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[Background Material and Data on Programs within the Jurisdiction of the Committee on Ways and Means (Green Book)]
[Program Descriptions]
[Section 11. Child Protection, Foster Care, and Adoption Assistance]
[From the U.S. Government Printing Office, www.gpo.gov]

 
SECTION 11 - CHILD PROTECTION, FOSTER CARE, AND ADOPTION ASSISTANCE

CONTENTS

Introduction
Federal Child Welfare Programs Today
	The Title IV-B Child Welfare Programs
	The Title IV-E Foster Care Program
	The Title IV-E Adoption Assistance Program
	The Title IV-E Adoption Incentives Payment Program
	The Title IV-E Foster Care Independence Program
State Accountability and Federal Oversight
	History of Federal Review Efforts
	Federal Conformity Review System
	Interethnic and Interjurisdictional Adoption Provisions
	State Performance Reports
Federal Waivers of Title IV-B and IV-E Provisions
Recent Trends Affecting Child Welfare Populations and Programs
	Child Abuse and Neglect
	Substance Abuse
	Kinship Care
	Welfare Reform
National Foster Care and Adoption Information
	Data Collection Systems
	Trends in Foster Care Caseloads
	National Data on Foster Care and Adoption
	Trends in Child Welfare and Foster Care Costs
Legislative History
References

INTRODUCTION

	Child welfare services aim to improve the conditions of 
children and their families and to improve or provide substitutes for
functions that parents have difficulty performing. Child welfare 
services encompass a broad range of activities, including protection 
of abused or neglected children, support and preservation of families, 
care of the homeless and neglected, support for family development, 
and provision of out-of-home care, including adoption. Services may 
help the family cope with problems or they may protect children while 
the family learns to perform appropriate parenting roles.
	It is generally agreed that it is in the best interests of 
children to live with their families. To this end, experts emphasize 
both the value of preventive and rehabilitative services and the need 
to limit the duration of foster care placements. However, if children 
must be removed, a major principle of professional social work is the 
provision of permanent living arrangements, either by returning 
children to their homes in a timely fashion or by moving children 
into adoption or other permanent arrangements.
	Many private, nonprofit and government entities work to 
provide child welfare services to families in need. The primary 
responsibility for child welfare services in the government, however, 
rests with the States. Each State has its own legal and administrative 
structures and programs that address the needs of children. The 
Federal Government has also been involved in efforts to improve the 
welfare of children in specific areas of national concern since the 
early 1900s. The largest Federal programs are authorized under titles 
IV-B and IV-E of the Social Security Act, are administered by the 
U.S. Department of Health and Human Services (HHS), and are under the 
jurisdiction of the House Committee on Ways and Means. Additional non-
Social Security Act Federal programs include grants to States, local 
governments and nongovernmental agencies for prevention and treatment 
of child abuse and neglect, advocacy centers for victims of sexual 
abuse, services for abandoned infants and children with AIDS, 
promotion of adoption, child abuse-related training for judicial 
personnel, federally administered research and demonstration, Indian 
child welfare programs, family violence programs, and a number of 
other small programs. Of these non-Social Security Act programs, most 
have annual funding of less than $25 million. In addition, services 
related to child welfare may be provided at State discretion under the 
Social Services Block Grant (title XX of the Social Security Act), 
described in section 10, and States also use funds under the 
Temporary Assistance for Needy Families program, described in 
section 7, for activities related to child welfare. Finally, a tax 
credit of up to $10,160 in 2003 (and indexed for future years) is 
available to adoptive parents to offset some of the initial expenses 
associated with adoption (including for children with special needs); 
see section 13.
	This section will focus specifically on Child Welfare, Foster 
Care, and Adoption Assistance Programs authorized under titles IV-B 
and IV-E of the Social Security Act.

FEDERAL CHILD WELFARE PROGRAMS TODAY

	The Social Security Act contains the primary sources of 
Federal funds available to States for child welfare, foster care, and 
adoption activities. These funds include both discretionary 
authorizations (for which the amount of funding available is 
determined through the annual appropriations process) and entitlements 
(under which the Federal Government has a binding obligation to make 
payments to any person or unit of government that meets the 
eligibility criteria established by law). The programs include the 
title IV-B Child Welfare Services, Promoting Safe and Stable Families, 
and Mentoring Children of Prisoners programs; and the title IV-E 
Foster Care, Adoption Assistance, and Foster Care Independence 
programs. 
	Table 11-1 lists these programs, and describes their funding. 
Table 11-2 provides data on the level of Federal funds provided to 
States under titles IV-B and IV-E for fiscal years 1989-2001, and the 
HHS projections for fiscal years 2002-2008.

TABLE 11-1 -- MAJOR FEDERAL PROGRAMS DEDICATED TO THE SUPPORT OF 
CHILD WELFARE ACTIVITIES

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

	Funds available to States from the title IV-B programs may be 
used for services to families and children without regard to family 
income. Federal matching funds for foster care maintenance payments 
under title IV-E are provided only in those cases in which the child 
would have been eligible for the old Aid to Families with Dependent 
Children (AFDC) program if still in the home. All children determined 
to have "special needs" related to their being adopted, as defined 
under title IV-E, are eligible for reimbursement of certain non-
recurring costs of adoption under the Title IV-E Adoption Assistance 
Program. However, only AFDC- or Supplemental Security Income (SSI)-
eligible "special-needs" children qualify for federally-matched 
adoption assistance payments available under title IV-E. Funds 
available to States for the Title IV-E Chafee Foster Care Independence 
Program may be used for services which facilitate the transition of 
children from foster care to independent living, regardless of whether 
they are eligible for foster care assistance under title IV-E.
	In addition to the programs described above, title IV-B 
authorizes funds for research and demonstration activities and for 
direct Federal grants to public and private entities for child welfare 
staff training. Under title IV-E, incentive payments are authorized 
for States that increase their number of adoptions of foster children, 
including children with special needs, above specified baselines.
	Table 11-3 provides HHS data and projections on participation 
under the title IV-E programs; data on participation in title IV-B 
programs are not available. Table 11-4 shows the Congressional Budget 
Office (CBO) projections for Federal foster care and adoption 
assistance caseloads and outlays for fiscal years 2003-2008. According 
to CBO, between 2003 and 2008, the federally-funded foster care 
caseload is projected to decline from 250,000 to 228,000 (9 percent). 
Over the same time period, title IV-E foster care outlays are expected 
to increase 14 percent, from $4.6 billion to $5.2 billion.  Also over 
the same time period, the adoption assistance caseload is projected to 
increase from 317,000 to 451,000 (42 percent), while total adoption 
assistance outlays are estimated to increase from $1.5 billion to  
$2.5 billion (66 percent).

TABLE 11-2 -- FEDERAL FUNDING TO STATES FOR CHILD WELFARE ACTIVITIES 
UNDER TITLES IV-B AND IV-E OF THE SOCIAL SECURITY ACT, 1995-2008 

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

TABLE 11-3--PARTICIPATION IN FOSTER CARE, ADOPTION, AND INDEPENDENT 
LIVING ACTIVITIES UNDER TITLE IV-E OF THE SOCIAL SECURITY ACT, 
1988-2008

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

TITLE IV-B CHILD WELFARE PROGRAMS

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

TABLE 11-4 -- CBO BASELINE CASELOAD AND OUTLAY PROJECTIONS FOR THE 
FEDERAL FOSTER CARE AND ADOPTION ASSISTANCE PROGRAMS, FISCAL YEARS

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

	Under legislation originally enacted in 1980 (Public Law 96-
272), States are limited in the amount of their title IV-B allotments 
that may be used for child day care, foster care maintenance payments, 
and adoption assistance payments. Specifically, States may use no more 
than their portion of the first $56.6 million in Federal title IV-B 
appropriations for these three activities. The intent of this 
restriction is to devote as much title IV-B funding as possible to 
supportive services that could prevent the need for out-of-home 
placement.  In November 2003, HHS issued a Program Instruction 
(ACYF-CB-PI-03-07) showing each State's title IV-B subpart 1 funding 
limit for foster care, adoption assistance, or work-related child 
care and instructing States to ensure that their estimated 
expenditures for those items, which are included in annual and 5-year 
planning documents, do not exceed these limits.
	Between 1977 and 1990, the annual authorization level for the 
Child Welfare Services Program remained flat at $266 million. The 
authorization level was increased to $325 million under Public Law 
101-239 beginning with fiscal year 1990. Appropriations for the 
program - the amount of money Congress actually made available for 
spending each year - increased from $163.6 million in fiscal year 
1981 to $294.6 million in fiscal year 1994. Appropriations decreased, 
to $292 million in fiscal year 1995 and $277.4 million in fiscal year 
1996, and have generally remained at $292 million since fiscal year 
1997 (see Table 11-2). Table 11-5 details the State-by-State 
distribution of child welfare service funds for selected fiscal years. 
Child welfare service funds are distributed to States on the 
basis of their under 21 population and per capita income.

