Administration for Children and Families (ACF) - Foster Care Title IV-E
Program level Payment Integrity results
Sponsoring agency: Department of Health and Human Services
View on Federal Program InventoryPROGRAM METRICS
$1,295 M
in FY 2025 outlays, with a
94.3%
payment accuracy rate
-
Improper payment estimates over time
View as:
Chart toggle amounts:Proper paymentsOverpaymentUnderpaymentTechnically improperUnknown
Payment Integrity results
-
FY 2025 improper payment estimates
Chart legend and breakdown
Payment accuracy rate
Improper payment rate
Unknown payment rate
Sampling & estimation methodology details
Sampling timeframe:
06/2024 - 05/2025
Confidence interval:
95% to <100%
Margin of error:
+/-1.7
Causes
Another significant factor contributing to improper payments was inconsistent adherence to state administrative protocols. Some agencies experienced delays in updating case management systems following changes in a child’s placement, licensing status of foster homes, or permanency goals. As a result, payments continued to be issued under incorrect program codes or at incorrect reimbursement rates. Inadequate training, staff turnover, and heavy caseloads also contributed to misinterpretation of federal guidelines, increasing the likelihood of processing errors and misclassification of allowable versus unallowable costs.
Lastly, the combination of legacy information systems and varied documentation standards across counties contributed to an environment in which errors were more likely to occur. Many states continued to rely on hybrid electronic-paper processes or outdated verification workflows that were not aligned with current Title IV-E payment integrity expectations. The lack of standardized documentation templates, insufficient automated controls, and limited quality assurance checks prior to claim submission all increased the risk that payments would be improperly coded or unverifiable. Strengthening system integration, improving documentation practices, and enhancing training will be critical to reducing both improper and unknown payments in future reporting cycles.
| Overpayment root cause | Overpayment amount |
|---|---|
| Amount of overpayments within the agency's control | $0.0 M |
| Amount of overpayments outside the agency's control | $66.3 M |
| Amount of overpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist | $0.0 M |
| Amount of overpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment | $0.0 M |
| Amount of overpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment | $66.3 M |
| Underpayment root cause | Underpayment amount |
|---|---|
| Amount of underpayments | $7.77 M |
| The amount of underpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist | $0.0 M |
| The amount of underpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment | $0.0 M |
| The amount of underpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment | $7.77 M |
| The amount of improper payments that were paid to the right recipient for the correct amount but were considered technically improper because of failure to follow statute or regulation | $0.0 M |
| The amount that could either be proper or improper but the agency is unable to determine whether it was proper or improper as a result of insufficient or lack of documentation | $0.0 M |
Prevention
To further support compliance, HHS updated the Title IV-E Review section of its website in FY 2024. These updates included revised review guides, posted review schedules for FY 2024–2026, and the publication of final state review reports. HHS also intensified its outreach efforts by reviewing state policies, providing interpretation of federal requirements, and clarifying eligibility standards to reduce misinterpretation of complex payment rules. At the conclusion of each Title IV-E Foster Care Eligibility Review, HHS issues a detailed, state-specific report outlining improper payment findings, promising practices, and required corrective actions. For states not in substantial compliance, HHS mandates the development and implementation of a Program Improvement Plan and imposes disallowances for overpayments identified during the review.
In addition to training and guidance, HHS employs audits and ongoing monitoring as key corrective actions. HHS conducts continuous reviews of state Title IV-E quarterly claims to identify and correct anomalies or errors in real time. These activities have been ongoing throughout FY HHS has implemented a series of corrective actions to address the underlying causes of improper and unknown payments within the Title IV-E Foster Care Program. As part of these efforts, HHS expanded training opportunities for federal and state reviewers to strengthen the accuracy of eligibility determinations. These trainings included comprehensive instruction on the Title IV-E Review Instrument and Instructions, as well as monthly office hours to answer eligibility-related questions and clarify complex sections of the review tool. These trainings were conducted throughout FY 2025 and will continue on a recurring basis. In addition, HHS increased communication with states by issuing clarifying guidance designed to improve program effectiveness and reinforce understanding of Title IV-E requirements.
