HOUSTON — State officials testified Tuesday how more than $320 million has been spent on court-ordered improvements to the Texas foster care system since 2019 as proof the need for oversight was no longer needed and a 15-year-old federal lawsuit should end.
“I think the remedial orders gave important direction,” said Audrey O’Neill, commissioner of the Texas Department of Family and Protective Services, referring to the 2018 injunction that spelled out the areas where DFPS and its sister agency, the Texas Health and Human Services Commission which regulates foster care facilities, should drastically overhaul. ”I believe these reforms are substantial and permanent.”
Both she and HHSC Commissioner Stephanie Muth spent hours testifying before U.S. District Judge Randy Crane, who held a hearing on the state’s request that it should be released from the seven years of federal monitoring for “substantial” compliance with the injunction.
Of that $320 million spent since 2019, a total of $66 million has been spent by the two agencies on federal court monitors who oversee everything from the number of children going into foster care each day to how quickly child abuse investigators reach a child victim of abuse and complete an interview with them. The other $254 million appeared to include enhancements to worker training, recruitment, retention, staffing increases, including a separate team of 60 state employees charged with compiling all the data sent to the federal monitors.
But attorneys for about 6,800 Texas children in long-term foster care, who filed the original 2011 lawsuit that resulted in the court monitoring, tried to prove with the state’s own star witnesses that the system is far from stable.
When asked by lead plaintiff lawyer Paul Yetter if moving the legacy state foster care to private contractors, an effort that began when Texas lawmakers approved sweeping reforms in 2017, was “rocky,” O’Neill responded: “There have been challenges.” To date, about 61% of Texas foster care children are in the care of private companies.
Specifically, Yetter had O’Neill recount how in July she terminated the agency’s largest private foster care contractor, EMPOWER, after it failed to improve managing the foster care cases of children in its care in Dallas and seven other counties. The agency first noticed EMPOWER was having persistent problems with retention of former state staff caseworkers in 2024. The caseworkers had been told by the state they would have to hire on with EMPOWER because their job was being eliminated or leave the agency. But many of those quickly quit the new contractor, forcing DFPS to shore up EMPOWER’s staffing with “master caseworkers” sent to help out.
But within months after those master caseworkers went back to their own jobs in late 2025, EMPOWER’s staffing problems persisted. After the second of two EMPOWER-managed children died in its care in March, DFPS moved to take over its operation through a court receivership. When EMPOWER failed to improve sufficiently by July, O’Neill fired EMPOWER.
Still the state legal team, led by private attorney Allyson Ho, argued: “It’s time for the Texas foster care system to be returned to Texas.”
Ho’s team has been moving aggressively to bring the ongoing and costly litigation to a close. She has helped the state overturn previous contempt sanctions against the state for its failure to investigate abuse and neglect at foster care facilities. She also successfully convinced a panel of the 5th Circuit Court of Appeals to remove U.S. District Janis Jack from overseeing the case for what the panel termed “antagonistic demeanor” toward state officials. Crane was appointed to take over the case.
She and her team questioned Muth and O’Neill on the witness stand about the work their agencies have done since federal monitors have been reviewing the foster care system’s progress.
Muth pointed to how the state’s new $35 million Terrell Center for Youth, a psychiatric hospital for traumatized foster care youth, is one of the lasting reforms the state has launched as a result of the lawsuit. While fewer children now come into foster care because the state has made a considerable effort today to avoid removing abused children from their homes, she and O’Neill noted how the children coming into state care have more behavior and mental health issues than previous generations.
“We are seeing a number of children coming in with higher needs than in the past,” Muth said. “This center was designed for that treatment.”
The hearing is expected to last for most of the week. Afterwards, Crane, the judge overseeing the case, will decide whether to release the state for monitoring or perhaps set a modified timeline for the case.
