SECTION 12. CHILD PROTECTION, FOSTER CARE, AND ADOPTION ASSISTANCE *
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    * The Personal Responsibility and Work Opportunity Reconciliation 
Act of 1996 changed this program; see appendix L for details.
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                                CONTENTS

Background
Federal Child Welfare Programs Today
  The Title IV-B Child Welfare Services Program
  The Title IV-E Foster Care Program
  The Title IV-E Adoption Assistance Program
  The Title IV-E Independent Living Program
Protections for Children in Foster Care
  Protections Linked To Title IV-B Child Welfare Services 
            Funding
  Mandatory Protections for Foster Children Funded Under Title 
            IV-E
  Reasonable Efforts Requirement
  State Compliance With Section 427 Child Protections
  Federal Financial Review Procedures Under Title IV-E
  New Conformity Review System Under Public Law 103-432
Recent Trends Affecting Child Welfare Populations and Programs
  Child Abuse and Neglect
  Child Abuse Fatalities
  Substance Abuse
  Trends in Foster Care Caseloads
  Increase in ``Kinship'' Care
  Family Preservation Programs
  National Data on Foster Care and Adoption Assistance
  Characteristics of Children in Substitute Care
  Reasons for Placement in Substitute Care
  Permanency Goals
  Living Arrangements of Children in Substitute Care
  Number and Duration of Placements While in Foster Care
  Outcomes for Children Leaving Care
  Characteristics of Children in Adoptive Care
  Trends in Child Welfare and Foster Care Costs
Foster Care and Adoption Information System
  Lack of Adequate Data
  OBRA 1993 and Final Rules for AFCARS and SACWIS
Legislative History
References

                               BACKGROUND

    Child welfare services aim to improve the conditions of 
children and their families and to improve or provide 
substitutes for functions parents have difficulty in 
performing. Child welfare services encompass a broad range of 
activities, including protection of abused or neglected 
children, support and preservation of families, care of the 
homeless and neglected, support for family development, and 
provision of out-of-home care. Services may help the family 
cope with problems or they may protect children while the 
family learns to perform appropriate parenting roles.
    It is generally agreed that it is in the best interests of 
children to live with their families. To this end, experts 
emphasize both the value of preventive and rehabilitative 
services and the need to limit the duration of foster care 
placements. However, if children must be removed, a major 
principle of professional social work is the provision of 
permanent living arrangements, either by returning children to 
their homes in a timely fashion or by moving children into 
adoption or other permanent arrangements.
    Many private, nonprofit and government entities work to 
provide child welfare services to families in need. The primary 
responsibility for child welfare services in the government, 
however, rests with the States. Each State has its own legal 
and administrative structures and programs that address the 
needs of children. The Federal Government has also been 
involved in efforts to improve the welfare of children in 
specific areas of national concern since the early 1900s. 
Almost 40 Federal programs provide support for such services 
today, administered by four different Cabinet agencies and 
overseen by five House committees (Robinson &amp; Forman, 1994). 
The largest of these programs are authorized under titles IV-B 
and IV-E of the Social Security Act. Additional programs 
include grants to States, local governments and nongovernmental 
agencies for prevention and treatment of child abuse and 
neglect, advocacy centers for victims of sexual abuse, services 
for abandoned infants and children with AIDS, promotion of 
adoption, child abuse-related training for judicial personnel, 
federally administered research and demonstration, Indian Child 
Welfare Programs, Family Violence Programs, and a number of 
small programs. Of the 38 programs, 26 had funding of less than 
$25 million in 1995. In addition, services related to child 
welfare may be provided at State discretion under the social 
services block grant (title XX of the Social Security Act), 
described in section 11.
    This section will focus specifically on child welfare, 
foster care and adoption assistance programs authorized under 
titles IV-B and IV-E of the Social Security Act. Title IV-B 
authorizes funds to States for a broad range of child welfare 
services, including family preservation and family support 
services; title IV-E authorizes the Foster Care, Independent 
Living, and Adoption Assistance Programs. The IV-B and IV-E 
programs are intended to operate in consort to help prevent the 
need for out-of-home placement of children, and in cases where 
such placement is necessary, to provide protections and 
permanent placement for the children involved. Funding is 
provided under the Foster Care Program to assist States with 
the maintenance costs of low-income (AFDC-eligible) children in 
foster care. The Independent Living Program is intended to help 
States facilitate the transition of older children from foster 
care to independent living; the Adoption Assistance Program 
helps States support the adoption of AFDC- or SSI-eligible 
children with ``special needs,'' such as minority status, age, 
membership in a sibling group, or a mental or physical 
handicap.

                  FEDERAL CHILD WELFARE PROGRAMS TODAY

    The Social Security Act contains the primary sources of 
Federal funds available to States for child welfare, foster 
care, and adoption activities. These funds include both 
nonentitlement authorizations (for which the amount of funding 
available is determined through the annual appropriations 
process) and authorized entitlements (under which the Federal 
government has a binding obligation to make payments to any 
person or unit of government that meets the eligibility 
criteria established by law). The programs include the Title 
IV-B Child Welfare Services and Family Preservation Programs, 
the Title IV-E Foster Care Program, the Title IV-E Adoption 
Assistance Program, and the Title XX Social Services Block 
Grant Program. Table 12-1 lists these programs, as well as the 
Title IV-E Independent Living Program, and describes their 
funding.
    Table 12-2 provides data on the level of Federal funds 
provided to States under titles IV-B and IV-E for fiscal years 
1985 through 1995, and HHS projections for fiscal years 1996 
through 2001. Under the Title XX Social Services Block Grant 
Program, States have discretion over what portion of their 
allocation they spend on child welfare activities, as well as a 
range of other activities not directly focused on children. 
Detailed data on child welfare services spending by States 
under the Title XX Program are not available.
    In addition to the funds allocated to the States or 
available on an entitlement basis, approximately $10.8 million 
was appropriated for fiscal year 1995 for research and 
demonstration activities and for direct Federal grants to 
public and private entities for child welfare staff training. 
These activities are authorized under section 426 of title IV-
B. For fiscal year 1996, $2 million is appropriated for 
training and no funding is appropriated for research under 
section 426.
    Funds available to States from the Title IV-B Child Welfare 
Program may be used for services to families and children 
without regard to their eligibility for AFDC. Federal matching 
funds for foster care maintenance payments under title IV-E are 
only provided in those cases where the child would have been 
eligible for AFDC if still in the home. All children determined 
to have ``special needs'' related to their being adopted, as 
defined under title IV-E, are eligible for reimbursement of 
certain nonrecurring costs of adoption under the Title IV-E 
Adoption Assistance Program. However, only AFDC- or SSI-
eligible ``special needs'' children qualify for federally 
matched adoption assistance payments available under title IV-
E. Funds available to States for the Title IV-E Independent 
Living Program may be used for services which facilitate the 
transition of children from foster care to independent living, 
regardless of whether they are eligible for AFDC foster care 
assistance.

 TABLE 12-1.--FUNDING ENVIRONMENT OF THE FEDERAL PROGRAMS WHICH SUPPORT FOSTER CARE, CHILD WELFARE, AND ADOPTION
                                                    SERVICES                                                    
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                 Program                           Budgetary classification           Federal support of total  
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Title IV-E Foster Care Program:                                                                                 
    Foster care assistance payments......  Authorized entitlement.................  Open-ended Federal match at 
                                                                                     Medicaid rate.             
    Placement services and administrative  Authorized entitlement.................  Open-ended Federal match of 
     costs.                                                                          50 percent. \1\            
    Training expenses....................  Authorized entitlement.................  Open-ended Federal match of 
                                                                                     75 percent.                
Title IV-E Adoption Assistance Program:                                                                         
    Adoption assistance payments.........  Authorized entitlement.................  Open-ended Federal match at 
                                                                                     Medicaid rate.             
    Nonrecurring adoption expenses.......  Authorized entitlement.................  Open-ended Federal match of 
                                                                                     50 percent. \2\            
    Placement services and administrative  Authorized entitlement.................  Open-ended Federal match of 
     costs.                                                                          50 percent.                
    Training expenses....................  Authorized entitlement.................  Open-ended Federal match of 
                                                                                     75 percent.                
Title IV-E Independent Living Program....  Authorized entitlement.................  100 percent Federal funding,
                                                                                     with a funding ceiling. \3\
Title IV-B Child Welfare Services                                                                               
 Program:                                                                                                       
    Child welfare services (subpart 1)...  Nonentitlement authorization...........  Federal match of 75 percent,
                                                                                     total capped at State      
                                                                                     allotment.                 
    Family preservation and family         Authorized entitlement.................  Federal match of 75 percent,
     support (subpart 2).                                                            with a funding ceiling. \4\
Title XX Social Services Block Grant       Authorized entitlement.................  100 percent Federal funding,
 Program.                                                                            with a funding ceiling.    
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\1\ Seventy-five percent matching is available from fiscal year 1994 through fiscal year 1996 for certain costs 
  related to data collection.                                                                                   
\2\ The Federal Government reimburses 50 percent of up to $2,000 of expenditures for any one placement.         
\3\ Beginning for fiscal year 1991, States are required to provide 50 percent matching for any Federal funding  
  claimed that exceeds $45 million.                                                                             
\4\ Program authorized through fiscal year 1998.                                                                
                                                                                                                
Source: Compiled by House Committee on Ways and Means staff.                                                    

    Table 12-3 provides data on participation under the Title 
IV-B and IV-E Programs. Table 12-4 shows the Congressional 
Budget Office projections for Federal foster care and adoption 
assistance for 1996 through 2001 under current law. Between 
1996 and 2001, the federally funded foster care caseload is 
projected to increase from 278,000 to 350,000 (26 percent). 
Total IV-E foster care costs are expected to increase 49 
percent, from $3,213,000 in 1996 to $4,794,000 in 2001. Over 
the same time period, the adoption assistance caseload is 
projected to increase from 121,000 to 191,000 (58 percent), 
while total adoption assistance costs are estimated to increase 
from $479 million to $901 million (88 percent).

                      TABLE 12-2.--FEDERAL FUNDING FOR CHILD WELFARE, FOSTER CARE, AND ADOPTION ACTIVITIES UNDER TITLES IV-B AND IV-E OF THE SOCIAL SECURITY ACT, 1985-2001                     
                                                                                    [In millions of dollars]                                                                                    
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                                                       Title IV-B-                    Title IV-E foster care State claims                    Title IV-E adoption assistance State               
                                                         1 child    Title IV-B-2 --------------------------------------------  Title IV-E                   claims                              
                     Fiscal year                         welfare       family                                                 independent -----------------------------------------     Total   
                                                         services   preservation   Total \1\    Maintenance  Administration/     living                Assistance  Administration/              
                                                                     and support                 payments      training \2\     program     Total \3\   payments       training                 
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1985.................................................        200.0  ............        546.2         355.3            190.9  ...........        41.8        31.6           10.2           788.0
1986.................................................        198.1  ............        605.4         391.6            213.8  ...........        55.0        40.6           14.4           858.5
1987.................................................        222.5  ............        792.6         479.7            312.9         45.0        73.7        53.9           19.8         1,133.8
1988.................................................        239.4  ............        891.1         548.3            342.8         45.0        97.1        74.1           23.0         1,272.6
1989.................................................        246.7  ............      1,153.1         646.0            507.1         45.0       110.5        86.2           24.3         1,555.3
1990.................................................        252.6  ............      1,473.2         835.0            638.2         50.0       135.7       104.9           30.8         1,911.5
1991.................................................        273.9  ............      1,819.2       1,030.4            788.8         60.0       175.3       130.3           45.0         2,328.4
1992.................................................        273.9  ............      2,232.8       1,203.8          1,029.0         70.0       219.6       161.4           58.2         2,796.3
1993.................................................        294.6  ............      2,547.0       1,365.0          1,182.0         70.0       272.4       197.3           75.1         3,184.0
1994.................................................        294.6         60.0       2,606.5       1,412.0          1,190.5         70.0       325.0       235.0           90.0         3,356.1
1995.................................................        292.0        150.0       3,050.2       1,594.5          1,455.7         70.0       411.4       306.3          105.1         3,973.6
1996 (estimate)......................................        277.4        225.0       3,332.8       1,706.9          1,625.9         70.0       482.5       359.5          123.0         4,387.7
1997 (estimate)......................................        292.0        240.0       3,603.7       1,914.9          1,688.8         70.0       554.8       413.2          141.6         4,760.5
1998 (estimate)......................................        292.0        255.0       3,926.0       2,093.6          1,832.4         70.0       624.6       465.3          159.3         5,167.6
1999 (estimate)......................................        292.0           NA       4,273.3       2,287.3          1,986.0         70.0       701.5       522.5          179.0         5,336.8
2000 (estimate)......................................        292.0           NA       4,652.1       2,498.2          2,153.9         70.0       787.5       586.5          201.0         5,801.6
2001 (estimate)......................................        292.0           NA       5,074.2       2,728.7          2,345.5         70.0       876.6       652.9          223.7         6,312.8
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\1\ Total includes administration and training expenditures, as well as maintenance payments, but does not include transfers to the Title IV-B Child Welfare Services Program. Differences in   
  total due to rounding.    \2\ Includes regular administration, State automated child welfare information system (SACWIS) costs, and training.    \3\ Total includes administration and        
  training expenditures, maintenance payments, and nonrecurring payments.                                                                                                                       
                                                                                                                                                                                                
NA--Not available.                                                                                                                                                                              
                                                                                                                                                                                                
Source: U.S. Department of Health and Human Services.                                                                                                                                           


 TABLE 12-3.--PARTICIPATION IN CHILD WELFARE, FOSTER CARE, AND ADOPTION ACTIVITIES UNDER TITLES IV-B AND IV-E OF
                                       THE SOCIAL SECURITY ACT, 1983-2001                                       
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                                                Title IV-                                                       
                                                B-1 child  Title IV-B-2   Title IV-E    Title IV-E   Title IV-E 
                  Fiscal year                    welfare      family      foster care  Independent    adoption  
                                                 services  preservation   assistance      Living     assistance 
                                                            and support  payments \1\  Program \2\  payments \1\
----------------------------------------------------------------------------------------------------------------
1983..........................................         NA  ............       97,370   ...........        5,309 
1984..........................................         NA  ............      102,051   ...........       11,581 
1985..........................................         NA  ............      109,122   ...........       16,009 
1986..........................................         NA  ............      110,586   ...........       21,989 
1987..........................................         NA  ............      118,549       20,182        27,588 
1988..........................................         NA  ............      132,757       18,931        34,698 
1989..........................................         NA  ............      156,871       44,191        40,666 
1990..........................................         NA  ............      167,981       44,365        44,024 
1991..........................................         NA  ............      202,687       45,284        54,818 
1992..........................................         NA  ............      222,315       57,360        68,197 
1993..........................................         NA  ............      232,668       57,918        78,044 
1994..........................................         NA           NA       244,473       71,081        91,872 
1995..........................................         NA           NA       260,737       73,137       106,880 
1996 (estimated)..............................         NA           NA       267,400           NA       119,900 
1997 (estimated)..............................         NA           NA       285,000           NA       131,200 
1998 (estimated)..............................         NA           NA       296,400           NA       140,400 
1999 (estimated)..............................         NA  ............      308,300           NA       150,200 
2000 (estimated)..............................         NA  ............      320,600           NA       160,700 
2001 (estimated)..............................         NA  ............      333,400           NA       170,300 
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\1\ Average monthly number of recipients.                                                                       
\2\ Estimated.                                                                                                  
                                                                                                                
NA--Not available.                                                                                              
                                                                                                                
Source: U.S. Department of Health and Human Services.                                                           

             The Title IV-B Child Welfare Services Program

Grants to States for child welfare services
    The Child Welfare Services Program under subpart 1 of title 
IV-B permanently authorizes 75 percent Federal matching grants 
to States for services that protect the welfare of children. 
These services: address problems that may result in neglect, 
abuse, exploitation or delinquency of children; prevent the 
unnecessary separation of children from their families and 
restore children to their families, when possible; place 
children in adoptive families when appropriate; and assure 
adequate foster care when children cannot return home or be 
placed for adoption. There are no Federal income eligibility 
requirements for the receipt of child welfare services.

  TABLE 12-4.--CBO BASELINE PROJECTIONS FOR THE FEDERAL FOSTER CARE AND ADOPTION ASSISTANCE PROGRAMS, 1996-2001 
                                    [By fiscal year, In millions of dollars]                                    
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              Program                   1996         1997         1998         1999         2000         2001   
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Foster care:                                                                                                    
    Title IV-E caseload                                                                                         
     (thousands)..................          278          293          308          323          337          350
    Average monthly maint. payment                                                                              
     (Federal share)..............         $514         $540         $568         $596         $626         $657
    Federal costs (millions):                                                                                   
      Maintenance payments........        1,712        1,899        2,102        2,310        2,528        2,756
      Administrative and child                                                                                  
       placement services.........        1,352        1,407        1,509        1,603        1,715        1,828
      Training....................          150          160          172          184          196          210
                                   -----------------------------------------------------------------------------
        Total claims..............        3,213        3,467        3,782        4,096        4,440        4,794
                                   =============================================================================
Adoption assistance:                                                                                            
    Title IV-E caseload                                                                                         
     (thousands)..................          121          135          149          163          177          191
    Average monthly payment.......         $247         $258         $268         $279         $290         $301
    Federal costs (millions):                                                                                   
      Maintenance payments........          359          417          479          545          615          690
      Administrative and child                                                                                  
       placement services.........          104          119          134          149          165          181
      Training....................           16           18           21           24           26           29
                                   -----------------------------------------------------------------------------
        Total claims..............          479          554          634          718          806          901
                                   =============================================================================
Independent living: Federal costs.           70           70           70           70           70           70
                                   =============================================================================
Total costs.......................        3,695        4,034        4,418        4,815        5,241        5,687
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Note.--Numbers may not add to totals due to rounding.                                                           
                                                                                                                
Source: Congressional Budget Office, March 1996 baseline.                                                       

    Under legislation enacted in 1980 (Public Law 96-272), 
States are limited in the amount of their title IV-B allotments 
that may be used for child day care, foster care maintenance 
payments, and adoption assistance payments. Specifically, 
States may use no more than their portion of the first $56.6 
million in Federal IV-B appropriations for these three 
activities. The intent of this restriction is to devote as much 
title IV-B funding as possible to supportive services that 
could prevent the need for out-of-home placement. In addition, 
States are required to implement certain foster care 
protections for all children in foster care to be eligible to 
receive their full allotment of Federal title IV-B 
appropriations. (The foster care protections are described 
later in this section.)
    Between 1977 and 1990, the annual authorization level for 
the Child Welfare Services Program remained flat at $266 
million. The authorization level was increased to $325 million 
under Public Law 101-239 beginning for fiscal year 1990. 
Appropriations for the program--the amount of money Congress 
actually made available for spending each year--increased from 
$163.6 million in fiscal year 1981 to $294.6 million in fiscal 
year 1994 (see table 12-2). Appropriations have since 
decreased, to $292 million in fiscal year 1995 and $277.4 
million in fiscal year 1996.
    Child welfare services funds are distributed to States on 
the basis of their under-21 population and per capita income. 
Because of minimal reporting requirements under the program, 
there are no reliable National or State-by-State data on the 
exact number of children served, their characteristics, or the 
services provided. Table 12-5 details the State-by-State 
distribution of child welfare services funds for selected 
fiscal years.
Grants to States for family preservation and support services
    Grants to States for family preservation and family support 
services were authorized as a capped entitlement under subpart 
2 of title IV-B, beginning in fiscal year 1994. States already 
had the flexibility to expend their child welfare services 
funds available under subpart 1 of title IV-B for family 
support and preservation services, but few States used a 
significant share of such funds for these two categories of 
services. Entitlement funding is authorized for 5 years at the 
following ceiling levels: $60 million in fiscal year 1994; $150 
million in fiscal year 1995; $225 million in fiscal year 1996; 
$240 million in fiscal year 1997; and either $255 million in 
fiscal year 1998 or the fiscal year 1997 level adjusted for 
inflation, whichever is greater.
    From these ceiling amounts, $2 million in fiscal year 1994 
and $6 million in each of fiscal years 1995-98 are reserved for 
use by the Secretary of HHS to fund research, training, 
technical assistance and evaluation of family preservation and 
support activities. In addition, $5 million in fiscal year 1995 
and $10 million in each of the subsequent three fiscal years 
are reserved for a grant program for State courts (described 
below). Finally, 1 percent of the family preservation and 
family support entitlement is reserved for allotment to Indian 
tribes. Table 12-6 shows State allotments of family 
preservation and family support entitlement funds in fiscal 
years 1994-96, and estimated State allotments for fiscal years 
1997-98.

