LA22-14

STATE OF NEVADA

Performance Audit
Department of Health and Human Services
Division of Child and Family Services
Assessment and Safety of Child Placements
2022

Legislative Auditor
Carson City, Nevada
 Audit Assessment and Safety of
Child Placements
Highlights
Highlights of performance audit report on the Division of Child and Family Services
Division of Child and Family Services issued on
May 4, 2022. Summary
Legislative Auditor report # LA22-14. While overall we found the Division generally complied with requirements associated with child
placements, some improvements can be made. Health, safety, and regulatory standards were not
Background always followed for some providers that care for children in state custody. Additionally, there
The Division of Child and Family Services’ was no evidence that some required background checks and provider assessments were
(Division) mission is to provide support and completed, and some inspections and subsequent corrective action of foster homes were not
services to assist Nevada’s children and families adequately documented. We also found unlicensed homes are not subjected to the same
in reaching their full human potential. The standards of licensed foster homes, but additional measures can help ensure the welfare of
Division provides or oversees a continuum of children placed in these homes. Improved oversight of child placement providers will assist the
services to support children, parents, and Division in ensuring the safety and welfare of children in state custody.
caregivers. The continuum of services includes Foster care payments were accurately and appropriately administered by the Division. We
comprehensive case management, emergency reviewed a representative sample of foster care and specialized payments and found payments
shelter care, foster and relative care, group home were made to verified youth placements at licensed facilities. Additionally, specialized
care, respite care, residential treatment care, and payments were supported by corresponding documentation in the Division’s records. Accurate
independent living services. and justified foster care payments support the financial health of the Division, the State, and
When the Division identifies a child that is in foster care providers.
need of protection due to abandonment or an
unsafe home environment, the Division can
Key Findings
remove the child from the home and place the Child placement providers did not always comply with health, safety, and regulatory standards.
child in licensed foster or unlicensed homes. Of 30 homes inspected, 10 or 33% of homes had health and/or safety deficiencies, and 79% of
foster placements had at least 1 foster care regulatory violation. (page 7)
The Division is responsible for overseeing the
home environment and care provided to children Four foster providers assessed did not comply with medication management requirements
in state custody. The Division also provides established in regulation. Foster care providers are required to maintain records detailing
supplemental payments to support additional provided medication and the date and time administered. Homes evaluated included children on
needs regarding the care of children in licensed antipsychotic and anti-seizure medications. (page 10)
foster homes. Child welfare services are funded After conducting reviews of Division files for 11 unlicensed placements selected for inspection,
primarily by state and federal funds. we found the Division did not have evidence required background checks and home assessments
were completed for some providers. There was no evidence of home inspection documentation
Purpose of Audit for 27% and no evidence of background checks for 45% of unlicensed placement providers
The purpose of the audit was to determine if reviewed. In addition, some emergency placements lacked required Division safety assessments,
Division processes ensure foster care and other including Emergency Placement Checklists (29%) and Confirming Safe Environment
homes for children in state custody are adequate assessments (57%). (page 11)
to ensure the safety and welfare of children. We
also evaluated controls over certain payments We also found that the Division did not always complete home inspection documentation and
supporting children and youth to ensure ensure that all residents of foster homes received required health assessments. Fifty-eight
payments were accurate and appropriate. This percent (14 of 24) of foster home inspection documentation was incomplete, including 2 missing
audit included a review of the Division’s inspection checklists, 7 checklists with inspection criteria not completed, and 10 inspection
activities for the 18-month period beginning checklists with missing or incomplete corrective action plans. Of the 24 foster homes, 5 homes
July 1, 2020, through December 31, 2021. We (21%) did not have a tuberculosis test completed timely for all the adults in the home, and 1
also reviewed child and placement monitoring foster home resident did not have any tuberculosis test on file. (page 12)
activities back to calendar year 2017. The Division has not established a written agreement with unlicensed providers who oversee
children in state custody, and home inspection procedures for unlicensed providers are brief or
Audit Recommendations poorly defined. Additionally, the Division does not provide documentation regarding expected
This audit report contains 10 recommendations home health and safety standards to unlicensed providers. The Division, children in state
to improve Division oversight of in-home custody, and providers are at increased exposure to preventable risk due to inadequate oversight
providers who care for children in state custody. of unlicensed placements. (page 14)
The Division accepted the 10 recommendations. Foster care payments were accurately and appropriately administered by the Division. We
Recommendation Status randomly selected 50 fiscal year 2021 foster care payments of 4,068 total claims and found
payments were accurately calculated, payment records in Unified Nevada Information
The Division’s 60-day plan for corrective action
Technology for Youth (UNITY) agreed to the state accounting system, and special payments
is due on August 1, 2022. In addition, the 6-
were supported by medical documentation. (page 18)
month report on the status of audit
recommendations is due on February 1, 2023.