TABLE 11-5 -- STATE -BY-STATE ALLOCATIONS FOR TITLE IV-B 
(SUBPART 1) -- CHILD WELFARE SERVICES, SELECTED FISCAL YEARS 1994-2003

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

	Because of minimal reporting requirements, no reliable data 
are available on the exact number of children or families served, 
their characteristics, or the services provided with child welfare 
service funds. The U.S. General Accounting Office reported in 
September 2003 that, based on its own surveys, States spent about  
28 percent of Child Welfare Services funds (title IV-B, subpart 1) 
in fiscal year 2002 on salaries for child welfare agency staff, 
primarily social workers who perform such activities as child 
protective services investigations, recruitment of foster parents, 
and making referrals for families in need of services (GAO, 2003).  
Another 17 percent was used for administration and management, 
16 percent for child protective services (e.g., telephone hotlines, 
emergency shelters, and investigative services), and 11 percent for 
foster care maintenance payments.  GAO further found that 42 percent 
of funding in fiscal year 2002 was targeted toward children in foster 
care and their parents, another 17 percent was targeted toward 
children at risk of abuse or neglect and their parents, and additional 
funds were spent on a combination of these populations. About 
5 percent of subpart 1 funding was targeted toward children waiting 
for adoption, or adopted children and adoptive parents, and 4 percent 
of subpart 1 funding was targeted toward such populations as 
delinquent youth or foster parents.  GAO reported that HHS conducts 
little specific oversight of States' use of subpart 1 funds, and does 
not generally monitor State compliance with the statutory provision 
limiting the use of these funds for foster care, adoption assistance, 
or work-related child care.
	A 1997 study funded by HHS provided some information on the 
number and characteristics of children and families served by the 
child welfare system in 1994, and examined changes in this population 
since a similar study was conducted of children and families served in 
1977 (U.S. Department, 1997). This study looked at children served by 
all components of the child welfare system, regardless of funding 
source, and found a significant decline in the number of children 
receiving services from the child welfare system, from an estimated 
1.8 million children in 1977 to an estimated 1 million in 1994. Of 
these totals, about the same number of children in each of the 
2 years were in foster care (543,000 in 1977 and 502,000 in 1994).  
However, HHS found a sharp drop in the number of children receiving 
services while still living at home, and a substantial increase in the 
percent of children receiving services as a result of abuse or neglect 
(45 percent in 1977 compared with 80 percent in 1994). The report 
suggests that child welfare agencies in 1994 were dealing with more 
difficult cases that required more extensive services and therefore 
were forced to set priorities and narrow their focus from a broader 
population of children and families to those in more immediate crisis. 
It is also worth noting that this study was conducted just prior to 
the full implementation of the Promoting Safe and Stables Families 
program.

Grants to States for promoting safe and stable families
	Grants to States for family preservation and family support 
services were originally authorized as a capped entitlement under 
subpart 2 of title IV-B, beginning in fiscal year 1994. States already 
had the flexibility to expend their child welfare services funds 
available under subpart 1 of title IV-B for family support and 
preservation activities, but few States used a significant share of 
such funds for these two categories of services. Entitlement funding 
was authorized for five years at the following levels: $60 million in 
fiscal year 1994; $150 million in 1995; $225 million in 1996; $240 
million in 1997; and either $255 million in 1998 or the 1997 level 
adjusted for inflation, whichever was greater. The Adoption and Safe 
Families Act (Public Law 105-89), enacted in November 1997, 
reauthorized and changed the name of this program to Promoting Safe 
and Stable Families (PSSF). Entitlement ceilings were set at the 
following levels: $275 million for fiscal year 1999, $295 million 
for 2000, and $305 million for 2001.  The Promoting Safe and Stable 
Families Amendments of 2001 (Public Law 107-133) reauthorized the 
program for five years (fiscal years 2002 through 2006) at $305 
million per year in mandatory funds and also authorized an 
additional $200 million per year in discretionary funding, for 
a total authorization of $505 million per year.  Of this discretionary 
authorization, Congress appropriated $70 million in fiscal year 2002 
and $99.4 million in fiscal year 2003.  The 2001 reauthorization also 
allowed for PSSF funds that are certified as unused by a State to be 
reallocated to other States.  
	From the mandatory ceiling amounts, $6 million is reserved 
each fiscal year for use by the Secretary of HHS to fund research, 
training, technical assistance, and evaluation of PSSF activities. 
In addition, $10 million is reserved each fiscal year for a grant 
program for State courts (described below). Indian tribes are allotted 
one percent of the mandatory PSSF funds.  From any discretionary 
funds appropriated, the following set-asides are made: 3.3 percent 
for evaluations, research, training, and technical assistance, 
3.3 percent for State court improvement grants, and 2 percent for 
Indian tribes.	
	After these set-asides are made, the remaining funds are 
allocated among States according to their relative shares of children
receiving food stamps, subject to a 25 percent non-Federal match. 
Table 11-6 shows State allotments of Promoting Safe and Stable 
Families funds in fiscal years 1999-2003. 
	States must submit a plan to HHS that provides a detailed 
account of how the money will be used. Prior to the enactment of 
Public Law 105-89, at least 90 percent of the funds had to be used for 
two categories of services: family preservation services and 
community-based family support services. Public Law 105-89 added two 
additional categories: time-limited family reunification services, 
and adoption promotion and support services. No more than 10 percent 
of funds can be used for administration.
	The Federal statute does not specify a percentage or minimum 
amount of funds that must be spent on any particular category of 
service, but says that States must devote "significant portions" of 
their expenditures to each of the four categories. HHS has issued 
annual program instructions specifying that States must have a "strong 
rationale" for spending less than 20 percent of their allotments on 
each of the four categories of services. 
	Family preservation services are intended for children and 
families, including extended and adoptive families that are at risk or 
in crisis. Services include: programs to help reunite children with 
their biological families, if appropriate, or to place them for 
adoption or another permanent arrangement; programs to prevent 
placement of children in foster care, including intensive family 
preservation services; programs to provide follow-up services to 
families after a child has been returned from foster care; respite 
care to provide temporary relief for parents and other care givers 
(including foster parents); services to improve parenting skills; 
and services to support infant "safe haven" programs (added by 
Public Law 107-133). 

TABLE 11-6 -- STATE BY STATE ALLOCATIONS FOR TITLE IV-B (SUBPART 2) 
PROMOTING SAFE AND STABLE FAMILIES, FISCAL YEARS 1999-2003

