U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Printing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2250 Mail: Stop SSOP, Washington, DC 20402–0001

91–276 2004

BUSH ADMINISTRATION FOSTER CARE FLEXIBLE

FUNDING PROPOSAL

HEARING

BEFORE THE

SUBCOMMITTEE ON HUMAN RESOURCES

OF THE

COMMITTEE ON WAYS AND MEANS 

U.S. HOUSE OF REPRESENTATIVES

ONE HUNDRED EIGHTH CONGRESS

FIRST SESSION

JUNE 11, 2003

Serial No. 108–23

Printed for the use of the Committee on Ways and Means

(

ii

COMMITTEE ON WAYS AND MEANS

BILL THOMAS, California, Chairman

PHILIP M. CRANE, Illinois 

E. CLAY SHAW, JR., Florida 

NANCY L. JOHNSON, Connecticut 

AMO HOUGHTON, New York 

WALLY HERGER, California 

JIM MCCRERY, Louisiana 

DAVE CAMP, Michigan 

JIM RAMSTAD, Minnesota 

JIM NUSSLE, Iowa 

SAM JOHNSON, Texas 

JENNIFER DUNN, Washington 

MAC COLLINS, Georgia 

ROB PORTMAN, Ohio 

PHIL ENGLISH, Pennsylvania 

J.D. HAYWORTH, Arizona 

JERRY WELLER, Illinois 

KENNY C. HULSHOF, Missouri 

SCOTT MCINNIS, Colorado 

RON LEWIS, Kentucky 

MARK FOLEY, Florida 

KEVIN BRADY, Texas 

PAUL RYAN, Wisconsin 

ERIC CANTOR, Virginia 

CHARLES B. RANGEL, New York 

FORTNEY PETE STARK, California 

ROBERT T. MATSUI, California 

SANDER M. LEVIN, Michigan 

BENJAMIN L. CARDIN, Maryland 

JIM MCDERMOTT, Washington 

GERALD D. KLECZKA, Wisconsin 

JOHN LEWIS, Georgia 

RICHARD E. NEAL, Massachusetts 

MICHAEL R. MCNULTY, New York 

WILLIAM J. JEFFERSON, Louisiana 

JOHN S. TANNER, Tennessee 

XAVIER BECERRA, California 

LLOYD DOGGETT, Texas 

EARL POMEROY, North Dakota 

MAX SANDLIN, Texas 

STEPHANIE TUBBS JONES, Ohio 

ALLISON H. GILES, Chief of Staff 

JANICE MAYS, Minority Chief Counsel 

SUBCOMMITTEE ON HUMAN RESOURCES

WALLY HERGER, California, Chairman 

NANCY L. JOHNSON, Connecticut 

SCOTT MCINNIS, Colorado 

JIM MCCRERY, Louisiana 

DAVE CAMP, Michigan 

PHIL ENGLISH, Pennsylvania 

RON LEWIS, Kentucky 

ERIC CANTOR, Virginia 

BENJAMIN L. CARDIN, Maryland 

FORTNEY PETE STARK, California 

SANDER M. LEVIN, Michigan 

JIM MCDERMOTT, Washington 

CHARLES B. RANGEL, New York

Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public hearing records 

of the Committee on Ways and Means are also published in electronic form. The printed 

hearing record remains the official version. Because electronic submissions are used to 

prepare both printed and electronic versions of the hearing record, the process of converting 

between various electronic formats may introduce unintentional errors or omissions. Such occurrences are inherent in the current publication process and should diminish as the process 

is further refined. 

iii

C O N T E N T S 

Page 

Advisory of June 4, 2003, announcing the hearing ............................................... 2

WITNESSES 

U.S. Department of Health and Human Services, Hon. Wade F. Horn, Ph.D., 

Assistant Secretary for Children and Families ................................................. 8

American Public Human Services Association, Elaine M. Ryan ......................... 28

County Welfare Directors Association of California, National Association of 

County Human Services Administrators, and Sonoma County Human Services Department, Dianne Edwards ..................................................................... 33

National Indian Child Welfare Association, Terry L. Cross ................................ 38

Ohio Department of Job and Family Services, Barbara Riley ............................. 24

SUBMISSIONS FOR THE RECORD 

Acevedo-Vila ́, Hon. Anı ́bal, a Representative in Congress from the Commonwealth of Puerto Rico, statement ........................................................................ 58

Allen, MaryLee, Children’s Defense Fund, statement .......................................... 69

Alliance for Children and Families, Carmen Delgado Votaw, letter and attachment ...................................................................................................................... 59

American Federation of State, County and Municipal Employees, statement ... 61

Association on American Indian Affairs, Rockville, MD, Jack F. Trope, letter 

and attachment .................................................................................................... 62

Atwood, Thomas C., National Council For Adoption, Alexandria, VA, statement ...................................................................................................................... 92

Child Welfare League of America, statement ........................................................ 63

Children’s Defense Fund, MaryLee Allen, statement ........................................... 69

Clark, Elizabeth J., National Association of Social Workers, statement ............ 81

Coalition for Family and Children’s Services in Iowa, Des Moines, IA, Ann 

Harrmann, statement and attachment .............................................................. 76

Delgado Votaw, Carmen, Alliance for Children and Families, letter and attachment ............................................................................................................... 59

Diehl, Sue, Maryland Chapter, National Association of Social Workers, Baltimore, MD, statement ........................................................................................... 79

Emig, Carol, Pew Commission on Children in Foster Care, statement .............. 98

Family Services of Central Florida, Leesburg, FL, Marlin Livingston, letter .... 78

Harris, Jesse J., University of Maryland School of Social Work, Baltimore, 

MD, statement ...................................................................................................... 101

Harrmann, Ann, Coalition for Family and Children’s Services in Iowa, Des 

Moines, IA, statement and attachment .............................................................. 76

Herna ́ndez, Antonia, Mexican American Legal Defense and Educational Fund, 

statement .............................................................................................................. 81

Katzenmeyer, Paula, Hutchinson, MN, statement (see listing under Olund, 

Lynn) ..................................................................................................................... 97

Livingston, Marlin, Family Services of Central Florida, Leesburg, FL, letter ... 78

Maryland Chapter, National Association of Social Workers, Baltimore, MD, 

Sue Diehl and Judith M. Schagrin, statement .................................................. 79

Mexican American Legal Defense and Educational Fund, Antonia Herna ́ndez, 

statement .............................................................................................................. 81

Mirabal, Manuel, National Puerto Rican Coalition, statement ........................... 96

National Association of Social Workers, Elizabeth J. Clark, statement ............. 81

National Coalition for Child Protection Reform, Alexandria, VA, Richard 

Wexler, statement ................................................................................................ 89

National Council For Adoption, Alexandria, VA, Thomas C. Atwood, statement ...................................................................................................................... 92

National Council of La Raza, Raul Yzaguirre, as submitted by Sonia M. 

Pe ́rez, statement ................................................................................................... 94

Page

iv

National Puerto Rican Coalition, Manuel Mirabal, statement ............................ 96

Olund, Lynn, Brimson, MN, Paula Katzenmeyer, Hutchinson, MN, Debbie 

Retterath, Adams, MN, and Deborah Trotter, Aitkin, MN, statement ........... 97

Pe ́rez, Sonia M., National Council of La Raza, submitting for Raul Yzaguirre, 

statement .............................................................................................................. 94

Pew Commission on Children in Foster Care, Carol Emig, statement ............... 98

Prevent Child Abuse America, Chicago, IL, statement ........................................ 99

Retterath, Debbie, Adams, MN, statement (see listing under Olund, Lynn) ..... 97

Schagrin, Judith M., Maryland Chapter, National Association of Social Workers, Baltimore, MD, statement ............................................................................ 79

Trope, Jack F., Association on American Indian Affairs, Rockville, MD, letter 

and attachment .................................................................................................... 62

Trotter, Deborah, Aitkin, MN, statement (see listing under Olund, Lynn) ........ 97

University of Maryland School of Social Work, Baltimore, MD, Jesse J. Harris, statement ....................................................................................................... 101

Voice For Adoption, statement ............................................................................... 102

Wexler, Richard, National Coalition for Child Protection Reform, Alexandria, 

VA, statement ....................................................................................................... 89

Yzaguirre, Raul, National Council of La Raza, as submitted by Sonia M. 

Pe ́rez, statement ................................................................................................... 94

(1)

BUSH ADMINISTRATION FOSTER CARE 

FLEXIBLE FUNDING PROPOSAL 

WEDNESDAY, JUNE 11, 2003

U.S. HOUSE OF REPRESENTATIVES, 

COMMITTEE ON WAYS AND MEANS, 

SUBCOMMITTEE ON HUMAN RESOURCES, 

Washington, DC. 

The Subcommittee met, pursuant to notice, at 2:06 p.m., in room 

B–318, Rayburn House Office Building, Hon. Wally Herger (Chairman of the Subcommittee) presiding. 

[The advisory announcing the hearing follows:]

2

ADVISORY

FROM THE COMMITTEE ON WAYS AND MEANS

SUBCOMMITTEE ON HUMAN RESOURCES

FOR IMMEDIATE RELEASE CONTACT: 202–225–1025

June 04, 2003

HR–4

Herger Announces Hearing on Bush Administration Foster Care Flexible Funding Proposal 

Congressman Wally Herger (R–CA) Chairman, Subcommittee on Human Resources of the Committee on Ways and Means, today announced that the Subcommittee will hold a hearing on the foster care flexible funding proposal included 

in the Bush Administration’s FY 2004 budget proposal. The hearing will take 

place on Wednesday, June 11, 2003, in room B–318 Rayburn House Office 

Building, beginning at 2:00 p.m.

In view of the limited time available to hear witnesses, oral testimony at this 

hearing will be from invited witnesses only. Witnesses will include representatives 

from the U.S. Department of Health and Human Services and other experts in child 

welfare issues. However, any individual or organization not scheduled for an oral 

appearance may submit a written statement for consideration by the Committee and 

for inclusion in the printed record of the hearing. 

BACKGROUND: 

In 1980, Congress enacted legislation that created a program of Federal support 

for child protection programs conducted by State and local governments. The legislation created two major programs, a capped grant program under Title IV–B of the 

Social Security Act that gave States flexibility in providing treatment for families 

and children involved in abuse or neglect as well as services for foster and adoptive 

families, and a series of open-ended entitlement programs under Title IV–E that 

help States operate their foster care, and adoption programs for children who have 

been removed from their families. In 2002, the Federal Government provided approximately $7 billion to the States for these programs. However, the majority of 

these funds ($5 billion) support the Title IV–E foster care program, which focuses 

on out-of-home placements for at-risk children, rather than on services designed to 

return children to their families or place them in adoptive homes. 

The Subcommittee is interested in reviewing proposals to provide more flexibility 

to States to spend their IV–E foster care dollars, including for additional prevention 

and treatment as well as for out-of-home placement needs. The Administration’s 

proposal would offer States such an alternative financing system to their current 

Title IV–E foster care program. Under this proposal, States could opt to receive 

their share of Federal foster care funds in a constant, fixed amount in each of the 

next 5 years. By exercising this option States would receive more money in the early 

years to spend on prevention andtreatment activities to support a broader range of 

families in need. 

In announcing the hearing, Chairman Herger stated, ‘‘It’s time to begin thinking 

creatively about how we can help States provide more comprehensive and coordinated services to children and families. States should have ample flexibility to use 

the resources we provide to best protect vulnerable children. I look forward to hearing more details on how the President’s proposal to allow States more flexibility 

would help them to meet their child welfare needs.’’

3

FOCUS OF THE HEARING: 

The hearing will review the proposal included in the Administration’s FY 2004 

budget to provide States an alternative foster care financing system. 

DETAILS FOR SUBMISSION OF WRITTEN COMMENTS: 

Please Note: Due to the change in House mail policy, any person or organization 

wishing to submit a written statement for the printed record of the hearing should 

send it electronically to hearingclerks.waysandmeans@mail.house.gov, along with a 

fax copy to (202) 225–2610, by the close of business, Wednesday, June 25, 2003. 

Those filing written statements who wish to have their statements distributed to 

the press and interested public at the hearing should deliver their 200 copies to the 

Subcommittee on Human Resources in room B–317 Rayburn House Office Building, 

in an open and searchable package 48 hours before the hearing. The U.S. Capitol 

Police will refuse sealed-packaged deliveries to all House Office Buildings. 

FORMATTING REQUIREMENTS: 

Each statement presented for printing to the Committee by a witness, any written statement 

or exhibit submitted for the printed record or any written comments in response to a request 

for written comments must conform to the guidelines listed below. Any statement or exhibit not 

in compliance with these guidelines will not be printed, but will be maintained in the Committee 

files for review and use by the Committee. 

1. Due to the change in House mail policy, all statements and any accompanying exhibits for 

printing must be submitted electronically to hearingclerks.waysandmeans@mail.house.gov, along 

with a fax copy to (202) 225–2610, in WordPerfect or MS Word format and MUST NOT exceed 

a total of 10 pages including attachments. Witnesses are advised that the Committee will rely 

on electronic submissions for printing the official hearing record. 

2. Copies of whole documents submitted as exhibit material will not be accepted for printing. 

Instead, exhibit material should be referenced and quoted or paraphrased. All exhibit material 

not meeting these specifications will be maintained in the Committee files for review and use 

by the Committee. 

3. Any statements must include a list of all clients, persons, or organizations on whose behalf 

the witness appears. A supplemental sheet must accompany each statement listing the name, 

company, address, telephone and fax numbers of each witness. 

The Committee seeks to make its facilities accessible to persons with disabilities. 

If you are in need of special accommodations, please call 202–225–1721 or 202–226–

3411 TTD/TTY in advance of the event (four business days notice is requested). 

Questions with regard to special accommodation needs in general (including availability of Committee materials in alternative formats) may be directed to the Committee as noted above.

hearing. The purpose of today’s hearing is to review the AdminisChairman HERGER. Good afternoon and welcome to today’s 

f tration’s foster care flexible funding proposal. 

Today, the Federal Government provides open-ended entitlement 

funding to help States support children in certain foster and adopted homes. These programs support the most vulnerable among us, 

children who have been removed from their own parents due to 

abuse or neglect. 

We all agree States should have ample resources and flexibility 

to prevent child abuse. I am pleased that this Subcommittee took 

steps last Congress to extend and expand the Promoting Safe and 

Stable Families Program, which provides important services to prevent abuse or support adoptions. 

I would like to thank Mr. Cardin for co-signing a letter with me 

to key appropriators supporting full funding for this important program. If extended in each of the next 5 years, it would ensure that 

4

$1 billion in added funding is available to prevent abuse or to 

speed the placement of children in permanent adoptive homes. Today’s hearing will review additional steps to make these programs 

serve children and families better. 

Most of what the Federal Government spends each year on child 

welfare programs, about $5 billion, supports children in foster care. 

These funds support the costs of maintaining children in out-ofhome placements, the costs of administering this program, and 

some training costs. 

However, under current law, States generally lack the flexibility 

to devote any of these funds to services and interventions to prevent foster placements in the first place. In short, we provide most 

of our funding in response to child abuse and neglect, not to prevent such abuse. To the degree States would like to refocus their 

efforts more on prevention, their hands are generally tied by current Federal rules. That is not good enough. We should think creatively about how we can help States better serve children and 

families. 

As we have learned from the States’ success with welfare reform, 

flexibility, and positive incentives are critical to achieving good results. As we will hear today, there is evidence that the sort of flexibility promoted by the Administration’s foster care proposal has 

been exercised in recent waiver programs and achieved results. 

I look forward to hearing from Dr. Wade Horn and the rest of 

today’s witnesses on the Administration’s foster care flexible funding proposal. Without objection, each Member will have the opportunity to submit a written statement and have it included in the 

record. Mr. Cardin, would you like to make an opening statement? 

[The opening statement of Chairman Herger follows:]

Opening Statement of the Honorable Wally Herger, Chairman, and a 

Representative in Congress from the State of California 

Good afternoon and welcome to today’s hearing. The purpose of today’s hearing 

is to review the Administration’s foster care flexible funding proposal. 

Today the Federal Government provides open-ended entitlement funding to help 

States support children in certain foster and adoptive homes. These programs support the most vulnerable among us—children who have been removed from their 

own parents due to abuse or neglect. 

We all agree States should have ample resources and flexibility to prevent child 

abuse. I’m pleased this Subcommittee took steps last Congress to extend and expand 

the Promoting Safe and Stable Families program, which provides important services 

to prevent abuse or support adoptions. 

I’d like to thank Mr. Cardin for co-signing a letter with me to key appropriators 

supporting full funding for this important program. Extending the program in each 

of the next five years would ensure that $1 billion in added funding is available to 

prevent abuse or to speed the placement of children in permanent adoptive homes. 

Today’s hearing will review additional steps to help these programs serve children 

and families better. 

Most of what the Federal Government spends each year on child welfare programs—about $5 billion—supports children in foster care. These funds support the 

costs of maintaining children in out-of-home placements, the costs of administering 

this program, and some training costs. 

However, under current law, States generally lack the flexibility to devote any of 

these funds to services and interventions to prevent foster placements from the 

start. In short, we provide most of our funding in response to child abuse or neglect, 

not to prevent such abuse. To the degree States would like to refocus their efforts 

more on prevention, their hands are generally tied by current Federal rules. 

That’s not good enough. We should think creatively about how we can help States 

better serve children and families. As we’ve learned from the States’ success with 

5

welfare reform, flexibility and positive incentives are critical to achieving good results. 

As we will hear today, there is evidence that the sort of flexibility promoted by 

the Administration’s foster care proposal has been exercised in recent waiver programs, and achieved positive results. 

I look forward to hearing from Dr. Wade Horn and the rest of today’s witnesses 

on the Administration’s foster care flexible funding proposal.

first thank you for holding this hearing. I think it is a very imporMr. CARDIN. Thank you very much, Mr. Chairman, and let me 

f tant hearing as we talk about foster care and child welfare issues. 

I must tell you, we are about one-fourth finished with this term 

of Congress, and I am getting very frustrated on issues that affect 

children. Dr. Horn has been a champion of speaking out on these 

issues. I would like to help him with getting more resources to deal 

with it first. I think one of our major problems has been that we 

just are not putting enough resources into these programs, and it 

is tough to talk about innovative new ways when we are not willing 

to put up the tools necessary to adequately deal with America’s 

most vulnerable children. 

This Subcommittee has had a proud history of dealing with vulnerable children, and we have been able to bring out some good bipartisan products that are now the law of the land. I hope that will 

be the model for moving forward on this issue. 

On the floor a little bit earlier, the Chairman and I were engaged 

on a bill that extended Temporary Assistance for Needy Families 

(TANF) (P.L. 104–193) for 3 additional months as we try to figure 

out TANF reauthorization. I pointed out at that time—and I will 

repeat that during this term of Congress—we seem to be able to 

find resources for everything but helping our children. 

We spent a couple of trillion dollars on tax cuts in 2001 and now 

in 2003. There was just recently a book released by Isabelle Sawhill, who points out that we spend 2 percent of our gross domestic 

product for our children at the Federal level. We spend 2.5 percent 

of our gross domestic product servicing our national debt. Our national debt will increase by $400 billion—this is the recent projections—in this next year. That will require us to spend somewhere 

around $15 to $20 billion in additional debt service in the next 

budget. We can only get a little bit of that money for children. The 

money instead is being used to service a tax cut. I think that is 

a mistake. 

So, Mr. Chairman, as we start this hearing, I am going to be expressing some serious concerns about the direction we are moving 

in these programs. I must tell you, I think it stems from, first, our 

budget priorities and whether we are willing to give the tools necessary. 

We have problems in our child welfare systems. We have caseworkers who turn over on average 2 years. That is not going to be 

solved by just giving States more flexibility. You have to be willing 

to make a commitment if we are going to deal with the problems 

of caseworkers that are handling our most difficult and most vulnerable children. 

We have real obstacles in our child welfare system dealing with 

substance abuse. If we are not willing to put some money into it, 

6

you can give all the flexibility you want to the States. I use the 

U.S. Government Accounting Office (GAO) report on child care. I 

think every one of our Governors, every one of our State Legislators would like to put more money into child care. It has been proven to be successful in dealing with a whole host of problems. Yet, 

all of our States are cutting child care. In my own State of Maryland, unless you go on welfare, you can’t be a new enrollee in the 

child care system. What a message. So, we need more resources in 

order to deal with these problems. 

On behalf of my Democratic colleagues, I filed legislation that I 

thought would be a model for our discussion, which talks about trying to provide more resources to our States to deal with the foster 

care problems and to deal with the turnover and preventive services and updating certain eligibility. Unfortunately, I think the Administration is taking a different approach. 

We don’t have the legislation yet, Dr. Horn, but we do know that 

you are suggesting what I would call a block grant option to the 

States which would have the opportunity to opt in. The problem is 

that once you start down this path, I don’t know how much improvement we are going to have for those States who don’t want 

to opt in, who want to continue the current system. 

You also indicate there is going to be a finite amount of money 

available. As I understand it, there are no reductions. We are trying to project what is going to happen, but we don’t know what is 

going to happen with caseload. The caseload could vary. These are 

circumstances that are not as predictable as what we do in the welfare system generally. We are dealing with children. We are dealing with children for whom there may not be adoptive parents willing to take care of them. 

So, what happens if we are wrong on the caseload? What happens with the States that stay under the current system? I am not 

sure we have answered those questions and I am very concerned 

as to what is going to happen as we move forward. 

Let me also suggest that there are a lot of questions that have 

been raised, and I will mention these early, Dr. Horn, in hopes that 

you will be able to deal with them. The State opts into a block 

grant and its foster care caseload goes up. How will it cover the resulting cuts in reimbursement? What will happen to children 

whose Medicaid coverage is tied to their current eligibility for Federal foster care payments? How will State funding for child welfare 

services be locked in under the block grant? Will Federal adoption 

assistance become less available if it is left with an increasingly 

out-of-date eligibility standard? Those are just some of the questions that I have, and I hope that we will be able to deal with 

them. 

I can assure you that as a Member of Congress so concerned 

about the children we are dealing with—and I know every Member 

of the Committee feels the same way—I welcome an opportunity in 

a public, private, or any kind of setting to see whether we can’t 

continue the tradition of this Committee and reach a bipartisan 

agreement on what is in the best interest of Federal policy to help 

our foster children. Thank you very much, Mr. Chairman. 

[The opening statement of Mr. Cardin follows:]

7

Opening Statement of the Honorable Benjamin L. Cardin, a Representative 

in Congress from the State of Maryland 

Mr. Chairman, I am glad there seems to be a growing consensus that improvements are needed in our child welfare system. Along with my Democratic colleagues 

on this subcommittee, I introduced legislation earlier this year to help our States 

and communities combat many of the specific problems that now plague children in 

foster care. The bill seeks to give our States the tools, motivation, and resources 

needed to ensure child safety, address the connection between substance abuse and 

child abuse, improve the retention of quality caseworkers, expand preventive services, and update certain eligibility standards. 

The Bush Administration has chosen a different path. The President has proposed 

an optional block grant for foster care, under which States could receive a fixed allocation of funds for five years, rather than being guaranteed matching payments for 

each eligible child. This plan, which is designed to be cost neutral, concerns me for 

a number of reasons. 

First, I do not agree with the premise that our child welfare system is 

undeserving of any new resources. We have now spent over $2 Trillion for three successive tax cuts, so it seems more than a little stingy to suggest that we cannot 

spend a single dime of new money on protecting abused and neglected children. 

Second, the Administration’s plan is a piecemeal approach that will deny an opportunity for meaningful change in many and probably most States. Some states 

may opt in, but many others will surely decide to pass on assuming the inherent 

risks associated with the proposal. The President’s plan offers nothing to these 

States who think the block grant is a bad deal. No new resources for preventive 

services, no needed updates in eligibility criteria, and no increased flexibility. The 

end result will be no change and no improvement for millions of children. 

Third, the proposal raises more questions than it answers, and it may cause more 

problems than it cures. For example:

• If a State opts into the block grant and its foster care caseload goes up, how 

will it cover the resulting cuts in reimbursement? 

• What will happen to children whose Medicaid coverage is tied to their current 

eligibility for federal foster care payments? 

• How will State funding for child welfare services be locked in under the block 

grant? 

• And will Federal adoption assistance become less available if its left with an 

increasingly out-of-date eligibility standard (as it is under the President’s plan)?

Mr. Chairman, I don’t know if there is a middle ground between what my colleagues and I have introduced and what the Administration is proposing. But I am 

always willing to work toward a consensus. Perhaps we all might benefit from the 

work now being conducted by a new Pew Commission on this topic. This non-partisan panel includes many leading child welfare experts, and it is chaired by a 

former Republican Member of this Committee, Bill Frenzel. The commission hopes 

to provide Congress with recommendations to improve the foster care system by 

early next year. 

In any event, I hope we can continue this committee’s tradition of bipartisanship 

on issues related to our Nation’s foster care system. Millions of vulnerable children 

are counting on us to get the job done. Thank you.

to our testimony, I want to remind our witnesses to limit their oral 

Chairman HERGER. Thank you, Mr. Cardin. Before we move on 

f statements to 5 minutes. However, without objection, all the written testimony will be made a part of the permanent record. 

For our first witness today, we are pleased to have with us once 

again Dr. Wade Horn, Assistant Secretary for Children and Families at the U.S. Department of Health and Human Services (HHS). 

Dr. Horn. 

8

STATEMENT OF THE HONORABLE WADE F. HORN, PH.D., ASSISTANT SECRETARY FOR CHILDREN AND FAMILIES, U.S. 

DEPARTMENT OF HEALTH AND HUMAN SERVICES 

Dr. HORN. Thank you very much, Mr. Chairman. It is a great 

pleasure to appear before you again to discuss the President’s proposal for improving child welfare in our Nation. Our proposal provides States and Indian tribes with both the flexibility and sustained financial support needed to build innovative programs that 

provide effective services to the thousands of children and families 

in the child welfare system. 

Over the past several years, with your help, the Federal Government has made important strides in reforming child welfare services. Through the Adoption and Safe Families Act 1997 (P.L. 105–

89), and other important legislative reforms, we built a national 

consensus on the key goals for child welfare, ensuring children’s 

safety, meeting children’s needs for timely permanency, and promoting child and family well-being. 

The Bush Administration is proud of the progress that we have 

made to date in providing more resources to States to support children, families, and youth. We are pleased to be able to work with 

this Committee and other Members of Congress to pass legislation 

reauthorizing and significantly increasing the funding level for the 

program, and I just want to pause for a moment to thank both you 

and the Ranking Member, Congressman Cardin, for indicating your 

support in writing to the Appropriations Committee to fully fund 

the President’s request for increased resources for the Promoting 

Safe and Stable Families Program. We also appreciate the authorization and, at this point, partial funding of the President’s proposal to provide education and training vouchers for youth who age 

out of foster care. 

These efforts represent important contributions to improving 

child welfare services, but we all know that there must be more 

done to protect children, support families, and promote timely permanency. Therefore, in the President’s 2004 budget, the Administration is proposing a major change in the Title IV–E foster care 

program, an alternative funding option to provide States with 

greater flexibility so they can design more effective ways to help 

vulnerable children and families and move toward a seamless child 

welfare system. States that don’t elect this option would continue 

to operate the existing Title IV–E entitlement program. 

Briefly, the alterative funding option would incorporate dollars 

from the existing Title IV–E maintenance payments program as 

well as the associated administrative and training costs. States 

that choose this option would be able to use the funds for foster 

care payments, prevention activities, permanency efforts, case management, administrative costs, training child welfare staff, and 

other service-related child welfare activities—a far broader range of 

uses of these funds than allowed under current law. 

The proposal would provide States with the flexibility to develop 

a child welfare system that supports a continuum of services to 

families in crisis and children at risk while removing some of the 

administrative burdens of many of the current Federal requirements, including the need to determine the child’s eligibility for Aid 

to Families with Dependent Children (AFDC). 

9

While States that choose this option would have greater flexibility in how they use the funds, they would continue to be required to maintain the child safety protections under current law, 

including requirements for conducting criminal background checks 

and licensing of foster care providers, obtaining judicial oversight 

of decisions related to a child’s removal and permanency, meeting 

permanency time lines, developing case plans for all children in 

foster care, and prohibiting race-based discrimination in foster and 

adoptive placements. 

Allocations for this alternative financing structure will be determined in consultation with States, using historic expenditure information, and would be cost-neutral over 5 years. However, a State 

could receive up front funding at the outset of the program cycle. 

This approach would allow States to develop innovative programs 

and make initial investments that are likely to result in cost savings to the States in later years. 

The proposal also includes a maintenance of effort requirement 

to ensure that States selecting this new option maintain their existing investments in the program. To help protect States against 

unanticipated emergencies affecting their foster care system, the 

proposal also includes a provision that would allow a participating 

State to access additional funding through the TANF contingency 

fund if specified crisis conditions are met. 

In addition to providing a new option for States, our proposal includes a $30 million set-aside for Indian tribes or consortia that 

can demonstrate the capacity to operate a Title IV–E program. 

Currently, tribes, as you know, are not eligible to receive direct 

Title IV–E funding, although some tribes are able to access funds 

through agreements with the States. This proposal would open the 

possibility for tribes to receive direct Title IV–E funding. 

In closing, I would like to thank the Subcommittee for the opportunity to discuss the President’s bold new vision for strengthening 

child welfare through our child welfare program option. This option 

encourages innovation and the development of cost-effective programming that, over time, will result in children reaching permanency more quickly and fewer children being removed from the 

home, a goal I know we all share. 

This Administration is firmly committed to improving the lives 

of every child in America. Enacting legislation that will give States 

a choice in how they design and fund their child welfare programs 

will move us closer to meeting this commitment. Thank you for this 

opportunity. I would be pleased to answer any questions that you 

may have. 

[The prepared statement of Dr. Horn follows:]

Statement of the Honorable Wade F. Horn, Ph.D., Assistant Secretary for 

Children and Families, U.S. Department of Health and Human Services 

Mr. Chairman and Members of the Subcommittee: 

Thank you for the opportunity to appear before you to discuss the President’s proposal for improving child welfare in our Nation. The proposal responds to long-term 

criticisms about the current structure for addressing the needs of at-risk children 

and families and the Administration’s desire to support innovation in addressing 

this critical issue. Our proposal provides States and Indian Tribes with both the 

flexibility and sustained financial support needed to build innovative programs that 

provide effective services to the thousands of children and families in need of child 

welfare services. 

10

Background 

Over the past several years, with your help, the Federal Government has made 

important strides in reforming child welfare services. Through the passage of the 

Adoption and Safe Families Act of 1997 and other important legislative reforms, the 

development of national outcome measures, and the implementation of the new, results-oriented Child and Family Services (CFS) review process, we have built a national consensus on the key goals for child welfare: ensuring children’s safety, meeting children’s needs for timely permanency in a loving family, and promoting child 

and family well being. We have developed regulations and policies to promote these 

goals and an infrastructure to track progress toward meeting them. We also have 

seen important progress, most notably in the area of adoption, with the annual 

number of children adopted from foster care increasing from 31,000 in FY 1997 to 

51,000 in FY 2001. We expect that the final number of adoptions for FY 2002 will 

exceed last year’s impressive results. 

It is fair to say that because of improved data collection and the CFS review process, we have more and better information than ever before about the state of child 

welfare services, both strengths and weaknesses. And despite the progress to date, 

it is evident that we still have a long way to go. Newspaper accounts from around 

the country continue to report individual tragedies where the system has failed to 

protect children. National statistics show that too many children are lingering in 

foster care and waiting for adoptive families. 

The CFS reviews began in FY 2001 and, to date, we have reviewed 37 States. We 

will complete the first round of all 50 States, the District of Columbia, and Puerto 

Rico by the end of March 2004. This is the most comprehensive and far-reaching 

Federal review of State child welfare services ever conducted. The review covers all 

areas of child welfare services, from child protection and family preservation to 

adoption and youth development. When weaknesses are identified, States are required to implement Program Improvement Plans. Through a network of National 

Resource Centers, we provide technical assistance to help States develop and implement their Plans. 

Among the most significant findings of the CFS reviews:

• States are performing slightly better on safety outcomes for children than on 

permanency and well being. In fact, the timely achievement of permanency outcomes for children in foster care, especially adoption, is one of the weakest 

areas of State performance. 

• All State program improvement plans need to include provisions to strengthen 

the quality of front-line practice in such areas as conducting needs assessments 

of children and families and developing effective case plans. 

• Most States need to make significant improvements in their judicial processes 

for monitoring children in foster care, such as ensuring timely court hearings 

and increasing their attention to timely termination of parental rights, where 

appropriate. 

• The reviews pointed to a correlation between frequent caseworker visits with 

children and positive findings in other areas, such as timely permanency 

achievement and indicators of child well being.

What more can be done to address these program shortfalls and better serve this 

vulnerable population? 

The Bush Administration is proud of the progress we have made to date in providing more resources to States to support children, youth and families. We were 

pleased to be able to work with this Committee and other Members of Congress to 

pass legislation reauthorizing and increasing the funding level for the Promoting 

Safe and Stable Families program, which funds family support, family preservation, 

time-limited reunification, and adoption promotion and support services. And we appreciate the authorization of the President’s proposal to provide education and training vouchers for youth who ‘‘age out’’ of foster care. This program offers youth a 

chance to pursue and complete their education, thereby improving their prospects 

to become truly independent and self-sufficient adults. 

The recent 2003 Consolidated Appropriations Resolution provided almost $405 

million for the Promoting Safe and Stable Families program, $29 million over the 

FY 2002 level, and included additional first-time funding of nearly $42 million to 

support educational vouchers for youth aging out of foster care. The President’s FY 

2004 request would go a step further and fully fund the Promoting Safe and Stable 

Families program at the level of $505 million and the educational vouchers program 

at $60 million. I hope that you will join us in supporting these targeted but important investments, as well as critical policy changes to foster care and adoption incentives requested by the Administration. 

11

Child Welfare Program Option 

The programs mentioned above make an important contribution to improving 

child welfare services. However, given what we have learned about the States’ child 

welfare systems, we all must continue to do more to protect children, support families, and promote timely permanency. Therefore, in our FY 2004 budget, the Administration is proposing a major change in the title IV–E foster care program. Under 

this proposal, States would be offered an alternative financing option to the current 

title IV–E entitlement program, where States could choose to administer their foster 

care program with a fixed allocation of funds over a five-year period, should this 

approach better support their particular child welfare needs. States that do not elect 

to receive funding provided by this option would continue operating under the current title IV–E entitlement program. 

Under current law, States may be reimbursed for a percentage (ranging from 50 

to 79 percent) of the costs associated with the foster care stays of eligible children. 

The Federal Government also reimburses States for 50 percent of allowable administrative costs and 75 percent of training costs for State and local staff and foster 

parents. While an essential source of funding to assist States with supporting children in foster care and related administrative and training expenses, the program 

has long been criticized for, among other things, its lack of flexibility, administrative 

burdens, and narrow focus on only those children already removed from the home. 

We have consistently heard from the States that the title IV–E foster care program is too restrictive because it provides funds only for poor children who have 

been removed from the home. In order to be eligible for title IV–E, a child must 

have been removed from a family that would have met AFDC eligibility requirements as they existed in 1996, prior to the enactment of the Personal Responsibility 

and Work Opportunity Reconciliation Act and the creation of the Temporary Assistance for Needy Families program. Under the IV–E program, the Federal Government does not share in the expenses relating to non-IV–E children and, as time 

passes, a declining proportion of foster care children nationally meet the old AFDC 

income standard. 

The program also is criticized for failing to support the goal of permanency. While 

reimbursement for foster care and related case management services is open-ended, 

title IV–E funds may not be used for other types of services that could prevent a 

child from needing to be placed in care in the first place or that could facilitate the 

child’s returning home or moving to another permanent placement. Furthermore, a 

State that is successful in preventing unnecessary removals or in shortening lengths 

of foster care stays actually is apt to receive less Federal funding than a State 

where children remain in foster care for long periods of time. 

States are concerned that the title IV–E program contains significant administrative burdens, which take valuable time and resources away from serving children 

and families. These include making IV–E eligibility and re-eligibility determinations 

and engaging in the cumbersome cost-allocation process for claiming administrative 

costs. 

In response to these concerns the Administration is proposing the alternative 

funding option to provide States with a more flexible environment so they can design more effective ways to strengthen services to vulnerable children and families 

and to further the goal of helping States develop a seamless child welfare system. 

Specifically, the alternative funding option would include dollars currently estimated for the existing title IV–E foster care maintenance payments program and 

the associated administrative costs. States that choose this option would be able to 

use the funds for foster care payments, prevention activities, permanency efforts (including subsidized guardianships), case management, administrative activities (including developing and operating State information systems), training child welfare 

staff, and other service-related child welfare activities—a far broader range of uses 

than allowed under current law. The proposal would provide States with the flexibility to develop a child welfare system that supports a continuum of services to 

families in crisis and children at risk while removing the administrative burden of 

many of the current Federal requirements, including the need to determine the 

child’s eligibility for AFDC. 

While States that choose this option would have much greater flexibility in how 

they use funds, they would continue to be required to maintain the child safety protections under current law, including requirements for conducting criminal background checks and licensing foster care providers, obtaining judicial oversight of decisions related to a child’s removal and permanency, meeting permanency timelines, 

developing case plans for all children in foster care, and prohibiting race-based discrimination in foster and adoptive placements. 

States that select this alternative financing structure would be required to apply 

for the new child welfare program option soon after enactment of the proposed legisVerDate jul 14 2003 00:18 Feb 06, 2004 Jkt 091276 PO 00000 Frm 00015 Fmt 6633 Sfmt 6621 E:\HR\OC\91276.XXX 91276
12

lation and to commit to the new funding structure for the full five-year period. State 

allocations would be determined in consultation with States, using historic expenditure information, and would be cost neutral over five years. However, a State could 

receive up-front funding at the outset of the program cycle. This approach would 

allow States to develop innovative programs and make initial investments that are 

likely to result in cost savings to the States in later years. The proposal also includes a maintenance-of-effort requirement to ensure that States selecting the new 

option maintain their existing level of investment in the program. 

To help protect States against unanticipated emergencies affecting their foster 

care systems, the proposal also includes a provision that would allow a participating 

State to access additional funding through the TANF contingency fund if specified 

crisis conditions are met. 

In addition to providing a new option for States, our proposal includes a $30 million set-aside for Indian Tribes or consortia that can demonstrate the capacity to 

operate a title IV–E program. Currently, Tribes are not eligible to receive direct title 

IV–E funding, although some Tribes are able to access funds through agreements 

with States. This proposal would open the possibility for Tribes to receive direct title 

IV–E funding. Indian Tribes would be subject to program requirements similar to 

those of States. However, the Secretary could waive certain program requirements, 

provided that doing so would not compromise child safety. 

We also are requesting a small administrative set-aside to facilitate program monitoring and technical assistance necessary to support the efforts of State and Tribal 

child welfare programs and to fund important child welfare research. As States and 

Tribes develop new and innovative service models and financing structures through 

the child welfare program option, it will be even more important to ensure that we 

have sufficient resources to provide technical assistance and to monitor their activities so we have an understanding of how the new option is affecting child welfare 

services and outcomes and to share any success stories with other States. 

We believe this proposal will result in the development of innovative child welfare 

programs that ultimately will better serve vulnerable children. We ask for your support in making this vision a reality. 

Adoption Incentive Proposal. 

Finally, I would like to take this opportunity to briefly address another proposal 

in the President’s FY 2004 budget as part of our request to reauthorize the Adoption 

Incentive Program. The Adoption Incentive Program, authorized under the Adoption 

and Safe Families Act, was the first Federal performance-based incentive program 

in child welfare. The program proved very successful in engaging all States in efforts to increase adoptions and made an important contribution to the large national 

increases in adoption we have seen over the past several years. However, as we 

have analyzed adoption data, we have learned that while the overall number of children being adopted has grown dramatically, older children in foster care still face 

excessively long waits for adoption, and in many cases, are never adopted. This is 

clearly a problem that warrants our attention. 

In fact, data from the Adoption and Foster Care Analysis and Reporting System 

(AFCARS) show that between the ages of 8 and 9, the probability that a child will 

continue to wait in foster care exceeds the probability that the child will be adopted. 

Further, the number of children in this older age group is growing, now representing almost half of the children waiting to be adopted nationally. 

To ensure that the adoption incentive focuses on these hard-to-place children, the 

President proposes that the Adoption Incentive Program be amended so it continues 

to recognize and reward overall increases in the number of adoptions while providing a special focus on the adoption needs of children age 9 and older. Awarding 

the incentive funds in this way will provide a special focus on the adoption needs 

of older children, while maintaining the goal of increasing adoptions for all waiting 

children. 

Conclusion

In closing, I would like to thank the Subcommittee for the opportunity to discuss 

the President’s bold new vision for strengthening child welfare through our new 

child welfare program option. This option encourages innovation and the development of cost-effective programming that over time will result in children reaching 

permanency more quickly and fewer children being removed from the home, a goal 

we all share. Under this option, we believe that States would be better able to develop a seamless child welfare system that supports a continuum of services to families in crisis and children at risk. 

This Administration is firmly committed to improving the lives of every child in 

America. Secretary Thompson has always been a strong advocate of increasing State 

13

control in designing programs that best meet the needs of their citizens. Enacting 

legislation that will give States a choice in how they design and fund their child 

welfare programs will move us closer to meeting that commitment. We look forward 

to working with you to pass legislation implementing these new proposals, and I 

would be pleased to answer any questions you may have.

Now, we will hear the gentleman from Kentucky, Mr. Lewis, to inChairman HERGER. Thank you for your testimony, Dr. Horn. 

f quire. 