For more information about this or other Legislative Auditor Audit Division
reports go to: http://www.leg.state.nv.us/audit (775) 684-6815. Legislative Counsel Bureau
 STATE OF NEVADA
LEGISLATIVE COUNSEL BUREAU
CARSON CITY OFFICE LAS VEGAS OFFICE
LEGISLATIVE BUILDING GRANT SAWYER STATE OFFICE BUILDING
401 S. CARSON STREET 555 E. WASHINGTON AVENUE, SUITE 4400
CARSON CITY, NEVADA 89701 LAS VEGAS, NEVADA 89101
(775) 684-6800 (702) 486-2800

Legislative Commission
Legislative Building
Carson City, Nevada

This report contains the findings, conclusions, and recommendations from our
performance audit of the Department of Health and Human Services, Division of Child
and Family Services, Assessment and Safety of Child Placements. This audit was
conducted pursuant to the ongoing program of the Legislative Auditor as authorized by
the Legislative Commission. The purpose of legislative audits is to improve state
government by providing the Legislature, state officials, and Nevada citizens with
independent and reliable information about the operations of state agencies, programs,
activities, and functions.

This report includes 10 recommendations to improve Division oversight of in-home

providers who care for children in state custody. We are available to discuss these
recommendations or any other items in the report with any legislative committees,
individual legislators, or other state officials.

Respectfully submitted,

Daniel L. Crossman, CPA

Legislative Auditor

April 19, 2022

Carson City, Nevada
Assessment and Safety of
Child Placements
Table of Contents

Introduction .................................................................................................... 1

Background .............................................................................................. 1

Scope and Objectives .............................................................................. 6

Enhanced Monitoring Can Help Ensure Safe Placements.............................. 7

Health and Safety Deficiencies of Child Placements ................................ 7

No Evidence Certain Health and Safety Assessments Completed ........... 10

Improving Unlicensed Placement Process ............................................... 14

Foster Care Payments Appropriately Administered ........................................ 18

Appendices

A. Audit Methodology.............................................................................. 19

B. Response From the Division of Child and Family Services ................. 23

 LA22-14

Introduction

Background The Division of Child and Family Services’ (Division) mission is to

provide support and services to assist Nevada’s children and
families in reaching their full human potential. The Division is
responsible for child welfare services; mental health services for
children, adolescents, and their families; juvenile justice services;
and services designed to support victims of abuse and neglect. In
Nevada’s 15 rural counties outside of Clark and Washoe, the
Division is responsible for supervising and administering child
protective and welfare services.

Budget and Staffing

Child welfare services are funded primarily by state and federal
funds. In fiscal year 2021, the Division had revenues of $23
million and expenditures of $21 million supporting rural child
welfare. Exhibit 1 shows fiscal year 2021 rural child welfare
services’ revenues and expenditures.

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Assessment and Safety of Child Placements

Rural Child Welfare Services Exhibit 1

Revenues and Expenditures
Fiscal Year 2021
Revenues Amounts
Federal Funds $ 9,245,703
Appropriations 7,948,526
County Assessments 4,077,148
Transfers from Other State Agencies 1,979,887
Other Revenue(1) 145,975
Gifts and Donations 4,150
Total Revenues $23,401,389

Expenditures
Personnel $10,583,434
Program Costs 9,381,946
Operating & Travel 1,414,423
State Cost Allocations 164,313
Information Services 110,547
Purchasing Assessment 2,938
Total Expenditures $21,657,601

Difference $ 1,743,788
Less: Reversion to General Fund (1,621,830)
Less: Budget Reduction to General Fund (121,958)
Balance Forward to 2022 $ -
Source: State accounting system.
(1)
Other revenue includes adjustments and reimbursements.

As of June 30, 2021, the Division had 798 filled positions of 1,065
legislatively authorized positions. The Division’s vacancy rate was
25%. The Division has rural child welfare offices in Carson City,
Elko, Ely, Fallon, Fernley, Pahrump, Tonopah, Winnemucca, and
Yerington.

Child Welfare Services

Child welfare agencies provide or oversee a continuum of services
to support children, parents, and caregivers. The continuum of
services includes comprehensive case management, emergency
shelter care, foster and relative care, group home care, respite
care, residential treatment care, and independent living services.
Out-of-home placements provide short-term and long-term
support for children to prepare them for reunification with birth
parents or for adoption.