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

	Family support services are intended to reach families that 
are not yet in crisis and to prevent child abuse or neglect from 
occurring. Family support services are generally community-based 
activities designed to promote the well-being of children and 
families, to increase the strength and stability of families 
(including adoptive, foster, and extended families), to increase 
parents' confidence and competence, to provide children with a 
stable and supportive family environment, to enhance child 
development, and to strengthen parental relationships and promote 
healthy marriages (added by Public Law 107-133). Examples include 
parenting skills training, respite care to relieve parents and other
care givers, structured activities involving parents and children to 
strengthen their relationships, drop-in centers for families, 
information and referral services, and early developmental screening 
for children. 
	As added by Public Law 105-89, time-limited reunification 
services are services and activities intended to facilitate the safe 
and appropriate reunification of children who have been removed from 
home and placed in foster care with their parents in a timely 
fashion; i.e., within 15 months of having entered foster care. 
Reunification services for children and their families include 
counseling, substance abuse treatment services, mental health 
services, assistance to address domestic violence, temporary child 
care and therapeutic services such as crisis nurseries, and 
transportation to and from these activities. Adoption promotion and 
support services, also added by Public Law 105-89, are services and 
activities designed to encourage more adoptions out of the foster care 
system, including pre- and post-adoptive services and activities 
designed to expedite adoptions and support adoptive families. 
	In regulations proposed on October 4, 1994 and made final on 
November 18, 1996, HHS set forth a series of child and family services 
"principles" that were intended to guide State implementation of the 
program. According to HHS, these principles emphasize the paramount 
importance of safety for all family members, including victims of 
child abuse and neglect and victims of domestic violence and their 
dependents. In the preamble to its regulations, HHS stated that family 
preservation "does NOT mean that the family must stay together or 
'be preserved'under all circumstances."  The principles also were 
intended to support a family-focused approach while allowing for 
individual needs and a service delivery approach that stresses 
flexibility, accessibility, coordination, and respect for cultural 
and community strengths. 
	The Secretary of HHS is required to evaluate activities under 
subpart 2 of title IV-B. In September 1994, the Secretary funded 
three evaluation projects: a study of the implementation of family 
preservation and family support programs; a national evaluation of 
family preservation and reunification programs; and a national 
evaluation of family support programs.  Summaries of the findings are 
found below.
	James Bell Associates released the final report (2003) on the 
family preservation and family support services implementation study, 
reporting on State and local planning efforts, the relationship of 
planning to service delivery, and the design of programs. The report 
stated that services did not fall neatly into the categories defined 
in the legislation, particularly for family preservation and family 
support, and, as was discussed in the interim report, the majority 
of services were in general more characteristic of family support 
programs.  However, the final report revealed that program sites 
appear to be moving toward a greater balance in service provision 
among the four categories.  This is also evidenced in the budget 
planning documents submitted by States to HHS, which show that funds 
have been shifted from family support programs to programs focusing 
on time-limited family reunification and adoption promotion and 
support.
	The final evaluation of family preservation and reunification 
(Westat, Chapin Hall Center for Children, James Bell Associates, 
2002) studied programs in four States (Kentucky, New Jersey, 
Tennessee, and Pennsylvania); three sites used the Homebuilders model, 
and one used a broader, home-based model.  The evaluation found no 
significant differences between the experimental and control groups 
for rates of foster care placement, days in care, case closings, or 
subsequent maltreatment.  In two of the four States, caretakers in 
the experimental groups tended to report greater improvement in their 
lives than those in the control group.  The evaluation's findings of 
minimal effects and benefits of family preservation programs are 
similar to those from previous evaluations and research.  The 
evaluation cautioned that these results should not be taken to mean 
that family preservation programs serve no useful purpose, but rather 
that they should indicate that these programs may need to undergo 
several changes, such as providing more targeted services to various 
subgroups and rethinking program objectives. 
	The final evaluation of family support programs (Abt 
Associates, 2001) found varied results on the effectiveness of these 
programs.  The evaluation's analysis of existing research on family 
support programs found that focusing on specific at-risk groups, such 
as children with special needs or teenage parents with young children, 
and providing support services in groups managed by professional 
staff, rather than home visits by paraprofessionals, were shown to 
have positive effects on parents and children.  Additionally, in order 
to positively affect children's cognitive development and school 
readiness, family support services must be provided directly to 
children rather than through parenting education.  However, although 
certain family support strategies have proven to be effective with 
specific populations, no single program approach was determined to be 
effective across all populations.
	Some additional information on States' use of PSSF funds was 
included in the September 2003 report by GAO on title IV-B in general 
(referred to earlier). Through surveys, GAO found that States spent 
almost half of their subpart 2 funds in fiscal year 2002 on family 
support and prevention activities and another 12 percent on family 
preservation.  About 14 percent was used for adoption activities and 
post-adoption services and 9 percent was used for family 
reunification.

Court Improvement Program 
	A portion of the Promoting Safe and Stable Families funds is 
reserved for a grant program to the highest State courts to assess 
and improve certain child welfare proceedings. The court set-aside 
equals $10 million in mandatory funds and  3.3 percent of any 
discretionary funds appropriated for each of fiscal years 2002-2006.  
A 25 percent non-Federal match is required.
	Courts use their grant funds to assess their procedures and 
effectiveness in determinations regarding foster care placement, 
termination of parental rights (TPR), and recognition of adoptions. 
Courts also can use these grant funds to implement changes found 
necessary as a result of the assessments. According to HHS, as of 
fiscal year 2003, 50 States and the District of Columbia were 
participating in this program.
	According to a review conducted for HHS on court improvement 
activities during 1995-98, States conducted thorough assessments of 
their judicial systems and came up with various recommendations 
(James Bell Associates, 1999). Categories where improvement was most 
commonly recommended were: representation of parties, timeliness of 
decisions, management information systems, quality of court hearings, 
judicial expertise, multidisciplinary training for court participants, 
coordination between the courts and child welfare agency or service 
providers, treatment and participation of parties, and resources for 
courts and social services. The activities most commonly implemented 
included: development of training and educational materials; pilot 
programs; revision of legislation, court rules and judicial 
directives; development of automated case tracking systems, public 
relations campaigns and local work groups; supplemental assessments or 
studies; increased number of attorneys, judges and other court 
personnel; hiring of court improvement coordinating staff; and 
improved treatment of parties. The report found that court improvement 
changes were still at an early stage, partially because initial 
assessments took longer to complete than expected and also because 
reforms requiring new legislation or staff take time to implement. 
However, the report concluded that the Court Improvement Program had 
raised the visibility of courts within the child welfare system and 
provided States with flexibility and resources to address court-
related challenges.

Mentoring Children of Prisoners
	The Promoting Safe and Stable Families Amendments of 2001 
(Public Law 107-133) created new program authority to provide 
mentoring services to children of prisoners.  This program is 
authorized to be funded at $67 million for each of fiscal years 2002 
and 2003 and for such sums as necessary in succeeding years. Funding 
for this program is separate from the $505 million authorized for PSSF 
activities.  This program received initial funding of $10 million in 
fiscal year 2003. HHS may provide grants of up to $5 million each to 
State or local governments, community- and faith-based organizations, 
and tribes or tribal groups in areas where there are significant 
numbers of children of prisoners.  Grantees must use non-Federal 
resources to make a minimum 25 percent in-kind or cash match of 
Federal funds for the first two years of a grant reward and a minimum 
of 50 percent match in succeeding years.  Two and a half percent of 
annually appropriated funds for this program are reserved for 
evaluation.

Child welfare research, training, studies
	In addition to providing funds to the States for services, 
title IV-B authorizes the Secretary of HHS to make direct grants for
research and demonstration, training, and studies. Specifically, 
section 426 authorizes direct grants from HHS to public and private 
organizations and institutions of higher education for research and 
demonstration projects related to child welfare, and for training 
projects for personnel in the child welfare field. For fiscal year 
2003, $7.4 million was appropriated for child welfare training, but 
no funding was provided for research and demonstration under 
section 426.
	Section 429A was added to title IV-B by the welfare reform 
legislation enacted in 1996 (Public Law 104-193). This provision
authorized and appropriated funds for HHS to conduct a national 
longitudinal study of children at risk for abuse or neglect, and of 
children who have been identified as victims of abuse or neglect. For 
this study, the welfare reform law appropriated $6 million for each 
of fiscal years 1996-2002; however, Congress subsequently rescinded 
the appropriations for each year, with the understanding that adequate 
funding was available for the study in the broader appropriation for 
social services and income maintenance research.
	In response to the section 429A provision, HHS has undertaken 
the National Survey of Child and Adolescent Well-Being (NSCAW). HHS 
anticipates that this study will provide nationally representative 
data on children and families that come into contact with the child 
welfare system, which will enable analysis of child and family well-
being outcomes in relation to the experience of children and families 
with the child welfare system, as well as characteristics of the 
families, the community environment, and other factors. The study is 
being conducted over a 6-year period (1997-2003) and includes a 
sample of more than 6,000 children, ages 0-14, from 100 child 
welfare agencies nationwide.
	In addition to child-level data, NSCAW is collecting data from 
State and local administrators, and findings from this component of 
the study were reported in June 2001.  Of the 46 State administrators 
participating in the survey, two-thirds reported that the Adoption and 
Safe Families Act of 1997 (Public Law 105-89) has caused improvements 
or changes in at least one of the following areas: child safety, 
permanency, collaboration with the courts, and data collection.  State 
administrators reported that formal collaborations have increased 
between agencies and groups serving child welfare clients, and that 
participation in multidisciplinary teams has increased, involving 
more partners (including families) and beginning at earlier stages of 
a case.  Local agencies described a dynamic system; 40 percent of 
local agencies had developed new initiatives in the previous 12 months.  
The Adoption and Safe Families Act resulted in shortened permanency 
planning time frames for almost all local agencies, greater emphasis 
on safety for about 60 percent, and increased emphasis on adoption 
for children in kinship foster care for the majority of local 
agencies.  Local agencies agreed that regulations, paperwork, and the 
number of hours worked per case had increased, with no decrease in 
the actual number of cases.  Local agencies reported less impact 
from interethnic adoption provisions enacted by Congress in the 
1990s, reporting some increased training on this issue but no 
increase in transracial foster or adoptive placements for 77 percent 
of local agencies.