Mr. LEWIS. Thank you, Mr. Chairman. Dr. Horn, will there be 

anything in the President’s proposal that would allow the States 

the flexibility to keep children within the family unit as far as 

aunts, uncles, grandparents? It seems like there should be an emphasis on this, to try to keep children with family members rather 

than in a new, strange environment, and I am not sure that there 

is that flexibility now. I think the grandparents or the aunt, uncle, 

brother, or sister, would have to go through the process of becoming legally a foster parent in order to do that. 

I know we have about 60,000 grandparents in Kentucky that are 

caring for their grandchildren now, which is good, but a lot of those 

people are on Social Security. They are elderly and it makes it a 

little difficult. We are paying a lot of dollars to take those children 

out of those circumstances and put them in, like I said, unfamiliar 

surroundings. 

Dr. HORN. That is an excellent question and, in fact, under the 

current system, States are prohibited from using Title IV–E funds 

for subsidized guardianship arrangements, which often are the 

kinds of situations that you describe with kinship members. Under 

the President’s flexibility proposal, States could, in fact, opt to use 

those monies, in part, to support subsidized guardianship arrangements. 

In fact, the State of Illinois has had a very large waiver over the 

last 5 years to look at using Title IV–E funds more flexibly in order 

to support subsidized guardianship arrangements, and one of the 

things that they found is that, by doing so, they move more children more quickly toward permanency arrangements, and have 

less need for long-term foster care. They are doing all that without 

compromising child safety. So, we think that this flexibility proposal would precisely address the issue that you raise. 

Mr. LEWIS. That would be wonderful. Thank you. 

Chairman HERGER. I thank the gentleman. The gentleman 

from Maryland, Mr. Cardin, to inquire. 

Mr. CARDIN. Thank you very much, Mr. Chairman. Dr. Horn, 

let me just go through a couple scenarios so I understand exactly 

what we are trying to achieve here. As I understand it, there are 

no new resources over baseline being put into this proposal for 

States that go into the optional block grant. There is some advance 

money, but over time, it is basically neutral on cost. 

We have seen in the history of foster care that there have been 

episodes where we have had large increases in the number of foster 

care children. In the late 1980s, we saw in a 5-year period a 42-

percent increase in foster care, which was attributed mostly to the 

crack cocaine problem. 

14

Obviously, the funds that are being made available through 

these programs are not geared towards a crack cocaine problem or 

a significant national problem. If there were a spike in the number 

of children that needed assistance with the State that chose the optional path, what would happen during this 5-year period? 

Dr. HORN. Well, first, it is not precisely correct to say that the 

President has not proposed additional resources for the child welfare system. As you know—and I know that you are very supportive of it—the President has proposed $1 billion in additional 

funds over 5 years through Safe and Stable Families, which can be 

used to fund an array of services in the child welfare system. 

In addition to that, we were very concerned with exactly the situation that you describe. In fact, I, in my first tenure in government, 

was the Commissioner of the Administration on Children, Youth 

and Families during the spike in foster care placements largely because of the crack cocaine epidemic and we were concerned that 

there be some protection for the States who chose this option. 

So, what we have built into the proposal is the ability for States 

to draw down additional funds under certain circumstances from 

the TANF contingency fund. As you know, that is a $2 billion fund 

that already exists and no State has yet needed to draw down any 

of those resources through the TANF program and we thought that 

by allowing States the ability to access those funds if there are 

spikes in foster care——

Mr. CARDIN. So, you would use the TANF contingency? You 

would not build in anything directly in this program? There is a 

lot of concern about whether there are adequate resources in 

TANF, including the contingency funds that we could argue another day. There would be no adjustment in the overall program 

that you are configuring based on external increases in caseload? 

Dr. HORN. In terms of the 5-year cost to the Title IV–E program, what we do is we capture all those costs over the next 5 

years. We then allow States to increase the spending in the first 

few years, if that is their choice, and reduce funding in each of the 

subsequent years, in order to return to the baseline. 

A piece that is important to keep in mind is that the baseline 

projections for this program have been decelerating over time. That 

is, if you go back 4 years ago, the baseline was accelerating at a 

higher percentage than it was 2 years ago and at a higher percentage than 1 year ago and so forth. So, actually, what we are seeing 

is a ratcheting down of the baseline over time. If, in fact, that continues, there actually will be less money 4 or 5 years from now 

than current baseline projections——

Mr. CARDIN. Let us hope you are right. I hope these projections—I just worry if it doesn’t. One of the problems we have, I 

think we all agree, is that the lookback, where you have to go back 

to the 1996 eligibility to see whether a family, a child qualifies, 

needs to be adjusted. However, you don’t change that. So, isn’t a 

State being penalized if it doesn’t go into the optional program because you still have the lookback arrangements? You are not trying 

to modernize the current program. Basically, it seems to me, you 

are trying to force States to go into the optional program that you 

call voluntary. 

15

Dr. HORN. No, it is a complete voluntary choice on the part of 

the State. If the State feels that this is something that works for 

them, then the State can opt into it. Otherwise, the program stays 

the same. 

Mr. CARDIN. Would you be willing to work with us to modernize 

the program on eligibility for those States that stay under the current system? 

Dr. HORN. I think at the heart of this proposal is this notion 

that it seems kind of absurd to continue to have as an eligibility 

requirement for the Title IV–E program—a program that hasn’t existed for 6 years called AFDC. 

Mr. CARDIN. Good. Well, maybe we can at least agree on that 

part of the issue. I think my time is just about expired, so I will 

save the final questions for the next round or I will send them to 

you in writing. Thank you. 

Chairman HERGER. Thank you, Mr. Cardin. The gentleman 

from Louisiana, Mr. McCrery, to inquire. 

Mr. MCCRERY. Thank you, Mr. Chairman. Dr. Horn, there do 

seem to be some parallels between the Administration proposal 

with foster care and the welfare proposal in 1996, the welfare plan 

that passed in 1996. In the welfare reform plan, we basically wanted to get people off welfare instead of adding to the rolls and basically giving States more money the more people they had on welfare. We said, look, we are going to give you a set amount of money 

and you can use it, and we hope you will use it, to keep people off 

of welfare and get them into work. 

This proposal seems to me to be somewhat the same. You are 

telling the States, look, we are going to give you the same amount 

of money we have been giving you, but we are going to give you 

flexibility that we hope you will use to prevent children from going 

into foster care. Is that kind of where we are with this? 

Dr. HORN. I think there are certain similarities between the 

two, yes. 

Mr. MCCRERY. I know that you have granted some State waivers and there are some demonstration projects. Can you point to 

any that have shown results from the States using this money in 

the ways that you anticipate? 

Dr. HORN. Yes. For example, in North Carolina, we granted a 

waiver in which they could use their Title IV–E funds with much 

more flexibility, including preventative services. One of the things 

that North Carolina found in this waiver process is that by providing more preventative services and being able to use those funds 

more flexibly, there was less need for children to go into foster 

care. 

It is important for us all to keep in mind that foster care is an 

important service. The goal is not to eliminate the foster care system. There are children who require foster care placements. We believe that the categorical nature of the funding streams that support the child welfare system often get in the way of allowing the 

flexibility that States need in order to create a system that is both 

seamless and efficient, so that foster care is available for those children who need foster care. We ought to be able to also provide 

more preventative services so there is less need for foster care in 

the first place, not at the expense of child safety, but in order to 

16

prevent abuse from occurring in the first place, obviating the need 

for some foster care placements. 

Mr. MCCRERY. So, in effect, you encourage States to invest 

some of this Federal money in prevention, preventing children from 

having to go into foster care, but then if they are successful in that, 

in keeping children off the foster care rolls, you don’t punish them 

by taking away their money. You reward them by continuing to 

give them a set amount of money that they can use for those purposes. 

Dr. HORN. Yes. In fact, under the President’s proposal, if a State 

did not use up its allotment in one year, much like the TANF program, they would be able to carryover those funds into subsequent 

years in case there were spikes in subsequent years in terms of a 

need for foster care or other services. So, yes, the idea would be if 

States are able to reduce the costs associated with foster care—not 

because they have compromised child safety but because they have 

been successful in prevention efforts—there may be savings that 

States then can reinvest or save for future years when there might 

be an additional need for foster care. 

Mr. MCCRERY. Is there anything in the Administration proposal 

that would allow States to reduce the child safety protections in the 

law? 

Dr. HORN. Nothing. Our proposal says that all of the child protections that are currently in place would continue. We actually 

think, in fact, that under the President’s proposal, if a State were 

to choose that option, we would be in a better position to be able 

to ensure those protections are there. This would be true not just 

for kids who are fully eligible, but for all of the children in foster 

care. This is because the mechanism for looking at many of those 

protections would no longer be the Title IV–E reviews, which are 

only relevant to kids who get a Title IV–E payment, about 44 percent of the caseload, but rather the child and family services reviews which look at all the kids in care. 

We think we would be in a better position to ensure those protections are in place, not just for Title IV–E kids, but for all the children in foster care, under the President’s proposal. 

Mr. MCCRERY. So, in other words, this proposal would actually 

give States the flexibility to expand their child safety protections? 

Dr. HORN. We think that it would give them the ability to dedicate the resources they need to ensure those protections are in 

place. 

Mr. MCCRERY. Thank you, Mr. Chairman. 

Chairman HERGER. Thank you, Mr. McCrery. The gentleman 

from Washington, Mr. McDermott, to inquire. 

Mr. MCDERMOTT. Thank you, Mr. Chairman. I appreciate the 

opportunity to talk. I wish we had a bill to look at, but since we 

don’t, I will have to go on what I sort of surmise is going on here. 

When you put a block grant out there and you say to the States, 

you can choose a block grant or you can choose to stay in the old 

program, obviously, you want them to go to the block grant, don’t 

you? 

Dr. HORN. That would be up to the State. I have no——

Mr. MCDERMOTT. Wouldn’t that be the purpose of putting out? 

You want to get them off the old program. 

17

Dr. HORN. I think it is simply giving the State the option, and 

they can choose what they see is in their best interests. 

Mr. MCDERMOTT. It seems to me, if I understand what is going 

on, you haven’t changed the payments since 1996 and if you want 

to have an upgrade in your payments, you have to go into the block 

grant. If you stay in the old program, it is based on the 1996 data, 

is that correct? There has been no update since 1996? 

Dr. HORN. States have the ability to set their own payment 

rates. 

Mr. MCDERMOTT. The payments from the Federal Government, 

those haven’t changed. 

Dr. HORN. The Federal Government reimburses using the Federal Medical Assistance Payments rate, so that has not changed. 

Mr. MCDERMOTT. If you stay with the old program, it is only 

kids that qualified for AFDC in 1996, right? 

Dr. HORN. That is current law. That is right. 

Mr. MCDERMOTT. So, what you are doing here is trying to 

make every incentive push in the direction of getting people to take 

the block grant, is that correct? 

Dr. HORN. No, it is not correct. What we are trying to do is provide an option for a State. The State would then have the ability 

to make a decision based upon what they perceive is in their own 

best interests, and if they think the current system works best for 

them, we have no a priori belief whether that is a good or a bad 

judgment. That is for the State to make. So, it is giving an option 

to a State. 

Mr. MCDERMOTT. I guess you were never in a State Legislature, but I was. I was a budget Chairman in a State Legislature 

and we would always try to figure out how to get the maximum 

amount of money out of the Federal Government. What you are 

telling me is that somebody would stay in a program where they 

would get less money? No. They are going to go for the block grant 

because they are going to get more money. Under present law, that 

baseline declines over time, right? 

Dr. HORN. No, actually it depends on the State, and that is why 

a State would have to individually determine whether it makes 

sense to them. Some State baselines are accelerating; some are decelerating. 

Mr. MCDERMOTT. We will discuss that if we ever see the language. Having done this a few years and watched the majority operate here, I always like to see what is in the language. We find 

out stuff in the language that is different than what we find in the 

newspaper, and these kind of hearings where we are kind of groping around in the dark. 

One question I would like to ask you is the whole question of, 

if you go to the issue of a block grant, are the children covered by 

Medicaid or not? 

Dr. HORN. Under the President’s proposal, States choosing the 

option could do one of two things regarding Medicaid. First of all, 

they could continue to qualify kids for Medicaid as under the current system. Most children in foster care actually qualify for Medicaid because once a child is placed outside of their home, it is the 

child’s individual assets and income—most of these kids don’t have 

income, most don’t have assets—that qualify or don’t qualify them 

18

for Medicaid. So, a State could continue under the option to do it 

that way, or under the President’s proposal, a State could make all 

children in foster care categorically eligible for Medicaid. So, we see 

this not as reducing the availability for Medicaid one iota for children under this option. 

Mr. MCDERMOTT. So, it is your testimony that no child will be 

denied Medicaid who is in foster care? 

Dr. HORN. It is my testimony that a State would have the ability to make a choice, either to continue to determine Medicaid eligibility as under the current system, or to make all the children categorically eligible for Medicaid who are in foster care under the 

State option. 

Mr. MCDERMOTT. That would be using options—using standards from 1996. If they stayed in the present program and used it, 

they would be using lower standards so that less kids would get 

in. 

Dr. HORN. We may be confusing two issues here. The standards 

for Medicaid eligibility are separate from the standards for Title 

IV–E eligibility. Medicaid eligibility for kids in foster care is based 

on the assets and income of the child. The asset threshold is 

$10,000 per child under the Chafee amendments and that would 

not change under the current law. If a State were to choose the option, they could continue to address Medicaid eligibility that way 

or make all the children categorically eligible in Medicaid. 

Right now, most kids in foster care are, in fact, eligible for Medicaid. Either they are categorically eligible because they are Title 

IV–E eligible or they are eligible because of the asset-income test. 

Under the President’s proposal, we would do away with the existing Title IV–E program for those States that choose the option. So, 

rather than making Title IV–E the category that allows kids to be 

Medicaid eligible, a State could choose instead to make all their 

children categorically eligible in foster care. 

Mr. MCDERMOTT. What they have to do, then, is take that out 

of the block grant that they have gotten in Medicaid? 

Dr. HORN. No. I think they would——

Mr. MCDERMOTT. The additional money——

Dr. HORN. Pay for it the same way they are paying for Medicaid 

now. 

Mr. MCDERMOTT. I have got a State where we are putting in 

waiting lists in Medicaid, so I think people are going to be looking——

Dr. HORN. In foster care? 

Mr. MCDERMOTT. No, not in foster care, in the regular Medicaid program. 

Dr. HORN. Okay, then that is a different issue. We are talking 

about the foster care. 

Mr. MCDERMOTT. Oh, this is another Medicaid program? 

Dr. HORN. This is the Medicaid program for kids in foster care. 

Mr. MCDERMOTT. It is not the same Medicaid? That is, Medicaid is not Medicaid? 

Dr. HORN. You said that your State has waiting lists for Medicaid, and I asked if that was true for foster care. 

Mr. MCDERMOTT. Yes, I understand that. 

19

Dr. HORN. I would be surprised if you had waiting lists for Medicaid coverage for kids in foster care. 

Chairman HERGER. The gentleman’s time has expired. 

Mr. MCDERMOTT. I would like to see the language, Mr. Chairman. 

Mr. CARDIN. Could I just ask unanimous consent for 15 seconds, just to get a clarification on Dr. Horn’s point? 

Chairman HERGER. Without objection. 

Mr. CARDIN. Thank you very much. You are suggesting that 

States have legislative authority so that all of their children in the 

new program could be eligible for Medicaid, is that what you are 

suggesting? 

Dr. HORN. Yes. 

Mr. CARDIN. Thank you. 

Chairman HERGER. The gentlelady from Connecticut, Mrs. 

Johnson, to inquire. 

Mrs. JOHNSON. Thanks very much, Mr. Chairman, and thanks 

for holding this hearing and for your interest in this subject. 

Dr. Horn, I have been working on this since 1990. My State was 

one that got a waiver and they very smartly divided the kids into 

a control group and a demonstration project. I just want to report 

how very well the children did under the demonstration project 

which allowed the money to follow the child’s need. Now, the 

money only goes to the State if you take the child out of the home. 

That is just so absurd, it is unbelievable. 

So, we got a waiver to do that, and in our waiver, 39 percent of 

the kids in the demonstration, that is, those kids who are allowed 

to have their needs determine where the money was spent, 39 percent of those kids were in in-home placements versus 11 percent 

under the regular program. Twenty-four percent of the—in the 12 

months of the demonstration project, kids spent 24 percent of their 

days with their family versus 9 percent for the control group, and 

children in in-home placements had 16.5 percent fewer clinical system visits than in the control group, which was 7 percent. 

So, in other words, their mental health, their progress toward 

dealing with their emotional problems was greater. Their treatment options were greater. Their length of stay in restrictive settings was radically decreased. The children did better. The families 

did better. It cost no more money. 

I do have two concerns with your proposal, because while it costs 

no more money, in a bill I introduced some years ago actually 

working with Mr. Cardin, we did allow States to negotiate with the 

Federal Government what their baseline would be, looking at projections. So, I think it is important that we not just automatically 

freeze them where they are now—that the expected increase in 

costs is recognized, because while this provides much better quality 

care for children and enables States to develop a much better group 

of community-based services, it isn’t necessarily going to save 

money. 

You have got to allow salaries to increase. One of the biggest 

mistakes we make in the human services is we don’t plan for salary growth costs. So, I think I would like you to address whether 

your plan in any way looks to the future of cost growth. 

20

Then the second thing we did in our bill was to enable States 

when there were certain dimensions of increasing caseload, and 

you referred to the problem with the crack babies, to elect to snap 

back into the entitlement-based program. That structure will be 

there because not every State is going to elect the block grant. If 

they could elect the block grant knowing that if certain triggers 

were reached they could automatically snap back into the old program, then I think you would see not only services grow and there 

never being a need to snap back, but I think we would see the 

quality of care for these children dramatically improve. 

So, those two things—the snap back and negotiated baseline, 

looking toward future costs—I would like you to address. 

Dr. HORN. First of all, I would like to recognize your longstanding interest in this——

Mrs. JOHNSON. Sometimes mean-spirited interest in this. 

[Laughter.] 

Dr. HORN. I just hope that in 2010, we are still not in this room 

trying to figure out how to reform child welfare. 

Mrs. JOHNSON. I hope not. 

Dr. HORN. In terms of your two issues, first of all, under the 

current baseline projections nationally, the expenditures under the 

Title IV–E program are expected to grow at about 4 percent a year, 

and all of that would be captured in the 5-year projections. 

Mrs. JOHNSON. You are not talking about freezing. You are 

talking about a baseline based on the expected growth. 

Dr. HORN. That is exactly right. So, there is expected growth 

that is part of the baseline. Some States have a higher growth rate 

than 4 percent, some have a lower growth rate. Nationally, the 

growth rate is 4 percent. 

Now, what is different about our proposal is that we don’t just 

say, if you take this, you are stuck with what the current baseline 

projections are year by year by year. You can choose that if you 

want to under our proposal. The other thing that we let you do is—

as an option—is to collapse that 5-year total and take it in equal 

5-year increments, which means in the first few years you get more 

money than you would expect under the current baseline projections and at the latter part you would have less money. The State 

would have the option. They could do it that way, equal increments, or allow it to grow over time given their baseline projections. 

The advantage of the former, that is, to take it in equal increments, is that you can put some up front investments in prevention 

that may reduce, we hope, the need for foster care. The advantage 

of the other is that you get a predictable growth in terms of the 

money that you get from the Federal Government over 5 years——

Mrs. JOHNSON. Which is basically the growth they would get 

anyhow. 

Dr. HORN. That is right, and so——

Mrs. JOHNSON. So, we are not in any way reducing the amount 

of money they are allowed to get. 

Dr. HORN. Not at all. 

Mrs. JOHNSON. We are giving them some options about when 

they get it. 

21

Dr. HORN. That is exactly right. In terms of your question about 

if there is an increase in caseload—we considered as an option the 

ability for States to opt back into the open-end entitlement and we 

couldn’t do that and keep this proposal cost neutral over 5 years 

if we also allowed States to take the money in equal increments 

over time. 

Mrs. JOHNSON. So, you could allow a snapback for the States 

whose base rose each year, but not for those that chose the option? 

Dr. HORN. That is not currently part of the President’s proposal. 

The way we try to deal with that is allow States who experience 

an uptick in the need for foster care to access additional dollars 

through the TANF contingency fund. 

Mrs. JOHNSON. Right. 

Chairman HERGER. The gentlelady’s time has expired. I thank 

her. The gentleman from California, Mr. Stark, to inquire. 

Mr. STARK. I guess we don’t know what the plan is, but I guess, 

basically, if I understand it, Dr. Horn, you want to give the States 

an option for a block grant and you are not increasing any funds 

to State programs for foster care programs, is that right? 

Dr. HORN. It is not true that we haven’t asked for additional 

funds for State child welfare systems, including foster care, because 

we have asked for $1 billion in additional money over 5 years in 

the Safe and Stable Families Program. 

Mr. STARK. How much did you get? 

Dr. HORN. We only got half of it, and——

Mr. STARK. Half? 

Dr. HORN. Half of it has been appropriated——

Mr. STARK. Is that $500 million or $100 million? 

Dr. HORN. We got $500 million over 5, and this year——

Mr. STARK. Oh, $100 million a year. 

Dr. HORN. Over 5 years, $500 million in additional money, and 

what we are asking for this year is for the other half. You came 

a little bit late to the hearing and I already expressed my gratitude 

to both the Chairman and the Ranking Member for sending a very 

supportive letter to the Appropriations Committee supporting our 

request for the additional money in Safe and Stable Families. 

Mr. STARK. If a State were to take your block grant and their 

caseload increased, if the preventive program didn’t work, or if 

there was a drug epidemic as we had with crack, then they would 

have no way to find the additional funds to deal with that increased caseload, is that correct? 

Dr. HORN. No, it is not, because under our proposal, the State 

in those conditions would be able to draw down additional funds 

from the $2 billion TANF contingency fund, and so there is an ability for States to access that money. 

Mr. STARK. That cuts their TANF program, so——

Dr. HORN. Well, no——

Mr. STARK. Let us just deal with the foster care. Under the 

block grant program, you are letting them take 5 years flag, or 5 

years fixed, and they can draw it down earlier if they choose, right? 

If the programs don’t work, then toward the end of the program 

where they would need more money for foster care services, is that 

right? 

Dr. HORN. Well, again——

22

Mr. STARK. If the caseload increases——

Dr. HORN. If the caseload increases, they would have the ability 

to draw additional funds. 

Mr. STARK. They would not get that from the Federal Government, would they? 

Dr. HORN. No, they would. The TANF contingency fund is part 

of the Federal budget. 

Mr. STARK. The contingency fund is for TANF, right, or for 

cases that one might expect in the coming recession who have nothing to do with foster care. That money could be used for child care 

and worker training and day care and all those other things, right? 

Dr. HORN. Well, we have just been through a recession and, in 

fact, under the TANF program—there was no State that drew 

down any money in the contingency fund. 

Mr. STARK. You may do very well in social work, but in economics, we are in a recession. We haven’t been through one yet. We are 

on the way down, pal, and let us confine your expertise, such as 

it is, to social work. We have not been through one yet. We are losing a couple of million jobs a year and they are not being recreated 

by the stupid tax cut and the unemployment is going up. In anybody’s book, that is very apt to increase the burden on TANF 

funds. So, that with a block grant to the States, it is close to lying 

to suggest that there will be money in the TANF funds to support 

foster care. 

Mr. CARDIN. Would the gentleman yield just very briefly on 

that point? 

Mr. STARK. Yes, I would be glad to. 

Mr. CARDIN. It is not only an increasing caseload, you are assuming a declining caseload. 

Dr. HORN. In which program? 

Mr. CARDIN. As I understand, the Congressional Budget Office 

(CBO) baseline assumes over the next 10 years a decline in the 

caseload, and therefore, the 4 percent reflects a decline in the caseload because of the average monthly maintenance payments going 

up. 

Dr. HORN. The way that——

Mr. CARDIN. I think that if a State just held its own, it actually 

would be under the CBO baseline. 

Dr. HORN. Well, I will try to restrict my testimony to my area 

of expertise and one of them is as a social scientist who looks at 

empirical data, and we actually have data from States who, in fact, 

have opted under the waivers to take this money more flexibly. The 

fact of the matter is, what they have been able to do is demonstrate 

with more flexible funding that they can, in fact, reduce the need 

for foster care. They can reduce the length of time in foster care 

and, in fact, expend less money. 

Mr. CARDIN. Let me just make one more point before Mr. 

Stark’s time expires, and that is that the total TANF contingency 

fund is $2 billion. The foster care system is $5 billion a year. It is 

hardly enough if we really run into a problem for the entire system. 

I think the point is, if we run into a problem, we are running 

significant risks here whether the resources are going to be there 

to deal with these vulnerable children. Thank you, Mr. Stark. 

23

Chairman HERGER. The gentleman’s time is expired. Dr. Horn, 

your testimony describes how national statistics show that too 

many children are lingering in foster care and waiting for adopted 

families. Could you give us a little more background about the 

number of children currently in foster care, how long these children 

spend in foster care, and what these lengths of stay mean in terms 

of outcomes for those children—and also could you give us the Administration’s proposal to address these concerns? 

Dr. HORN. Currently, there are about 542,000 children in foster 

care. About 46 or close to 47 percent of them are Title IV–E eligible 

children. The average length of stay for a child in foster care is 

about 3 years. Now, one of the things we know from the empirical 

literature is that the longer a child spends in foster care and the 

increase in the number of placements in foster care is directly associated with poor outcomes. 

So, if we want to have better outcomes for children, what we 

need to do is find ways to reduce the length of stays in foster 

care—again recognizing the foster care system is an important 

piece of the system of child welfare services—and also try to reduce 

the number of placements. We believe that by providing the ability 

for States to use this money more flexibly—to, in fact, fund more 

preventative services as well as more intensive services for kids 

that are particularly at risk—will support State efforts to improve 

outcomes for children. 

There is a State waiver that we gave that looked at children who 

are very, very much at risk from multiple placements, disruptive 

placements, and long-term foster care. These are kids with long 

histories of aggressive behavior, fire setting, and so forth. Right 

now, you can’t use Title IV–E funds for those kids to provide intensive services. So, we provided the waiver to provide intensive services to those kinds of children, and what we found was that those 

kids who are provided those intensive services were less likely to 

have disrupted foster care placements and so we think that States 

can use this more flexible funding structure to better suit the needs 

of children in the foster care system. 

Remember, it is important to keep in mind that we do not fund 

all children in foster care. We only fund 47 percent of the kids in 

foster care, those children who are Title IV–E eligible. Those children, in part, are Title IV–E eligible by pretending the AFDC system still exists. It doesn’t exist. Yet we make eligibility workers in 

the foster care system pretend as if the 6-year-old dead program 

still is alive, and well, that makes no sense. 

So, what we are saying is, break down the categorical nature of 

this funding stream. Allow States to use this money more flexibly. 

Allow them to use it for services as well as administrative costs 

and foster care payments, which they can’t do now under current 

law, and we think—and based on the experience we have had with 

the State waivers—that we are going to see better outcomes for 

kids. 

Chairman HERGER. Thank you. The Congressional Research 

Service (CRS) recently did a memo that shows how Federal foster 

care funding can swing wildly within States from year to year. At 

the same time, we don’t see these wild swings in the number of 

children in foster care based on this. If I were a State program adVerDate jul 14 2003 00:18 Feb 06, 2004 Jkt 091276 PO 00000 Frm 00027 Fmt 6633 Sfmt 6602 E:\HR\OC\91276.XXX 91276
24

ministrator, one of the most attractive features of this proposal is 

the added predictability I could gain in terms of Federal funds that 

we receive to serve children and families in the next 5 years. 

Dr. Horn, would you care to comment about how this proposal 

can provide States more predictability over funding they receive 

and what that can mean for States? 

Dr. HORN. Well, certainly if a State were to choose this option, 

they would have a very clear idea of the amount of money that 

they will have in each of the next subsequent 5 years. They could 

choose that money to come to them in equal installments over 5 

years or in an acceleration based upon the State’s baseline projections. They would know exactly how much money they would have 

and I think that would add to predictability. If I were running a 

child welfare system and wanted to know what my budget was, I 

would have a better sense of being able to budget for the future 

years if I knew what that money was, as opposed to sort of rapid 

changes in how much money is being drawn from the Federal Government. 

Chairman HERGER. Dr. Horn, thank you very much for your 

testimony. With that, I would like to ask the next——

Mr. STARK. Mr. Chairman? 

Chairman HERGER. Yes? 

Mr. STARK. Could we have a second round here? 

Mr. CARDIN. Mr. Chairman, if I might, this will be the first 

time I have made this request. I think we have made some 

progress here today in clarifying some of the points. I think it 

might be useful to have a second round, and I would request maybe 

we could limit it to 3 minutes rather than 5. 

Chairman HERGER. I think we have had good testimony from 

the Administration. I do not want to delay the next round, and I 

believe we will move to the next round. 

Mr. STARK. Sort of like weapons of mass destruction, Mr. Chairman. If we hide them from the public——

Chairman HERGER. The next panel will have a seat at the 

table, please: Barbara Riley, Deputy Director of the Office of Children and Families of the Ohio Department of Job and Family Services; Elaine Ryan, Deputy Executive Director of Policy and Government Affairs of the American Public Human Services Association 

(APHSA); Dianne Edwards from my home State of California, Director of Sonoma County Human Services Department; and Terry 

Cross, Executive Director of the National Indian Child Welfare Association in Portland, Oregon. Ms. Riley, if you would testify. 

STATEMENT OF BARBARA RILEY, DEPUTY DIRECTOR, OHIO 

DEPARTMENT OF JOB AND FAMILY SERVICES, COLUMBUS, 

OHIO 

Ms. RILEY. Chairman Herger, distinguished Subcommittee 

Members, I am Barbara Riley, Deputy Director of the Ohio Department of Job and Family Services and responsible for Ohio’s child 

welfare program. 

It is my pleasure to testify today in regard to the Administration’s foster care flexible funding proposal. For a number of years, 

the States have been eager to engage in a conversation regarding 

25

child welfare financing, and I welcome the opportunity to discuss 

some of the benefits and the challenges this proposal presents. 

In order to provide some context for Ohio’s interest in foster care 

financing, I would like to share just a quick snapshot of our child 

welfare system. In State fiscal year 2002, we had over 71,000 reports of child abuse and neglect involving nearly 114,000 children. 

In July, 1992, we had 17,285 children in out-of-home placement, 

and by July of 2002, that had risen to 22,883, with an average 

length of stay of 208 days, and until I heard the average for the 

country, I had no idea how lucky Ohio’s children are that we are 

only at 208. However, I would like to ask you to think about how 

long 208 days is in a child’s life. 

In State fiscal year 2002, Ohio’s children spent over 8 million 

days in foster care, which is equal to 21⁄2 days for every child in 

Ohio, and an increase of 39 percent from 1992. In that same timeframe, placement costs rose by 134 percent. 

In State fiscal year 2002, 36,417 Ohio children were in the custody of a public children’s service agency, and our total expenditures for child welfare in Ohio in fiscal year 2003 are projected to 

be about $850 million, with county taxpayers bearing 55 percent of 

that total while the Federal Government will absorb approximately 

38 percent of that cost. 

These statistics clearly represent the scope of our issues, but the 

depth and the breadth of the problems we face to resolve is vast, 

and our experience has taught us that segregated funding streams 

do not support the efforts that need to be made to affect child safety and well-being. In fact, I believe that the current Title IV–E 

funding system rewards failure rather than success. So, Ohio is 

very much interested in the foster care flexible financing proposal 

with some modifications. 

This proposal would allow the States to choose to receive their 

foster care maintenance, administration, and training funding in 

the form of a quasi-block grant, providing greater flexibility. I am 

able to foretell the future of this proposal for Ohio with some level 

of confidence as Ohio is in the enviable position of having a Title 

IV–E child welfare demonstration wavier that has taught us just 

how important flexible funding can be. 

In our protect Ohio waiver, 14 counties receive a budget of placement days at a very set unit cost and along with that the flexibility 

to use their Title IV–E funding on children and services as they see 

fit. To the extent that a county is able to avoid the placement of 

children, their allocated dollars not used on placement may be used 

for non-Title IV–E services, such as family counseling, drug treatment and prevention. 

We have just completed our 5-year evaluation, and it reveals several very intriguing results. On the business side, we have saved 

$41.2 million in placement costs while those dollars are available 

for alternative services. Most importantly, children experience 

682,350 fewer days in placement. 

On the programmatic side, the waiver results include improved 

availability and quality of services, development of new services, 

increases in service capacity, timely access, increased attention to 

outcomes, and increased family involvement. In essence, the State 

serves as a managed care provider to the Federal Government, and 

26

the Federal Government indemnifies itself against any cost overruns for increases in placement costs that might be experienced by 

those 14 counties. 

If we could extend this ability statewide to align funding with 

successful outcomes for children and families, I believe it could herald the beginning of child welfare reform in Ohio akin to the level 

of reform experienced under the TANF program. 

The Administration’s foster care flexible funding proposal promises much. However, for us to be able to experience such a reformation, we would like to recommend that Congress provide States 

with the ability to negotiate how to administer this budget-neutral 

flexible funding option in each State. 

The Congress allows States to choose to opt in beyond the Federal fiscal year 2004. Even if you freeze the base for establishing 

funding levels, this type of endeavor requires incredible planning 

at the State level and may even require changes in State law. We 

would ask Congress to allow States to reopen the option if additional Federal requirements alter the actuarial assumptions on 

which original funding levels were based. 

Also, the inflation factor needs to more accurately reflect an individual State’s experience rather than a national average. We also 

believe that access to the contingency fund should be dependent 

only on increases in State caseloads, not national experience. 

Also, for Ohio, it is important that the statewide Automated 

Child Welfare Information Systems funding not be included. 

Chairman HERGER. If you could sum up your testimony, please. 

Ms. RILEY. Mr. Chairman, Members of the Subcommittee, there 

is little doubt in my mind that the Federal funding for foster care 

forces rigidity—that is, as it is today—forces rigidity onto the foster 

care system and the flexible funding here offers much promise to 

Ohio. Thank you, Mr. Chairman. 

[The prepared statement of Ms. Riley follows:]

Statement of Barbara Riley, Deputy Director, Ohio Department of Job and 

Family Services, Columbus, Ohio 

Good afternoon. Chairman Herger, distinguished Subcommittee Members, I am 

Barbara Riley, Deputy Director of the Ohio Department of Job and Family Services, 

and responsible for Ohio’s child welfare program. It is my pleasure to be able to testify today in regard to the Administration’s Foster Care Flexible Funding proposal. 

For a number of years the states have been eager to engage in a conversation regarding child welfare financing, and I welcome this opportunity to explore some of 

the benefits and challenges this proposal presents. 

In order to provide context for our interest in foster care financing, I would like 

to share a snapshot of our child welfare system.

• In State Fiscal Year (SFY) 2002 we had 71,366 reports of child abuse and neglect, involving 113,897 children. 

• In July 1992 there were 17,285 children in out-of-home placements. In July 

2002 that number had risen to 22,883, with an average length of stay of 208 

days. 

• In SFY 2002 Ohio’s children spent 8,105,166 days in foster care, which is equal 

to 21⁄2 days for every child in Ohio, and an increase of 39% from 1992. In that 

same time frame costs rose by 134% to $325.4 million per year. 

• In SFY 2002, 36,417 Ohio children were in the custody of a public children services agency. 

• Total expenditures for child welfare in Ohio in SFY 2003 are estimated to be 

$850–$865 million, with county taxpayers bearing about 55 percent of that 

total, while the Federal Government will absorb approximately 38 percent of 

the cost.

27

These statistics clearly represent the scope of our issues. The depth and breadth 

of the problems we must resolve is vast, but our experience has taught us that segregated funding streams do not support the efforts that need to be made to affect 

the safety and well-being of children. In fact, I believe that the current Title IV–

E funding system rewards failure rather than success, so Ohio is very much interested in the Foster Care Flexible Funding Proposal, with some modifications. 

This proposal would allow the states to choose to receive their foster care maintenance, administration, and training funding in the form of a quasi block grant, providing greater flexibility in determining who we serve and with what services. I am 

able to foretell the future of this proposal for Ohio with some level of confidence, 

as Ohio is in the enviable position of having a IV–E child welfare demonstration 

waiver that has taught us just how important flexible funding can be. In our 

ProtectOhio waiver, 14 counties receive a budget of placement days at a set unit 

cost; and along with that, the flexibility to use their IV–E funding on any child who 

is a victim of abuse and neglect, and for any service, regardless of IV–E eligibility. 

To the extent that a county is able to avoid placement of children, their allocated 

dollars, not used on placement, may be used for non IV–E services such as family 

counseling, drug treatment, prevention services, etc. 

Our five year evaluation has been completed and reveals several very intriguing 

results. On the business side: we have saved $41.2 million in placement costs, with 

those dollars available for alternative services; and most importantly, children experienced 682,350 fewer days in placement. On the programmatic side, the waiver results include: improved availability and quality of services, development of new 

services, increases in service capacity, timely access to services, increased attention 

to outcomes, increased family involvement in case management, and increases in recruiting results for foster and adoptive parents. In essence, the state serves as a 

managed care provider to the Federal Government, and the Federal Government indemnifies itself against any ‘‘cost overruns’’ for increases in placement costs that 

might be experienced by these counties. 

If we could extend statewide this ability to align funding with successful outcomes 

for children and families, I believe it would herald the beginning of child welfare 

reform in Ohio, akin to the level of reform experienced with Temporary Assistance 

to Needy Families. The Administration’s Foster Care Flexible Funding Proposal 

promises much, however, for us to be able to experience such a reformation, I would 

like to recommend that:

• Congress provide states with the ability to negotiate how to administer this 

budget neutral flexible funding option in each state; 

• Congress allow states to choose to ‘‘opt in’’ beyond FFY 2004, even if you freeze 

the base for establishing funding levels, as this type of endeavor requires planning at the state level, including potential necessary changes in state law; 

• Congress allow states to reopen the option if additional federal requirements 

alter the actuarial assumptions on which original funding levels were based; 

• The inflation factor more accurately reflect an individual state’s experience, 

rather than a national average; 

• Access to the contingency fund be dependent only on increases in state caseloads; and 

• SACWIS funding not be included in the option.

Mr. Chairman, members of the subcommittee, there is little doubt in my mind 

that federal funding for foster care, as now manifested in Title IV–E, forces a rigidity onto child welfare practice that limits and stifles state and local innovation. Removal of that rigidity would, in my opinion, create a singularly powerful catalyst 

to state and local innovation and reform by targeting service dollars to both stated 

federal policy objectives, and just plain good child welfare practice. I also believe 

that any flexible funding model must occur in the context of preserving a federal 

entitlement for foster care maintenance funds, while also creating a more rational 

array of funding incentives which reward best practice behaviors. Against this backdrop, Ohio would both welcome and embrace many of the elements of the Administration’s proposal. 

Thank you for the opportunity to provide this testimony, and I would be happy 

to answer any questions.

Ryan? 

Chairman HERGER. Thank you very much, Ms. Riley. Ms. 

f

28

STATEMENT OF ELAINE M. RYAN, DEPUTY EXECUTIVE DIRECTOR, POLICY AND GOVERNMENT AFFAIRS, AMERICAN PUBLIC HUMAN SERVICES ASSOCIATION 

Ms. RYAN. Mr. Chairman and Members of the Subcommittee, 

thank you so much for the opportunity to testify. I am Elaine Ryan. 

I am the Deputy Executive Director of the APHSA. I really appreciate the opportunity to focus on this very critical issue of child 

welfare financing that just impacts so many children’s lives. We 

have had the opportunity to testify before you and really commend 

Congresswoman Johnson’s leadership on child welfare financing in 

the past, and Mr. Cardin’s, and also look forward to working with 

the Committee on these important issues. 

Our association has spent the last 7 years looking at child welfare financing, so this is not new to our association. We see what 

I think most of the experts in the room and those who have testified see, and that is the fact that the Title IV–E entitlement structure is just woefully inadequate and out of step with the needs of 

the children and families we serve. 

For example, the circumstances of abuse and neglect bring children to the system. It is not the income of their parents. Yet we 

have a Federal funding stream that only supports the services to 

the poor children in the system, but not all the children in the system. We believe that needs to be reformed. 

The second principle that we have embraced over the years is enhanced Title IV–E flexibility. By flexibility, we mean the ability to 

use Federal funds in a way that are more contemporary with the 

needs of the system. For example, Title IV–E funds cannot be used 

for investigations, frontline worker training, post-adoption services 

to guarantee that those are successful adoptions, permanency, or 

subsidized guardianship for some of the older, more troubled children in the system. It is out of step with the children and families’ 

needs and it needs to be reformed. 

So, we come to you with a lot of recommendations and are grateful for the opportunity, because we feel a sense of urgency. You see, 

because of the lookback, the Federal financial commitment to child 

welfare has slipped over the years. Just by inflation alone, fewer 

children are eligible for any reimbursement or services. 

Second, we have experienced huge cuts in the Social Services 

Block Grant program (SSBG), and I just want to commend the 

Members of this Subcommittee in particular for your leadership, 

and Congressman Levin’s and Mrs. Johnson’s leadership, in particular, to restore block grant funding for the SSBG, such a critical 

source. The block grant has been cut from $2.8 billion to $1.7 billion and it is hurting on the frontlines. We need to have that restored. 

I have a lot of passion about this issue, and it is because I think 

so much is at stake that we do this right, that we take the time 

to embrace proposals that will have the maximum possible benefit 

for the vulnerable children and families in this system. 

