MYTH:  Group homes make a lot of money for their owners and pay their administrators exorbitant salaries and benefits.

FACT: Foster care group homes in California are required by law to be operated by nonprofit, public benefit corporations.  They do not have owners, do not generate profits for owners or shareholders, and do not pay dividends.

Private nonprofit agencies providing group home services, of course, must operate according to sound business principles in order to fulfill their charitable missions.  They must develop and operate within a budget that balances anticipated revenues with anticipated expenses and that includes a prudent strategic reserve.  They must also offer salaries and benefits that allow them to recruit and retain qualified staff and that meet standards of reasonableness pursuant to federal and State law and regulations, including IRS standards.

There may be isolated instances in which some group home administrators have been paid unreasonably high salaries.  When identified, they should be handled in accordance with existing federal and State rules. 

MYTH:  The AFDC-Foster Care rates paid to group homes are more than adequate to cover the reasonable costs of program operations.

FACT: The current group home rate-setting system was inadequate from its inception and gets worse each year.  Over 70% of all group home programs run at a deficit.

The current Residential Care Level (RCL) rate-setting system was initially implemented in 1990, theoretically reflecting the actual average costs of group homes.  The sad reality is that the original rates included only $5.93 per hour for the wages of entry-level child care workers and 20% to cover group homes’ share of the costs of payroll taxes and employee benefits, a sum inadequate to permit group homes to recruit and retain qualified staff. 

To make matters worse, RCL rates have been frozen 10 out of the past 14 years; group home agencies did not even receive COLAs.  During that time, the Consumer Price Index (CPI) rose by over 44%, while RCL rates rose by less than 27%. 

Current RCL rates include only $7.83 per hour for the wages of entry-level child care workers; in contrast, the entry-level wage paid by the State for a psychiatric technician trainee is $12.47 per hour.  While severely limiting the wages and benefits of group home staff, the California Department of Social Services (CDSS) funds a package of health and retirement benefits for its own employees equal to 35% of wages, in contrast to the 20% included in the RCL rates for the same purpose.

In addition, substantial new costs have been imposed upon group homes by State regulations promulgated since 1990 and by overwhelming increases in rates for workers compensation and other forms of insurance, costs not reflected in the CPI figures. 

MYTH:  There may be a few good group homes, but most of them are just expensive warehouses, holding foster children until they turn 18. Group homes bring foster children into placement who could just as easily be cared for in less restrictive and less expensive foster homes or who could be left at home with their parents.

FACT:  Agencies providing group home services do not place children in group homes. Juvenile court judges, acting on the recommendations of county social workers and probation officers, decide which children should be removed from their homes, whether they should be placed in group or other forms of foster care, how long they should remain in group care, and when they should be moved to permanence.

Group homes assess each foster child referred for placement to determine if they are able to provide the care and services needed by that child. After accepting children for placement, group homes periodically reassess each child to ensure that his/her needs are being met and that the group home remains an appropriate living situation. Based on their assessments, group homes make recommendations to the children’s caseworkers regarding care, services, continued placement and permanence. 

Like any other area of human activity, including journalism and government, group home care has a few bad apples, but the vast majority of group homes provide quality care and services under very difficult circumstances. 

If marginal care or questionable practices are identified, county placing agencies and State licensing staff should require the group homes in question to improve their performance. County placing agencies should refuse to place with those group homes that do not meet expectations, and the Community Care Licensing branch should revoke their licenses.  

Although most foster children go on to live positive and productive lives as adults, the outcomes for far too many foster children are not as good as they should be. The nonprofit organizations that operate group homes have responsibility for individual children for a relatively short period of time, one or two years at the most, and often for much shorter periods.  These programs are usually successful in achieving their goals for children—e.g. stabilizing seriously emotionally disturbed children so that they can be reunified with their parents—but, unfortunately, they do not control, and they are not funded to impact, what happens to foster children after discharge. 

MYTH:  Group homes don’t let their foster children attend public schools and force them to attend their own nonpublic schools (NPS), that do not provide the education children need, but do provide a financial gain for group home operators.

FACT:  The public school district in which a group home is located decides where a foster child will be educated, not the group home.  The majority of foster children living in group homes attend public schools, not NPSs.

Some agencies providing group home services also operate nonpublic schools to meet the educational needs of some or all of the children in their care. Each NPS must be certified by the California Department of Education and must have a contract with each school district from which it accepts placements.

NPSs only receive public school funding for providing services to children (a) with special education needs as (b) identified in their individualized education programs (IEPs) that are (c) prepared by a team composed of school district staff and the child’s parent, district appointed parent surrogate, or holder of the child’s educational rights—not by the group home or the NPS. 

Those children whose IEPs specify placement in an NPS associated with a group home have been determined through the IEP process to need the kind of structure and consistency that can only be provided by an NPS integrated with the residential treatment program in the group home. 

MYTH:  It would cheaper for the State and/or counties to operate their own group home programs.

FACT:  Children’s residential facilities operated by the State and counties have consistently proven to be much more expensive than group homes operated by private nonprofit agencies. 

The following two examples illustrate this fact: 

1. Prior to its closure in 2004, a number of audits were conducted of MacLaren Children's Center in Los Angeles County.  The Los Angeles Daily News reported on August 13, 2001, that the costs of operating MacLaren were almost $1,000 per day, or $336,895 per child per year, over 4 times the amount of the most expensive and most intensive group home programs in the state.  Despite the high costs, the quality of care and services provided at MacLaren was the subject of severe criticism by outside observers.
2. In the Summary for the proposed Governor's Budget for 2004-05, the California Department of Finance reported that the average cost per resident in State operated developmental centers will increase from $124,000 per year in 1998-99 to an estimated $205,000 in 2004-05, more than 2½ times the amount of the most expensive group homes.

The fact is that providing 24-hour residential care to children with emotional, mental health, developmental, and behavioral challenges is expensive.  The primary cost driver is wages paid to the people who care for the children.  With one child care staff for every two or three children in care, the costs of wages and benefits add up quickly, even when the wages and benefits paid are relatively low.  

Experience demonstrates that private nonprofit agencies have been able to provide quality care and services at lower costs than public entities.

MYTH:  Counties have a financial incentive to place foster children in group homes because they get federal and State money to pay for it.

FACT:  Counties have a strong financial incentive not to place foster children in group homes.

Counties are required to pay 60% of the nonfederal share of costs for all foster care placements. It is much less expensive for county departments to place children in county-licensed foster homes or with foster family agencies, than to place them in group homes.

In fact, the large financial disincentive for group home placements pushes counties to place children in lower cost placements, when it is questionable if such placements can meet the children’s needs. Some foster children in some counties are forced to experience multiple placement failures in foster homes before they are placed in a group home program capable of meeting their needs.

Contact

Doug Johnson, California Alliance of Child and Family Services,  djohnson@cacfs.org