To further support compliance, HHS updated the Title IV-E Review section of its website in FY 2024. These updates included revised review guides, posted review schedules for FY 2024–2026, and the publication of final state review reports. HHS also intensified its outreach efforts by reviewing state policies, providing interpretation of federal requirements, and clarifying eligibility standards to reduce misinterpretation of complex payment rules. At the conclusion of each Title IV-E Foster Care Eligibility Review, HHS issues a detailed, state-specific report outlining improper payment findings, promising practices, and required corrective actions. For states not in substantial compliance, HHS mandates the development and implementation of a Program Improvement Plan and imposes disallowances for overpayments identified during the review.
In addition to training and guidance, HHS employs audits and ongoing monitoring as key corrective actions. HHS conducts continuous reviews of state Title IV-E quarterly claims to identify and correct anomalies or errors in real time. These activities have been ongoing throughout FY 2025 and will continue into FY 2026 to help prevent future improper payments and ensure sustained compliance. This audit process supports early detection of issues and enables timely technical assistance to states.
HHS will expand its training strategy in FY 2026 by releasing a series of new on-demand training videos covering the Title IV-E Foster Care Eligibility Review Instrument and compliance assessment methods. These resources provide consistent, easily accessible guidance for state agencies and federal staff. HHS will also continue cross-enterprise collaboration with Title IV-E agencies to reinforce understanding of federal requirements and support the sharing of effective practices among states. Combined with ongoing audits and quarterly claim reviews, these actions will strengthen program integrity and reduce the likelihood of future improper and unknown payments.
HHS anticipates that the level of planned or completed corrective actions will address the cause of the Improper Payments and potential Unknown Payments proportional to the severity of the associated amount and rate of the root cause. During the Title IV-E Foster Care Eligibility Reviews, HHS identified specific root causes of errors and associated corrective actions for each reviewed state. In FY 2024, HHS resumed conducting onsite Title IV-E reviews, following a nearly four-year suspension due to the response to the COVID-19 pandemic. During the period of the suspension, HHS relied on previous data and experiences to develop and update its corrective action plans, which are designed to help states address the improper payments that contribute most to Title IV-E improper payments. The adequacy of these actions is reflected in the low FY 2025 reported error rate of 5.72%.
The adequacy of the corrective actions is reflected in the relatively low error rates reported following the review suspension. Although the FY 2025 error rate increased to 5.72% from 4.82% in FY 2024, the overall rate remains well below the statutory threshold of 10%, indicating that the corrective measures continue to exert a stabilizing effect on payment accuracy despite the lack of recent review data from FY 2020–FY 2023. Because HHS did not calculate or report improper or unknown payment rates during those four fiscal years, it is not possible to determine long-term trends in effectiveness; however, the modest increase observed in FY 2025 does not diminish the broader evidence that the corrective actions are appropriately targeted and operationally sound. By aligning corrective actions with clearly identified root causes for each state and maintaining focus on error-prone areas, HHS has positioned the Title IV-E Foster Care Program to make measurable progress in reducing improper and unknown payments as routine reviews and monitoring activities continue moving forward.
| Payment type | Mitigation strategies taken | Mitigation strategies planned |
|---|---|---|
| Overpayments | Audit, Cross Enterprise Sharing, Training | Audit, Cross Enterprise Sharing, Training |
| Underpayments | Audit, Cross Enterprise Sharing, Training | Audit, Cross Enterprise Sharing, Training |
Additional information
Since baseline reporting began in FY 2004, HHS has implemented a long-term strategy to identify, reduce, and prevent improper payments across the Title IV-E Foster Care program. Efforts include on-site reviews, post-review follow-up, Court Improvement Program initiatives, increased automation, dissemination of best practices, continuous quality improvement efforts and targeted outreach.
Beginning April 2020, HHS paused Title IV-E Reviews, which affected calculation of the National Error Rate, because these reviews generate the data used for error rate estimation. Despite the pause in reviews, HHS continued improper payment reduction efforts by relying on historical review data, prior state performance, lessons learned from past reviews, and experiences to develop and update its corrective action plans. HHS emphasized several strategic actions to reduce and prevent the types of payment errors that drove previous performance including but are not limited to:
• Quality Improvement and Compliance Support
• Enhanced engagement with Title IV-E agencies on program compliance details.
