Signed, Not Ordered: Inside the Off-the-Books Foster System Where Hundreds of Thousands of American Children Disappear Without a Case Number

Every year, state child protective services agencies separate somewhere between 100,000 and 300,000 children from their parents without filing a petition, without a judge, without a lawyer for anyone, and without generating a single federal data record that the separation occurred. The mechanism is a piece of paper — a "safety plan," a "parental child safety placement," a "custody and visitation agreement" — presented to a frightened parent during an investigation with an implicit or explicit alternative: sign, or we take the child to foster care. Because the parent signs, the law treats the separation as voluntary. Because it is voluntary, no court reviews it, no attorney is appointed, no reunification clock starts, no permanency hearing is ever held, and the child never appears in the Adoption and Foster Care Analysis and Reporting System (AFCARS). And because the relative now raising that child is not a licensed foster parent, no Title IV-E foster care maintenance payment follows the child — the grandmother gets a TANF child-only grant averaging $328 a month instead of the roughly $915 a month the same child would generate in licensed care. Since November 2023, federal regulation has offered states a funded, lawful way out of this trap. Nearly two-thirds of eligible jurisdictions have not taken it.

The Setup: A Removal That Isn't Called a Removal

The legal architecture of American child welfare assumes a binary. Either the state leaves a child at home, or it removes the child — and removal triggers a cascade of constitutional and statutory protections: a petition alleging specific facts, a probable-cause hearing usually within 72 hours, appointed counsel for indigent parents in most states, a guardian ad litem for the child, a judicial finding that remaining at home would be "contrary to the welfare" of the child, a "reasonable efforts" finding, a case plan, periodic reviews, and permanency hearings at least every 12 months under 42 U.S.C. § 675(5).

Hidden foster care is the third option the statute never contemplated. Georgetown Law professor Josh Gupta-Kagan named and mapped it in America's Hidden Foster Care System, 72 Stan. L. Rev. 841 (2020), describing arrangements in which "CPS agencies alter a child's physical custody without initiating court action" — the child moves to a grandmother, an aunt, a family friend, sometimes for weeks, sometimes for years, on the strength of a signature obtained during an investigation.

The vocabulary varies by state and is deliberately anodyne. Texas calls it a Parental Child Safety Placement (PCSP). North Carolina counties used Custody and Visitation Agreements (CVAs). Elsewhere it is a safety plan, a present danger plan, an informal family plan, or simply kinship diversion. The federal bill now pending in Congress defines the category functionally: "any separation of a child from the child's parents or primary caregivers that occurs without the State taking responsibility for the care or placement of the child and without a court order or the involvement and oversight of a court of law, whether voluntary or involuntary."

That last clause — whether voluntary or involuntary — is the entire fight. The agency's position is that the parent consented. The parent's position, over and over in the litigation record, is that consent obtained under a threat of formal removal, at a kitchen table, with no lawyer present, at nine o'clock at night, is not consent at all.

The Scale Nobody Measures

There is no federal count. That is not an oversight; it is the defining feature.

AFCARS, the federal foster care census, captures only children for whom the state has "placement and care responsibility." A child living with an aunt under a safety plan has, by design, no such status — the state has taken no custody. The National Child Abuse and Neglect Data System (NCANDS) captures investigations and maltreatment findings, not the custodial consequences of an unsubstantiated case. The Child and Family Services Reviews, HHS's flagship state performance audit, draw their case samples from children in state custody. A child in hidden foster care is invisible to all three.

What exists are estimates, and they are enormous:

• 100,000 to 300,000 children a year are diverted, according to the range cited by Child Trends and Casey Family Programs — against roughly 332,000 children in licensed foster care on the most recent AFCARS count for FY2025.
• A frequently cited study of nearly 6,000 children across 83 counties found that when children were moved out of their home following a CPS investigation, close to half went informally to relatives with no court case initiated at all.
• The GAO found in 2020 (GAO-20-434) that about 2.7 million children were living with kin caregivers, of whom only 139,000 were in formal foster care. Its December 2025 follow-up, Relatives Raising Children: Federal Support Helps, but Challenges Persist (GAO-26-107658), put the figure at roughly 2.4 million children as of 2023 and found kinship families more likely than families generally to live in poverty, with caregivers disproportionately disabled and out of the labor force.
• Generations United's 2025 State of Grandfamilies analysis reduces it to a ratio: for every one child being raised by relatives inside foster care, 19 more are raised by kin outside it — a caregiving workforce the organization estimates saves U.S. taxpayers $10.5 billion a year.