     TABLE 12-5.-- STATE-BY-STATE ALLOCATIONS FOR TITLE IV-B CHILD WELFARE SERVICES, SELECTED YEARS 1987-96     
                                            [In thousands of dollars]                                           
----------------------------------------------------------------------------------------------------------------
                                                                     Fiscal year                                
                                   -----------------------------------------------------------------------------
               State                   1987       1989       1992       1993       1994       1995       1996   
                                      actual     actual     actual     actual     actual     actual   allotments
----------------------------------------------------------------------------------------------------------------
Alabama...........................      4,783      5,136      5,432      5,798      5,623      5,512       5,106
Alaska............................        417        294        614        675        754        756         725
Arizona...........................      3,344      3,797      4,418      4,781      5,034      5,036       5,015
Arkansas..........................      2,838      3,095      3,273      3,496      3,424      3,387       3,178
California........................     20,445     23,100     27,289     30,049     31,732     31,575      31,049
                                                                                                                
Colorado..........................      2,772      3,091      3,558      3,845      3,866      3,904       3,719
Connecticut.......................      2,081      2,143      1,942      2,066      2,120      2,077       2,052
Delaware..........................        570        654        717        764        726        720         713
District of Columbia..............        386        432        431        448        447        427         345
Florida...........................      9,105     10,361     11,773     12,946     13,146     13,096      12,781
                                                                                                                
Georgia...........................      6,622      7,301      7,737      8,386      8,426      8,418       8,032
Hawaii............................        656      1,119      1,180      1,281      1,204      1,205       1,117
Idaho.............................      1,304      1,388      1,581      1,734      1,703      1,719       1,622
Illinois..........................      9,932     10,773     11,338     12,157     11,773     11,634      11,067
Indiana...........................      5,572      6,064      6,709      7,115      6,952      6,832       6,367
                                                                                                                
Iowa..............................      2,861      3,074      3,364      3,566      3,475      3,402       3,223
Kansas............................      2,150      2,461      2,885      3,083      3,068      3,034       2,873
Kentucky..........................      4,154      4,556      4,883      5,192      5,030      4,961       4,624
Louisiana.........................      5,106      5,657      6,350      6,750      6,527      6,412       5,910
Maine.............................      1,313      1,391      1,443      1,533      1,482      1,455       1,378
                                                                                                                
Maryland..........................      3,440      3,798      3,924      4,256      4,343      4,291       4,168
Massachusetts.....................      2,714      4,418      4,336      4,567      4,708      4,597       4,579
Michigan..........................      8,888      9,551     10,196     10,860     10,885     10,634      10,075
Minnesota.........................      3,937      4,206      4,753      5,093      5,092      5,070       4,785
Mississippi.......................      3,519      3,923      4,177      4,438      4,293      4,245       3,949
                                                                                                                
Missouri..........................      4,958      5,235      5,798      6,218      6,146      6,072       5,727
Montana...........................        978      1,049      1,136      1,212      1,207      1,220       1,158
Nebraska..........................      1,641      1,744      1,996      2,137      2,071      2,032       1,879
Nevada............................        775        964      1,170      1,326      1,401      1,430       1,379
New Hampshire.....................        950      1,024      1,028      1,078      1,087      1,074       1,096
                                                                                                                
New Jersey........................      5,424      5,465      4,936      5,308      5,224      5,193       5,388
New Mexico........................      1,642      2,072      2,291      2,493      2,510      2,526       2,418
New York..........................     13,529     14,373     14,490     15,530     15,452     15,231      14,148
North Carolina....................      6,432      7,189      7,771      8,326      8,112      8,086       7,728
North Dakota......................        750        849        942        983        945        929         858
                                                                                                                
Ohio..............................     10,402     10,429     12,283     13,053     12,878     12,748      11,853
Oklahoma..........................      3,332      3,735      4,144      4,428      4,406      4,374       4,133
Oregon............................      2,586      2,850      3,283      3,576      3,556      3,555       3,321
Pennsylvania......................     10,038     11,236     11,905     12,650     12,148     11,949      11,076
Rhode Island......................        888        953      1,025      1,070      1,054      1,032         984
                                                                                                                
South Carolina....................      4,015      4,468      4,747      5,101      4,948      4,867       4,544
South Dakota......................        853        938      1,038      1,107      1,075      1,077         991
Tennessee.........................      5,001      5,598      5,933      6,329      6,210      6,166       5,792
Texas.............................     16,243     18,958     21,845     23,688     23,795     23,796      22,401
Utah..............................      2,555      2,891      3,196      3,478      3,474      3,481       3,284
                                                                                                                
Vermont...........................        632        583        713        750        715        699         674
Virginia..........................      4,907      5,463      5,891      6,322      6,373      6,323       6,114
Washington........................      3,774      4,382      5,169      5,668      5,699      5,741       5,231
West Virginia.....................      2,226      2,397      2,454      2,565      2,486      2,417       2,789
Wisconsin.........................      4,672      5,077      5,639      6,033      6,022      5,950       5,574
                                                                                                                
Wyoming...........................        101        382        703        751        724        719         638
American Samoa....................         NA        163        175        183        193        190         183
Guam..............................        304        342        376        395        351        346         328
Northern Marianas.................        110        118        124        127        142        140         135
Puerto Rico.......................      3,671      3,674      7,094      7,532      8,105      7,951       7,480
Virgin Islands....................        202        295        311        328        280        276         263
                                   -----------------------------------------------------------------------------
      Total.......................    222,500    246,679    273,911    294,624    294,624    291,989     277,389
----------------------------------------------------------------------------------------------------------------
NA--Not applicable; jurisdiction not eligible under statute.                                                    
                                                                                                                
Note: Totals may differ from sum of State amounts due to rounding.                                              
                                                                                                                
Source: U.S. Department of Health and Human Services.                                                           


                     TABLE 12-6.--TITLE IV-B FAMILY PRESERVATION AND FAMILY SUPPORT SERVICES STATE ALLOTMENTS, FISCAL YEARS 1994-98                     
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                     Estimated fiscal   Estimated fiscal
                          State                             Fiscal year 1994   Fiscal year 1995   Fiscal year 1996      year 1997          year 1998    
                                                               allotments         allotments         allotments         allotments         allotments   
--------------------------------------------------------------------------------------------------------------------------------------------------------
Alabama..................................................         $1,199,639         $2,880,911         $4,167,863         $4,467,573         $4,767,282
Alaska...................................................             77,754            186,726            300,567            322,181            343,794
Arizona..................................................          1,005,253          2,414,096          3,767,107          4,037,998          4,308,890
Arkansas.................................................            577,604          1,387,105          2,023,818          2,169,350          2,314,882
California...............................................          6,925,694         16,631,924         25,989,033         27,857,894         29,726,755
                                                                                                                                                        
Colorado.................................................            616,481          1,480,468          2,184,121          2,341,180          2,498,239
Connecticut..............................................            444,311          1,067,004          1,643,100          1,761,255          1,879,409
Delaware.................................................            105,524            253,413            400,756            429,574            458,393
District of Columbia.....................................            194,386            466,814            701,323            751,755            802,187
Florida..................................................          2,615,879          6,281,986         10,479,771         11,233,368         11,986,964
                                                                                                                                                        
Georgia..................................................          1,555,088          3,734,514          5,891,114          6,314,742          6,738,370
Hawaii...................................................            194,386            349,853            681,285            730,276            779,267
Idaho....................................................            155,509            373,451            581,096            622,883            664,669
Illinois.................................................          2,504,802          6,015,235          8,716,445          9,343,241          9,970,037
Indiana..................................................            938,606          2,254,046          3,566,729          3,823,211          4,079,693
                                                                                                                                                        
Iowa.....................................................            427,649          1,026,991          1,462,760          1,567,946          1,673,133
Kansas...................................................            372,110            893,616          1,342,533          1,439,074          1,535,615
Kentucky.................................................          1,083,007          2,600,822          3,706,994          3,973,562          4,240,131
Louisiana................................................          1,888,321          4,534,767          6,392,059          6,851,710          7,311,361
Maine....................................................            244,371            586,852            901,701            966,542          1,031,383
                                                                                                                                                        
Maryland.................................................            760,882          1,827,244          2,765,217          2,964,063          3,162,908
Massachusetts............................................            960,822          2,307,396          3,426,464          3,672,860          3,919,256
Michigan.................................................          2,304,862          5,535,083          7,694,517          8,247,827          8,801,136
Minnesota................................................            655,358          1,573,831          2,384,499          2,555,967          2,727,435
Mississippi..............................................          1,155,208          2,774,210          3,947,447          4,231,307          4,515,166
                                                                                                                                                        
Missouri.................................................          1,149,654          2,760,873          4,187,901          4,489,051          4,790,202
Montana..................................................            133,293            320,101            480,907            515,489            550,071
Nebraska.................................................            233,263            560,177            841,588            902,106            962,624
Nevada...................................................            161,063            386,789            681,285            730,276            779,267
New Hampshire............................................             94,416            226,738            380,718            408,096            435,473
                                                                                                                                                        
New Jersey...............................................          1,132,992          2,720,860          3,927,410          4,209,828          4,492,247
New Mexico...............................................            455,419          1,093,679          1,723,251          1,847,169          1,971,088
New York.................................................          4,043,228          9,709,736         14,046,501         15,056,579         16,066,658
North Carolina...........................................          1,160,762          2,787,548          4,408,317          4,725,317          5,042,318
North Dakota.............................................             99,970            240,076            340,643            365,138            389,634
                                                                                                                                                        
Ohio.....................................................          2,782,496          6,682,112          9,437,806         10,116,475         10,795,144
Oklahoma.................................................            694,236          1,667,194          2,524,763          2,706,318          2,887,873
Oregon...................................................            510,957          1,227,055          1,903,591          2,040,478          2,177,364
Pennsylvania.............................................          2,360,401          5,668,459          8,175,424          8,763,316          9,351,207
Rhode Island.............................................            188,832            453,477            701,323            751,755            802,187
                                                                                                                                                        
South Carolina...........................................            805,313          1,933,945          2,905,482          3,114,414          3,323,346
South Dakota.............................................            127,739            306,764            440,832            472,532            504,232
Tennessee................................................          1,327,378          3,187,674          4,929,300          5,283,764          5,638,228
Texas....................................................          5,376,160         12,910,748         19,617,010         21,027,662         22,438,314
Utah.....................................................            294,356            706,890          1,062,004          1,138,372          1,214,740
                                                                                                                                                        
Vermont..................................................            105,524            253,413            380,718            408,096            435,473
Virginia.................................................            927,499          2,227,371          3,486,578          3,737,296          3,988,015
Washington...............................................            938,606          2,254,046          3,306,238          3,543,988          3,781,738
West Virginia............................................            572,050          1,373,768          2,364,461          2,534,488          2,704,516
Wisconsin................................................            821,975          1,973,957          2,745,179          2,942,584          3,139,989
                                                                                                                                                        
Wyoming..................................................             77,754            186,726            260,491            279,223            297,955
American Samoa...........................................             90,857            122,095            154,717            160,919            167,122
Guam.....................................................            129,726            219,181            264,143            278,357            292,571
Northern Mariana.........................................             80,428             96,047            119,418            123,036            126,654
Puerto Rico..............................................          1,442,746          3,498,785          5,618,957          6,025,218          6,431,479
                                                                                                                                                        
Virgin Islands...........................................            117,401            188,397            214,725            225,321            235,916
                                                          ----------------------------------------------------------------------------------------------
      Totals.............................................         57,400,000        137,383,039        206,750,000        221,600,000        236,450,000
                                                          ==============================================================================================
Set-asides:                                                                                                                                             
    Indians (1%).........................................            600,000          1,498,773          2,250,000          2,400,000          2,550,000
    T, TA &amp; Eval.........................................          2,000,000          6,000,000          6,000,000          6,000,000          6,000,000
    Courts...............................................                  0          5,000,000         10,000,000         10,000,000         10,000,000
                                                          ----------------------------------------------------------------------------------------------
      Subtotal...........................................          2,600,000         12,498,773         18,250,000         18,400,000         18,550,000
                                                          ==============================================================================================
Total for fiscal year....................................         60,000,000    \1\ 150,000,000        225,000,000        240,000,000        255,000,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Includes $118,188 in lapsed funds.                                                                                                                  
                                                                                                                                                        
Source: U.S. Department of Health and Human Services.                                                                                                   

    After these set-asides are made, remaining entitlement 
funds are allocated among States according to their relative 
shares of children receiving food stamps, subject to a 25-
percent non-Federal match. States must submit a plan to HHS 
that provides a detailed account of how the money will be used. 
At least 90 percent of the funds must be used for two 
categories of services: family preservation services and 
community-based family support services. No more than 10 
percent of funds can be used for administration. The Federal 
statute does not specify a percentage or minimum amount of 
funds that must be used for either family preservation or 
family support. However, in program guidance to States issued 
on January 18, 1994, HHS stated that allocations of less than 
25 percent to either type of service will require a strong 
rationale. HHS subsequently restated this position in proposed 
regulations for the Family Preservation and Family Support 
Program, issued on October 4, 1994. Final regulations have not 
yet been published.
    Family preservation services are intended for children and 
families, including extended and adoptive families, that are at 
risk or in crisis. Services include: programs to help reunite 
children with their biological families, if appropriate, or to 
place them for adoption or another permanent arrangement; 
programs to prevent placement of children in foster care, 
including intensive family preservation services; programs to 
provide follow-up services to families after a child has been 
returned from foster care; respite care to provide temporary 
relief for parents and other caregivers (including foster 
parents); and services to improve parenting skills.
    Family support services are intended to reach families 
which are not yet in crisis and to prevent child abuse or 
neglect from occurring. Family support services are generally 
community-based activities designed to promote the well-being 
of children and families, to increase the strength and 
stability of families (including adoptive, foster and extended 
families), to increase parents' confidence and competence, to 
provide children with a stable and supportive family 
environment, and to enhance child development. Examples include 
parenting skills training, respite care to relieve parents and 
other caregivers, structured activities involving parents and 
children to strengthen their relationships, drop-in centers for 
families, information and referral services, and early 
developmental screening for children.
    In regulations proposed for the Family Preservation and 
Family Support Program on October 4, 1994, HHS set forth a 
series of child and family services ``principles'' that are 
intended to guide State implementation of the program. 
According to HHS, these principles emphasize the paramount 
importance of safety for all family members, including victims 
of child abuse and neglect and victims of domestic violence and 
their dependents. In the preamble to its proposed regulations, 
HHS states that family preservation ``does NOT mean that the 
family must stay together or `be preserved' under all 
circumstances.'' The principles also are intended to support a 
family-focused approach while allowing for individual needs, 
and a service delivery approach that stresses flexibility, 
accessibility, coordination, and respect for cultural and 
community strengths.
    The Secretary of HHS is required to evaluate Family 
Preservation and Family Support Programs and to submit interim 
evaluation findings to Congress by December 31, 1996; final 
evaluation findings are due by December 31, 1998.
    As stated above, a portion of the entitlement funds is 
reserved for a grant program to the highest State courts to 
assess and improve certain child welfare proceedings. The court 
set-aside equals $5 million in fiscal year 1995 and $10 million 
in each of fiscal years 1996-98. A 25 percent non-Federal match 
is required in each of the last 3 fiscal years.
    Courts will use grant funds to assess their procedures and 
effectiveness in determinations regarding foster care 
placement, termination of parental rights, and recognition of 
adoptions. Courts also can use these grant funds to implement 
changes found necessary as a result of the assessments. 
According to HHS, 48 States and the District of Columbia chose 
to implement this program, beginning in fiscal year 1995. 
Idaho, Pennsylvania, and Wyoming are not participating in the 
program.

                   The Title IV-E Foster Care Program

    The Foster Care Program under title IV-E is a permanently 
authorized entitlement program. The program provides open-ended 
matching funds to States for the maintenance payments made for 
AFDC-eligible children in foster care family homes, private 
nonprofit child care facilities, or public child care 
institutions housing up to 25 people. The program is mandatory 
for States participating in the AFDC Program (all States 
participate). The Federal matching rate for a given State is 
that State's Medicaid matching rate, which averages about 57 
percent nationally and can range from 50 to 80 percent. States 
may claim open-ended Federal matching at a rate of 50 percent 
for their child placement services and administrative costs. 
States also may claim open-ended Federal matching at a rate of 
75 percent to train personnel employed by the State or by local 
agencies administering the program and to train foster and 
adoptive parents. During fiscal years 1994-96, States also have 
been able to receive Federal matching at the 75 percent rate 
for eligible costs related to automated child welfare 
information systems.
    States are required to provide foster care maintenance 
payments to AFDC-eligible children removed from the home of a 
relative if the child received or would have been eligible for 
AFDC prior to removal from the home and if the following apply: 
(1) the removal and foster care placement were based on a 
voluntary placement agreement signed by the child's parents or 
guardians or a judicial determination that remaining in the 
home would be contrary to the child's welfare; (2) reasonable 
efforts were made to eliminate the need for removal or to 
return the child to his home; and (3) care and placement of the 
child are the responsibility of specified public agencies. 
Children in the AFDC Foster Care Program are also eligible for 
Medicaid.
    Maintenance payments under the Title IV-E Foster Care 
Program are intended to cover the costs of food, shelter, 
clothing, daily supervision, school supplies, general 
incidentals, liability insurance for the child, and reasonable 
travel to the child's home for visits.
Foster care expenditures and participation rates
    The average estimated monthly number of children in AFDC 
foster care more than doubled between 1983 and 1995, from 
97,370 in fiscal year 1983 to 260,737 in fiscal year 1995 (see 
table 12-3). More detailed data on foster children and their 
characteristics are described later in this section.
    State claims for child placement services and 
administrative costs for the Title IV-E Foster Care Program 
have increased considerably since 1981. Current HHS regulations 
give the following examples of allowable child placement 
services and administrative costs for the Foster Care Program: 
referral to services, preparation for and participation in 
judicial determinations, placement of the child, development of 
the case plan, case reviews, case management and supervision, 
recruitment and licensing of foster homes and institutions, 
rate setting, and a proportionate share of agency overhead. As 
discussed later, many of these activities are required by the 
Federal Government as foster care ``protections'').
    Table 12-7 provides a State breakdown of foster care 
expenditures in fiscal year 1995 for maintenance payments, 
child placement and administration, data collection, and 
training expenditures. Note that California and New York 
account for 43 percent of the estimated fiscal year 1995 
expenditures. A more detailed discussion of growth in child 
placement services and administrative costs is presented below.
Foster care payment rates
    Table 12-8 shows each State's monthly foster care payment 
rates for children ages 2, 9, and 16, as determined in an 
annual survey conducted by the American Public Welfare 
Association (APWA). States are allowed to set them at any 
level; thus, the rates vary widely. For instance, in 1994 the 
minimum basic monthly rate for a 16-year-old foster child in 
the State of Alabama was $241 compared with $637 in the State 
of Connecticut. New York City had a monthly payment rate of 
$547. The nationwide average for this age group was $407 per 
month compared with $329 for 2-year-olds and $350 for 9-year-
olds. According to APWA, 45 States supplement these base rates 
for children who have special needs or a need for particular 
items.
    The 1980 reform legislation stipulated that title IV-E 
foster care payments could be made for children in public 
institutions, whereas previously under title IV-A payments were 
limited to children in private nonprofit institutions or foster 
family homes. To qualify for Federal payments, these public 
institutions may not accommodate more than 25 children. 
Facilities operated primarily for the detention of delinquents, 
including forestry camps and training schools, are ineligible 
for Federal funds. It is generally agreed that the costs 
associated with institutional care are substantially higher 
than the cost of family foster care. For example, the Child 
Welfare League of America in 1994 estimated that the annual 
cost of supporting a child in family foster care was $4,800, 
compared to an estimated annual cost of $36,500 for a child in 
group care.

                                    TABLE 12-7.--FEDERAL FOSTER CARE EXPENDITURES UNDER TITLE IV-E, FISCAL YEAR 1995                                    
                                                             [Estimate, dollars in millions]                                                            
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                   Child       State Automated                          Child placement 
                                                                 Maintenance     placement      Child Welfare                             services and  
                             State                                 payments    services and      Information      Training    Total    administration as
                                                                              administration   System (SACWIS)                          percent of total
--------------------------------------------------------------------------------------------------------------------------------------------------------
Alabama........................................................        $2.06           $3.98              $0.32      $0.93      $7.29              54.60
Alaska.........................................................         2.16            4.85               0.51       0.01       7.53              64.41
Arizona........................................................        15.07           13.68               4.68       0.89      34.32              39.86
Arkansas.......................................................         6.97           11.77               3.40       8.24      30.38              38.74
California.....................................................       297.48          240.10               0.00      32.30     569.88              42.13
Colorado.......................................................         6.65           15.64               0.01       2.12      24.42              64.05
Connecticut....................................................        12.45           31.06               9.51       3.01      56.03              55.43
Delaware.......................................................         0.86            2.41               1.15       0.34       4.76              50.63
District of Columbia...........................................         5.83           10.70               0.00       0.14      16.67              64.19
Florida........................................................        23.17           42.31               2.04       1.86      69.38              60.98
Georgia........................................................        11.79            8.37               0.47       2.77      23.40              35.77
Hawaii.........................................................         2.66            5.85               0.00       0.25       8.76              66.78
Idaho..........................................................         0.89            2.23               2.50       0.00       5.62              39.68
Illinois.......................................................        99.98           80.37               0.00      10.11     190.46              42.20
Indiana........................................................        38.35           33.17               0.63       0.46      72.61              45.68
Iowa...........................................................         7.44            4.22               2.08       0.99      14.73              28.65
Kansas.........................................................         8.64            8.15               0.96       3.62      21.37              38.14
Kentucky.......................................................        17.59           20.01               1.65       5.12      44.37              45.10
Louisiana......................................................        20.01           12.31               0.00       2.53      34.85              35.32
Maine..........................................................        12.01            1.47               0.23       1.12      14.83               9.91
Maryland.......................................................        23.35           24.68               0.00       4.34      52.37              47.13
Massachusetts..................................................        33.61           47.13               0.51       1.21      82.46              57.15
Michigan.......................................................        59.77           52.11               0.28     (0.42)     111.74              46.64
Minnesota......................................................        21.72            7.67               0.15       4.34      33.88              22.64
Mississippi....................................................         1.76            3.45               0.00       0.37       5.58              61.83
Missouri.......................................................        17.47           15.02               0.59       5.07      38.15              39.37
Montana........................................................         4.07            1.15               3.76       0.02       9.00              12.78
Nebraska.......................................................         8.57            6.56               0.13       2.23      17.49              37.51
Nevada.........................................................         1.32            1.08               0.28       0.11       2.79              38.71
New Hampshire..................................................         3.92            3.91               0.04       0.35       8.22              47.57
New Jersey.....................................................        15.32           13.40               0.00       0.04      28.76              46.59
New Mexico.....................................................         2.86            1.86               0.98       1.01       6.71              27.72
New York.......................................................       421.52          294.04               1.07      14.50     731.13              40.22
North Carolina.................................................        32.85            6.64               0.34       1.32      41.15              16.14
North Dakota...................................................         2.89            3.45               0.60       0.65       7.59              45.45
Ohio...........................................................        68.38           52.63               0.00       6.08     127.09              41.41
Oklahoma.......................................................         6.41            4.80              15.32       2.43      28.96              16.57
Oregon.........................................................         9.78           13.24               2.81       1.83      27.66              47.87
Pennsylvania...................................................       138.81           41.76               0.00       6.60     187.17              22.31
Rhode Island...................................................         4.80            3.31               0.45       0.08       8.64              38.31
South Carolina.................................................         6.08            3.69               0.40       1.91      12.08              30.55
South Dakota...................................................         0.89            1.46               0.04       0.04       2.43              60.08
Tennessee......................................................        15.42            7.17               0.00       1.74      24.33              29.47
Texas..........................................................        50.64            4.94              41.58       2.84     100.00               4.94
Utah...........................................................         3.96            4.49               1.09       0.95      10.49              42.80
Vermont........................................................         5.74            1.77               0.02       0.67       8.20              21.59
Virginia.......................................................         6.21           11.05               0.00       2.38      19.64              56.26
Washington.....................................................         9.87            2.16               0.18       0.38      12.59              17.16
West Virginia..................................................         3.86            1.39               0.06       0.56       5.87              23.68
Wisconsin......................................................        19.56           24.13               0.00       1.27      44.96              53.67
Wyoming........................................................         0.52            0.22               0.00       0.00       0.74              29.73
                                                                ----------------------------------------------------------------------------------------
      Total....................................................     1,593.99        1,213.01             100.82     141.71   3,049.53              39.78
--------------------------------------------------------------------------------------------------------------------------------------------------------
Totals may differ from sum of State amounts due to rounding.                                                                                            
                                                                                                                                                        
Source: U.S. Department of Health and Human Services.                                                                                                   


                     TABLE 12-8.--FOSTER CARE BASIC MONTHLY MAINTENANCE RATES FOR CHILDREN AGES 2, 9, AND 16, SELECTED YEARS 1987-94                    
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             Age 2                               Age 9                              Age 16              
                    State                    -----------------------------------------------------------------------------------------------------------
                                                1987     1991     1993     1994     1987     1991     1993     1994     1987     1991     1993     1994 
--------------------------------------------------------------------------------------------------------------------------------------------------------
Alabama.....................................      168      181      205      205      188      202      229      229      198      213      241      241
Alaska......................................      428      561      588      588      478      499      523      523      565      592      621      621
Arizona.....................................      223      247      295      297      223      247      284      286      282      305      362      365
Arkansas....................................      175      195      300      300      190      210      325      325      220      240      375      375
California..................................      294      345      345      345      340      400      400      400      412      484      484      484
                                                                                                                                                        
