A sweeping 129-page audit released on Mar. 9, 2026, by Kentucky Auditor Allison Ball's office found that 304 foster children spent a combined 1,577 days in state office buildings, hotels, state parks, and other unlicensed settings over a nearly two-year period, costing taxpayers at least $6.1 million amid a severe shortage of licensed foster homes.
Scope of the Crisis
The investigation by the Commonwealth Office of the Ombudsman examined data from January 2023 through October 2024 and revealed that the vast majority of these so-called "nontraditional placements" occurred in Cabinet for Health and Family Services (CHFS) offices, which accounted for 269 of the total placements.
The remaining children were housed in hotels (17 placements), state parks (16), hospitals where they were not formally admitted (11), community centers (7), and one private child-placing office, according to the Courier Journal.
Among the 304 children, 130 stayed for just one day, while 174 had extended stays averaging 8.3 days. The longest cumulative stay for an individual child was 55 days. The average age of children in extended stays was 15, and most had already been through an average of 9.6 prior placements before ending up in an office building.
Alarming Safety Concerns
The audit documented deeply troubling conditions. Eighty-three children with suicidal thoughts and behaviors were housed in office buildings that lacked psychiatric care, suicide-safe design, or trained clinical supervision.
In the majority of the cases reviewed, there was no clear record that children received medical care, medication management, therapy, or attended school during their time in these settings.
The report also detailed instances of sex trafficking, physical abuse, and children going missing. At least one child in state care reported being a victim of sex trafficking after running away from a placement site.
Another child went missing for 264 days and died three weeks before turning 18. Guardian ad litem attorneys were not notified for over half of the children placed in nontraditional settings.
Systemic Failures
Auditor Ball's report identified four systemic failures at the core of the crisis: a lack of transparency by CHFS regarding its use of nontraditional placements, unreliable documentation practices, a complete absence of governing policies or standards for these placements, and a continuum of care that does not meet children's needs.
The problem has persisted for at least four years despite repeated promises from state officials to fix it. CHFS Secretary Eric Friedlander previously acknowledged the situation was dire but told lawmakers his agency had not found a solution, WKMS reported.
The audit also criticized Governor Andy Beshear's administration for failing to implement 2024 Senate Bill 151, a law designed to expand kinship care by placing children with relatives.
Growing Demand, Shrinking Supply
As of March 1, 2026, there are 8,753 children in Kentucky's out-of-home care system. The state has steadily lost foster care capacity, with advocates and officials pointing to inadequate support and low reimbursement rates as key factors driving foster parents away.
Therapeutic foster homes have been operating at roughly 50% capacity, yet many refuse to accept children with the most severe behavioral needs.
Recommendations and Path Forward
The audit issued 10 recommendations, including implementing the stalled kinship care law, creating formal policies governing nontraditional placements, building a secure therapeutic facility for children whose needs exceed what foster care can provide, and publishing monthly public reports on the use of these placements.
The report also urged the state to study successful models in other states, including Washington's hub home program and Tennessee's faith-based transitional home network.
Ball called the findings a "crisis" that demands immediate action. "The vulnerable children of Kentucky deserve to be placed in nurturing environments where they are provided with the resources, stability, and care they need," she said in a statement, as per WDRB.