Not all of those 2.4 million arrangements are agency-engineered. But the agency-engineered share is exactly the share nobody counts. In a 2022 survey of state child welfare administrators conducted by Child Trends for the Annie E. Casey Foundation — 46 of 52 jurisdictions responded — 33 states reported having policies that affirmatively allow kinship diversion. A July 2026 Child Trends report based on interviews with 14 states found that few could publicly report how many children they had diverted, or what happened to them afterward.

Texas is the rare state with public numbers, and only because litigation and legislation forced them out: 6,192 PCSPs initiated in fiscal year 2021, dropping to 1,481 in fiscal 2022 after DFPS changed practice in March 2022 to restrict PCSPs to genuinely parent-initiated short-term placements. A 75 percent drop following a policy memo is itself evidence of how discretionary the practice is.

The Money: Why the Payment Gap Is the Point, Not the Bug

Title IV-E of the Social Security Act reimburses states for foster care maintenance payments — food, shelter, clothing, daily supervision — but only for children placed in a fully licensed or approved foster family home. That rule lives in 45 C.F.R. § 1355.20, and the 2023 rulemaking expressly reaffirmed that "anything less than full licensure or approval is insufficient for title IV-E eligibility."

The consequence for kin is brutal arithmetic:

Pathway	Monthly support to the caregiver
Licensed kinship foster home (Title IV-E)	~$915/child (national average maintenance payment)
Unlicensed kin, TANF child-only grant	~$328/child national average; as low as $81/month in some states
Hidden foster care, no referral	$0

One state cost analysis cited by kinship advocates puts the daily reimbursement gap at $12.67 per child for kinship caregivers versus $27.07 for licensed foster families — about $4,625 versus $9,881 per child per year. Multiply that spread by the diverted population and the fiscal logic of hidden foster care becomes obvious. A Chapin Hall policy brief on kinship diversion stated it plainly: jurisdictions have "a strong financial incentive" to use informal kinship care because they avoid foster care maintenance payments and the cost of case management, services, and court time — and frontline managers find it a convenient way to hold caseloads down.

Meanwhile, the only federal program designed to reach kin outside foster care — the National Family Caregiver Support Program — was funded at roughly $150 million a year to serve a population GAO measured in the millions. That is under $65 per child per year.

There is one more wrinkle that turns a budget story into an accountability story. The Family First Prevention Services Act of 2018 opened Title IV-E to pay for prevention services for up to 12 months for "candidates for foster care" — children who can remain with a parent or kin caregiver. Analysts across the ideological spectrum have noted the unintended effect: Family First lets an agency bill the federal government for services surrounding a child who has already been separated informally, without ever conceding that a removal occurred. The federal dollar arrives; the federal record does not.

The Lawful, Funded Alternative — and the States Declining It

The standard agency defense of diversion has always been that licensing kin is impossible: grandmothers' houses fail square-footage rules, bedroom-per-child rules, fire-marshal inspections, swimming-pool fencing rules, and foster-parent training requirements written for strangers recruited to take in strangers' children.

HHS removed that excuse. In the final rule "Separate Licensing or Approval Standards for Relative or Kinship Foster Family Homes" (RIN 0970-AC91), published at 88 Fed. Reg. 66700 on September 28, 2023 and effective November 27, 2023 — with adoption by states beginning in 2024 — the Children's Bureau amended the § 1355.20 definition of "foster family home" to provide that agencies "may establish one set of foster family home licensing or approval standards for all relative or kinship foster family homes that are different from the set of standards used to license or approve all non-relative foster family homes."