We were asked early on, quite frankly, when the Administration 

released their budget proposal to examine it, and we gladly did so 

by putting together a working group of States. When we asked 

about which States had interest in the issue of child welfare financing, 38 States signed up immediately to say, count us in, because 

29

they know what we all know, that this system is in bad need of 

reform. 

The foster care flexible funding option that the Administration 

has put forth has some very positive options. First, it stops the 

slide and the lookback. In other words, States don’t have that declining Title IV–E reimbursement. Second, States can use those 

dollars for all children in the system. Third, you can use those dollars for multiple purposes, like some of those that I have mentioned earlier in my testimony. 

With that said, we also have heard in our exploration of this 

some concerns raised. For example, Congresswoman Johnson’s 

point of the snapback—I like that better than opt out—but quite 

frankly, States are concerned that if they commit once and have a 

short period of time that they are in for 5 years. They also have 

raised some issues that I have outlined in my testimony that I 

commend to your attention. 

States are in very different points of reform. Ohio is in a place. 

California is in a place. One thing we know is we need every option 

possible to serve these children as quickly as possible and with 

some flexibility to meet their needs. The current system doesn’t do 

that. 

Let me just close by saying that we are very appreciative of Mr. 

Cardin’s leadership in terms of trying to fix the lookback, making 

it a bit more contemporary. Of course, we want Federal financial 

participation on all children in the system, but we really appreciate 

your initiative as a fine starting point for future discussions. 

Second, States, as you well know, are going through the child 

and family services reviews. They are then asked to put together 

Program Improvement Plans (PIPs), and as I have put it, in some 

circumstances, State budgets are too pooped to PIP. 

[Laughter.] 

In other words, we don’t have the resources to meet the objectives contained in those proposals, to be able to get some of those 

improved outcomes for children and families, and we have a lot at 

stake here. 

So, let me say that we appreciate the recognition of the idea that 

more resources might be needed for those program improvement 

plans, but we think we can find perhaps some reform in making 

Title IV–E more flexible so that you can actually use those dollars 

to drive those outcomes. For example, training caseworkers in child 

development, you can’t——

Chairman HERGER. If you could sum up, please. 

Ms. RYAN. You can’t do that now, and we think that Title IV–

E could be made more flexible in a number of ways. 

Let me just sum up by saying we are appreciative of the child 

welfare waiver authority and Congressman Herger, for your leadership in including that in the Welfare Reform Act (P.L. 104–93). We 

want to see that demonstration authority that has worked so well 

in Ohio and Connecticut continue. In sum, I am happy to answer 

any questions that you may have for me. 

[The prepared statement of Ms. Ryan follows:]

30

Statement of Elaine M. Ryan, Deputy Executive Director, Policy and 

Government Affairs, American Public Human Services Association 

Good afternoon, Mr. Chairman and Members of the Subcommittee, I am Elaine 

M. Ryan, Deputy Executive Director for Policy and Government Affairs at the American Public Human Services Association (APHSA). I am pleased to have the opportunity to testify about child welfare financing reform and the proposal to create a 

foster care funding option for states. 

Child Welfare Financing Reform Goals

As the national organization representing state and local agencies responsible for 

the operation and administration of public human service programs, including child 

protection, foster care and adoption, APHSA has a long-standing interest in developing policies and practices that promote improved performance by states in operating these programs for our nation’s most vulnerable children and families. Indeed, 

APHSA members have dedicated nearly seven years discussing and crafting policy 

recommendations with respect to the financing of the child welfare system. APHSA 

has embraced two fundamental goals for child welfare financing reform outlined in 

our policy document, Crossroads: New Directions in Social Policy. First, there should 

be federal financial participation in support of all children in the child welfare system and, second, there should be increased flexibility in the use of IV–E funds. 

APHSA policy supports delinking IV–E eligibility from AFDC so that the Federal 

Government can share in the support of all children in the child welfare system, 

regardless of income. With respect to increased flexibility, we strongly believe that 

the current IV–E structure fails to support the outcomes for children and families 

that we seek to achieve. Federal funding is disproportionately directed to funding 

out of home care—the very part of the system agencies seeks to minimize in order 

to achieve greater permanence for children. The IV–E entitlement should fund frontend services, reunification, post-permanency for children and families in the system 

as well. 

Over the past several years, the demands on the child welfare system have increased significantly. State administrators have focused their efforts on implementing the requirements of the Adoption and Safe Families Act and setting forth 

plans to achieve improved outcomes for children with respect to safety, permanency 

and well-being. At the same time, fewer and fewer children served in the child welfare system are supported with federal funds, due to the ‘‘look back’’ provision of 

the welfare reform act that links IV–E eligibility to the former AFDC eligibility 

rules in effect as of July 16, 1996. In addition, since 1996, the Social Services Block 

Grant, a critical source of federal funding for child welfare, has been dramatically 

reduced from $2.8 billion to $1.7 billion. And recent federal policy announcements 

and actions threaten to restrict federal IV–E reimbursement for administrative costs 

incurred on behalf of children in unlicensed foster family homes as well as for targeted case management under Medicaid. Given the growing demands on the child 

welfare system and in light of the fragmented and fragile funding infrastructure, 

we believe Congress must address the critical issue of child welfare financing. 

With so much at stake, we urge this subcommittee to engage in a thorough and 

comprehensive examination of all possible reform proposals. 

The Administration’s Foster Care Flexible Funding Proposal

We want to commend the Administration for highlighting the need for child welfare financing reform by setting forth a foster care flexible funding option in its FY 

2004 Budget. Shortly after the release this year of the Administration’s proposal, 

APHSA formed a working group of interested states to discuss various aspects of 

the proposal. In addition, Dr. Horn, Assistant Secretary for the Administration for 

Children and Families and various Administration officials have met with our members and have solicited input on the proposed idea and the design of a state option. 

I am pleased to have the opportunity to share some of our preliminary thoughts on 

the broad construct of the foster care flexible funding proposal, based on the feedback we have received from our working group. However, it is important to note 

that APHSA has not taken a formal position on the Administration’s proposal to 

date. When legislation is introduced in Congress, we will bring the proposal before 

our membership for consideration at that time. 

As we understand the proposal, there are several strong aspects of the Administration’s foster care flexible funding option. First, states would have the flexibility 

to use their IV–E funding allotments, as well as their MOE funds, for a broad range 

of services to children and families. We assume any legislative language would enable states to invest in prevention, subsidized guardianship, case-management, postadoption services, and cross-system collaborative efforts with substance abuse agencies and juvenile courts and other activities and services as they see fit. Second, 

31

under the option, states could use the federal and MOE funds for all children in 

their foster care system, without regard to income. Third, under the option states 

could stem the decline in IV–E funding, due to the ‘‘AFDC look-back.’’ Fourth, states 

would have the option of spending a greater proportion of their annual allotments 

in the first several years and could opt to roll any unspent funds from one fiscal 

year to the other. Finally, states would have access to a contingency fund in the 

event of a significant increase in their foster care caseload. 

Determination of Baseline and Opt-in Period

As the subcommittee members are well aware, states child welfare systems are 

at various stages of reform and their state fiscal situations vary. Some states have 

experienced dramatic declines in IV–E eligibility claims in recent years, some have 

achieved reductions in foster care caseloads, some have seen increases, and some 

have operated waiver demonstrations. In addition, states differ in the resources 

used to support their child welfare systems—some have used TANF, SSBG, Medicaid, and a host of state and local resources. Therefore, states will need to engage 

in a complex calculation of whether to embrace the option or continue to operate 

under the entitlement structure. 

States will have great interest in the calculation of the baseline, the base year, 

treatment of claims filed vs. claims paid, the treatment of child support collections, 

disallowances and deferrals. States should be consulted in the development of the 

criteria used to calculate the baseline. In addition, we would urge the subcommittee 

to consider adding a state option to exclude the cost of AFCARS and SACWIS systems from the baseline calculation and retain the current federal match for these 

data systems. 

Lead time will be important to states interested in opting in to allow for calculations to determine benefits of participating, to make any needed regulatory and/or 

statutory changes, systems changes, and to instruct the field of changes in practice. 

A significant time period may be required due to the need for extensive discussions 

with their local jurisdictions who administer child welfare. In addition, the proposed 

one-time opt-in period may limit some states from taking advantage of the option, 

due to the need to seek legislative approval or to undertake the aforementioned approval process. The subcommittee might explore the idea of allowing states to opt 

in within a two or three year period. 

Opt Out

Some states have expressed concerns with the provision in the foster care option 

that would require states to stay in the option for five years. In light of the fiscal 

difficulties in the states, and the uncertainty related to the rising cost of child welfare, caseload dynamics and other factors, we urge the subcommittee to consider affording states the opportunity to opt out within the five year period. The creation 

of a contingency fund, while helpful, may not be able to shield states from unexpected revenue shortfalls or rising state deficits. With the protection of children our 

paramount concern, state should be able to opt out of the plan. 

Maintenance of Effort

As in the TANF statute, we recommend the maintenance of effort (MOE) requirement should be limited to the historic share of state match for the base year identified in the law. 

Links to Other Programs

As the subcommittee considers the option, we encourage you to look in-depth at 

the relationship this foster care option will have to other federal programs such as 

IV–E Adoption Assistance and Medicaid. While states may serve all children without respect to income under the foster care option, IV–E eligibility for Adoption Assistance must be simplified. Medicaid coverage must be continued for all previously 

eligible children under the option. 

Contingency Fund

Under the Administration’s proposal, states would need to meet a federal and 

state trigger in order to draw contingency funds. We recommend that the subcommittee consider one trigger linked to a significant increase in the state’s foster 

care caseload. In addition, Congress should ensure that the match rate under the 

contingency fund is no greater than the state’s current IV–E match rate. 

Additional Congressional Actions

As stated earlier, state child welfare systems vary widely. For some states, the 

proposed option may not be viable. Cost neutrality conditions and financial risks 

may not be acceptable to some states. Therefore, in addition to considering the fosVerDate jul 14 2003 00:18 Feb 06, 2004 Jkt 091276 PO 00000 Frm 00035 Fmt 6633 Sfmt 6621 E:\HR\OC\91276.XXX 91276
32

ter care funding option, we encourage the subcommittee to consider the following 

revisions to the IV–E entitlement. 

Address the ‘‘Look Back’’

Under the welfare law of 1996, states were given greater flexibility to establish 

Medicaid eligibility, including an inflation factor. However, with respect to IV–E eligibility, no inflation factor was included in the provision. In 1996, Congress acknowledged that they would need to address the IV–E eligibility criteria at a later 

date. Nearly seven years have passed and no action has been taken. We urge action 

on this critical issue. We want to acknowledge the legislation sponsored by Congressman Cardin that would update the IV–E eligibility by linking it to TANF eligibility. While we believe the proposal does not go far enough, we believe it is a positive starting point for further discussion. 

Expand IV–E Flexibility

We appreciate that the Cardin bill recognizes that states will need additional resources in order to implement their Program Improvement Plans resulting from the 

federal Child and Family Service Reviews. We urge the subcommittee to examine 

the ways IV–E funding might be made more flexible so that states could use these 

resources to improve the outcomes for children and families in the system. 

Restore the Social Services Block Grant

I cannot discuss child welfare funding without mentioning the Social Services 

Block Grant (SSBG). SSBG is a critical source of federal funding for child welfare 

services, and $1.3 billion in increased funding is currently pending in the Senate 

as part of the CARE Act. It is also through the leadership of several members of 

this committee including Representatives Johnson, Levin, Camp, Cardin, 

McDermott, English, and Stark who have called for full restoration of SSBG to $2.8 

billion as part of the Social Services Block Grant Restoration Act. APHSA strongly 

encourages the subcommittee to support SSBG Restoration, either through passage 

of this legislation or as part of HR7, the companion bill to CARE that may move 

through the House. There are a host of SSBG services that support children and 

their families involved in the child welfare system; it is significant that in FY 2001 

49 states used over $825.5 million for such child welfare services such as foster care, 

child protection, prevention and intervention, and adoption. According to an Urban 

Institute survey, SSBG was the second major funding stream for child welfare services after Title IV–E. Also, with only $21 million available federally under the Child 

Abuse and Prevention and Treatment Act (CAPTA) for the protection of children, 

states made use of over $314 million in SSBG funds for the same purpose. 

Reauthorize and Expand IV–E Child Welfare Waivers

We appreciate the leadership of this subcommittee to reauthorize IV–E waivers 

in H.R. 4, the welfare reform act and call on Congress to include this provision in 

any final TANF legislation. The current waiver process limits innovation, prohibits 

approval for multiple states to test similar innovations, such as subsidized guardianship; restricts research, control groups, and random assignment requirements; 

cost-neutrality methodology; and limits statewide approaches. While the waiver program has enabled some states to reinvest federal foster care funding in services and 

other activities to improve their systems and promote permanence, in its current 

mode of HHS implementation, it is a promise unfulfilled and will not meet state’s 

needs for the flexibility necessary to achieve broad systems change. APHSA strongly 

supports making substantial modifications to the current Title IV–E waiver process 

to allow more flexibility and to foster system change, including eliminating the limited number of waivers HHS can approve; eliminating approval criteria that require 

random assignment and control groups that limit statewide approaches; eliminating 

the limited number of states that may conduct waivers on the same topic; eliminating the limited number of waivers that may be conducted by a single state; and 

enabling states to continue their waivers beyond five years. The Title IV–E Demonstration Waivers would afford states another option to achieve flexibility and improve performance. 

Conclusion 

APHSA’s vision for child welfare is a society where children are free from abuse 

and neglect, and live in safe, stable, permanent families-where children and families 

have needed supports and can help themselves. When children are at risk and come 

to the attention of the public agency, the agency can provide services and supports 

to them and their families to mitigate their problems and prevent them from being 

removed from their families and communities. When children must come into care, 

the agency can address children and family needs expeditiously and enable a safe 

33

reunification or, where that is not possible, find an alternative permanent placement expeditiously, while assuring their well-being in the interim. This is a vision 

where the safety and protection of children is the shared responsibility of all parts 

of the human service agency and the larger community. It is a vision where the 

child welfare system has the capacity to improve outcomes for children and families 

and the Federal Government and states are equal partners in serving all children 

in all parts of the system. 

The child welfare financing system, developed 23 years ago, no longer supports 

states’ efforts to achieve this vision. We need reform and look forward to working 

with the subcommittee to devise a financing construct that can meet the needs of 

the most vulnerable children and families we serve. 

Thank you for the opportunity to testify. I would be pleased to respond to any 

questions you may have.

wards from my own home State of California, Director of the 

Chairman HERGER. Thank you, Ms. Ryan. Now, Dianne Edf Sonoma County Human Services Department. Ms. Edwards? 

STATEMENT OF DIANNE EDWARDS, DIRECTOR, SONOMA 

COUNTY HUMAN SERVICES DEPARTMENT, SANTA ROSA, 

CALIFORNIA, VICE PRESIDENT, NATIONAL ASSOCIATION OF 

COUNTY HUMAN SERVICES ADMINISTRATORS, AND CHAIR, 

LEGISLATIVE COMMITTEE, COUNTY WELFARE DIRECTORS 

ASSOCIATION OF CALIFORNIA, SACRAMENTO, CALIFORNIA 

Ms. EDWARDS. Good afternoon, Mr. Chairman and Members of 

the Subcommittee. I am honored to be here today to give the local 

perspective on the Administration’s foster care proposal. I am 

Dianne Edwards, Director of Human Services for Sonoma County. 

I am also representing the County Welfare Directors Association of 

California and the National Association of County Human Services 

Administrators. 

California is among 12 States where counties operate foster care 

with State and Federal oversight. We have experienced increased 

public scrutiny of our programs in recent years, leading to a multitude of ideas for reinventing the system. One of the most promising ideas is increasing the front-end prevention services for families in order to reduce further involvement with child welfare. 

Past efforts to increase prevention have been held back in part 

by the inflexible child welfare funding structure. States, as you 

have heard, must evaluate Federal Title IV–E eligibility for every 

foster child, using outdated rules from the AFDC program. Since 

these rules have not been updated, the proportion of eligible California children has dropped by more than 4 percent over time and 

is expected to continue to decline unless this is changed. 

For these reasons, counties urge you to eliminate the AFDC 

lookback and we would welcome the ability to use Title IV–E funds 

for front-end services. States opting into the Administration’s proposal could do both. However, we are concerned about other provisions that would limit our flexibility to administer child welfare. 

In particular, the 5-year budget neutrality requirement will 

make it very difficult, if not impossible, for us to fully realize the 

benefits of increased flexibility. At a time when the Federal Government is working with States to expand front-end services to 

families and improve outcomes, we feel it would be detrimental to 

cap Federal funding for child welfare services. We would like to see 

34

more prevention, treatment, training, and fiscal incentives for 

States that improve. Emphasizing these aspects of the child welfare system while maintaining the uncapped Title IV–E system as 

in the legislation that Congressman Cardin has introduced, the 

Child Protective Services Improvement Act (H.R. 1534), would improve the services available to all families. 

We have a number of recommendations to improve the Administration’s proposal and make it more workable for a greater number 

of States and counties. First, the Federal Government should share 

in the services provided to all abused and neglected children, not 

only those from poor families or those who reside in States that 

choose the flexible funding option. The lookback should be eliminated. 

Second, while increased prevention activities should reduce the 

need for out-of-home care, it could take longer than the Administration’s 5-year time line. Instead of sharing this risk, the proposal 

would shift it to States and counties. A better option would be to 

increase flexibility in the use of Title IV–E funding while maintaining the program’s uncapped nature so all States can increase their 

prevention and early intervention strategies. 

While the proposal would allow States to access the TANF contingency fund, the criteria for doing so are relatively narrow. Access to the fund should be more flexible and should be broadened 

to allow a county or a sub-State region to also receive funding. 

Importantly, States must maintain their current level of spending on child welfare programs. The definition of child welfare is of 

critical importance, and we would be happy to assist in drafting 

specific maintenance of effort language to ensure that spending remains in the program. 

Further, training dollars and automation expenditures should be 

kept outside of the flexibility proposal. Increased training is key to 

improving performance on the Federal outcomes of safety, permanence, and well-being. 

The statewide child welfare data systems are key to measuring 

and tracking these improvements. As such, the Federal Government has a stake in the operation and improvement of such systems. 

Currently, children who are found eligible for Federal Title IV–

E funding are automatically eligible for Medicaid. We understand 

that States will be given the option to declare all children covered 

and we strongly support this option. 

Finally, given the ramifications of the flexible grant option, 

States with county-administered child welfare systems should be 

required to consult with the local statewide organizations before 

opting in. 

Now that you have heard our recommendations, we also have a 

question. Can States truly opt back out after the 5-year period? It 

appears that a State would have to redetermine Title IV–E eligibility using the lookback for its entire caseload in order to return 

to the uncapped funding environment. If so, this would be cost prohibitive. Further, States and counties would have to continue serving the non-federally eligible families using their own funding or 

scale back their services. Neither option is appealing. 

35

In conclusion, States and counties are working in partnership 

with the Federal Government to improve outcomes and ensure 

safety, well-being, and permanence for children and families. Elimination of the AFDC lookback requirement and the ability to use 

Title IV–E funds for front-end services would enhance the implementation of program improvement plans. Given the fiscal condition of counties, we believe that this is not the time to limit Federal funding for foster care, training, automation, or program operations. The Federal Government should continue to share in the 

risk of a new prevention-focused strategy as well as the rewards. 

I thank you again for inviting me to testify and would be happy 

to answer any questions. 

[The prepared statement of Ms. Edwards follows:]

Statement of Dianne Edwards, Director, Sonoma County Human Services 

Department, Santa Rosa, California, Vice President, National Association 

of County Human Services Administrators, and Chair, Legislative Committee, County Welfare Directors Association of California, Sacramento, 

California 

Good afternoon, Mr. Chairman and Members of the Subcommittee. I am honored 

to be here today to give the local-level perspective on the Bush Administration’s foster care proposal. I am Dianne Edwards, Director of the Human Services Department in Sonoma County, California. I am a past president of the County Welfare 

Directors Association of California (CWDA), currently serve as chair of CWDA’s Legislative Committee, and am also Vice President of the National Association of County Human Services Administrators (NACHSA). 

Each of California’s 58 counties operates its own child welfare, foster care, and 

adoptions programs, with oversight from the state and Federal Governments. We 

are one of a dozen states where counties operate foster care. In recent years, we 

have seen a trend toward increased public scrutiny of the child welfare system, not 

just at the state and federal levels, but also from the courts, the media, and foster 

children and their families. This increased attention has led to a multitude of ideas 

for reinventing the system. As you will hear often during your examination of this 

issue, one of the most promising practices is that of increasing ‘‘front-end’’ prevention services for families in order to reduce their further involvement with child protective services. 

Prevention is not a new concept, but the sharpened focus on front-end services 

is a significant change. Past efforts to increase these services have been hampered 

by a lack of flexibility in the federal child welfare financing structure. For example, 

the funding we receive through Title IV–B can be used for a wide range of activities 

to protect and reunify families, but it is an insufficient allocation that most California counties exhaust in the first three months of each fiscal year. We spend the 

rest of the year scrambling to patch together services using other limited and less 

flexible funding sources. At the same time, we are required to evaluate federal Title 

IV–E eligibility for every child who enters foster care, using outdated rules from the 

Aid to Families with Dependent Children (AFDC) program. Because these rules 

have not been updated since 1995, the number of eligible California children has 

dropped by 4 to 5 percent over the past several years. This decline is expected to 

continue if nothing is changed, with counties covering a greater share of the costs 

for these children. 

For these reasons, counties generally support increased flexibility in the use of 

Title IV–E funding. That said, we have concerns with provisions of the Administration’s proposal that would actually limit our flexibility to administer child welfare, 

rather than increase it. Much of the proposal, especially the elimination of the 

AFDC look-back requirement and the ability to use Title IV–E funds for some frontend services that are not presently covered, could lead to major improvements in 

child welfare. But this is not the time to limit federal funding for foster care, staff 

training, program operations, or automation. In particular, we fear that the budget 

neutrality requirement will limit our ability to spend more money on prevention activities and staff training over the long-term. This would make it very difficult, if 

not impossible, for us to reap the benefits of increased flexibility. Without assurances that the funds will grow to support the expanded services, rather than diminish over time, we cannot endorse the proposal. 

36

1 California Department of Social Services (April 2000). SB 2030 Child Welfare Services Workload Study: Final Report. Sacramento, California. 

WHY FLEXIBLE FUNDING IS NEEDED 

To give you a sense of magnitude, California will spend more than $4 billion on 

its child welfare program next year. While county funding currently represents onequarter of these expenditures, the counties’ share may increase to nearly $1.5 billion 

in the coming year. Although $4 billion is a lot of money, counties would need much 

more in order to offer up-front prevention to all of the families who could benefit 

from it. Our child welfare workers already carry caseloads that are twice the recommended levels, making it difficult for them to provide services beyond the basic 

protections to children and families.1 Mental health and substance abuse treatment 

programs are also overextended, making these services unavailable to many families. 

For years counties have recognized that federal funding should be available to 

children in need of protection regardless of their parents’ income. The Federal Government should share in the services that we provide to all abused and neglected 

children, not only those from poor families. Enabling counties to use Title IV–E 

funds in a more flexible manner, as included in the Bush Administration proposal 

as well as HR 1534, the bill that Congressman Cardin has introduced, would definitely help. If we could use Title IV–E funding to pay for mental health services 

and substance abuse treatment, we could ensure faster access to needed services. 

If we could use Title IV–E funding without ‘‘looking back’’ to outdated eligibility 

rules from a program that no longer exists, we could save administrative costs and 

direct those funds toward more services for a broader group of families. Congressman Cardin’s legislation would also provide new funding for staff training and retention, substance abuse assessment and treatment, and fiscal incentives for states 

that achieve better outcomes. Emphasizing these aspects of the child welfare system 

would further improve the services available to families. 

CONCERNS WITH FUNDING PROVISIONS 

We support the elimination of the AFDC look-back requirement, but this flexibility comes at too high a price in the Administration’s proposal. While we agree 

that increased prevention activities should ultimately reduce the need for out-ofhome care, no one knows how fast that reduction will occur. It could very well be 

longer than the Administration’s five-year budget neutrality timeline. This uncertainty, though not uncommon in social services programs, is usually accompanied 

by some sharing of risk among the federal, state, and county governments. In this 

case, instead of sharing the risk, the Administration shifts it entirely to the states 

and counties. If a state front-loads its funding for prevention activities, it might not 

see a return for eight or ten years, or even more. During the five-year budget-neutrality window, a state could run out of federal money and be left holding the bill 

for continuing foster care placements. 

From counties’ perspective, a better option would be to increase flexibility in the 

use of federal Title IV–E funding and eliminate the unnecessary AFDC look-back 

requirements, while maintaining the entitlement nature of Title IV–E. This will enable all stakeholders to share in both the risks and the rewards of providing more 

prevention and intervention services. Restructuring child welfare in partnership is 

particularly important at a time when most states, including California, are entering into plans with the Federal Government to improve their child welfare outcomes. The expanded services and supports and additional staff training called for 

in these plans—and, ultimately, the improved outcomes that all of us seek for children and families—cannot be realized unless Title IV–E is made more flexible and 

is continued as a stable, dependable funding source for states and counties. While the proposal would allow states to access the $2 billion Temporary Assistance to Needy Families program contingency fund under certain circumstances, the 

current proposal would not enable all states to benefit. Access to the contingency 

fund should be made more flexible and should also be broadened to allow a county 

or a sub-state region to receive funding. As we understand the current proposal, the 

criteria that must be met in order to access the fund are relatively narrow, enough 

so that a state may not be able to receive funding even when it is dire need. Of 

particular interest to county-run child welfare systems is the idea of allowing a 

county or region to access the contingency fund even if the state as a whole cannot. 

For example, caseloads or unemployment rates in one county may increase sharply, 

while the rest of the state experiences only minor increases. 

Another vital issue for counties is the structure of the state maintenance-of-effort 

requirement. States should be required to maintain their current level of spending 

on child welfare programs. We believe the way in which ‘‘child welfare’’ is defined 

37

will be of critical importance in ensuring that spending remains in the program. We 

would be happy to assist in drafting the specific language regarding this requirement. 

Further, we recommend that training dollars be kept outside of the flexibility proposal and maintained as an uncapped funding source, as in the current system. In 

California, counties have forged many successful training partnerships with universities and community organizations, using the enhanced 75 percent federal matching rate for training activities to improve the skills of our child welfare staff. Increased training will be a key piece of improving county performance on the federal 

outcomes of safety, permanence, and well-being. The Federal Government has a 

stake in ensuring that the changes it hopes to facilitate in state child welfare programs come to pass, and ensuring that funding remains available for this vital function. 

Along the same lines, states should not have an incentive to limit the maintenance and operation of their Statewide Automated Child Welfare Information Systems (SACWIS) or to shift funding for these projects to other program areas. We 

believe that automation funding should not be included in the proposal, in order to 

ensure continued state commitment to these vital systems. The SACWIS projects 

ensure more consistent data collection and reporting across the nation, and are a 

key component of the federal child welfare review system. As such, the Federal Government has a stake in the continued operation and improvement of these systems. 

ADOPTION ASSISTANCE PROGRAM 

Additionally, while states opting into the program will be able to forego the timeconsuming process of determining federal eligibility for children placed into foster 

care, they will continue to determine eligibility for adoption assistance using the old 

AFDC look-back rules. While the rules will be changed to enable states to test at 

one point in time rather than two, this requirement still will reduce the effectiveness of eliminating the look-back requirement for foster care. 

GOVERNANCE ISSUES 

At this time, it is not clear what steps a state would be required to take in order 

to opt into the flexible funding proposal. Given the potentially significant ramifications of opting in, a decision-making process that includes program administrators 

and other stakeholders is advisable. In states that are county-administered, we ask 

that the state be required to consult with the statewide association of counties on 

the advisability of opting into the proposal. In states with county-administered child 

welfare programs, the county association would also have the right to approve or 

disapprove the state request for the optional grant. State legislatures should also 

have the right to approve or disapprove the request. 

ENSURING MEDICAID ELIGIBILITY 

Currently, children who are found eligible for federal Title IV–E funding are automatically eligible for federal Medicaid reimbursement under Title XIX. This categorical link helps to ensure that foster children receive preventative and acute medical 

care. Understandably, counties are concerned that removing the look-back requirement for federal Title IV–E eligibility could also jeopardize the eligibility of those 

children to the Medicaid program. From our discussions with representatives of the 

Administration, we understand that states will be given the option of either declaring all foster children a covered group, or conducting a separate eligibility process 

for these children. As the cost of allowing states to declare all foster children eligible 

for Medicaid without a separate eligibility determination process is estimated to be 

minor, we encourage the committee to preserve this option for states. 

CAN STATES TRULY OPT BACK OUT? 

While the states opting into the proposal could theoretically opt back out after five 

years, we are unclear on whether that is truly possible. Would a state have to redetermine Title IV–E eligibility under the old AFDC rules for its entire caseload in 

order to return to the uncapped funding environment? Would programs operated 

using flexible Title IV–E dollars be grandfathered in, or would they become stateonly programs? Redetermining eligibility would be cost-prohibitive, requiring a significant administrative effort. Further, states and counties would have to decide 

whether to continue serving non-federally eligible families using their own funding 

or scale back their programs and services. Neither option would be appealing, even 

if the national economy has improved by that time. 

CONCLUSION 

States and counties are working with the Federal Government to improve program outcomes and ensure safety, well-being and permanence for children and their 

38

families. Much of the Administration’s proposal, especially the elimination of the 

AFDC look-back requirement and the ability to use Title IV–E funds for front-end 

services, would enhance the implementation of these program improvement plans. 

However, we believe that this is not the time to limit federal funding for foster care, 

staff training, program operations, or automation. The budget neutrality required 

under the Bush Administration proposal could very well serve to limit, rather than 

expand, prevention activities and training. The Federal Government should continue 

to share in the risks of the new prevention-focused strategy, as well as the rewards. 

Thank you very much for this opportunity to testify on the foster care funding 

proposal. As always, counties stand ready to provide any assistance and support 

that we can as you consider how to proceed along the path toward greater flexibility.

Mr. Terry Cross, Executive Director of the National Indian Child 

Chairman HERGER. Thank you very much, Ms. Edwards. Now, 

f Welfare Association in Portland, Oregon. Mr. Cross? 

Mr. MCDERMOTT. Mr. Chairman, before you—may I ask a 

point of information, Mr. Chairman? 

Chairman HERGER. Yes. 

Mr. MCDERMOTT. All these people are responding as though 

they have something in hand or they know what is going to be proposed. The only thing I know of is a 6-inch paragraph in the budget 

proposal. Is that what you are responding to, or have you been presented other information? 

Chairman HERGER. Well, that is what we have. That is the purpose of this hearing. That is why we asked the Administration——

Mr. MCDERMOTT. You mean they are responding to this? 

Chairman HERGER. We heard witnesses, again, from the Administration—the purpose of this hearing is to try to bring out the 

thoughts on all sides, and basically, yes, that is what we have 

done. 

Mr. MCDERMOTT. How did they get this information? 

Chairman HERGER. Mr. Cross, if you would proceed, please. 

Thank you. 

STATEMENT OF TERRY L. CROSS, EXECUTIVE DIRECTOR, NATIONAL INDIAN CHILD WELFARE ASSOCIATION, PORTLAND, 

OREGON 

Mr. CROSS. Thank you, Mr. Chairman. I am very honored to be 

here today. This is a historic day for our American Indian children, 

to be included at the table at the front end of decisionmaking about 

children’s policy, because so often we have been left out of the process and our children get left out of programs, including Title IV–

E. 

I would like to commend the Administration for this bold inclusion of tribes in this particular language. As several people have 

said, it is very early. We don’t know exactly what it is. In reviewing 

both the short paragraph in the budget proposal as well as the testimony presented today, we think that the proposal is on a good 

track when it comes to tribal children. 

I also want to thank Congressman Camp for his leadership on 

this issue and bringing this to the attention of the House in his 

bill, the Indian and Alaska Native Foster Care and Adoption Services Amendments of 2003 (H.R. 443), which would open direct funding for the entitlement portion of this program to tribes, since 

tribes don’t currently have that. 

39

You might ask why, and, what is the situation? Well, tribes are 

sovereign nation-states within a nation, and one of the areas that 

they retain sovereignty over, the power to govern themselves, is 

around the custody of their children and Congress affirmed that in 

1978 in the Indian Child Welfare Act (P.L. 95–608) that set up a 

mechanism for tribes to be able to exercise their jurisdiction on 

child welfare issues, have their own tribal courts and tribal codes 

and child welfare programs. 

However, in 1980, when Title IV–E was put into being, tribes 

were not at the table. We did not get invited to the hearings. So, 

as a result, we are left out of that funding stream. 

We have been working now for many years to open this funding 

stream to tribal children under the custody of tribal courts. It has 

been almost an impossible process. We have approximately 5,000 

Indian children in foster care across the country for whom nobody 

is paying any foster care payment. Poor people are taking care of 

those children out of the kindness of their hearts. There is no training for the workers, there is no money for administration, and 

there are no funds for record keeping. 

This Committee has done a marvelous job in the last several 

years of addressing issues in child welfare, but none of what you 

have done has done one thing for children under the custody of 

tribal courts because none of the protections of safety and wellbeing or permanency extend to children under the custody of tribal 

courts. So, while I applaud your efforts with all children, our children are left behind, and I have to tell you that it is time for that 

to stop. 

I had a grandmother come up to me at a meeting 2 weeks ago. 

She takes care of three children, not her grandchildren, though 

they call her ‘‘Grandmother.’’ She is a foster parent. Her question 

was, ‘‘Do you think it would be possible for me to get some financial help to take care of these kids? I can’t meet my housing costs. 

I can’t buy enough food to feed them. Some of the kids have been 

sexually abused. There is no money for counseling or mental health 

care.’’ That has to stop. 

We estimate that the Navajo Nation alone has 300 children in 

foster care for whom no one pays a foster care payment. We also 

know that many, many Indian children would be adopted by their 

relatives, by their neighbors, by their families’ friends, but there is 

almost no access to adoption assistance. While tribal members can 

go to State offices and apply, those offices are mostly hundreds of 

miles away and those services are not available through their 

tribes. The human cost is high. 

The systems costs are also high. We know that over-representation of Indian children in the State system is high. The Children 

and Family Services Review (CFSR) has shown that 65 percent of 

the kids in South Dakota are Indian in the foster care system. Only 

17 percent of the kids are Indian in the State. If tribes had access 

to these resources, they would be providing services for those children and those children would be close to their homes and they 

would be with their relatives. 

Adoption does not seem to be addressed in this proposal. We 

don’t see any language, but I may have missed it. There are some 

issues we are going to have to be very careful about and we want 

40

to make sure that tribes are in this discussion, things like what is 

the distribution formula? What about match when tribes can’t provide match? What about unexpected increases in cost? Say, for instance, that 65 percent of kids in the South Dakota foster care system—tribes take over their own services, those kids go back to the 

tribes. Representative Johnson raised a very important point earlier today. The dollars should follow the child. 

Tribes also need access to the same option that States have, to 

opt into the entitlement portion of this program, which they currently do not have. 

This proposal is consistent with every piece of Federal policy of 

the Administration and the Congress over the last several years, 

including ‘‘No Child Left Behind,’’ self-determination, communitybased, faith-based, permanency, and well-being. I hope you see fit 

to include Indian children, because you guys can do something 

about it. Thank you. 

[The prepared statement of Mr. Cross follows:]

Statement of Terry L. Cross, Executive Director, National Indian Child 

Welfare Association, Portland, Oregon 

The National Indian Child Welfare Association submits this statement on the 

Bush Administration’s foster care flexible funding proposal. Our statement will 

focus on the potential benefits for American Indian children and areas needing further clarification. This statement will also show how not having access to Title IV–

E funding in the past has hampered the ability of tribal governments to provide 

basic services that support permanency for their children. 

Summary of Recommendations 

The National Indian Child Welfare Association is honored to have this opportunity to present our comments and recommendations before the subcommittee. In 

the past, tribal governments were often not included in the debates that decided 

how federal funding would flow or how services would be designed, which underscores the importance of this opportunity. 

Our general response to the President’s flexible funding proposal as it applies to 

American Indian children is very positive. This includes a $30 million reserved 

amount for distribution to eligible tribal governments. For many years now, tribal 

governments have struggled to piece together funding to provide child welfare services in ways that are as creative and innovative as anything you will see elsewhere. 

This has not been easy but has demonstrated the strong desire of tribal governments to exercise their sovereignty and right to self-governance. 

There are still many details that need to be worked out and clarified, and this 

is why it is very important for Congress and the Administration to open a dialog 

with tribal governments on how to develop the best possible funding proposal. The 

nuances and complexities of making a child welfare program successful for American Indian children, such as integrating requirements under existing federal Indian 

laws with this proposal, are many, but there are many good minds and people with 

expertise in these areas that can help. 

Our primary recommendations are summarized below:

• Tribal governments should have the same options as states under this proposal, 

including having access to the existing Title IV–E program. This means amending the Title IV–E law, as in Representative Dave Camp’s legislation, H.R. 443, 

which allows tribal governments to administer the program. 

• Tribal government eligibility should be extended to all tribal governments in 

the United States and also include tribal consortia. 

• The distribution of tribal funding from any reserved amount should take into 

consideration the historic lack of child welfare funding for tribes and provide 

opportunities in the future to adjust funding based upon factors such as need 

and inflation. In addition, if enacted, the numbers of tribal governments likely 

to apply will grow each year for several years. Allowing for the redistribution 

of any funds not allocated during a fiscal year would be helpful and could be 

accomplished through the use of supplemental or contingency budgets submitted by eligible tribal governments. 

41

• Maximum flexibility in the use of these funds will be important in addressing 

the issues that cause American Indian children to become involved in the child 

welfare system, including cross cutting issues like alcohol and substance abuse 

that impact all child welfare populations, but have unique origins and dynamics 

in American Indian communities. We also support the Administration considering providing some limited waiver authority to the Secretary to adjust program requirements for tribal governments that improve outcomes but don’t sacrifice health or safety. • Tribal governments that apply should also be able to determine their service 

area and who they will serve, similar to what is available in other federal laws 

(TANF and Title IV–B). • The ability of tribal governments, who are the poorest of the poor, to provide 

matching funds is limited in most cases. We recommend waiving any matching 

fund requirement for tribal governments. If the subcommittee is not amenable 

to this, we recommend using a strategy that is used in other federal programs 

that allows tribal governments to use other public funds as match (state and 

federal) and consider the use of in-kind contributions to meet match requirements. • Because tribal governments have not received the funding that state governments have, there will be a need for additional technical assistance than what 

is already available. The technical assistance should be rooted in tribal child 

welfare realities and will help tribal governments access a knowledge base for 

program innovation and success. 

American Indian Children and Title IV–E

Important to understanding how the Bush Administration’s proposal will impact 

American Indian children is the overall experience with Title IV–E for these children. It is a story of American Indian children left behind. 

In 1980 when the Foster Care and Adoption Assistance Act was debated and then 

enacted into law, Congress did not consider that thousands of American Indian children receive child welfare services through their tribal governments. State governments were the only eligible recipients for Title IV–E funds as written into the law. 

This oversight created a gap in the program where American Indian children under 

the jurisdiction of tribal courts could not receive Title IV–E services. These are the 

same children who are found to be some of the most over represented children in 

the foster care system and live in communities with some of the greatest needs in 

the United States. This oversight has essentially made a class of children ineligible 

for federal entitlement services simply because of where they live in the United 

States. 

In most tribal communities, the inability to access Title IV–E funds has meant 

additional hardship for tribal governments as they try to develop child welfare services that can move American Indian children towards permanency. Recruiting, 

training, and maintaining an adequate pool of foster and adoptive homes has been 

very difficult, with many tribes having to place children in unsubsidized homes because no funding exists. Case management, a critical element of helping children 

move out of crisis and into a permanent arrangement, is hampered when funding 

for staff positions and the training of staff is inadequate. Data systems critical to 

developing information that can inform government officials and policymakers have 

received a boost from Title IV–E funding, but tribal governments have not shared 

in this. The overall effect has been to limit progress towards improving permanency 

for American Indian children. 

Addressing this disparity in recent years have been several members of the House 

and Senate who have signed on to legislation that would amend Title IV–E to make 

tribal governments eligible to receive these funds directly. We thank the primary 

House co-sponsor of H.R. 443, Representative Dave Camp, for introducing this important legislation and working to seek its passage. 

Some stopgap efforts to piece together foster care funding for tribal governments 

has occurred in 13 states. Agreements between tribes and states have allowed a 

small portion of tribes the ability to receive Title IV–E funding for foster care services. These agreements have given about 70 tribes access to foster care funding to 

support maintenance payments to foster families. However, these agreements are 

often hard to develop and provide only a small portion of the overall program funding to tribes. Agreements to provide access to the adoption assistance program or 

reimburse tribes for eligible administrative services are almost non-existent. Tribal 

governments who want to develop agreements in many other states have not been 

able to because of state officials who are cautious about administrative or legal concerns. Two studies, one conducted by the Department of Health and Human Services Office of Inspector General in 1994 entitled, ‘‘Opportunities for Administration 

42

for Children and Families to Improve Child Welfare Services and Protections for Native American Children’’ and one that Casey Family Programs and the National Indian Child Welfare Association conducted in 2000 entitled, ‘‘Tribal/State Title IV–

E Agreements: Facilitating Tribal Access to Federal Resources’’ had similar findings. 