Colorado....................................      235      296      313      319      266      296      313      319      318      352      372      379
Connecticut.................................      268      386      515      567      302      424      524      586      350      478      593      637
Delaware....................................      264      301      301      342      266      304      304      342      342      391      391      440
District of Columbia........................      304      304      437      431      304      304      437      431      317      317      526      519
Florida.....................................      233      296      296      296      233      296      296      296      293      372      372      372
                                                                                                                                                        
Georgia.....................................      300      300      300      300      300      300      300      300      300      300      300      300
Hawaii......................................      194      529      529      529      233      529      529      529      301      529      529      529
Idaho.......................................      138      198      198      228      165      205      205      250      204      278      278      338
Illinois....................................      233      268      311      322      259      299      346      358      282      325      377      390
Indiana.....................................      226      281      405      405      245      330      462      462      280      398      518      518
                                                                                                                                                        
Iowa........................................      159      198      308      328      201      243      322      342      285      300      382      405
Kansas......................................      187      304      304      205      245      304      304      277      280      386      386      351
Kentucky....................................      248      265      263      263      263      288      285      285      300      333      330      330
Louisiana...................................      199      283      298      298      232      316      331      331      265      349      364      364
Maine.......................................      244      296      296      296      250      304      304      304      291      353      353      353
                                                                                                                                                        
Maryland....................................      285      535      535      535      285      535      535      535      303      550      550      550
Massachusetts...............................      362      410      415      410      362      410      415      410      433      486      492      486
Michigan....................................      315      332      354      383      315      332      354      383      395      416      442      454
Minnesota...................................      285      341      377      377      285      341      377      377      375      442      487      487
Mississippi.................................      130      145      175      175      150      165      205      205      160      175      250      250
                                                                                                                                                        
Missouri....................................      174      209      212      212      212      255      259      259      232      281      286      286
Montana.....................................      283      307      322      330      283      307      322      330      354      384      406      416
Nebraska....................................      210      222      326      326      210      291      394      394      210      351      461      461
Nevada......................................      275      281      281      281      275      281      281      281      330      337      337      337
New Hampshire...............................      200      200      324      314      251      251      354      342      354      354      418      404
                                                                                                                                                        
New Jersey..................................      203      244      264      272      215      259      280      288      253      305      320      340
New Mexico..................................      236      258      258      308      247      270      270      341      259      281      281      367
New York....................................      312      353      367      367      375      424      441      441      434      490      510      510
New York City...............................      342      386      401      401      403      455      473      473      465      526      547      547
North Carolina..............................      215      265      265      315      215      265      265      365      215      265      265      415
                                                                                                                                                        
North Dakota................................      240      260      265      265      287      312      318      318      345      416      424      424
Ohio........................................      240      289      381      413      270      328      381      413      300      366      381      413
Oklahoma....................................      300      300      300      300      360      360      360      360      420      420      420      420
Oregon......................................      200      285      305      315      234      295      317      327      316      363      391      404
Pennsylvania................................      558      303      306      315      558      319      357      368      558      377      459      473
                                                                                                                                                        
Rhode Island................................      223      274      273      279      223      274      273      279      275      335      334      341
South Carolina..............................      138      182      182      212      158      209      209      239      208      275      275      305
South Dakota................................      188      237      251      259      230      291      308      317      276      349      370      382
Tennessee...................................      139      255      336      336      190      226      262      262      224      267      385      385
Texas.......................................      243      420      476      476      243      420      476      476      274      420      476      476
                                                                                                                                                        
Utah........................................      198      300      310      300      198      300      310      300      225      300      310      300
Vermont.....................................      210      371      321      416      249      371      321      416      268      447      386      504
Virginia....................................      193      246      251      256      244      288      294      300      309      365      372      379
Washington..................................      184      270      278      292      227      332      342      359      268      392      405      425
West Virginia...............................      161      161      161      161      202      202      202      202      242      242      242      242
                                                                                                                                                        
Wisconsin...................................      163      231      240      276      224      257      267      301      284      324      337      361
Wyoming.....................................      300      400      400      400      300      400      400      400      330      400      400      400
                                             -----------------------------------------------------------------------------------------------------------
    Average monthly rates...................      239      294      321      329      263      314      339      350      307      365      394      407
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note.--Figures are rounded to the nearest dollar. Most States and/or counties supplement these basic rates with additional payments.                    
                                                                                                                                                        
Source: American Public Welfare Association.                                                                                                            

Exclusion of foster children from AFDC assistance units
    The Deficit Reduction Act of 1984 (Public Law 98-369) 
required that certain blood-related, adoptive parents or 
siblings be included in the family unit if the family applies 
for income assistance under the AFDC Program. Because there was 
no statutory exclusion for foster care recipients, AFDC 
operating policy required that their income be included with 
the family's when the family's eligibility was determined. 
However, Public Law 99-514, enacted in 1986, stated that a 
foster child who is receiving IV-E maintenance payments must 
not be considered a family member during the time the family 
receives AFDC, and that the child's income in the form of 
maintenance payments, and other income and resources, must be 
excluded from the family's as well.
    The Omnibus Budget Reconciliation Act of 1990 (Public Law 
101-508) repealed the 1986 provision and added a new section 
409 to title IV-A stipulating that foster children receiving 
maintenance payments under title IV-E or under State or local 
programs are not considered family members for purposes of 
AFDC. Similarly, the law specifies that children receiving 
adoption assistance payments under either title IV-E or State 
or local law are not considered family members for AFDC 
purposes, unless the family would lose AFDC benefits as a 
result.

               The Title IV-E Adoption Assistance Program

    The Title IV-E Adoption Assistance Program is an open-ended 
entitlement program required of States that participate in AFDC 
(all States participate). Like the IV-E Foster Care Program, 
the IV-E Adoption Program funds three distinct types of 
activities: maintenance payments for qualified children who are 
adopted, administrative payments for expenses associated with 
placing children in adoption, and training of professional 
staff and parents involved in adoptions.
    Under the adoption program, which is permanently 
authorized, States develop adoption assistance agreements with 
parents who adopt eligible children with special needs. Federal 
matching funds are provided to States that, under these 
agreements, provide adoption assistance payments to parents who 
adopt AFDC- or SSI-eligible children with special needs. In 
addition, the program authorizes Federal matching funds for 
States that reimburse the nonrecurring adoption expenses of 
adoptive parents of special needs children (regardless of AFDC 
or SSI eligibility).
Definition of special needs
    A special needs child is defined in the statute as a child 
with respect to whom the State determines there is a specific 
condition or situation, such as age, membership in a minority 
or sibling group, or a mental, emotional, or physical handicap, 
which prevents placement without special assistance. Before a 
child can be considered to be a child with special needs, the 
State must determine that the child cannot or should not be 
returned to the biological family, and that reasonable efforts 
have been made to place the child without providing adoption 
assistance. States have discretion in defining special needs 
eligibility criteria and individually determining whether a 
child is eligible. For example, some States add religion or not 
being able to place the child without subsidy to the definition 
of special needs.
Adoption assistance agreements and payments
    An adoption assistance agreement is a written agreement 
between the adoptive parents, the State IV-E agency, and other 
relevant agencies (such as a private adoption agency) 
specifying the nature and amount of assistance to be given. 
Under the adoption assistance agreement, States may make 
monthly adoption assistance payments for AFDC- and SSI-eligible 
children with special needs who are adopted.
    The amount of adoption assistance payments to be made is 
based on the circumstances of the adopting parents and the 
needs of the child. No means test can be used to determine 
eligibility of parents for the program; however, States do use 
means tests to determine the amount of the payment. Payments 
may be adjusted periodically if circumstances change, with the 
concurrence of the adopting parents. However, the payments may 
not exceed the amount the family might have received on behalf 
of the child under foster care. Adoption assistance payments 
may continue until the child is age 18, or, at State option, 
age 21 if the child is mentally or physically handicapped. 
Payments are discontinued if the State determines that the 
parents are no longer legally responsible for the support of 
the child. Federally subsidized payments may start as soon as 
an agreement is signed and the child has been placed in an 
adoptive home. Parents who have been receiving adoption 
assistance payments must keep the State or local agency 
informed of circumstances that would make them ineligible for 
payments, or eligible for payments in a different amount.
    The Federal matching rate for the adoption assistance 
payments is based on each State's Medicaid matching rate. 
States may also claim open-ended Federal matching at the rate 
of 50 percent for the costs of administering the program and 
for training both staff and adoptive parents at the rate of 75 
percent.
    Not all families of adopted IV-E eligible children with 
special needs actually receive adoption assistance payments. 
The adoptive parents' circumstances may be such that an 
adoption subsidy is not needed or wanted. Adopted AFDC- or SSI-
eligible children with special needs are also eligible for 
Medicaid if an adoption assistance agreement is in effect, 
regardless of whether adoption assistance payments are being 
made.
    States also have the option under the Medicaid Program to 
provide Medicaid coverage for other special needs children 
(those not eligible for AFDC or SSI) who are adopted if they 
have been identified as a special category of medically needy 
children under a State's Medicaid Program. Pursuant to the 1985 
budget reconciliation legislation, a child for whom an adoption 
assistance agreement is in effect is eligible for Medicaid from 
the State in which the child resides regardless of whether the 
State is the one with which the adoptive parents have an 
adoption assistance agreement.
    The structure of adoption subsidy programs varies across 
States. Some States offer basic maintenance payments and also 
allow additional payments for certain activities (such as 
family counseling) or for certain groups of children (such as 
children with severe handicaps). Other States offer one level 
of payment to everyone with no special allowances. Some States 
allow parents to request changes in payment levels on a regular 
basis if circumstances change for a child; others allow very 
little change once the adoption agreement is signed. Some 
States start payments as soon as placement is made; others not 
until the adoption is finalized.
    Not all children who receive adoption subsidies from States 
are eligible for Federal IV-E funds. The American Public 
Welfare Association (APWA) estimates that at the end of 1990 
(the latest year for which data are available), approximately 
half of the estimated 99,000 children nationwide whose families 
received adoption subsidies were IV-E eligible. The non-IV-E 
children's adoption subsidies are paid solely by the State in 
which their adoption agreement was signed. States differ in 
whether comparable IV-E children and non-IV-E children receive 
similar adoption subsidy amounts.
Nonrecurring adoption costs
    The Adoption Assistance Program also authorizes Federal 
matching funds for States to pay the one-time adoption expenses 
of parents of special needs children (regardless of AFDC or SSI 
eligibility). In order to be eligible, the child must be a 
child with special needs, as defined in section 473(c) of the 
Social Security Act and described above.
    Through the program, parents may receive reimbursement of 
up to $2,000 per child for these nonrecurring adoption 
expenses, and States may claim 50 percent Federal matching for 
these reimbursements. Qualified adoption expenses are defined 
as reasonable and necessary adoption fees, court costs, 
attorney fees, and other expenses that are directly related to 
the adoption of a child with special needs. States may vary in 
the maximum amount they allow parents to receive under this 
provision (see table 12-9 for State-by-State data on maximum 
reimbursement rates).
    All 49 States have implemented the program; the District of 
Columbia has not. However, the average reimbursements have not 
equaled the $2,000 Federal cap, with the average payment being 
$966 in 1996. According to the Association of Administrators of 
the Interstate Compact on Adoption and Medical Assistance 
(AAICAMA), for which the American Public Welfare Association 
serves as the secretariat, in a number of States, the larger 
amounts of nonrecurring adoption costs are being paid for costs 
incurred in the adoption of special needs children from foreign 
countries and private agencies. Parent adopting children from 
the public child welfare agencies are not claiming as many 
expenses because many costs incurred in the adoption of these 
children are already covered under the States' adoption 
programs.

                                  TABLE 12-9.--STATE REIMBURSEMENT OF NONRECURRING ADOPTION COSTS, 1991, 1992, AND 1996                                 
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                            Has your                          Estimated                                                                 
                                             State                 Estimated   average                                                                  
                                          implemented    Maximum    average    payment     Estimated average                                            
                 State                        the        payment    payment     as of     payment as of April         Major reimbursement cost(s)       
                                         reimbursement               of May     April            1996                                                   
                                            program?                  1991       1992                                                                   
--------------------------------------------------------------------------------------------------------------------------------------------------------
Alabama................................           Yes      $1,000       $350       $412                $1,000  Legal fees, travel, preplacement visits. 
Alaska.................................           Yes       2,000      1,200        829                \1\ NA  Legal fees, travel, home studies.        
Arizona................................           Yes       2,000      2,000      1,596                 2,000  Legal fees, agency fees, travel, home    
                                                                                                                studies.                                
Arkansas...............................           Yes       1,500        100        500                   200  Court filing, fingerprint checks.        
California.............................           Yes         500        400        400                   500  Agency fees.                             
Colorado...............................           Yes         800        250        250                   800  Legal fees.                              
Connecticut............................           Yes         750         90         90                   424  Legal fee.                               
Delaware...............................           Yes       2,000        300        300                    NA  Agency fees.                             
District of Columbia...................            No                                                                                                   
Florida................................           Yes       1,000        400        400                 1,000  Attorney fees.                           
Georgia................................           Yes         700        400        400                   400  Legal fees.                              
Hawaii.................................           Yes       2,000         NA         NA                    NA                                           
Idaho..................................           Yes       2,000         NA        350               \2\ 550  Agency fees, attorney fees, travel.      
                                                                                                        2,000                                           
                                                                                              average = 1,275                                           
Illinois...............................           Yes       1,500         NA         NA                    NA  Legal fees, home studies.                
Indiana................................           Yes       1,500        635         NA                   700  Legal fees, agency fees.                 
Iowa...................................           Yes       1,000        700        700                   300  Legal fees.                              
Kansas.................................           Yes       2,000         NA         NA                   700  Legal fees, home studies, travel.        
Kentucky...............................           Yes       1,000        378        378                   476  Legal fees, agency fees.                 
Louisiana..............................           Yes       1,000        400        600                   600  Legal fees.                              
Maine..................................           Yes   \3\ 2,000         NA  .........                    NA  Legal fees, travel.                      
Maryland...............................           Yes       2,000         NA      2,000                 2,000  Legal fees, travel, home studies by      
                                                                                                                private agencies. \4\                   
Massachusetts..........................           Yes         400        400  .........                   400  Legal fees, home studies.                
Michigan...............................           Yes       2,000  .........  .........                   170  Court fees, birth certificate cost.      
Minnesota..............................           Yes       2,000      2,000      2,000                 1,750  Legal fees, agency fees.                 
Mississippi............................           Yes       1,000        500        500                   550  Legal fees.                              
Missouri...............................           Yes       2,000         NA     \5\ 45            625--legal  Legal fees, agency fees.                 
                                                                                                   910--other                                           
                                                                                              average = 1,535                                           
Montana................................           Yes       2,000      1,000      1,000                   200  Legal fees, home studies, private agency 
                                                                                                                fees.                                   
Nebraska...............................           Yes       1,500         NA         NA                 1,500  Legal fees, private agency fees, travel. 
Nevada.................................           Yes         250        250        250                    NA  Legal fees, travel, home studies.        
New Hampshire..........................           Yes       2,000      2,000      2,000                 1,556  Legal costs, agency fees, travel.        
New Jersey.............................           Yes       2,000         NA        850                    NA  Home studies, legal fees.                
New Mexico.............................           Yes       2,000        500        500                    NA  Legal fees, travel.                      
New York...............................           Yes       2,000        500        500                   600  Legal fees.                              
North Carolina.........................           Yes       2,000         NA        176                    NA  Legal fees.                              
North Dakota...........................           Yes       2,000        350        540                    NA  Legal fees.                              
Ohio...................................           Yes       2,000        761        672                 2,000  Legal fees, travel.                      
Oklahoma...............................           Yes       2,000      2,000        350     \6\ domestic--275  Legal fees, agency fees.                 
                                                                                            tribal, foreign--                                           
                                                                                                        2,000                                           
                                                                                              private                                                   
                                                                                              average = 1,138                                           
Oregon.................................           Yes       2,000        300        450                    NA  Legal fees.                              
Pennsylvania...........................           Yes       2,000         NA        700                   811  Legal fees, agency fees.                 
Rhode Island...........................           Yes       1,000         NA        902                 1,000  Legal fees, home studies, preadoption    
                                                                                                                supervision.                            
South Carolina.........................           Yes       1,500        750        750                 1,500  Legal fees.                              
Texas..................................           Yes       1,500         NA         NA                   875  Legal fees, agency fees.                 
Utah...................................           Yes       2,000        327        327                   650  Legal fees, home studies, travel.        
Vermont................................           Yes       2,000      1,500      1,500             \7\ 2,000  Legal fees, home studies, agency         
                                                                                                                placement fees.                         
Virginia...............................           Yes       2,000        280        396                   884  Legal fees.                              
Washington.............................           Yes       1,500        655        780                   636  Legal fees.                              
West Virginia..........................           Yes       2,000  .........  .........                 1,400  Legal fees, private agency home studies. 
Wisconsin..............................           Yes       2,000        655        780                   468  Legal fees home studies.                 
Wyoming................................           Yes       2,000        350        350                    NA  Legal fees.                              
                                                       -------------------------------------------------------                                          
      Average..........................           XXX       1,651        682        664               \8\ 966                                           
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Alaska: Indicated that the maximum amount was being paid primarily for the adoption of special needs children from foreign countries.               
\2\ Idaho: For domestic adoptions, the average payment is $500; For foreign (China &amp; Haiti) adoptions, the average payment is $2,000. This differential 
  is due to the fact that most expenses are paid for by the public agency when a child is adopted from the public agency.                               
\3\ Maine: The program was not implemented until 1996.                                                                                                  
\4\ Maryland: Bills submitted are often over $5,000, many of which are for children adopted from foreign countries.                                     
\5\ Missouri: The low cost of this number is due to the fact that at the time the state was able to secure a lot of pro bono legal representation.      
\6\ Oklahoma: The average payment for children adopted from the Department of Human Services is $275; For special needs children adopted from foreign   
  countries, private agencies, and tribal adoptions, the average payment is $2,000.                                                                     
\7\ Vermont: Most payments made for nonrecurring adoption costs are for children adopted from foreign countries; nonrecurring adoption costs are paid   
  for the adoption of special needs children being adopted from foreign countries. There are few, if any, costs for adopting children from the public   
  agency.                                                                                                                                               
\8\ This number accounts for the total average payment of nonrecurring adoption costs in 36 States.                                                     
                                                                                                                                                        
NA--Not available.                                                                                                                                      
                                                                                                                                                        
Source: Special survey conducted in spring 1996 by the American Public Welfare Association.                                                             

Adoption assistance expenditures
    The number of children receiving adoption assistance 
payments and the Federal expenditures for these payments have 
increased significantly since the program began. In fiscal year 
1981, only six States participated in the program, with 
payments being made for an average of 165 children per month. 
In fiscal year 1995, 50 States plus the District of Columbia 
participated, and 78,044 children (see table 12-10) were 
served.
    Federal expenditures for adoption assistance payments have 
increased from less than $400,000 in fiscal year 1981 to an 
estimated $411 million in fiscal year 1995, and are expected to 
reach $482 million in fiscal year 1996.
    HHS data indicate that expenditures for child placement 
services and administration for the Adoption Assistance Program 
have also increased significantly in recent years. In fiscal 
year 1981, claims totaled $100,000; in fiscal year 1995 they 
totalled an estimated $105 million and are expected to be $123 
million in fiscal year 1996.

               The Title IV-E Independent Living Program

    In 1986, title IV-E was amended by Public Law 99-272 
(Consolidated Omnibus Budget Reconciliation Act of 1985) to 
include section 477, which established the Independent Living 
Program to assist youth who would eventually be emancipated 
from the foster care system. Several surveys conducted during 
the mid-1980s showed that a significant number of homeless 
shelter users had been recently discharged from foster care, 
thereby prompting Congress to establish a program to help 
youngsters in foster care establish their independence.
    An annual entitlement amount of $45 million was established 
for 1987 and 1988 to provide States with the resources to 
create and implement independent living services. These 
services are designed to assist AFDC-eligible children age 16 
and over make a successful transition from foster care to 
independent adult living when they become ineligible for foster 
care maintenance payments at age 18. In 1988, the program was 
expanded under Public Law 100-647, which permitted States to 
provide independent living services to all youth in foster care 
aged 16 to 18 (not just title IV-E-eligible youth); States 
could also provide follow-up services to youth up to 6 months 
after their emancipation from substitute care. Under Public Law 
101-508, States have the option of serving individuals up to 
age 21 in the Independent Living Program. Funds are allocated 
on the basis of each State's share of children receiving IV-E 
foster care in 1984.