• Reinforcement of documentation and eligibility determination expectations.
• Sharing State Best Practices
• Facilitated coordinated exchanges among states to highlight effective strategies.
• Systemic and Sustainable Improvement
• Encouraged structural changes that create lasting improvements in program operations.
• Family First Prevention Services Act (FFPSA) Guidance
• Conducted outreach on new federal requirements related to:
o Staff safety checks for childcare institutions
o Restrictions on use of non-family-based foster care
• Issued written guidance on these statutory changes.
• Webinars and Policy Clarification
• Delivered a series of webinars to clarify:
o Title IV-E eligibility standards
o Federal documentation requirements
o Complex policy concepts
• Supported state eligibility determinations for foster care maintenance payments.
• Ongoing Technical Assistance
• Continued training and technical support for state agencies and stakeholders.
• Quarterly Claims Review
• Maintained continuous review of state Title IV-E quarterly claims.
• Identified and corrected claim anomalies and potential errors.
Reduction target
0 %HHS has not yet determined whether its current internal controls, human capital resources, information systems, and related infrastructure are sufficient to reduce improper or unknown payments to a tolerable rate because a tolerable rate for the Title IV-E Foster Care program has not been established. Although onsite Title IV-E Foster Care Eligibility Reviews resumed in FY 2024 after a four-year suspension due to the COVID-19 pandemic, these reviews are designed for federal monitoring rather than for determining the level of investment needed to further reduce improper payments. As a result, while the review data contribute to calculating the Foster Care Error Rate, they do not by themselves provide the information necessary to assess whether existing agency controls and infrastructure are adequate to achieve a theoretically tolerable rate. Consequently, HHS currently lacks the basis for evaluating whether additional investments or process improvements would yield cost-effective reductions in improper or unknown payments.
The HHS FY 2026 Justification of Estimates for Appropriations Committees includes a request for $10.447 billion for the Payments for Foster Care, Prevention, and Permanency appropriation, which supports the Title IV-E Foster Care program and related activities. This funding also covers administrative and training costs necessary for program operations. The account is subject to sequestration of administrative funding under the Balanced Budget and Emergency Deficit Control Act of 1985, as amended, which affects certain Foster Care–related activities. Aside from administrative and training resources, the budget submission does not request additional funding specifically dedicated to establishing or maintaining payment integrity.
HHS employs a multilayered approach to ensure that executive managers, program officials, and, where appropriate, state and local governments are held accountable for meeting improper payment reduction goals. Each year, HHS conducts a comprehensive assessment of internal controls in accordance with OMB Circular A-123, Management’s Responsibility for Enterprise Risk Management and Internal Controls, including Appendix C, which specifically addresses payment integrity improvement. As part of this process, senior officials in each HHS office must complete and sign an Internal Control and Risk Management Certification, affirming their responsibility for maintaining effective controls that prevent, detect, and reduce improper payments. Operating Divisions also submit annual assurance statements, which require leadership to evaluate and attest to the adequacy of internal controls over operations, financial reporting, and compliance—including controls related to payment accuracy.
Beyond federal leadership accountability, HHS ensures that states, local governments, tribes, and nonprofit organizations receiving federal funds meet accountability standards through the Single Audit process. Entities that expend at least $1,000,000 in federal awards are required to undergo an annual Single Audit. These audits evaluate if recipients have effective controls in place and if federal funds, including for the Foster Care program, are spent in accordance with applicable requirements. Findings from Single Audits and HHS Office of Inspector General (OIG) audits are used to identify overpayments and may result in the repayment of disallowed costs, complementing enforcement mechanisms for improper payment recovery.
HHS further reinforces accountability by using audit results, monitoring activities, and internal reviews to guide corrective action expectations for both internal leadership and external recipients. Executive managers and program offices are expected to address identified weaknesses promptly, and failure to do so can influence performance evaluations and oversight decisions. Collectively, these steps create a robust framework that emphasizes oversight, prevention, and timely recovery of overpayments, ensuring all levels of program administration are responsible for maintaining strong payment integrity.