The Bureau of Indian Affairs offers some discretionary funding for foster care to 

a limited number of tribes, but this source does not support program costs and is 

unavailable to a large number of tribes. It is part of an $85 million pot of funds 

termed ‘‘Welfare Assistance’’, which must also meet the other following needs of 

tribes nationwide: general assistance, non-medical institutional or custodial care of 

disabled adults; the Tribal Work Experience program; burial expenses of deceased 

indigent American Indian people; and emergency assistance to prevent hardship 

caused by fire, flood, or other acts of nature. To say the least, this is not a reliable 

source of funds for foster care and adoption assistance. We also point out that the 

funding from the Bureau of Indian Affairs does not support adoption assistance 

services. At the Navajo Nation, a recipient of these Bureau funds, the tribal social 

services program still has to place approximately 300 children a year in unsubsidized foster care. The Navajo families that volunteer their time and homes have 

very modest incomes and yet are forced to use what little resources they have to 

support the costs of providing a foster care or adoptive placement. This situation 

creates an additional risk factor for disrupted placements, beyond what state child 

welfare programs typically see. As you can see, the funding picture for foster care 

and adoption assistance services for American Indian children is bleak and does not 

even begin to meet the overwhelming needs found in most tribal communities. 

The Department of Justice reports that violent victimizations were more likely 

among American Indian children than any other racial group, and that between 

1992 and 1995 child abuse and neglect rates increased among American Indians 

while declining for other groups (1999 National Report Services: Juvenile Justice 

Bulletin). Many of these Indian children end up in the child welfare system; tribes 

need the resources of the Title IV–E program to assist these children and their families. 

The Administration’s Proposal for Title IV–E Flexible Funding and Application with American Indian Children 

Our general response to the Administration’s proposal to provide $30 million for 

allocation to eligible tribal governments is supportive in that the proposal recognizes 

the needs of tribal governments to be included in any new development or reform 

of federal child welfare programs. We also interpret this element of the Title IV–

E proposal as support for the government-to-government relationship that tribal 

governments have with the Federal Government. It is consistent with the way many 

DHHS and other federal funds are distributed to tribes—on a government-to-government basis that allows for local design of programs within the confines of federal 

law. While there are still many details to be ironed out, this appears to be a promising beginning. A number of the tribal governments with whom we have talked regarding this proposal are also very interested and looking forward to having the opportunity to provide their input too. 

Our basic understanding of the proposal, at this point, is that it would be an option for states and require a five-year commitment. Funding is also reserved for eligible tribal governments under this proposal—approximately $30 million—which 

would be available after an application is submitted to the Department of Health 

and Human Services and approved, although the process and amounts available for 

distribution to individual tribal governments have not yet been determined. The 

process for determining who is an eligible tribal applicant has not been decided either, although conversations with the Children’s Bureau have indicated that they 

are looking at a number of possibilities. We also understand that individual children 

will not have to meet a certain income level requirement in order to qualify for services under this proposal. The President’s proposal also mentions providing some 

waiver authority to modify or waive certain requirements for tribal programs as 

long as the modifications do not compromise child safety or health. Funding under 

this proposal will also be available for purposes authorized under Title IV–B or IV–

E, which would include subsidized guardianship placements—a good option for some 

children for whom adoption is not realistic. 

Based upon the information we have received so far, we are providing a brief description of what the National Indian Child Welfare sees as the key issues, areas 

that need clarification, and our ideas on how to address these challenges. 

Eligibility for tribal governments—Tribal governments, like state governments, need dependable, adequate funding for child welfare services for children 

under their jurisdiction. In many situations, lack of funding has been the primary 

barrier for tribes as they seek to protect their children and give them a greater 

43

sense of permanency. All tribes in the United States operate some form of child welfare service, and a great number of these currently operate foster care and adoption 

services. Since the President’s proposal implies great flexibility in how the funds can 

be used and tribal communities have the experience and some of the greatest needs, 

it makes good sense to allow all tribal governments to participate in this proposal. 

Basic program and reporting requirements required for all applicants will provide 

the Children’s Bureau with an opportunity to evaluate the suitability of this program for each applicant. Furthermore, by increasing tribal participation in this program, the Federal Government will also facilitate the collection of tribal data on foster care and adoption, which is currently not available. By not limiting eligibility 

to only select groups of tribes, the Administration will be making a strong statement 

about its commitment to improving child welfare services for all American Indian 

children. 

Tribal consortia—Tribal child welfare services have been provided through consortium in many parts of the United States for over 20 years. Tribes in states like 

Alaska and California, which comprise over half of all tribal governments in the 

United States, rely on the option to use consortium to maximize their limited funds. 

Typically, the consortium designates a lead tribe that becomes the services administrator for Indian children in the identified service area. The organization of tribal 

consortium in child welfare is a response to several things: 1) the need to improve 

service coordination, 2) the need to maximize the use of limited funding and improve access to other potential funding sources, and 3) the need to provide tribal 

governments with insufficient resources the opportunity to exercise their authority 

and responsibility to protect their children. Allowing tribal consortia to qualify for 

funding under the President’s proposal will help a much greater number of Indian 

children who otherwise would go unserved, and, we believe, will help make the administration of the program by the Children’s Bureau easier. 

Distribution of funds—Related to tribal eligibility will be the issue of how available funding is distributed to eligible tribes. Because most tribes have had very limited access to federal child welfare funding, especially foster care and adoption assistance funding, it is almost impossible to know what an accurate baseline of need 

related to these types of services is. Accurate caseload and program histories, especially related to use of Title IV–E funds, are not available at this time. If the President’s proposal is enacted, our experience tells us that tribal governments will apply 

incrementally, with more applying each year. At the end of five years, we could see 

even more tribal governments wanting to apply as increased information regarding 

promising practices and critical analysis of program operations becomes available. 

These issues underline the need for tribes to have the same options as states to 

choose between the existing IV–E program and the President’s flexible funding option and for a periodic system to review the adequacy of tribal funding under this 

proposal. This review may trigger the adjustment of the reserved funds for tribal 

governments, based upon factors such as need and inflation and also be equitable 

with any mechanism that provides adjustments for state allocations. 

An approach to ensuring adequate tribal participation and benefits for American 

Indian children would be to allow redistribution of any unspent funds in a given 

fiscal year. This is consistent with how other similar federal funding for tribal governments is distributed (Title IV–B, Subpart 2) and can be accomplished through 

the use of supplemental or contingency budgets submitted by tribal governments. 

The Secretary could review supplemental applications and assess them for their 

merit and feasibility. 

Waiver authority—Research regarding tribal child welfare programs demonstrates that culturally defined services are much more likely to succeed with Indian children and families, and this is an area where waivers may be appropriate. 

Another reason for allowing waiver authority is the economy of scale of applying requirements designed for larger programs that are not feasible for smaller programs. 

The ability of federal programs to allow flexibility in program requirements is a 

positive development, and, used wisely, will help reduce the flow of children into the 

child welfare system and produce better outcomes for those who are involved. 

Service area—Under the TANF program and other federal programs, tribes define their service area and the American Indian population being served. This is important because of the differences in available tribal resources, working relationships with state and county governments, and jurisdictional variances. When tribal 

governments have this option, they will often use it to provide services to more than 

just members of their tribe. They may provide the services to Indian people from 

other tribes living within their reservation or service area. This can help alleviate 

the burden state and county agencies often feel and provide more accessible and/

or culturally designed services. New and emerging partnerships can also develop as 

44

tribal and state agencies work to map out a service delivery plan that meets everyone’s needs. 

Matching funds—Proposing a significant match or maintenance of effort requirement for tribes could become an impediment to tribal participation. The majority of 

tribal communities continue to be economically disadvantaged. In many cases, their 

only source of revenue for government services will come from Bureau of Indian Affairs or Indian Health Services funds, which are restricted to specific activities. Because tribal communities often have such high rates of poverty and unemployment, 

tribal governments have very few options when it comes to raising general, unrestricted revenue. As a result, a number of federal programs have reduced match requirements that apply to tribal governments and/or provide them with the opportunity to use other federal or state funds as match (e.g. TANF, Title IV–B and Child 

Care Block Grant). This can be done without supplanting tribal funding or significantly reducing maintenance of effort. We strongly recommend flexibility with regard to any required tribal match rates. 

We note that, according to the 2000 Census, the poverty rate for the large federal 

reservations is 40.3%; the unemployment rate for the same set of large reservations 

is 22.8%. Several reservations have poverty rates of over 50% with unofficial employment rates exceeding 30%. 

Technical assistance—While the National Indian Child Welfare Association, 

through our partnerships with four of the National Resource Centers in Child Welfare, has been able to provide technical assistance to many tribes that are planning 

for or operating foster care and adoption assistance services, we consistently have 

to turn away tribal governments who request technical assistance. We can also see 

an increased demand for technical assistance from tribal governments once this proposal is enacted. To ensure that critical information and assistance is available to 

further the program’s goals, it would be worthwhile to establish technical assistance 

resources for tribes interested in child welfare services. This could be approached 

in several ways, but the overall goal would be to improve access to the knowledge 

base in practice and policy. 

Conclusion 

We greatly appreciate the opportunity to appear before you today to share our 

thoughts and ideas regarding the President’s proposal for flexible foster care funding. As we said earlier, both our organization and the tribal governments that we 

have talked with are very interested in this proposal in combination with amending 

the Title IV–E law to allow tribal governments, like state governments, to administer the current Title IV–E program. I think it is fair to say that all of us are looking to improve the way in which children and families receive services in the child 

welfare system. We want to avoid the mistakes of the past, take advantage of the 

opportunities before us now, and create a world where all children can receive the 

services they need. The National Indian Child Welfare Association feels strongly 

about this, as we are sure you do, and is hopeful that this will be the Congress that 

will make this vision a reality.

inquire, the gentleman from Louisiana, Mr. McCrery. 

Chairman HERGER. Thank you very much, Mr. Cross. Now to 

f Mr. MCCRERY. Thank you, Mr. Chairman. Ms. Riley, you talked 

in your oral presentation generally about how current foster care 

program rules limit how a State can serve children and families. 

Would you elaborate on that? What are some of the limitations or 

restrictions that current law places on the States? 

Ms. RILEY. Mr. Chairman, Congressman McCrery, the limit that 

you have heard a lot about today is that we have to spend Title 

IV–E funds on placement costs and placement is really only one 

small part of what a child welfare system ought to be, and in fact, 

it ought to be a smaller part than what it is. 

So, the restriction for that weighs heavily on us. The opportunity 

to have the flexibility to do something with those dollars that 

would provide things like family counseling—we are not allowed to 

provide counseling for families with Title IV–E dollars. We are not 

providing substance abuse services for families with Title IV–E dolVerDate jul 14 2003 00:18 Feb 06, 2004 Jkt 091276 PO 00000 Frm 00048 Fmt 6633 Sfmt 6602 E:\HR\OC\91276.XXX 91276
45

lars. All of those types of ancillary services that wrap around the 

placement of a child are crucial to returning that child home—and 

not just services for the child but services for the family, as well, 

so that the child has an opportunity to go back to an intact and 

functioning family. So, those are all precluded under the current 

Title IV–E funding stream. 

Mr. MCCRERY. Is that one of the reasons that Ohio requested 

a waiver? 

Ms. RILEY. Absolutely. Absolutely. 

Mr. MCCRERY. Is it working as you thought it would when you 

get that flexibility to use that Federal money? 

Ms. RILEY. I have to admit that I wasn’t there when we applied 

for that waiver, so I am not certain what people thought it would 

do. I do know that we had hoped for somewhat better results than 

we have achieved. Five years has not been long enough. We are 

just beginning to see a glimmer of change in many of the areas. 

We do think that that glimmer is sufficient to show us that this 

flexibility would be vital to that ongoing building of that service. 

We have learned that 5 years has not been sufficient to really see 

outcomes and have measurable outcomes that we can project accurately into the future. 

Mr. MCCRERY. Well, what types of services were you able to develop with this increased flexibility? 

Ms. RILEY. Like California, we are a State supervised, county 

administered system, so 14 counties did it basically 14 different 

ways. We had things like subsidized guardianships. We had lots of 

prevention services, lots of counseling services. We had folks like 

social workers placed in schools to deal directly at the school with 

the children who are in the child protection system. So, a real 

array of services. It also allowed us to be an incredible pot of experiment to be able to tell which of those things work best, and we 

are just now beginning to get a handle on what happened in one 

county versus another and how we might learn from where it was 

successful. 

Mr. MCCRERY. Prior to your waiver, you were unable to use the 

Federal Title IV–E funds for those kinds of services? 

Ms. RILEY. That is correct. 

Mr. MCCRERY. So, I assume that since you have seen some 

glimmer, as you put it, there is hope for the favorable outcomes 

that you had gone for with these kinds of services. Do you think 

that there is some merit to expanding the waiver in your State to 

all States across the nation? 

Ms. RILEY. Mr. McCrery, I think it would be very helpful to be 

able to expand it from 14 counties to 88 in Ohio and across the 

country. 

Mr. MCCRERY. Last, you say in your testimony that, ‘‘I believe 

that the current Title IV–E funding system rewards failure rather 

than success.’’ Would you elaborate? 

Ms. RILEY. Mr. McCrery, right now, we are receiving funding for 

children that are in placement rather than funding that rewards 

the goals of the Adoption and Safe Families Act, which encourage 

States to keep children at home, to quickly reunify children. Instead, we get money—the longer the child stays, the more money 

we get. We want it to be the opposite, and in our waiver counties, 

46

that is exactly what we have been able to do. They bank their dollars that they did not spend on placement and can spend them on 

those alternative services. 

Mr. MCCRERY. Thank you. Thank you, Mr. Chairman. 

Chairman HERGER. Thank you, Mr. McCrery. Ms. Riley, I want 

to thank you also for the great work that we hear coming out of 

your State. Thank you very much for the example I believe you are 

setting and that we can all, hopefully, learn from and help improve 

the system throughout the nation. With that, the gentleman from 

Maryland, Mr. Cardin, to inquire. 

Mr. CARDIN. Thank you very much, Mr. Chairman. I think we 

all agree that we need to reform the Title IV–E system, so that is 

not a matter that is in disagreement. In fact, as you noticed, on the 

Democratic side, we filed legislation to do just that. 

I was disappointed we didn’t have a second round because I 

thought we were trying to come to a conclusion on the lookback 

with the Administration. One of my concerns is that we all agree 

the lookback is not a good idea, to go back to the AFDC rules. Yet, 

if I understand the Administration’s proposal, we still have the 

lookback for adoption services assistance, because that is not dealt 

with in the legislation. If I had a chance on a second round, I would 

have tried to clarify that. 

So, I think that we are still going to need to reform the basic system, and I think we all agree with that, and particularly with giving States a true option. We want to make sure that the current 

system is reformed to give the States the flexibility they need and 

still protect our national goals. 

Ms. Edwards, in your testimony, you—the CBO baseline assumes 

a 25-percent reduction in the Title IV–E caseload assumptions over 

the next 10 years, as to how they get to the dollars that are available. So, I guess my concern is that in your State, if you were to 

go into the option, if you would go into the block grant and you 

were not able to achieve the caseload reductions, in fact, if you had 

a caseload increase, is it possible that where we are trying to get 

more funds in preventive services, and we all agree with that, that 

ultimately you might have to take money out of preventive services 

in order to finance your basic caseload increases? Is that a real 

risk? 

Ms. EDWARDS. Mr. Cardin, Mr. Chairman, obviously, that is a 

risk and one that is greatly concerning to us. If, indeed, our State 

opted in and we invested more money up front and the caseload increased, then we would have no other option. I would point out, 

too, that already, there are many children in the system for whom 

we cannot use Title IV–E funding because of the lookback. We still 

are responsible for those children. So, it would only add to the burden and that burden ultimately falls at the local level. 

In California, counties pay about one-quarter of the costs of the 

foster care system, and that is roughly $1 billion. I don’t think it 

comes as any surprise to you that not only counties in California, 

but across the nation, are having financial difficulties meeting all 

of the needs for services in their communities. 

Mr. CARDIN. I appreciate that answer. Ms. Ryan, I also appreciate your testimony where you try to be kind to the Administration’s proposal and then you add a lot of caveats that you would 

47

like to see improved on, and I like all your caveats. States should 

be allowed to opt out of the block grant, Mrs. Johnson already covered that. The triggers for the contingency funds should be improved. The State maintenance of efforts are limited. This plan 

should be accompanied by an increase in the SSBG. All States 

should be allowed to update their eligibility standards for foster 

care regardless of whether they opt into the block grant. All States 

should be provided more flexibility for preventive services. I agree 

with all of those assessments. 

I guess my question to you is, that is fine, but as I understand 

the Administration’s proposal, they want it budget neutral. It 

seems to me that your recommendation, your suggestions—and I 

support them—require that we provide additional help in order to 

be able to achieve the flexibility and the results that we want. 

Ms. RYAN. Mr. Cardin and Mr. Chairman, I would have to respond that—and really to a question I think Congressman 

McDermott asked—we have been in a series of conversations with 

the Administration. We haven’t seen the actual details of the proposal. We hope that there is an opportunity to talk about the baseline, what is in the baseline, what might be the rate of growth in 

the baseline. National rates of growth are quite different than 

State rates of growth. Congresswoman Johnson talked about the 

fact that States are not similarly situated. We have rising costs of 

care that have nothing to do with inflation or the number of children, so-called children, who have been in the system with multiple 

issues that are actually more costly. So, yes, we believe that under 

the Administration’s proposal, we need to have that discussion 

about baseline growth. 

Mr. CARDIN. Thank you. I appreciate that response. Ms. Riley, 

you present to us a real opportunity because you already have 

something similar to what the Administration is proposing in a certain number of your counties. So, I would like you to make available to our Committee, unless you have the information today—

some of the problems you are encountering. We know we have high 

caseloads, caseworker turnover is very heavy, and we don’t have 

experienced caseworkers. I would like to know if there has been a 

difference in those counties in which you have had the waiver program in effect. I would like to know the caseload reductions, the 

comparisons, et cetera. I assume that in those counties, you feel 

you have adequate resources. If that is not the case, I would like 

to know that, also. 

So, if you could make available for the Committee the specific information over the last several years of what has happened as far 

as caseworker longevity, reduction of caseload, eligible individuals, 

and whether you have adequate funding in order to deal with these 

problems, I would appreciate it. 

Ms. RILEY. Mr. Chairman, Mr. Cardin, we would be happy to do 

that. Anecdotally, I can tell you that it has been positive in some 

counties and less so than in others, but we will be happy to provide 

that county by county and try to tie it back to some of the things 

they did that engendered those outcomes. 

[The information is being retained in the Committee files.] 

Mr. CARDIN. I appreciate that. Thank you. 

48

Chairman HERGER. I thank the gentleman from Maryland. Just 

a couple of points. Number one is that in the next 15 minutes or 

so, we are expected to have a series of three or four votes. Second, 

any questions that any Members of this Committee have for any 

of our panelists, including Dr. Horn, can be submitted in writing 

and we will include that in the record. 

Also, it is my understanding one of the reasons why the Administration does not have this writing is that this policy is evolving 

now. I understand, Ms. Ryan, that they are in contact with you, 

and again, one of the purposes of this Committee is to get the information out and hopefully to come up with the very best policy that 

we can. Certainly, that is the intent of this Committee. 

With that, I would like to, Ms. Ryan, ask you the same question 

I posed to Dr. Horn. With the recent CRS memo that shows how 

Federal foster care funding can swing wildly within State from 

year to year, would you care to share how you feel this proposal 

can help provide States more predictability over the funding they 

currently receive, and what that can mean to States? 

Ms. RYAN. Thank you, Mr. Chairman. I think that what the 

CBO data may be showing is that, frankly, there are wide 

variances among States in terms of the number of children cared 

for, the cost of care, and the so-called penetration rate in terms of 

Title IV–E claiming. A lot of things can drive that caseload. 

One thing that we have seen, is that in some States in recent 

years, they have actually increased their Title IV–E claims. The 

State of Washington, for example, has. West Virginia has. In other 

places, States have seen a dramatic reduction in those claims. 

I think under this foster care reduction, or this proposal, what 

it would do is enable States to be able to know the fixed amount 

of money that they have, be able to set some reasonable targets as 

to whether or not they believe that they can operate from year to 

year with some certainty of how many resources that they have 

available to them. Quite frankly, for some States, they may be able 

to achieve what Ohio has achieved, which is a reduced length of 

stay in foster care or reduced number of children to free up those 

dollars to be able to use them for more preventive front-end services. In other States, they may not be so successful, and that may 

actually influence whether they decide to opt in. 

Just to close with this and say that sometimes within the course, 

given the wide variation of those claiming rates, sometimes during 

the course, like the crack epidemic or the methamphetamines on 

the West Coast, there are things beyond the control of a particular 

system where, for whatever reason, we believe States should be 

able to opt out within the 5-year period because the protection of 

children are paramount in this program. 

Chairman HERGER. Thank you, Ms. Ryan. Ms. Riley, would you 

mind commenting on the same question? 

Ms. RILEY. I smiled while you asked that question, because although I think it would give us greater predictability and I would 

welcome that predictability, I worry a little about where my swing 

is whenever the baseline is established, because if that base happens to hit one of my down years, it could very negatively reflect 

on my next 5 years’ worth of revenue flow. So, that causes me concern. The predictability would be welcome. 

49

Chairman HERGER. Thank you very much. With that, the gentleman from Washington, Mr. McDermott, to inquire. 

Mr. MCDERMOTT. Thank you, Mr. Chairman. I was trying to 

ask earlier, what do you think this system is going to do? What 

kind of specificity did you have when you prepared your testimony 

coming here, because some of you say you are in favor of this? You 

just want to have flexibility? Is that enough of an offer from the 

Federal Government? 

Ms. RILEY. Mr. McDermott, speaking from Ohio’s point of view, 

flexibility is not enough, but it is a big incentive. I also raised in 

my testimony a number of issues we would like to see addressed, 

some of which we have had some answers to, some—or not answers, but we have had some information around and some we 

have not. So, I think there are still many things undetermined. 

Our source of information was primarily APHSA and some conference calls that they have convened and their willingness to 

share from their perspective. 

Ms. RYAN. I would be happy to respond to that question, as well. 

After the President’s proposal was put in the budget, we actually 

reached out to our States, quite frankly thrilled that someone was 

paying attention to child welfare financing at that level, and asked 

them to convene a workgroup. We invited the Administration, Dr. 

Horn, as well as Joe Knoll and Susan Orr, to actually talk to our 

members about what they had in mind. We had nothing written. 

In fact, I think in some ways those are things that I have actually 

prepared as a series of conversations that are continual conversations. 

So, we don’t have any formal proposal. We have a broad rubric, 

and we have been engaged in discussions about what makes sense 

in terms of opt in, opt out, claims filed versus claims paid, and 

other kind of arcane issues. 

Mr. MCDERMOTT. Are you saying that you like this new proposal with the thought in mind that you will have the same 

amount of money or less money or more money? 

Ms. RYAN. I think that at this point, our association does not 

have a formal position on the proposal because we haven’t seen it, 

and when legislation is introduced, we will put it before our Membership, understand the details, and determine whether or not this, 

quite frankly, fits the needs of the States. So, we have not taken 

a position to date. 

What we do believe is that some of the fundamental pieces of it 

are well worth the time to explore. The flexibility to use those 

funds on all children in the system is very attractive to States, and 

I will defer to the professionals at the table. 

The second piece, the fact that you can use those dollars for 

things that actually make sense for families, is also very, very attractive. There is some peril among some administrators in some 

States saying, we are not sure we can take the risk to enter a fixed 

allotment of funds and be able to produce the kind of changes needed to free up those dollars to do those good things. 

So, I think at this point, we have taken this as an idea, something that we want to work with the Administration to try to refine. If it is a State option, we want to make it the best option. If 

there are States that cannot opt into this for whatever reason, we 

50

want to continue to pursue things like fixing the lookback, making 

sure Title IV–E is much more flexible so that they can actually 

support the goals of the program. 

Mr. MCDERMOTT. What is it that States do that make it not 

possible for them to opt into the program? What have they done 

wrong? Give me an example of a State that hasn’t been able to opt 

in because of something they have done. Is it a law they have 

or——

Ms. RYAN. I think at this point, because we don’t really know 

what would be involved in the opt in—for example, the baseline determination, what the rate of growth might be over time. Those 

could give pause to States. Some States have actually achieved 

shorter length of stay in foster care for children. They might not 

see enough promise in this to lock in at a fixed amount of money, 

thinking that they have done as well as they could do. 

Some other States, like the State of Washington, quite frankly, 

have increased Title IV–E claims in recent years, and so if they 

have expectation that they might be able to find more children who 

are Title IV–E eligible to be able to get increased Federal reimbursement, they are going to be unlikely to look back a year when 

their claims weren’t as high and then lock in at that point. 

So, as I tried to put out in my testimony, States are in very different places, and as you well know, child welfare financing is a 

system in crisis serving children and families in crisis, and we have 

the gall to expect outcomes and measure them. We have got half 

of the children covered with any Federal dollars. We are patching 

together SSBG dollars, a little bit of Medicaid, some TANF, some 

court costs, some local costs, some State costs, and then actually 

say it is a system. 

I think that the issue before us is whether or not we can create 

some context for this next round of reform so that we actually can 

get the hydraulics right, that we have the funding stream flexible 

enough to serve families and children and that it is adequate in 

order to meet the outcomes that these Child and Family Service 

Reviews ask States to achieve. So, we want to have a very thoughtful and planned full discussion on this next round of reform. 

Mr. MCDERMOTT. I assure you, I hope we have another hearing when we have a bill. 

Ms. RYAN. Thank you. 

Chairman HERGER. I thank the gentleman. Mr. Cross, the Administration proposal would provide $30 million for tribes to operate child welfare programs. What types of programs and services 

do you feel the tribes would provide under this option? 

Mr. CROSS. Foster care, primarily, because right now, that is 

where the need is. We don’t have enough detail to judge. One of 

the things that scares me about this, while I believe it is on a good 

track, is that we have no baseline by which to measure because so 

many tribal children are in foster care without any payment or because they are in the custody of States, and tribes would do those 

services if they had that money. 

I believe we are going to have to be very cautious and flexible 

with how we create the baseline for tribes and that is going to have 

to take shape over a period of years. I hope any legislative lanVerDate jul 14 2003 00:18 Feb 06, 2004 Jkt 091276 PO 00000 Frm 00054 Fmt 6633 Sfmt 6602 E:\HR\OC\91276.XXX 91276
51

guage allows for some realistic picture of how many children this 

is really going to mean. 

Tribal programs right now across the country are providing a 

range of child welfare services, but they are piecing together those 

services with a variety of funding sources. Some contract with the 

States around them. Some are using their own tribal resources. 

They receive very small amounts from IV–B part 1. Most of those 

grants are under a couple thousand dollars. Seventy tribes in the 

country, approximately, are receiving IV–B part 2. The majority of 

them receive less than $20,000 each. Tribes receive about $20,000 

each from the Indian Child Welfare Act Title II appropriation. 

So, tribes are piecing all of these different funding sources together, and then are able to hire one or two caseworkers who are 

handling everything and then not having enough resources to pay 

a foster care payment. 

So, this would be the most dramatic thing to happen for Indian 

children since the passage of the Indian Child Welfare Act. I can’t 

emphasize enough that when a people have the authority and responsibility to protect and care for their children and then there 

are no resources to do that, we are leaving children behind simply 

because of their residence and citizenship in the nations of our Indian Tribes in this country. It is as if you cut off the upper peninsula of Michigan or something and said, you are just not eligible 

for an entitlement or in the program. 

So, I am here because whatever happens, tribes need a voice. I 

can’t say that this is a good thing. We don’t know because we don’t 

have language yet to indicate what the real impact of this would 

be across the board. We can only say that it seems that these concepts are on a good track. This is a good conversation to have. For 

the tribal provisions, I am feeling that this is very promising. It is 

the first time that this kind of dialog has gone forward within the 

Administration. 

Chairman HERGER. Thank you, Mr. Cross. The gentleman from 

California, Mr. Stark, to inquire. 

Mr. STARK. Thank you, Mr. Chairman. I want to thank the witnesses, and I want to address this problem. We don’t know, and the 

Chair doesn’t seem disposed to let the Administration tell us very 

much about what this plan will look like. Basically, all we know 

is they want to block grant the funds, and this thing will not increase them if the caseload goes up. 

We do know that the same Administration for children and families has given us some dire predictions. Now, in Connecticut, HHS 

has told us that the caseworkers have failed to maintain stability 

of foster care placement and that reducing the staff would have—

a reduced staff will have more difficulties ensuring stability for foster children. 

In Indiana, 70 kids died from abuse and neglect in the year July 

2001 to July 2002, a new State record. HHS found that the cause 

was that the State child protection agencies failed to sufficiently reduce incidences of repeated mistreatment and warned that State 

budgets will further impact the limited ability to track these 

incidences. Now, there are dozens of comments. All these studies 

are bad. So, we are hearing from the same people who are suggesting we limit the funding. 

52

Ms. Riley’s State, I gather, operates under what would be the 

way you would operate if you had the block grant, is that not correct? 

Ms. RILEY. Mr. Stark, 14 of our 88 counties operate under something that we think——

Mr. STARK. Well, but when you answered Mr. Cardin—because 

the Children’s Bureau found that Ohio’s welfare program did not 

achieve substantial conformity with any of the seven safety, permanency, or well-being outcomes. In addition, Ohio did not meet national standards for measures relating to repeat maltreatment, 

maltreatment of children in foster care, foster care reentry, stability of foster care placements, length of time to achieve reunification, or the length of time to achieve adoption. There are a few 

things that you did right, but it doesn’t have much to do in here. 

It goes on, caseworkers didn’t visit parents with sufficient frequency. Your case reviews found that children did not receive adequate services to meet their physical and mental health needs. You 

are going to tell me that you can improve that with less money? 

Now, I would like to know if those figures didn’t apply to these 

14 counties where you are using this system. That would be very 

good to know. I will bet you they are just in there with the rest 

of the counties, aren’t they? 

Ms. RILEY. Mr. Stark, the figures you are referencing refer to 

the Child and Family Service Review——

Mr. STARK. Yes. 

Ms. RILEY. Which we, like every other State that has gone 

through it——

Mr. STARK. Every State in the Union got——

Ms. RILEY. Has not done well. 

Mr. STARK. It is not well in any State. I don’t know how we did 

in California. We probably didn’t do much better. 

Ms. EDWARDS. Mr. Stark, California did not pass the reviews, 

either. 

Mr. STARK. Yes. I am not suggesting—every State didn’t. What 

I am saying is that block granting it didn’t seem to help much. 

Ms. RILEY. Mr. Stark, really, the Child and Family Service Review—I have to admit, I am not certain I can encompass all of this 

in a very short time, but the Child and Family Service Review has, 

I think, a lot of other deficiencies attached to it, and——

Mr. STARK. Well, you just heard the guy. He has a lot of deficiencies, too, the guy who is running this system. We are not here 

to talk about the deficiencies in our Administration. What we are 

trying to say is, is it suddenly a solution to underpaid, underfunded, overworked social workers in States to say, we are going 

to give you a block grant and let you move the chairs around on 

the Titanic as it sinks? Is that what you guys want? 

Ms. RILEY. Mr. Stark, that is not a solution. That, however, may 

contribute to a solution, and I am hopeful for that. 

Mr. STARK. Will it help us in California, Ms. Edwards? 

Ms. EDWARDS. No, I am afraid it will not. We need the flexibility. We need to eliminate the lookback. I am gravely concerned 

when I know that in California, we have a study that shows we 

need $280 million more to adequately staff child welfare as it exists 

today. 

53

Mr. STARK. Ms. Ryan, your association—can we do this without 

adding any resources? 

Ms. RYAN. I think I have testified, Mr. Stark, that the fact is 

that the system needs more resources. So, it wouldn’t be my testimony that we would plan shrinkage and think that we could do a 

better job. 

Having said that, I have to say that, on all of our members’ behalf, the Child and Family Service Review is a snapshot. It is a 

baseline. It is the first time we have actually taken a look. So, it 

ought not to be perceived as a measure of whether or not States 

are actually achieving outcomes. 

I think it is very important, though, to your point, to look at 

those measures and to ask whether or not Title IV–E funds can be 

used to meet any of those improved outcomes. That is why we 

called for improved flexibility——

Mr. STARK. What if we just made them an entitlement for 

matching funds? Wouldn’t that be better? 

Ms. RYAN. We testified to broaden the use of Title IV–E funding 

and we would have a better chance at moving those——

Mr. STARK. Would you like that better, Ms. Riley, just to make 

it an entitlement and let Ohio match it? 

Chairman HERGER. The gentleman’s time has expired. 

Mr. STARK. I want to hear that answer, Mr. Chairman. It might 

change your mind. 

Ms. RILEY. Mr. Stark, I would love an entitlement. 

Mr. STARK. A little information wouldn’t hurt you, Mr. Chairman. 

Chairman HERGER. We have gone——

Mr. STARK. Once you get used to learning things, even as Republicans, it helps. 

Chairman HERGER. We have gone 1 minute and 6 seconds over 

your time. Would the gentlemen from Michigan, Mr. Levin, like to 

inquire? 

Mr. LEVIN. Mr. Chairman, my apologies. Due to other meetings, 

I just had to miss most of this, but I guess I came in at an important moment for the discussion of the issue. We have a number of 

votes now. 

I don’t think the issue is more flexibility. I think we want to 

grant enough flexibility so that you can do your job. That is a different question than a block grant. Mr. Stark asked you whether 

you want more flexibility without more resources. Do you? 

Ms. RILEY. Mr. Levin, no. 

Mr. LEVIN. I would think that that may be an important message for everybody to hear. I have been on this Subcommittee off 

and on for how many years, 14 or 15? This has been a major problem area, and anybody who thinks that the answer is simply to 

shift this off to the States with the present level of resources, when 

we got into this issue in part because the States were not doing a 

job—if the States had been pulling their weight on these issues, I 

don’t think we ever would have been involved in this difficult and 

important area. 

So, now simply to say, ship it back to the States with the States 

in the present circumstances they are in—right? What is the budget deficit in your State? 

54

Ms. RILEY. Mr. Levin, I fear to say which year? 

Mr. LEVIN. You pick. 

Ms. RILEY. We are anticipating, I believe, another $1 billion 

shortfall after several billion dollar cuts in the upcoming biennial. 

Mr. LEVIN. I don’t have anything further. 

Mr. STARK. How about in California? 

Mr. LEVIN. I didn’t want to embarrass you. 

[Laughter.] 

Ms. EDWARDS. I can top that, Mr. Levin. 

Mr. LEVIN. It was $30 billion, wasn’t it? 

Ms. EDWARDS. The last count was, I think, $36 billion. 

Mr. LEVIN. So, resources are an issue? 

Ms. EDWARDS. Absolutely. 

Mr. LEVIN. Thank you. 

Chairman HERGER. Ms. Riley, you say in your testimony, ‘‘I believe that the current Title IV–E funding system rewards failure 

rather than success.’’ Do you believe this option could give you the 

flexibility necessary to address this issue in your foster care system 

that needs to be addressed? 

Ms. RILEY. Chairman Herger, that is the linchpin for why I 

want to at least further explore the option, because right now, I believe that we are rewarding excessive, potentially excessive placements of children because we fund placements, while we are not 

funding child abuse prevention, we are not funding family casework services, we are not funding substance abuse services, all of 

which would help our families immensely. 

Chairman HERGER. Ms. Riley, I want to thank you very much, 

and I want to thank each of the members of our panel and our previous panel for testifying today. Your testimony will be very helpful 

to us as we consider options to improve our foster care system. 

With that, the hearing stands adjourned. 

[Whereupon, at 3:59 p.m., the hearing adjourned.] 

[Questions submitted from Chairman Herger and Mr. Cardin to 

the Honorable Wade F. Horn, and his responses follow:]

Question from Chairman Wally Herger to the Honorable Wade F. Horn 

Question: Under the existing child welfare waiver authority, four states—

Indiana, North Carolina, Ohio and Oregon—have demonstrated some of the 

promise of the Administration’s Foster Care Flexible Funding proposal. 

Could you describe these programs and what they have been able to accomplish? 

Answer: In each of these four child welfare waiver demonstration sites, the State 

is providing counties or other local entities the opportunity to use Title IV–E foster 

care funds more flexibly to enhance the array of services available to prevent foster 

care placement, facilitate reunification and otherwise ensure safe, permanent outcomes for children. In these States, counties may use Title IV–E funds for an array 

of services, but their total Title IV–E allotment is fixed by agreement with the 

State. These States have arrangements with participating counties to share risks 

and rewards if expenses are either below or above their planned Title IV–E allotment.

• Indiana has set aside 4,000 slots and is allowing counties to use up to $9,000 

annually per slot to develop an increased capacity for home- or communitybased alternatives to institutional placements. All counties pay any costs for 

foster care or related administrative expenses that exceed $9,000. Eligible children are those who are at risk of placement, or have already been placed, and 

who have substantiated reports of abuse/neglect. Services most frequently paid 

for with Title IV–E funds have been child and family counseling, parenting and 

55

homemaker skills. Job-related services, legal assistance and other services also 

are available. • In North Carolina, 19 counties receive a capped amount of Title IV–E funds 

that may be used flexibly to meet the needs of children and families in the child 

welfare system. If a county’s expenses are in excess of their Title IV–E allotment, the State and county will share the excess costs. Eligible children are 

those who are at imminent risk of placement or are already in placement. Counties use their funds in a variety of ways. Thirteen counties use funds to meet 

needs on a case-by-case basis. Other counties developed new services in-house 

or entered into contracts with providers for such services as family support, assessment, adoption, substance abuse and mental health treatment and family 

reunification. 

• In Ohio, 14 counties are experimenting with a diverse array of managed care 

strategies. The State provides the participating counties with a capped amount 

of funds. Each county has developed its own managed care strategy for managing expenditures within the allotment. Some of the strategies employed by 

counties include establishing capitated or case rate contracts with private providers; developing utilization review strategies including pre-placement and period review processes; increasing incentives to enhance foster care provider networks; and establishing quality assurance procedures. 

• In Oregon, the State requested plans from interested branch offices to spend a 

portion of their foster care budgets more flexibly than typically allowed. Plans 

addressed three types of services: foster care prevention, expansion of established services, and ‘‘innovative’’ service plans for the development and implementation of new services. The State approved plans and negotiated agreements 

with the branch offices. If the branch office spends less of its flexible funds than 

budgeted, the difference is ‘‘banked’’ and available for future local waiver proposals. If additional foster care funds are needed, the State makes up the difference with realized savings through the first quarter after the shortfall occurred. Key service strategies employed by Oregon’s counties have included 

Family Decision Meetings, Enhanced Visitation, and facilitation of drug and alcohol treatment.

Two of the States, North Carolina and Oregon, have now submitted final evaluations reporting on outcomes for children based on their first 5 years of implementation of these demonstrations.

• In North Carolina, researchers found that while the probability of foster care 

placement following a substantiated report of abuse or neglect declined in both 

the demonstration counties and the comparison counties over the 5 years of the 

demonstration, the decline in out-of-home placement was more dramatic in the 

19 demonstration counties with access to flexible funding under the waiver than 

in the comparison counties. 

• Similarly, Oregon’s final evaluation report found that in the localities in which 

the child welfare agency had access to flexible funds through the Title IV–E 

waiver and/or through a State-funded System of Care initiative, children were 

more likely to remain in their own homes. Children in the localities with access 

to both waiver and System of Care funds were over three times as likely to remain at home as children in localities that did not have access to either source 

Questions from Representative Benjamin L. Cardin to the Honorable Wade 

of flexible funding.

fF. Horn 

Question: In your testimony, you suggest that under the Administration’s 

plan, States ‘‘could receive up front funding’’ to make investments in family 

related services that may reduce future foster care placements. However, 

the Administration’s estimates (from OMB) suggest that the plan would increase child welfare spending by only $119 million over the next two years 

(while reducing expenditures correspondingly in later years). Do you believe $119 million is going to make a huge difference to a foster care system 

that will spend $10 billion over the same time period? 

Answer: The Child Welfare Program Option allows States to receive up front 

funding and to save funds immediately from reduced administrative burdens. States 

claimed approximately $68 million of these administrative costs in FY 2001. Although some activities that are linked to eligibility requirements will continue 

56

under the proposal, we expect significant savings in this area. Another area where 

we expect savings is in the area of cost allocation, as this process will be significantly streamlined. 

We believe that this initial influx of funding in addition to the longer-term savings generated from innovative programs that reduce foster care caseloads will allow 

States to fund new and improved services and maintain their responsibility for children in foster care. This proposal is an opportunity for States to use Federal funds 

to improve the way they plan, organize, and invest in their child welfare system. 

Additionally, the President’s FY 2004 budget requests full funding of Promoting Safe and Stable Families, which will provide States with an additional $1 billion 

influx of funding for their child welfare systems over 5 years. States may use that 

influx in the same flexible manner they may use Program Option funds. 

We believe that the flexibility afforded states through the Program Option coupled 

with the additional funding in Promoting Safe and Stable Families will have a significant impact in improving state child welfare systems. 

Question: You stated that the Administration’s foster care plan is designed to be cost-neutral over 5 years. Does the Administration have a position on other proposals that may provide net new resources to the child 

welfare system (beyond seeking full funding for the current Promoting 

Safe and Stable Families Program)? For example, is the Administration 

willing to consider providing additional resources to the child welfare system to implement program improvement plans, address substance abuse 

problems, and improve the retention of qualified caseworkers? 

Answer: We developed the Child Welfare Program Option using the following 

principles: 1) provide maximum flexibility to States; 2) maintain child safety, permanency and well-being outcomes and 3) retain cost neutrality. Any child welfare reforms that we consider must comport with those principles. 