 TABLE 12-10.--ADOPTION ASSISTANCE STATE CLAIMS, FISCAL YEARS 1990-95, AND AVERAGE NUMBER OF CHILDREN RECEIVING 
                                      ADOPTION ASSISTANCE, FISCAL YEAR 1995                                     
                                            [In thousands of dollars]                                           
----------------------------------------------------------------------------------------------------------------
                                                                  Fiscal year                                   
                             -----------------------------------------------------------------------------------
                                                                                                         1995   
            State                                                                                       Average 
                                 1990        1991        1992        1993        1994        1995       monthly 
                                Claims      Claims      Claims      Claims      Claims      Claims     number of
                                                                                                       children 
----------------------------------------------------------------------------------------------------------------
Alabama.....................        $384      $1,054      $1,070      $1,195      $1,830      $1,866         238
Alaska......................         170         360         590         839       1,070       1,286         376
Arizona.....................       1,182       1,338       1,660       3,117       3,960       5,522       1,095
Arkansas....................         507         582         670       1,241       1,960       1,541         317
California..................      19,742      27,747      30,230      36,623      43,590      48,235      14,146
                                                                                                                
Colorado....................         774       1,177       1,120       1,961       3,230       3,315       1,198
Connecticut.................       1,137       1,529       2,640       3,652       6,310       7,028       1,141
Delaware....................         251         330         380         413         430         536         181
District of Columbia........         772       (191)         820       1,269       1,970       1,846         319
Florida.....................       5,354       5,357       7,980       8,257      10,580      16,824       3,776
                                                                                                                
Georgia.....................       1,076       1,341       2,070       3,146       3,320       4,365       1,189
Hawaii......................          81          47         160         243         480         606         159
Idaho.......................         294         330         360         570         580         753         233
Illinois....................       4,643       4,376       6,300       7,558      13,060      16,802       5,568
Indiana.....................       1,636       2,540       4,020       5,711       6,710       7,338       1,958
                                                                                                                
Iowa........................         996       2,878       2,750       2,923       3,870       4,976       1,204
Kansas......................         539         725         880       1,576       2,240       2,740       1,341
Kentucky....................       2,206       2,692       2,930       3,052       3,320       3,539         799
Louisiana...................       1,481       2,746       5,830       7,656       9,320      11,043       1,431
Maine.......................         984       1,229       2,300       2,646       2,960       2,794         521
                                                                                                                
Maryland....................       1,005       1,219       1,680       2,385       2,880       3,633       1,064
Massachusetts...............       3,618       5,010       6,230       7,134       8,380       9,604       2,875
Michigan....................      11,881      14,202      17,540      21,868      26,840      31,917       9,138
Minnesota...................       1,101       1,462       1,710       4,003       4,620       5,224       1,121
Mississippi.................         351         398         410         410         390         667         247
                                                                                                                
Missouri....................       1,695       2,470       5,450       4,674       5,190       6,743       2,305
Montana.....................         192         603         530         631         760         905         241
Nebraska....................         665         767       1,000       1,179       1,560       1,771         607
Nevada......................         162         204         250         333         460         669         177
New Hampshire...............         295         438         620         600         740         842         324
                                                                                                                
New Jersey..................       2,844       4,157       5,000       6,009       6,700       8,869       2,271
New Mexico..................       1,178       1,609       1,810       1,798       1,890       2,438         733
New York....................      33,336      39,200      44,400      57,520      72,590      89,816      20,518
North Carolina..............         739         836       1,090       1,748       2,550       4,228       1,475
North Dakota................         172         250         350         466         500         461         145
                                                                                                                
Ohio........................       9,608      14,167      18,860      22,964      30,300      35,007       8,116
Oklahoma....................       1,069       1,161       1,630       1,960       2,240       2,950         579
Oregon......................         969       1,547       2,370       2,804       3,300       4,020       2,167
Pennsylvania................       2,960       4,263       5,440       6,820       8,090      10,273       2,597
Rhode Island................       3,069       3,353       3,610       4,399       4,610       4,194         630
                                                                                                                
South Carolina..............       1,568       1,766       2,070       2,235       2,910       3,915         621
South Dakota................          50         492         540         555         630         649         267
Tennessee...................       1,345       2,010       2,100       3,573       3,240       3,620         974
Texas.......................       4,546       5,233       6,750       9,142      14.520      17,160       3,943
Utah........................         376         447         660         748       1,240       1,158         375
                                                                                                                
Vermont.....................       1,147       1,248       1,740       2,009       1,860       1,947         391
Virginia....................       1,014       1,655       1,970       2,291       2,590       2,997       1,296
Washington..................         620       2,055       4,000       1,987       3,940       3,013       2,405
West Virginia...............         197         230         260         285         440         492         160
Wisconsin...................       3,714       4,565       5,290       6,171       7,730       9,056       1,736
Wyoming.....................          45          79         110          60          60          23           6
                             -----------------------------------------------------------------------------------
      Total.................     135,740     175,283     220,230     272,409     344,540     411,216     106,880
----------------------------------------------------------------------------------------------------------------
Totals may differ from sum of State amounts because of rounding.                                                
                                                                                                                
Source: U.S. Department of Health and Human Services.                                                           

    Public Law 101-239 increased the amount of Federal 
entitlement funds available to the States for the Independent 
Living Program to $50 million for fiscal year 1990, $60 million 
for fiscal year 1991, and $70 million for fiscal year 1992. 
Beginning in fiscal year 1991, States are required to provide 
50 percent matching for any Federal funding claimed that 
exceeds the original $45 million funding level. In 1993, 
Congress permanently extended the authority for independent 
living under Public Law 103-66. Table 12-11 shows State 
allotments under the Independent Living Program in fiscal year 
1995.
    Section 477 of title IV-E instructed HHS to carry out a 
study of the program's effectiveness. Under contract with HHS, 
Westat, Inc. completed the first phase of the study in 1989 
(Cook, 1990) and the second phase in 1992 (Cook, 1992). The 
first phase is a purely descriptive assessment of the needs of 
youth emancipated from foster care between January 1, 1987 and 
July 31, 1988, States' development of Independent Living 
Programs to serve these youth, and the proportion of youth 
served.
    The first report found that independent living services 
offered by the States generally fell into the following 
categories: basic skills training (including health promotion, 
housekeeping, money management, decisionmaking, and food and 
nutrition management); education initiatives (including private 
tutoring, and GED and college preparation); and employment 
initiatives (including job training and placement, and personal 
presentation and social skills). In addition, 14 States held 
teen conferences designed to bring these foster care youth 
together to provide them with supportive contacts, teach them 
independent living skills, focus on self-esteem building, and 
help prepare them for their impending emancipation from foster 
care.
    The report concluded that emancipated youth were a troubled 
population. In the study population, two-thirds of 18-year-olds 
did not complete high school or a GED and 61 percent had no job 
experience. In addition, 38 percent had been diagnosed as 
emotionally disturbed, 17 percent had a drug abuse problem, 9 
percent had a health problem, and 17 percent of the females 
were pregnant. The group also lacked placement stability. 
During the time they were in foster care, 58 percent 
experienced at least three living arrangements and 
approximately 30 percent had been in substitute care for an 
average of 9 years.
    Of the total 34,600 youth emancipated from foster care 
during the study period, 31 percent received services through 
their State's formalized Independent Living Program, 29 percent 
received nonformalized (but related) services, and 40 percent 
received no independent living services at all.
    The second phase of the Westat report, released in 1992, 
followed up on youths who had been emancipated from foster care 
during the period from January 1987 to July 1988. Interviews 
conducted with these youths about their experiences after 
leaving foster care revealed several notable results. First, 
many of the skills encouraged by the Independent Living Program 
were positively related to good outcomes once the adolescents 
left foster care. These skills included money management, 
consumer education, and job training. Westat also found that 
2\1/2\ to 4 years after leaving foster care, many of the youths 
were encountering problems adjusting to life as an adult. Only 
about half had completed high school, a little less than half 
had jobs and only about 40 percent had had a job for at least 1 
year, 60 percent of the females had given birth, 25 percent of 
the youth had been homeless for at least one night, and fewer 
than 1 in 5 were completely self-supporting.

 TABLE 12-11.--TITLE IV-E INDEPENDENT LIVING FEDERAL AWARDS, FISCAL YEAR
                                  1995                                  
                        [In thousands of dollars]                       
------------------------------------------------------------------------
                                                                Total   
                           State                                awards  
------------------------------------------------------------------------
Alabama....................................................       $1,044
Alaska.....................................................           13
Arizona....................................................          350
Arkansas...................................................          272
California.................................................       12,554
Colorado...................................................          830
Connecticut................................................          759
Delaware...................................................          204
District of Columbia.......................................          927
Florida....................................................          993
Georgia....................................................        1,105
Hawaii.....................................................           18
Idaho......................................................          108
Illinois...................................................        2,833
Indiana....................................................        1,020
Iowa.......................................................          452
Kansas.....................................................          722
Kentucky...................................................          792
Louisiana..................................................        1,358
Maine......................................................          569
Maryland...................................................        1,245
Massachusetts..............................................          639
Michigan...................................................        4,195
Minnesota..................................................        1,148
Mississippi................................................          517
Missouri...................................................        1,302
Montana....................................................          244
Nebraska...................................................          438
Nevada.....................................................          155
New Hampshire..............................................          322
New Jersey.................................................        2,311
New Mexico.................................................          208
New York...................................................       11,651
North Carolina.............................................        1,051
North Dakota...............................................          193
Ohio.......................................................        2,877
Oklahoma...................................................          624
Oregon.....................................................          931
Pennsylvania...............................................        4,664
Rhode Island...............................................          317
South Carolina.............................................          583
South Dakota...............................................          193
Tennessee..................................................          782
Texas......................................................        1,852
Utah.......................................................          203
Vermont....................................................          297
Virginia...................................................        1,362
Washington.................................................          830
West Virginia..............................................          335
Wisconsin..................................................        1,563
Wyoming....................................................           45
                                                            ------------
      Total................................................       70,000
------------------------------------------------------------------------
Source: U.S. Department of Health and Human Services.                   

                PROTECTIONS FOR CHILDREN IN FOSTER CARE

    Protections Linked To Title IV-B Child Welfare Services Funding

    To encourage State use of IV-B funds to help keep families 
together and prevent the placement of children in substitute 
care, the 1980 legislation requires that if the title IV-B 
appropriation exceeds the Federal appropriation in 1979 ($56.5 
million), States may not use any funds in excess of their 
portion of the $56.5 million for foster care maintenance 
payments, adoption assistance, or work-related child care. 
Appropriations for title IV-B have consistently exceeded this 
amount.
    Further, since 1980, States have not been eligible for all 
of their Federal IV-B funds unless the following protections 
have been implemented: (1) a one-time inventory of children in 
foster care more than 6 months to determine the appropriateness 
of and necessity for the current foster care placement, whether 
the child should be returned to his parents or freed for 
adoption, and the services necessary to achieve this placement 
goal; (2) a statewide information system from which the status, 
demographic location, and placement goals of every child in 
care for the preceding 12 months can be determined; (3) a case 
review system to assure procedural safeguards for each child in 
foster care, including a 6-month court or administrative review 
and an 18-month dispositional hearing to assure placement in a 
setting that is the least restrictive (most family-like) 
setting available, in close proximity to the original home, and 
in the best interest of the child; and (4) a reunification 
program to return children to their original homes. These 
provisions have been contained in section 427 of the Act. 
Effective for fiscal years beginning after April 1, 1996, 
however, these protections are required of States as a 
component of their State plans, under section 422(b)(9) of the 
Act. This change was enacted under the Omnibus Budget 
Reconciliation Act of 1993 (Public Law 103-66).
    In addition to the protections specified above, States have 
been required to implement a preplacement preventive service 
program if the title IV-B appropriation amount is $325 million 
for 2 consecutive years. The amount appropriated for title IV-B 
has never been sufficient to trigger this provision. However, 
effective April 1, 1996, States are required to implement 
preplacement preventive services as a component of their State 
plans. In addition, under Public Law 103-66, States are 
required to review their policies and procedures related to 
abandoned children and to implement any changes necessary to 
enable permanent placement decisions to be made expeditiously 
for such children.

   Mandatory Protections for Foster Children Funded Under Title IV-E

    The 1980 legislation strengthened the State plan 
requirements under title IV-E to emphasize protections for 
foster children originating from families eligible for AFDC at 
the time of placement. By law, for children receiving payments 
under the title IV-E State plan, States must establish specific 
goals as to the maximum number of children in care more than 24 
months, and a description of the steps the State will take to 
meet these goals. In addition, State IV-E plans must include 
the same case review provisions for IV-E-eligible children as 
are required for all foster children under the title IV-B 
protections (described above). The case review must be 
conducted every 6 months and include:
 1. A written document describing the child's placement and its 
        appropriateness;
 2. A plan, if necessary, for compliance with requirements made 
        by judicial determination;
 3. A plan of services to be provided to improve family 
        conditions and facilitate the reunification of the 
        child with her family, or--if reunification is not 
        possible--to provide for a permanent placement and to 
        serve the needs of the child during the time she is 
        placed in foster care; and case plans showing that 
        reasonable efforts have been made prior to placement to 
        prevent the need for placement or to return the child 
        home if removed.
    As a result of Public Law 101-239, foster children's case 
records must include their health and education records. The 
names and addresses of the child's health and educational 
providers must be recorded as well as the child's grade level 
performance, school record, and assurances that the child's 
placement takes into account the proximity of the school in 
which the child was enrolled at the time of placement. In 
addition, a record of the child's immunizations, medical 
problems, required medications, and other relevant information 
must be included.
    The 1980 law provided sanctions for noncompliance with 
these State plan requirements and mandated an independent audit 
of States' title IV-E programs (including adoption assistance) 
and an administrative review (see below).

                     Reasonable Efforts Requirement

    The 1980 legislation requires that reasonable efforts must 
be made to prevent the placement of a child in foster care, and 
to reunify a foster child with his parents. The Social Security 
Act specifies this requirement in two separate provisions. 
First, in order for a State to be eligible for title IV-E 
funding, its plan must specify that reasonable efforts will be 
made prior to the placement of a child in foster care to 
prevent the need for foster care or to help the child return 
home (sec. 471 (a)(15)). Second, every IV-E-eligible child 
placed in foster care must have a judicial determination that 
reasonable efforts were made to prevent out-of-home placement 
in that particular case (sec. 472(a)(1)).
    The term ``reasonable efforts'' is not defined in the law, 
nor has it been defined by HHS in federal regulations. For 
States to comply with the plan requirement on reasonable 
efforts, HHS regulations require State plans to include a 
description of the services offered and provided to prevent 
removal of children from their homes and to reunify the family. 
The regulations further provide an illustrative list of the 
types of preplacement preventive and reunification services 
that may be offered. This list includes: 24-hour emergency 
caretaker and homemaker services, day care, crisis counseling, 
emergency shelters, access to available emergency financial 
assistance, respite care, home-based family services, self-help 
groups, services to unmarried parents, provision of or 
arrangement for mental health, drug and alcohol abuse 
counseling, vocational counseling or vocational rehabilitation, 
and postadoption services. The actual services to be provided 
in specific cases depends on State, and in some cases, 
individual judicial interpretations of the Federal law. 
Research conducted by the American Bar Association in the mid-
1980s (Ratterman, Dodson &amp; Hardin, 1987) and anecdotal reports 
since then indicate that the interpretation of reasonable 
efforts varies widely among States.
    As a result of the lack of definition of ``reasonable 
efforts,'' Federal courts are becoming a source of direction 
for defining reasonable efforts in individual cases. 
Nationwide, foster children, parents, and advocacy groups have 
brought suits against State and local child welfare systems 
challenging their failure, in whole or in part, to make 
reasonable efforts to preserve or reunify families. In deciding 
these cases, courts are defining what State actions would 
fulfill the reasonable efforts criterion.
    Federal courts are also becoming increasingly involved in 
the child welfare system, although this has traditionally been 
an area within exclusive State jurisdiction. On March 25, 1992, 
the U.S. Supreme Court decided in Suter v. Artist M., an 
Illinois case, that the reasonable efforts requirement of 
Public Law 96-272 does not confer a private right on the child 
beneficiaries of the Act.
    The plaintiffs, abused and neglected children in State 
custody, brought suit under the Act and under 42 U.S.C. 1983 
alleging that the State social services agency failed to: (1) 
make ``reasonable efforts'' to prevent the removal of children 
from their homes; (2) make ``reasonable efforts'' to reunify 
children who have been removed from their homes with their 
families; (3) notify appropriate agencies when a child is 
mistreated while placed in another home; and (4) develop case 
plans to assure proper services are provided to children while 
in placement. State officials questioned the appropriateness of 
involvement by the Federal judiciary in the resolution of child 
welfare disputes and in the operation of child welfare systems.
    Both the district court and the seventh circuit court of 
appeals held that the ``reasonable efforts'' requirements 
conferred enforceable rights on the child beneficiaries which 
were sufficiently specific to be enforceable in an implied 
cause of action directly under Public Law 96-272 or in an 
action brought under 42 U.S.C. 1983. The Supreme Court 
reversed, and construed the ``reasonable efforts'' requirement 
to impose only a generalized duty on the State, to be enforced 
not by the child beneficiaries, but by the Secretary of Health 
and Human Services in monitoring and enforcing compliance with 
State plan requirements. The Court found that Public Law 96-272 
does not create any rights, privileges, or immunities within 
the meaning of section 1983, and fails to provide the 
``unambiguous notice'' that is necessary before States 
receiving Federal grants can be subjected to suit.
    As a result of the Court's decision in Suter, Congress 
enacted legislation in 1994 (Public Law 103-432) adding a new 
section 1130A to the Social Security Act. The provision 
establishes that, in any action brought to enforce a provision 
of the Social Security Act, the provision is not to be deemed 
unenforceable because of its inclusion in a section of the Act 
requiring a State plan. Congress explicitly stated in section 
1130A that it does not intend to limit or expand any grounds 
for determining the availability of private actions to enforce 
State plan requirements. The provision also is not intended to 
alter the Court's decision in Suter that the reasonable efforts 
requirement in Public Law 96-272 is not enforceable in a 
private right of action.
    In response to a congressional request, HHS in 1994 
directed two of its child welfare resource centers to gather 
information and make recommendations regarding implementation 
of the reasonable efforts requirement. The National Resource 
Center for Legal and Court Issues (part of the American Bar 
Association's Center on Children and the Law) and the National 
Child Welfare Resource Center for Organizational Improvement 
(University of Southern Maine) convened an interdisciplinary 
advisory panel on April 21, 1995, and has released a summary of 
the panel's discussion. Among the panel's findings and 
recommendations:
 1. Despite its varied implementation, the reasonable efforts 
        requirement in Public Law 96-272 has had a positive 
        impact overall for children and families. The 
        reasonable efforts concept is most effective in 
        communities with strong family preservation programs. 
        However, reasonable efforts are appropriate only when 
        consistent with the child's health and safety, and 
        activities must be assessed on a case-by-case basis.
 2. Reasonable efforts requirements in Federal law should be 
        continued and actively enforced. However, in some 
        cases, it is appropriate not to offer family 
        preservation or reunification services, and the Federal 
        Government should clarify to States when such inaction 
        is proper. Further, child welfare workers need training 
        in making these decisions.
 3. The Federal Government should support and guide States as 
        they identify and incorporate services into their State 
        plans, but there was little support among the panel for 
        a federally mandated set of core services.
 4. Judicial oversight of reasonable efforts is effective and 
        should be continued, including as a component of 
        determining eligibility for Federal reimbursement. 
        However, judges need proper training and should be 
        assigned to regular child welfare caseloads. Likewise, 
        agency personnel need training in adequately educating 
        the court with regard to specific cases. In the case of 
        a judicial determination that reasonable efforts have 
        not been made, there should be a short grace period for 
        appropriate efforts to be made before Federal financial 
        assistance is denied.
 5. Reasonable efforts determinations should be made at every 
        critical step in a case, from removal from home through 
        the case review, rather than on a one-time basis.

          State Compliance With Section 427 Child Protections

    As described earlier, section 427 of title IV-B has 
specified the child protections that must be in place in order 
for a State to receive its allotment of certain appropriated 
title IV-B funds. Effective for fiscal years beginning after 
April 1, 1996, however, these protections are required of 
States as part of their title IV-B plan, under section 
422(b)(9) of the Social Security Act (table 12-12).
    In 1980, following the enactment of Public Law 96-272, HHS 
identified a total of 18 child protections required by section 
427 of title IV-B. In what came to be known as ``427 reviews,'' 
the caseload of each State receiving incentive funds was 
examined to determine compliance with these child protections. 
The HHS reviews required the following:
 A. That the case plan for each child include a:
   1. Description of the type of home or institution in which 
            the child is to be placed;
   2. Discussion of the appropriateness of the placement;
   3. Plan to achieve placement in the least restrictive (most 
            family-like) setting;
   4. Plan for placement in close proximity to the parents' 
            home, consistent with the best interest and special 
            needs of the child;
   5. Statement of how the responsible agency plans to carry 
            out the voluntary placement agreement or judicial 
            determination;
   6. Plan for ensuring that the child will receive proper 
            care;
   7. Plan for providing services to the parents, child, and 
            foster parents to improve conditions in the 
            parents' home and facilitate the return of the 
            child to the home, or into a permanent placement;
   8. Plan for services to address the needs of the child while 
            in foster care;
   9. Discussion of the appropriateness of services provided;
 B. That the status of each child in foster care be reviewed 
        periodically but no less frequently than every 6 months 
        by a court or administrative review to determine the:
  10. Continuing necessity for and appropriateness of 
            placement;
  11. Extent of compliance with the case plan;
  12. Extent of progress made toward alleviating or 
            ``mitigating'' the causes of foster placement;
  13. Likely date the child may be returned home or placed for 
            adoption or provided legal guardianship;
 C. That all administrative reviews must:
  14. Be open to participation by parents;
  15. Be conducted by a panel of appropriate persons, at least 
            one of whom is not responsible for the case 
            management of, or the delivery of services to, the 
            child or parents;
 D. That procedural safeguards that pertain to parental rights 
        are followed when:
  16. The child is removed from the parents' home;
  17. A change is made in the child's placement;
  18. Any determination of the parents' visitation privileges 
            is made.
    Table 12-12 identifies child protections in section 427, 
the new section 422(b)(9), and section 475 of the Social 
Security Act.
    Under the old section 427, Federal review of a State's 
foster care system consisted of two phases: (1) the 
administrative review, and (2) the survey of case records. The 
process was initiated when a State ``self-certified'' after 
determining that it was in compliance with the 18 protections 
outlined above. An administrative review was then conducted to 
determine if all policy and procedural systems necessary to 
implement the child protections were in place on a statewide 
basis.
    If the State had fully implemented these administrative 
components, the review process proceeded to the case record 
survey stage. Three separate case record surveys were conducted 
in each State (an initial, subsequent, and triennial review) by 
a team composed of Federal and State personnel. Each of these 
reviews demanded a higher level of compliance, and a State must 
pass the preceding review before moving to the next one. If a 
State was found out of compliance, HHS issued a disallowance 
against the State's allotment of incentive funds for the coming 
fiscal year. States could appeal the disallowance to the HHS 
Departmental Appeals Board.
    According to HHS, virtually all funding disallowances 
occurred as a result of States not holding periodic reviews and 
dispositional hearings within the time frame specified in the 
statute.

          Federal Financial Review Procedures Under Title IV-E

    In addition to the child protection reviews described above 
to assure compliance with section 427, HHS reviewed 
expenditures made under the Title IV-E Foster Care and Adoption 
Assistance Programs. The title IV-E statute requires, as a 
component of State plans, that States arrange for independent 
audits of their activities under both titles IV-B and IV-E at 
least once every 3 years. In addition, section 471(b) allows 
the Secretary of HHS to withhold or reduce payments to States 
upon finding that a State plan no longer complies with State 
plan requirements, or, in the State's administration of the 
plan, there is substantial failure to comply with its 
provisions. The Secretary must first provide reasonable notice 
and opportunity for a hearing.

