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By Cheryl Sullivan / September 27, 1988

New Orleans

AMERICA'S massive foster-care system has become so overburdened that it is threatening the welfare of thousands of the children it is supposed to protect. The system is in such disarray that many experts now say in too many cases state custody is as harmful to the children as are the abusive homes from which they were taken.

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As a result, child-advocacy groups are increasingly resorting to lawsuits to force the state to be a better parent to abused and neglected kids in its care. Efforts to reform the system from within, they say, have not corrected a pattern of widespread negligence that sometimes results in harrowing cases of physical abuse, or even death. Consider the following children:

Nathan Moncrieff, a state ward since birth, was 13 months old in April 1986 when he was placed with two men. About a month later, the San Francisco boy was dead, bludgeoned by the couple, one of whom had a criminal record that should have disqualified him from foster care.

Charlie Wright was seven years old when he died last year after a beating inflicted by his mother's live-in boyfriend. Charlie had been in foster care three times because of neglect, but in each instance the Children Services Board in Akron, Ohio, shuttled the boy back to his prostitute mother in the interest of reuniting the family. The board cleared itself of blame in an internal investigation, but added that Charlie should have been removed permanently from the family years before.

Two-year-old Henry Gallop died Aug. 11, 1987, of unexplained causes in a Boston foster home. Ninety-eight days later a second foster child, 15-month-old Arron Johnson, was found dead in the same home. The home had a long record of rule violations, and a medical examiner's report later revealed that both children died of poisoning.

Stacey E. was placed in state custody when she was 3 years old after being sexually abused by a family member. Over the next four years, she stayed in five different foster homes, moving in one case because she was again sexually abused. Stacey is 12 now. She is part of a federal lawsuit brought by 15 foster children, charging that Louisiana officials violated their constitutional and legal rights to be free from harm while in state custody.

Joseph Hout, aged 2, was literally shaken to death in January, and his foster parents have been charged with the murder. Neither the city of Philadelphia nor a private placement agency carefully screened the foster father, who had hidden his 1981 conviction for rape and aggravated assault.

Similar tragedies litter the landscape of the entire child-welfare world. They raise two important questions:

Are these just isolated cases in a system that, though overburdened, is otherwise beneficent, as most state officials say?

Or, are they the inevitable consequences of a system so flawed that it is sometimes fatal, as many child advocates argue?

America's child-welfare system, scrutinized as part of the Monitor's six-month investigation of children in state custody, is undeniably being squeezed as never before.

New and pressing problems confront it: a shrinking pool of stay-at-home foster mothers, a 212 percent increase since 1976 of child-abuse reports, more than 1,000 children with AIDS, and a growing number of babies born addicted to cocaine.

Most often, social-service agencies have received no additional resources - and even face reduced funding in some states - to meet these extra responsibilities.

Training for social workers and for foster parents has also suffered, many child-welfare administrators say. At the bare minimum, prospective foster parents in most states go through a screening process, a home inspection, and a criminal background check. But problems persist. Background checks and foster parent training classes are not always as thorough as they need to be, they say.

The result can be worker caseloads that are double and triple the standard caseloads, as in Chicago. Or a 100 percent annual staff turnover, as in New Orleans. Or 300 children a day languishing in an emergency-shelter system that 15 years ago cared for only 40 kids, as in San Francisco.

``Just at the time when foster-care reform was supposed to start, we saw a huge influx of cases in San Francisco and a substantial cut in federal funding under the Reagan administration'' in social service programs, says Margaret Brodkin, director of Coleman Advocates for Children and Youth in San Francisco.