The Option allows each State that chooses it to direct its funding in the manner 

that best serves the population, including, but not limited to implementing program 

improvement plans, addressing substance abuse problems and improving the retention of qualified caseworkers. Having said that, we are, of course, willing to discuss 

issues and other proposals with members. 

As with the Safe and Stable Families Program, the Administration is requesting full funding ($60 million) for the Independent Living Education and Training Vouchers program for FY 2004, the same as the FY 2003 request. The program was funded at $42 million less a rescission of .65 percent in FY 2003. These vouchers provide 

youth an additional resource to prepare for adult living, increasing the prospect that 

they will be able to secure work and become contributing members of society. Full 

funding would allow us to continue supporting State efforts to meet the needs of 

this highly vulnerable population. 

I would also like to take this opportunity to note that the President’s FY 2004 

budget for SAMHSA provides a new $200 million State voucher program for substance abuse treatment. 

Question: Your testimony highlighted the growing inequality of the current eligibility standard for Federal foster care assistance. Under this socalled ‘‘look back’’ provision, States must verify that a foster child’s birth 

family was eligible for welfare under the rules in place in 1996 (which are 

not indexed for inflation). You suggested that States selecting the proposed 

option foster care block grant would not have to go through this look-back 

process. Does the Administration also support addressing this problem for 

states [sic] decide not to opt into the Administration’s proposal. [sic] In 

other words, would you support updating eligibility standards for Federal 

foster care payments in States that do not believe the proposed block grant 

is a good deal? The Administration’s plan does not address the look-back 

problem for determining adoption assistance payments, regardless of 

whether a States opts into the proposed block grant. Does the Administration support updating eligibility standards for Federal adoption assistance 

payments? 

Answer: The Administration developed the Child Welfare Program Option in a 

cost-neutral environment. With respect to both of your questions, we are unfamiliar 

with any proposals that address the look-back date for both the foster care and 

adoption assistance programs that are cost-neutral. However, we are willing to review and discuss any proposals that do so. 

I would point out that spending under the Title IV–E adoption assistance program 

continues to grow at a rate of 10 percent per year and thus we are maintaining the 

entitlement to adoption in order to ensure that all children can grow up in a loving 

and permanent home. However, under our proposal, any State that chooses the 

child welfare program option would only be required to test for AFDC eligibility 

57

once at the time that termination of parental rights proceedings are initiated rather 

than determining eligibility at two points in time (at the point of removal from the 

home and when the State files the adoption petition), as is currently required. 

Question: Between 1987 and 1992, the number of children in foster care 

increased by 42%, going up from 300,000 to 427,000. A significant factor in 

this increase was the emergence of crack cocaine and the devastating impact it had on families. If a similar trend occurs in the future for whatever 

reasons, what would happen under the Administration’s proposal? Do you 

think a capped contingency fund designed to help state [sic] welfare programs during economic downturns can truly respond to such a dramatic 

change in the number of at-risk children? 

Answer: The Child Welfare Program Option allows each State to re-direct dollars 

as necessary so that the State quickly may address unexpected changes, trends and 

circumstances within the State before such circumstances become overwhelming. If 

a State is not able to do so, and it meets all other criteria, the contingency fund 

is available to provide relief. 

The TANF contingency fund is currently authorized at a level of $2 billion. No 

State has drawn down these funds even during an economic downturn and we anticipate that few States will need the funds for the TANF program in the future. 

Further it should be noted that the triggers for the contingency fund under the 

Child Welfare Program Option have been modified to appropriately address the 

child welfare environment. Under the Option, States may request additional funding 

from the TANF contingency fund when the State’s foster care population increases 

by at least 15 percent over the course of two fiscal years and either the foster care 

population increases by at least 10 percent nationally over the course of two years, 

or the unemployment trigger for the TANF Contingency Fund is met. 

Question: Children currently eligible for federal foster care payments are 

categorically eligible for Medicaid. If a State no longer calculates eligibility 

for these payments under the proposed block grant, how are we going to 

guarantee continued Medicaid coverage for these kids? You mentioned the 

Administration’s plan would allow States to make all children in foster 

care categorically eligible for Medicaid if they opted into the block grant. 

Can you outline how that would work? Does OMB consider such a reform 

to be cost-neutral? 

Answer: Our child welfare proposal does not impact Medicaid eligibility. Children 

that are currently eligible will continue to be eligible. The vast majority of children 

in foster care are either currently entitled to Medicaid under the existing Title IV–

E foster care maintenance payments program or would otherwise qualify for the 

program. With the exception of the children who have significant income and resources of their own, all children who have been removed from their parents’ home 

and receive services under the program option would be eligible for Medicaid under 

an eligibility group that covers all children with incomes at or below the Federal 

poverty line. 

Question: The Administration’s plan requires a projected baseline under 

current law of foster care spending over five years in every state [sic] opting into the block grant (to devise funding levels). Do such baselines exist 

today? Are their [sic] any other programs that you are aware of that depend on state-by-state [sic] baselines of projected future spending? How 

would you ensure that all of these state [sic] baselines add up to a budgetneutral National baseline? What role would OMB play in constructing these 

state [sic] baselines and ensuring budget neutrality? 

Answer: The Administration does not currently project State-by-State baselines 

for the Foster Care program, or for any other relevant Department of Health and 

Human Services (‘‘HHS’’) programs. We plan to work with States, the Congress and 

other interested organizations such as the American Public Human Services Association to develop a methodology for determining State-by-State allocations that 

would function within the national baseline. Similarly, the Office of Management 

and Budget (‘‘OMB’’) will be involved in these discussions, as both OMB and HHS 

have strong interests in maintaining cost-neutrality, which the President requires 

for this proposal.

[Submissions for the record follow:]

f

58

Statement of the Honorable Anı ́bal Acevedo-Vila ́, a Representative in 

Congress from the Commonwealth of Puerto Rico 

I commend the Chairman and the committee for focusing their attention on the 

critical problem of protecting and providing for our nation’s abused and neglected 

children. I am confident that this marks the beginning of a dialogue on this urgent 

national problem, one that I expect will culminate in action by this Congress to 

strengthen our nation’s response to child abuse and neglect. I agree that providing 

more flexibility under the IV–E program is an important step in this direction, and 

like many of the states, Puerto Rico would be very interested in investigating the 

option of the allotment, given an appropriate baseline. We agree that it is of vital 

importance that federal funding support more services, including preventive services, for these families and children. 

I also want to take this opportunity to bring to the committee’s attention the specific difficulties the Commonwealth of Puerto Rico is facing with the IV–E program 

regarding the federal support available to assist us in ensuring the safety and well 

being of our most vulnerable boys and girls. 

Sadly, as is the case on the Mainland, child abuse and neglect are very serious 

and urgent problems in Puerto Rico. The twin evils of poverty and substance abuse 

have combined to conspire against our children and have placed too many of them 

at risk for abuse and neglect. In 2002, the Commonwealth received around 30,000 

complaints of abuse and neglect and approximately 10,000 children went through 

our foster care system. 

When Governor Sila Caldero ́n was sworn into office two and a half years ago, she 

encountered a child welfare system that was in complete disarray. There was a 

backlog of over 4,000 complaints that were waiting to be assigned; the investigations 

themselves took 2–3 months to complete, and social workers were overwhelmed with 

caseloads of over 50 complaints each. Leaving children in possibly risky environments for such extended periods of time was simply unacceptable. 

Improving our child protection system became one of our highest priorities, so 

over the last two and a half years, with an investment of an additional $12 million 

in Commonwealth dollars, the Governor doubled the number of social workers in 

this program, shrunk the backlog of cases by 88 percent, and reduced social workers’ 

caseloads down to an average of 28. In addition, last year a pilot program to reduce 

the turnaround of complaint investigations to 48 hours was successfully instituted 

in one of the Family Department regions. It will be extended to the whole Island 

by the end of July. Moreover, last year the Commonwealth inaugurated the first 

multidisciplinary transitional shelter, ‘‘Mi Casita Feliz,’’ at an annual operating cost 

of $2.4 million. This 108-bed shelter, run in cooperation with the Health, Justice, 

and Police Departments, not only provides immediate shelter for children who have 

just been removed, but it also offers integrated medical, psychological, social, and 

educational evaluations and services. Similar shelters are slated to open this year 

in two other regions of the Island. 

I am very pleased with the progress made. However, all these ground-breaking 

improvements came without the benefit of any additional support from our Federal 

partners. Children living in Puerto Rico are denied their entitlement to IV–E assistance solely on the basis of where in the U.S. they live. Unfortunately, Puerto Rico’s 

IV–E program is capped, so once the ceiling is reached, the Federal partnership 

ends and it is up to the Commonwealth alone to provide resources for these essential services. This legislatively imposed cap on foster care expenditures has no foundation in either welfare or economic policy, but is an arbitrary limitation imposed 

on the Commonwealth. 

States with populations similar to Puerto Rico are reimbursed $40 to $50 million 

a year for their foster care and adoption assistance expenditures, however, and 

Puerto Rico receives about $12 million a year. Puerto Rico receives one quarter of 

one percent of all IV–E funding, when the Commonwealth has seven times that proportion of the nation’s foster kids. This limitation undermines our ability to respond 

quickly and appropriately to provide the necessary level of care these children require. It also undermines the Federal investment in the system as it prevents investments in training and in data systems to assure appropriate record keeping and 

tracking. 

One example of unintended consequences resulting from the statutory dollar limitation on the IV–E program for the Commonwealth occurred in October 2002, when 

Puerto Rico the Commonwealth earned an adoption incentive bonus. On one day the 

Department of Health and Human Services awarded the bonus and on the next day, 

it reduced the Foster Care IV–E basic grant because the performance bonus had put 

Puerto Rico over the welfare cap. Similarly, there is no room under the cap for our 

IV–E eligible training, administrative, and placement expenses. Furthermore we 

59

have been advised by ACF that the additional funds Mr. Horn spoke of in his testimony to the Subcommittee, the Educational Vouchers Program which is intended 

to support educational opportunities for youth placing out of foster care will not be 

available either, because of the cap. 

Furthermore Puerto Rico has been advised by ACF that because of the cap on IV–

E the $648,557 Puerto Rico was to receive for the Educational and Training Vouchers for Youths Aging out of Foster Care will not be available. This is the program 

that Dr. Horn referenced in his testimony to the Subcommittee that Congress established, which is intended to support educational opportunities for youth placing out 

of foster care. 

Mr. Chairman, Puerto Rico is in favor of additional flexibility for the IV–E program. However, it is also important to establish an appropriate baseline so that children, regardless of where they live in the United States, have access to a foster care 

system that is responsive, caring, and addresses their needs. The issue of child protective services is a critical issue in the Commonwealth and I look forward to working with you so that we can take significant steps to resolving these issues. 

In addition to the critical issue of establishing an appropriate base line—a concern 

that I believe is shared by all of the states—there are other issues that the Commonwealth would like to work with the Committee to resolve as the foster care proposal is developed. These are the:

1. Contingency Fund: Puerto Rico is not authorized to participate in the TANF 

contingency fund. While I am hopeful that Congress will address this issue 

during the reauthorization of TANF, access to the Contingency fund is a fundamental need if the Commonwealth is to implement the flexible foster care 

proposal. 

2. Maintenance of Effort: Puerto Rico has historically overmatched the IV–E 

requirement because of the cap. Given the relative low levels (as compared to 

the states) of Federal financial participation in the Puerto Rico IV–E program, 

mandating the Commonwealth to this higher level of MOE would appear to 

be overly burdensome. 

3. Medicaid Eligibility: While children eligible for IV–E are automatically eligible for Medicaid and, in the states there is a full Federal partnership for 

the provision of healthcare. However, in the Commonwealth, the Federal Government only contributes approximately 15% of eligible Medicaid costs. I 

would urge the Committee to exempt the Medicaid expenditures for IV–E children from the Medicaid cap. 

4. CFS Review: Puerto Rico expects to have its CFS Review completed this year 

by HHS. However, the difference between the improvement plan that the 

Commonwealth will adopt and work to implement and the plans implemented 

by the states is that there will be no reimbursement for eligible IV–E expenses that occur with the implementation of the plan. States can secure additional IV–E reimbursement for eligible portions of their plan, but because of 

the cap on foster care expenses, Puerto Rico will be required to confront this 

federal mandate with no federal partner to help finance this effort.

Mr. Chairman, it is my hope that my colleagues will join with me this year in 

working to see that Puerto Rico’s abused and neglected children are provided the 

same access to federal assistance during the darkest times of their lives—without 

the imposition of arbitrary limits that bear no relationship to their actual needs. Let 

us renew our commitment to protecting all the vulnerable children of this country, 

regardless of where they live, and let us reinforce the historical partnership between 

the Federal Government and the Commonwealth so that children in Puerto Rico are 

not left behind.

fAlliance for Children and Families 

Washington, DC 20004

June 25, 2003

Honorable Wally Herger 

Chairman, Subcommittee on Human Resources 

Ways and Means Committee 

House of Representatives 

Washington, DC 20510

Dear Chairman Herger,

Please consider this cover letter and the attached documents as our submission 

for the printed record of the June 11, 2003 hearing held by your Committee on ‘‘FosVerDate jul 14 2003 00:18 Feb 06, 2004 Jkt 091276 PO 00000 Frm 00063 Fmt 6633 Sfmt 6621 E:\HR\OC\91276.XXX 91276
60

ter Care Flexible Funding Proposal’’. As you consider this issue, we believe it is imperative that you take into consideration the voice of the nonprofit sector, which has 

increasingly been delivering services on the front lines to America’s most vulnerable 

children. 

As your Committee prepares to explore the Bush Administration’s Flexible Funding Proposal for foster care, we ask that you consider the recommendations of the 

Alliance for Children and Families, a national association of nonprofit, human service organizations that serve almost eight million people in more than 6,700 communities. 

Please feel free to contact the Alliance for Children and Families and our member 

agencies all across the nation. Our website lists our members in every state 

(www.alliance1.org) and both our Milwaukee headquarters and our Washington, 

D.C. policy office can answer your questions about our research and recommendations. The Alliance would be honored to participate in any upcoming hearings on 

these or other issues affecting nonprofit human service providers. 

Sincerely, 

Carmen Delgado Votaw 

Senior Vice President, Public Policy 

The Alliance for Children and Families’ Recommendations for the Bush 

Administration Foster Care Flexible Funding Proposal

The Alliance Responds to Secretary Horn’s testimony on June 11, 2003 before the

House Subcommittee on Human Resources, Ways and Means Committee.

We are pleased that Assistant Secretary Horn was willing to use this hearing as 

an opportunity to explore and clarify components of the Administration’s flexible 

funding proposal for foster care. There is a growing consensus among national advocacy groups, child welfare providers, as well as many states and policymakers that 

the current mechanism for funding the nation’s child welfare system needs revision, 

and must be revamped. Child welfare funding has eroded, and scant attention has 

been paid to maintaining the funding for children in the foster care system, who 

often have severe physical and psychological needs. It is imperative that any proposed changes promote and invest in increased prevention and early intervention, 

while assuring protection, permanency and well being of our country’s most vulnerable children. 

The Need for Increased Investment in Child Welfare Services

Although the Administration’s proposal will provide states with the option to utilize greater funds initially, they will be limited to a capped amount over five years. 

Thus, it is unlikely that the block granted funds will be sufficient to build the frontend capacity of child welfare systems, in addition to sustaining foster care maintenance payments and providing case management to families. We recognize the 

states’ need for more flexibility to provide more targeted systems of care, however, 

new investments are also needed to make improvements and build a more preventative system. 

The Alliance for Children and Families further recommends the following:

• Eliminate the ‘‘Look Back’’ for Adoption Assistance—While eliminating 

the ‘‘look back’’ provision for foster care streamlines the IV–E process, maintaining the provision for Adoption Assistance reverses this movement towards simplification. An assessment of the child’s household income at removal must still 

be completed while the child is in foster care for accurate determination, because this information is still needed for Adoption Assistance eligibility. If eligibility determinations are eliminated from foster care, the ‘‘look back’’ provision 

should be eliminated from foster care as well. 

• Set Aside Funds for Children with Severe Needs; Research & Training—Because the children coming into the foster care system have increasingly 

complex physical and behavioral health needs, it is unlikely that child welfare 

costs will be significantly reduced as prevention strategies begin to take effect. 

The Federal Government should acknowledge the severe needs of this population, and consider maintaining the entitlement mechanism for specific populations, such as children who are compliant with Adoption and Safe Families 

Act (ASFA) regulations, and are placed in treatment foster care, group, and residential care facilities. Furthermore, the federal commitment to providing reVerDate jul 14 2003 00:18 Feb 06, 2004 Jkt 091276 PO 00000 Frm 00064 Fmt 6633 Sfmt 6621 E:\HR\OC\91276.XXX 91276
61

search and training dollars to states should be considered distinct from the 

block of funds for prevention and service provision. • Create Minimum Standards for State Involvement in Child Welfare— With the offer of more state flexibility, the Federal Government is transferring 

a greater share of responsibility and risk for the child welfare population to the 

states. The partnership between the Federal Government and states in providing services to abused and neglected children must be maintained and states 

should be discouraged from diminishing their investment in the child welfare 

system once receiving federal dollars. Additionally, Congress should create appropriate and minimum standards in areas such as size of caseloads, to give 

guidance to participating states to ensure the progress of child welfare reforms. 

States must carefully weigh the decision to forgo entitlement programs with 

state match requirements that may help them leverage additional resources 

Statement of the American Federation of State, County and Municipal 

within their own state legislatures.

fEmployees 

The American Federation of State, County and Municipal Employees (AFSCME) 

is a labor organization representing 1.4 million workers, predominantly in the public 

sector. Tens of thousands of our members are caseworkers, supervisors and provide 

clerical support for public child welfare agencies across the country. 

Many child welfare programs are in crisis, with more abuse and neglect cases 

than state and county run systems can handle successfully. Congress can play an 

important role in alleviating the strains on these systems that cause many of the 

heartbreaking stories we read about in local newspapers. However, allowing states 

to cap funding for the Title IV–E Foster Care and Adoption Assistance program in 

exchange for more flexibility runs directly counter to this goal. 

Retain and Expand Child Welfare Entitlement 

The open-ended entitlement to Title IV–E funds has provided stable, reliable 

funding for abused and neglected children who require placement in out-of-home 

care. During periods like the late 1980s when child welfare caseloads increased dramatically, state and county child welfare agencies relied on additional federal assistance as the need for foster care exploded. More recently, foster care roles have leveled off in many states and concomitantly, the need for federal foster care dollars 

has stabilized. 

While federal support for foster care and adoptions has been strong, states and 

counties have not received sufficient funds for other components of their child welfare systems, including abuse prevention, family reunification, substance abuse, and 

mental health services. States should be allowed to fund kinship guardianship assistance payments under Title IV–E as seven states currently are able to do through 

waivers. Moreover, Congress should provide guaranteed funding for the Promoting 

Safe and Stable Families Program (PSSFP), an important abuse prevention program. In addition, the authority of the Secretary of the U.S. Department of Health 

and Human Services to approve child welfare demonstration projects should be extended. 

AFSCME’s Recommendation: We urge Congress to preserve the Title IV–E 

open-ended entitlement to ensure a stable and reliable federal commitment to supporting abused and neglected children. We also support allowing states to use Title 

IV–E funds more flexibly. 

Workforce Crisis 

In a 2003 report entitled ‘‘The Unsolved Challenge of System Reform, The Condition of Frontline Human Service Workforce,’’ the Annie E. Casey Foundation and 

the Brookings Institution Center for Public Service appropriately refer to child welfare workers as ‘‘America’s other first responders.’’ They found that while this workforce is highly committed and motivated, workloads are overwhelming, stress is too 

high, and training is inadequate. All of this had led to 40 percent turnover rates 

and inexperienced staff without the tools to perform their extremely challenging 

jobs. 

A 1998 AFSCME survey of our members who work in child welfare had similar 

findings. Caseloads in well over half of the child welfare agencies surveyed exceeded 

the recommended guidelines published by the Child Welfare League of America. 

Wages were not commensurate with the job demanded of these professional workers, virtually all of whom have a minimum of four years of college. Training was 

62

inadequate, with workers lacking a voice in shaping the training received. And, violence in the workplace and in the neighborhoods where workers must go was also 

a serious problem. Over 70 percent of the AFSCME affiliates responding to the survey reported that front-line workers in their agencies had been victims of violence 

or threats of violence in the line of duty. 

AFSCME’s Recommendation: We support legislation that recognizes and begins 

to solve the problems front line workers face. Federal grants to states should be established to improve the working conditions of child welfare workers by increasing 

wages, lowering caseloads and workloads, improving education and training, providing scholarships and student loan forgiveness, and increasing worker safety. 

Fully Fund Child Welfare and Related Programs 

Too often in the federal budget process, child welfare and related programs do not 

receive the funding they require to perform the critically important work they are 

charged to do. For example, funding for the Child Abuse Prevention and Treatment 

Act (CAPTA) and Promoting Safe and Stable Families Program is often set below 

the funding level authorized. Looking at the Fiscal Year 2004 budget, the House 

subcommittee mark contains only a 1% increase in funding for mental health services and an increase only slightly above inflation for substance abuse treatment. 

These funding levels will not come close to closing the gap between services needed 

and services provided. 

Indeed, the House subcommittee mark proposes to reduce funding overall for children and family services programs by 9 percent. And, funding for the Social Services 

Block Grant (SSBG) has been flat funded for years after it was cut in the mid-1990s. 

Almost one-quarter of SSBG spending goes for child welfare services. 

AFSCME Recommendation: All programs that provide services for families either in the child welfare system or at-risk of abuse or neglect should be provided 

the funds they need to keep children safe. This includes services that get to the root 

causes of abuse, including mental health and substance abuse programs, as well as 

child welfare programs. 

Conclusion 

Protecting vulnerable children from abuse and neglect should be a national priority. This commitment must be reflected in federal policies and funding. We urge 

this Congress to reject a cap on funding for the Title IV–E program, enact legislation that would support the child welfare workforce, and increase funding for child 

welfare and related services.

fAssociation on American Indian Affairs 

Rockville, Maryland 20850

June 23, 2003

Congressman Wally Herger 

Chairman, Subcommittee on Human Resources 

Ways and Means Committee 

U.S. House of Representatives 

1102 Longworth House Office Building 

Washington, DC 20515

Dear Chairman Herger,

Re: Submission for the record of the June 11, 2003 hearing on the Bush Administration Flexible Foster Care Funding proposal.

Please accept the following statement for the record of the above hearing. 

The Association on American Indian Affairs is an 80-year-old Indian advocacy organization located in South Dakota and Maryland and governed by an all-Native 

American Board of Directors. We have been involved with Indian child welfare 

issues for decades and played a key role in the enactment of the Indian Child Welfare Act of 1978. We have had a long-standing interest in the issue of direct funding 

to tribes under Title IV–E of the Social Security Act, having testified before this 

subcommittee about this issue as far back as 1990. 

We applaud the Administration’s recognition of the need for direct tribal funding 

under Title IV–E in its flexible funding proposal. We also wish to thank Rep. Camp 

for introducing and seeking the enactment of H.R. 443 that would provide direct 

tribal funding under the existing Title IV–E program. It is long overdue that the 

exclusion of tribal governments from this program be rectified. 

There are many needs in Indian country that access to this money can address. 

Among other things, this money can be used to pay foster families, provide assistVerDate jul 14 2003 00:18 Feb 06, 2004 Jkt 091276 PO 00000 Frm 00066 Fmt 6633 Sfmt 6621 E:\HR\OC\91276.XXX 91276
63

ance and support for those families, finance child protective services to prevent family breakup and ensure adequate training for staff and foster families. Attached is 

a fact sheet that summarizes the many reasons why inclusion of tribes in Title IV–

E—both any new program and the existing program—is critical. 

As you move forward to develop legislation implementing the President’s proposal, 

it is critically important that tribes and organizations such as ours and the National 

Indian Child Welfare Association be involved in the discussion. In that way, the 

Committee can ensure that any law that is enacted will truly meet the needs of Indian country. It is also vital that this Committee support the enactment of H.R. 443, 

so that tribes will have access to adoption assistance money, in addition to foster 

care money, and in order to provide tribes with the same option as states in regard 

to the Title IV–E foster care program. 

Thank you for considering this testimony. 

Sincerely, 

Jack F. Trope 

Executive Director 

Fact Sheet on Title IV–E Funding to Indian Tribal Governments 

As has been well documented, tribal exclusion from the Title IV–E program was 

not deliberate. At that time (1980), the Committees addressing these issues did not 

fully understand nor recognize the critical role of tribal governments in service delivery to children, nor the inherent sovereignty of Indian tribal nations. Today, Congress has a better understanding of tribal sovereignty and the critical role of tribal 

governments in providing services to children and families and it is time to correct 

this oversight. Tribal governments are the entities best situated to provide such 

services to their communities for several reasons:

• Indian tribes are ‘‘domestic dependent nations’’ with inherent sovereign powers. 

They have a direct government-to-government relationship with the Federal 

Government and are not subdivisions of the states. 

• History has shown, and a 1994 HHS inspector general report confirmed, that 

in the case of Title IV–E, there have been some tribal-state agreements negotiated, but they are limited in number and scope and generally do not include 

the full array of IV–E services and administrative support that states are able 

to access. 

• Tribal programs are more attuned to the special programmatic and cultural 

needs of their local communities and have experience in operating quality programs when resources are available; permanency for Indian children who need 

out-of-home placements is best achieved when tribes have the resources to ensure that quality foster care and adoptive placements for these children. 

• Tribal members continue to experience inequity in the quality and quantity of 

services available under State-administered programs. 

• Although some tribes have accumulated significant resources because of their 

successful gaming operations, most tribes continue to lack a substantial economic and tax base from which to generate resources. 

• Federal resources provided for Indian people for social services through Bureau 

of Indian Affairs and Indian Health Services budgets have consistently been inadequate, falling far short of need.] 

• In the case of Title IV–E, providing for tribal access to this program would address a substantial injustice—namely, that some of the neediest children in the 

country are excluded from a program that is an entitlement for all other similarly situated children, simply because they fall under tribal jurisdiction.

Of note, support for these provisions is not limited to tribes and Indian organizations. For example, the 1994 HHS Inspector General report specifically recommended direct funding to tribes under Titles IV–E and state-based groups such 

as the American Public Human Services Association have taken a clear position in 

support of Title IV–E funding for tribal governments.

Statement of the Child Welfare League of America 

f The Child Welfare League of America (CWLA) welcomes this opportunity to submit testimony on behalf of our more than 1,100 public and private nonprofit childserving member agencies nationwide on the Administration’s proposal to restructure 

64

Title IV–E foster care funding. This hearing represents an important opportunity 

to address the comprehensive reform of the child welfare system that is needed to 

ensure that our most vulnerable children are protected from abuse and neglect. 

Newspaper headlines across the country reveal that we, as a country, need to do 

more to protect our children from abuse and neglect and to care for the children 

who are in foster care. All children need protection and do best when they are living 

in permanent loving homes. There is also a compelling national interest in providing 

consistent levels of safety, protection, and care for America’s children across each 

state in the nation. 

CWLA strongly opposes any measure that limits the federal responsibility to participate fully with the states in meeting our fundamental obligation to America’s 

most vulnerable children and families. We believe that a new, more complete approach to shared state and federal funding should be implemented. In the meantime, while recognizing the inadequacy of the current program, we believe that it 

is essential to maintain basic Title IV–E entitlements until a more effective financing method is implemented. 

Nationwide Reform Is Needed To Build A System Of Care That Will Ensure

Children Are Protected

While recognizing the valiant efforts of the people who work within our nation’s 

child welfare system, CWLA recognizes that the current child welfare system does 

not protect all children adequately. The shared federal, state, local, and tribal responsibility has never been fully developed or realized. The result is an incomplete 

system that continues to be in urgent need of reform and completion. We are overdue in implementing an improved and strengthened system. True child welfare reform hinges on an improved system of shared financing responsibilities among federal, state, local, and tribal governments. 

The national child welfare system continues to be in need of:

• A reliable, responsive, and predictable method of guaranteed funding, for a full 

range of essential services, as well as placement and treatment services. The 

current Title IV–E entitlement has proven to be an imperfect vehicle for funding a true child welfare system. Viable alternatives that offer guarantees to all 

children in need should be explored. 

• A means of maintaining consistent focus on safety, permanency, and well-being 

as outcomes for children. 

• Rigorous standards combined with strong federal and state accountability mechanisms. 

• Recruitment and support of adequately trained child welfare professionals, foster parents, mentors, and community volunteers. 

• Resources that enable parents to provide adequate protection and care for their 

own children. 

Flaws In The Current System

The current child welfare financing structure is unbalanced.

• Title IV–E foster care provides approximately 38% of support for all child welfare services, yet it supports only about 50% of the small portion of children 

who actually are placed in out-of-home care. At most, this group represents less 

than even 20% of children receiving child welfare services. In fact, the federal 

role, as defined and limited by these eligibility requirements, has never been 

extended to all of this country’s children who have been removed from their 

homes. Due to the eligibility restrictions linking Title IV–E eligibility to outdated 1996 AFDC standards, this limited level of federal support for children 

through Title IV–E is consistently diminishing over time. 

• Even among those who are Title IV–E eligible, the scope of reimbursable care 

is limited to routine maintenance care. Family support services that might keep 

a child at home or treatment services that might reduce the length of time in 

out-of-home care are not included. 

The current system of financing child welfare services is complex. 

• An inordinate amount of state administrative costs is attributable to maintaining individual eligibility systems, cost allocation systems, blended funding formulas, match certification protocols, and other artifacts of an overly complex 

system. 

• Since the patchwork of mechanisms that finance child welfare services is so 

complex, states vary greatly in fully utilizing existing resources. 

65

The currect system is inadequately linked to either need or outcomes and 

is over-invested in misplaced accountability. 

• Strong steps have been taken to move the child welfare system to an outcomesbased accountability system. Despite some significant shortcomings, the current 

federal review system, under the Child and Family Service Reviews, has substantial promise. • In the meantime, states continue to be required to invest considerable money 

and time in systems to track Title IV–E eligibility and related administrative 

tasks. By some estimates, this consumes as much as 5% of the total investment 

in the child welfare system. These resources could be better utilized in providing services or managing the mandated safety, permanency, and well-being 

outcomes for children. 

The current system is overly dependent on potentially transitory resources. 

• Temporary Assistance for Needy Families (TANF), the Social Services Block 

Grant (SSBG), and Medicaid provide significant federal resources for child welfare. These funding sources, however, must provide resources for services to 

many other consumer populations. In addition, funding for SSBG is unpredictable and has been significantly reduced in recent years. 

Principal Objectives Of Child Welfare Reform

An improved federal and state child welfare financing system should be constructed to achieve four principal objectives. CWLA looks forward to working with 

this Subcommittee to develop a comprehensive child welfare reform proposal that 

includes the following principles:

1. Preserve the shared federal and state responsibility for protecting and 

caring for at-risk children. 

a. Maintain and expand federal protections for individual children. 

b. Ensure full federal financial participation in both protection and care responsibilities for all children who require the attention of state child protection 

agencies. 

c. Ensure that the Federal Government continues to share responsibility for closing the gap between resources and need with the states to guarantee safety 

and permanency of children coming to the attention of the child welfare system—resources should match needs. 

d. Establish a nationally-recognized mechanism for objectively defining the full 

extent of protection and care needs of children in the child welfare system. 

e. Extend direct access to federal funding by tribes for care and protection of children who are victims of abuse and neglect. 

2. Ensure that the outcomes of safety, permanency, and well-being are 

achieved for all children.

a. Build on the success of the Child and Family Service Review process by continuing the emphasis on child outcomes. 

b. Initiate a concerted national effort to refine the scope and reliability of measurable outcomes. 

c. Connect performance indicators to nationally-defined standards of child need. 

3. Attain high levels of quality and accountability in state and local programs.

a. Ensure accountability through formal standards of care, accreditation, certification, or licensure. 

b. Continue and strengthen Child and Family Service Reviews. 

c. Strengthen and refine national reporting standards (AFCARS, NCANDS, etc.). 

d. Allow states and tribes substantial flexibility to design service systems that 

work within a local context, while still requiring them to meet performance 

standards. 

4. Provide states with sufficient flexibility to permit simplified administration and a full continuum of responsive services.

a. Simplify administration by eliminating individual eligibility determination and 

the need to track case administrative costs as distinct from service costs. 

b. Provide state and local flexibility in defining the mix of services and types of 

care. Permit flexible services in response to a full range of child welfare client 

needs. 

c. Allow states to use all federal funds for both service and administration to 

support delivery through either public or private agencies. 

66

d. Allow set-asides to address special needs, such as workforce development, 

training, and research. 

The Administration’s Foster Care Funding Proposal

The Administration’s response to the reforms needed in child welfare include a 

proposal that would restructure the current Title IV–E foster care program. While 

legislation has not yet been introduced, some details have emerged through congressional testimony and public comments from Administration officials. Under the proposal, each state would have an option to receive a fixed, predetermined allocation, 

or block grant, of Title IV–E foster care maintenance payments, administrative 

costs, and training funds. 

Under the proposed option:

• States would receive annual grants over a five-year period. Funding would 

equal the projected growth in federal foster care expenditures. These projections 

would be based on the current restrictions which require states to base eligibility on their 1996 AFDC program standards. States would be allowed to draw 

down up to 20% of this five-year total in any one year. 

• All states would have a set period of time to opt-in, or choose this option. States 

not choosing this option at that set time could not elect to make that choice at 

a later date. States that do choose this option must continue to receive this set 

funding for a period of five years. Once a state chooses the option, it may not 

opt-out during the five-year period. 

• States choosing the option could spend the funds on foster care and any services 

now provided under Title IV–E and Title IV–B, Child Welfare Services, and 

Promoting Safe and Stable Families programs. 

• States could use the funds for any child in the child welfare system, regardless 

of income. Based on current eligibility, approximately 50% of all children in foster care are supported with federal funds. 

• States choosing the option would have to maintain the same level of state funds 

now used to draw down federal Title IV–E foster care funds. 

• States would be expected to maintain the protections for children that exist in 

current law. 

• If a state experienced an unusual increase in their foster care population, a 

state could draw funds from an emergency fund under the TANF block grant. 

To qualify for this relief, a state would have to meet a national and state target 

increase in foster care caseload or unemployment rates. 

• HHS would continue to conduct Child and Family Service Reviews. For states 

choosing this option, Title IV–E eligibility reviews would be eliminated. 

• A set-aside of $30 million would be established for Indian Tribes or consortia 

that demonstrate the capacity to operate a Title IV–E program. Indian tribes 

will have similar program requirements as states. However, HHS may waive 

certain state program requirements that are burdensome to Indian Tribes but 

do not compromise child safety. 

• The Title IV–E Adoption Assistance program would remain unchanged. The eligibility for this program would continue to be linked to a state’s 1996 AFDC 

standards. 

CWLA Key Concerns About The Administration’s Foster Care Funding Proposal 

The Administration’s proposal opens the door to a serious national consideration 

about the way in which we choose to carry out our collective responsibility for protecting and caring for the most vulnerable children and youth in our communities. 

Based on the information available, the proposal does appear to recognize the urgent need for administrative simplification and more flexibility for states to develop 

creative solutions to the widely varied needs of children and families. It acknowledges that up-front investment is required to begin movement toward new patterns 

of child protection and care. 

The Administration’s proposal, however, does not yet appear to offer the depth of 

reform or the guarantee of sufficient federal financing necessary nationwide to improve the child welfare system and ensure that all children are protected. The proposal appears to freeze federal resources at a time when there is a great need for 

significant new investments and reform in our national child welfare system. 

CWLA also has many concerns about the Administration’s proposal:

• The proposal breaks the link between federal funding based on an entitlement 

funding formula and transforms it into a fixed amount of funds no longer driven 

by need or the number of eligible children. 

67

• The proposal does not address the complex array of federal funding sources for 

child welfare. Title IV–E foster care, the subject of the Administration’s proposal, comprises 38% of all federal child welfare spending. Other federal funding sources include: Title IV–E adoption assistance (10%); the Social Services 

Block Grant (17%); Temporary Assistance for Needy Families (15%); Medicaid 

(10%); Title IV–B, Child Welfare Services, and Promoting Safe and Stable Families Program (5%); and SSI and others (5%). • The Administration’s foster care proposal is cost neutral, setting a five-year cap 

on spending. The proposal does not recognize the need for any new resources 

to build a system of care to better protect children and address pressing issues, 

including supports for the child welfare workforce and substance abuse treatment for families that come to the attention of the child welfare system. • A state choosing the foster care option would receive a fixed allocation/block 

grant based on the current Title IV–E eligibility criteria that link eligibility to 

1996 AFDC standards. This means that the allocation/block grant would be 

based on a declining number of children becoming eligible over the next five 

years. • The proposal would not ensure that funds would be used for prevention services. Current Title IV–E funding does not cover all children in out-of-home care 

and few, if any states, adequately fund their child welfare systems so as to provide the safety and permanence contemplated by current law. States may have 

to use the fixed allocation/block funds to cover non-Title IV–E eligible children. 

There is no guarantee that any funds would be used for prevention services. 

Federal Title IV–E funding currently supports only 50% of the children in outof-home care. • Adoption assistance eligibility would continue to be linked to foster care eligibility. If the Title IV–E foster care eligibility is removed, determining future eligibility for adoption assistance would be complex and more difficult than it is 

presently. This may result in reducing the number of federally-supported adoptions from foster care. • The role of the cities and counties is not protected in this state option proposal. 

There is no requirement that the fixed allocation/block grant funds be distributed to local or regional governments will be based on need or eligible children. 

There is no requirement that a city or county, which may include the bulk of 

a state’s foster care population, will have any input in whether a state chooses 

this block grant or not. • The proposed state maintenance-of-effort is based only on state funds currently 

used to draw Title IV–E federal funds. Since the financing of child welfare services (adoption, foster care, child protection, and other services) involves a variety of federal, state, and local funds, it appears that states would be able to reduce state spending by billions of dollars and still meet the federal spending 

requirement necessary to draw down the fixed allocation/block grant. • Questions remain about the formula being developed to determine each individual state share of the fixed amount of funding. Will all states that take the 

fixed allocation/block grant option and project they will have increased costs 

over the next five years be eligible to receive increased funds? Will the formula 

be based on historical claim or actual reimbursements? Since the overall total 

federal allotment is fixed, would some states get less if other states negotiated 

an increase since certain formulas that benefit one state could result in less 

funding for another state? • In order to access needed additional funds if states experience a dramatic increase in child welfare caseloads (or an increasingly complex caseload with 

greater needs), the proposal suggests that states could access the TANF emergency fund. The trigger that would allow a state to draw these TANF funds 

would be based on national and the individual state increases in foster care. 

These criteria would not necessarily reflect what is happening in a county or 

city where the bulk of the foster care population might be found. These emergency relief funds would divert funds from TANF. If the same event (a recession 

for example) caused both cash assistance and foster care caseloads to increase, 

a state may have to choose whether they wanted to fund increases in TANF 

or foster care. 

• The proposal would combine Title IV–E training funds into the fixed allocation. 

States would have to choose what, if any, portion of the allocation could be dedicated to training and staff development. 

CWLA Recommendations

CWLA urges Congress to comprehensively review and take action on what is truly 

needed to build the system of care so that children are protected. CWLA looks forVerDate jul 14 2003 00:18 Feb 06, 2004 Jkt 091276 PO 00000 Frm 00071 Fmt 6633 Sfmt 6621 E:\HR\OC\91276.XXX 91276
68

ward to working with this Subcommittee to develop a comprehensive child welfare 

financing reform proposal that is built on the following four principles and achieves 

the objectives outlined earlier.

• Maintain Federal/State Responsibilities 

• Achieve Sound Outcomes 

• Ensure Quality and Accountability 

• Provide State Flexibility 

Pew Commission on Children in Foster Care 

The Pew Commission on Children in Foster Care has been established to develop 

recommendations to improve outcomes for children in the foster care system. The 

Commission was announced on May 7, 2003, as an independent, nonpartisan body 

with the goal of developing effective and practical recommendations to improve the 

foster care system. The Commission will focus on recommendations in the areas of 

improving existing federal financing mechanisms to facilitate fewer foster care entries and faster movement of children from foster care into safe, permanent, and 

nurturing families. The Commission will also focus on improving court oversight by 

providing state and local courts with tracking and management tools to help achieve 

safety and permanency for foster children. 

The Commission members are committed to reach consensus on a set of achievable recommendations in these targeted areas and to seek implementation of these 

recommendations. A final report and recommendations are due to be released in the 

summer of 2004. CWLA urges Congress to carefully weigh these recommendations 

as they move forward in making changes to the federal/state partnership in financing child welfare services. 

Congressional Proposals Addressing Child Welfare Financing 

Congress can also take action to make incremental improvements to the child welfare system. Many of CWLA’s recommendations were contained in testimony submitted to this Subcommittee for the April 8, 2003, hearing on the implementation 

of the Adoption and Safe Families Act (ASFA). Those recommendations included:

• Eliminate the eligibility link to 1996 AFDC standards so all children in foster 

care receive federal assistance. Congress has mandated legal and permanency 

protections for all foster and adopted children, however, federal funding is only 

available to pay for the costs of children who are eligible for Title IV–E. A reformulation of the federal-state share would have to be determined in order to institute this change. 

The current law links Title IV–E eligibility to archaic standards that each state 

had in place under their 1996 AFDC cash welfare system. States are required 

to maintain the same eligibility standards that existed in July 1996. Since 

AFDC no longer exists, this continues to be an administrative burden on the 

states. If the current system remains in place, what is even more critical, is the 

fact that as time goes by, fewer and fewer children will be eligible for federal 

foster care and adoption assistance. Based on these standards, only 50% of children in out-of-home placement are currently eligible for the Title IV–E funding. 