TABLE 12-12.--SECTIONS 427 [422] AND 475 REQUIRED PROTECTIONS FOR FOSTER
                                CHILDREN                                
------------------------------------------------------------------------
           Requirement                          Description             
------------------------------------------------------------------------
Inventory, sec. 427(a)(1)........    Includes all children in foster    
[422(b)(9)(A)]                        care under State responsibility   
                                      for 6 months preceding the        
                                      inventory;                        
                                      State determines appropriateness  
                                       of and necessity for current     
                                       foster placement;                
                                      Whether a child can or should be  
                                       returned to parents or be freed  
                                       for adoption;                    
                                      Services necessary to facilitate  
                                       either the return of a child or  
                                       the child's placement for        
                                       adoption or legal guardianship.  
                                                                        
Statewide information system,        Includes status, demographic       
 sec. 427(a)(2)(A).                   characteristics, location, and    
[422(b)(9)(B)(i)]                     placement goals of foster children
                                      in care the preceding 12 months.  
                                                                        
Service program, sec.                To help children where appropriate,
 427(a)(2)(C).                        return to families or be placed   
[422(b)(9)(B)(iii)]                   for adoption or legal             
                                      guardianship.                     
                                                                        
Case plan, sec. 427(a)(2)(B).....    A written document that includes:  
[422(b)(9)(B)(ii)]                    a plan to achieve placement in the
and sec. 475(1) (A) and (C) and        least restrictive (most family-  
 475(5)(A).                            like) setting available;         
                                      a plan for placement in close     
                                       proximity to the parents home    
                                       consistent with the best interest
                                       and special needs of the child   
                                       (sec. 475(5)(A));                
                                      a description of type of home or  
                                       institution in which a child is  
                                       to be placed;                    
                                      a discussion of appropriateness of
                                       placement;                       
                                      a statement of how the responsible
                                       agency plans to carry out the    
                                       voluntary placement agreement or 
                                       judicial determination made in   
                                       accordance with sec. 472(a)(1);  
                                      a plan for ensuring that the child
                                       will receive proper care;        
                                      a plan for providing services to  
                                       the parents, child, and foster   
                                       parents to improve conditions in 
                                       the parents home and facilitate  
                                       the return of the child home or  
                                       permanent placement;             
                                      a plan for services to address the
                                       needs of a child while in foster 
                                       care;                            
                                      a discussion of appropriateness of
                                       services provided;               
                                      where appropriate for a child 16  
                                       or over, a description of        
                                       programs and services to prepare 
                                       for transition to independent    
                                       living;                          
                                      to the extent available and       
                                       accessible the health and        
                                       educational records of the child.
                                                                        
Case reviews, sec. 427(a)(2)(B)..    Status of each child is reviewed   
[422(b)(9)(B)(ii)]                    periodically but not less         
                                      frequently than once every 6      
                                      months by a court or              
                                      administrative review to          
                                      determine:                        
                                      continuing necessity for and      
                                       appropriateness of placement;    
                                      extent of compliance with case    
                                       plan;                            
                                      extent of progress made toward    
                                       alleviating or ``mitigating''    
                                       causes of foster placement;      
                                      likely date child may be returned 
                                       home or placed for adoption or   
                                       provided legal guardianship.     
                                     Administrative review means:       
                                      open to participation of the      
                                       parents;                         
                                      conducted by panel or appropriate 
                                       persons, at least one of whom is 
                                       not responsible for the case     
                                       management of, or the delivery of
                                       services to, the child or        
                                       parents.                         
                                                                        
Dispositional hearing, sec.          To be held:                        
 427(a)(2)(B) and sec. 475(5)(C).     in family or juvenile court or    
[422(b)(9)(B)(ii)]                     other court of competent         
                                       jurisdiction or by administrative
                                       body approved by the court;      
                                      no later than 18 months after the 
                                       original placement (and not less 
                                       frequently than every 12 months  
                                       thereafter);                     
                                      to determine future status of the 
                                       child (return to parent, continue
                                       foster care for special period on
                                       permanent or long-term basis,    
                                       placement for adoption);         
                                      to determine transition services  
                                       needed for a child 16 or older.  
                                                                        
Procedural safeguards, sec.          Applied to:                        
 427(a)(2)(B) and sec. 475(5)(C).     parental rights pertaining to     
[422(b)(9)(B)(ii)]                     removal of child from parent's   
                                       home;                            
                                      a change in child's placement;    
                                      any determination of parents'     
                                       visitation privileges.           
------------------------------------------------------------------------
\1\ The sections enclosed in brackets will be effective October 1, 1996 
  as mandated in Public Law 103-432; section 427 is repealed.           
                                                                        
Source: U.S. General Accounting Office (1989), and U.S. Department of   
  Health and Human Services.                                            

    In practice, the Secretary has disallowed expenditures for 
Federal reimbursement under title IV-E as a result of several 
review procedures, including audits conducted pursuant to 
section 471(a)(13). Disallowances may result from audits 
conducted by the HHS inspector general, regional office reviews 
of quarterly expenditure reports submitted by States as part of 
the claims reimbursement process, or Federal financial reviews.

         New Conformity Review System Under Public Law 103-432

    In 1994, Congress enacted legislation (Public Law 103-432) 
adding a new section 1123 to the Social Security Act. This 
section establishes a child welfare conformity review system to 
replace the various title IV-B and IV-E review methods 
described above. This legislation also changes the enforcement 
mechanism for the child protection requirements originally 
contained in section 427. As mentioned earlier, States have 
been required to comply with section 427 child protections in 
order to qualify for their full allotment of title IV-B funds. 
Effective for fiscal years beginning after April 1, 1996, 
however, this incentive funding mechanism is eliminated and 
States are instead required to comply with the child 
protections as a component of their State plans, under a new 
section 422(b)(9).
    HHS is currently pilot-testing the new conformity review 
system and plans to issue a notice of proposed rulemaking 
during the summer of 1996. In the interim, reviews are no 
longer being conducted under the old systems described above 
and disallowances are not being made. The new system is 
intended to be more comprehensive and streamlined, and to 
provide technical assistance in addition to financial penalties 
to help States comply with Federal requirements.
    Specifically, Public Law 103-432 requires the new review 
system to determine whether State programs conducted under 
titles IV-B and IV-E are in substantial conformity with State 
plan requirements contained in Federal law, implementing 
regulations, and approved State plans. The system will provide 
for an initial review of each State program, a timely 
subsequent review of any program found out of substantial 
conformity, and less frequent reviews for States that are in 
substantial conformity. Federal regulations must specify the 
requirements subject to review and the criteria that will be 
used to measure conformity. The regulations also must specify a 
method for determining the amount of any Federal matching funds 
to be withheld due to a State's failure to substantially 
conform. States will be given an opportunity to develop and 
implement a corrective action plan, subject to Federal 
approval, and financial penalties may be suspended and 
ultimately rescinded if a State successfully completes the 
corrective action plan. States must be notified within 10 days 
after any determination that they are not in conformity, and 
may appeal the determination to the Departmental Appeals Board. 
Decisions of the Appeals Board may be subject to judicial 
review.

     RECENT TRENDS AFFECTING CHILD WELFARE POPULATIONS AND PROGRAMS

    Data on social problems that are a common focus of child 
welfare services--such as incidence and causes of child abuse 
and neglect, and trends in foster care caseloads--are sometimes 
used to show the need for both child protection and preventive 
services for families. Although these data do not represent the 
absolute number of children or families in need of services, 
they are often used to suggest trends in the need for services.

                        Child Abuse and Neglect

    Between 1963 and 1967 every State and the District of 
Columbia enacted some form of child abuse and neglect reporting 
law. The model reporting law disseminated by the U.S. 
Children's Bureau facilitated the States' rapid adoption of 
these laws; after 1974 reporting laws were modified to conform 
to the standards established by the Child Abuse Prevention and 
Treatment Act of 1974 (CAPTA).
Trends
    The trend in child abuse and neglect reporting, in terms of 
numbers of reports and rates, was one of steady growth with a 
three-fold increase in reporting between 1976 and 1993, 
although the rate of growth slowed in the 1990s and there was 
no increase in the rate of reporting between 1992 and 1993. In 
1976 there were 670,000 child abuse and neglect reports 
received by the 50 States and the District of Columbia, for a 
rate of 10 per 1,000 children. By 1993 there were 2,936,554 
reports, representing 2,603,955 individual children for a rate 
of 43 per 1,000 children (see chart 12-1).
    Increased reporting does not necessarily mean that there 
has been a corresponding increase in child abuse and neglect. 
As noted below, not all reports are substantiated. Increased 
reporting may be more an indicator of how many cases of 
suspected abuse come to professional attention than an 
indicator of the true extent of child maltreatment. Public 
awareness campaigns, increased training of professionals, and 
increases in child protective service staff may result in more 
cases of child maltreatment coming to professional attention. 
On the other hand, even though more cases are reported, 
researchers and professionals agree that even with nearly 3 
million reports, not all maltreated children are reported.
Substantiated cases
    In 1993, 39.3 percent of the children reported were either 
substantiated or indicated as abused and neglected. \1\ The 
remaining 60.7 percent of those reported were either 
unsubstantiated, no finding was made, there was an unknown 
disposition, or some other disposition of the report was made. 
An estimated 6 percent of the unsubstantiated reports were 
deemed to be intentionally false reports (U.S. Department of 
Health and Human Services, 1996). There has been a decline in 
the rate of substantiation of child maltreatment reports from 
65 percent in 1976 to 33 percent in 1993 (McCurdy &amp; Daro, 1993; 
Weise &amp; Daro, 1995).
---------------------------------------------------------------------------
    \1\ Substantiated means that the allegation of maltreatment or risk 
of maltreatment is supported or founded on the basis of State law. 
Indicated means that maltreatment cannot be substantiated, but there is 
reason to believe that the child was maltreated or at risk of 
maltreatment (U.S. Department of Health and Human Services, 1996).
---------------------------------------------------------------------------
Types of maltreatment
    In 1993, of the 1,067,231 child victims for whom 
maltreatment was substantiated or indicated and for whom there 
were data on the type of maltreatment, 233,487 (3.4 per 1,000) 
experienced physical abuse, 475,153 experienced neglect (6.9 
per 1,000), 23,009 experienced medical neglect (less than 0.1 
per 1,000), 139,817 experienced sexual abuse (2 per 1,000), 
48,288 experienced emotional maltreatment (less than 0.1 per 
1,000), 140,618 children were classified as other forms of 
maltreatment (2 per 1,000), and 6,859 experienced unknown forms 
of maltreatment.

                         Child Abuse Fatalities

    The U.S. Advisory Board on Child Abuse and Neglect (1995) 
estimated that 2,000 children under the age of 18 are killed by 
parents or caretakers each year. The Board suggests that this 
is a low estimate. Philip McClain and his colleagues (1993) 
report that abuse and neglect kills 5.4 to 11.6 children per 
100,000 children under 4 years of age (see chart 12-1).

 CHART 12-1. REPORTS OF CHILD ABUSE AND NEGLECT AND CHILD FATALITIES, 
                             SELECTED YEARS
&lt;GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT&gt;

    Source: McCurdy and Daro (1993).

                            Substance Abuse

    There is widespread belief that a significant portion of 
the increase in child abuse and neglect and foster care 
placements resulted from the introduction of crack cocaine 
during the mid-1980s. The availability of crack has been linked 
to the abuse of children of all ages. According to a 1990 
publication by the House Committee on Ways and Means, New York 
City officials blame the introduction of crack for the 
threefold increase in that city's child abuse and neglect cases 
involving parental substance abuse between 1986 and 1988. 
Perhaps the biggest impact that crack has had on the child 
welfare system is the large increases in very young infants 
entering the foster care system at birth as a result of 
prenatal drug use, drug toxicity at birth, or abandonment at 
the time of birth in the hospital (boarder babies). Drug-
exposed infants also often enter substitute care shortly after 
they are born as a result of a diagnosed failure to thrive or 
of parental abuse and neglect.
    The National Association for Perinatal Addiction Research 
and Education estimated in 1988 that 11 percent of all pregnant 
women use illegal drugs. A 1990 General Accounting Office (GAO) 
study reported that the actual number of drug-exposed infants 
born each year is unknown, although the study noted that the 
two most widely cited estimates are 100,000 and 375,000. An HHS 
office of the Inspector General (OIG) 1989 survey of 12 cities 
found that 30 to 50 percent of drug-exposed infants enter 
foster care. New York City reported a 268 percent increase 
between 1986 and 1989 in referrals of drug-exposed infants to 
the child welfare system (Office of the Inspector General, 
1990a).
    More recently, the National Pregnancy and Health Survey, 
sponsored by the National Institute on Drug Abuse, surveyed a 
nationally representative sample of 2,613 women who delivered 
babies between October, 1992 and August, 1993. These survey 
results were used to estimate the drug, alcohol, and cigarette 
use of the approximately 4 million women who gave birth in the 
United States during 1992. The survey estimated that 221,000 or 
5.5 percent of the women used some illicit drug during 
pregnancy. At some time during their pregnancy, 119,000 women, 
or 2.9 percent, reported using marijuana; 45,000 women, or 1.1 
percent, used cocaine, and 34,800, or 0.9 percent, used crack. 
The survey also found that 757,000 women, or 18.8 percent, used 
alcohol and 820,000, or 20.4 percent, smoked cigarettes at some 
time during their pregnancy (National Institute on Drug Abuse, 
1995).
    Data from a five-State foster care archive show how 
increasing numbers of drug-exposed infants are stretching State 
child welfare systems to their limits (Goerge, Wulczyn, &amp; 
Harden, n.d.). Data for California, Illinois, Michigan, New 
York, and Texas indicate that the most striking change in the 
characteristics of children entering foster care in the mid-to-
late 1980s was the increase in the number of infants who were 
admitted into care.
    Researchers conducting the five State study divided the 
period from 1983-92 into 3 discrete periods: 1983-86 (the 
period before admissions began to surge); 1987-89 (the period 
of most rapid growth); and 1990-92 (when caseloads in several 
States began to decline). Between 1983 and 1986, about 16 
percent of first admissions into foster care were of children 
younger than 1 year of age. By contrast, between 1987 and 1989 
children under the age of 1 represented almost 23 percent of 
first admissions. Fortunately, the rate increased only slightly 
to 24 percent from 1990 to 1992.
    Looking at individual States, researchers found that the 
proportion of infants entering foster care nearly doubled in 
New York, from 16 percent of first admissions in 1983-86 to 28 
percent in 1990-92. Infants entering foster care in Illinois 
increased as a percentage of first admissions from 16 percent 
in 1983-86 to 28 percent in 1990-92, and in Michigan, from 17 
percent to 20 percent during the same time periods.
    This rise in infant admissions is likely to result in 
larger foster care caseloads in the future, regardless of 
whether overall admissions begin to decline. Researchers in the 
five State data archive found that infants who are placed in 
foster care tend to remain in care longer than children placed 
at older ages. Data for each of the five States indicated that 
duration of care generally decreased with age of placement.
    Not only do younger children spend the longest time in 
foster care, but many children discharged from foster care 
eventually reenter care. During 1989, 15 percent of New York's 
admissions into foster care was comprised of children 
reentering care. A 1988 Illinois study by Mark Testa and Robert 
Goerge found that nearly 40 percent of the earliest cohorts of 
foster children that are reunified with their parents 
eventually reenter substitute care.

                    Trends in Foster Care Caseloads

    The incidence of all children in the United States who are 
in foster care has increased from 3.9 per 1,000 in 1962 to 6.5 
per 1,000 in 1994. The incidence of children in foster care 
increased slowly during the 1960s, climbed sharply in the 
1970s, and then deceased until 1982. In fact, the incidence of 
childen in foster care in 1982 was 3.9 per 1,000-exactly the 
same as twenty years earlier. However, since 1982, the 
incidence has risen steadily each year. In just two years 
between 1987 and 1989, the incidence rose from 4.5 per 1,000 to 
5.7 per 1,000. The incidence has continued to rise to 6.5 per 
1,000 on 1994, the most recent year for which data are 
available on the total number of children in foster care.
    The number of children in Federally assisted foster care 
has grown significantly in the years since funding first became 
available under AFDC in the early 1960s. The number grew from 
1962 to 1976, then decreased from 1976 to 1983. Since 1983, the 
number of foster care children funded under title IV-E has 
increased steadily. In 1980, when title IV-E was first enacted, 
33 percent of the total foster care population was funded under 
title IV-E. By 1994, this proportion increased to 52 percent 
(see table 12-13).

  TABLE 12-13.--U.S. FOSTER CARE AND AFDC/IV-E FOSTER CARE POPULATION, TOTAL AFDC CHILDREN, AND U.S. POPULATION 
                                              AGES 0-18, 1962-2000                                              
----------------------------------------------------------------------------------------------------------------
                                                           U.S. foster     AFDC/IV-E                            
                                                               care       foster care    Total AFDC      U.S.   
                                                            population     children       children    population
                           Year                              (end of       (average       (average    ages 0-18 
                                                              fiscal        monthly       monthly     (calendar 
                                                            year) \1\     number) \2\   number) \3\   year) \4\ 
----------------------------------------------------------------------------------------------------------------
1962.....................................................      272,000             989    2,781,000   69,864,000
1963.....................................................      276,000           2,308    2,921,000   71,164,000
1964.....................................................      287,000           4,081    3,075,000   72,406,000
1965.....................................................      300,000           5,623    3,243,000   73,520,000
1966.....................................................      309,400           7,385    3,369,000   73,179,000
1967.....................................................      309,600           8,030    3,558,000   73,429,000
1968.....................................................      316,200           8,500    4,013,000   73,396,000
1969.....................................................      320,000          16,750    4,591,000   74,000,000
1970.....................................................      326,000          34,450    5,494,000   73,516,000
1971.....................................................      330,400          57,075    6,963,000   73,665,000
1972.....................................................      319,800          71,118    7,698,000   72,369,000
1973.....................................................           NA          84,097    7,965,000   72,243,000
1974.....................................................           NA          90,000    7,824,000   72,070,000
1975.....................................................           NA         106,869    7,928,000   71,402,000
1976.....................................................           NA         114,962    8,156,000   70,500,000
1977.....................................................           NA         110,494    7,818,000   69,699,000
1978.....................................................           NA         106,504    7,475,000   67,003,000
1979.....................................................           NA         103,771    7,193,000   68,307,000
1980.....................................................      302,000         100,272    7,320,000   67,913,000
1981.....................................................      274,000         104,851    7,615,000   67,571,000
1982.....................................................  \5\ 262,000          97,309    6,975,000   67,118,000
1983.....................................................  \5\ 269,000          93,360    7,051,000   66,768,000
1984.....................................................  \5\ 276,000         102,051    7,153,000   66,863,000
1985.....................................................  \5\ 276,000         109,122    7,165,000   66,797,000
1986.....................................................  \5\ 280,000         110,749    7,294,000   66,932,000
1987.....................................................  \5\ 300,000         118,549    7,381,000   67,221,000
1988.....................................................  \5\ 340,000         132,757    7,326,000   67,709,000
1989.....................................................  \5\ 383,000         156,871    7,370,000   67,877,000
1990.....................................................  \5\ 400,000         167,981    7,755,000   67,751,983
1991.....................................................  \5\ 414,000         202,726    8,515,000   68,495,777
1992.....................................................  \5\ 427,000         224,507    9,225,000   69,482,770
1993.....................................................  \5\ 445,000         231,048    9,539,000   70,510,226
1994.....................................................  \5\ 468,000         244,473    9,590,000   71,383,332
1995.....................................................           NA         260,737    9,275,000   72,246,000
1996 (estimate)..........................................           NA         267,400    8,796,000   72,923,484
1997 (estimate)..........................................           NA         285,000    8,922,000   73,554,051
1998 (estimate)..........................................           NA         296,400    9,048,000   74,073,498
1999 (estimate)..........................................           NA         308,300    9,175,000   74,394,258
2000 (estimate)..........................................           NA         320,600    9,288,000   74,718,358
----------------------------------------------------------------------------------------------------------------
\1\ Data from Child Welfare Research Notes #8 (July 1984), published by Administration for Children, Youth, and 
  Families, HDS, HHS. This note cites as sources of data for the foster care population: annual reports from    
  1962-72 of the Children's Bureau and the National Center for Social Statistics, Social and Rehabilitation     
  Services; National Study of Social Services to Children and their Families, published by ACYF in 1978, for    
  1977 data; and the Office of Civil Rights, HHS, report,``1980 Children and Youth Referral Survey: Public      
  Welfare and Social Service Agencies'' for 1980 data.                                                          
\2\ Incomplete data based on voluntary reporting to the Department of Health, Education and Welfare, prior to   
  1975.                                                                                                         
\3\ Includes foster children 1971-81.                                                                           
\4\ U.S. Census Bureau, Population Division, unpublished data (1962-80); U.S. Bureau of the Census, Current     
  Population Reports, Series 1095 (1980-89), PPL-41 (1990-95), and 1130 (1996-2000).                            
\5\ American Public Welfare Association.                                                                        
                                                                                                                
NA--Not available.                                                                                              
                                                                                                                
Source: Compiled by staff of the House Committee on Ways and Means.                                             

    More detailed information is available on these trends from 
a number of State data systems. Currently, some of the most 
interesting data are from the multi-State data archive 
mentioned above, in which California, Illinois, Michigan, New 
York and Texas are participating. According to a first-year 
report from the archive, a total of 204,157 children were in 
foster care in these 5 States as of December 31, 1992 (of which 
California and New York accounted for 70 percent). The five 
State figure represented almost half of the nation's total 
number of foster children, as estimated by the American Public 
Welfare Association's voluntary data collection system.
    All five States have seen tremendous growth in their foster 
care populations during the period from 1988-92. In fact, in 
every State except Michigan, the number of children in care had 
doubled during the time period. Specific growth rates were as 
follows: California, 143 percent; Illinois, 135 percent; 
Michigan, 67 percent; New York, 125 percent; and Texas, 124 
percent. The most intense growth in all five States was between 
the years 1987-89, when the caseload grew by almost 40 percent. 
Specifically in New York, the foster care population increased 
by 66 percent between 1987 and 1989. However, since then, 
growth in foster care caseloads has returned to the levels 
observed prior to 1987, except in Illinois and Texas. In fact, 
in Illinois, the foster care population grew by an additional 
42 percent during the period from 1990-92.
    When researchers separated the primary urban area in each 
of the five States from the balance of the State, they 
determined that 75 percent of the caseload growth between 1983 
and 1992 occurred in urban areas. New York City and Chicago 
were responsible for virtually all of the foster care caseload 
growth in New York State and Illinois. Both of these urban 
areas experienced a tripling of their foster care populations 
during the time period. Since 1990, the growth rate in New York 
City has slowed, but there has not been a similar decline in 
the Cook County growth rate.
    Total caseload size is a function of both the number of 
children entering care (admissions) and the number of children 
leaving care (discharges). When examining admissions and 
discharges, researchers in the five State data archive found 
somewhat different patterns in each of the States. For example, 
the number of Illinois' admissions had been stable during the 
period from 1983-86, but increased by 34 percent from 1987-92. 
Throughout this entire period, the number of children 
discharged in Illinois stayed constant; therefore, the number 
of discharges did not offset the increase in admissions, 
resulting in overall growth in the total caseload.
    In New York, both admissions and discharges grew from 1983-
85, but discharges outnumbered admissions so that overall 
caseload size declined during that period. However, from 1985-
87, discharges decreased by almost 8 percent while admissions 
grew by 34 percent, resulting in significant caseload growth. 
Admissions grew by an additional 28 percent from 1987-89. 
During this period, discharges also grew but only by 16 percent 
so that the overall caseload continued to increase. Since 1989, 
the number of admissions in New York has declined and 
discharges have grown, so that by 1992, the total size of the 
foster care population declined.
    Texas and Michigan have experienced growth in both their 
number of admissions and discharges during the decade from 
1983-92. However, admissions have exceeded discharges in both 
States during the period, resulting in overall growth. In 
California, admissions grew until 1989, but have since declined 
each year. This decline, along with a rapid increase in the 
number of discharges from 1988-90, resulted in a drop in the 
growth rate.
    Researchers in the five State data archive also examined 
the length of time children stayed in foster care, and found 
that, for children placed between 1988 and 1992, the median 
duration was about a year and a half in California, Illinois 
and New York. The median duration was about 1 year in Michigan 
and less than 9 months in Texas. However, certain groups are 
more likely to stay in care longer. Specifically, the 
researchers found that children from urban areas in each of the 
States had significantly longer durations, and that black 
children in four of the five States stayed longer than all 
other racial or ethnic groups. Further, children placed as 
infants stayed in care longer than older children.