THE TITLE IV-E FOSTER CARE PROGRAM

Eligibility criteria
	The Foster Care Program under title IV-E is a permanent 
entitlement that provides open-ended matching payments to States for 
the costs of maintaining certain children in foster care, and 
associated administrative, child placement, and training costs. 
Several eligibility criteria apply to the foster children on whose 
behalf Federal reimbursement is available to States. First, children 
must have been removed from families that would have been eligible 
for Aid to Families with Dependent Children (AFDC), as the program 
existed in their State on July 16, 1996. Although welfare reform 
legislation enacted in 1996 (Public Law 104-193) repealed the AFDC 
Program, its eligibility criteria continue to be used for determining 
children's eligibility under title IV-E. Under Public Law 104-193 as 
originally enacted, foster children would be eligible under 
title IV-E if their families met the AFDC criteria of June 1, 1995; 
however, technical corrections enacted in 1997 changed this date to 
July 16, 1996 (Public Law 105-33). The welfare reform legislation 
replaced AFDC with a block grant to States called Temporary Assistance 
for Needy Families (TANF), and requires all States participating in 
TANF to certify that they will operate a foster care and adoption 
assistance program under title IV-E. 
	States are required to provide foster care maintenance 
payments to AFDC-eligible children removed from the home of a relative 
if the child received or would have received AFDC prior to removal 
from the home and if the following also apply: (1) the removal and 
foster care placement were based on a voluntary placement agreement 
signed by the child's parents or guardians or a judicial determination 
that remaining in the home would be contrary to the child's welfare; 
(2) reasonable efforts were made to eliminate the need for removal or 
to return the child home (unless certain exceptions apply, which are 
described later in the section); and (3) care and placement of the 
child are the responsibility of the State. Children whose expenses are
eligible for reimbursement under title IV-E also are deemed eligible 
for Medicaid. Finally, States may claim reimbursement on behalf of 
eligible children who have been placed in licensed or approved foster 
family homes or child care institutions, which can be public or 
private, including both for-profit and nonprofit. Public child care 
institutions can accommodate no more than  25 children, although no 
limitation applies to the size of private institutions. Detention 
facilities for children determined to be delinquent are not eligible
for Federal reimbursement under title IV-E.
	Not all foster children meet the Federal eligibility criteria 
just described.  Table 11-7 shows, for each of fiscal years 1999 
through 2001, the average monthly number of foster children in each 
State who were eligible for Federal subsidies under title IV-E, and 
the total number of foster children in each State who were in care on 
September 30 of the given fiscal year.  While these two sets of 
numbers are not directly comparable, they can be used to give rough 
estimates of the percent of foster children who are supported solely 
with State and/or local funds.

Financing structure
	The Federal matching rate for foster care maintenance payments 
for a given State is that State's Medicaid matching rate, which is 
inversely related to State per capita income, may vary annually, and 
can range from 50 to 83 percent. States may claim open-ended Federal 
matching at a rate of 50 percent for their child placement services 
and administrative costs, including costs of data collection. States 
may claim open-ended Federal matching at a rate of 75 percent for 
costs of training personnel employed (or preparing for employment) 
by State or local agencies administering the program and for training 
current and prospective foster and adoptive parents. During fiscal 
years 1994-97, States also were able to receive Federal matching at 
the 75 percent rate for certain costs related to the development 
of Statewide Automated Child Welfare Information Systems (SACWIS);
currently, these costs are matched at the 50 percent rate.

TABLE 11-7-- TITLE IV-E AND TOTAL FOSTER CARE CASELOADS, BY STATE, 
FISCAL YEARS 1999-2001 

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

Foster care expenditures and participation rates
	The average estimated monthly number of children in title 
IV-E foster care grew by 131 percent between 1988 and 1998, from 
132,757 to 306,500 (Table 11-3). However, between 1998 and 2002, the 
number declined 17 percent, to 254,000, and is projected to continue 
a gradual decline to 237,300 in 2008.  Also between the years 1998 
and 2002, while the caseload grew smaller, Federal spending on title 
IV-E foster care increased 22 percent, from $3.7 billion to an 
estimated $4.5 billion (Table 11-2).  Table 11-8 provides a State 
breakdown of foster care expenditures in fiscal year 2002, showing 
maintenance payments, child placement services and administration, 
information systems, training, and expenditures under waiver 
demonstrations. Note that California, New York, Pennsylvania, 
Illinois and Ohio accounted for 56 percent of total Federal foster 
care expenditures in fiscal year 2002.  California alone accounted 
for 26 percent of all Federal foster care expenditures in that year.
	Federal expenditures for child placement services, 
administrative costs, training, and information systems have grown 
more rapidly (increasing by 390 percent from fiscal year 1989 to 
fiscal year 2002) than expenditures for foster care maintenance 
payments (which grew by 214 percent during that time period). In 
fiscal year 1989, expenditures for child placement services, 
administration, training, and information systems equaled $507 
million, or 44 percent of total Federal foster care expenditures. 
In fiscal year 2002, Federal expenditures for child placement 
services, administration, training, and information systems totaled 
almost  $2.5 billion, or 55 percent of total Federal expenditures 
for foster care. HHS regulations give the following examples of 
allowable child placement services and administrative costs for foster 
care under title IV-E: referral to services, preparation for and 
participation in judicial determinations, placement of the child, 
development of the case plan, case reviews, case management and 
supervision, recruitment and licensing of foster homes and 
institutions, rate setting, and a proportionate share of agency 
overhead. In addition, Federal matching is available for certain 
expenses related to data collection and automation of child welfare 
information systems (see below). Expenditures for child placement 
services and administration also include expenditures made on behalf 
of children before and during the time a title IV-E eligibility 
determination is made; as a result, Federal reimbursement is provided 
for expenditures made for some children who, ultimately, are 
determined not eligible for title IV-E maintenance payments. 
	In response to concerns about the rapid growth in 
administrative costs, the 101st Congress enacted legislation as part 
of the Omnibus Budget Reconciliation Act of 1990 (Public Law 101-508) 
that was intended to provide better information on State reimbursement 
for administrative costs. Under Public Law 101-508, "child placement 
services'' was added as a separate category for which States could 
claim reimbursement, in addition to administrative costs. Prior to 
this provision, child placement services were included among 
administrative costs and not identified separately. HHS reports that 
of claims filed for child placement and administrative costs in fiscal
year 2001, 45 percent were for case planning and management 
activities, 19 percent were for preplacement activities, 4 percent 
were for eligibility determinations, and the remaining 32 percent 
were for other activities including traditional administrative and 
overhead costs.

Foster care payment rates
	Table 11-9 shows each State's "basic" monthly foster care 
payment rates in 1994, 1998, and 2000 for children ages 2, 9, and 16, 
as reported in surveys conducted by the Child Welfare League of 
America. States are allowed to set the payments at any level; thus, as 
the Table shows, the rates vary widely. The basic monthly foster care 
rates shown in the Table are those paid for family foster care, and 
differ from rates paid for group or congregate care.
	The family foster care rates shown in the table are only 
generally comparable due to variations among States regarding the 
items that are covered under the basic rate, additional services that 
are provided by supplements (which are not shown in this table), and 
the States' administrative structures. Room and board is covered in 
all of the basic family foster care rates shown; some of the rates 
shown also include amounts for supervision or clothing.  States 
include other items in their basic rates, such as child care, respite 
care, transportation, personal allowance, school supplies, 
recreational and community activities, and incidentals. In addition, 
many States and counties supplement their basic rates for items such 
as education, child care, respite care, level of need, clothing, 
transportation, health and medical care (other than

TABLE 11-8 -- ESTIMATED FEDERAL IV-E FOSTER CARE EXPENDITURES,
FISCAL YEAR 2002

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

Medicaid or State-funded medical assistance), and special emotional, 
behavioral, medical, or psychological needs.
	Public Law 96-272 (1980) stipulated that title IV-E foster 
care payments could be made for children in public institutions, 
whereas previously under title IV-A (AFDC), payments were limited 
to children in private nonprofit institutions or foster family homes. 
To qualify for Federal payments, these public institutions may not 
accommodate more than 25 children. Facilities operated primarily for 
the detention of delinquents, including forestry camps and training 
schools, are ineligible for Federal funds. Legislation enacted in 1996 
(Public Law 104-193) also allows participation of for-profit 
institutions. It is generally agreed that the costs associated with 
institutional care are substantially higher than the cost of family 
foster care. However, definitive data are not available.