The critical features:

• Kin homes approved under kin-specific standards are fully IV-E eligible and must receive the same foster care maintenance payment a non-relative home would receive for that child.
• Federal safety floors remain: criminal background and child abuse registry checks under 42 U.S.C. § 671(a)(20), plus standards on safety, sanitation, admission policies, civil rights, and the reasonable and prudent parent standard under § 671(a)(10)(A).
• ACF's own regulatory impact analysis projected federal Title IV-E costs of $28,753,988 in year one, rising to a 10-year total of $3,084,840,780, covering 1,392 additional children in year one and 20,861 by year ten. Commenters told the agency that in one state fewer than 30 percent of relative foster homes were licensed under the old regime.

Nearly three years on, uptake is the scandal. Per HHS analysis released in early 2026, as of February 2026 only 24 eligible jurisdictions — 19 states and five Tribes — had even submitted a Title IV-E plan amendment, and as of April 2026, 20 state plans had been approved. Nearly two-thirds of jurisdictions have not amended their plans at all. The Children's Bureau has since issued Information Memorandum IM-26-02, publishing updated national model kin-specific licensing standards so states cannot claim they lack a template.

And even for children already living with a relative, federal policy has long recognized "constructive removal" — a paper removal in which a court order transfers legal custody from the parent while the child physically stays put with the caregiver, satisfying the "contrary to the welfare" and "reasonable efforts" findings and opening IV-E eligibility. The pathway to legalize and fund these placements exists. Thousands of agencies are choosing the unfunded, unreviewable one instead.

Named Players and the Incentive Structure

The agencies. State and county child welfare directors face a set of incentives that all point the same direction: diversion reduces the foster care census (a number legislators and advocates watch), reduces caseloads, avoids the state's non-federal match on maintenance payments, avoids court time and agency attorney hours, and — crucially — avoids creating a case record that a judge, a parent's lawyer, or a federal reviewer could later scrutinize.

The federal regulator. The Children's Bureau within ACF wrote the kin licensing rule and issued the model standards, but it has no mechanism to compel adoption and does not collect a single data element on diversion. When GAO recommended in December 2025 that HHS establish an ongoing process to proactively share information with states about programs available to kinship caregivers, HHS did not agree with the recommendation.

The reformers and researchers. Josh Gupta-Kagan (Georgetown), who built the legal framework; Diane Redleaf, whose work at the Family Defense Center produced the key Seventh Circuit litigation; Richard Wexler of the National Coalition for Child Protection Reform; the Annie E. Casey Foundation and Child Trends, who produced the only state-by-state policy map; Generations United and the Grandfamilies & Kinship Support Network; Casey Family Programs; the Barton Center at Emory, which published 2023 guidance for lawyers on intervening at the safety-plan stage.

The legislators. Sen. John Cornyn (R-TX) introduced the Hidden Foster Care Transparency Act, S. 2902, on September 18, 2025, joined by Sen. Jon Ossoff (D-GA); Rep. Nathaniel Moran (R-TX-01) introduced the House companion, H.R. 5507, the next day. The bill would fold hidden foster care into AFCARS reporting: the number of children separated; how many arrangements end without entering foster care and how many convert to formal care; the allegation categories that triggered them; services provided to caregivers; whether the investigation was substantiated; whether counsel was provided or referred within 72 hours; duration, including arrangements exceeding 90 days with no custody order; final outcomes; and subsequent maltreatment reports at 3, 6, 9, and 12 months. It imposes no penalties. It merely requires counting — and as of this writing it has not passed.

The disparate impact. ACF's own rule preamble documents who is holding this bag: Black Americans are 13 percent of the U.S. population but head nearly 25 percent of grandparent-led households; American Indian and Alaska Native people are 1.3 percent of the population and are represented in grandparent-led households at more than double that rate. There is a further, under-discussed consequence for Native families: the Indian Child Welfare Act's protections — tribal notice, the right to intervene, active-efforts findings, placement preferences — are triggered by a child custody proceeding. A separation accomplished by signature triggers nothing. Hidden foster care is, functionally, an ICWA bypass.

When It Goes Wrong: Cherokee County's $4.6 Million Verdict

The most complete public record of hidden foster care turning criminal comes from Cherokee County, North Carolina, where the Department of Social Services used "Custody and Visitation Agreements" to transfer children out of their parents' custody — documents with no statutory basis and no judicial approval.