                      Increase in ``Kinship'' Care

    In recent years, States appear to have increased their use 
of ``kinship'' foster care, in which foster children are placed 
with their own relatives. Little reliable national data are 
available to document this trend, but some State reporting 
systems and national surveys support the conclusion that 
kinship care is growing.
    In its annual survey of State foster care reimbursement 
rates, the American Public Welfare Association (APWA) asked a 
series of questions about kinship care in late 1992. While many 
States could not distinguish relative placements from other 
foster care placements, at least 26 States indicated that they 
had experienced an increase in their use of kinship care during 
the previous 3 years.
    Children placed with relatives grew from 18 percent to 31 
percent of the total foster care caseload during the period 
from 1986 through 1990 in 25 States that supplied information 
to the Inspector General of HHS (Office of Inspector General, 
1992). This percentage increase is especially notable because 
it occurred during a period of rapid overall caseload growth. 
Kinship care is growing most rapidly in urban areas; for 
example, almost half of New York City's foster care population 
is children in kinship care. It appears that most of the recent 
growth in foster care in some parts of the country may actually 
have been growth in kinship care.
    Kinship care providers are usually grandparents, and 
frequently single grandmothers. As their numbers have increased 
in recent years, grandparent caregivers in many States and 
cities have organized into support groups, and are beginning to 
press for financial support and services at the State and 
Federal level. These groups often include grandparents and 
relatives of children who are not necessarily under State 
custody, but who would be at risk of needing foster care from 
strangers in the absence of their relatives.
    Many of the children who live in kinship homes receive 
federally subsidized public assistance, either through Aid to 
Families with Dependent Children (AFDC) or the IV-E Foster Care 
Program. At the end of 1992, an estimated 442,000 children were 
in foster care nationwide, and almost half participated in 
title IV-E, at a Federal cost in fiscal year 1993 of $2.6 
billion. However, it is not known how many foster children are 
in kinship care, or how many kinship care children receive AFDC 
instead of foster care subsidies. Further, there is no explicit 
Federal policy regarding which program is more appropriate for 
kinship children and their caretakers.
    State policies and practices governing the implementation 
of Federal programs vary widely. Particularly with regard to 
kinship families, these differences in State policies have a 
direct impact on family income and Federal costs. For example, 
eligibility for federally subsidized foster care payments is 
limited to licensed foster care providers. However, some States 
routinely license relatives as foster care providers, making 
them eligible for Federal foster care subsidies, while other 
States do not usually license relatives, leaving them eligible 
only for AFDC.
    Under both AFDC and the Federal Foster Care Program, States 
establish their own payment levels, and, in almost all States, 
foster care subsidies are significantly higher than AFDC 
payments. On average, foster care benefits for one child, 
payable in 1992, were 50 percent higher than the maximum AFDC 
benefit for one person, available as of January 1993.
    Both title IV-E and AFDC are open-ended entitlements, with 
costs shared by the Federal and State governments. The Federal 
Government reimburses States for at least half of eligible 
spending under both programs; thus, Federal costs would 
increase if kinship families currently receiving AFDC were made 
eligible for the higher foster care subsidies. At the same 
time, some kinship families already are receiving Federal 
subsidies, which raises the issue of equity for kinship 
families nationwide.
    Little national information is available about kinship 
providers or the children in their care, although some research 
has been conducted on kinship care in certain States and 
cities. For example, several studies have produced information 
about the demographic characteristics of kinship providers. 
While the results of these studies vary, collectively they 
generate a picture of kinship providers as predominantly 
female, disproportionately minority, generally low-income, and 
with low educational attainment.
    Recent studies on children in kinship care suggest that 
children placed with relatives are similar in many respects to 
children in traditional foster care (Berrick, Barth &amp; Needell, 
1992; Dubowitz, Feigelman &amp; Zuravin, 1993). One difference 
found in both studies was racial composition; children in 
kinship care were more likely to be black than foster children 
living with nonrelatives. Further, children placed with 
relatives tend to remain in care longer than children placed in 
nonrelative foster care.

                      Family Preservation Programs

    In response to rising foster care caseloads, States have 
shown great interest in family preservation programs. These 
programs go back at least to the settlement house movement 
created at Hull House in Chicago by Jane Adams in 1910. Family 
preservation programs are designed to help children and 
families that are at risk or in crisis. While family 
preservation services have been a key component of the child 
welfare system for nearly a century, the renewed emphasis on 
child abuse and neglect in the early 1960s and the 
conceptualization of this problem as one arising out of the 
psychopathology of the parents or caretakers changed the child 
welfare emphasis from one of preserving families to one of 
protecting children. With the implementation of mandatory 
reporting laws in all 50 States and the accompanying dramatic 
increase in child abuse and neglect reports, child welfare 
agencies turned more to removal of children from homes deemed 
at risk and placement of these children in temporary foster 
homes as the treatment of choice. By 1978 it was estimated that 
there were some 500,000 children in foster care in the United 
States (Tatara, 1993; Pelton, 1989).
    By the end of the 1970s there was increasing concern about 
the number of children in foster care and the cost. The model 
of child abuse that explained abuse as a result of individual 
personality disorders or mental illness had been replaced by 
explanations of maltreatment that emphasized social factors, 
such as poverty, stress, social isolation, and lack of 
understanding of proper parenting skills.
    There was widespread questioning of the need to remove so 
many children from their biological homes and the effectiveness 
of foster care as a means of dealing with child maltreatment. 
Researchers and practitioners assumed that funds spent on 
foster care could be spent more effectively supporting and 
preserving families.
    A number of States are now implementing a new type of 
family preservation program called ``intensive'' family 
preservation. Intensive family preservation programs differ 
from traditional family preservation in several important ways. 
First, the services are intensive. That means that caseworkers 
provide services to families as many as 3 to 5 times each week. 
The services are available at any time of day or week. 
Caseworkers have much smaller caseloads than traditional child 
welfare caseworkers. Whereas a traditional child welfare 
caseworker may carry a caseload of between 15 and as many as 60 
families, intensive family preservation caseworkers may have a 
caseload of 2 or 3 families. In addition to being intensive, 
services are provided for a limited period of time, usually 
between 6 and as many as 30 weeks. Traditional family 
preservation interventions have no predefined timeline and may 
be provided for many months--until the child is reunified or 
placed in a permanent placement. Finally, whereas traditional 
family preservation programs are based on a deficit model that 
assumes abusive parents do not have the personal, social, or 
economic resources to cope with raising children, intensive 
family preservation programs are designed to identify and work 
with families around their strengths. Thus, if a family has a 
strong network of relatives, the work focuses on using this 
network to help with family stressors or crises.
    The initial evaluations of intensive family preservation 
programs were uniformly enthusiastic. The programs were claimed 
to have reduced placement of children, while at the same time 
assuring the safety of those children. Foundation program 
officers and program administrators claimed that families 
involved in intensive family preservation programs had low 
rates of placement and ``100 percent safety records'' (Barthel, 
1991; Forsythe, 1992).
    But there were major methodological and design limitations 
of the evaluations of these early studies. The vast majority of 
the evaluations of intensive family preservation programs 
either employed no control or comparison group, or used a 
comparison group that was not an appropriate match for the 
group receiving treatment. Moreover, there were questions 
raised about whether ``placement avoidance'' was the 
appropriate outcome measure for the evaluations. Peter Rossi 
cautioned that ``placement avoidance'' was not the proper 
outcome variable since placement avoidance was itself the 
treatment. In his 1992 review, Rossi also concluded that the 
evaluation studies did not convincingly demonstrate that 
intensive family preservation programs reduced placement or 
reduced child welfare program costs.
    There have been at least 46 evaluations of intensive family 
preservation programs, of one form or another (Heneghan, 
Horwitz &amp; Leventhal, 1996; Lindsey, 1994). Of these 46 
evaluations and of 802 published articles on intensive family 
preservation, only 10 studies actually evaluated an intensive 
family preservation program, included outcome data in the 
report, and used a control group. In California, New Jersey, 
and Illinois, the studies had large samples and randomized 
control groups, thus allowing for a rigorous evaluation. In all 
three studies, there were either small or insignificant 
differences between the group receiving intensive family 
preservation services and the group receiving traditional 
casework services. Even in terms of placement avoidance, there 
were no differences between the two groups, thus suggesting 
that earlier claims that intensive family preservation programs 
were successful in reducing placement obtained those results 
because of the low overall rate of placement in child welfare 
agencies. These results also point to how difficult it is for 
caseworkers to accurately classify a family as at high risk of 
being placed, since 80 to 90 percent of the children in the 
control groups were not placed.
    Thus, the empirical case for intensive family preservation 
has yet to be made. Amid the claims and counterclaims on 
intensive family preservation, and following the funding of the 
Family Preservation and Support Act of 1993, the Department of 
Health and Human Services funded a national evaluation of 
family preservation and support services. This evaluation, 
conducted by Westat, the Chapin Hall Center for Children, and 
James Bell Associates, will examine a range of family 
preservation and family reunification programs at a number of 
sites across the country. The study, which is scheduled for 
completion by June 1999, proposes to use a randomized trial 
design with a variety of outcome measures, including placement, 
cost, and family functioning.

          National Data on Foster Care and Adoption Assistance

    The primary source of national data on foster care, until 
recently, has been the Voluntary Cooperative Information System 
(VCIS) conducted by the American Public Welfare Association 
(APWA). This voluntary survey was begun by APWA with support 
from HHS in 1982. Detailed VCIS data are available for fiscal 
years 1982 through 1990. In addition, data are available from 
the VCIS on the total numbers of children in care through 
fiscal year 1994 and rough estimates are available for 1995.
    For fiscal year 1990, 41 States and Puerto Rico responded 
to the voluntary survey. However, not all States and 
jurisdictions were able to respond to every question in the 
survey; therefore, the data are incomplete for many items, and, 
according to APWA, should be considered ``rough'' national 
estimates. It also should be noted that definitions of some 
terms varied and that reporting periods were not identical 
among States.
    The VCIS data report on all children in substitute care 
under the management and responsibility of the State child 
welfare agency, including: foster family care (relative and 
nonrelative), group homes, child care facilities, emergency 
shelter care, supervised independent living, nonfinalized 
adoptive placements, and any other arrangement considered 24-
hour substitute care by the State agency. No distinctions are 
made among these different forms of substitute care. Finalized 
adoptions are not included in the VCIS data; however, 
nonfinalized adoptions are reflected in the data.
    As a result of Federal legislation enacted in 1986, States 
now are required to participate in a mandatory data collection 
system known as the Adoption and Foster Care Analysis and 
Reporting System (AFCARS). Once fully operational, AFCARS will 
replace the VCIS. AFCARS requires States to collect and submit 
to HHS key information on all children in foster care, 
beginning in October of 1994. States are also required to 
submit information on adoptions when the State IV-B/IV-E agency 
was involved in the placement or financial support of the 
adopted child. The legislative history and development of this 
data collection system are described later in this section.
Number of Children in Substitute Care
    The following table shows the number of children in 
substitute care, by State, based on VCIS data collected by 
APWA.
    Although the most recent complete VCIS data are for 1990, 
VCIS data are also available on the total estimates of children 
in foster care through 1995. These numbers indicate dramatic 
increases in the second half of the 1980s, from 270,000 
children at the end of 1985 to 468,000 children by the end of 
1994 (see table 12-14). APWA has further calculated 494,000 as 
a rough national estimate for the number of children in foster 
care at the end of 1995.
    In addition to the number of children reported as being in 
care on the first and last days of the fiscal year, the numbers 
of children who entered and left care during the year and a 
cumulative total number of children served throughout the year 
also were estimated by APWA, as shown below.

                     TABLE 12-14.--NUMBER AND MOVEMENT OF SUBSTITUTE CARE CHILDREN, 1982-94                     
----------------------------------------------------------------------------------------------------------------
                                                            Start of   Entered     Total                 End of 
                           Year                               year       care      served   Left care     year  
----------------------------------------------------------------------------------------------------------------
1982.....................................................    273,000    161,000    434,000    172,000    262,000
1983.....................................................    263,000    184,000    447,000    178,000    269,000
1984.....................................................    272,000    184,000    456,000    180,000    276,000
1985.....................................................    270,000    190,000    460,000    184,000    276,000
1986.....................................................    273,000    183,000    456,000    176,000    280,000
1987.....................................................    280,000    222,000    502,000    202,000    300,000
1988.....................................................    312,000    199,000    511,000    171,000    340,000
1989.....................................................    347,000    222,000    565,000    182,000    383,000
1990.....................................................    379,000    238,000    617,000    217,000    400,000
1991.....................................................    400,000    224,000    624,000    210,000    414,000
1992.....................................................    414,000    238,000    652,000    225,000    427,000
1993.....................................................    427,000    230,000    657,000    212,000    445,000
1994.....................................................    444,000    254,000    698,000    230,000    468,000
----------------------------------------------------------------------------------------------------------------
Source: American Public Welfare Association, revised July 1996.                                                 

    Under AFCARS, States are required to submit data reports 
twice yearly. The first submission was for the period October 
1, 1994, to March 31, 1995. Based on data submitted by 21 
States for this period, HHS projected a national estimate of 
469,073 children in foster care at the end of 1994. This number 
is very close to the VCIS estimate of 468,000 for 1994. A 
limited amount of more detailed data on children in foster care 
is available from AFCARS, reported below. As the system becomes 
fully operational, more complete and comprehensive data will be 
available.
    Table 12-15 shows the number of foster children by State, 
including the percent male and female, for the 21 States that 
submitted data under AFCARS that met HHS' selection criteria. 
An additional 10 States submitted data that were rejected for 
analysis by HHS for various reasons.

 TABLE 12-15.--CHILDREN IN FOSTER CARE AS OF DECEMBER 31, 1994 BY STATE 
                               AND GENDER                               
------------------------------------------------------------------------
                                                           In percent   
                   State                      Number   -----------------
                                                         Males   Females
------------------------------------------------------------------------
Alaska \1\................................       1,104     61.4     38.6
Arizona...................................       3,994     49.6     50.3
Arkansas..................................       2,055     47.4     52.6
California................................      87,368     50.8     49.2
District of Columbia......................       2,380     51.3     48.7
Florida \2\...............................      12,579     51.1     48.8
Georgia...................................      12,568     48.7     50.8
Idaho.....................................       1,032     58.0     42.0
Illinois..................................      45,657     50.1     49.9
Kansas....................................       5,804     57.0     43.0
Kentucky..................................       3,949     49.9     50.1
Massachusetts.............................      14,514     49.3     49.6
New Jersey................................       6,920     53.7     46.3
New Mexico................................       1,506     47.5     52.5
New York..................................      60,216     52.0     48.0
Ohio......................................      14,520     52.0     47.9
Oregon....................................       5,439     53.2     46.8
Rhode Island..............................       3,074     55.4     44.6
South Carolina............................       4,482     49.7     50.3
Texas.....................................      16,414     49.7     50.3
Utah......................................       1,415     51.8     48.2
                                           -----------------------------
      Totals..............................     306,990     51.1     48.9
Nat'l Est.................................     469,073                  
------------------------------------------------------------------------
\1\ Data were extracted from an Information System under development.   
\2\ Does not include relative placement cases.                          
                                                                        
Source: Preliminary analysis of data from Adoption and Foster Care      
  Analysis and Reporting System, U.S. Department of Health and Human    
  Services.                                                             

    Table 12-16 lists the average monthly number of children in 
foster care who received Federal funding under title IV-E for 
the years 1986, 1990, 1994, and 1995. These figures are lower 
than VCIS and AFCARS estimates because they do not include the 
substantial number of children who were not determined eligible 
for Federal funding (i.e., they were not from AFDC-eligible 
homes). In 1995, there were 136 percent more children in foster 
care receiving Federal subsidies than in 1986 and 55 percent 
more than in 1990.

             Characteristics of Children in Substitute Care

    Much of the demographic data collected on children in 
substitute care through the VCIS reflect three different 
groupings: children entering care during the study period, all 
children remaining in care at the end of the period, and 
children who left care during the period. AFCARS data reported 
below reflect children in foster care as of December 31, 1994.
Age
    Table 12-17 shows the age breakdown of children entering 
care, in care, and leaving care during fiscal year 1990. APWA's 
analysis of these data with comparable information from 
previous years shows gradual increases in the percentages of 
younger children entering foster care from fiscal year 1982 
through fiscal year 1990.
    Table 12-18 shows the age breakdown at the end of 1994 in 
the 21 States that submitted useable data to HHS under the new 
AFCARS system. These data are roughly similar to the VCIS data 
for children in care at the end of 1990.
Race/Ethnicity
    Although a significant portion of the children in foster 
care are white, black children are overrepresented in the 
foster care population. Table 12-19 indicates the racial 
composition of children who entered substitute care during 
fiscal year 1990, who were in care at the end of fiscal year 
1990, and who left substitute care during fiscal year 1990. 
APWA's comparison of these data with comparable information 
from previous years indicates a decrease in the percentage of 
white children in foster care since fiscal year 1982, and 
increases in the percentages of black children and Hispanic 
children.
    Table 12-20 shows the racial composition of foster children 
in care at the end of 1994, in the 21 States that submitted 
data to HHS under AFCARS. In comparison with the VCIS data on 
children in care at the end of 1990, the percentage of minority 
children in care appears to have increased further, while the 
share of white children in foster care has continued to 
decline.
Disability/health status
    Based on reports from 16 States, APWA found that 13 percent 
of children in substitute care at the end of fiscal year 1990 
had one or more disabling conditions.

                Reasons for Placement in Substitute Care

    For fiscal year 1990, the VCIS data report the reasons 
children were placed in substitute care in 19 States. The 
majority of children--71.1 percent--were placed in substitute 
care either for their protection or because their parent was 
unable or unavailable to care for them (table 12-21).

     TABLE 12-16.--TITLE IV-E FOSTER CARE AVERAGE MONTHLY NUMBER OF CHILDREN, SELECTED FISCAL YEARS 1986-95     
----------------------------------------------------------------------------------------------------------------
                                                                    Fiscal year                 Percent change  
                        State                        -----------------------------------------------------------
                                                        1986      1990      1994      1995     1986-95   1990-95
----------------------------------------------------------------------------------------------------------------
Alabama.............................................     1,450       965       957     1,041       -28         8
Alaska..............................................         8       347       271       289     3,513       -17
Arizona.............................................       481       866     2,697     2,429       405       180
Arkansas............................................       434       323       773       829        91       157
California..........................................    23,901    40,286    52,646    58,590       145        45
Colorado............................................     1,440     2,011     2,274     2,455        70        22
Connecticut.........................................     1,104     2,006     1,971     2,312       109        15
Delaware............................................       289       125       221       288        -0       130
District of Columbia................................       928       593     1,248     1,119        21        89
Florida.............................................     1,374     3,454     4,070     5,535       303        60
Georgia.............................................     1,893     2,647     3,426     3,610        91        36
Hawaii..............................................        46        41       530       606     1,217     1,378
Idaho...............................................       435       138       280       311       -29       125
Illinois............................................     4,378     9,340    16,808    20,802       375       123
Indiana.............................................     1,310     1,822     3,123     3,761       187       106
Iowa................................................       940     1,189     1,547     1,688        80        42
Kansas..............................................     1,076     1,113     1,326     1,206        12         8
Kentucky............................................     1,613     1,536     1,928     2,275        41        48
Louisiana...........................................     2,274     2,618     2,792     3,087        36        18
Maine...............................................       655       774     1,126     1,248        91        61
Maryland............................................     1,511       803     3,553     3,001        99       274
Massachusetts.......................................     1,018     3,695    12,223    10,170       899       175
Michigan............................................     6,823     8,218     8,244     8,362        23         2
Minnesota...........................................     1,574     2,100     3,063     3,652       132        74
Mississippi.........................................       627       723       836       794        27        10
Missouri............................................     2,114     2,410     4,421     4,707       123        95
Montana.............................................       281       364       615       669       138        84
Nebraska............................................       799     1,036     1,170     1,144        43        10
Nevada..............................................       222       462       696       625       182        35
New Hampshire.......................................       249       414       532       562       126        36
New Jersey..........................................     3,840     2,816     3,715     4,421        15        57
New Mexico..........................................       601       729       719       702        17        -4
New York............................................    17,188    31,036    51,310    48,341       181        56
North Carolina......................................     1,411     3,561     3,550     4,128       193        16
North Dakota........................................       256       308       528       470        84        53
Ohio................................................     4,166     5,164     6,358     6,866        65        33
Oklahoma............................................       885       894     1,447     1,091        23        22
Oregon..............................................     1,313     2,218     2,155     2,506        91        13
Pennsylvania........................................     7,058     8,823    14,346    16,260       130        84
Rhode Island........................................       434       433       670       837        93        93
South Carolina......................................       946     1,209     1,364     1,713        81        42
South Dakota........................................       302       219       196       194       -36       -11
Tennessee...........................................     1,031     1,876     5,150     6,398       521       241
Texas...............................................     2,917     3,595     5,461     5,917       103        65
Utah................................................       283       385       515       542        92        41
Vermont.............................................       500       860       907     1,017       103        18
Virginia............................................     1,795     1,878     2,335     2,459        37        31
Washington..........................................       983     2,751     1,989     1,969       100       -28
West Virginia.......................................       759     1,166     1,515     2,872       278       146
Wisconsin...........................................     2,620     5,562     4,780     4,784        83       -14
Wyoming.............................................        53        85        96        83        57        -2
                                                     -----------------------------------------------------------
      Totals........................................   110,586   167,981   244,473   260,737       136        55
----------------------------------------------------------------------------------------------------------------
Source: U.S. Department of Health and Human Services.                                                           


   TABLE 12-17.--AGES OF CHILDREN ENTERING, IN, AND LEAVING SUBSTITUTE  
                         CARE, FISCAL YEAR 1990                         
                              [In percent]                              
------------------------------------------------------------------------
               Age range                  Entering   In care    Leaving 
------------------------------------------------------------------------
All ages...............................        100        100        100
Under 1 year...........................       16.1        4.9        5.2
1-5 years..............................       26.1       31.1       26.5
6-12 years.............................       26.2       32.3       25.6
13-18 years............................       31.1       29.7       39.3
19 years and older.....................        0.4        1.7        3.2
Age unknown............................        0.1        0.3       0.02
Median age (years).....................        7.8        8.6       10.3
Number of States reporting.............         22         23        23 
------------------------------------------------------------------------
Source: American Public Welfare Association.                            


