Our firm was retained by our client for a foster care service provider which operated several residential homes for youth and provided behavioral programs and residential placements to children. Due to a sewer backup, one of the foster homes had to be closed, and the youths residing in this facility were unable to be re-homed due to a shortage of beds in other foster homes. The provider was in the process of re-opening a new foster home for the displaced youth.
Our role was to determine the amount of funding that was lost as a result of the closure of the foster home that was impacted by the sewer backup. In order to verify the number of children in foster care at the time of the loss, we utilized government statistics that reported the total number of youth in foster care on a monthly basis. This procedure was performed to determine the reasonability of the claim submitted by the insured. We also reviewed copies of the funding agreements to verify the per diem rates received.