Unless changes are made, some states may be able to serve less than one-third 

of their children in out-of-home placement through the use of Title IV–E foster 

care funds. 

• Address the growing child welfare workforce issues that pose challenges to ensuring children’s safety and care. A major challenge in reducing the number of 

children entering or remaining in out-of-home care or waiting for an adoptive 

family lies in the ability of a well-staffed and well-trained child welfare workforce. Caseworkers must assist families that are experiencing difficult and 

chronic family problems. They also must achieve the goals of safety and permanency and make lifetime decisions for the child within the ASFA timelines. Yet, 

the safety and permanency of children is hampered due to large caseloads, caseworker turnover, and minimal training. In addition, extending federal training 

funds will ensure that workers employed in private agencies are well-trained. 

• Dedicate significant new resources to provide substance abuse treatment for 

families in the child welfare system. Families in the child welfare system need 

access to appropriate substance abuse treatment. Up to 80% of the children in 

the child welfare system have families with substance abuse problems. Resources for substance abuse treatment for families are chronically in short supply. All states report long waiting lists. Alarmingly, over two-thirds of parents 

involved in the child welfare system need substance abuse treatment, but less 

than one-third get the treatment they need. To ensure that permanency decisions can be made for children whose families have alcohol and other drug probVerDate jul 14 2003 00:18 Feb 06, 2004 Jkt 091276 PO 00000 Frm 00072 Fmt 6633 Sfmt 6621 E:\HR\OC\91276.XXX 91276
69

lems, special steps must be taken to begin services and treatment for the family 

immediately upon a child’s entry into foster care or to regain custody of their 

children. 

• Make available a federally-funded guardianship permanency option to allow 

states to provide assistance payments on behalf of children to grandparents and 

other relatives who have assumed legal guardianship of the children for whom 

they have committed to care for on a permanent basis. 

• Extend and expand the existing child welfare waivers. The U.S. Department of 

Health and Human Services should collect data on these efforts in order to 

evaluate their effectiveness. 

• Extend and modify the adoption incentive program to help older youth secure 

permanent adoptive homes. 

• Adopt the Administration’s recommendation to increase funding to $505 million 

for the Promoting Safe and Stable Families Program and $60 million for the 

educational and training vouchers for youth aging out of foster care. 

• Restore funding for the Social Services Block Grant. SSBG funding comprises 

17% of all federal child welfare funding. Reductions in SSBG funding in recent 

years has hampered state ability to protect needed services. 

• Provide direct tribal access to Title IV–E funds. Currently, tribes can only access these federal funds through agreements with states.

Legislation has been introduced this year that adopt some of these incremental 

measures. The Child Protection Improvement Act (HR. 1534), introduced by Representative Ben Cardin (D–MD) and several members of this Subcommittee, makes 

a down payment towards addressing the comprehensive reforms needed. H.R. 1534 

provides new funding to help states implement strategies to expand and improve 

their child welfare system, including the expanded use of child welfare waivers. The 

legislation will also help public and private child welfare agencies better secure and 

maintain a stable and well-trained child welfare workforce. New funds are also provided to address the substance abuse treatment needs of families in the child welfare system and to ensure that more children are eligible for federal foster care and 

adoption assistance. The bill also provides first-time federal assistance to support 

kinship guardianship as a permanency option for some children. 

Child welfare reform measures are also contained in Title VIII of the Act to Leave 

No Child Behind, (H.R. 936). That legislation provides additional federal funding for 

preventive, crisis, permanency, and post-permanency services for children and parents or other caregivers when they first come to the attention of the child welfare 

system; when children enter foster care; and when children leave care to be united 

with their families, adopted, or placed permanently with grandparents or other relatives. Title VIII would also expand eligibility for foster care, adoption assistance, 

and other services. 

Conclusion

The child welfare system needs reform. CWLA calls on Congress to take action 

to ensure that we, as a country, do a better job of protecting and caring for our children. We urge Congress to take time to review and act on comprehensive child welfare reform measures that maintain a strong federal responsibility. CWLA strongly 

opposes any measure that limits the federal responsibility to participate fully with 

the states in meeting this fundamental obligation. We believe that a new, more complete and streamlined approach to shared state and federal funding should be implemented. In the meantime, while recognizing the inadequacy of the current program, 

we believe that it is essential to maintain basic Title IV–E entitlements until a more 

effective financing method is implemented. CWLA believes important and necessary 

reforms must be enacted to guarantee a federal/state/local commitment to ensure a 

consistent level of safety and care for all of America’s children. We look forward to 

working with this Subcommittee to develop a comprehensive child welfare reform 

proposal that meets all the needs of America’s most vulnerable children and families.

Statement of MaryLee Allen, Children’s Defense Fund 

f The Children’s Defense Fund (CDF) is pleased to have the opportunity to submit 

a written statement for the record of the June 11, 2003, hearing on the Bush Administration’s Foster Care Flexible Funding Proposal before the Subcommittee on 

Human Resources. 

70

The Children’s Defense Fund’s mission is to Leave No Child Behind and to ensure every child a healthy start, a head start, a fair start, a safe start and a moral 

start in life and successful passage to adulthood with the help of caring families and 

communities. CDF provides a strong, effective voice for all the children of America 

who cannot vote, lobby, or speak for themselves. We pay particular attention to the 

needs of poor and minority children and those with disabilities. 

CDF’s advocacy for reforms on behalf of children who are abused or neglected or 

at risk of maltreatment predates the passage of the Adoption Assistance and Child 

Welfare Act of 1980. Over the years we have had the opportunity to work closely 

with Members of the Subcommittee on Human Resources, formerly the Subcommittee on Public Assistance and Unemployment Compensation, to make improvements in many aspects of the child welfare system. The Subcommittee has 

often played a leadership role in securing new investments in family support services, strengthening adoption opportunities for children, creating new opportunities 

for older youths aging out of foster care, and putting in place new monitoring mechanisms for promoting quality care for children. Despite these gains, much remains 

to be done. 

We therefore appreciate your current attention to how to structure the financing 

of child welfare to create the best opportunities for children—those who are at risk 

of entering foster care, those in care, and those who have returned home, been 

adopted or are with kin and need ongoing support to prevent them from returning 

to care. As you well know, this is not a new discussion. When we testified before 

this Subcommittee in 1979, we urged that funds for prevention and specialized services be put on an equal footing with funds for out-of-home care, and today our message is similar. There also have been a number of financing proposals before you 

in recent years. Yet, investments in out-of-home care are still almost three times 

the investments in prevention and other services. We urge the Subcommittee to give 

careful consideration to the issue of child welfare financing throughout the 108th

Congress—to hear from state officials, providers, and advocates in states that have 

explored alternative funding options, to review proposals from the recently appointed Pew Commission on Children in Foster Care that is examining child welfare 

financing and the role of the courts, and to craft reforms that will ensure long term 

gains for all vulnerable children and families. 

In our statement, we will do three things:

• Comment on the foster care flexible funding proposal included in the Bush Administration’s FY 2004 Budget, by posing ten questions that we believe must 

be asked of it and any other financing proposals; 

• Suggest briefly an alternative financing scheme for child welfare; and 

• Recommend steps that can and should be taken immediately, while broader financing options are being considered, to increase the capacity in states to promote safety and permanence for children.

Concerns About the Bush Administration’s Foster Care Flexible Funding Proposal 

The Administration proposes to offer states the option of taking a fixed amount 

of money over five years in exchange for its current open-ended funding for foster 

care under Title IV–E of the Social Security Act. While few details and no legislative 

language are yet available, the Administration proposes that states could receive 

more money in the early years to spend on prevention and treatment activities. 

While CDF agrees with the goal of increased investments in prevention and treatment, we do not believe that what appears to be a foster care block grant, as proposed by the Administration, will reach that goal. In fact, we are concerned that 

a block grant, especially if implemented when states are in deep fiscal crises and 

as part of a broader strategy to end key supports for poor children and families, 

would have a negative impact on the very children and families it is intended to 

serve. If we are to keep children safe and in permanent families we need a continuum of services that includes prevention, specialized services, foster care, and a 

range of permanency and post-permanency options. 

We list our concerns about the Administration’s foster care block grant below, in 

the form of ten key questions, and ask you to consider these questions as you examine this and other financing proposals that come before the Subcommittee. 

1. Will the proposal assure increased investments in prevention? 

The Administration’s foster care block grant continues to pit prevention against 

foster care. It appears that increased federal funds for prevention would be available 

only if foster care costs decline, yet some of the claims made by proponents of the 

block grant suggest that states would be able to make more children in foster care 

eligible for federally-supported payments because they will be able to use federal 

71

funds for children who do not meet the current AFDC eligibility criteria. Decisions 

about expenditures should be based on the individual needs of the children and families, rather than pitting one type of service against another. There also seems to 

be no assurance that funds would be invested in prevention, even if foster care costs 

should decline. It also is not clear at this time whether all states opting for the block 

grant would be eligible for an initial increase in funds or what the amount of that 

increase would be. 

2. What attention will be given to the specialized treatment needs of children and families facing substance abuse, mental health problems, domestic violence, and other challenges? 

The Administration’s block grant similarly gives no attention to the specialized 

treatment needs of families struggling with substance abuse, mental health problems, and domestic violence. As many as 80 percent of the children who enter the 

child welfare system are from families challenged by substance abuse. 30 to 60 percent of the children who are exposed to domestic violence are also victims of child 

abuse. Today you cannot attend a meeting of child welfare officials from various 

states without the discussion turning to shortfalls in the areas of substance abuse 

and mental health treatment. It is critically important that funding be tied to what 

children need. Even if increased dollars were available for prevention, it is difficult 

to foresee new investments in treatment for substance abuse, mental health, and 

domestic violence problems. 

3. How will the protections under current law be maintained and enforced? 

The maintenance of protections and quality of care for abused and neglected children has been a constant challenge in the states. More than half of the states have 

been the subject of class action lawsuits, most of which have resulted in consent decrees that specified improvements in the protections afforded children. It is critical 

that the protections in current law, such as requirements for case plans, periodic 

case reviews, placements in the most family-like setting, and reasonable efforts to 

preserve and reunify families and to guarantee quality foster care when other alternatives are not available be maintained. While Assistant Secretary Horn testified 

to the Subcommittee that current protections would be maintained in the foster care 

block grant, it will be important to see how they are drafted. It is also critical that 

there be a method in place to monitor and enforce the protections. The current Title 

IV–E eligibility reviews will no longer be required. While the Child and Family 

Services Reviews will continue, they focus on ensuring certain outcomes are 

achieved for children and do not directly assess whether individual protections for 

children are maintained. The reviews also are only undertaken every five years. 

4. How will training for staff, foster parents, and adoptive parents be improved? 

It is not clear whether training funds will be included in the foster care block 

grant. Although it was not mentioned in Assistant Secretary Horn’s testimony, 

training has been described as being part of the new financing option in presentations by other Administration officials. Given the crises in child welfare systems, 

it is clear that increased training to improve the quality of care provided needs to 

be an urgent priority. We are concerned that investments in training would be reduced if training funds, which are now available on an open-ended basis and at a 

higher match rate than foster care, were included in the block grant. Instead, as 

we will describe later, funding for training must be increased. Federal IV–E training 

funds must be expanded to reach staff from private child welfare agencies (only public agency staff are currently eligible) and staff from related child-serving agencies, 

such as mental health and substance abuse, who are working with children in the 

child welfare system. 

5. What will be the impact on adoption? 

Given current descriptions of the foster care block grant, it is not clear how eligibility for Title IV–E adoption assistance, which will remain outside of the block 

grant, will be determined. Although Administration officials have made clear their 

priority for adoption, it is not clear that more children would be adopted under the 

current proposal. Currently most children qualify for federal adoption assistance 

based on their eligibility for the IV–E foster care program, but those eligibility requirements will no longer be in place. Will states still be required to use the IV–

E eligibility rules to determine the individual eligibility of children for adoption? It 

certainly seems inconsistent with a focus on increased flexibility and permanence 

for children in foster care to increase requirements for getting children adopted from 

foster care. 

72

6. How will Medicaid eligibility be ensured? 

The foster care block grant proposal also raises questions about children’s eligibility for Medicaid. Currently all children who are eligible for IV–E foster care are 

categorically eligible for and must be covered through the state’s Medicaid program. 

States may elect to cover non-IV–E eligible foster children through their Medicaid 

program as well. In states that opt for the block grant, will all children served by 

the block grant who receive foster care be automatically eligible for Medicaid? Will 

foster children be mandatory or optional participants in state Medicaid programs? 

Will children who receive services through the block grant be eligible for Medicaid 

if they are not in foster care? Will children currently in IV–E foster care who receive 

Medicaid continue to be automatically eligible for it, even if they no longer receive 

foster care under the block grant? Will states have to develop an eligibility determination process for Medicaid? Will an amendment to the Medicaid law be required? How will this proposal work with the Administration’s proposal to block 

grant certain aspects of the Medicaid program? Recognition of special health and 

mental health needs of these children is well established and it is critically important that they not lose Medicaid. 

7. How will the proposal accommodate emergencies in the child welfare 

system? 

The Administration has made clear that under no circumstances would states be 

able to opt out of the block grant during the five-year period. What would happen 

therefore if a state experienced a sudden and dramatic increase in its foster care 

caseload? Many states saw this in the mid-1980’s as large urban areas experienced 

the crack cocaine epidemic. Other states have seen sudden jumps in caseloads following a tragic death of a child at home. Sometimes a change in the law also can 

result in more children entering care. Sometimes these caseload increases occur despite a state’s best efforts but the state remains responsible for ensuring that children’s needs are met. What would happen if a state experienced increased foster 

care costs, despite a decreased foster care caseload, because the children in care presented more complex challenges or the state better identified their challenges? 

Again, the state would need additional funds to address the needs of children in 

care. The safety valve proposed by the Administration in its new funding option—

the TANF contingency fund—seems problematic in at least two ways. 

First, the complexities of accessing the TANF contingency fund have made it difficult for even TANF agencies to use the funds to date. It also seems problematic 

for child welfare agencies to have to compete with TANF agencies for emergency 

services. It means pitting families who are struggling to work to keep their children 

out of the child welfare system against families who are trying to get help to get 

their children back home. Which services or groups of families would get priority? 

This is an important question given that some of the factors that might trigger a 

foster care caseload increase will also contribute to a greater need for TANF. 

Second, there is also uncertainty about what would count as an emergency. In 

various presentations about its proposals, the Administration has referred to both 

state and national triggers. Yet, it is easy to imagine an individual state, say the 

size of Connecticut, Louisiana, or Wyoming, having a big increase in their caseload 

that would likely have no, or only a minimal, impact on the national caseload. In 

considering financing proposals, attention must be given to how best to expand resources for alternative services while at the same time offering a safety net for the 

vulnerable children for whom foster care may be the last and only option. 

8. What is the danger that investments in child welfare will be reduced 

over time before the needs of children and families are adequately met? 

What impact will the block grant have on other child welfare spending? We have 

concerns, described more specifically below, that the foster care block grant being 

discussed could actually result over time in reduced resources for child welfare in 

the states. 

First, it is not clear that protections will be built in to prevent states from withdrawing some of their other investments in child welfare when they receive their 

block grant. Currently states make significant federal, state, and local investments 

in child welfare. In 2000, based on Urban Institute data, Title IV–E represented 

25% of child welfare expenditures. Of the remainder, 25% were from other federal 

programs, 39% were state, and 11% were local. In examining financing proposals, 

it is essential to ensure that states be required to maintain at least their current 

levels of federal, state, and local child welfare funding. In addition to including 

strong maintenance of effort and non-supplanting provisions, it must be clear how 

the Federal Government will enforce these provisions and what penalties would attach. These were issues that the Subcommittee gave thoughtful attention to during 

73

its look at financing options in the 107th Congress and should be revisited in the 

context of proposals currently on the table. 

Second, the conversion of programs to block grants often results in decreased levels of expenditures over time. The Title XX Social Services Block Grant (SSBG) is 

a good example. In 2000, 22% of the SSBG funds were used for child welfare activities. SSBG was funded at $2.7 billion in 1995 and $1.7 billion in 2002, a decline 

of 38% (a 45% decline in constant 2002 dollars). We have great concern that a foster 

care block grant will result in decreased dollars in the end, when increased investments are actually needed. Yet, there seems to be no assurance that states could 

opt out of the block grant if the dollars available to them were reduced. In fact, it 

is difficult to figure out how a state could opt out of the block grant even at the 

end of five years. A requirement that it redetermine eligibility for its entire caseload 

at that point would certainly be burdensome and costly. 

Third, we have special concerns about the impact of the block grant on spending 

in county-administered states. Under current law, counties are assured each year 

of getting federal reimbursement for foster care for all of their eligible foster children. Under the block grant though, as we expect it to be proposed, dollars will go 

to the states and states will decide on allocations to the counties. Some counties, 

therefore, may be left with significant shortfalls. The Chair of the Legislative Committee of the County Welfare Directors of California and Vice President of the National Association of County Human Services Administrators joined others at the 

June 11 hearing in raising questions about the new financing option. She testified 

that she feared ‘‘the budget neutrality requirements will limit our ability to spend 

more money on prevention activities and staff training over the long-term.’’ ‘‘Without assurances that the funds will grow to support the expanded services, rather 

than diminish over time,’’ she said, ‘‘we cannot endorse the proposal.’’

Fourth, the block grant is likely to make it even harder for child welfare administrators to obtain new state child welfare investments that in the past they could 

have argued would bring them increased federal investments. Given state fiscal 

shortfalls in states, it may even be difficult for them to hang on to the state dollars 

they have had. 

Fifth, it is not clear what the call for cost neutrality means in the context of the 

Title IV–E Foster Care Program overall. For example, what would happen if states 

that remain in the entitlement program and do not opt for the block grant exceed 

their projected expenditures and overall IV–E spending exceeds the budget limits? 

Would HHS be permitted or required to reduce the funds available to states that 

elected the new program option in order to keep the overall program cost budget 

neutral? There is also always the danger with a block grant, or any funding change 

for that matter, that a future Congress could reduce funding. Would a state then 

have the option of withdrawing from the block grant? 

9. In what broader context is the new financing mechanism being proposed? 

The Administration’s foster care block grant is one of four major proposals in its 

FY 2004 Budget to turn major federal programs over to the states without adequate 

assurances that key services and protections will be maintained. The Administration also is proposing to cap portions of Medicaid funding, block grant the Section 

8 Housing Program for low-income families, and dramatically alter the structure of 

Head Start without an assurance that comprehensive services will be maintained. 

These changes all impact some of the same vulnerable families. In fact, the assurance of health care, housing, and quality early childhood services are all preventive 

services that can help keep families out of the child welfare system. Thus we must 

ask what we know about the likely outcomes of these proposals and whether the 

foster care block grant proposal is part of a larger effort to dismantle investments 

in the most vulnerable children and families. 

10. Are there better ways to increase state flexibility and increase preventive, permanency, and post-permanency services for abused and neglected children and those at risk of maltreatment? 

Yes, there are better short-term and long-term approaches than the foster care 

block grant to increase state flexibility and key investments in services and supports 

necessary to enhance safety and permanence for children. These include alternative 

approaches to providing flexibility and increased resources within the IV–E program 

and steps that can be taken right now to increase state’s capacity in these areas, 

all of which are discussed below. 

74

Alternative Proposals for Increasing State Flexibility and Increased Resources to 

Promote Safety and Permanence for Children 

Before describing what we believe can be done immediately, we want to describe 

an alternative financing scheme that we believe is responsive to many of the questions and concerns just raised. The proposal is in the comprehensive Act to Leave 

No Child Behind (H.R. 936/S. 448), which is legislation that lays out a comprehensive policy vision for meeting the challenge of giving all children a healthy start, 

a head start, a fair start, and a safe start in life and successful passage to adulthood 

with the help of caring families and communities. 

Title VIII of the Act to Leave No Child Behind takes important steps towards giving all children a safe start in life and ensuring that they grow up in nurturing, 

permanent families by giving states increased flexibility and expanded investments. 

It also requires additional steps toward enhanced accountability. It makes clear that 

federal, state, and local governments should have shared responsibility for ensuring 

the safety and permanence of all children who have been abused and neglected or 

are at risk of maltreatment. We look forward to discussing these proposals with 

both staff and Members of the Subcommittee as you explore other financing alternatives throughout the 108th Congress. Very briefly, Title VIII of the comprehensive 

Act to Leave No Child Behind:

• Provides prevention, protection, and crisis services for children when 

they first come to the attention of the child welfare system by allowing IV–E 

funds to be used for these services on a limited basis, eliminating fiscal disincentives that deprive some children of important services, and restoring funding for the Social Services Block Grant. 

• Promotes permanency for children in foster care and expands permanency options for children leaving foster care by allowing IV–E funds to 

be used for services to children in foster care and their families, to promote safe 

reunification or other planned permanent living arrangements as provided for 

under the Adoption and Safe Families Act (ASFA), and to offer post-permanency 

services when children are returned home or moved to adoption or other permanent homes. It also offers ongoing Kinship Guardianship Assistance Payments 

under IV–E to relative caregivers who obtain legal guardianship of the children 

for whom they cared for in foster care and for whom return home or adoption 

are not appropriate. It would also help promote adoption and other permanency 

options by extending IV–E adoption assistance payments to children up to age 

19 in certain circumstances, providing that the adoption assistance payments 

for children must be at least equal to the foster care payment for which the 

child would have been eligible, and promoting permanency grants to states to 

help them move their backlog of waiting children to permanent families. 

• Gets rid of long time inequities in the IV–E Programs by eliminating the 

AFDC eligibility requirements for both the Titles IV–E Foster Care and Adoption Assistance Programs; providing for a uniform match across all Title IV–E 

activities; and also allowing Indian Tribes and tribal consortia to be eligible for 

direct funding under the Title IV–E Programs. 

• Increases accountability within the child welfare system by requiring 

states to report regularly to HHS on improvements being made in services and 

staffing and on the children who are not moving to permanent families in a 

timely fashion; requiring coordination with the Child and Family Service Reviews; asking external child welfare review boards to report regularly to Congress on how children are faring; and providing fiscal incentives for public child 

welfare agencies to become accredited. 

Steps That Can Be Take Immediately to Build State Capacity for Safety and Permanence for Children 

At the same time the Subcommittee reviews comprehensive proposals like the 

above, we urge you to take some important steps now that will help to increase the 

capacity of states to continue working to promote safety and permanence. 

The Administration’s own proposal to reauthorize and expand the Adoption Incentive Program and the proposal to extend the Child Welfare Waiver Demonstration Program that was part of the House-passed TANF Reauthorization 

Bill (H.R. 4), are two proposals that would help states make important improvements now. The Adoption Incentive Program includes alterations to recognize the 

special efforts needed to help older children in care move to adoption. In the future, 

CDF would like to see the program expanded further to reward successful state efforts not only to move children to adoption, but also to help children return safely 

to their families or be placed permanently with kin, the other permanency options 

recognized in the ASFA. The continuation of the Child Welfare Waiver DemonstraVerDate jul 14 2003 00:18 Feb 06, 2004 Jkt 091276 PO 00000 Frm 00078 Fmt 6633 Sfmt 6621 E:\HR\OC\91276.XXX 91276
75

tion Program, with the improvements already approved by the House, will allow 

even more states to use their IV–E and IV–B Program funds more flexibly. To date, 

some states have taken steps to use this flexibility to invest in alternative services, 

but generally on a smaller scale in selected counties. Much more can be learned 

from these waiver demonstrations. 

We also urge you to approve the provisions in the Child Protection Services 

Improvement Act, H.R. 1534, introduced by Representatives Ben Cardin and 

George Miller, which will further give states the capacity they need to keep children 

safe and in permanent families. It offers expanded flexibility to all states in selected 

areas, addresses gaps in services, improves the quality of the child welfare workforce and staff from related service systems, and enhances accountability. Let us 

mention briefly some of its specific changes:

• Expands flexibility for states so that they can provide foster care and 

adoption assistance for all the children who need it and allows states 

to provide assistance to children permanently placed with grandparents and other relatives who have been caring for them in foster 

care. These are both areas where states have been asking for increased flexibility. The current Title IV–E eligibility rule that requires that children must 

have been removed from families who were eligible for AFDC according to 

standards in place in July 1996 makes no sense. The TANF Program has replaced the AFDC program and most states have increased their income and resource guidelines since that time. Recognizing in the first instance that it 

makes little sense to condition foster care or adoption eligibility on the income 

of the homes from which abused and neglected children were removed, it certainly makes no sense to require that these families be even poorer than those 

who would be eligible for TANF in the state. In exploring new financing structures, Congress should certainly ensure that the Federal Government would 

contribute to assistance for all children. Immediately, however, steps, as proposed in H.R. 1534 could be taken to help eliminate this inequity in current 

law. H.R. 1534 would eliminate the current requirement that states ‘‘look back’’ 

to July 1996 in determining eligibility and instead allow states to update their 

eligibility standards so that eligibility could be based on their current eligibility 

for the TANF Program. 

H.R. 1534 would also allow states to use Title IV–E funds more flexibly to provide subsidized guardianship payments on behalf of children who were in foster 

care with grandparents and other relatives, for whom return home and adoption 

have been ruled out, and whose relatives want to care for them permanently. 

Thirty-four states currently have some sort of subsidized guardianship program 

that offers help to varying numbers of children. Seven states have been using 

Title IV–E funds for such programs under the Child Welfare Waiver Demonstration Program and others have expressed an interest in doing the same. 

• Addresses gaps in services by guaranteeing investments in prevention 

and increasing substance abuse treatment for families who come to the 

attention of the child welfare system. H.R. 1534 recognizes that between 

40 and 80 percent of the children who come to the attention of the child welfare 

system have families with substance abuse problems. It draws from bipartisan 

legislation in the Senate (S. 614) that would provide funds to states where the 

child welfare and substance abuse prevention and treatment agencies apply together to make improvements on behalf of children and families who come to 

the attention of the child welfare system. States must indicate how they will 

use the flexible funds to expand comprehensive substance abuse treatment to 

the parents and their children, enhance screening and assessment so that families can be directed to the treatment they need, expand after-care services for 

families in recovery to ensure that safety and permanence are maintained, and 

enhance training of staff in both systems and the tracking of cases so progress 

can be documented. It also clarifies that states could use their waiver demonstration programs to expand community partnerships in their states to keep 

children safe. Finally, the bill ensures that the Promoting Safe and Stable Families Program will receive funding at the full authorization level by making all 

$505 million mandatory spending. 

• Supports a quality workforce for abused and neglected children. H.R. 

1534 addresses the turnover rate in child welfare and provides funds for improvements in staff recruitment and retention activities. The General Accounting Office recently reported that the average tenure of a child welfare worker 

is only two years. The bill requires improvements in working conditions, supervision, and training. It also takes steps to expand training under the Title IV–

E Program for staff in private child welfare agencies who work with these famiVerDate jul 14 2003 00:18 Feb 06, 2004 Jkt 091276 PO 00000 Frm 00079 Fmt 6633 Sfmt 6621 E:\HR\OC\91276.XXX 91276
76

lies, court staff, and staff of substance abuse treatment and mental health agencies and domestic violence programs working with children in the child welfare 

system. S. 2437 and H.R. 734 also address the workforce challenges in important ways. • Enhances accountability. H.R. 1534 takes important steps to make states 

more accountable for the care they are providing. Certainly news headlines from 

Florida, New Jersey, Missouri, Delaware, and other states over this past year 

do little to instill confidence in public child welfare systems. The bill helps to 

restore confidence in the system by improving the quality of the workforce, targeting resources in the areas where states see they are needed, and strengthening accountability. It provides grants and bonuses to states that are implementing their program improvement plans developed in response to the Child 

and Family Service Reviews. It also recognizes the importance of having members of the community, and other stakeholders, included in the review process 

and in the implementation of the Program Improvement Plans. It takes important steps toward getting improved data from the states. It is difficult to ensure 

that children will get what they need if they cannot track where they are, the 

type of help they are getting, and their progress over time. This provision complements the recent request from HHS for recommendations for improvements 

in the Adoption and Foster Care Analysis and Reporting System.

CDF looks forward to working with you to explore further child welfare financing 

strategies that will benefit children who have been abused and neglected and are 

at risk of maltreatment. We ask you to examine a range of options, including those 

in Title VIII of the Act to Leave No Child Behind, to combine the best of them to 

benefit children. 

Statement of Ann Harrmann, Coalition for Family and Children’s Services 

Thank you.

fin Iowa, Des Moines, Iowa 

On behalf of the Coalition for Family and Children’s Services in Iowa, I thank you 

for the opportunity to respond to the President’s proposal for flexible funding for foster care. The Coalition is an alliance of 32 agencies in Iowa that provide most of 

the direct treatment services to abused and troubled children. Coalition agencies 

provide services in all counties in Iowa. 

Currently abused and neglected children in Iowa are facing a gridlock when they 

try to get help in the child welfare system. We feel that the federal and state child 

welfare system as currently structured and funded is adding to harm of children 

who have already been hurt. 

Let me offer one recent example, which unfortunately is all too typical. It is a case 

of a young girl who has been sexually and physically abused and is waiting to get 

into group care—in fact, has been waiting to get into group care for 13 months. She 

has been in emergency shelter and because shelter is meant to be short term, she 

has been passed from shelter to shelter, knowing no stability, and being further victimized. This cannot be an American value! 

There are currently 188 similar Iowa children waiting to get therapy in group 

care, and the number is growing every day. In the past 2 years, thousands of children did not receive needed child welfare services because $30 million in state and 

federal funding was cut from the state budget. Iowa lost about $12 million in IV–

E and IV–B alone. Additionally, 258 foster care beds closed, 82+ services/programs 

closed, often in rural areas, and 500+ staff are no longer employed in private agencies. 

The number of state social workers has been cut back dramatically. Iowa social 

workers currently have among the highest caseloads in the nation. 

The amount of red tape and bureaucratic record keeping required of private nonprofit agencies is shocking, keeping many staff documenting every word and action 

rather than working with children in order to turn their lives around. 

We applaud President Bush’s proposal to provide more flexibility in the foster 

care/child welfare system. We believe the goal of the child welfare system should 

be that children get better, not that every word spoken and every action is documented with just the right words and phrases. Flexibility would indeed help states 

to help children. 

The Coalition also supports being able to use federal funds for child welfare services other than foster care. In Iowa, private and public agencies provide a rich array 

of child welfare services including family centered services, family preservation, 

77

family foster care, partial group care, shelter care, counseling, and group care/residential treatment. We believe that all of these services deserve equal federal participation and are of great value to abused and neglected children. 

The Iowa Coalition is concerned about the Administration’s proposal for several 

reasons:

• Flexibility will not take the place of resources. The child welfare system in Iowa 

(and many other states) is severely under funded. Flexibility will not make up 

for the $30–$50 million that has been stripped from the Iowa child welfare system in the past 2–3 years. The Federal Government should allocate sufficient resources to improve the lives of abused and neglected children. 

• We haven’t seen any proposal to change the ‘‘look back’’ issue. The formula 

needs to be changed so that eligibility is not tied to AFDC in 1996. There 

is not an AFDC program any longer and 1996 is 7 years ago. Our nation should 

be about helping all children.This should be tied to an eligibility standard that 

covers all children in need of care regardless of income. 

• If that cannot be accomplished in this fiscal year then tie eligibility to another 

program such as TANF cash assistance or another program that can be adjusted to address the annual impact of inflation. Costs do increase for everyone 

in the child welfare system i.e. insurance, heating, housing and staff salaries. 

• The provision that allows use of TANF in case of a foster care crisis is unworkable. As noted above, Iowa is already in a foster care crisis. We don’t think a 

contingency fund will help, when additional resources are needed now. 

• We believe that child welfare services should remain an entitlement. All abused 

and neglected children should receive the services they need to become healthy, 

productive adults.

Thank you for this opportunity to provide testimony on this critical issue. 

78

fFamily Services of Central Florida 

Leesburg, Florida 34748

June 25, 2003

Sub-Committee on Human Resources 

Committee on Ways and Means 

U.S. House of Representatives 

Rayburn House Office Building 

Room B–317

Washington, DC 20515

Dear Sub-Committee on Human Resources, 

During the recent Ways and Means sub-committee on Human Resources hearing 

for the President’s proposal to block grant foster care, several concerns were raised. 

The Child Welfare League of America has highlighted several of their concerns, but 

I would like to address two that specifically affect Florida’s foster children. 

The first concern is the low penetration rate of a block grant. As you may be 

aware, currently the Title IV–E foster care program provides funding for approximately 47–57% of children in foster care nationwide. This area of concern, as well, 

does not address the diversity of federal funding sources for child welfare. Under 


Insert offset folio 91276a.001
79

the current proposal, 76% of federal spending for child welfare would be frozen 

through 2008. This includes the Title IV–E Adoption Assistance (10%), the Social 

Services Block Grant (17%), TANF (15%), Medicaid (10%), and Title IV–B, Child 

Welfare Services and Promoting Safe and Stable Families (5%). 

Furthermore, adoption assistance eligibility would continue to be linked to foster 

care eligibility. If the Title IV–E Foster Care is removed, determining the future eligibility for adoption assistance would be complex and more difficult than it is presently and may result in reducing the numbers of federally supported adoptions from 

foster care, which in turn, would lead to an increase in the number of children without permanency. 

The second concern is the high growth rate in Florida and the growing number 

of children in foster care in Florida. The Administration’s foster care proposal is cost 

neutral, setting a five-year cap on spending. The proposal does not recognize the 

need for any new resources (e.g. Staff development and training or prevention programs). According the President’s proposal, states choosing the foster care option 

would receive a fixed allocation/block grant based on the current 1996 AFDC eligibility standards. This means the allocation/block grant would be based on a declining number of children becoming eligible over the next five years. Based on these 

standards, states that do not choose the child welfare program option would continue to increasingly have to provide state only support for foster care, since federal 

supports would continue to decrease since fewer and fewer children would be eligible for federal assistance unless Congress acted separately on this issue. 

In addition, to access additional funds if states experience a dramatic increase in 

child welfare caseloads or an increasingly complex caseload with greater needs, the 

Administration’s proposal allows states to access the $2 billion TANF contingency 

fund. The trigger that would allow a state to draw down these TANF funds would 

be based on national and individual state increases in foster care. These criteria 

would not necessarily reflect what is happening in a county or city where the bulk 

of the foster care population might be found. These emergency relief dollars would 

divert funds from TANF. If the same event (a recession for example) caused both 

cash assistance and caseloads to increase, a state may have to choose whether they 

wanted to fund increases in TANF or foster care. 

Along with both of these concerns are the questions about the formula that will 

be used to determine each individual state share of the fixed amount of funding. 

Will all states that take the fixed allocation/block grant option and project they will 

have increased costs over the next five years be eligible to receive increased funds? 

Will the formula be based on historical claim or actual reimbursements? Since the 

overall federal allotment is fixed, would some states get less if other states negotiated an increase since certain formulas that benefit one state could result in less 

funding for another state? 

I hope that you will take these issues into consideration as you deliberate on 

President Bush’s Proposal. 

Sincerely, 

Marlin Livingston 

f Senior Vice President

Statement of Sue Diehl and Judith M. Schagrin, Maryland Chapter, 

National Association of Social Workers, Baltimore, Maryland 

We appreciate the opportunity to offer comments with regards to the Administration’s Foster Care Flexible Funding Proposal. Like so many others interested in 

child welfare, we value debate about alternative funding strategies. 

There is no disagreement that the IV–E funding strategy is broken and needs to 

be fixed. The administrative costs for establishing eligibility are unacceptable, the 

‘‘look back’’ to AFDC eligibility in June, 1996 is dated, and the rigidity of funding 

discourages innovation. Furthermore, all children in the government’s custody need 

the nation’s financial commitment, not just those from impoverished homes. We welcome the interest the Bush Administration has in these issues, and support much 

needed and long overdue reforms in the nation’s child welfare systems. Gambling 

with child welfare financing, however, is hardly compatible with real reform. We 

would offer the following concerns:

• There is increasing recognition that a professionally educated, trained, and supervised child welfare workforce is an integral part to achieving the important 

goals of safety, permanence, and child well-being. The Administration’s funding 

80

strategy does not address the child welfare workforce despite a recent GAO report concluding that HHS should be playing a greater role in the recruitment 

and retention of staff. 

• Other studies have demonstrated that child welfare professionals with social 

worker degrees have higher job performance and lower turnover rates than 

other workers. One of the most outstanding initiatives to improve the child welfare workforce—IV–E child welfare training partnerships between universities 

and public agencies—will be undermined by the proposed funding strategy. 

• The Federal Child and Family Services Reviews are finding a correlation between frequent caseworker visits with children and positive findings in other 

areas such as achievement of timely permanence for children in foster care, and 

indicators of child well-being. Because caseload size drives caseworker contact, 

genuine reform requires sufficient fiscal resources to insure that nationally recognized caseload standards are met. 

• The funding plan touts flexibility as a selling point, painting an optimistic picture of the preventive services that may (or may not) significantly lower the 

number of children in foster care. Recent studies completed by Chapin Hall and 

Westat, Inc. questioned the effectiveness of preventive services and no data is 

available as to the timeframe necessary to develop and implement preventive 

services. States risk running out of money long before this five year experiment 

has come to an end. 

• Since the success of prevention strategies remains largely unknown, States receiving up-front funding at the outset of the program cycle with the belief that 

investment in preventive services will result in cost-savings later on are taking 

an enormous risk. The likely impact is that the fiscal burden will ultimately 

shift to States already in deep financial distress. 

• Under certain circumstances, the proposed fiscal plan would allow States to access additional funds from the TANF Contingency Fund. This pits the needs of 

the nation’s poor children against the needs of the nation’s abused, neglected 

and foster children as this fund, too, is capped. 

• With reference to the much promoted flexibility, in a recent publication on child 

welfare financing, Rob Geen of the Urban Institute pointed out that nationally, 

56% of child welfare funding is already flexible (SSBG, TANF, IV–B, and state 

funds not used for matching federal allocations.) Mr. Geen found no direct correlation between availability of flexible funding and front-end services, nor was 

he able to identify data to support the contention that the result of the Administration’s strategy will be effective preventive services. 

• In states like Maryland, where 66% of child welfare funding is already flexible, 

opting into the Administration’s plan would likely be imprudent. However, the 

Administration’s plan forces States that opt out to maintain a federal funding 

strategy that everyone has agreed is wholly inadequate and needs reform. 

• Once states opt in for the five year period and receive their fixed allocation, real 

accountability for federal requirements becomes ephemeral.

In summary, the flexible foster care financing strategy is a wonderfully optimistic 

but poorly informed proposal. Significantly, the Administration’s strategy is not evidence based; assumptions are made about preventive services that have not been 

borne out by research and experience. If preventive services are not effective or the 

timeframe for success extends beyond five years, States already experiencing serious 

financial hardships will be forced to take on even more responsibility for funding 

critical services for children. Optimally a foster care financing strategy that embraces a genuine commitment by the Federal Government to our children’s safety, 

permanence, and well-being would include:

• support for a quality workforce; 

• expansion of university and child welfare agency partnerships; 

• incentives to promote innovation; 

• lower administrative costs; 

• enhanced accountability; 

• support for functional data systems; 

• an entitlement to funding.

While reforming the federal financing of child welfare services must be a priority, 

basing a proposal on what amounts to wishful thinking represents an abdication of 

responsibility for our nation’s most vulnerable children. Surely we can do better 

than this.

f

81

Statement of Antonia Herna ́ndez, Mexican American Legal Defense and 

Educational Fund 

On behalf of MALDEF, a national Latino civil rights organization, we urge you 

to remedy the problem of disparate foster care funding for Puerto Rico. We have 

written to this Congress before about the need to prevent discrimination in the provision of temporary assistance to needy families (TANF). Today, we urge the House 

Ways & Means Committee to amend H.R. 4 and solve the problem of disparate 

treatment of Puerto Rican children. It is unconscionable that the abused and neglected children of the island receive much less federal funding than other American 

children. Foster Care and Adoption Assistance (Title IV–E) should be removed from 

the welfare cap for Puerto Rico, to assure that children needing foster care are not 

left behind due to a discrepancy in how they are treated by federal policy. 

Puerto Rico has been doing an excellent job to try to ensure the safety of its most 

vulnerable boys and girls, but current federal law blocks these efforts by capping 

its IV–E program. For example, Puerto Rico has shrunk backlogs by 88 per cent, 

and consolidated services for children at high risk in a shelter that combines police, 

medical and social services. But unlike the U.S. States and the District of Columbia, 

Puerto Rico’s IV–E program is capped, so once the ceiling is reached, it is up to the 

Commonwealth alone to provide resources for these children. States with populations similar to Puerto Rico are reimbursed $40 to $50 million a year for foster 

care and adoption assistance expenditures; however, Puerto Rico only receives about 

$12 million a year. Puerto Rico therefore receives only one quarter of one percent 

of all IV–E funding, although Puerto Rico has seven times that proportion of the 

nation’s foster kids. 

Furthermore, the Commonwealth is currently ineligible to receive its earned adoption bonus. The Commonwealth has been doing outstanding work to place neglected 

children in safe and loving homes, which also reduces governmental expenditures. 

Yet, although Puerto Rico earned a federal adoption incentive bonus, this put the 

IV–E program over the cap for Puerto Rico. In 2002, funding was actually reduced 

due to excellent performance. This contradicts the very reasons for the adoption incentives, and it is unfair to Puerto Rican children. 