            TABLE 12-18.--CHILDREN IN FOSTER CARE AS OF DECEMBER 31, 1994, BY SELECTED STATE AND AGE            
----------------------------------------------------------------------------------------------------------------
                                                                            Age distribution                    
                                                       ---------------------------------------------------------
                                                                      In percent                                
                                                       ----------------------------------------                 
                    State                      Number     Age                           Age 19    Mean    Median
                                                         less   Age 1-  Age 6-  Age 13-  years    age      age  
                                                        than 1     5      12      18      and    years    years 
                                                         year    years   years   years   older                  
----------------------------------------------------------------------------------------------------------------
Alaska \1\..................................     1,105     4.0    20.3    23.5    51.7     0.5   11.331   13.380
Arizona.....................................     3,995     5.4    32.8    34.9    26.5     0.4    8.594    8.005
Arkansas....................................     2,055     3.4    27.2    28.7    40.0     0.8   10.110   10.683
California..................................    87,310     4.7    31.6    36.9    26.3     0.4    8.775    8.342
District of Columbia........................     2,380     4.6    33.0    30.0    26.8     5.5    9.381    8.735
Florida \2\.................................    12,587     3.5    29.1    33.4    31.4     2.6    9.648    9.457
Georgia.....................................    12,473     3.9    30.6    36.2    26.7     1.4    9.036    8.638
Idaho.......................................     1,032     1.9    24.1    21.5    51.6     0.9   11.215   13.576
Illinois....................................    45,657     4.5    33.3    36.1    23.3     2.8    8.756    7.984
Kansas......................................     5,801     1.9    16.5    24.4    55.2     2.1   12.221   14.283
Kentucky....................................     3,949     2.8    23.6    32.0    38.9     2.7   10.596   11.225
Massachusetts...............................    14,667     3.7    28.4    31.2    35.1     1.6    9.823    9.703
New Jersey..................................     6,920     6.5    29.0    29.2    34.0     1.3    9.409    9.399
New Mexico..................................     1,506     3.9    29.2    35.9    29.5     1.5    9.413    8.976
New York....................................    60,216     3.5    31.5    35.8    26.6     2.5    9.149    8.471
Ohio........................................    14,507     5.4    28.3    30.9    34.0     1.2    9.500    9.648
Oregon......................................     5,439     3.4    30.3    34.5    31.1     0.6    9.329    9.062
Rhode Island................................     3,074     5.2    25.4    24.4    40.3     4.7   10.609   11.288
South Carolina..............................     4,482     5.1    26.6    31.9    34.7     1.7    9.774   10.192
Texas.......................................    16,415     4.9    32.6    35.2    26.8     0.4    8.700    8.342
Utah........................................     1,415     2.8    19.8    32.4    44.8     0.2   10.795   11.745
                                             -------------------------------------------------------------------
      Totals................................   306,985     4.3    30.7    34.8    28.6     1.6    9.159    8.720
Nat'l Est...................................   469,073                                                          
----------------------------------------------------------------------------------------------------------------
\1\ Data were extracted from an Information System under development.                                           
\2\ Does not include relative placement cases.                                                                  
                                                                                                                
Source: Preliminary analysis of data from the Adoption and Foster Care Reporting and Analysis System, Department
  of Health and Human Services.                                                                                 


TABLE 12-19.--RACE/ETHNICITY OF CHILDREN ENTERING, IN, AND LEAVING CARE,
                            FISCAL YEAR 1990                            
                              [In percent]                              
------------------------------------------------------------------------
             Race/ethnicity               Entering   In care    Leaving 
------------------------------------------------------------------------
White..................................       47.2       39.3       49.9
Black..................................       30.8       40.4       29.4
Hispanic...............................       13.7       11.8       12.8
Other..................................        4.6        4.3        4.7
Unknown................................        3.7        4.2        3.2
Number of States reporting.............         23         31        25 
------------------------------------------------------------------------
Note.--According to the Census Bureau, in 1990 whites were 75.6 percent 
  of the population, blacks were 11.8 percent, and Hispanics were 9.0   
  percent.                                                              
                                                                        
Source: American Public Welfare Association.                            

                            Permanency Goals

    Table 12-22 indicates the permanency planning goals for 
substitute care children in fiscal year 1990, according to 
reports from 26 States. As the table shows, family 
reunification was the permanency goal for more than half the 
children in care.
    Comparing the data in table 12-22 with earlier years shows 
a significant increase in family reunification as a permanency 
goal. Family reunification was the goal for 39.2 percent of 
children in fiscal year 1982, according to VCIS data, compared 
with 60.1 percent of substitute care children in fiscal year 
1990.

           Living Arrangements of Children in Substitute Care

    The VCIS data for fiscal year 1990 contain information on 
the living arrangements of substitute care children in 28 
States. Table 12-23 shows that the majority of substitute care 
children were living in foster family homes, although a 
significant percentage were living in either group homes, 
residential treatment centers, or emergency shelters.
    The VCIS data for fiscal year 1990 included some limited 
information on children placed in unlicensed/unpaid relatives' 
homes. Only seven States could provide actual data on such 
children, but a total of nine States said that such children 
were included in their counts of children placed in substitute 
care. In the seven States that reported data, 19.3 percent of 
their caseload lived in unlicensed/unpaid relatives' homes, 
ranging from 7.4 percent in one State to 32.6 percent in 
another.

         Number and Duration of Placements While in Foster Care

    The VCIS collected data on the number of placements during 
the preceding 3 years experienced by children in care at the 
end of fiscal year 1990. More than half the children in care at 
the end of fiscal year 1990 had experienced more than one 
placement, according to data from 15 States (table 12-24).

                         TABLE 12-20.--CHILDREN IN FOSTER CARE AS OF DECEMBER 31, 1994, BY STATE AND RACE/ETHNICITY, IN PERCENT                         
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                     Non-Hispanic \5\                                   
                                                                                       --------------------------------------------                     
                               State                                 Number   Hispanic                          AI/AN    Asian/PI     Unknown     Total 
                                                                                        White \3\  Black \3\     \3\        \3\                         
--------------------------------------------------------------------------------------------------------------------------------------------------------
Alaska \1\........................................................     1,105       1.7       35.9       11.2      45.2         1.0         4.9      99.9
Arizona...........................................................     3,997      22.2       55.0       17.2       2.5         0.4         2.6      99.9
Arkansas..........................................................     2,055       0.6       54.7       43.3       0.4         0.2         0.8     100.0
California........................................................    87,382      24.7       35.6       36.9       1.0         1.5         0.1      99.8
District of Columbia..............................................     2,380       0.9        1.2       95.0       0.0         0.0         2.8      99.9
Florida \2\.......................................................    12,587       0.0       50.2       49.2       0.1         0.1         0.4     100.0
Georgia...........................................................    12,631       1.0       35.2       59.9       0.0         0.1         3.8     100.0
Idaho.............................................................     1,032       0.0       85.9        0.7       4.2         0.0         9.2     100.0
Illinois..........................................................    45,657       3.9       18.0       76.7       0.1         0.2         1.0      99.9
Kansas............................................................     5,804       5.5       64.9       25.8       1.3         0.8         1.7     100.0
Kentucky..........................................................     3,949       1.4       67.3       26.7       0.2         0.4         4.0     100.0
Massachusetts.....................................................    14,337      17.3       52.5       25.7       0.2         1.3         3.1     100.1
New Jersey........................................................     6,920      11.0       22.8       63.2       0.5         0.6         1.9     100.0
New Mexico........................................................     1,506      45.2       35.9       11.1       7.1         0.7         0.0     100.0
New York..........................................................    60,216      14.5       13.2       52.3       0.1         0.4        19.6     100.1
Ohio..............................................................    14,531       1.4       45.8       47.2       0.1         0.1         5.3      99.9
Oregon............................................................     5,439       6.2       70.6       13.5       4.8         0.9         4.0     100.0
Rhode Island......................................................     3,074      11.0       54.8       26.3       1.1         1.3         5.5     100.0
South Carolina....................................................     4,482       0.0       34.5       63.9       0.0         0.0         1.5      99.9
Texas.............................................................    16,415      25.1       33.6       30.1       0.2         0.4        10.6     100.0
Utah..............................................................     1,415       8.3       81.3        3.3       5.7         0.7         0.8     100.1
                                                                   -------------------------------------------------------------------------------------
      Totals \4\..................................................   306,914      13.8       32.3       46.8       0.7         0.8         5.6     100.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Data were extracted from an Information System under development.    \2\ Does not include relative placement cases and its Information System at the
  time of data extraction did not contain ``Hispanic Origin'' information.    \3\ The Race and Ethnicity categories have been determined using two      
  AFCARS data elements, ``Race'' and ``Hispanic Origin.''    \4\ The national estimate was 469,073.    \5\ The four Race/Ethnicity categories defined as
  ``Non Hispanic'' resulted from States' coding data element ``Race'' as White, Black, AI/AN (American Indian/Alaskan Native), or ASIAN/PI (Asian/      
  Pacific Islander), and leaving data element ``Hispanic Origin'' blank (missing) or coding it as ``No'' or ``Unable to Determine.''                    
                                                                                                                                                        
Source: Preliminary analysis of data from the Adoption and Foster Care Analysis and Reporting System, Department of Health and Human Services.          


TABLE 12-21.--REASONS CHILDREN ENTERED SUBSTITUTE CARE, FISCAL YEAR 1990
------------------------------------------------------------------------
                                                                Percent 
------------------------------------------------------------------------
Protective service...........................................       50.2
Parent condition or absence..................................       20.9
Status offense/delinquent....................................       11.3
Relinquishment of parental rights............................        0.8
Handicap of child............................................        1.9
Other........................................................       12.5
Unknown......................................................       2.4 
------------------------------------------------------------------------
Source: American Public Welfare Association.                            


  TABLE 12-22.--PERMANENCY PLANNING GOALS FOR CHILDREN IN CARE, FISCAL  
                                YEAR 1990                               
------------------------------------------------------------------------
                                                                Percent 
------------------------------------------------------------------------
Family reunification.........................................       60.1
Long-term foster care........................................       12.0
Adoption.....................................................       15.1
Independent living...........................................        5.2
Guardianship.................................................        3.1
Care and protection in substitute care.......................        2.2
Unknown......................................................       2.3 
------------------------------------------------------------------------
Source: American Public Welfare Association.                            


 TABLE 12-23.--LIVING ARRANGEMENTS OF CHILDREN IN CARE, FISCAL YEAR 1990
------------------------------------------------------------------------
                                                                Percent 
------------------------------------------------------------------------
Foster family homes..........................................       74.5
Nonfinalized adoptions.......................................        2.7
Group homes/residential treatment/emergency shelters.........       16.4
Independent living...........................................        0.5
Other........................................................        5.6
Unknown......................................................       0.3 
------------------------------------------------------------------------
Source: American Public Welfare Association.                            


 TABLE 12-24.--NUMBER OF PLACEMENTS DURING PREVIOUS 3 YEARS FOR CHILDREN
                 IN CARE AT END OF FISCAL YEAR 1990 \1\                 
------------------------------------------------------------------------
                                                                Percent 
------------------------------------------------------------------------
1 placement..................................................       42.6
2 placements.................................................       27.5
3-5 placements...............................................       23.6
6 or more placements.........................................        6.1
Unknown......................................................        0.2
------------------------------------------------------------------------
\1\ Includes current placement.                                         
                                                                        
Source: American Public Welfare Association.                            

    A comparison of these data with data from previous years 
suggests a trend toward more multiple placements between fiscal 
years 1982 and 1990. Specifically, a total of 43.1 percent of 
children in care at the end of fiscal year 1982 had been in 
more than one placement, compared with 57.2 percent at the end 
of 1990.
    Table 25 indicates the length of time in continuous care 
experienced by children who remained in care at the end of 
1990. A comparison with 1982 data on length of stay for 
children remaining in care at the end of the year indicates 
that the percentage of children in care for 5 or more years has 
decreased from 18.2 to 10.2 percent, and the percentage of 
children in care 6 months or less is somewhat less in 1990 than 
it was in 1982 (21.7 percent), although it had increased 
slightly in the interim years.

    TABLE 12-25.--LENGTH OF TIME IN CONTINUOUS CARE, FISCAL YEAR 1990   
                              [In percent]                              
------------------------------------------------------------------------
                                                               Children 
                                                                in care 
------------------------------------------------------------------------
0-6 months..................................................        17.8
6-12 months.................................................        14.8
1-2 years...................................................        23.9
2-3 years...................................................        15.8
3-5 years...................................................        16.9
5 years or more.............................................        10.2
Unknown.....................................................         0.6
Median (years)..............................................         1.7
Number of States............................................          22
------------------------------------------------------------------------
Source: American Public Welfare Association.                            

                   Outcomes for Children Leaving Care

    Data are available from the VCIS from 24 States on the 
outcomes for children who left care in 1990. Table 12-26 
indicates that two-thirds of children were reunified with their 
families. A comparison of these data with earlier years 
indicates that family reunification significantly increased 
from 49.7 percent in fiscal year 1982 to 66.6 percent in fiscal 
year 1990. Adoption, on the other hand, decreased as an outome 
for children leaving care from 10.4 percent in fiscal year 1982 
to 7.7 percent in fiscal year 1990.
    When evaluating these data on outcomes for children leaving 
care, it should be remembered that a portion of the children 
will likely return to substitute care at some point. For 
example, 15 percent of children entering care in fiscal year 
1990 were reentrants.

              Characteristics of Children in Adoptive Care

    As with foster care, national data on the characteristics 
of children for whom adoption assistance payments are made are 
sketchy. Thus far, the only available data has been from APWA's 
VCIS reports. Once AFCARS is fully operational, data on 
adoptive children will become available.
    Not all of the children described in VCIS data are the 
beneficiaries of adoption subsidies. VCIS collects information 
from States and compiles it in an annual report, with data 
available from fiscal years 1982-90. APWA notes that the data 
in its reports should be treated as rough estimates given the 
voluntary nature of the information and the fact that not all 
States report data on all questions or conform to the same data 
definitions.

   TABLE 12-26.--OUTCOMES FOR CHILDREN WHO LEFT CARE, FISCAL YEAR 1990  
------------------------------------------------------------------------
                                                                Percent 
------------------------------------------------------------------------
Reunified....................................................       66.6
Adopted......................................................        7.7
Reached age of majority/emancipated..........................        6.5
Other \1\....................................................       15.7
Unknown......................................................       3.5 
------------------------------------------------------------------------
\1\ ``Other'' includes such reasons as running away, marriage,          
  incarceration, death, discharge to another agency, or legal           
  guardianship established.                                             
                                                                        
Source: American Public Welfare Association.                            

    VCIS collects information on adoptions related to 
substitute care children only. VCIS divides children in 
adoptive care into those with finalized adoptions, those 
awaiting adoptive placement, and those residing in nonfinalized 
adoptive homes. Children in the latter two categories are 
included in VCIS's definition of substitute care. VCIS collects 
data on the age, race/ethnicity, special needs status, and 
relation to adoptive parents of these children. The numbers 
below represent national estimates that APWA calculated based 
on data received from reporting States. Not all of the children 
described below were adopted with subsidies.
    As shown in table 12-27, VCIS reported that 17,000 children 
had their adoption finalized in fiscal year 1990, and another 
18,000 were placed in nonfinalized adoptive homes. In addition, 
20,000 were still in substitute care and awaiting adoptive 
placement at the end of fiscal year 1990. Of the adoptions that 
were finalized in fiscal year 1990, the two largest age groups 
of children were between 1 and 5 years of age (49.7 percent) 
and between 6 and 12 years of age (37.4 percent). About half of 
these children (50.8 percent) were white, while 29.2 percent 
were black. Two-thirds had one or more special needs.
    Less than half (41.5 percent) of the children whose 
adoptions were finalized in fiscal year 1990 were adopted by 
people unrelated to them. Another 47.2 percent of the children 
were adopted by nonrelative foster parents. Seven percent were 
adopted by relatives. The characteristics of children awaiting 
adoptive placement are somewhat different from children whose 
adoptions were finalized. These children are generally older 
and include a greater percentage of black children (42.8 
percent versus 29.2 percent of finalized children). In 
addition, of the children awaiting adoptive placement, 46.3 
percent had been waiting for 2 or more years.

    TABLE 12-27.--FINALIZED ADOPTIONS AND CHILDREN AWAITING ADOPTIVE    
                       PLACEMENT, FISCAL YEAR 1990                      
                            [In percentages]                            
------------------------------------------------------------------------
                                                              Children  
                                              Finalized       awaiting  
                                            adoptions \1\     adoptive  
                                                           placement \2\
------------------------------------------------------------------------
Age:                                                                    
    0-1 year..............................       \3\ 4.5        \3\ 4.0 
    1-5 years.............................          49.7           36.2 
    6-12 years............................          37.4           43.2 
    13-18 years...........................           7.7           15.8 
    19 years and older....................           0.2            0.7 
    Unknown...............................           0.5            0.1 
Race/ethnicity:                                                         
    White.................................      \4\ 50.8       \5\ 44.3 
    Black.................................          29.2           42.8 
    Hispanic..............................          13.3            7.0 
    Other.................................           4.5            3.7 
    Unknown...............................           2.2            2.2 
Special needs status:                                                   
    1 or more special needs...............      \6\ 66.7       \7\ 71.7 
    No special needs......................          33.3           27.9 
    Unknown...............................           0.0            0.4 
Time awaiting adoptive placement: \8\                                   
    0 to 6 months.........................  .............          19.4 
    6 to 12 months........................  .............          12.4 
    1 to 2 years..........................  .............          21.4 
    2 years or more.......................  .............          46.3 
    Unknown...............................  .............          0.5  
------------------------------------------------------------------------
\1\ Data reported on the number of finalized adoptions which took place 
  during fiscal year 1990.                                              
\2\ Data reported on the number of children awaiting placement at the   
  end of fiscal year 1990.                                              
\3\ Data provided by 20 States.                                         
\4\ Data provided by 27 States.                                         
\5\ Data provided by 25 States.                                         
\6\ Data provided by 19 States.                                         
\7\ Data provided by 18 States.                                         
\8\ Data provided by 16 States.                                         
                                                                        
Source: American Public Welfare Association.                            

             Trends in Child Welfare and Foster Care Costs

    As a result of the trends in foster care caseloads and the 
Federal requirements of Public Law 96-272, funding for the 
Title IV-E Foster Care Program has increased significantly from 
1981 to 1996. Based on Administration estimates for fiscal year 
1996, Federal title IV-E expenditures increased almost tenfold 
(from $308.8 million to $3,333 million) between 1981 and 1996. 
Although the program has not been fully funded since 1981, 
funding for the Title IV-B Child Welfare Services Program 
increased by 80 percent from 1981 to 1994 ($163.6 million to 
$294.6 million), although funding for this program has since 
declined to $277.4 million in fiscal year 1996. Funding for the 
title XX social services block grant, which States may use for 
child welfare services, has actually fallen in nominal terms.
    In recent years, an increasing proportion of title IV-E 
costs has been expended on child placement services, 
administration, and training. Table 12-29 shows HHS and CBO 
estimates of title IV-E expenditures through fiscal year 2001. 
Expenditures for administration include child placement service 
expenditures on behalf of children who are ``candidates'' for 
foster care, as well as children who are actual recipients of 
foster care maintenance benefits. In other words, funds are 
expended on behalf of certain children before and during the 
time a title IV-E eligibility determination is made; as a 
result, Federal reimbursement is provided for administration 
and services for some children who, ultimately, are determined 
not eligible for title IV-E maintenance payments.

 TABLE 12-28.--PROPORTION OF SPECIAL NEEDS \1\ CHILDREN IN FOSTER CARE, 
         AWAITING ADOPTION, AND ADOPTED, SELECTED YEARS 1984-90         
------------------------------------------------------------------------
                                                   Year                 
             Status              ---------------------------------------
                                    1984      1985      1988      1990  
------------------------------------------------------------------------
Number of children in foster                                            
 care...........................   276,000   276,000   340,000   406,000
(Percent with special needs)....        22        18        22        13
Number of foster children                                               
 awaiting adoption..............    17,000    16,000    18,000    20,000
(Percent with special needs)....        43        51        64        72
Number of foster children                                               
 adopted........................    20,000    16,000    19,000    17,000
(Percent with special needs)....        57        62        59        67
------------------------------------------------------------------------
\1\ Special needs are determined by the States and may include a child's
  age, minority status, membership in a sibling group, or medical,      
  emotional, or physical disability.                                    
                                                                        
Source: Maximus (1987); American Public Welfare Association (1993).     

    Table 12-30 shows Federal foster care expenditures by State 
in 1984, 1988, 1993, and 1995. Between 1984 and 1995, total 
foster care expenditures increased from $438 million to $3.050 
billion (596 percent). Between 1988 and 1995, total foster care 
expenditures increased by 242 percent. Over this latter time 
period, foster care maintenance costs increased from $548 
million to $1.594 billion (191 percent). Because of the large 
increase in administrative and placement costs relative to 
maintenance costs, the share of total cost represented by 
maintenance costs decreased between 1988 and 1995.
    Some have argued that foster care and adoption assistance 
became more expensive for the Federal Government after 
enactment of Public Law 96-272 because a growing number of 
States transferred costs they had traditionally paid with State 
dollars to the Federal Government as administrative expenses. 
During an April 1987 hearing of the House Select Committee on 
Children, Youth, and Families, Dodie Livingston, Commissioner 
of the Administration for Children, Youth, and Families, 
testified that ``States are finding ways to refinance existing 
services through these entitlements and the growth in 
administrative cost does not reflect increases in services or 
improved management.'' She also expressed concern that the 
open-ended entitlement of title IV-E was being exploited by 
States that were hiring consultants to help them ``capture'' 
more available Federal funds. As evidence, the Assistant 
Secretary pointed to the high variability of title IV-E 
administrative and cost claims among States.

