Federal Audit: Kentucky Foster Treatment Centers Hired Staff With Disqualifying Convictions

Frankfort, Kentucky — Kentucky’s child welfare agency failed to tell two residential treatment programs for foster children that staff they had hired were ineligible because of disqualifying convictions, and a child at one of those facilities was hospitalized after injecting methamphetamine from a syringe found in a staff member’s purse, a federal audit released this month found.

The audit by the U.S. Department of Health and Human Services Office of Inspector General, issued Oct. 19, found that all 15 qualified residential treatment programs it reviewed broke federal or state rules, with 165 instances of noncompliance in all. Qualified residential treatment programs, known as QRTPs, are facilities for foster children with serious emotional or behavioral needs.

What the audit found

Auditors reviewed the period from Oct. 1, 2023, through Sept. 30, 2024, and made unannounced site visits to the 15 facilities between July and December 2025, accompanied by state staff. The 165 violations included 24 involving background checks, 104 involving personnel and training records, 12 involving written policies and staffing, and 25 involving the physical environment.

Kentucky did not have a fingerprint-based national background check system for facility staff, as federal law requires, and did not obtain a federal waiver for the alternative checks it used, the report says. At seven of the 15 facilities, child abuse registry checks were not run in other states for hires who held out-of-state driver’s licenses.

At one facility, auditors found a staff member providing alcohol and drug counseling to children on a temporary license that had expired about eight months earlier. Neither the facility nor the state had caught it. At another, written procedures required children to sit in a hallway facing away from others, barred them from talking to others and limited bathroom and water breaks to once an hour. One child’s record showed the child was made to sit facing away from the group for 61 of 150 placement days.

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Bathrooms at four facilities lacked hot water, a working toilet or soap, according to the report. Auditors also found expired or locked-away fire extinguishers and cleaning supplies stored with food.

A separate review of 30 children’s case files found 70 instances of noncompliance in 25 of them, including missing court approvals, discharge plans and health screenings. The audit found $571,306 in improper Title IV-E foster care payments, including a federal share of $416,009.

Where the system failed

Auditors traced the problems primarily to weak state oversight. State officials told auditors in July 2025 that routine onsite monitoring of the facilities had not occurred since August 2023. The state instead relied on licensing inspections, which the report says did not catch the missing training records or the safety hazards.

These weaknesses exposed children in Kentucky’s QRTPs to unsafe environments, inadequate care, and unqualified staff

HHS Office of Inspector General, audit OAS-24-05-010

Of the two ineligible employees, the one tied to the methamphetamine incident was fired after the state investigated, and the other resigned when the facility opened an internal investigation into an accusation that the employee verbally assaulted a child, the report says.

The state’s response

The Cabinet for Health and Family Services’ Department for Community Based Services agreed to improve case records and training records, with new systems planned for January 2027, and said fingerprint-based national background checks have now been completed for all staff at the 15 facilities.

The agency disagreed that it should refund the $416,009, saying its own analysis puts the overpayment $80,730 lower. It also disagreed that it needs routine onsite monitoring, citing an agreement between two divisions of the cabinet. The inspector general said it asked several times for documents supporting both positions and did not receive them, and it maintains that both disputed recommendations are valid.

The state removed these children from their homes and chose where to place them. That placement is the state’s responsibility, including who is hired to care for them. When the agency that takes custody does not check the people it pays to watch children, and lets its own routine monitoring lapse for nearly two years, the harm falls on children who had no say in where they were sent. FAN tracks these failures in its overview of foster care system problems.

Key facts

• HHS OIG audit OAS-24-05-010 was issued Oct. 19, 2026, and covers Oct. 1, 2023, to Sept. 30, 2024.
• All 15 Kentucky QRTPs reviewed broke federal or state rules, with 165 instances of noncompliance.
• The state did not tell two facilities that hires were ineligible because of disqualifying convictions; a child at one was hospitalized after injecting methamphetamine from a staff member’s syringe.
• Routine state onsite monitoring had not occurred since August 2023, officials told auditors.
• One child was made to sit facing away from the group for 61 of 150 placement days.
• Auditors found $571,306 in improper Title IV-E payments, including a $416,009 federal share.
• Kentucky agreed with two of four recommendations and disputed the refund and onsite monitoring recommendations.

Sources

• U.S. Department of Health and Human Services, Office of Inspector General — Kentucky Could Better Protect Children Residing in Qualified Residential Treatment Programs (OAS-24-05-010) (2026-10-22)
• HHS Office of Inspector General — Full audit report, OAS-24-05-010 (PDF) (2026-10-19)

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