On July 9th, 2012, the American Bar Association published a story about fraud in adoption subsidies. According to the report, hundreds of millions of the $2.5 billion paid in adoption subsidies may have been collected by adoptive parents who do not support their adopted children.
The likely scenario, according to this report, is that an adopted child is no longer living with his or her adoptive parents. There are many reasons for this; for example, in the case of divorce, a child may be living with a parent in a state that is not paying the subsidy, or a a child may not be living in the home because he or she ran away or were kicked out by his or her parents.
From the report:
Available data suggest that the number of adopted children who do not live with their adoptive parents until they turn 18 is significant. Nina Williams-Mbengue, program director at the National Conference of State Legislatures, found that 10-25 percent of pre-adoptive placements disrupt before adoption proceedings are finalized, and 10-15 percent of adoptions dissolve after they are finalized. Some practitioners believe that the numbers are much higher.
The ABA directs the blame on the U.S. Department of Health and Human Services which prohibits states from investigating possible adoption subsidy fraud. Furthermore, states are not allowed to suspend or reduce the adoption subsidy payments "without the concurrence of the adoptive parents."
However, federal laws allow for states to investigate and/or request proof of support that they are not allowed to do for adoptive parents receiving adoption subsidies. Therefore, relatives that qualify for relative guardianship assistance for becoming legal guardians to relative children may have their subsidies withheld or reduced if the state discovers they are not supporting a child.
For more about this issue, read the report here.