  TABLE 12-29.--PROPORTION OF TITLE IV-E FOSTER CARE EXPENDITURES SPENT ON ADMINISTRATION AND TRAINING, FISCAL  
                                               YEARS 1983-2001 \1\                                              
----------------------------------------------------------------------------------------------------------------
                                                                      Total                                     
                                                                     Federal     Administration   Administration
                                                                    title IV-E    and training     and training 
                           Fiscal year                             expenditure    expenditures    proportion of 
                                                                       (in       (in millions)        total     
                                                                    millions)         \2\                       
----------------------------------------------------------------------------------------------------------------
Actual:                                                                                                         
    1983.........................................................       $394.8           $117.9             0.30
    1984.........................................................        445.2            147.4             0.33
    1985.........................................................        546.2            190.9             0.35
    1986.........................................................        605.4            213.8             0.35
    1987.........................................................        792.6            312.9             0.39
    1988.........................................................        891.1            342.8             0.38
    1989.........................................................      1,153.1            507.1             0.44
    1990.........................................................      1,473.2            638.2             0.43
    1991.........................................................      1,819.2            788.8             0.43
    1992.........................................................      2,232.8          1,029.0             0.46
    1993.........................................................      2,547.0          1,182.0             0.46
    1994.........................................................      2,606.5          1,190.5             0.46
    1995.........................................................      3,050.2          1,455.7             0.48
HHS estimate:                                                                                                   
    1996.........................................................      3,332.8          1,625.9             0.49
    1997.........................................................      3,603.7          1,688.8             0.47
    1998.........................................................      3,926.0          1,832.4             0.47
    1999.........................................................      4,273.3          1,986.0             0.46
    2000.........................................................      4,652.1          2,153.9             0.46
    2001.........................................................      5,074.2          2,345.5             0.46
CBO estimate:                                                                                                   
    1996.........................................................      3,213.0          1,502.0             0.47
    1997.........................................................      3,467.0          1,567.0             0.45
    1998.........................................................      3,782.0          1,681.0             0.44
    1999.........................................................      4,096.0          1,787.0             0.44
    2000.........................................................      4,440.0          1,911.0             0.43
    2001.........................................................      4,794.0          2,038.0             0.43
----------------------------------------------------------------------------------------------------------------
\1\ Does not include transfer to title IV-B.                                                                    
\2\ Includes regular administration, training, and for fiscal years 1994-2001, State automated child welfare    
  information system (SACWIS) costs.                                                                            
                                                                                                                
Source: Compiled by House Committee on Ways and Means staff based on data from U.S. Department of Health and    
  Human Services and Congressional Budget Office.                                                               

    In October of 1987, the HHS Office of Inspector General 
(OIG) published a report on the high absolute levels of title 
IV-E administrative and training costs and the wide variation 
of claims among States. The report found that the 
administrative costs associated with the Foster Care Program 
were much higher than those associated with similar programs 
such as AFDC, and the Medicaid and Food Stamp Programs. 
However, the additional spending was attributed to the fact 
that regulations implementing Public Law 96-272 expressly 
defined many activities as allowable administrative costs that 
were not reimbursed by the Federal Government when foster care 
was part of AFDC. By regulation, claimable title IV-E 
administrative costs include:
 1. Referral to services at time of intake;
 2. Preparation for, and participation in, judicial 
        determinations;
 3. Placement in foster care;
 4. Development of a case plan;
 5. Case reviews;
 6. Case management and supervision;
 7. Recruitment and licensing of foster homes and institutions; 
        and
 8. Foster care rate setting.
    The 1987 report also found that much of the variation of 
States' administrative cost claims was linked to the degree of 
sophistication of each State's accounting practices. The report 
concluded that although HHS had uncovered some random 
accounting errors ``there was no evidence found to demonstrate 
patterns of abuse.'' In fact, OIG did an audit of the State of 
Missouri, in which claimed administrative costs had risen 
``precipitously'' and found no serious State violations of 
Federal guidelines or regulations.
    In addition, the report noted that the decision by the HHS 
Departmental Appeals Board concerning Missouri's title IV-E 
allowable administrative costs, which was issued shortly before 
the OIG's report, would further expand the allowable expenses 
that could be charged as administration and training. The 
Office of Inspector General issued another report in August 
1990b with the following specific findings, which are generally 
consistent with the findings made in the 1987 report:
 1. The term ``administrative costs'' is a misnomer. Most of 
        the activities being funded are not traditional 
        administrative costs, but are ``important child 
        placement services.'' Administrative costs grew from 
        $143 million in 1985 to $400 million in 1988. However, 
        only 20 percent of the cost increase is attributable to 
        administration of the program. Nearly 80 percent 
        relates to direct service activities that the IG 
        classified as ``child placement services.''
 2. The current procedure used to account for costs does not 
        allow for examining any correlation between increased 
        administrative costs and increased services to foster 
        children.
 3. Cost increases occurred for two primary reasons: the 
        expanded definition of allowable administrative 
        activities provided in Public Law 96-272, and a broad 
        interpretation of that definition by the Departmental 
        Appeals Board. Other factors contributing to the 
        increases were the States' use of consultants, an 
        increase in the number of title IV-E children, 
        increases in the number of case workers, and cost-of-
        living increases for State employees.
 4. Variations in costs among States resulted from using 
        nonhomogeneous cost indicators, a lack of uniformity in 
        defining and allocating allowable costs, a gradual 
        trend by States to use consultants for identifying 
        opportunities to maximize Federal funding sources, and 
        States' revision of cost allocation plans to capture 
        costs for children who are ``candidates'' for IV-E 
        foster care (but who may not ultimately receive foster 
        care maintenance payments).

                                     TABLE 12-30.--FEDERAL FOSTER CARE EXPENDITURES BY STATE, SELECTED YEARS 1984-95                                    
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                      Fiscal year total expenditures (dollars in   Maintenance costs   Maintenance costs    Percentage  
                                                                       millions)                      (dollars in     as a percentage of     growth in  
                        State                        --------------------------------------------      millions)             total             total    
                                                                                        1995 \2\ ----------------------------------------  expenditures,
                                                        1984 \1\    1988 \1\  1993 \2\     \3\      1988    1995 \2\    1988    1995 \3\    1988-95 \3\ 
--------------------------------------------------------------------------------------------------------------------------------------------------------
Alabama.............................................         $2.20     $1.96     $4.68     $7.29     $1.79     $2.06      91.3      28.3             272
Alaska..............................................          0.08      0.59      4.41      7.53      0.59      2.16     100.0      28.7           1,176
Arizona.............................................          2.12      3.78     17.97     34.32      1.40     15.07      37.0      43.9             808
Arkansas............................................          0.55      1.11      9.75     30.38      0.65      6.97      58.6      22.9           2,637
California..........................................         99.74    196.95    478.06    569.89    123.63    297.48      62.8      52.2             189
Colorado............................................          1.60      4.59     20.27     24.42      3.19      6.65      69.5      27.2             432
Connecticut.........................................          2.93      6.86     15.90     56.03      5.08     12.45      74.1      22.2             717
Delaware............................................          0.42      0.53      1.34      4.75      0.52      0.86      98.1      18.1             796
District of Columbia................................          7.15      2.79     11.20     16.67      0.52      5.83      18.6      35.0             497
Florida.............................................          2.92      9.66     45.88     69.37      6.03     23.17      62.4      33.4             618
Georgia.............................................          7.39     11.35     24.50     23.41      5.88     11.79      51.8      50.4             106
Hawaii..............................................          0.04      0.09      2.91      8.77      0.07      2.66      77.8      30.3           9,644
Idaho...............................................          0.25      0.64      2.15      5.62      0.59      0.89      92.2      15.8             778
Illinois............................................          6.30     26.95    117.59    190.46     18.12     99.98      67.2      52.5             607
Indiana.............................................          1.10      1.79     37.65     72.61      1.50     38.35      83.8      52.8           3,956
Iowa................................................          1.84      4.64     13.66     14.73      2.30      7.44      49.6      50.5             217
Kansas..............................................          3.45      4.61     19.37     21.38      3.65      8.64      79.2      40.4             364
Kentucky............................................          2.19      7.78     34.06     44.37      6.32     17.59      81.2      39.6             470
Louisiana...........................................         10.51     15.07     28.56     34.85      7.48     20.01      49.6      57.4             131
Maine...............................................          2.97      5.09      9.44     14.83      3.20     12.01      62.9      81.0             191
Maryland............................................          3.06     22.27     44.60     52.37      5.29     23.35      23.8      44.6             135
Massachusetts.......................................          5.12     10.65     57.40     82.46      6.49     33.61      60.9      40.8             674
Michigan............................................         33.32     46.34    103.27    111.75     29.28     59.77      63.2      53.5             141
Minnesota...........................................          6.38     20.59     33.00     33.88      7.30     21.72      35.5      64.1              65
Mississippi.........................................          0.97      0.93      4.09      5.58      0.91      1.76      97.8      31.5             500
Missouri............................................          4.35     14.51     29.07     38.15      6.43     17.47      44.3      45.8             163
Montana.............................................          1.53      2.16      4.58      9.00      1.82      4.07      84.3      45.2             317
Nebraska............................................          2.29      5.28     10.16     17.49      2.52      8.57      47.7      49.0             231
Nevada..............................................          0.36      1.06      2.88      2.80      0.68      1.32      64.2      47.1             164
New Hampshire.......................................          1.21      2.83      7.37      8.23      1.75      3.92      61.8      47.6             191
New Jersey..........................................          5.87     15.05     25.30     28.76      7.16     15.32      47.6      53.3              91
New Mexico..........................................          0.63      3.91      5.46      6.70      2.21      2.86      56.5      42.7              71
New York............................................        128.61    255.27    779.23    731.13    177.57    421.52      69.6      57.7             186
North Carolina......................................          2.11      2.36     17.63     41.16      2.15     32.85      91.1      79.8           1,644
North Dakota........................................          0.79      1.33      5.41      7.59      1.06      2.89      79.7      38.1             471
Ohio................................................          5.80     32.16     91.98    127.09     14.11     68.38      43.9      53.8             295
Oklahoma............................................          3.68      4.21      8.19     28.96      2.20      6.41      52.3      22.1             588
Oregon..............................................          6.26     13.12     14.08     27.67      5.92      9.78      45.1      35.3             111
Pennsylvania........................................         29.19     45.28    180.46    187.17     39.25    138.81      86.7      74.2             313
Rhode Island........................................          1.24      5.45      8.08      8.64      2.26      4.80      41.5      55.6              59
South Carolina......................................          1.34      4.42      8.82     12.08      1.92      6.08      43.4      50.3             173
South Dakota........................................          0.52      1.63      2.57      2.44      0.67      0.89      41.1      36.5              50
Tennessee...........................................          1.68      2.71     15.77     24.33      2.65     15.42      97.8      63.4             798
Texas...............................................         10.18     31.21     72.18    100.00      8.92     50.64      28.6      50.6             220
Utah................................................          0.81      1.68      5.96     10.49      1.22      3.96      72.6      37.8             524
Vermont.............................................          1.93      3.83      6.65      8.20      1.91      5.74      49.9      70.0             114
Virginia............................................          3.09      4.64     13.39     19.63      3.33      6.21      71.8      31.6             323
Washington..........................................          4.36      7.58     19.89     12.59      3.77      9.87      49.7      78.4              66
West Virginia.......................................          5.56      7.50      4.27      5.88      5.31      3.86      70.8      65.6            (22)
Wisconsin...........................................         10.32     13.61     42.58     44.95      9.43     19.56      69.3      43.5             230
Wyoming.............................................          0.14      0.76      1.05      0.75      0.34      0.52      44.7      69.3             (1)
                                                     ---------------------------------------------------------------------------------------------------
      Total.........................................        438.45    891.16  2,524.72  3,049.60    548.34  1,593.99      61.5      52.3             242
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Does not include transfers from title IV-E (Foster Care) to title IV-B (Child Welfare Services).    \2\ Does not include disputes and               
  reconciliations.    \3\ For fiscal year 1995, includes State Automated Child Welfare Information System (SACWIS) expenditures.                        
                                                                                                                                                        
Note.--Totals may differ from sum of State amounts because of rounding.                                                                                 
                                                                                                                                                        
Source: Department of Health and Human Services.                                                                                                        

    The report concluded that legislative and administrative 
measures were necessary for containing escalating 
administrative costs.
    During the second session of the 101st Congress, 
legislation was enacted as part of the Omnibus Budget 
Reconciliation Act of 1990 (Public Law 101-508) designed to 
provide better information on State reimbursement for 
administrative costs. Under the provisions of Public Law 101-
508, ``child placement services'' was added as a separate 
category for which States may claim reimbursement, in addition 
to administrative costs. Prior to this provision, States 
claimed reimbursement for child placement services as 
administrative costs. The amendment, while not changing the 
type of services for which States may claim reimbursement, was 
designed to provide more specific information on how Federal 
matching funds are used. HHS reports that of claims filed for 
child placement and administrative costs in fiscal year 1994, 
45 percent were for case planning and management activities, 30 
percent were for preplacement activities, 9 percent were for 
eligibility determinations, and the remaining 16 percent were 
for other activities, including traditional administrative and 
overhead costs.

              FOSTER CARE AND ADOPTION INFORMATION SYSTEM

                         Lack of Adequate Data

    Historically, there has been a lack of reliable data on 
foster care and adoption. In fact, not every State even 
reported its average monthly foster care caseload under the 
federally assisted program until 1975. Moreover, States have 
never been required to collect data on non-federally-assisted 
foster care. This lack of data was one of several concerns that 
Congress hoped to address with enactment of the Adoption 
Assistance and Child Welfare Act of 1980 (Public Law 96-272).
    The 1980 law imposed several requirements on States as a 
condition for incentive funds under the Title IV-B Child 
Welfare Services Program, including a one-time inventory of 
children in foster care and a statewide information system for 
tracking children in foster care. Shortly after enactment of 
Public Law 96-272, HHS wrote detailed guidelines for the 
implementation of these requirements, which were published as 
an interim final rule on December 31, 1980. However, HHS 
withdrew these regulations the following March, stating that 
the Office of Management and Budget (OMB) had not reviewed and 
approved certain sections. In 1982, the Department issued a 
policy information question (ACYF-PIQ-82-06) which restated the 
law's requirement that States have an information system, but 
did not specify the system's content. The 1980 regulations were 
never reissued.
    Since 1982, HHS has funded the American Public Welfare 
Association (APWA) to conduct a voluntary annual survey of 
States, known as the Voluntary Cooperative Information System 
(VCIS). Until now, VCIS has been the only source of national 
data on the number and characteristics of children in foster 
and adoptive care. However, the VCIS is of limited use for 
several reasons--not all States participate fully in the 
survey, reporting periods are not consistent among States, and 
there is a serious time lag between data collection and 
publication. Further, data are available only in an aggregated, 
State-specific format, preventing the type of analysis that 
could be conducted with case-specific data. VCIS data are 
presented earlier in this section.
    In response to the need for better data collection, 
Congress in 1986 approved an amendment to title IV-E (section 
479) requiring that an advisory committee be established and 
submit a report to Congress and HHS with recommendations for 
establishing, administering, and financing a system for 
collecting data on adoption and foster care. This amendment, 
contained in the Omnibus Budget Reconciliation Act, Public Law 
99-509, required that the Secretary of HHS issue final 
regulations for the system by December 31, 1988, and that 
mandatory data collection be fully implemented no later than 
October 1, 1991.
    The advisory committee submitted its final report in 1987, 
and in May 1989, HHS submitted an implementation plan to 
Congress.
    On September 27, 1990, HHS proposed regulations to 
implement the data collection system known as the Adoption and 
Foster Care Analysis and Reporting System (AFCARS). The 
population to be covered would have been children under the 
responsibility of the State child welfare agency and financing 
would have come from the title IV-E administrative cost match. 
States would have been able to claim only that portion of their 
costs that related to children eligible for title IV-E, 
although the system would have required States to collect data 
on non-IV-E children as well.

            OBRA 1993 and Final Rules for AFCARS and SACWIS

    In 1993, as part of the Omnibus Budget Reconciliation Act 
(Public Law 103-66), Congress amended section 479, the title 
IV-E provision added in 1986 that required establishment of a 
foster care and adoption data collection system.
    The 1993 amendment authorized an enhanced Federal matching 
rate to States for certain costs related to data collection for 
fiscal years 1994-96. The statute specifies that this enhanced 
match of 75 percent is available for costs of planning, design, 
development and installation of statewide mechanized data 
collection and information retrieval systems, including costs 
of hardware, as long as the systems do the following: comply 
with HHS regulations; to the extent practicable, interface with 
State child abuse and neglect data collection systems and with 
AFDC data collection systems; and provide more efficient, 
economical and effective administration of State child welfare 
programs, as determined by HHS.
    The 1993 law provides that ongoing operational costs of 
State data collection and information retrieval systems will be 
matched at the 50 percent Federal rate available for 
administrative expenses under title IV-E. After fiscal year 
1996, the enhanced match will expire and all data collection 
costs will be matched at the 50 percent rate. Further, the 
amendment specifies that States may claim reimbursement for 
data collection systems without regard to whether they are used 
for foster and adoptive children who are not eligible for title 
IV-E assistance.
    On December 22, 1993, HHS published two sets of rules in 
the Federal Register: interim final rules for Statewide 
Automated Child Welfare Information Systems (SACWIS), issued in 
response to enactment of Public Law 103-66; and final rules 
implementing AFCARS. Under the interim final rules for SACWIS, 
States must develop ``comprehensive'' child welfare data 
collection systems, of which AFCARS will be a component, in 
order to qualify for Federal funding, including the 75 percent 
enhanced match. According to HHS, ``comprehensive'' means that 
a State SACWIS system must include child welfare services, 
foster care and adoption assistance, family preservation and 
support services, and independent living.
    Under the interim final rules, State SACWIS systems must do 
the following, at a minimum:
 1. Meet the AFCARS requirements;
 2. Provide for intrastate electronic data exchange with data 
        collection systems operated under AFDC, Medicaid, child 
        support enforcement, and the National Child Abuse and 
        Neglect Data System (unless not practicable for certain 
        reasons);
 3. Provide for automated data collection on all children in 
        foster care under the responsibility of the State child 
        welfare agency to support implementation of section 427 
        protections and requirements;
 4. Collect and manage information necessary to facilitate 
        delivery of child welfare services, family preservation 
        and family support services, family reunification 
        services, and permanent placement;
 5. Collect and manage information necessary to determine 
        eligibility for the Foster Care, Adoption Assistance, 
        and Independent Living Programs; meet case management 
        requirements;
 6. Monitor case plan development, payment authorization and 
        issuance, and review and management including 
        eligibility determinations and redeterminations; and
 7. Ensure confidentiality and security of information.
    In addition, optional SACWIS functions could include (if 
cost-beneficial) resource management, tracking and maintenance 
of legal and court information, administration and management 
of staff and workloads, licensing verification, risk analysis, 
and interfacing with other automated information systems.
    HHS reports that, as of April 1996, 27 States were 
implementing SACWIS and another 18 were in the planning phase. 
Among those in some phase of implementation, 5 States were 
partially operational. The 27 implementing States were:
  Alaska, Arizona, Arkansas, California, Connecticut, District 
        of Columbia, Delaware, Idaho, Iowa, Indiana, Georgia, 
        Kentucky, Massachusetts, Minnesota, Missouri, Montana, 
        Nebraska, North Dakota, New Mexico, Oklahoma, Oregon, 
        Rhode Island, South Carolina, South Dakota, Texas, 
        Utah, and Washington.
    The 18 States that were in the planning process were:
  Alabama, Colorado, Florida, Illinois, Louisiana, Maine, 
        Maryland, Michigan, Mississippi, Nevada, New Hampshire, 
        New Jersey, New York, Tennessee, West Virginia, 
        Wisconsin, Wyoming, and Virginia.
    Hawaii, Pennsylvania, Kansas, North Carolina, Ohio and 
Vermont either were not participating or had terminated their 
projects.
    Under the final AFCARS rules, States are required to 
collect case-specific data on all children in foster care for 
whom the State child welfare agency has responsibility for 
placement, care or supervision, regardless of their eligibility 
for title IV-E. Further, States are required to collect data on 
all adopted children who were placed by the State child welfare 
agency, and on all adopted children for whom the State provides 
adoption assistance (ongoing payments or for nonrecurring 
expenses), care or services either directly or by contract with 
other private or public agencies. States must report data to 
HHS twice a year. Penalties for noncompliance with AFCARS 
requirements will not be imposed during the first six reporting 
periods (Oct. 1, 1994-Sept. 30, 1997). Half-penalties will be 
imposed during the following two reporting periods, and full 
penalties will be imposed on States out of compliance for the 
reporting period beginning October 1, 1998.
    Preliminary data are available from AFCARS and are 
presented earlier in this section.

                          LEGISLATIVE HISTORY

    Federal assistance to enable States to make maintenance 
payments for children who were not living with a parent and had 
been placed in foster care by a child welfare agency first 
became available under what was then called the Aid to 
Dependent Children (ADC) Program in 1961.
    Foster care under title IV-A of the Social Security Act was 
amended in 1980 by Public Law 96-272. This legislation 
continued AFDC foster care as a required Federal matching grant 
program, but transferred it to a newly created title IV-E. It 
also changed the funding mechanism for this program and the 
Child Welfare Services Program under title IV-B, providing 
linkages between the two to encourage less reliance on foster 
care placement and greater use of services aimed at preventing 
placement and encouraging family rehabilitation. The 
entitlement nature of AFDC foster care was retained, but under 
title IV-E its open-endedness was potentially limited by a 
provision that was contingent on the funding level of title IV-
B. The legislation specified a number of protections to help 
prevent inappropriate placements or long-term stays in foster 
care, and a number of programs were established to provide 
services to specialized foster care populations. Under title 
IV-E, a new Federal matching grant program for payments to 
parents who adopt a child with special needs was also 
established and permanently authorized. Funding for adoption 
assistance is on an open-ended entitlement basis.
    The Foster Care and Adoption Assistance Programs were 
amended in the 99th Congress, under the Consolidated Omnibus 
Budget Reconciliation Act of 1985 (COBRA, Public Law 99-272). 
This legislation also established a new entitlement program 
under title IV-E to help States facilitate the transition of 
children age 16 and over from AFDC foster care to independent 
living. The program is called the Independent Living Program.
    The 99th Congress also enacted legislation as part of the 
Tax Reform Act of 1986 (Public Law 99-514) that amended the 
Adoption Assistance Program under title IV-E to provide for 
Federal matching funds for the one-time adoption expenses of 
children with special needs, regardless of whether the children 
are eligible for AFDC or SSI payments.
    During the 100th Congress, legislation was enacted to 
expand the Independent Living Program to include children ages 
16 or over who are in any foster care situation and to provide 
services for specified children for 6 months after foster care 
payments or foster care ends (Public Law 100-647).
    During the first session of the 101st Congress, legislation 
was enacted as part of the Omnibus Reconciliation Act of 1989 
(Public Law 101-239) to increase the authorization level of the 
IV-B program from $266 million to $325 million; and to extend 
the Independent Living Program through 1992, increase the 
entitlement ceiling from $45 million to $50 million for fiscal 
year 1990, $60 million for fiscal year 1991, and $70 million 
for fiscal year 1992, and establish a State match beginning in 
fiscal year 1991.
    During the second session of the 101st Congress, the 
Omnibus Budget Reconciliation Act of 1990 (Public Law 101-508) 
made several minor amendments to the Child Welfare, Foster Care 
and Adoption Assistance Programs. Among other things, these 
amendments required States to distinguish between traditional 
administrative costs and child placement costs which previously 
had been classified as administrative costs, and gave States 
the option of providing independent living services to foster 
children up to age 21.
    The 103d Congress enacted significant child welfare 
amendments in the Omnibus Budget Reconciliation Act of 1993 
(Public Law 103-66). This legislation created a new capped 
entitlement under title IV-B for a broad range of services to 
families (including foster, adoptive and extended families), 
termed ``family preservation'' and ``family support'' services. 
The legislation also: included a set-aside for grants to State 
courts for assessments and improvements of judicial child 
welfare proceedings; authorized a 3-year enhanced match to 
States for planning, designing, developing or installing child 
welfare data collection systems; permanently authorized the 
Independent Living Program; and permanently authorizes a 75 
percent matching rate for certain State training expenses.
    Also enacted during the 103d Congress were the Social 
Security Act Amendments of 1994 (Public Law 103-432), which 
contained a variety of child welfare provisions. Under these 
amendments, the ``section 427'' child protections were re-
established as State plan requirements under a new section 
422(b)(9) of the Act, effective April 1, 1996. In addition, 
Public Law 103-432 authorized a new conformity review system to 
monitor and enforce State compliance with Federal requirements 
and State plan provisions.
    Public Law 103-432 also: requires States to describe 
measures taken to comply with the Indian Child Welfare Act in 
their title IV-B State plans; authorizes child welfare 
traineeships; requires foster care placements to be in the 
``most appropriate'' as well as ``most family-like'' setting; 
and requires dispositional hearings to be held at least every 
12 months after the first such hearing. Further, the 1994 
legislation authorizes HHS to conduct child welfare 
demonstrations in up to 10 States, allowing States to waive 
certain IV-B and IV-E provisions; establishes additional case 
plan and case review procedures for children placed outside 
their home State; and establishes a timetable for Federal 
review of State foster care and adoption assistance claims. 
Finally, Public Law 103-432 established a new section 1130A of 
the Social Security Act, addressing judicial review of Social 
Security Act provisions that are required as components of 
State plans. This provision was developed in response to a 
Supreme Court ruling in Suter v. Artist M., an Illinois child 
welfare case.

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