History of Federal protections for children in foster care 
	The 1980 legislation that established the current framework 
of titles IV-B and IV-E contained several provisions intended to 
protect foster children and children at risk of foster care placement. 
Under the 1980 law as originally enacted, States were not eligible 
for all of their Federal title IV-B funds unless the following 
protections had been implemented: (1) a one-time inventory of children 
who had been in foster care more than 6 months to determine the 
appropriateness of and necessity for their current foster care 
placement, whether the child should be returned home or freed for 
adoption, and the services needed to achieve this placement goal; 
(2) a statewide information system containing the status, demographic 
characteristics, location, and placement goals of every child in care 
for the preceding 12 months; (3) a case review system to assure 
procedural safeguards for each child in foster care, including a 
6-month court or administrative review and an 18-month dispositional 
hearing to assure placement in the least restrictive (most family-
like) setting available, in close proximity to the child's original 
home, and consistent with the child's best interest; and (4) a 
reunification program to return children to their original homes.
	These provisions were originally contained in section 427 of 
the Social Security Act. Effective for fiscal years beginning after 
April 1, 1996, however, these protections are required of States as 
a component of their State plans under section 422 of the act. This 
change was enacted under the Omnibus Budget Reconciliation Act of 1993 
(Public Law 103-66). In addition, the Adoption and Safe Families Act 
(Public Law 105-89) made significant changes in the case review 
system, including a requirement that dispositional hearings (renamed 
permanency hearings) be held at 12 months after placement and a 
requirement that States initiate procedures to terminate parental 
rights after a child has been in foster care a certain period of time 
(see below).
	Since April 1, 1996, States have been required to implement 
preplacement preventive services as a component of their State plans. 
In addition, under Public Law 103-66, States are required to review 
their policies and procedures related to abandoned children and to 
implement any changes necessary to enable permanent placement 
decisions to be made expeditiously for such children.
	States must comply with certain State plan requirements under 
title IV-B that are intended to protect all children in foster care. 
The law reinforces these protections by specifically requiring that 
they be provided in the case of children for whom Federal 
reimbursement is claimed under title IV-E. In addition, the law 
requires States to establish specific goals for title IV-E-eligible 
children who will remain in foster care more than 24 months, and to 
describe the steps the State will take to meet these goals. 

Mandatory procedural safeguards: "reasonable efforts"
	The 1980 legislation required that in every case, "reasonable 
efforts'' must be made to prevent placement of a child in foster care 
and to reunify a foster child with her parents. The Adoption and Safe 
Families Act (Public Law 105-89), enacted in November 1997, modified 
this provision. First, the law now specifies that a child's health and 
safety must be of "paramount" concern in all efforts made by the State 
to preserve or reunify the child's family. States continue to be 
required to make reasonable efforts to preserve or reunify the 
family, but the 1997 law established exceptions to this requirement.  
Specifically, States are not required to make such efforts if a court 
finds that a parent had killed another of their children, or committed 
felony assault against the child or a sibling, or if their parental 
rights to another child had previously been involuntarily terminated.
	In addition, the law establishes that efforts to preserve or 
reunify a family are not required if the court finds that a parent 
had subjected the child to "aggravated circumstances." Each State may 
define these circumstances in State law; the act cites abandonment, 
torture, chronic abuse, and sexual abuse as examples. Moreover, the 
law does not preclude judges from using their discretion to protect a
child's health and safety regardless of whether the specific 
circumstances are cited in Federal law. If the court determines that 
reasonable efforts to preserve or reunify a child and family are not 
required, the law now requires that a permanency hearing be held 
within 30 days of the child entering foster care, and that reasonable
efforts be made to place the child for adoption or in an alternative 
permanent setting in a timely manner.
	Notwithstanding the exceptions allowed under the Adoption and 
Safe Families Act, reasonable efforts to preserve or reunify a family 
are still required in most cases. The Social Security Act establishes 
this requirement in two separate provisions. First, in order for a 
State to be eligible for title IV-E funding, its plan must specify 
that reasonable efforts will be made prior to a child's placement in 
foster care to prevent the need for placement or to help the child 
return home, unless the exceptions described above apply (section 
471(a)(15)). Second, for every title IV-E-eligible child placed in 
foster care, a judicial determination must be made and documented that 
reasonable efforts were made to prevent placement into foster care 
in that particular case, unless an exception applies (section 
472(a)(1)).

TABLE 11-9 -- FOSTER CARE BASIC MONTHLY MAINTENANCE RATES FOR CHILDREN 
AGES 2, 9, AND 16, SELECTED YEARS 1994-2000

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

	The term "reasonable efforts" is not defined in law or 
regulations. Instead, U.S. Department of Health and Human Services 
(HHS) regulations have required State plans to include a description 
of the services provided to prevent removal or to reunify families. 
The regulations provide an illustrative list of the types of 
preplacement preventive and reunification services that may be 
offered. This list includes: 24-hour emergency caretaker and homemaker 
services; day care; crisis counseling; emergency shelters; access to 
available emergency financial assistance; respite care; home-based
family services; self-help groups; services to unmarried parents; 
provision of or arrangement for mental health; drug and alcohol abuse 
counseling; vocational counseling or vocational rehabilitation; and 
postadoption services.
	Because "reasonable efforts" is not defined by statute, 
Federal courts have been active in defining reasonable efforts in 
individual cases. Over the 20 years since enactment of Public Law 
96-272, numerous lawsuits have been filed by foster children, parents, 
and advocacy groups against State and local child welfare systems, 
challenging their failure to make reasonable efforts to preserve or
reunify families. Many of these cases have been broad in scope, and 
some Federal courts have become involved in the overall child welfare 
system, although this traditionally has been an area of exclusive 
State jurisdiction.
	As a result of the U.S. Supreme Court's decision in one such 
case (Suter v. Artist M., 1992), Congress enacted legislation in 1994 
(Public Laws 103-382 and 103-432). These laws added a new section to 
the Social Security Act, which was inadvertently enacted twice, as 
section 1123 and section 1130A. The provision establishes that, in 
any action brought to enforce a provision of the Social Security 
Act, the provision is not to be deemed unenforceable because of its 
inclusion in a section of the act requiring a State plan. Congress 
explicitly stated that it does not intend to limit or expand any 
grounds for determining the availability of private actions to 
enforce State plan requirements. The provision also is not intended to 
alter the Court's decision in Suter that the reasonable efforts 
requirement is not enforceable in a private right of action.

Mandatory procedural safeguards: case planning and case reviews
	The law specifies case review provisions that apply to all 
foster children, as required by the title IV-B State plan, and to 
title IV-E-eligible children in order for States to claim Federal 
reimbursement for expenditures made on their behalf. The case review 
process must include a written case plan that: describes the child's 
placement, including its safety and appropriateness; describes a plan 
for assuring the child receives safe and proper care and that services 
are provided to enable the child to return home or to another 
permanent setting; includes the child's health and education records; 
describes services to help the child prepare for independent living, 
if the child is age 16 or older; and for children with permanency
plans of adoption or another permanent arrangement, documents the 
steps taken or planned by the agency to place the child in accordance 
with that plan. Children must have a case plan that is designed to 
achieve a safe setting, that is the least restrictive (most family-
like) and most appropriate setting available, in close proximity to 
the child's parent's home, and is consistent with the child's best 
interest and special needs.	The law also requires an 
administrative or judicial review at least every 6 months for 
children in foster care to determine the continuing need and 
appropriateness of the foster care setting, compliance with the case 
plan, progress made toward improving the conditions that caused the 
child to be placed in foster care, and projecting a date by which the 
child can be returned home or placed for adoption or legal 
guardianship.
	The mandatory case review process also includes a judicial 
permanency hearing, to be held no later than 12 months after a child 
has entered foster care (as amended by Public Law 105-89), and every 
subsequent 12 months. This hearing determines the child's permanency 
plan; i.e., whether the child should be returned to the parents, 
placed for adoption (in which case, the State also will initiate 
proceedings to terminate parental rights), referred for legal 
guardianship, or placed in another planned, permanent arrangement 
(if other options, including placement with a fit and willing 
relative, are not in the child's best interest). Prior to enactment 
of Public Law 105-89 in 1997, long-term foster care also was a 
specified permanency plan. Also as amended in 1997, the law provides 
that States may make efforts to reunify a child and family 
concurrently with efforts to place the child for adoption or 
guardianship. This practice, referred to as "concurrent planning," 
allows States to develop a backup plan, to save time in case efforts 
to restore the original family are unsuccessful.
	The permanency hearing also must ensure safeguards for 
children placed outside their home State; must determine the 
independent living services needed for foster children aged 16 and 
older; and must ensure safeguards for the parental rights pertaining 
to children in foster care. A child's foster parents, preadoptive 
parents, or relative caretakers must be given notice and an 
opportunity to be heard at any review or hearing held with respect 
to the child.

Mandatory procedural safeguards: filing for termination of parental 
rights (TPR)

	One of the most significant provisions of the 1997 Adoption 
and Safe Families Act requires States to initiate proceedings to 
terminate parental rights for certain foster children. There was no 
comparable provision in prior law. Specifically, the act requires
States to initiate or join TPR proceedings for children who have been 
in foster care for 15 of the most recent 22 months, or for infants 
determined under State law to be abandoned, or in any case in which 
the court has found that a parent has killed another of their children
or committed felony assault against the child or a sibling. States can 
opt not to initiate such proceedings if the child is in a relative's 
care, or if the State agency has documented in the child's case plan 
a compelling reason to determine that TPR would not be in the child's 
best interest, or if the State had not provided necessary services to 
the family. According to final regulations issued by HHS on January 
25, 2000, exceptions to the TPR requirement must be made on a case-
by-case basis; States may not establish blanket exceptions for 
categories of children. For purposes of the TPR provision and the 
12-month permanency hearing, children are considered to have entered 
foster care on the first date that the court finds they have been 
subjected to abuse or neglect, or 60 days after their removal from 
home, whichever occurs first.