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 LA22-14

Child Removal Process

When the Division identifies a child that is in need of protection
due to abandonment or an unsafe home environment, the Division
can remove the child from the home, and the child can be placed
in protective custody of the State. Statute prioritizes child out-of-
home placements for children entering state custody in the
following order: (1) in a hospital, if the child needs hospitalization;
(2) with family or a person with a significant emotional and positive
relationship with the child; (3) a licensed foster home; or (4) in any
other licensed shelter that provides care to children.

Division Monitoring of Foster Homes

Children in state custody can be cared for in licensed foster
homes, which are regulated by the Division’s licensing personnel.
The purpose of licensing is to guarantee basic safety standards
within foster homes, to ensure continuous child safety, and to
support permanency goals of children. These homes can be
operated by nonrelatives or relatives of children. To become a
foster home, a potential provider must submit an application and
receive an in-depth evaluation of their household, including a
home inspection, health and safety assessments, and background
checks.

After becoming licensed, the home must maintain standards

outlined in Nevada Revised Statutes (NRS) 424, Nevada
Administrative Code (NAC) 424, and Division policy. Licensing
personnel are responsible for ongoing monitoring of foster homes
to ensure compliance with state law and licensing standards and
to provide training, technical assistance, and support services.
The Division monitors foster providers through annual home
inspections, continuing background checks, and health
assessments.

Division Monitoring of Unlicensed Homes

Children in state custody can also be placed with extended family
or fictive kin in unlicensed placements. Fictive kin is a person who
is not related by blood to a child but has a significant emotional
and positive relationship with the child. Unlicensed relative and
fictive kin placements are distinct from licensed foster care and in
certain cases are prioritized over foster care when safe and

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Assessment and Safety of Child Placements

appropriate. Unlicensed homes cannot receive foster care

payments and are not subject to the statutory and regulatory
requirements for foster homes outlined in NRS and NAC 424.

When a child is placed in an unlicensed placement, the home

must be inspected, and the adult residents must undergo
background checks. If a child is being removed in an emergency
situation, home and provider assessments are formally
documented in an Emergency Placement Checklist and the
Confirming Safe Environment assessment. Both unlicensed
homes and licensed foster homes are required to be visited by
caseworkers at least once every 2 months and assessed for
safety. Exhibit 2 shows the total placements in which children in
state custody reside by county and licensure status.

Homes With Children in State Custody Exhibit 2

By County and Licensure Status
As of June 14, 2021
Licensed Unlicensed
County(1) Homes Homes Totals
Carson City 14 18 32
Churchill 6 5 11
Douglas 4 2 6
Elko 10 5 15
Eureka 1 0 1
Humboldt 4 5 9
Lander 1 1 2
Lyon 9 20 29
Mineral 2 3 5
Nye 10 29 39
Pershing 0 2 2
White Pine 4 1 5
Totals 65 91 156
Source: Auditor prepared based on Division child placement records.
(1)
Esmeralda, Lincoln, and Storey Counties are not listed because those did not have
placements of children in state custody.

The Division’s current process for monitoring the safety of

licensed and unlicensed child placements before and after child
placement is outlined in Exhibit 3.

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 LA22-14

Process for Monitoring the Safety of Child Placements Exhibit 3

Caseworker Division Provides
• Identifies Relatives or Fictive Kin • Verbal Agreement
• Inspects Placement Home • Verbal Standards
Child Removed
From Primary • Background Check of Adult Residents
Unlicensed Ongoing Monitoring
Caregiver Provider Activities - Unlicensed
• Caseworker Visits
• Confirming Safe
Environment Assessment
Division Provides
Licensing Worker Ongoing Monitoring
• Signed Agreement
• Provider and Activities - Licensed
Home Assessment • Written Standards
Applies for • Caseworker Visits
Potential Foster Care Licensing Licensed Foster • Confirming Safe
Foster Assessment Provider Environment Assessment
Provider
• Annual Home Inspection by
Licensing Personnel
• Relicensing Every 2 Years
Source: Auditor prepared based on Division policies and procedures.

Payments Supporting Child Out-of-Home Care

Foster providers receive payments for the services they render in
caring for children in state custody. Advanced Foster Care and
Specialized Foster Care receive enhanced payments to support
specialized care of children with a severe emotional disturbance.
Other specialty rates include supplemental payments for children
with challenging medical or behavioral issues. Court Jurisdiction
payments assist youth that have aged out of foster care and need
financial support for the transition to independent living. Exhibit 4
shows fiscal year 2021 Division foster care payments by type.

Foster Care Payments by Type Exhibit 4

Fiscal Year 2021
Number of Percentage
Placement Type Amount Claims of Claims
Family Foster Care $1,230,903 2,523 62%
Court Jurisdiction 400,243 526 13%
Relative Foster Care 308,410 546 13%
Advanced Foster Care 254,893 287 7%
Specialized Foster Care 273,240 110 3%
Medically Fragile 20,331 75 2%
Special Rate 52 1 0%
Totals $2,488,072 4,068 100%
Source: Auditor prepared from Unified Nevada Information Technology for Youth (UNITY)
data.