Brian Hogan, who is illiterate, testified that DSS told him he would go to jail, that his daughter would go to foster care, or that she would be given to another family for adoption if he did not sign. What he signed surrendered custody of his 10-year-old daughter until she turned 18. In 2021 a federal jury returned a unanimous verdict on 18 claims against Cherokee County, former DSS Director Cindy Palmer, and former DSS attorney Scott Lindsay, awarding $4.6 million — $1.5 million to Hogan and $3.1 million to his daughter — followed by a $1.78 million attorney-fee award. A separate victim of the same practice settled for $4 million.

The criminal exposure was real. A Macon County jury found Scott Lindsay guilty of 12 felony counts and two misdemeanor counts of obstruction of justice. Cindy Palmer pleaded guilty to one felony count of obstruction of justice in October 2021 and received a mitigated 5-to-15-month sentence, suspended for 12 months of unsupervised probation.

Cherokee County is the exception that proves the rule — not because the conduct was unusual, but because a lawyer eventually got the documents. In the ordinary hidden foster care case, there are no documents to get, no docket to search, and no case number to FOIA.

The Courts Blessed It: Dupuy and the Consent Loophole

Federal constitutional litigation has largely failed, and for a specific reason.

In Dupuy v. Samuels, 465 F.3d 757 (7th Cir. 2006), Judge Richard Posner upheld Illinois' safety plan regime against a due process challenge, reasoning that where a parent consents, "no hearing of any kind is necessary; hearings are required for deprivations taken over objection, not for steps authorized by consent." Confronted with the argument that a threat to remove renders consent coerced, the court answered that "it is not a forbidden means of 'coercing' a settlement to threaten merely to enforce one's legal rights." The Sixth Circuit reached a parallel result in Smith v. Williams-Ash (2008), holding that a voluntary safety plan defeats a procedural due process claim.

The doctrine that emerges is stark. Where caseworkers remove a child with no court order and no parental consent, they risk Fourth and Fourteenth Amendment liability — the rule of cases like Croft v. Westmoreland County (3d Cir. 1997) and Hernandez v. Foster (7th Cir. 2011). Where they obtain a signature first, the same physical separation becomes constitutionally unremarkable. Qualified immunity absorbs most of what is left. The legal system has, in effect, created a strong professional incentive to get a signature before a judge.

State legislatures have begun to fill the gap. In 2023 Texas enacted requirements that CPS notify parents of the right to seek counsel before a PCSP, imposed a statutory time limit on such placements, and required DFPS to track and report the numbers. Washington's Keeping Families Together Act (HB 1227) raised the removal standard and barred moving a child out of a safe, stable relative placement. Virginia has expanded kinship-as-prevention programs and barrier-crime waivers for relatives. But in most of the country, a safety plan has no expiration date, no review, and no ceiling.

The Accountability Gap: Every Watchdog Is Aimed at the Other System

Consider who is supposed to be watching, and why none of them can see this.

Family court judges never receive a petition. Parents' attorneys are appointed at the first hearing — which never happens. Guardians ad litem and CASA volunteers are appointed by courts, in cases. Citizen review panels and foster care review boards review children in state custody. State child welfare ombudsmen generally have jurisdiction over agency cases. Title IV-E eligibility reviews audit payments — and no payment was made. CFSRs sample children in care. Court Improvement Program funding measures court performance in cases that reach courts. Congressional oversight, when it comes, targets the visible system: Sen. Ossoff's 13-month Senate Human Rights Subcommittee investigation produced a 64-page report on Georgia DFCS documenting that 1,790 children in DFCS care were reported missing between 2018 and 2022 and that more than 400 children in state custody were likely sex trafficked over five years. That scrutiny was possible because those children were on a list. Children in hidden foster care are on no list at all.

The result is a system in which a child can be separated from a parent for two years, returned or not returned on nothing more than agency discretion, and no institution in the United States — not the county, not the state, not HHS — can say it happened.