THE TITLE IV-E ADOPTION ASSISTANCE PROGRAM

	The Title IV-E Adoption Assistance Program is an open-ended 
entitlement program required of States that participate in TANF. Like 
the IV-E Foster Care Program, the IV-E Adoption Assistance Program 
funds three distinct types of activities: assistance payments for 
qualified children who are adopted, administrative payments for 
expenses associated with placing children in adoption, and training 
of professional staff and parents involved in adoptions.
	Under the Adoption Assistance Program, which is permanently 
authorized, States develop adoption assistance agreements with 
parents who adopt eligible children with special needs. Federal
matching funds are provided to States that, under these agreements,
provide adoption assistance payments to parents who adopt AFDC- or 
SSI-eligible children with special needs. In addition, the program 
authorizes Federal matching funds for States that reimburse the 
nonrecurring adoption expenses of adoptive parents of special-needs 
children (regardless of AFDC or SSI eligibility).

Definition of special needs
	A special-needs child is defined in the statute as a child 
with respect to whom the State determines there is a specific 
condition or situation, such as age, membership in a minority or 
sibling group, or a mental, emotional, or physical disability, which 
prevents placement without special assistance. Before a child can 
be considered to be a child with special needs, the State must 
determine that the child cannot or should not be returned to the 
biological family, and that reasonable efforts have been made to 
place the child without providing adoption assistance. States have 
discretion in defining special-needs eligibility criteria and 
individually determining whether a child is eligible. For example, 
some States add religion or not being able to place the child without
subsidy to the definition of special needs.

Adoption assistance agreements and payments
	An adoption assistance agreement is a written agreement 
between the adoptive parents, the State IV-E agency, and other 
relevant agencies (such as a private adoption agency) specifying the 
nature and amount of assistance to be given. Under the adoption 
assistance agreement, States may make federally subsidized monthly 
adoption assistance payments for AFDC- and SSI-eligible children with 
special needs who are adopted.
	The amount of adoption assistance payments is based on the 
circumstances of the adopting parents and the needs of the child. No 
means test can be used to determine eligibility of parents for the 
program; however, States do consider the adoptive parents' income in
determining the payment. Payments may be adjusted periodically if 
circumstances change, with the concurrence of the adopting parents. 
However, the payments may not exceed the amount the family would 
have received on behalf of the child under foster care. Adoption 
assistance payments may continue until the child is age 18, or, at 
State option, age 21 if the child is mentally or physically disabled. 
Payments are discontinued if the State determines that the parents 
are no longer legally responsible for the support of the child. 
Federally subsidized payments may start as soon as an agreement is 
signed and the child has been placed in an adoptive home.
	Not all families of adopted IV-E eligible children with 
special needs actually receive adoption assistance payments. The 
adoptive parents' circumstances may be such that an adoption subsidy 
is not needed or wanted. Adopted AFDC- or SSI-eligible children with 
special needs are also eligible for Medicaid if an adoption 
assistance agreement is in effect, regardless of whether adoption 
assistance payments are being made. Pursuant to the 1985 budget 
reconciliation legislation, a child for whom an adoption assistance 
agreement is in effect is eligible for Medicaid from the State in 
which the child resides regardless of whether the State is the one 
with which the adoptive parents have an adoption assistance 
agreement.
	States also have the option under the Medicaid Program to 
provide Medicaid coverage for other special-needs children (those 
not eligible for AFDC or SSI) who are adopted under a State-funded 
adoption subsidy program. According to the Association of 
Administrators of the Interstate Compact on Adoption and Medical 
Assistance (AAICAMA), all States but two currently take this option, 
with regard to children for whom they have an adoption assistance 
agreement in effect. (The two that do not take this option are 
Connecticut and New Mexico.) In addition, AAICAMA reports that 32 
States provide Medicaid to children living in their States who have 
State-funded adoption assistance agreements from other States, and 
another 9 States provide Medicaid to children with State-funded 
adoption assistance agreements from other States, but only if those 
States are members of the Interstate Compact on Adoption and Medical 
Assistance. As of February 2003, an additional three States were in 
the process of developing reciprocity policies.
	The Adoption and Safe Families Act (Public Law 105-89) 
contains additional requirements regarding health insurance coverage 
for special-needs adopted children who are not eligible for title 
IV-E adoption assistance. Specifically, the 1997 law requires States 
to provide health insurance coverage to non-title IV-E children for 
whom they have an adoption assistance agreement in effect, if the 
children have special needs for medical, mental health or 
rehabilitative care. This health coverage can be through Medicaid or 
another program, as long as benefits are comparable. In addition, the 
law prohibited States from receiving adoption incentive payments 
(described below), or from receiving waivers of title IV-B or IV-E 
provisions (also described below), unless they provided health 
coverage for non-title IV-E children who are living in their State, 
but who are covered by an adoption assistance agreement from another 
State.
	The structure of adoption subsidy programs varies across 
States. Some States offer basic maintenance payments and also allow 
additional payments for certain activities (such as family 
counseling) or for certain groups of children (such as children with 
severe disabilities). Other States offer one level of payment to 
everyone with no special allowances. Some States allow parents to 
request changes in payment levels on a regular basis if circumstances 
change for a child; others allow very little change once the adoption 
agreement is signed. Some States start payments as soon as placement 
is made; others not until the adoption is finalized. (Table 11-10 
shows basic adoption subsidy rates by State for 2002, as published by 
the North American Council on Adoptable Children in May 2003.)
	Not all children who receive adoption subsidies from States 
are eligible for Federal title IV-E funds.  HHS reports that in 2001, 
74 percent of children adopted from foster care received Federal title 
IV-E adoption assistance and 14 percent received State-funded adoption 
assistance; the remainder did not receive ongoing adoption assistance.  
The non-IV-E children's adoption subsidies are paid solely by the 
State in which their adoption agreement was signed.

Nonrecurring adoption costs
	The Adoption Assistance Program also authorizes Federal 
matching funds for States to pay the one-time adoption expenses of 
parents of special-needs children (regardless of AFDC or SSI 
eligibility). In order to be eligible, the child must be a child with 
special needs, as defined in section 473(c) of the Social Security Act 
and described above.
	Through the program, parents may receive reimbursement of up 
to $2,000 per child for these nonrecurring adoption expenses, and 
States may claim 50 percent Federal matching for these reimbursements. 
Qualified adoption expenses are defined as reasonable and necessary 
adoption fees, court costs, attorney fees, and other expenses that are 
directly related to the adoption of a child with special needs. States 
may vary in the maximum amount they allow parents to receive under 
this provision.
	All States and the District of Columbia have implemented the 
program; Delaware does not operate a separate program for reimbursing 
these one-time expenses. Table 11-10 shows State-by-State data on 
maximum reimbursement rates for nonrecurring expenses, as reported by 
the North American Council on Adoptable Children in May 2003. It 
should be noted that these are maximum payment rates, which are not 
necessarily the amounts received by an individual family; a 1996 
survey by the American Public Human Services Association found that 
the average reimbursements did not equal the maximum for many States.  
In addition, parents adopting children from public child welfare 
agencies may not necessarily claim these reimbursements because many 
costs incurred in public agency adoptions are already covered under 
the States' adoption programs.

Adoption assistance expenditures
	The number of children receiving adoption assistance payments 
and the Federal expenditures for these payments have increased 
significantly since the program began. In fiscal year 1981, only six 
States participated in the program, with payments being made for an 
average of 165 children per month. In fiscal year 2002, 50 States plus 
the District of Columbia and Puerto Rico participated, and an average 
of 285,600 children (Table 11-3) were served per month.  Federal 
expenditures for adoption assistance payments have increased from less 
than $400,000 in fiscal year 1981 to $1.3 billion in fiscal year 2002, 
and are expected to reach almost $2.5 billion by fiscal year 2008 
(Table 11-2).  HHS data indicate that expenditures for child placement 
services and administration for the Adoption Assistance Program also 
have increased significantly in recent years. In fiscal year 1981, 
claims totaled $100,000; in fiscal year 2002 they totaled $305 million 
and are expected to be $451 million in fiscal year 2008.  

TABLE 11-10 -- ADOPTION ASSISTANCE BASIC RATES AND MAXIMUM 
NONRECURRING EXPENSE ALLOWANCE, BY AGE, 2002

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

	Table 11-11 below shows estimated Federal adoption assistance 
expenditures in fiscal year 2002, by State, broken down by assistance 
payments, administration, training, and expenditures under waiver 
demonstrations.  Table 11-12 shows average monthly participation in 
adoption assistance, by State, in fiscal years 1999, 2000, and 2001.