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Assessment and Safety of Child Placements

Scope and The scope of our audit included a review of the Division’s activities
Objectives for the 18-month period beginning July 1, 2020, through
December 31, 2021. We also reviewed child and placement
monitoring activities back to calendar year 2017. Our audit
objectives were to:

• Determine if Division processes ensure foster care and

other homes for children in state custody are adequate to
ensure the safety and welfare of children; and

• Evaluate controls over certain payments supporting

children and youth to ensure payments are accurate and
appropriate.

This audit is part of the ongoing program of the Legislative Auditor

as authorized by the Legislative Commission and was made
pursuant to the provisions of NRS 218G.010 to 218G.350. The
Legislative Auditor conducts audits as part of the Legislature’s
oversight responsibility for public programs. The purpose of
legislative audits is to improve state government by providing the
Legislature, state officials, and Nevada citizens with independent
and reliable information about the operations of state agencies,
programs, activities, and functions.

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 LA22-14

Enhanced Monitoring Can

Help Ensure Safe Placements

While overall we found the Division generally complied with

requirements associated with child placements, some
improvements can be made. Health, safety, and regulatory
standards were not always followed for some providers that care
for children in state custody. Additionally, there was no evidence
that some required background checks and provider assessments
were completed, and some inspections and subsequent corrective
action of foster homes were not adequately documented. We also
found unlicensed homes are not subjected to the same standards
of licensed foster homes, but additional measures can help ensure
the welfare of children placed in these homes. Improved oversight
of child placement providers will assist the Division in ensuring the
safety and welfare of children in state custody.

Health and Safety We found the majority of placements were sufficiently sanitary and
Deficiencies of safe; however, child placement providers did not always comply
Child Placements with health, safety, and regulatory standards. We inspected 30
licensed and unlicensed placements in all Division regions,
including 24 licensed foster care and 6 unlicensed placements. Of
those inspected, 10 or 33% of placements had health and/or
safety deficiencies, and 19 or 79% of foster placements had at
least 1 foster care regulatory violation. An example of a regulatory
violation included providers not maintaining proper medical and
other child records. In placements in which health and safety
standards were not maintained, children were potentially exposed
to conditions that put their health and safety at risk.

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Assessment and Safety of Child Placements

Health and safety deficiencies observed during auditor inspections

are outlined in Exhibit 5.

Health and Safety Hazards Observed Exhibit 5

During Auditor Inspections of Select Placements

Hazardous Exterior
Chemical Hazard (2) Conditions (2)

Egress Window Blocked (1) Sharps Hazard (1)

Safe Sleep Violation (1) Fire Hazard (4)

Tobacco Products Not

Secured (1) Electrical Hazard (1)

Source: Auditor prepared based on home inspections.

Note: Numbers within parentheses signify the numbers of placements identified with the
indicated hazards. At certain placements, we identified more than one health and
safety hazard.

We also identified one unlicensed placement with unsanitary and

bleak living conditions, an additional placement with unsanitary
conditions, and another with bleak living conditions. Examples of
unsanitary conditions included a placement with an insect
infestation, significantly dirty carpets, and inferior housekeeping
conditions. In this same unlicensed placement, there were bleak
living conditions in which the children in state custody did not have
a bedroom or beds but instead slept on a couch even though the
Division initially ensured the home had beds for the children. In
this placement, there were sufficiently substandard conditions,
and the Division promptly transferred the children to a different
placement.

Unlicensed placements are not subject to the standards outlined

in NRS and NAC 424 and do not receive assistance payments.
Additionally, the Division does not provide unlicensed providers
with written documentation regarding standards for living
conditions at the time of placement. Without documented
standards, unlicensed providers lack necessary guidance and
may not meet Division health and safety expectations in the
future.

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 LA22-14

Foster providers must adhere to standards outlined in statute and

regulation, which ensure placements for children are safe and
meet basic healthy living conditions. Foster providers are given
and agree to follow written home health and safety standards.
When placements do not follow these standards, children’s health
and safety is at risk.

Furthermore, the Division supports foster care providers by

providing communication and training regarding health and safety
standards, but they do not communicate common deficiencies
identified through licensing or monitoring activities. Conversely,
the Division does not regularly provide general communications to
unlicensed providers, because they do not maintain a contact list
that could be used for these purposes. Developing a contact list
to inform and educate unlicensed providers and informing all
providers of common issues or concerns can help ensure health,
safety, and other standards are met and children are adequately
cared for.

