S. Dakota Indian Foster Care 4: The Mystery Of A Missing $100 Million : NPR Public Editor The headline number in the NPR investigation into foster care for Native American children in South Dakota was that the state receives nearly $100 million a year in federal funds. The series alleged that this money — a large amount in a poor state — is driving state abuses of Native American children. Without clearly telling us, however, the $100 million number is poorly sourced and pumped up by including white children and adoptions. The state says it receives less than a quarter of that amount for Indians, even including funds for Medicaid and adoptions. The reporters have not given me information proving the state wrong.

S. Dakota Indian Foster Care 4: The Mystery Of A Missing $100 Million

A herd of pronhorn antelope stretches across the snowy landscape of the Cheyenne River Indian Reservation. Steve McEnroe/AP hide caption

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Steve McEnroe/AP

A herd of pronhorn antelope stretches across the snowy landscape of the Cheyenne River Indian Reservation.

Steve McEnroe/AP

Allegation: South Dakota receives almost $100 million a year in federal reimbursements for foster care of Native Americans.

A cartoon poster summoned Lakota Indians to the May summit on foster care. "South Dakota receives $100 million each year from Washington D.C. for foster care," declared the poster, and highlighted the amount in red.

"Shouldn't this funding go to the tribes so that they can handle their own foster care needs?" It is a good question. A big red "Yes" followed.

The sought-after $100 million cited in the poster comes from the NPR investigative series and shows how the size of the federal funding claim, stated on-air as fact by reporter Laura Sullivan, has taken on a life of its own. Yet, the number is almost certainly wrong. It may be an exaggeration by three to four times.

The number is important because it is for this money that state social workers are portrayed as making pacts with the devil. In a poor state like South Dakota, which gets nearly half of its operating funds from the federal government, $100 million is a lot of money. But in addition to it being unproven that federal funds act as a motive for alleged state abuse in ripping Indian children from their families, as seen in Chapter 3, the dollar amount itself is based on mistaken calculations and misleading labeling.

To show how we are misled, let's go back to the beginning. The website headline on Part One refers to "Native Foster Care." Melissa Block introduces the series as being about "how one state places Indian children in foster care." The framing and all the reporting on-air by lead reporter Laura Sullivan is about — or seems to be about — Native American children. To all of us in the audience, this is a story about Indians. Yet, the dollar amount is in fact for reimbursements related to children of all races and ethnicities. And it is not for just foster care, but for adoption and other related services, too. We are not told that these switches are being made in who and what the reimbursements are for, even though the changes inflate the total — in a big way.

Flyers distributed for the May summit in Rapid City, S.D. included the $100 million figure used in the NPR investigative series. South Dakota Department of Social Services hide caption

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South Dakota Department of Social Services

Flyers distributed for the May summit in Rapid City, S.D. included the $100 million figure used in the NPR investigative series.

South Dakota Department of Social Services

The unannounced switches are made when reporter Laura Sullivan opens the finance section of her story by saying:

Sullivan: Every time a state puts a child in foster care, the federal government sends money. Because South Dakota is poor, it sends lots of money - almost $100 million a year.

How are we supposed to know that when she refers to "a child" here, she means of any race or ethnicity? Or that "foster care" includes adoption and other services?

The hidden nature of the definitional transition can be seen even more graphically online in a prominent box summarizing the very findings of the series. Each of the first four findings speak specifically and only about Native American children. Then the fifth says (ungrammatically):

* A close review of South Dakota's budget shows that they receive almost $100 million a year to subsidize its foster care program.

I — and I am sure most readers — took the reference to "its foster care program" to be referring only to Native American children, too, and only for what most of us think of as a foster child living with a foster family, or possibly also in a group center.

What is the fiscal size of the exaggeration? In fiscal year 2010, 43 percent of the children in foster care in South Dakota were not Native American, according to the state. As the reimbursements for Indian and other children are roughly equal, this switch in measures alone drops the supposed total coming into the state for Native children to $57 million. No mean drop.

In FY10, meanwhile, there were 1,473 adopted children of all races receiving state and federal support, compared to a monthly average of 792 in standard foster care in foster homes according to the state. Among Indian children, 767 were in adoption and an average of 484 were in foster care. At any one given point in time, in other words, foster children are actually greatly outnumbered by adopted ones — almost by double.

4.1: State Breakdown Of Child Placements, FY10 and FY11

Source: South Dakota Department of Social Services

The editors explained the broader definition this way:

In the story, we use foster care as an umbrella term that covers the treatment and care of children who are removed from their homes after allegations of abuse, neglect or assault. All children who are placed for adoption wait in foster care until the adoptive process is complete. Federal guidelines under the Adoption and Safe Families Act require states to move children into the adoptive process if they have been in foster care for the preceding 12 months. States can move earlier but few do. The majority of South Dakota children removed from their homes with little exception are placed first in emergency care or family foster care.

What the editors are saying here is that the story counts as foster funding is all federal money for the care of children put in emergency, family, group, treatment, guardianship and adoption arrangements. But I could not find such an "umbrella" definition of foster care in either popular usage or any dictionary. The child welfare glossary of the federal Department of Health and Human Services, perhaps the most authoritative source, defines foster care as:

"A service for children who cannot live with their custodial parent(s) or guardian(s) for some period of time. Children in foster care may live with relatives, unrelated foster parents, or with families who plan to adopt them. Foster care is intended to be short-term, with the focus on returning children home as soon as possible or providing them with permanent families through adoption or guardianship. For purposes of Federal reporting and funding, the term also describes non-familial placement settings including group homes, residential care facilities, and supervised independent living."

