

• Proportion of children placed by private agencies;

• Names of private agencies and whether they are for-profit or non-profit;

• Accreditation requirements, if any, for private foster care providers;

• Detailed descriptions of the selection process for private foster care contractors;

• Detailed descriptions for safety inspections at foster care providers, and if those inspections are different depending on whether the provider ir private, public, non-profit, or for-profit;

• Statistics on substantiated instances of abuse.

The governors have until May 29 to provide the committee with this information.

Source: Consumerist