State Failed To Comply With Laws For Licensing Foster Homes And Put Children At Risk

The state frequently failed to meet legal requirements for licensing foster homes to care for children who may have been abused or neglected, a lapse that created new risks that those children could be placed in unsafe homes, according to a new audit of the foster care licensing system.

The report by the Hawaii Office of the Auditor also concluded the Child Welfare Services Branch has missed out on federal funding because of its licensing problems. The federal government will not help pay the cost of foster homes that are not properly licensed, according to the audit.

The state Department of Human Services was unable to estimate how much in federal reimbursements were lost, but the many problems with licensing foster homes suggest “the State is forgoing significant federal reimbursement dollars,” according to the audit.

DHS disputed the auditor’s conclusion that children were put at risk because of its licensing practices, saying it found no evidence of that when it reviewed the cases cited in the audit. But the department agreed there is a need for changes to its policies and procedures.

The 82-page audit released Monday was ordered by lawmakers in 2022 via Senate Concurrent Resolution 102. The resolution specifically cited the death of 6-year-old Ariel Sellers — also known as Isabella Kalua — in Waimanalo the previous year.

Ariel disappeared while in the care of her adoptive parents, Lehua and Isaac Kalua, who started off as her foster parents. The Kaluas were charged with second-degree murder and other offenses in the case, and are awaiting trial. Ariel was never found, but she was declared legally dead last year.

The case raised obvious questions about foster home licensing because the Kaluas had arrest records. Isaac Kalua had felony convictions for terroristic threatening and assault, and Lehua Kalua was arrested in a drug case in 2000. Her case was dismissed after she graduated from drug court in 2002.

The audit scrutinized a practice known as “child-specific” foster placements, which are cases where children who land in foster care are placed with people such as relatives, friends of the family, a child’s teacher or neighbor.

The department gives preference to those child-specific placements because they can help maintain some sense of normalcy for children. However, those caregivers often do not have time to become fully licensed before they receive the children being placed with them.

In those cases DHS can issue 60-day “provisional certificates” for the foster homes, giving those families time to meet the standard requirements for general-licensed foster homes. Those include interviews, fingerprint-based FBI clearances for all adults in the home and checks for any history of child abuse or neglect.

The audit found DHS “issued multiple provisional certificates to child-specific homes, often retroactively, without the authority to do so and, most importantly, contrary to the legal licensing requirements.”

“This common practice allowed children to remain indefinitely in homes that had not demonstrated the ability or willingness to meet licensing requirements,” according to the report.

In one case cited in the audit, two members of a family refused to undergo a fingerprint background check in 2022 “because they were from the Philippines,” but the department issued the home a provisional certificate anyway. Foster children lived there under that arrangement for 456 days.

In another case cited in the audit, the department granted seven extensions of a provisional certificate for a child-specific foster home despite “concerns about drug use and unsafe living conditions” reported by Catholic Charities. That family also failed to complete the FBI fingerprint background check.

The audit noted that state law and the department’s administrative rules require that foster homes be licensed by the DHS in order to care for a child.

“However, we found DHS struggled to comply with that mandate to place abused and neglected children in licensed foster homes, often allowing children to remain in homes for months — even years — that had not, and sometimes would not, complete the licensing requirements that the department established to ensure the home is safe, stable and nurturing,” the audit concluded.

The auditor also took a random sample of 103 foster homes. That sample included 30 child-specific homes that took an average of 314 days to complete the licensing process, according to the report.

“Of the 103 homes in our sample, we identified more than three dozen instances where ‘active’ homes had neither a provisional certificate nor a license,” according to the report.

A top administrator of the department acknowledged that if children are harmed in an unlicensed home, the state faces huge liability, according to the report.

The report also found fault with the department’s oversight of Catholic Charities Hawaii, which was hired to handle many licensing responsibilities including home studies and training of prospective foster parents.

But the audit found DHS did not evaluate whether Catholic Charities satisfactorily performed the services it was hired for.

One contract called for Catholic Charities to license foster families within 90 days, but the audit found that only three of 49 child-specific homes analyzed for the report met that target.

Duties related to the contracts were divided between two DHS offices, but neither of them established a legally required process for monitoring and evaluating the contractor’s performance, according to the report.

That resulted in “contractors being paid despite contract terms and conditions not being met,” according to the report.

In its response to the audit, DHS said it “always prioritizes the child’s safety.” It noted that other participants in the system including parents, their lawyers and the guardian ad litem for each child can raise concerns in Family Court with the placements.

The department also said a new web portal was launched in 2021 to help speed the licensing process, but cited challenges that delayed permanent licensing. Those included difficulties in finding interpreters, waitlists for training opportunities and limited numbers of fingerprinting sites and machines.

The department also cited staffing shortages, which have become more acute in recent years.

Catholic Charities Hawaii said in a written statement Monday that it “recognizes the importance of placing children in safe and supportive environments while expediting the licensing process.”

When licensing child-specific homes, home studies often are started, “but cannot be completed due to factors such as children being reunited with their families, foster home applicants withdrawing, or other assessment-related issues,” the nonprofit said in the statement.

“Our records indicate that we achieved a high level of the program goals,” Catholic Charities said in its statement.