The government, dictionaries and most of us, I believe, do not consider adoption as foster care, for example. Only about halfway through the finance section of their story do Sullivan and Walters even mention adoption, and then they do so in offhand ways.

It would be defensible for Sullivan, working with producer Amy Walters, to include children in all these categories in their reporting. Each of the categories is relevant to their theme of state abuse of Indian families. What is wrong is to be unclear in the labeling.

I didn't calculate how much the inclusion of adoption and other groups exaggerates the funding total, but surely the impact is large.

Then there is a third major disputable funding variable in the investigative team's calculations. These are medical expenses. Of the "almost $100 million," Sullivan and Walters told me that $37 million to $70 million represents medical reimbursements, most of it through Medicaid.

This is an extraordinarily broad range for a number that is available from the state or the federal government. From the state side, Kim Malsam-Rysdon, secretary of the Department of Social Services, told me that Medicaid expenditures for Sullivan's expanded group of children in foster, adoption and related care was less than $13 million in FY10. The feds reimbursed roughly $9 million of that, she said. This is far below Sullivan's band of $37 million to $70 million. Non-Medicaid medical reimbursements are minor, Malsam-Rysdon said.

Because federal Medicaid reimbursements are not broken down by race or ethnicity, we don't precisely know how much of this $9 million reimbursement was for Indian children alone. But a fairly obvious estimate can be done. The funding that is related to Indians is roughly proportional to their number, according to Malsam-Rysdon. More Indian than white children receive special need funding, but this is a tiny amount of money, as we saw in the introductory section. Given that 57 percent of all children who were removed by the state from their families in FY10 were Native American, according to the state, this would mean that the amount of Medicaid related to Native American children was just over $5 million.

We are now a long, long way from $37 million to $70 million in medical expenses. As an incentive to take Indian children from their families, moreover, the $5 million is even less a temptation than this small sum might suggest. Only a part of it is actually incremental, or new, money, because many of these Indian children were already receiving Medicaid while living with their birth families. Sullivan told me that the state appears to use the federal reimbursements to cover hidden salaries and administrative costs. Malsam-Rysdon said that less than 5 percent of the Medicaid reimbursements are kept by DSS to cover such costs and that the rest goes to families.

So, then, what is the bottom line? How off might the $100 million be?

The state has an answer. Using Sullivan's own expanded definition of foster care and including Medicaid, Malsam-Rysdon said that federal reimbursements in FY10 were $39.5 million for all children, of which $22.5 million was for Native ones alone. Not counting Medicaid, she said that the totals were $30.5 million for all children and roughly $18 million for Native ones. With or without Medicaid, we now are in the neighborhood of a third for all children and a fifth for Native ones of the claimed almost $100 million.

This is more than the $10.6 million that the state originally claimed in its first public response after the NPR series aired. But that number was based on a limited definition of foster care and did not include Medicaid, Malsam-Rysdon said.

The following chart pulls together the state's current figures for federal reimbursements and the total number of children involved in the many different categories for FY10 and FY11.

4.2: State Breakdown Of Federal Reimbursements For Foster And Related Care, Including Adoptions, FY10 and FY11

Source: South Dakota Department of Social Services

Malsam-Rysdon said that the above calculations include all federal funds going to families, institutions and the state. The money helped cover expenses, she said, related to "foster care, group care, psychiatric residential treatment, subsidized guardianship, subsidized adoption, independent living services, parenting education, staffing, administration, family preservation services and tribal contracts." Again, she said that there was no extra hidden money.

NPR editors said the "almost $100 million" funding number was informed by many sources. Among them, they said, was an advocacy research non-profit for low-income families called CLASP; a federal official from the Administration for Children and Families; the director of the National Coalition for Child Protection Reform; former state lawmakers; former governor Bill Janklow; and several other unnamed sources.

These are all good people to approach for analysis, but the authoritative hard numbers should be readily available from official public sources. I do not have the capacity to audit the state's balance sheets. But the governor's office and the Department of Social Services would have to be telling such extraordinary lies with their numbers, which real auditors can easily disprove, that it seems unlikely that they are dissembling to the extent that Sullivan and Walters's numbers suggest.

NPR said the state declined repeated requests for follow-up interviews, did not answer detailed questions submitted by email, told its foster care contractors not to cooperate with NPR and did not offer any satisfactory explanations for federal reimbursements.

Malsam-Rysdon denies this. "Her claim that we wouldn't provide a clear breakdown of budget and expenses is an outright lie," she wrote me. "We answered all budget and other questions she asked, and our state's Bureau of Finance and Management provided all budget information she requested, and this is supported in e-mail. I've asked her to provide a specific list of questions she asked of DSS that she claims weren't answered."

I cannot judge who was at fault for the breakdown in communications between the NPR reporters and the state. The poisoned atmosphere was certainly damaging to all concerned. Still, the lack of a state response to the $100 million number, if only to say what editors told me, was a regrettable omission, which editors acknowledge.

I have no reason to think that Sullivan and Walters intentionally sought to be misleading in their definitional switches. Poor writing and editing appear to me to be to blame for making the switches without ever saying so.

The end result was a poorly supported dollar number that appears to leave a greatly exaggerated image of how much federal money is going to actual foster care for Indian children in South Dakota — and thus, to magnify the supposed incentive the state has for removing Indian children from their homes. As the summit poster indicates, the series also misled Native Americans themselves.

Download a PDF of the full report.