(LEX 18) — Kentucky's child welfare agency has been placing foster children in state office buildings, hotels, and state parks for years — at a cost of more than $6 million to taxpayers — while failing to establish any formal policies to govern the practice, according to a new audit from the Kentucky Office of the Auditor of Public Accounts.
The 129-page audit report examined 304 children who were placed in what the Cabinet for Health and Family Services calls "nontraditional placements," or NTPs, between Jan. 1, 2023, and Oct. 29, 2024, according to the report released by the Kentucky Auditor of Public Accounts, Allison Ball. Those children spent a combined 1,577 days in settings that were never designed or licensed to house children.
"Housing children in state offices is a terrible solution to a solvable problem," the report states. "Yet, to the detriment of Kentucky's children, CHFS's promised solution remains undelivered."
What the audit found
The report read that investigators identified distinct nontraditional placement (NTP) stays across the 22-month review period. The placements occurred in the following settings:
- 269 placements in CHFS office buildings
- 17 placements in hotels
- 16 placements in state parks
- 11 placements in hospitals where the child was not admitted
- 7 placements in community centers
- 1 placement in a private child-placing or child-caring office
The average length of an NTP stay was 8.3 days. One child accumulated a total of 55 days across multiple nontraditional placements. 46 children spent 10 or more days cumulatively in NTP settings, according to the report.
Children at serious risk
The audit documented alarming safety incidents tied to the use of nontraditional placements, including:
- At least one child who reported being a victim of sex trafficking after running away from an NTP location
- One child who was found with a person wanted by law enforcement for murder after fleeing an NTP
- One child who died three weeks before his 18th birthday after going missing for 264 days following an NTP stay
- One child who was allegedly forcefully slammed to the ground by a provider during an emergency placement
- At least two children placed in out-of-state facilities with documented investigations involving allegations of neglect, sexual misconduct by staff, and the use of chemical injections as restraints
- 83 children with suicidal thoughts and behaviors who were housed in office buildings without psychiatric care, suicide-safe design, or trained clinical supervision
In 81.2% of cases — 247 out of 304 — medical care, medication management, continuation of therapy, and school attendance were not readily apparent during the period when the child was housed in a nontraditional setting, the report noted.
No policies, no oversight
The audit found CHFS has operated for years without any formal policies, procedures, or standards governing nontraditional placements. The only statewide guidance identified was a non-binding "Nontraditional Placement Tip Sheet" distributed in February 2024.
Investigators visited nine CHFS offices used as NTP locations across the state. None had on-site shower facilities. Children were transported to fire departments, churches, private residences, or YMCAs to meet basic hygiene needs. Sleeping arrangements ranged from twin beds in converted offices to air mattresses in visitation rooms.
The audit also found CHFS failed to notify the Guardian ad Litem — the court-appointed legal advocate for the child — in more than 50% of NTP cases.
A $6.1 million price tag — at minimum
The audit calculated a minimum daily cost of $3,924 per child in an NTP, based on staffing, security, food, and transportation. Applied across the 1,577 NTP days in the sample period, the estimated aggregate cost to taxpayers is at least $6.1 million.
That figure does not include hotel or state park room costs, overtime and shift differentials, property damage, staff injuries, or the cost of converting office space into sleeping areas.
The audit also noted that because NTP settings are not licensed foster care placements, Kentucky cannot claim federal reimbursement under the Title IV-E Foster Care Program for children housed in those settings, meaning the state absorbs 100% of NTP costs.
CHFS refused to cooperate, audit claims
The audit was conducted by the Commonwealth Office of the Ombudsman, which operates under the Office of the Auditor of Public Accounts. Investigators said CHFS repeatedly impeded the investigation.
CHFS initially revoked the Ombudsman's access to iTWIST, the state's child welfare database, forcing Auditor Allison Ball to file a lawsuit to restore access. CHFS also declined to meet with investigators, failed to provide requested case management reports, and admitted to inaccurate documentation in more than 100 iTWIST entries.
"CHFS has refused to fully collaborate and participate in this investigation," the report states.
In a September 2025 response to investigators, CHFS said further discussion "would not have been helpful" and claimed the Ombudsman's preliminary assessment contained "numerous factual errors" without specifying any of them.
Conclusion
Between July 2023 and January 2026, Kentucky lost more than 1,500 total licensed placement beds statewide — an 11% reduction in capacity during the very period when the NTP crisis was publicly identified, according to the audit. Fifteen residential facilities have closed since 2020. The number of emergency shelters has dropped from 15 in 2006 to only 5 at the time of the report.
"The problem itself is not insurmountable," the report concludes. "We simply need focused leadership to implement those and other models across the Commonwealth, and a bureaucracy willing to adapt, ask for, and receive such help."