If Puerto Rico is treated differently than U.S. states because of various justifications, this is certainly not the fault of the children and the poor. MALDEF urges 

you to amend H.R. 4 in order to remove the IV–E cap for Puerto Rico, and treat 

its most vulnerable children in the same way as other American children are treated. Any other discrepancies in TANF funding for Puerto Rico should also be resolved 

as you process TANF reauthorization this year.

Statement of Elizabeth J. Clark, Ph.D., National Association of Social 

fWorkers 

Organizational Description 

The National Association of Social Workers (NASW) is the largest membership organization of professional social workers in the world, with nearly 150,000 members. 

NASW works to enhance the professional growth and development of its members, 

to create and maintain standards for the profession, and to advance sound social 

policies. NASW also contributes to the well-being of individuals, families and communities through its work and advocacy. 

Ninety-one percent of NASW members hold master’s degrees in social work, and 

92 percent maintain some type of license, certification, or registration in their state; 

70,000 also hold advanced credentials from NASW. 

Nearly 40 percent of NASW members say that mental health is their primary 

practice area; eight percent practice in child welfare or family organizations; eight 

percent practice in the health sector; six percent practice in schools; and another 

three percent work primarily with adolescents. 

Overview 

The social work profession has a long tradition of involvement with the child welfare system, and welcomes the opportunity to participate in the current debate 

about how to restructure system financing to improve outcomes for children and 

families. 

Among NASW’s major concerns with the outlines of the President’s flexible 

funding proposal is the possible loss of federal support for educating and 

training the child welfare workforce. Without the current Title IV–E financing structure, which provides three federal dollars for every state/

82

[i]Olsen, L. & W. Holmes, ‘‘Educating Child Welfare Workers: The Effects of Professional 

Training on Service Delivery,’’ Journal of Education for Social Work, 18(1), 1982. [ii] Booz-Allen & Hamilton Inc., ‘‘The Maryland Social Services Job Analysis and Personnel 

Qualifications Study,’’ Executive Summary, Baltimore: Maryland Department of Human Resources, 1987. [iii]Dhooper, S.S., Rose, D.D., and L.C. Wolfe, ‘‘Does Social Work Education Make a Difference?,’’ Social Work, 35(1), 1990. [iv] Hess, P., Folaron, G. and A. Jefferson, ‘‘Effectiveness of Family Reunification Services: An 

Innovative Evaluative Model,’’ Social Work, 37(4), 1992. [v] Albers, E., Reilly, T., & B. Rittner, ‘‘Children in Foster Care: Possible Factors Affecting Permanency Planning,’’ Child and Adolescent Social Work Journal, 10(4), 1993. [vi] U.S. General Accounting Office, ‘‘HHS Could Play a Greater Role in Helping Child Welfare 

Agencies Recruit and Retain Staff’’ (GAO–03–357), March 2003. [vii] Ibid. 

local dollar, training is not likely to remain a priority—especially when 

states are facing record budget deficits. Without a well-trained, competent, 

and stable workforce, it is nearly impossible to deliver uniformly high quality services. 

A number of studies have documented the critical connections between training, 

competency, and quality services.

• In 1982, a study based on an analysis of the data from the ‘‘1977 National 

Study of Social Services To Children and Their Families’’ found that workers 

with social work education were more effective in service delivery than workers 

with bachelor of arts (BA) degrees or other graduate degrees.[i]

• In 1987, Booz-Allen & Hamilton Inc. found that the ‘‘overall performance of 

MSWs [master’s in social work] was significantly higher than non-MSWs,’’ and 

that ‘‘education, specifically holding an MSW, appears to be the best predictor 

of overall performance in social service work.’’ [ii]

• In 1990, a study of social service workers in Kentucky found that staff with social work degrees, either BSWs or MSWs, were better prepared than those without social work degrees.[iii]

• In 1992, a study on the ‘‘Effectiveness of Family Reunification Services’’ found 

that, in nearly 40 percent of the cases reviewed, insufficient or inadequate caseworker training or experience was a contributing factor in preventing family reunification.[iv]

• Those findings were confirmed in a 1993 study that found child welfare staff 

with BSW and MSW degrees were more effective in developing successful permanency plans for children who were in foster care for more than two years.[v]

The connection of workforce quality to family outcomes was further documented 

in a March 2003 report by the U.S. General Accounting Office (GAO). The report, 

‘‘HHS Could Play a Greater Role in Helping Child Welfare Agencies Recruit and Retain Staff,’’ states, ‘‘A stable and highly skilled child welfare workforce is necessary 

to effectively provide child welfare services that meet federal goals. [However] large 

caseloads and worker turnover delay the timeliness of investigations and limit the 

frequency of worker visits with children, hampering agencies’ attainment of some 

key federal safety and permanency outcomes.’’ [vi]

The Administration for Children and Families (ACF) concurred with the GAO’s 

findings, saying, ‘‘ACF’s initial analysis of the CFSR [Child and Family Services Reviews] data involving the first 32 States reviewed makes it abundantly clear that 

sufficient staff to make regular, substantive contacts with the children and families 

in their caseloads is essential. A direct relationship was found between the consistency and quality of caseworker visits with the child and family and the achievement 

of case outcomes evaluated in the CFSR.’’ [vii]

Child Welfare Workforce 

As it should, the public has high expectations for the child welfare system. Everyday, these agencies make life and death decisions for children and families with 

complex needs, while striving to meet extensive legal mandates. Much of the burden 

of these decisions falls to front-line workers and their supervisors. 

Child welfare positions are particularly demanding and stressful, often involving 

unreasonable workloads and low pay, in comparison to jobs in other sectors that require comparable amounts of education and responsibility. Consequently, it is difficult to attract the most qualified employees, those with professional training and 

experience, and turnover and vacancy rates among child welfare agencies are often 

alarmingly high. 

Standards and policies for child welfare practice that are promulgated by the 

Child Welfare League of America, the American Humane Association, and NASW 

83

[viii] National Association of Social Workers, ‘‘Addressing the Program and Personnel Crisis in 

Child Welfare: A Social Work Response,’’ NASW Commission on Family and Primary Associations, 1989. [ix]Leighninger, L. & A.J. Ellett, ‘‘De-professionalism in Child Welfare: Historical Analysis and 

Implications for Social Work Education,’’ paper presented at the Council on Social Work Education Annual Program Meeting, Orlando, Florida, March 1998, cited in C. Risley-Curtiss, ‘‘Current Challenges and Future Directions for Collaborative Child Welfare Educational Programs,’’ 

Journal of Human Behavior in the Social Environment, 7(1/2), 2003. [x]Lieberman, A.A., Hornby, H., & M. Russell, ‘‘Analyzing the Educational Backgrounds and 

Work Experiences of Child Welfare Personnel: A National Study,’’ Social Work, 33(6), 1988. [xi] Child Welfare League of America, ‘‘Minimum Education Required by State Child Welfare 

Agencies, Percent, By Degree Type, 1998,’’ State Child Welfare Agency Survey, 1999. [xii]Zlotnik, J.L., ‘‘Preparing Social Workers for Child Welfare Practice: Lessons from an Historical Review of the Literature,’’ Journal of Health & Social Policy, 15(3/4), 2002. [xiii] U.S. General Accounting Office, ‘‘Child Welfare: Complex Needs Strain Capacity to Provide 

Services’’ (GAO/HEHS–95–208), based on survey by American Public Welfare Association 

(APWA), September 1995. [xiv] U.S. General Accounting Office, ‘‘HHS Could Play a Greater Role in Helping Child Welfare 

Agencies Recruit and Retain Staff’’ (GAO–03–357), March 2003. [xv] Ibid. [xvi] Alliance for Children and Families, American Public Human Services Association, Child 

Welfare League of America, ‘‘The Child Welfare Workforce Challenge: Results from a Preliminary Study,’’ presented at Finding Better Ways 2001, Dallas, Texas, May 2001. [xvii] U.S. General Accounting Office, ‘‘HHS Could Play a Greater Role in Helping Child Welfare Agencies Recruit and Retain Staff’’ (GAO–03–357), March 2003. [xviii] Risley-Curtiss, C., ‘‘Current Challenges and Future Directions for Collaborative Child 

Welfare Educational Programs,’’ Journal of Human Behavior in the Social Environment, 7(1/2), 

2003. 

recommend that child welfare administrators and supervisors have a master’s degree in social work (MSW) and previous child welfare experience, and that direct 

service workers have at least a bachelor in social work (BSW) degree.[viii] However, 

these standards contrast sharply with reality. 

In the 1950s, close to 50 percent of child welfare staff were professional social 

workers.[ix] By the 1980s, only 28 percent of child welfare staff had either a BSW 

(15 percent) or an MSW (13 percent) degree.[x] A survey of the child welfare workforce conducted in 1998 found that fewer than 15 percent of child welfare agencies 

require caseworkers to hold either bachelors or masters degrees in social work.[xi]

In the late 1980s, the failed commitment to employing well-trained child welfare 

staff was coupled with rising foster care caseloads, rising rates of child abuse and 

neglect reports, increasing numbers of class action suits, and increased media attention resulting from a number of child deaths.[xii]

By the mid-1990s, 90 percent of states reported difficulty in recruiting and retaining caseworkers.[xiii] The major challenges child welfare agencies face in recruiting 

and retaining front-line workers and supervisors include: low salaries, high caseloads/workloads, administrative burdens, risk of violence, limited and inadequate 

supervision, and insufficient training.[xiv]

Worker Turnover

The GAO found that turnover rates of child welfare staff—which affect both recruitment and retention efforts—has been estimated at between 30 percent and 40 

percent annually nationwide, with workers’ average tenure being less than two 

years.[xv]

Turnover rates vary greatly among agencies. In a child welfare workforce survey 

conducted in 2000, 36 agencies reported annual turnover rates between zero and 20 

percent, while 23 agencies reported rates between 50 percent and 600 percent.[xvi]

One Texas state official reported that because of high turnover, caseworkers with 

only three years of experience are commonly promoted to supervisory positions, 

which has caused additional problems. Some newly promoted supervisors have requested demotions because they feel unprepared for the requirements of their jobs, 

and the caseworkers they supervise have complained of poor management and insufficient support.[xvii]

In Arizona, a wide gap developed between the demand for child welfare services 

and the availability of qualified staff to meet this demand. Because of personnel 

shortages, the Department of Economic Security (DES) was, in some recent years, 

unable to respond to as many as 25 percent of child abuse and neglect reports 

deemed appropriate for investigation statewide.[xviii]

84

[xix] Alliance for Children and Families, American Public Human Services Association, Child 

Welfare League of America, ‘‘The Child Welfare Workforce Challenge: Results from a Preliminary Study,’’ presented at Finding Better Ways 2001, Dallas, Texas, May 2001. [xx] Russell, M., ‘‘1987 National Study of Public Child Welfare Job Requirements,’’ Portland, 

ME: University of Southern Maine, National Resource Center for Management and Administration, 1987. [xxi] Child Welfare League of America, ‘‘Florida Recruitment and Retention Study,’’ 1990. [xxii] Anderson, D.G., ‘‘Coping Strategies and Burnout Among Veteran Child Protection Workers,’’ Doctoral dissertation, University of South Carolina, 1994. [xxiii] Harrison, S.G., ‘‘Exploration of Factors Related to Intent to Leave Among Child Welfare 

Caseworkers,’’ Doctoral dissertation, Ohio State University, 1995. [xxiv] Cicero-Reese, B. & P. Black, ‘‘Research Suggests Why Child Welfare Workers Stay on the 

Job,’’ Partnerships for Child Welfare, 5(5), February 1998. [xxv] U.S. General Accounting Office, ‘‘HHS Could Play a Greater Role in Helping Child Welfare Agencies Recruit and Retain Staff’’ (GAO–03–357), March 2003. [xxvi] Ibid. [xxvii] Alliance for Children and Families, American Public Human Services Association, Child 

Welfare League of America, ‘‘The Child Welfare Workforce Challenge: Results from a Preliminary Study,’’ presented at Finding Better Ways 2001, Dallas, Texas, May 2001. 

Inadequate Training

The good news-bad news about turnover is that, according to a 2000 workforce 

survey, states estimated that nearly 60 percent of turnover is preventable.[xix] One 

way to prevent turnover, which has been documented by a number of studies, is by 

hiring better-trained staff. 

• A study based on the 1987 National Study of Public Child Welfare Job Requirements found that turnover is consistently higher in states that do not require 

any kind of degree for child welfare positions, and is consistently lower in states 

that require an MSW.[xx]

• A 1990 study in Florida found that workers without educational preparation for 

child welfare work were most likely to leave within one year of being hired.[xxi]

• A 1994 study in South Carolina found that social work education (particularly 

graduate social work education) reduces workers’ burnout, a major cause of staff 

turnover.[xxii]

• A 1995 study in Ohio found that, among nine variables predictive of worker retention, three of the most important were: training; having had an internship 

in public child welfare as part of preparation; and agency support (including 

strong supervision).[xxiii]

• A 1998 study examining the reasons child welfare workers remain in their positions longer than two years found that—in addition to concern for, and satisfaction in, helping children—the two most decisive factors in employee retention 

were social work education and the climate of the work environment, including 

supportiveness of supervisors and peers. More than 80 percent of those who 

stayed beyond two years had completed at least one social work degree.[xxiv]

Low Salaries

Another major obstacle to recruitment and retention is the fact that child welfare 

agencies often are forced to compete for workers with institutions that pay higher 

wages and offer safer and more predictable work environments. 

The Bureau of Labor Statistics’ national wages survey reports that elementary 

and middle school teachers earn, on average, about $42,000 annually, while ‘‘social 

workers’’ earn about $33,000. One county official in Texas reported that teachers 

now earn starting salaries of about $37,000, while entry-level caseworkers earn 

about $28,000 annually, a difference of about 32 percent.[xxv]

One private agency in California reported that foster care workers with MSWs 

who worked in group residential care facilities, which provided structured living arrangements and treatment services for children with complex needs, earned $5,000 

to $30,000 less than school counselors, nurses, and medical- and public-health social 

workers.[xxvi]

According to the 2000 workforce survey, the average annual salaries for public 

child protective services workers is $33,000 and, for private agency staff, $27,000. 

For child welfare supervisors in public agencies, the average annual salary is 

$42,000 and, in private agencies, $40,000.[xxvii]

85

[xxviii] U.S. General Accounting Office, ‘‘HHS Could Play a Greater Role in Helping Child Welfare Agencies Recruit and Retain Staff’’ (GAO–03–357), March 2003. [xxix] Alliance for Children and Families, American Public Human Services Association, Child 

Welfare League of America, ‘‘The Child Welfare Workforce Challenge: Results from a Preliminary Study,’’ presented at Finding Better Ways 2001, Dallas, Texas, May 2001. [xxx] U.S. Department of Health and Human Services, 1999, cited in C. Risley-Curtiss, ‘‘Current Challenges and Future Directions for Collaborative Child Welfare Educational Programs,’’ 

Journal of Human Behavior in the Social Environment, 7(1/2), 2003. [xxxi] U.S. General Accounting Office, ‘‘HHS Could Play a Greater Role in Helping Child Welfare Agencies Recruit and Retain Staff’’ (GAO–03–357), March 2003. [xxxii] American Federation of State, County, and Municipal Employees, ‘‘Double Jeopardy: 

Caseworkers at Risk Helping At-Risk Children: A Report on the Working Conditions Facing 

Child Welfare Workers,’’ 1998. [xxxiii] U.S. General Accounting Office, ‘‘HHS Could Play a Greater Role in Helping Child Welfare Agencies Recruit and Retain Staff’’ (GAO–03–357), March 2003. [xxxiv]Leighninger, L. & A.J. Ellett, ‘‘De-professionalism in Child Welfare: Historical Analysis 

and Implications for Social Work Education,’’ paper presented at the Council on Social Work 

Education Annual Program Meeting, Orlando, Florida, March 1998, cited in C. Risley-Curtiss, 

‘‘Current Challenges and Future Directions for Collaborative Child Welfare Educational Programs,’’ Journal of Human Behavior in the Social Environment, 7(1/2), 2003. 

High Caseloads/Workloads

In California, Illinois, Kentucky, and Texas, agencies reported that their inability 

to retain staff has contributed to their existing unmanageable caseloads.[xxviii] Those 

four states are not alone. 

The Child Welfare League of America (CWLA) recommends a caseload ratio of 12 

to 15 children per caseworker, and the Council on Accreditation (COA) recommends 

that caseloads not exceed 18 children per caseworker. However, a national survey 

found that caseloads for individual child welfare workers ranged from 10 to 110 children, with workers handling an average of about 24 to 31 children each—double the 

recommended number.[xxix]

Contributing to the workload problem is the increasing complexity of cases. Drug 

and alcohol abuse most often co-occurs with a finding of abuse or neglect, but it is 

rarely the only serious issue. Poverty, substandard housing, mental illness, domestic 

violence, and HIV/AIDS are also often present.[xxx]

One former private agency worker in Delaware reported that, although caseloads 

were manageable, the complexity of each case was a problem. And one former county worker in California said that cases are becoming increasingly difficult, and caseworkers are no longer able to do ‘‘social work.’’ This caseworker also said that the 

amount of work and stress is endless, and limits the amount of time she has to perform her job well.[xxxi]

Risk of Violence

Another difficulty facing today’s child welfare workers is the constant risk of violence. According to a 1998 national study of front-line caseworkers, more than 70 

percent had been victims of violence or threats of violence in the line of duty. In 

a peer exit interview process conducted in one state, 90 percent of its child protective services employees reported that they had experienced verbal threats; 30 percent experienced physical attacks; and 13 percent were threatened with weapons.[xxxii]

According to public agency caseworkers in Texas, their salaries do not reflect the 

risks to personal safety they face as part of their work. These caseworkers reported 

that, given the safety risks they are exposed to daily, they should be given hazardous duty pay, similar to workers in other high-risk professions.[xxxiii]

Federal Support for the Child Welfare Workforce 

Federal support for child welfare workforce began with enactment of the Social 

Security Act (SSA) in 1935. The U.S. Children’s Bureau awarded SSA grants to 

states to strengthen child welfare services and promoted professionalism of child 

welfare employees by encouraging educational leave for workers to study in schools 

of social work. As of 1939, at least 35 states and Hawaii had granted educational 

leave to people to attend graduate schools of social work.[xxxiv]

Today, the Federal Government’s primary support for training continues to be 

through its funding of two Social Security Act programs—Title IV–B, Section 426 

and Title IV–E both still administered by the Children’s Bureau. 

Title IV–B, Section 426 Child Welfare Training Program

The Title IV–B, Section 426 Child Welfare Training Program was formalized in 

the SSA Amendments of 1962, as a response to a perceived workforce shortage for 

86

[xxxv]Zlotnik, J.L., ‘‘Preparing Social Workers for Child Welfare Practice: Lessons from an Historical Review of the Literature,’’ Journal of Health & Social Policy, 15(3/4), 2002. [xxxvi] U.S. Department of Health and Human Services, Administration for Children and Families, ‘‘Program Announcement No. ACYF/CB–2003–01,’’ Federal Register, 68(111), June 10, 

2003. [xxxvii] U.S. General Accounting Office, ‘‘HHS Could Play a Greater Role in Helping Child Welfare Agencies Recruit and Retain Staff’’ (GAO–03–357), March 2003. [xxxviii]Zlotnik, J.L., ‘‘The Use of Title IV–E Training Funds for Social Work Education: An Historical Perspective,’’ Journal of Human Behavior in the Social Environment, 7(1/2), 2003. [xxxix] Ibid. [xl] U.S. General Accounting Office, ‘‘Foster Care: Federal Policy on Title IV–E Share of Training Costs’’ (GAO/HRD–94–7), November 1993. [xli] U.S. General Accounting Office, ‘‘HHS Could Play a Greater Role in Helping Child Welfare 

Agencies Recruit and Retain Staff’’ (GAO–03–357), March 2003. 

graduate level social workers who are prepared for—and interested in— working in 

public child welfare.[xxxv]

Under the IV–B program, grants are awarded to public and private nonprofit institutions of higher learning, usually social work education programs, to develop and 

improve the education, training, and resources available for providers of child welfare services. These grants are used to upgrade the skills and qualifications of child 

welfare workers through their participation, full-time or part-time, in training programs focused specifically on child welfare practice. 

Guidelines for the program vary from year to year, depending on the Children’s 

Bureau’s analysis of need. Priorities for fiscal year 2003 grants, which were announced earlier this month, include practice in rural communities, training for 

American Indian and/or Alaskan Native public child welfare staff, effective models 

for staff recruitment and retention, and training for healthy marriage and family 

formation.[xxxvi]

The Section 426 program is the only one of six child welfare discretionary grant 

programs managed by the Children’s Bureau with a specific emphasis on staff training. In fiscal year 2002, even after funding increases in the late 1990s, the training 

program received the second smallest share—nine percent—of the Children’s Bureau’s total discretionary funds.[xxxvii]

Program funding reached a high of $8 million in 1978, was cut by more than 50 

percent (to $3.8 million) in 1982, and stayed at that level for many years. Funding 

was not increased until 1995 when it jumped to $4.6 million and then was cut again 

in 1996 to $2 million. Strong advocacy resulted in an increase to $4 million in 1997; 

$6 million in 1998; and eventually to $7 million, where it stands today. 

According to a leading expert on the program, ‘‘The 426 program has served as 

an important catalyst for innovations in child welfare training and to stimulate the 

preparation of social work students for child welfare careers. However, the competitive nature of the grant program, the narrow categories for which applicants are 

sought each fiscal year, and the limitations of a $7 million annual appropriation restrict its beneficiaries to a small cadre of states and social work education programs.’’ [xxxviii]

Title IV–E Child Welfare Training Program

The Title IV–E child welfare training program represents a much greater federal 

investment in the child welfare workforce than Title IV–B. Created as part of the 

Child Welfare and Adoption Assistance Act of 1980, Title IV–E is a valuable tool 

to address the child welfare-staffing crisis and ensure that staff have the competencies necessary to perform their jobs. 

Under the program, the Federal Government demonstrates its support for training by providing an enhanced federal match of 75 percent (other administrative 

costs are matched at 50 percent) to fund training programs both for current and 

prospective child welfare staff. In addition to short-term and long-term training and 

direct financial assistance to students, this funding also may be used for curriculum 

development, materials and books, and incentives for recruitment. 

Although the program was created in 1980, it was not until the early 1990s that 

Children’s Bureau staff became aware of the real opportunities provided by Title 

IV–E training funds.[xxxix] In fiscal year 1990, Title IV–E provided about $44 million 

to states to train child welfare workers.[xl] By fiscal year 2001, 49 states received 

$276 million in Title IV–E training reimbursements. These reimbursements ranged 

from a low of approximately $1,400 in Wyoming to a high of more than $59 million 

in California, with the median reimbursement approximating $3.1 million.[xli]

87

[xlii] Ibid. [xliii]Zlotnik, J.L. & L. Cornelius, ‘‘Preparing Social Work Students for Child Welfare Careers: 

The Use of Title IV–E Training Funds in Social Work Education,’’ Journal of Baccalaureate Social Work Education, 51, 2000. [xliv]Zlotnik, J.L., ‘‘The Use of Title IV–E Training Funds for Social Work Education: An Historical Perspective,’’ Journal of Human Behavior in the Social Environment, 7(1/2), 2003. [xlv] U.S. General Accounting Office, ‘‘HHS Could Play a Greater Role in Helping Child Welfare 

Agencies Recruit and Retain Staff’’ (GAO–03–357), March 2003. [xlvi] Robin, S.C. and C.D. Hollister, ‘‘Career Paths and Contributions of Four Cohorts of IV–

E Funded MSW Child Welfare Graduates,’’ Journal of Health and Social Policy, 15(3/4), 2002. [xlvii] Barbee, A.P., ‘‘Creating a Chain of Evidence for the Effectiveness of Kentucky’s Training 

System,’’ For the Child and Family Services Review, March 2003; and N. S. Dickinson and R. 

Perry, ‘‘Do MSW Graduates Stay in Public Child Welfare? Factors Influencing the Burnout and 

Retention Rates of Specially Educated Child Welfare Workers,’’ The California Social Work Education Center, University of California at Berkeley, August 1998. [xlviii]Scannapieco, M. and K. Connell-Carrick, ‘‘Do Collaborations with Schools of Social Work 

Make a Difference for the Field of Child Welfare? Practice, Retention, and Curriculum,’’ Journal 

of Human Behavior in the Social Environment, 2003. 

University-Agency Training Partnerships under Title IV–E

According to the GAO report, the university-agency training partnerships, funded 

by Title IV–E, present promising practices for addressing the staffing crisis in child 

welfare. It is a finding with which HHS concurred: ‘‘[A]lthough few in number, the 

ACF funded university and State child welfare agency partnerships referenced in 

this report have had a positive impact on State child welfare agencies’ ability to recruit and retain child welfare staff.’’ [xlii]

These partnership programs are designed to prepare social work students for careers in the child welfare profession, and to develop the skills of current workers. 

The programs require that students receiving stipends for the study of child welfare 

commit to employment with the state or county public child welfare agency for a 

specified period of time. The length of the contractual employment obligation—usually one to two years—and the curriculum content each program offers, differ by 

state and sometimes by university. 

A survey conducted in 1996 found that 68 university social work programs in 29 

states were accessing IV–E funds for BSW and MSW education.[xliii] Today, it is esti- mated that partnerships exist in over 40 states, and use more than $50 million, to 

prepare workers for the challenges of child welfare service delivery.[xliv]

While relatively few in number, available studies on the impact of Title IV–E 

training partnerships suggest that they improve both worker retention and worker 

competence.[xlv]

Improved Worker Retention 

One study, which tracked four groups of students who participated in a training 

partnership, found that 93 percent continued to be employed in the child welfare 

profession—and 52 percent remained with public agencies—well beyond he minimum required by their employment obligation.[xlvi]

Findings were similar in evaluations of programs in Kentucky and California. 

Evaluations in both states found that more than 80 percent of participants remained with the state agencies after their initial work obligations concluded. In 

Kentucky, whose collaboration includes nine of the state’s undergraduate social 

work schools and the Cabinet for Families and Children, state officials attribute 

their retention rates, in part, to the intensive coursework, formal internships, and 

rigorous training included in the curriculum of the training partnerships. California’s collaboration consists of the state’s 15 graduate schools of social work, the Department of Social Services, county welfare directors, and the California Chapter of 

NASW.[xlvii]

In Texas—where six universities offer both BSW and MSW stipends, five offer 

BSW stipends only, and one offers only MSW stipends—graduates of one participating program were surveyed. The survey found that 70 percent of respondents 

were still employed with the agency after their contractual employment obligation 

expired.[xlviii]

Improved Worker Competence 

The program evaluations in Kentucky and California suggest that the training 

partnerships improved worker competence. In both states, evaluations found that 

staff hired through specially designed Title IV–E programs performed better on the 

job and applied their training more deftly than employees hired through other 

means. 

Controlling for undergraduate grade point averages, the Kentucky study found 

that those who completed the training scored better on the agency’s test of core comVerDate jul 14 2003 00:18 Feb 06, 2004 Jkt 091276 PO 00000 Frm 00091 Fmt 6633 Sfmt 6621 E:\HR\OC\91276.XXX 91276
88

[xlix]Fox, S., Miller, V. & A.P. Barbee, ‘‘Finding and Keeping Child Welfare Workers: Effective 

Use of Training and Professional Development,’’ Journal of Human Behavior in the Social Environment, 7(1/2), 2003. [l] Jones, L.P. and A. Okamura, ‘‘Reprofessionalizing Child Welfare Services: An Evaluation of 

Title IV–E Training,’’ Research on Social Work Practice, September 2000. [li] Ellett, B. and K. Gansle, ‘‘Louisiana Title IV–E Program Begins Evaluation Process,’’ Partnerships for Child Welfare, 5(5), February 1998. [lii] U.S. General Accounting Office, ‘‘HHS Could Play a Greater Role in Helping Child Welfare 

Agencies Recruit and Retain Staff’’ (GAO–03–357), March 2003.

petencies. Kentucky supervisors reported that they considered students certified by 

the partnership to be better prepared for their jobs than other new employees.[xlix]

The California study reported that students who participated in the partnership 

training scored higher on a test of child welfare knowledge, reported greater competency in their work, and had a more realistic view of child welfare work than 

those who had not participated.[l]

In Louisiana, research found that Title IV–E participants score higher on child 

welfare competency exams than control groups, have higher rates of retention with 

the agency, and score higher on supervisor evaluations of their work preparation.[li]

Recommendations

Over the years, NASW has advocated for a number of improvements to increase 

the effectiveness of the Title IV–E program. The association continues to support 

those changes, but believes they should be made within the current financing structure. Our recommendations for improvements include: 

1. Eliminating requirements for cost allocation based on the percentage of 

the Title IV–E eligible caseload: All children in the system benefit by better 

qualified staff, not only children from families meeting the 1996 AFDC income 

test. 

2. Expanding eligibility for training content: Eligible training should include 

all areas related to meeting the federal goals of safety, permanence, and wellbeing, and should not be limited to training related to out-of-home placement. 

3. Expanding access for reimbursement to private universities: In many jurisdictions, social work education programs at private universities are the most 

geographically accessible for child welfare workers. However, direct financial 

participation by private universities is prohibited, which limits access to quality 

training programs for many child welfare staff. 

4. Expanding the 75 percent reimbursement rate to include all real costs 

of traiing, both direct and indirect, incuding the costs of administering 

the training program: Current limitations significantly reduce the number of 

colleges and universities able to provide the required matching funds. 

Conclusion

With or without the recommended improvements, it is clear that the current Title 

IV–E child welfare training program is critical to re-professionalizing the child welfare system. Continued strong federal support for this program and others designed 

to create a well-trained, competent, and stable child welfare workforce will be even 

more critical in the future, as states develop and implement Program Improvement 

Plans (PIPs) to meet outcomes measured in the Child and Family Services Reviews. 

In response to the March 2003 GAO report, HHS noted that ‘‘a number of States 

have identified strategies that target workforce stabilization and reduction in caseloads as part of their PIPs,’’ but acknowledged that ‘‘the Federal Government has 

limited resources to offer States in these efforts.’’ [lii] While additional resources are 

clearly needed, now is not the time to jeopardize the current federal funding available to assist states in their efforts to educate and train their child welfare staff. 

Again, we appreciate the opportunity to provide the social work perspective on 

child welfare financing, and look forward to participating in the debate as the issue 

moves forward. 

For additional information, please contact Cynthia Woodside, senior government 

relations associate, 202–336–8324 or cwoodside@naswdc.org.

f

89

Statement of Richard Wexler, National Coalition for Child Protection 

Reform, Alexandria, Virginia 

I am pleased to have the opportunity to submit written testimony concerning the 

Bush Administration’s foster care funding flexibility plan on behalf of the National 

Coalition for Child Protection Reform, a non-profit child advocacy organization dedicated to making the child welfare system better serve America’s most vulnerable 

children. 

We are a very small organization, with no particular interest in becoming another 

big non-profit bureaucracy. But what we lack in size, we make up for in track 

record. We were the only national child advocacy organization to predict the collapse 

of the Florida child welfare system—three years before it happened—because we 

knew that the child welfare agency there was embarking on the same course that 

had led other states and localities to disaster. 

And we are proud to have been the only child advocacy organization, aside from 

the event sponsors, singled out for thanks by Rep. George Miller at the Child Welfare Summit he helped to organize last year. 

There is much more about us at our website, www.nccpr.org. But there’s something else you should know about us. 

We’re liberals—and in my case, at least, a tax-and-spend liberal at that. 

But when an Administration with which we often disagree comes up with a plan 

that has the potential to be the biggest change for the better in federal child welfare 

policy in 23 years, we’d rather put ideology aside and help make it work than jerk 

our knees in opposition before anyone has even seen the fine print. 

The story of one child and his mother explains why this change has the potential 

to be so important. 

This is what a single mother in The Bronx named Rose Mary Grant had to do 

every week for many, many months, just to see her 11-year-old son, Issa, as described in a keenly-observed story in the Westchester County, N.Y. Journal-News.

‘‘Starting from her brick apartment tower, Rose walks a block to Gun Hill 

Road, takes the 28 bus to the subway station, catches the 5 train to Harlem, makes her way down 125th Street, boards the Metro-North train to 

Dobbs Ferry, and rides a shuttle . . . At each step, she places two metal 

crutches ahead of her and swings forward on two prosthetic legs.’’

The journey would have been worth it, had there been something worthwhile at the end of the line. But there wasn’t. Issa was warehoused at a 

‘‘residential treatment center.’’

Issa is not paranoid, he’s not schizophrenic, he’s not delusional. The only label 

pinned on him is Attention Deficit Hyperactivity Disorder. Sometimes, at home, he 

was seriously out-of-control. But his handicapped, impoverished single mother 

couldn’t do what middle-class and wealthy families do: find a good psychiatrist and 

hire home health aides. 

She couldn’t do that because the Federal Government does almost nothing to help 

pay for such alternatives. But, in many cases, the Federal Government, in other 

words, the American taxpayer, will gladly reimburse states between 50 and 79 cents 

for every one of the 86,000-or-more dollars it costs to keep children like Issa in his 

‘‘RTC.’’

Now consider another case, described in the cover story of the June issue of the 

outstanding trade journal, Youth Today. EMQ Children and Family Services used 

to be just like the place that warehoused Issa. But ten years ago, they admitted to 

themselves that what they were doing was not helping children. So they shut down 

100 of their 130 beds and came up with far better alternatives for the children. They 

wound up helping more children at less cost and getting far better outcomes. Another institution, called Youth Villages in Tennessee won a national award for doing 

the same thing. Keep in mind that the children they helped in their own homes or 

foster homes are the very same children that the child welfare establishment—what 

I have come to call, ‘‘the foster care- industrial complex’’ insists absolutely cannot 

be helped anyplace except in their institutions. 

But both Youth Villages and EMQ encountered the same problem: For years, even 

though their alternatives were better and cheaper, they couldn’t get reimbursement 

from their states. EMQ almost went out of business. 

There are many cases that don’t involve institutions at all, but do involve needless 

use of foster care. 

Contrary to the common stereotype, most parents who lose their children to foster 

care are neither brutally abusive nor hopelessly addicted. Far more common are 

cases in which a family’s poverty has been confused with child ‘‘neglect.’’ Other 

cases fall on a broad continuum between the extremes, the parents neither all vicVerDate jul 14 2003 00:18 Feb 06, 2004 Jkt 091276 PO 00000 Frm 00093 Fmt 6633 Sfmt 6621 E:\HR\OC\91276.XXX 91276
90

tim nor all villain. What these cases have in common is the fact that there are a 

wide variety of proven programs that can keep these children in their own homes, 

and do it with a far better track record for safety than foster care itself. 

But financial incentives at the federal, state and sometimes local level—plus the 

power of the ‘‘foster care-industrial complex’’ marginalize these alternatives. 

Documentation for this, and other problems related to the widespread confusion 

of poverty with child ‘‘neglect’’ can be found in our Issue Papers at www.nccpr.org. 

To many liberals, the confusion of poverty with child ‘‘neglect’’ is the single biggest problem in child welfare. That confusion is encouraged by federal funding formulas. 

The giant federal entitlement program for foster care—Title IV–E—is about ten 

times larger than the primary ‘‘funding stream’’ used to prevent foster care, Title 

IV–B. 

The Bush Administration proposes to change that. And what are many of my fellow liberals doing? Jerking their knees in opposition. 

I will not go into the details of the plan here—to the extent that we know them—

the Subcommittee already is familiar with them. 

There are many legitimate questions about this plan, and no one should endorse 

it without qualification until they are answered. Most of the questions involve arcane but important details you have heard about in other testimony. They fall under 

headings like ‘‘maintenance of effort’’ and ‘‘eligibility lookback.’’ But that is a reason 

to wait for the details, negotiate, and then take a position. Instead, in much of the 

child welfare community, the response boils down to: ‘‘Whatever it is, we’re against 

it.’’

In some cases, that’s naked self-interest. Of course the Child Welfare League of 

America is opposed—their member agencies hold children in foster care. The Residential Treatment Center that held Issa so long and so needlessly is a prominent 

member. 

States and localities typically tell these agencies that their first job is to return 

these children safely to their own homes or, if that is not possible, find them adoptive homes. But if they do that, those same states and localities will stop paying 

them. The states say they want permanence, but they pay for limbo, reimbursing 

agencies for every day they hold children like Issa in foster homes or institutions. 

You have undoubtedly heard and read a great deal about the ‘‘addiction’’ problem 

in child welfare, and that problem is indeed serious. But the biggest addiction problem in child welfare isn’t substance-abusing parents. The biggest addiction problem 

in child welfare is politically powerful, old-line, well-established child welfare agencies with blue-chip boards of directors that are addicted to per-diem payments and 

addicted to institutionalization as the only answer for too many children. And these 

agencies are putting their addiction ahead of the needs of the children. 

And the biggest ‘‘enabler’’ of this addiction is the Federal Government, with its 

‘‘open spigot’’ of money for substitute care, and far, far less for anything other than 

substitute care. 

Breaking an addiction is extremely difficult. One first has to get past the addict’s 

denial. So it’s no wonder that so much of the foster care-industrial complex is opposing this plan without even seeing it. 

Sadly, even the Children’s Defense Fund, an organization whose past work in 

child welfare has been heroic, has lost its way on this issue. Without waiting for 

the fine print, CDF has lumped this good idea in with some bad ideas in the Bush 

budget and denounced all of them—in apocalyptic terms. The CDF website has included material claiming that the plan would ‘‘dismantle’’ foster care. That is preposterous. There is no way that a purely voluntary plan that, in some cases, will 

give states more money than they would get under the status quo, can ‘‘dismantle’’ 

foster care. Such claims only undermine CDF’s credibility when the organization 

seeks, rightly, in my view, to prevent budget cuts in other areas. 

The opposition to this proposal has consisted of a shameful collection of fear, 

smear, and scare stories.

• First of all, this is not a ‘‘block grant’’ in any meaningful sense of the term. 

Under a block grant, several different funding streams are combined, states are 

allowed to use the money for any purpose covered by any of those funding 

streams—and, often, some money is cut from the total. 

This plan involves only one portion of one funding stream—Title IV–E foster 

care funds. This money could be spent on prevention and adoption. But the 

other funding streams remain separate. Title IV–B funds for prevention, for example, cannot be used for foster care. This ‘‘IV–B firewall’’ is a crucial feature 

of the plan. Were IV–B and IV–E to be combined, the ‘‘foster care-industrial 

complex’’ would grab the prevention money to use for more foster care. This 

91

plan recognizes that danger. In the absence of this firewall we would oppose the 

plan. 

• Second, this plan not only does not cut funding, in some cases, funding may go 

up. Under this plan, states would receive the same, agreed-upon amount of 

money for each of the five years. In contrast, states that stick with the status 

quo will find that the proportion of foster care costs covered by the Federal Government will decrease, as a result of the ‘‘eligibility lookback.’’

• And perhaps most important, this plan is strictly voluntary. Though states that 

opt in must stay in for five years, any state that feels it’s not getting a good 

deal can walk away from the table and stick with the status quo. If the fine 

print matches the broad outlines, governors and child welfare leaders who have 

the guts and imagination to try something with so much potential to do so 

much good, should have the right to do so, without being held back by their 

timorous colleagues and a foster care establishment with a huge vested interest 

in the status quo.

As I said at the outset, there are legitimate questions about this plan, and we 

cannot endorse it until we see the details and see if they match the promise of the 

proposal’s broad outlines. But because the plan is strictly voluntary, it doesn’t have 

to be ideal to be worth offering to the states. 

Some of the key questions include: How will the emergency fund work? How will 

it be triggered? Is it adequate? (It may, in fact, be adequate for some states and 

not others; that’s the beauty of a voluntary plan). 

Ideally, I would like to see states able to opt out in fewer than five years, and 

I’d like an emergency fund that would be more reassuring to states than the ideas 

discussed so far. But again, that may someday be a reason for some states not to 

take part in the plan, it is not a reason to deny any state the chance to participate 

by strangling the plan before anyone has even seen it. 

Some of my liberal friends have argued that Congress should support legislation 

introduced by Representatives Benjamin Cardin and George Miller instead. 

They’re half right. 

These representatives have been tireless champions for children, and they have 

introduced a bill with some good provisions, increasing funding for crucial prevention programs. But this bill and the Bush Administration plan are not mutually exclusive. If the fine print in the Bush plan lives up to the broad outlines there is 

no reason that Congress shouldn’t support this plan and the good provisions of 

Cardin-Miller. 

But Cardin-Miller also has a provision likely to backfire. It ties some of the aid 

to states’ performance on Child and Family Service Reviews (CFSRs). Unfortunately, though well-intended, the CFSR process is deeply flawed. The sample size 

is far too small to accurately measure state performance. And in at least one crucial 

instance, the incentives in CFSRs perversely encourage poor performance. 

The CFSRs measure reducing average length of stay in foster care, but they do 

not measure success in keeping children out of foster care in the first place. As a 

result, this measure rewards states or localities with hair-triggers for removals. 

These states remove children at the drop of a hat. Then they realize that many of 

the children didn’t need to be taken and return them—much the worse for the experience—in a month, or two, or three. As a result, the average length of stay looks 

low. 

In contrast, a state that takes family preservation seriously will truly remove children only as a last resort. As a result, the problems in those children’s birth families 

will be genuinely serious and are likely to take more time to resolve—if they can 

be resolved at all. So in these states, average length of stay will be longer, even 

though those states actually may be doing a better job. 

The Administration is aware of these problems, and may be able to fix them when 

the next round of CFSRs take place. But until we know that, it would be counterproductive to base aid to states upon performance using these flawed measures. And 

that is one of the things the Cardin-Miller bill proposes to do. 

