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When any child leaves my home I sort through all of their clothing, shoes & toys. Any toys & shoes that they obtained while in my home move with them. Only clothes that fit move on with them - usually an assortment of old & new clothes. I often hold onto a couple of out fits so I'm prepared for the next child that size. All my children leave with a new blanket (one received while in my home & labeled with their name in perm. marker).
In Florida we are supposed to get a "resource book" for each child from the PI or CW. Usually I get and empty 3 ring binder. I put copies of everything in there - health records, WIC paperwork, day care/ school papers, medicaide info, everything. I am dilligent in photographing my kids at least once a month and date the photos for the their resource books. (I ususally have kids under 3yrs and they change in appearance so quickly).
In 18 months I've had 9 children moved in & out of my home (only 2 sets of 2 sibs). I keep a file with the "care & custody" letter I had for them and paystubs from the monthly (daily) stipend checks. I also keep a photo album of my kids with the dates I had them in my home. Just in case any of them ever come back looking for some history.