Foster Home Regulatory Violations

Of the 24 foster homes inspected, 19 or 79% had at least 1
regulatory violation. NAC 424 outlines requirements for health,
safety, and proper management of foster homes. Medical records
need to be maintained by the care provider to evidence the child
received proper health care and also assist other providers if a
child’s placement changes. Additionally, requirements include
maintaining an inventory of each child’s clothing and belongings.
This is important because it helps ensure a child’s belongings stay
with them and are not lost while they are in state custody. The
foster care regulatory violations observed are defined in Exhibit 6.

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Assessment and Safety of Child Placements

Foster Care Regulatory Violations Observed Exhibit 6

During Auditor Inspections of Select Placements

Child Medical Records Bedroom Window Screen

Lacking (6) Missing (1)

No Child Clothing
Inventory (18)

Source: Auditor prepared based on home inspections.

Note: Numbers within parentheses signify the numbers of placements identified with the
indicated violation. For certain placements, we identified more than one regulatory
violation.

Deficient Medication Management Recordkeeping

Four foster providers assessed did not comply with medication
management requirements established in regulation. Foster care
providers are required to maintain records detailing provided
medication and the date and time administered. Homes evaluated
included children on antipsychotic and anti-seizure medications.
Without completed medication administration records (MARs),
there is no documentation verifying children receive medications
timely. These records are important for confirming the right child
got the right medication at the right dosage and frequency.

The Division stated it is unlikely its staff are always checking

MARs during inspections or home visits due to the focus on other
health and safety requirements. Furthermore, Division
management stated it provides a MAR template to foster
providers, but some providers might have trouble completing it
due to its complexity. The Division is considering improving its
MAR template, so it is easier to complete.

No Evidence The Division did not have evidence that health and safety
Certain Health assessments were completed for some providers housing children
and Safety in state custody. Additionally, some foster provider home
Assessments inspection documentation was not completed according to policy.
Completed Important health and safety assessments were not completed
timely, leaving children at a higher risk with providers lacking
sufficient preliminary and continuing assessment.

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 LA22-14

Unlicensed Placement Documentation Review

After conducting reviews of Division files for 11 unlicensed
placements selected for inspection, we found the Division did not
have evidence required background checks and home
assessments were completed for some providers. Although some
of these background checks may have been completed and not
documented, evidence of certain required checks was not
maintained.

Children in state custody should only be placed in an unlicensed

placement once the care provider has passed a background
check and a basic home safety inspection. In addition, when
children are removed from their homes in emergency situations,
policy requires Division staff to complete an Emergency
Placement Checklist and Confirming Safe Environment
assessment. These assessments document Division efforts to
verify the safety of unlicensed placements. Children are exposed
to higher risk in unlicensed placements when these required
assessments are not completed. Exhibit 7 outlines the missing
documentation we identified in our evaluation of unlicensed
placements.

Auditor Evaluation of Unlicensed Exhibit 7

Placement Documentation

No Evidence of Home Inspections No Evidence of Background

3 of 11 Checks 5 of 11
27% Unlicensed 45% Unlicensed
Placements Placements(1)

No Emergency Placement Checklists No Confirming Safe Environment

Assessments
2 of 7 4 of 7
29% Emergency 57% Emergency
Placements(2) Placements(2)

Source: Auditor results of documentation review of Division records.

(1)
For 2 of 5, background checks were initiated, but there was no evidence results were
received or reviewed.
(2)
Only 7 of 11 unlicensed placements reviewed occurred in emergency situations.

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Assessment and Safety of Child Placements

Foster Home Documentation Review

After conducting file reviews of 24 licensed foster homes, we
found the Division did not always complete home inspection
documentation and ensure that all residents of foster homes
received required health assessments. When Division staff
complete inspections of foster homes, they utilize a standardized
checklist to verify regulatory standards are met. Home inspection
paperwork also includes a section for the Division to document a
corrective action plan, when necessary, to remedy certain
deficiencies identified. Division policy requires corrective action
plans to define the regulatory violation and actions to be taken to
correct the violation, including a timeframe for corrective action.
Division staff should monitor the corrective action process, and
document measures taken by providers to correct the violation.

We evaluated foster home inspection checklists for completeness

and for Division oversight of provider corrective action, when
necessary. The results of our evaluation are in Exhibit 8.