Why It Matters, and What Would Fix It

For the child: no reunification services, no permanency hearing, no timeline, no guardian ad litem, no legal permanency at the end — and a caregiver with no legal custody, which means barriers to school enrollment, consent to medical care, and health coverage. For the parent: separation without a finding, with no forum to contest the allegation, and no defined path back. For the relative: full responsibility at roughly a third of the money, frequently while also being told that if the parent comes back around, the "plan" will be treated as broken and the children will go to strangers.

The fixes are neither exotic nor expensive:

1. Count them. Pass the Hidden Foster Care Transparency Act (S. 2902 / H.R. 5507) and add diversion elements to AFCARS. No reform survives a data vacuum.
2. Adopt kin-specific licensing. Thirty-plus jurisdictions have not amended their IV-E plans under the § 1355.20 rule, despite ACF's model standards in IM-26-02. Every one that does converts an unfunded separation into a funded, supervised placement at parity rates.
3. Put a clock and a judge on it. Any safety plan separating a child from a parent should expire — 30 days is the Texas model — unless the agency files a petition or obtains a constructive-removal order.
4. Counsel at the kitchen table. Notice in writing that the plan is voluntary and refusable, plus access to counsel within 72 hours, is the single intervention most likely to distinguish genuine consent from capitulation.
5. Fund the caregivers who are already doing the work. Kinship navigator programs, TANF child-only reform, and payment parity would reach a population saving taxpayers an estimated $10.5 billion a year for an average of $328 a month.

The federal government has already conceded the underlying point. It wrote a rule, priced it at $3 billion over a decade, published model standards, and told states they may license grandmothers on terms that fit grandmothers. What it has not done is require anyone to use it, or to admit how many children are waiting on the other side of that choice.

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Sources:

• Josh Gupta-Kagan, America's Hidden Foster Care System, 72 Stan. L. Rev. 841 (2020)
• Separate Licensing or Approval Standards for Relative or Kinship Foster Family Homes, 88 Fed. Reg. (Sept. 28, 2023) · Federal Register listing
• ACF: States and Territories That Have Adopted Separate Licensing Standards · ACF: States Increasingly Promote Kinship Care, though Opportunity Remains · ACF IM-26-02, Updated National Model Kin-Specific Licensing Standards
• ASPE Issue Brief, States Increasingly Promote Kinship Care (March 2026)
• S. 2902, Hidden Foster Care Transparency Act (119th Cong.) · H.R. 5507 · Rep. Moran press release
• GAO-20-434, Child Welfare and Aging Programs · GAO-26-107658, Relatives Raising Children: Federal Support Helps, but Challenges Persist
• Child Trends, State Tracking of Kinship Diversion Can Inform the Field (July 2026) · Annie E. Casey Foundation, New Insights on State Kinship Diversion Policies · Family Ties state policy analysis
• Chapin Hall, Diverting Children from Foster to Kinship Care (2023)
• Generations United, The Costs of Caregiving · State of Grandfamilies 2025 · Grandfamilies & Kinship Support Network, TANF child-only strategies
• Grandfamilies.org, Hidden Foster Care and Kinship Diversion Caselaw · Barton Center, Hidden Foster Care: Guidance for Preventative Legal Advocacy
• Dupuy v. Samuels, 465 F.3d 757 (7th Cir. 2006) · Smith v. Williams-Ash (6th Cir. 2008) · Hernandez v. Foster (Family Defense Center)
• Cherokee County DSS: $4.6M federal jury verdict · WFAE coverage · Attorney convicted of obstruction · $4M settlement
• Out of the Shadows: The Hidden Foster Care System in Texas, Texas Law Review · Texas CFSR Statewide Assessment (Feb. 2024) · Texas Children's Commission, PCSP Roundtable Report · The Imprint, Texas Aims to Regulate 'Hidden Foster Care'
• Sen. Ossoff, Findings of 13-Month Foster Care Investigation · 1,790 Georgia DFCS children reported missing
• NICWA, Honoring Native Kinship (April 2026) · ABA Journal, Shadow Foster Care

Note on one date in the directive: the kin-specific licensing rule amending 45 C.F.R. § 1355.20 was published September 28, 2023 and took effect November 27, 2023; state adoption began in 2024.