TABLE 11-11 -- ESTIMATED FEDERAL ADOPTION ASSISTANCE EXPENDITURES 
UNDER TITLE IV-E, FISCAL YEAR 2002

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

TABLE 11-12 -- TITLE IV-E ADOPTION ASSISTANCE AVERAGE MONTHLY 
CASELOADS, BY STATE, FISCAL YEARS 1999-2001

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

THE TITLE IV-E ADOPTION INCENTIVES PAYMENT PROGRAM

	The Adoption and Safe Families Act (ASFA) of 1997 (Public 
Law 105- 89) established a new provision intended to promote adoption 
through incentive payments to States that increase their number of 
foster child adoptions, with additional incentives for the adoption of 
special-needs foster children with adoption assistance agreements 
under title IV-E.  This discretionary program was authorized to grant 
payments for adoptions finalized in each of fiscal years 1998 through 
2002; funds to make these grants were authorized through fiscal year 
2003.  Incentive payments equaled $4,000 for each foster child whose 
adoption was finalized (over a certain State-specific baseline) and an 
additional $2,000 for each special-needs child whose adoption was 
finalized (over a State-specific baseline). For adoptions finalized in 
fiscal year 1998, the baseline was the State's average number of 
adoptions in fiscal years1995-97. For adoptions finalized in fiscal 
years 1999-2002, the State's baseline was the highest number of 
adoptions in any preceding year, beginning with fiscal year 1997. 
Table 11-13 shows each state's baseline and number of incentive-
qualifying adoptions for fiscal years 1998, 2000, and 2002. Qualifying 
adoptions shown in this Table are those of children who were in foster 
care before their adoption and are not necessarily the same as 
adoptions made with the involvement of public child welfare agencies.  
Through fiscal year 2002, States earned a total of $159.7 million in 
adoption incentive payments. Table 11-14 shows the adoption incentives 
payments, by State, in fiscal years 1999 through 2003 which are 
payments for adoptions completed in each of fiscal years 1998 through 
2002. 
	Public Law 105-89 originally authorized appropriations of 
$20 million annually for fiscal years 1999-2003 for adoption incentive 
payments. In addition, discretionary budget caps were adjusted to help 
ensure that the funds were actually appropriated for each year. 
However, in several years, the amount of incentive payments that 
States earned exceeded the $20 million level and Congress provided 
additional funds in several years to ensure States received their full 
incentive earnings.  For example, States earned $42.5 million for 
adoptions finalized in fiscal year 1998; $51.5 million for adoptions 
finalized in fiscal year 1999; and $33.2 million for adoptions 
finalized in fiscal year 2000.  However, States earned adoption 
incentives of $17.6 million and $14.9 million for adoptions finalized 
in fiscal years 2001 and 2002, respectively.
	Congress enacted Public Law 108-145 in December 2003 
reauthorizing annual appropriations of $43 million for the Adoption 
Incentives program for fiscal years 2004 through 2008, to reward 
States for increased adoptions finalized in fiscal years 2003 through 
2007.  Under this latest version of the program, States continue to 
be rewarded for all increased adoptions of foster children, above a 
baseline, and the incentive payment remains at $4,000 for each 
adoption above the baseline. However, the baseline is updated to the 
number of such adoptions in fiscal year 2002 (for adoptions finalized 
in fiscal year 2003), and the highest previous year beginning with 
fiscal year 2002 (for adoptions finalized in fiscal year 2004 and 
subsequent years).  States also continue to be rewarded for increased 
adoptions of special needs children, and this additional payment 
remains at $2,000.  However, the special needs payment is now limited 
only to adoptions of special needs children who are under age 9 at the 
time the adoption is finalized, and the baseline is set at the number 
of such adoptions in fiscal year 2002 (for adoptions finalized in 
fiscal year 2003), and the highest previous year beginning with fiscal 
year 2002 (for adoptions finalized in FY2004 and subsequent years).  
Public Law 108-145 creates

TABLE 11-13 -- BASELINE AND NUMBER OF INCENTIVE-QUALIFYING ADOPTIONS, 
BY STATE, SELECTED FISCAL YEARS 1998-2002

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

TABLE 11-14 -- ADOPTION INCENTIVES PAYMENTS, BY STATE, FISCAL YEARS 
1999-2003  

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

a third incentive payment, equal to $4,000 for each increased adoption 
of foster children who are age 9 or older at the time of adoption. 
States must exceed their baseline number of such "older child" 
adoptions to earn this payment, set at the number of such adoptions in 
fiscal year 2002 (for adoptions finalized in fiscal year 2003), and 
the highest previous year beginning with fiscal year 2002 (for 
adoptions finalized in fiscal year 2004 and subsequent years). The
older child adoption incentive payment is independent of the basic 
foster child incentive payment, so that a State can earn a payment on 
the basis of an increase in its older child adoptions, but not 
necessarily be eligible for an incentive payment based on its total 
number of foster child adoptions.  Under the revised program, a State 
can receive a special needs incentive payment (for children with 
special needs who are under age 9) only if they also qualify for an 
incentive payment on the basis of either an increase in total foster 
child adoptions or older child adoptions.

THE TITLE IV-E FOSTER CARE INDEPENDENCE PROGRAM

	In 1986, title IV-E was amended by Public Law 99-272 
(Consolidated Omnibus Budget Reconciliation Act of 1985) to include 
section 477, which established the Independent Living Program to 
assist youth who would eventually be emancipated from the foster care 
system. Several surveys conducted during the mid-1980s showed that a 
significant number of homeless shelter users had been recently 
discharged from foster care, prompting Congress to establish a program 
to help youngsters in foster care establish their independence. 
	Initially, an annual entitlement amount of $45 million was 
established for 1987 and 1988 to provide States with the resources to 
create and implement independent living services. These services were 
designed to assist title IV-E-eligible children age 16 and over make 
a successful transition from foster care to independent adult living 
when they became ineligible for foster care maintenance payments at 
age 18. In 1988, the program was expanded under Public Law 100-647, 
which permitted States to provide independent living services to all 
youth in foster care aged 16 to 18 (not just title IV-E-eligible 
youth); States could also provide follow-up services to youth up to 
6 months after their emancipation from foster care. Under Public Law 
101-508, States had the option of serving individuals up to age 21 in 
the Independent Living Program. Funds were allocated on the basis of 
each State's share of children receiving title IV-E foster care 
in 1984.
	Public Law 101-239 increased the amount of Federal entitlement 
funds available to the States for the Independent Living Program to 
$50 million for fiscal year 1990, $60 million for fiscal year 1991, 
and $70 million for fiscal year 1992. Beginning in fiscal year 1991, 
States were required to provide 50 percent matching for any Federal 
funding claimed that exceeded the original $45 million funding level. 
In 1993, Congress permanently extended the authority for independent 
living under Public Law 103-66.
	In response to continuing concerns about the adjustment 
problems faced by older children leaving foster care, the 106th 
Congress enacted the Foster Care Independence Act of 1999 (Public Law 
106-169). The law replaced section 477 with new language and renamed 
the program the John H. Chafee Foster Care Independence Program, in 
honor of the Rhode Island Senator who was one of the law's sponsors 
and who died before it was enacted. As amended in 1999, the Foster 
Care Independence Program is intended to help States provide services 
to children who are likely to remain in foster care until age 18 (no 
minimum age is specified for participation in the program), as well as 
former foster children between the ages of 18 and 21. To participate 
in the program, States must submit a 5-year plan to HHS and must 
certify that, among other things, no more than 30 percent of program 
funds will be used for room and board for 18-20 year olds and that 
services will be coordinated with related Federal and State youth 
programs, including transitional living youth projects funded under 
the Juvenile Justice and Delinquency Prevention Act, abstinence 
education, housing programs, programs for disabled youth, and school-
to-work activities. The law also allows foster care youth to 
accumulate assets up to $10,000 without losing their Title IV-E 
eligibility status and it permits States to extend Medicaid coverage 
to former foster children between 18 and 21 years of age.  As of the 
end of 2003, 9 States included this optional coverage in their 
Medicaid plans.
	States have flexibility in the use of their Foster Care 
Independence Program funds within the general purposes outlined in 
the law. These purposes include helping eligible children make the 
transition to self-sufficiency through such services as assistance 
in obtaining a high school diploma, career exploration, vocational 
training, job placement and retention, training in daily living 
skills, training in budgeting and financial management skills, 
substance abuse prevention, and preventive health activities.
	The revised Foster Care Independence Program is a capped 
entitlement with an annual ceiling set at $140 million, which is 
double the entitlement ceiling level prior to enactment of Public 
Law 106-169. States are entitled to an amount based on their share of 
the Nation's foster care population, in the most recent year for which 
information is available. However, no State may receive less than the 
greater of $500,000 or the amount received by the State in fiscal year 
1998. The law contains a ratable reduction provision to ensure total 
State allotments do not exceed the national ceiling of $140 million. 
The law also requires a 20 percent non-Federal match. 
	In 2001, under Public Law 107-133, Congress authorized an 
additional $60 million in discretionary funds for education and 
training vouchers.  Youths otherwise eligible for the Foster Care 
Independence Program, as well as youths who are adopted from foster 
care after reaching 16 years of age, are eligible for education and 
training vouchers worth up to $5,000 per year for the cost of 
attendance at an institution of higher education.  States may allow 
youths participating in the education and training voucher program 
when they reach age 21 to remain eligible for the program until 
age 23, so long as they are enrolled in a postsecondary education or 
training program and making satisfactory progress toward completion.  
For fiscal year 2003, the first year in which this program was 
funded, Congress appropriated $41.7 million for the vouchers
	
	Table 11-15 shows FY2003 allotments to States under the 
Foster Care Independence Program, both for the general program and 
for education and training vouchers.
	