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 LA22-14

Auditor Evaluation of Foster Home Inspection Exhibit 8

Documentation

of home inspection documentation was incomplete

58% (14 of 24)

2 7 10

Inspection Inspections had Missing or

checklists were some inspection incomplete corrective
missing for criteria not completed action plans (CAPs)(1)
inspections
Criteria not assessed: Noncompliance not
documented as
• Electrical safety documented in a CAP:
completed • Proper child record • Missing safety training
storage • Electrical and fire safety
• Weapons safety
• Pet safety
• Proper refuse storage

Details Regarding 10 Missing or Incomplete Corrective

Action Plans (CAPs)(1)

4 of 10 5 of 10 6 of 10
Inspections with CAPs Lacked CAPs Lacked
Noncompliance Assigned Documented
Lacked CAPs Timeframe for Follow-Up
Correction

Source: Auditor results of documentation review of Division records.

(1)
Some CAPs lacked both an assigned timeframe and Division follow-up.

We also evaluated foster provider records for required

tuberculosis testing. Of 24 foster homes, 5 homes (21%) did not
have a tuberculosis test completed timely for all adults in the
home, and 1 foster home resident did not have a tuberculosis test
on file. Overdue tuberculosis screenings were on average over a
year late.

Division files lacked documentation because monitoring and

oversight controls were insufficient to ensure all activities were
properly documented. Division management also stated that
there were significant staff and supervisory shortages and
telework challenges related to COVID-19 restrictions that
impacted their licensing group during the period evaluated.

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Assessment and Safety of Child Placements

Finally, Division management stated that tuberculosis testing was

difficult to schedule because of COVID-19 restrictions at medical
offices during 2020.

Improving Improving the process by which the Division establishes and

Unlicensed manages unlicensed providers would support both caretakers and
Placement children placed in these households. The Division has not
Process established a written agreement with unlicensed providers who
oversee children in state custody, and home inspection
procedures for unlicensed providers are brief or poorly defined.
Additionally, the Division does not provide documentation
regarding expected home health and safety standards to
unlicensed providers. The Division, children in state custody, and
providers are at increased exposure to preventable risk due to
inadequate oversight of unlicensed placements.

No Written Agreement for Unlicensed Providers

Unlicensed providers do not sign a written agreement with the
Division that outlines responsibilities and expectations regarding
the placement of children in a home. Instead, the Division relies
on verbal descriptions of its expectations to unlicensed providers.
In contrast, licensed foster care providers sign an agreement
defining provider and Division responsibilities and authorizing the
Division to make announced and unannounced home visits.
Written agreements with unlicensed providers can help establish
mutual understanding between the Division and providers
regarding the responsibilities and rights of the parties when caring
for a child in state custody. These agreements could also include
the ability to inspect placements by the Division and its authorized
representatives, when applicable.

Division management stated too much regimentation of the

process governing unlicensed placements could lead to children
being placed outside of familial and fictive kin placements.
However, management also stated a concise unlicensed provider
agreement would be reasonable.

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 LA22-14

Unlicensed Inspection Procedures Are Brief or Poorly

Defined
The Division’s initial unlicensed placement inspection procedures
are brief, and continuing inspection procedures are poorly defined.
For instance, the Emergency Placement Checklist includes brief
inspection procedures but is not required to be completed after the
initial placement. Additionally, there is no checklist used for
continuing inspections of unlicensed placements, which can result
in variation of how staff conduct monthly visits.

Monthly caseworker visits used to assess the continuing safety of

unlicensed placements were also inconsistently documented in
UNITY, Nevada’s statewide automated child welfare information
system. We reviewed 22 system case notes that documented
unlicensed placement visits, including 2 for each unlicensed
provider selected for inspection. We found case notes did not
always specify a home inspection took place or certain activities
like assessments of chemical and medicine storage or fire safety
were completed.

Furthermore, four Division employees who perform monthly visits

indicated procedures performed could vary. For instance, one of
four employees interviewed did not inspect every room in the
house during home visits. Consistent home inspection criteria and
training can help ensure that home environments meet uniform
safety and living standards.

Written Standards Not Shared With Unlicensed Providers

The Division does not provide documentation regarding expected
home health and safety standards to unlicensed providers.
Unlicensed health and safety standards are not published in
statute, regulation, or policy. This contrasts with foster home
providers that receive specific documentation that defines home
health and safety standards published in statute, regulation, and
policy.

Unlicensed providers, especially those without recent experience

caring for children, may not be aware of safety and other
standards that protect children. Thus, children could be at a
higher risk of health and safety issues at unlicensed placements.

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Assessment and Safety of Child Placements

The Division could reduce the risk of harm to a child or provider in

an unlicensed placement if proper agreements and standards are
established.