Others have said that financial incentives don’t really affect child welfare decision-making anyway. (I wonder if they also believe HMOs have no affect on health 

care decisions?) These tend to be the same people who benefit most from the status 

quo. If they’re right, they have nothing to worry about, and the Bush plan is a great 

way to put their claim to the test. 

But in fact, I think they’re worried about the nation as a whole seeing the same 

kind of success as is now being seen in the State of Illinois. 

In 1997, Illinois had one of the worst child welfare systems in the country. Illinois 

had 51,000 children in foster care—proportionately more than any other state. 

Today, the foster care population in Illinois is under 22,000—and, proportionately, 

92

below the national average. At the same time, and this is most important, child 

safety has improved. 

If you thought that was all due to adoption, it’s understandable. Since that’s the 

part of the story that is most popular politically, it is the part that state officials 

like to tell the most. But the biggest change in Illinois is that the state is taking 

far fewer children in the first place—and it has changed financial incentives to get 

children back into their own homes faster. 

Illinois no longer simply pays private agencies for each day they hold a child in 

foster care. Instead, agencies are rewarded financially for keeping children safely in 

their own homes or finding them adoptive homes. They are penalized financially for 

letting children languish in foster care. Once Illinois changed the payment system, 

lo and behold: The ‘‘intractable’’ became tractable, the ‘‘dysfunctional’’ became functional the foster care population plummeted and, as I said, child safety improved. 

Some have argued that the very fact that Illinois managed to do this under the 

current system shows that there is no need to change federal financial incentives. 

However:

• Illinois is an exception. It required rare and extraordinary guts and imagination, combined with an unprecedented child welfare crisis, before the state could 

summon the strength to fight its ‘‘foster care-industrial complex’’ and accomplish real reform. 

• Illinois was among the first states to take advantage of waivers offered by the 

Department of Health and Human Services and among the most creative in 

their use.

In order to accomplish its reforms, Illinois had to swim against the tide of federal 

policy as reflected by where the Federal Government puts its money. If we really 

want to change child welfare and improve the prospects of America’s most vulnerable children, then the tide of federal policy needs to turn toward reform, so states 

that want to do better are swimming with the tide instead of against it. 

If the fine print matches the broad outlines, then the Bush plan offers the potential to do just that.

Statement of Thomas C. Atwood, National Council For Adoption, 

fAlexandria, Virginia 

Chairman Herger, the National Council For Adoption thanks the House Ways and 

Means Sub-Committee on Human Resources for the opportunity to submit a written 

statement regarding the important topic of ‘‘The Bush Administration Foster Care 

Flexible Funding Proposal.’’ Although there are details still to be determined, in our 

view the principles articulated in this proposal would be a significant step forward 

in America’s efforts to develop new and better ways of serving children in foster 

care. 

The National Council For Adoption (NCFA) is a research, education, and advocacy 

nonprofit whose mission is to promote the well-being of children, birthparents, and 

adoptive families, by advocating for the positive option of adoption. Since our founding in 1980, NCFA has been a leader in promoting sound child welfare and adoption 

policies that make it easier for children to be adopted out of foster care into families, 

present adoption as a positive option for women with unplanned pregnancies, reduce 

obstacles to transracial adoption, make adoption more affordable through the tax 

credit, and facilitate intercountry adoptions. NCFA’s 1996 monograph, ‘‘Foster Care: 

Too Much, Too Little, Too Early, Too Late,’’ by Dr. Carol Statuto Bevan, contributed 

much to the intellectual basis for the Adoption and Safe Families Act of 1997 

(ASFA). 

While reaffirming the commitment to family reunification when appropriate, 

ASFA clearly established the priority of child safety. ASFA reformed the child welfare system to promote more timely permanency decisions to help prevent children 

from languishing in foster care. ASFA encourages adoption out of foster care with 

incentives for states, and it expanded support services to foster and adoptive families. ASFA gave the Department of Health and Human Services tools for producing 

greater accountability and innovation in the child welfare system. 

ASFA’s results have been positive. The number of children adopted out of foster 

care rose from 31,000 in FY 1997 to 50,000 in FY 2001. ASFA has been a successful 

policy for tens of thousands of former foster children who would not otherwise have 

been adopted into their forever families. However, while we have made significant 

progress in addressing the needs of children in foster care, there is still much to 

93

be done. As of September 30, 2001, there were 542,000 children in foster care, of 

whom 126,000 were waiting to be adopted. 

The tide of children needing foster care is, unfortunately, all too steady. Moreover, 

as we find homes for more children, the children who remain in foster care may 

tend to be more difficult to place. Not all children will find adoptive homes, especially those who are older. These realities accentuate the need in our child welfare 

system for increased child and family services in the areas of recruitment, training, 

and education of adoptive and foster parents, pre- and post-placement counseling 

and services for children and families, vocational and job training for older foster 

care populations and for those aging out of foster care, and counseling foster youth 

for independent living and for prevention of substance abuse and other harmful behaviors. 

The Bush Administration took creative steps in addressing the needs of older children in foster care with its initiatives to provide education and training vouchers 

for youth who age out of foster care and to increase states’ financial incentives for 

placing for adoption foster children age 9 and up. The vouchers offer youth a chance 

to extend their education and improve their possibilities of succeeding as self-sufficient adults. States’ increased incentives to place children 9 and up will improve 

this vulnerable population’s prospects for adoption. The Department of Health and 

Human Services has found that from age 9 on, a child’s likelihood of remaining in 

foster care is greater than the likelihood of being adopted. 

The President’s foster care flexible funding proposal is a logical next step in addressing the needs of the evolving population of children in foster care. This new 

Child Welfare Program Option would allow states to maintain the federal funding 

of their foster care program as is, or to receive these funds as a flexible grant over 

five years, to support a range of child welfare services. The proposal’s funding flexibility, including the option of up-front funding, offers states the opportunity to be 

timely and effective in addressing the particular concerns and needs of their respective foster care populations and systems. 

The flexible funding proposal is consistent with a proven model for federal-state 

partnerships: The Federal Government provides goals, incentives, standards, and 

accountability; the states determine the best ways to achieve them, given the particular needs and circumstances of their respective states. This model for federalstate partnership has worked in many policy areas and can also work in serving 

the needs of children in foster care, and of their families and caregivers. The flexible 

funding proposal recognizes that it does not serve the best interests of children and 

families for the Federal Government to dictate a one-size-fits-all policy for our diverse 50 states. The states have important perspectives on the needs of the children 

and families served by their respective child welfare systems. The Federal Government must work with the states to make safe and stable homes a reality for all 

children. 

Given the flexibility, states will direct their federal foster care dollars in various 

ways depending on the particular needs of their respective populations. The flexible 

funding should be sufficiently inclusive as to allow states to use the funds for such 

programs and child and family services as:

• Recruitment, training, and education of adoptive and foster parents. 

• Pre- and post-placement counseling and services for adoptive and foster children 

and families. 

• Vocational counseling and job training and placement for older foster care children and for those aging out of foster care. 

• Counseling foster youth for independent living and prevention of sexual abuse 

and substance abuse.

If Congress grants states the flexibility recommended in this proposal, states are 

likely over the next five years to develop creative and effective approaches that address these concerns. 

Finally, it should be noted that the proposal provides safeguards against possible 

negligence of states’ foster care populations by requiring states to: adhere to the 

child safety protections mandated by ASFA; maintain existing levels of investment 

in their child welfare programs; and continue to participate in the Administration 

for Children and Family’s Child and Family Service Reviews. Congress should ensure that the policy is sufficiently inclusive to allow states to spend their federal 

foster care dollars on the areas of greatest need, such as foster and adoptive family 

training and recruitment, pre- and post-placement counseling, and vocational training and life skills counseling for older foster children. 

President Bush’s flexible funding proposal recognizes the crucial importance of the 

federal-state partnership in developing effective solutions that meet the needs of 

children in foster care, and of their families and caregivers. While reducing states’ 

94

administrative burdens, it offers states a useful tool to structure their child welfare 

programs in ways that support the ongoing priorities of safety, timely permanency, 

and improved well-being for children and families. While protecting against a reduction of resources spent on foster care, the proposal allows states the opportunity to 

target their foster care resources in ways best suited to their respective populations’ 

and systems’ needs. The President’s flexible funding proposal is a logical next step 

for America’s child welfare system.

Statement of Raul Yzaguirre, National Council of La Raza, as submitted by 

fSonia M. Pe ́rez 

Introduction

My name is Sonia M. Pe ́rez and I am Deputy Vice President of the National 

Council of La Raza (NCLR); I also oversee the activities of NCLR’s Puerto Rico regional office. NCLR is the largest national Latino research and advocacy organization in the U.S.; and works to reduce poverty and discrimination and improve life 

opportunities for the estimated 38 million Hispanics living on the mainland U.S. 

and the nearly 4 million people in the Commonwealth of Puerto Rico through our 

network of 300 local affiliate community-based organizations and 33,000 individual 

associate members. 

For more than 15 years, NCLR has been engaged in research and public information efforts on poverty, social policy, and related issues affecting Latino families. In 

particular, NCLR has researched and written extensively on the experience of 

Latina women and their children with public assistance, as well as on the impact 

that welfare reform has had on Hispanic families in the U.S. mainland and in Puerto Rico. Through its research on welfare reform issues, NCLR has learned that significant disparities in funding for social welfare programs exist between Puerto Rico 

and the 50 states, despite the Island’s high level of poverty and the significant challenges faced by poor families and children. 

Background

The Commonwealth of Puerto Rico faces unique social and economic conditions 

that significantly impact the well-being of the U.S. citizens living on the Island, and, 

particularly, the Island’s children. For example, according to the U.S. Census Bureau:

• Almost half (48.2%) of the total population lives below the poverty level. 

• About three in five (58.3%) children in Puerto Rico are poor—the only U.S. 

state, territory or commonwealth with a higher child poverty rate is American 

Samoa (67%). 

• More than one-quarter (27%) of families in Puerto Rico are headed by a female 

householder.

In addition, Puerto Rico has experienced slower economic growth and significantly 

higher unemployment than the States—even during the economic boom of the 

1990s. According to the latest data from the Puerto Rico Department of Labor, the 

Island had a 12.1% unemployment rate in May. 

Child Welfare in Puerto Rico

Poverty and other social and economic factors have placed many children at risk, 

not only of poor educational, social, and health outcomes, but also of abuse and neglect. While data on child abuse, neglect, and foster care have not always been systematically collected for Puerto Rico, data from the Puerto Rico Department of the 

Family indicate the following:

• The Commonwealth received 71,617 child abuse and neglect complaints in fiscal 

year 2002. 

• At the end of 2002, there were roughly 9,555 children in foster care in Puerto 

Rico. 

• Abused and neglected children are cared for in approximately 3,380 certified 

foster homes. 

• To maintain this level of care, the Commonwealth spends $25.5 million in payments to foster families alone, at an average monthly maintenance payment of 

$325. 

95

Funding Limitations

One of the most significant challenges that Puerto Rico faces in trying to address 

these issues is low funding. Local government funds help to meet some of the need, 

but as is the case with other states, federal monies greatly help to offset the administrative costs and payments to families providing foster care to children who have 

been abused or neglected. 

While children who have been removed from their families are entitled to foster 

care and adoption programs and assistance under the Title IV–E Foster Care and 

Adoption Assistance Program in the States, foster care is not an entitlement in 

Puerto Rico. The Title IV–E program falls under the Section 1108 cap, which restricts total welfare funding to Puerto Rico, creating a ceiling for several unrelated 

programs, including TANF and Assistance for the Aged, Blind and Disabled (Puerto 

Rico’s substitute for Supplemental Security Income, from which the Commonwealth 

is excluded). This means that aid to abused and neglected children competes with 

assistance to the Island’s poor families, the disabled, and seniors. 

The funding limitations placed on the Title IV–E program in Puerto Rico have farreaching consequences. For instance, States with populations similar to Puerto Rico 

receive $40 to $50 million in reimbursements per year for their foster care and 

adoption assistance expenditures, whereas Puerto Rico is only reimbursed roughly 

$12 million a year. Also, the Congressional Budget Office (CBO) projected that the 

federal share of monthly maintenance payments averaged $564 for foster care, making Puerto Rico’s average federal share of $152.50 only 27% of the national average. 

Puerto Rico has not been able to take advantage of the adoption assistance program to the same extent as the states: in 2000, 88% of all children adopted out of 

foster care received adoption subsidies, while in Puerto Rico, the rate was 19%. According to the CBO the projected average federal share of monthly maintenance 

payments was $283 for adoption assistance, however, the average federal share in 

Puerto Rico was only $90. The Commonwealth spent approximately $500,000 in 

Adoption Assistance payments in 2002, for 255 special needs children. Nearly one 

in three of these children were assisted with state-only funds. Adoption assistance 

payments for children adopted in Puerto Rico range from $107 to $300 a month, 

with an average of $180. Federal funding in this area has become so restricted, that 

when Puerto Rico earned a bonus for increasing adoptions, the basic IV–E grant 

was reduced, because of the impact of the welfare cap on the program, in order to 

provide the Island with the $218,000 performance incentive. 

Taken as a whole, the limitation on federal funding for Puerto Rico’s child welfare 

system has created significant challenges in its efforts to care for vulnerable children, which range from limited and outdated case management capacity, insufficient 

communications between regional offices because of inadequate technology, and poor 

management and follow-up systems. In the end, the lack of federal funds, technical 

assistance, and general support means that too many children in need of services 

in Puerto Rico fall through the cracks. 

Foster Care Flexible Funding Proposal: Disadvantages for Puerto Rico 

NCLR believes that members of Congress must consider the unique barriers facing Puerto Rico’s child welfare system, particularly in light of the President’s proposal for offering an alternative financing option to the current Title IV–E program. 

This proposal would not enhance Puerto Rico’s ability to serve children who are neglected or abused. Specifically, the proposal does not consider the following:

• There are existing disparities for federal funding for these services between Puerto Rico and the 50 states. The problem facing Puerto Rico’s child 

welfare system is severely limited federal contributions, due to the Section 1108 

cap. As discussed above, Puerto Rico is unable to serve its existing populations 

well because of competing needs. 

• The current low federal contribution would undermine the establishment of an appropriate baseline for any proposed foster care block 

grant. In the last three years, Puerto Rico received $10 to $12 million in federal funding for foster care and adoption assistance. Since the foster care block 

grant would be based on previous federal reimbursements, the baseline would 

preserve the historic inequity in funding and would result in inadequate resources for Puerto Rico to care for children who are abused or neglected. 

• A block grant will aggravate the problem of low funding levels in Puerto Rico. While the President’s proposal to block-grant foster care funding is 

purported to provide states with increased flexibility in using federal funds to 

support a broader range of families and prevention and treatment activities, 

such claims would not apply to Puerto Rico. Because the Island currently receives inadequate federal funds for the breadth of services provided to the IsVerDate jul 14 2003 00:18 Feb 06, 2004 Jkt 091276 PO 00000 Frm 00099 Fmt 6633 Sfmt 6621 E:\HR\OC\91276.XXX 91276
96

land’s poor, abused and neglected children, extending eligibility and broadening 

the range of activities would result in greater competition for funding and services than presently exist. Such an approach would further strain already limited 

resources. • Elements of the flexible foster care funding proposal do not apply to 

Puerto Rico. The President’s proposal includes a provision that would allow 

States to access additional funding through the TANF contingency fund if specific crisis conditions are met. However, Puerto Rico is not authorized to participate in the TANF contingency fund. Therefore, this provision could not be used 

to benefit children in need.

The Title IV–E Foster Care and Adoption Assistance Program was established as 

a state-federal partnership to ensure that abused and neglected children receive the 

services needed to be safe. However, because Title IV–E funding falls under the 

Commonwealth’s federal welfare cap, Puerto Rican children in need of these services 

have no entitlement to federal aid—rather they must compete with the poor, blind, 

aged and disabled for limited federal funding. 

NCLR supports two directions for responding to these deficiencies:

• Remove the Title IV–E program from Puerto Rico’s welfare cap. In order 

for Puerto Rico to reach parity with other states and meet the existing needs 

in this area, the Title IV–E program should not be considered as part of the 

Island’s overall ‘‘welfare’’ cap. Such a measure is a critical step in strengthening 

Puerto Rico’s partnership with the Federal Government and shoring up its ability to provide appropriate levels of support and protection for these children. 

• Assess and enhance funding levels for foster care, adoption, and abuse/

maltreatment services for children in Puerto Rico based on existing 

needs. In addition to the funding disparities outlined above, the President’s 

proposal would be largely inaccessible to the Commonwealth due to the Section 

1108 cap. The question of how best to address the serious child welfare issues 

in Puerto Rico should not be determined by faulty formulas or proposals that 

do not apply to the Island, but instead by examining the serious deficiencies, 

backlogs, and inadequate services that prevent the current system from protecting the most vulnerable children in Puerto Rico.

Statement of Manuel Mirabal, the National Puerto Rican Coalition 

f On behalf of the National Puerto Rican Coalition (NPRC), a non-profit organization representing the interests of the seven million Puerto Rican U.S. citizens on 

the mainland and the Island of Puerto Rico, I would like to express my appreciation 

to the Chairman and the Committee for their attention in addressing a pressing 

issue: meeting the needs of the nation’s abused and neglected children. 

I am confident that the Committee will work to ensure that no child is left behind 

as you design this important legislation. However, I would like to focus my remarks 

on the island of Puerto Rico, where the Foster Care situation is very unique. While 

IV–E Foster Care and Adoption Assistance is an entitlement throughout the states, 

funding is severely limited in Puerto Rico due to a cap on Foster Care and two unrelated programs. TANF, Aid to Aged, Blind and Disabled (the program the Island has 

instead of SSI) and Foster Care and Adoption Assistance fall under one arbitrary 

cap. This cap is so restrictive that Puerto Rico has never received reimbursement 

for eligible administration, placement and training cost in IV–E, nor was it able to 

receive additional funding under the Adoption Incentive Bonus the Island earned in 

2002. Similarly, Puerto Rico bears most of the costs of providing health care to children in Foster Care due to a federal funding cap on Medicaid. Due to these funding 

restrictions, the Island has had to face difficult challenges in meeting the needs of 

abused and neglected children. Fortunately, the government of Puerto Rico has 

made it a priority to care for these children by investing additional resources into 

the program. 

While I am encouraged by Puerto Rico’s efforts, it is unrealistic to expect the Island to continue to bear this disproportionate financial responsibility in meeting the 

needs of these children. In Puerto Rico, the child poverty rate is 58 percent, with 

630,000 poor children. In cases where parents are unable or unwilling to care for 

them, these children should not be left behind. 

The need for federal support is undeniable as many Puerto Rican children are 

subject to some type of mistreatment. For example, in 2002, there were 30,000 complaints of abuse and neglect and 10,000 children were in the Foster Care system. 

97

Yet, while states with populations similar in size to Puerto Rico are reimbursed 

from $40 to $50 million, the Island receives approximately $12 million per year. It 

is essential that resources are provided to ensure that children are not trapped in 

high risk environments. 

To remedy the federal funding inequity, NPRC recommends the following:

• Remove IV–E Foster Care from the Section 1108 cap. Due to the cap, Puerto 

Rico could not even receive the adoption incentive bonus earned last year without having to cut the IV–E Foster Care basic grant. Further, Puerto Rico only 

receives 0.26 percent of total federal IV–E dollars, yet 1.7 percent of the nation’s 

foster children reside on the Island. • Exempt Medicaid expenditures for IV–E foster children from the Medicaid Cap. 

The states receive federal support for Medicaid costs associated with providing 

health care to children in IV–E Foster Care. However, in Puerto Rico, the Federal Government only contributes approximately 15 percent of eligible Medicaid 

costs due to the funding cap.

As the Committee moves toward crafting legislation to meet the needs of the nation’s at-risk children, I hope you will use this opportunity to remedy the inequities 

the Island faces when providing for this population of children.

Statement of Lynn Olund, Brimson, Minnesota, Paula Katzenmeyer, Hutchinson, Minnesota, Debbie Retterath, Adams, Minnesota, and Deborah 

f Trotter, Aitkin, Minnesota 

This written testimony is in response to the Foster Care Flexible Funding Proposal that had a hearing on June 11, 2003. As an interested human service professional and citizen concerned for the well being of our nation’s children, I would like 

to make a few short comments.

1. The professionalism of child welfare workers and consistency in child welfare 

practice are major concerns, judging from the statistics and testimony already 

provided to the committee. 

2. Child welfare worker turnover contributes to both of these concerns. Turnover 

has been connected to a lack of support due to a shortage of proper training 

and excessive workloads. Administrative duties also compete for time spent 

with children in need. 

3. Retention of seasoned workers through the provision of consistent training 

and support will contribute to the improved safety and the well being of the 

most vulnerable members of our society, our children. They depend on us now, 

as we will depend on them in the future. With ongoing training, policy will 

be interpreted correctly and practice will be followed accurately, helping to insure that all children will receive equal care and oversight, improving their 

chances for success, or even survival. Workers who are trained will have the 

confidence and competence to make the most efficient use of their time, reaching more children in need, and minimizing their own stress in achieving positive outcomes. 

4. If the flexible funding proposal is followed, we will be moving away from the 

safeguards listed above, and moving toward the likelihood that child welfare 

workers will be frustrated in their efforts and make misjudgments that affect 

the safety of the children under their responsibility.

I was a front line worker in county social services until I accepted my present 

position as a community trainer of social services agencies. The reason I was interested in taking my present position was my own experience of the frustration of 

good workers trying to follow policy and do the best work possible, while not always 

having sufficient training support to be sure what the best practices are. In my current position, our project team conducted a satisfaction survey of workers who have 

received support and training. The response was consistently positive regarding assisting workers with meeting their responsibilities. Having been both a worker and 

trainer, I know the value and necessity of training. I know how much more productively time is used when workers are clear as to their obligations and they know 

where to receive support from resources about difficult situations. Training partnerships are invaluable in solving some of the worst dilemmas we face in improving 

child welfare outcomes. These outcomes are so important since they represent real 

children who are counting on us. 

Thank you.

f

98

Statement of Carol Emig, Pew Commission on Children in Foster Care 

The nonpartisan Pew Commission on Children in Foster Care was launched on 

May 7, 2003 under the leadership of former Congressmen Bill Frenzel and Bill 

Gray. This expert panel of experienced legislators, child welfare administrators and 

providers, judges, parents, and youth, is committed to improving outcomes for some 

of the nation’s most vulnerable children by developing practical, bipartisan recommendations related to federal financing and court oversight of child welfare. It 

will report those recommendations in 2004. 

For the purposes of this hearing, this statement primarily addresses the Commission’s work on federal financing. It is important to note, however, that court practices are also an integral part of our work. 

The Commission shares Congress’ desire to protect children who have experienced 

abuse and neglect and provide them with the safe and permanent homes that all 

children deserve. While changes in financing won’t solve every problem in child welfare, thoughtful change could enable every state and community to do a better job 

of supporting the healthy development of these very vulnerable children. 

The Pew Commission on Children in Foster Care is committed to developing—

quickly—a set of practical, evidence-based recommendations. Our work has been 

greeted with interest and excitement across the policy and political spectrum. This 

enthusiasm reflects consensus in the policy and practice communities that the current financing structure does not effectively promote the Adoption and Safe Families 

Act’s (AFSA’s) goals of safety, permanence, and well-being for children, as well as 

widespread interest in the development of thoughtful, new recommendations for reform. The Commission will therefore carefully examine a broad array of financing 

options to develop recommendations that will promote good outcomes for children. 

In doing so, we intend to learn from information that is just now emerging from 

states and communities that have experimented with different financing structures, 

including those with federal waivers. States and communities clearly differ in their 

circumstances and approaches, and the Commission’s recommendations will take 

these differences into account. We welcome input and suggestions and will be posting information for submitting ideas to the Commission on our web site shortly. 

Every member of the Pew Commission is committed to developing recommendations that have a strong likelihood of adoption. We share Congress’ frustration over 

the current child welfare system and its urgency to do a better job for children and 

families. We also know that progress in this arena occurs only when there is strong 

bipartisan agreement. That is the experience of ASFA and the Promoting Safe and 

Stable Families Act. Our goal, therefore, is to develop practical, evidence-based recommendations that will earn broad, bipartisan support among policy makers and 

will improve outcomes for children. 

About the Commission

The Pew Commission on Children in Foster Care will focus its recommendations 

in two targeted areas:

• Improving existing federal financing mechanisms to facilitate faster movement of children from foster care into safe, permanent families and to reduce 

the need to place children in foster care. 

• Improving court oversight of child welfare cases to facilitate better and 

more timely decisions affecting children’s safety, permanence, and well-being.

Timeline and Process. The Commission will report recommendations by summer 2004—sooner, if possible. The Commission held its first meeting in May 2003. 

It will meet again in September and November 2003, and as often as necessary in 

the first several months of 2004. 

In light of this short timeline, we will request that interested parties submit suggestions or ideas this summer for consideration by the Commission. Guidelines for 

these submissions will be posted on the Commission’s website, 

www.pewfostercare.org. 

The Pew Commission on Children in Foster Care is committed to developing recommendations that will earn the support of Congress, federal agencies, states, 

courts, and communities. The Commission will therefore consult closely with representatives of the Administration, members of Congress, the Governors, state legislators, the major judicial associations, state and local child welfare directors, and 

major professional associations. These contacts are already underway. 

Funding for the Commission. The Commission is supported by a grant from 

The Pew Charitable Trusts to the Georgetown University Public Policy Institute.

f

99

Statement of Prevent Child Abuse America, Chicago, Illinois 

Prevent Child Abuse (PCA) America appreciates this opportunity to submit testimony on the title IV–E funding proposal put forth by the Bush Administration in 

its FY 2004 budget plan. We hope this testimony will be of assistance to the Subcommittee as it considers improvements and reforms to the child welfare system 

over the coming weeks and months. 

PCA America is the leading organization working at the national, state and local 

levels to prevent the abuse and neglect of our nation’s children. By valuing children, 

strengthening families and engaging communities, PCA America works with its 

chapters in 36 states and the District of Columbia to prevent child maltreatment 

before it occurs. 

As you are well aware, each year approximately three million children are reported to be abused and neglected; about one million of these reports are ultimately 

substantiated. We also know that abuse and neglect exacts an enormous toll on children. In addition to the physical and emotional harm inflicted, children who are 

maltreated suffer higher rates of school failure, feelings of worthlessness, aggressive 

behavior, detention, and incarceration. It is also known that child abuse and neglect 

causes a substantial drain on resources and services. In a landmark study released 

in 2001, PCA America discovered that today child abuse and neglect costs American 

taxpayers $258 million per day, or more than $94 billion per year. Put another way, 

the consequences of child abuse and neglect cost every American family more than 

$1,400 each year. 

Since the Administration has yet to release a detailed description of its title IV–

E proposal, this testimony reflects our general thoughts on the objectives, rather 

than the specifics,of the flexible funding option. 

Increased Flexibility 

As we understand the Administration’s proposal, states will be able to choose between continuing to receive title IV–E foster care funds as an uncapped entitlement 

or opting into a five-year, fixed-sum block grant. The block grant option would give 

states greater discretion on the use of title IV–E funds, so that states would no 

longer be obliged to spend all of the dollars on out of home care. Instead, states 

could use title IV–E to fund up-front efforts to prevent child abuse and neglect from 

occurring in the first place. 

The move toward flexible funding addresses one of PCA America’s primary concerns with the way child welfare is currently financed—that the overwhelming focus 

of the federal response to child maltreatment is on out of home care. As you know, 

there is a tremendous imbalance between what is invested to prevent abuse and neglect before it happens and what is spent on care and services after abuse or neglect 

has occurred. This is not to say that investments made in treating and intervening 

on behalf of abused and neglected children are too high or less vital to protecting 

children and families. On the contrary, the incidence and nature of child abuse and 

neglect, coupled with requirements put in place by the Adoption and Safe Families 

Act (ASFA) and other recent reforms, can well exceed the financial capacity to respond to, let alone prevent, child maltreatment. 

The block grant option would allow foster care funds to support a broader range 

of services to children and families, including front-end prevention services intended 

to reduce the number of children coming into the child welfare system in the first 

place—services, it should be noted, that have historically been under funded. As the 

leading national advocate for child abuse and neglect prevention, PCA America fully 

supports a more flexible use of federal funds that allows for a full continuum of 

services while emphasizing the value of prevention, if this approach provides sufficient funding to support the full continuum of services. 

Whether or not states participating in the block grant option will actually invest 

title IV–E funds in prevention services is quite another matter. Cash-strapped 

states, in particular, may not have the resources to do so over the long term. Because the Administration’s proposal is budget neutral, additional federal investments are not anticipated under the plan. We are thus mindful of existing block 

grants, such as Temporary Assistance to Needy Families (TANF), Social Services 

Block Grant (SSBG), and Comprehensive Community Development Block Grant 

(CCDBG), which have not kept pace with inflation, resulting over time in a considerable erosion of their financial value to the states. If a similar block grant for title 

IV–E fails to keep pace with inflation, the Administration’s proposed policy will predictably decrease the federal investment in title IV–E over time and thereby increase the financial exposure of the states. 

The prospect of a diminished federal commitment to child welfare is particularly 

troublesome given the current demands on state child welfare systems. Since pasVerDate jul 14 2003 00:18 Feb 06, 2004 Jkt 091276 PO 00000 Frm 00103 Fmt 6633 Sfmt 6621 E:\HR\OC\91276.XXX 91276
100

sage of ASFA and implementation of Child and Family Services (CFS) reviews, 

states have also been asked to address child welfare shortfalls by making substantial and costly system improvements. No additional resources have been provided 

to carry out such improvements, although Representative Cardin has proposed state 

grants for this purpose in H.R. 1534. Since the child welfare system is generally 

under funded and the demands on state systems are increasing, it is doubtful that 

the Administration’s title IV–E proposal makes sufficient provision for the necessary 

investments in child welfare intervention, system reform, and child maltreatment 

prevention. 

An additional issue addressed by the Administration’s proposal is the application 

of outdated AFDC standards to the determination of title IV–E eligibility. Currently, 

title IV–E foster care funds cover maintenance payments for just over half of the 

children in out of home care. This is because eligibility for title IV–E is tied to 

AFDC standards which predate the 1997 welfare reform law. The elimination of the 

AFDC look-back requirement will increase the number of children determined eligible for title IV–E services. Still, without new federal investments and faced with increasing financial pressures, states may not have enough resources to support frontend services even if they are allowed by law to do so. That said, we applaud the 

Bush Administration as well as Representative Cardin for eliminating the AFDC 

look-back requirement in their respective proposals. 

Finally, the efficacy of child maltreatment prevention is demonstrated, but its economic value is realized only over the long-run. So, it is unlikely that increased investment in child maltreatment prevention will result in immediate and commensurate cost savings in out of home care. Indeed, it is more likely that increased prevention and early intervention services will have a case-finding effect in the nearterm, possibly enabling earlier and more effective intervention. Hence, the Administration’s proposal neither ensures increased investment in funding for child maltreatment prevention services or sufficient time for states to realize the economic 

benefits of such investment were they to make them. 

Capped Funding 

Our general concern with the Administration’s proposal stems from the financial 

risk transferred to states electing to participate in the block grant option. While enjoying greater flexibility to use title IV–E funds for a broader range of services including up-front prevention, these states would also relinquish the title IV–E entitlement status and assume greater financial risk should foster care caseloads increase in the future. 

At a general level, block grants afford states increased discretion in the use of federal funds, but also transfer primary financial risk from the Federal Government 

to the states. In a period of stable or decreased demand for child welfare services, 

a block grant option may allow states greater latitude to redirect funding, possibly 

in support of prevention services and other front-end investments. On the other 

hand, in a period of increased demand and/or escalating costs for child welfare services, the block grant option may expose participating states to considerable financial 

risk. Even stable caseloads may result in increased costs for states if the block grant 

is not structured to keep pace with inflation. 

Conclusion 

Many important details of the Administration’s proposal are not yet known. How 

will state block grant allocations be determined? Will all foster children continue to 

be Medicaid eligible? What criteria will have to be met before states can access the 

TANF contingency fund? We look forward to hearing more about proposed changes 

to title IV–E and working with our networks to consider the merits of the Administration’s proposal. 

We appreciate the Subcommittee’s consideration of child welfare improvements 

this session and its increased attention to the value of prevention.

Statement of Dean Jesse J. Harris, University of Maryland School of Social 

fWork, Baltimore, Maryland 

Thank you for this opportunity to submit written testimony regarding the Bush 

Administration’s Foster Care Flexible Funding Proposal. The purpose of this letter is to urge Congress to closely examine the specifics of the Bush Administration proposal, and, and avoid the rush to ‘‘do something’’ without the 

type of scrutiny that is necessary to bring about true reform. I am writing 

from my perspective as Dean of the University of Maryland School of Social Work 

101

and a social work educator in one of the largest schools of social work in the nation. 

Our faculty members have national reputations as practitioners, researchers, and 

educators in child welfare practice and policy. In addition, our School has developed 

a highly successful partnership with the Maryland Department of Human Resources, with federal financial assistance through Title IV–E of the Social Security 

Act to educate the next generation of public child welfare professionals, who are the 

backbone of any child welfare system, and ultimately responsible for producing the 

outcomes of child welfare programs identified in the Adoption and Safe Families Act 

of 1997 (ASFA). 

Although the Administration has not yet submitted specific statutory proposals, 

I have had the opportunity to review a number of the features of the Administration’s proposals circulated in press releases. It is commendable that the Bush Administration seeks to streamline federal financing for foster care. The current system, based on foster children’s eligibility for AFDC, is cumbersome and costly for 

the states and Federal Government to administer. A review of this method for calculating federal financial assistance to provide care and planning for a permanent, 

safe, and healthy family situation for abused children in state custody is long overdue. I am, however, deeply concerned that the cornerstone of the Federal 

Government’s responsibility for abused, abandoned, and neglected children 

is being dismantled without an opportunity to thoroughly examine how its 

replacement will impact vulnerable children, their families, and state agencies responsible for providing services to this population. 

Analyses that have examined alternative funding proposals over the past 10 

years, (Improving Child Welfare Agency Performance through Fiscal Reforms: An 

Assessment of Recent Proposals; Geen, The Urban Institute, 2003) have concluded 

that any fiscal reform must be understood from the perspective that the current system is chronically under funded: ‘‘Experts agree that child welfare agencies are severely under funded given the ever expanding scope of their responsibilities’’ 

(Courtney 1997, Myers, 1994, Primus 2000; Schorr 1997). Thus, reform proposals 

should not seek to drastically reduce federal expenditures needed to protect our nation’s children and seek permanent homes for children in state custody. 

Flexibility of funding, while desirable, will not, in itself, address the complex 

needs of children in foster care. In fact, most states, including Maryland, already 

have funding flexibility for the majority of child welfare programs. This has not diminished the number of children entering care, due in part, from growing substance 

abuse problems among the child-bearing population, and the inadequacy of community based substance abuse and mental health treatment programs. Moreover, there 

is no evidence to suggest that federal child welfare financing strategies have any 

effect on decision making on the case level. Therefore, a proposal that encourages states to draw down future child welfare dollars on the promise that 

funding flexibility will decrease funding needs in the future, may be seriously flawed and may result in a fiscal crisis of unprecedented proportions 

for child welfare programs in the future. 

Of great concern to me is the unanswered question of how the current proposal 

would address child welfare workforce issues. The primary resource need for the 

child welfare system is its workforce. Yet, a recent GAO report (March, 2003), notes 

that child welfare agencies suffer from chronic high turnover and staff shortages. 

In this report, the GAO’s analysis of HHS’s state child welfare agency reviews in 

27 states showed that large caseloads and worker turnover delay the timeliness of 

investigations of child maltreatment, limit the frequency and quality of worker visits, and hamper attainment of other key federal safety and permanency outcomes. 

The GAO concludes, ‘‘A stable and highly skilled child welfare workforce is 

necessary to provide child welfare services that meet federal goals.’’ The 

GAO recommended that HHS take action that helps child welfare agencies address 

recruitment and retention challenges through University Training Partnerships, accreditation of state & local child welfare agencies, and leadership and mentoring 

programs. Research has indicated that State-University Partnerships, such as our 

Title IV–E Education for Public Child Welfare Program, produce a highly trained, 

competent workforce prepared to carry out the missions of child safety, permanence, 

and well-being, outlined in ASFA. Any proposals to reform federal financing 

strategies should include set asides for this critical purpose. 

Historically, the Federal Government has provided leadership in setting standards 

for the provision of child welfare services, oversight, and accountability measures 

that have resulted in improved services to children and families across the nation. 

The nation’s children and families continue to need this level of leadership from 

Washington. 

Thank you for your consideration.

f

102

Statement of Voice For Adoption 

Voice for Adoption (VFA), a nationwide, not-for-profit, membership organization 

dedicated to speaking out for our nation’s waiting children, appreciates the opportunity to share our concerns with the Committee about the Bush Administration’s 

foster care proposal. VFA believes that the child welfare system is in great need of 

real reform; however, we are waiting to take a position until a formal proposal is 

introduced as legislation. 

VFA appreciates that the Administration’s proposal is optional and does not force 

states to enroll in a five-year capped alternative funding program. We believe that 

many states would choose to stay with their current entitlement system if the proposal were enacted. 

VFA is concerned that any attempt to cap a program that already has limited resources will be detrimental to the children and youth in the child welfare system. 

Since the proposal has not been introduced in Congress, VFA sees an opportunity 

to work with the Administration by offering suggestions for the proposal that we 

believe would most benefit children and families. 

Suggestions

Maintain current funding levels (with cost of living adjustments). In the 

past Congress has taken resources from block grants to fund other unrelated 

projects or reduced the funding levels of block grants. A good example of this is the 

Social Services Block Grant (SSBG), which is a vital source of federal funding for 

child welfare services. States have seen the funding levels for SSBG drop 31 percent, from $2.5 billion in 1997 to $1.725 billion in 2001. VFA is concerned that any 

block grant or capped allotment for Title IV–E would experience a similar reduction, 

further limiting the ability of states to meet the needs of vulnerable children and 

families. 

Completely delink Title IV–E eligibility from AFDC guidelines. VFA applauds the fact that the Administration’s proposal addresses the need to de-link 

Title IV–E foster care eligibility from 1996 Aid to Families with Dependent Children 

(AFDC) eligibility standards. However, we are concerned that the proposal would 

only de-link Title IV–E eligibility for foster care, not for adoption assistance, and 

only for states that opt into the new program. VFA urges the Committee to consider 

eliminating the same eligibility for adoption assistance. All families that adopt foster children meeting the state’s definition of special needs should receive financial 

support and services. De-linking eligibility for foster care and not adoption assistance would create an administrative nightmare for states. 

In addition, having the funding formula for the five year allotment be based on 

estimates of Title IV–E eligible children using the current 1996 AFDC requirements 

seemingly defeats the purpose of updating the eligibility standards, as states will 

have less money to provide services for a larger population of eligible children. 

Mandate specific funds for vital services. Giving states flexibility in how they 

spend their Title IV–E foster care funds should not mean that states don’t invest 

in keeping families together and preventing children from entering into foster care. 

While states are likely to come up with creative uses for the flexible funding, it is 

still important to target resources to specific areas such as post-adoption services, 

family recruitment, and other adoption activities. 

VFA agrees that Title IV–E is restrictive and inhibits state innovation. We urge 

Congress and the Administration to consider expanding Title IV–E to include funding post-adoption services to help families who adopt special needs children. Title 

IV–E money can be used for case management for children in foster care, but once 

children are adopted, there needs to be Title IV–E funds available for ongoing case 

management to provide post-adoption services to families who adopt children from 

foster care. Ongoing services to families and children before, during and after adoption papers are signed are critical in promoting the well-being of families and minimizing the possibility that adoptions will fail. Comprehensive counseling, support 

groups, case management and educational and advocacy services assist families who 

have adopted with strengthening and preserving the family. 

Create an independent, unmatched emergency fund. Under the Administration’s proposal, states that experience an increase in foster care caseloads may access emergency TANF funds. The TANF emergency fund would be the source of relief for two separate programs. Additionally, there is a 50 percent match of state 

dollars to federal dollars. States are experiencing the worst financial crisis in decades. Some states will not attempt to access the emergency funds due to the matching requirement. The triggers to use the emergency funds would not necessarily reflect what is happening in a county or city where the bulk of the foster care population might be found. 

103

Offer a few opportunities to opt in and out of the program. Under the Administration’s proposal, states would have only one chance to opt into the program. 

Once a state is in the program, it cannot opt out. More flexibility to opt in or out 

would make the program more attractive to states. VFA is also concerned that localities and counties would not have input if their states decide to take the flexible 

financing option. 

Keep the Adoption Incentive Program independent. VFA supports and applauds the Administration’s efforts to reauthorize the Adoption Incentive Program 

at $43 million, and to target incentives to place older children in care. However, we 

also urge lawmakers not to attach the reauthorization of the program to the flexible 

funding proposal. The Adoption Incentive Program is considered one of the most innovative provisions in AFSA. It encourages states to find adoptive homes for waiting 

children who are legally free for adoption by granting a financial incentive for each 

foster child that the state places in adoption. During the past five years, states reinvested millions of dollar in adoption incentive payments in adoption programs, including post-adoption services, family recruitment, and adoption promotion and support. 

As Congress begins to review the Administration’s Foster Care Financing proposal, we hope that the above suggestions will be considered. Also, it is important 

to remember that the bipartisan Pew Commission on Children in Foster Care was 

created recently, and will recommend reforms to the foster care financing system 

in 2004. VFA encourages Congress to also review the outcomes from Title IV–E 

waiver recipients. These waivers demonstrate a variety of what does and does not 

work. Using all available resources will aid lawmakers in their efforts to address 

the crisis in foster care.

Æ