Recommendations
1. Communicate to licensed and unlicensed providers
applicable health, safety, and regulatory deficiencies
identified in this audit report. Periodically inform licensed
and unlicensed providers of common deficiencies identified
in Division home inspections.
2. Generate a list that is routinely updated of all unlicensed
providers that care for children in state custody and their
contact information.
3. Enhance supervisory oversight to ensure staff routinely
verify medication administration records are completed in
accordance with Division policy and regulations.
4. Improve the medication administration template for ease of
use and understandability.
5. Ensure supervisory oversight is performed and documented
for unlicensed placements to ensure Emergency Placement
Checklists, Confirming Safe Environment assessments,
background checks, and home inspections are being
completed timely.
6. Ensure documented supervisory review routinely takes place
of a sample of foster home inspection paperwork to verify
completeness and confirm corrective action plans are issued
and resolved.
7. Comply with policy requiring tuberculosis testing be
completed timely and documented.
8. Establish a written agreement with unlicensed placement
providers regarding rights and responsibilities for care of
children in state custody. Ensure the agreement
acknowledges the Division or its authorized representatives
may perform home inspections.
9. Create and implement an inspection checklist for unlicensed
placements that is completed on a regular basis.

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10. Develop and provide documented health and safety

standards to unlicensed providers upon child placement.

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Assessment of Safety of Child Placements

Foster Care Payments

Appropriately Administered

Foster care payments were accurately and appropriately

administered by the Division. We reviewed a representative
sample of foster care and specialized payments and found
payments were made to verified youth placements at licensed
facilities. Additionally, specialized payments were supported by
corresponding documentation in the Division’s records. Accurate
and justified foster care payments support the financial health of
the Division, the State, and foster care providers.

We selected a random sample of 50 fiscal year 2021 foster care

payments of 4,068 total claims based on the percentage of total
claims of different payment categories. Payment categories
included Advanced Foster Care, Court Jurisdiction, Family and
Relative Foster Care, Medically Fragile, Special Rate, and
Specialized Foster Care. Our review found the Division calculated
all payments accurately according to the established payment
schedule. We then compared Division payment records from
UNITY to state accounting records and found no discrepancies.
All payments were also made to verified youth placements at
licensed facilities. Lastly, we found Advanced Foster Care,
Specialized Foster Care, Medically Fragile, and Special Rate
payments were supported by medical documentation.
The Division has an automated payment disbursement system
which accurately calculated payment rates and dispensed them
appropriately to foster care providers. Additionally, there is a
system of supervisory and quality assurance reviews that assisted
in verifying the accuracy of payments. The Division helps support
the financial health of foster care providers and the State when it
administers accurate and justified foster care payments.

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Appendix A
Audit Methodology

To gain an understanding of the Division of Child and Family

Services (Division), we interviewed staff, reviewed statutes and
regulations, and policies and procedures relevant to its operations.
We also reviewed financial information, prior audit reports,
budgets, legislative committee minutes, and other significant
information such as user access and system programs utilized by
the Division. In addition, we documented and evaluated internal
controls related to Division oversight of placement providers of
children in state custody and foster care payments.

Our audit included a review of the Division’s internal controls

significant to our audit objectives. Internal control is a process
effected by an entity’s management and other personnel that
provides reasonable assurance the objectives of an entity will be
achieved. Internal control comprises the plans, methods, policies,
and procedures used to fulfill the mission, strategic plan, goals, and
objectives of the entity. The scope of our work on controls related
to Division oversight of child placements, provider health and
safety assessments, and foster care payments, included the
following:

• Exercise oversight responsibility; establish structure,

responsibility, and authority; and evaluate performance
and enforce accountability (Control Environment);

• Design control activities and design information system

control activities (Control Activities);

• Use quality information (Information and Communication);

and

• Perform monitoring activities (Monitoring).

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Deficiencies and related recommendations to strengthen the

Division’s internal control systems are discussed in the body of the
report. The design, implementation, and ongoing compliance with
internal controls is the responsibility of agency management.

To determine if controls for monitoring placements for children in

state custody were adequate, we received a list of homes in which
children in state custody resided generated from Unified Nevada
Information Technology for Youth (UNITY), Nevada’s statewide
automated child welfare information system. We assessed the
accuracy and completeness of UNITY foster facility data by
comparing UNITY records with Division physical records. To
ensure the data was complete, we haphazardly selected foster
home licensing files from the Carson City, Elko, and Pahrump
regional Division offices. We verified there was a corresponding
UNITY record for each physical file. We concluded the foster
facility records were sufficiently reliable for our intended purposes.

We then selected a stratified random sample of 35 of 156 homes,

including every Division district, for both licensed and unlicensed
placements. We reviewed Division home inspection criteria
including statutes, regulations, and policies and procedures.
During home inspections, we noted deficiencies related to
unsanitary conditions, personal health and safety hazards, bleak
living conditions, and violations of foster care regulations. We
discussed our results with Division management. Of 35 homes
selected, only 30 homes could be inspected due to unlicensed
placement providers that elected to not be inspected. Of homes
inspected, 24 were licensed foster homes and 6 were unlicensed
placements.

To determine if Division safety and health assessments of

placement providers for children in state custody were performed,
we obtained Division physical files. For licensed placement
providers, we reviewed files for required licenses, background
checks, tuberculosis testing results, and home inspections. We
also verified that all residents 18 and older were documented in
UNITY. For unlicensed providers, we reviewed UNITY and
physical files for Emergency Placement Checklists, a Confirming
Safe Environment assessment, law enforcement and other

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background checks, home inspections, and supervisory review.

We shared our results with Division management.

To evaluate the sufficiency of the Division’s oversight of unlicensed

placements, we reviewed Division statutes, regulations, and
policies and procedures defining required Division oversight of
unlicensed providers. We also held discussions with the Division
regarding oversight activities.

To verify whether Division foster care payments were adequately

administered, we requested a list of foster care payments recorded
in UNITY during fiscal year 2021. To evaluate the reliability of
UNITY foster care payment data, we discussed with the Division
user access controls and additional IT controls. We tested controls
to ensure they were operating as intended. Additionally, we
conducted accuracy testing on the payment data. We concluded
that foster care payment data was sufficiently reliable for our
intended purpose.

We then identified the fiscal year 2021 payment data relating to

Advanced Foster Care, Court Jurisdiction, Family and Relative
Foster Care, Medically Fragile, Special Rate, and Specialized
Foster Care and selected a stratified random sample of 50 of 4,068
payments. We reviewed the appropriateness of payments by
gathering claim-related information in UNITY and comparing it to
state accounting system records to verify the payment was
accurate and appropriate. Additionally, we ensured payments
were only provided for children in active placements with licensed
providers, and payments had supporting documentation.

We used nonstatistical audit sampling for our audit work, which for
these analyses was the most appropriate and cost-effective
method for concluding on our audit objectives. Based on our
professional judgement, review of authoritative sampling guidance,
and careful consideration of underlying statistical concepts, we
believe that nonstatistical sampling provided sufficient, appropriate
audit evidence to support the conclusions in our report. We did not
project the exceptions to the population, because tests were not
intended to be projected.

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Our audit work was conducted from April 2021 to January 2022.
We conducted this performance audit in accordance with generally
accepted government auditing standards. Those standards require
that we plan and perform the audit to obtain sufficient, appropriate
evidence to provide a reasonable basis for our findings and
conclusions based on our audit objectives. We believe that the
evidence obtained provides a reasonable basis for our findings and
conclusions based on our audit objectives.

In accordance with NRS 218G.230, we furnished a copy of our

preliminary report to the Administrator of the Division of Child and
Family Services. On April 8, 2022, we met with agency officials to
discuss the results of the audit and requested a written response to
the preliminary report. That response is contained in Appendix B,
which begins on page 23.

Contributors to this report included:

Scott Jones, PhD, CIA

Deputy Legislative Auditor

Zack Fourgis, MBA

Deputy Legislative Auditor

Tammy A. Goetze, CPA

Audit Supervisor

Shannon Riedel, CPA

Chief Deputy Legislative Auditor

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Appendix B
Response from the Division of Child and Family Services

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Assessment and Safety of Child Placements

The Division of Child and Family Services’ Response to

Audit Recommendations
Recommendations Accepted Rejected

1. Communicate to licensed and unlicensed providers

applicable health, safety, and regulatory deficiencies
identified in this audit report. Periodically inform licensed
and unlicensed providers of common deficiencies identified
in Division home inspections ...................................................... X
2. Generate a list that is routinely updated of all unlicensed
providers that care for children in state custody and their
contact information ..................................................................... X
3. Enhance supervisory oversight to ensure staff routinely
verify medication administration records are completed in
accordance with Division policy and regulations ......................... X
4. Improve the medication administration template for ease of
use and understandability........................................................... X
5. Ensure supervisory oversight is performed and documented
for unlicensed placements to ensure Emergency Placement
Checklists, Confirming Safe Environment assessments,
background checks, and home inspections are being
completed timely ........................................................................ X
6. Ensure documented supervisory review routinely takes place
of a sample of foster home inspection paperwork to verify
completeness and confirm corrective action plans are issued
and resolved............................................................................... X
7. Comply with policy requiring tuberculosis testing be
completed timely and documented ............................................. X
8. Establish a written agreement with unlicensed placement
providers regarding rights and responsibilities for care of
children in state custody. Ensure the agreement
acknowledges the Division or its authorized representatives
may perform home inspections................................................... X
9. Create and implement an inspection checklist for unlicensed
placements that is completed on a regular basis ........................ X
10. Develop and provide documented health and safety
standards to unlicensed providers upon child placement ............ X
TOTALS 10

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