TABLE 11-15 -- STATE-BY-STATE TITLE IV-E FOSTER CARE INDEPENDENCE 
PROGRAM ALLOTMENTS, FISCAL YEAR 2003 

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

	As originally enacted in 1986, section 477 instructed HHS to 
conduct a study of independent living services, which was done in two 
phases by Westat, Inc. (Cook, 1990, 1992). Looking at youths who 
emancipated from foster care between January 1987 and July 1988, 
Westat reported that they were a troubled population, with low rates 
of education or job experience and high rates of emotional 
disturbance, drug abuse, health problems, and pregnancy.
	Later research conducted by the University of Wisconsin had 
similar findings (Courtney & Piliavin, 1998). Looking at Wisconsin 
youths 12-18 months after they emancipated from foster care in 1995,
researchers found that 37 percent had still not completed high school 
and 12 percent had been homeless at least once since their discharge 
from foster care. While 81 percent had held at least one job since 
their discharge, only 61 percent reported being employed at the time 
of their interview, suggesting that job retention was a problem for 
some. Of females, 40 percent were receiving public assistance, as 
were 23 percent of the males. Access to medical care was a problem 
for 44 percent of the youths, usually because of a lack of health 
insurance. While almost half of the youths had received mental 
health services when still connected to the child welfare system, 
21 percent reported receiving such services after they left foster 
care. Although they were not reunited with their biological families 
by the child welfare system, many of the youths had contact with their 
original families after their discharge from foster care, with about 
one-third actually living with their families. At the same time, 
40 percent reported continued and frequent contact with their foster 
parents. About 18 percent of the youths had been incarcerated at some 
point since their discharge.
	The U.S. General Accounting Office (GAO) reported in 1999 that 
State and local administrators felt they could not provide youths who 
were leaving foster care with all the support they needed to make a 
successful transition to independent adult living.  Also in 1999, 
HHS released a report reviewing the history of the Independent Living 
Program over the 10 years from 1987 through 1996 (U.S. Department, 
1999b). This report found that many eligible youth did not receive 
independent living services at all. Specifically, in 30 States that 
reported data for fiscal year 1996, 37 percent of eligible youth 
received no services. Of those youth served in fiscal year 1996, 
65 percent were either 16 or 17 years old, while 22 percent were 18 
and the remainder were 19 or 20. Half the youth were white, and 
slightly more than half were females. African-American youth comprised 
38 percent and Hispanic youth 9 percent. Half of the youth served had 
been in foster care less than 2 years, while 20 percent had been in 
care 5 years or longer. Slightly more than a quarter of the youth had 
special needs, and 9 percent were parents or pregnant.
	To enable assessments of State independent living activities, 
Public Law 106-169 directed the Secretary of HHS to develop a series 
of outcome measures, including the following: educational attainment, 
high school diploma, employment, avoidance of dependency, homelessness, 
nonmarital childbirth, incarceration, and high-risk behaviors. The 
Secretary was directed to identify data elements that can be used to 
track the number and characteristics of children receiving independent 
living services, the type and quantity of services provided, and State 
performance on the outcome measures. HHS reported to Congress in 
September 2001 on its plan for this data system and piloted data 
collection instruments in seven states (HHS, 2001).  The Department 
expects States to collect some characteristic data needed through 
their existing data collection systems, but is developing additional 
characteristic, services and outcome data items that will be unique.  
State collection of these data is expected to begin in October 2006 
with the first State reports submitted to HHS in 2007. Once this data 
collection plan is in effect, States must submit the required reports
or face financial penalties.  In addition, the law requires the 
Secretary to conduct evaluations of innovative State Independent 
Living Programs or programs that have potential national significance.
The law reserves 1.5 percent of each year's appropriation for such 
evaluation, technical assistance, performance measurement, and data 
collection.

STATE ACCOUNTABILITY AND FEDERAL OVERSIGHT

	Federal child welfare law requires States to comply with a 
series of provisions that are intended to protect children who have 
been placed in foster care or who are at risk of foster care placement. 
States are required to comply with these provisions to be eligible to 
receive Federal funds, but the extent to which the Federal Government 
actually holds States accountable has been an issue of ongoing 
concern. On January 25, 2000, HHS published final regulations 
establishing a new system, mandated by Congress, for monitoring and 
enforcing the implementation by States of Federal child welfare laws. 
The new regulations took effect on  March 27, 2000. In addition, the 
law establishes specific penalties for violations of certain 
provisions intended to eliminate ethnic or geographic barriers to 
adoption. Finally, the Adoption and Safe Families Act in 1997 (Public 
Law 105-89) mandated that HHS establish a series of outcome measures 
to be used to rate the performance of State child welfare programs,
and to report annually on State performance in meeting these outcome 
measures. HHS published the outcome measures on August 20, 1999, and 
has issued annual reports for 1998 through 2000.  The Federal review 
system, the penalties applicable to violations of ethnic or geographic
discrimination provisions, and the outcome measures used to measure 
State performance are described in detail below.

HISTORY OF FEDERAL REVIEW EFFORTS

	The history of Federal child welfare review efforts goes back
to passage of the Adoption Assistance and Child Welfare Act of 1980 
(Public Law 96-272). Many of the original foster child protections 
were established by that legislation as part of section 427 and were 
voluntary incentives for States to meet to receive their full 
allotment of title IV-B funds. In addition, the 1980 law established 
eligibility requirements that were used to determine which children 
could qualify for federally subsidized foster care and adoption 
assistance payments. These eligibility criteria contained provisions 
that were intended to work together with the "section 427 
requirements" to protect children in foster care.
	In the early 1980s, HHS developed and operated review systems 
for monitoring State compliance with section 427 protections and with 
the Federal foster care requirements under title IV-E. However, child 
welfare advocates, State and Federal officials, and Members of 
Congress grew dissatisfied with the early review systems for various 
reasons, both procedural and programmatic, and beginning in 1989, 
Congress suspended the collection of penalties resulting from these 
reviews. 
	Procedural concerns included a lack of formal regulations, 
frequently resulting in confusion about the standards that States 
were expected to meet. Reviews were conducted retrospectively, 
sometimes for fiscal years that had long past, so that current 
practices were not examined. Exacerbating this problem was the late 
release of final reports by HHS, so their findings and recommendations 
were sometimes irrelevant by the time they were issued. State 
officials had limited ongoing contact with Federal regional office 
staff, so that formal reviews were seen as adversarial and punitive, 
rather than collaborative and potentially helpful. The reviews were 
often seen as time consuming, labor intensive, and burdensome for 
the States.
	Of greater concern, however, was the perception that the 
reviews did not result in improved services for children and families. 
Both section 427 and title IV-E eligibility reviews focused on paper 
compliance with legal requirements. Moreover, States were sometimes 
held accountable for circumstances beyond their control, such as the 
schedule or actions of the courts. Reviews were criticized for 
focusing on isolated components of a State's child welfare system, 
rather than the system as a whole. When problems were identified,
penalties were imposed but little technical assistance was provided. 
The review system contained no mechanism for helping States improve 
the quality of their child welfare programs, and also was criticized 
for failing, in some cases, to identify problems in State programs.  
	In 1989, Congress imposed the first in a series of 
moratoriums, prohibiting HHS from collecting penalties associated 
with these reviews. Finally, in 1994, Congress enacted two significant 
provisions as part of the Social Security Act amendments of that year 
(Public Law 103-432). First, Congress restructured title IV-B so that 
the foster child protections previously contained in section 427 were 
no longer voluntary incentives, but rather mandatory components of the 
State title IV-B plan. Second, Congress mandated the development of a 
new system to review State conformity with Federal requirements, 
including State plan requirements, under titles IV-B and IV-E.
	The 1994 legislation directed HHS to develop a review system 
that would incorporate the concepts of technical assistance and 
corrective action. Specifically, HHS was directed to specify the 
Federal requirements that would be subject to review and the criteria 
that would be used to determine if a State was substantially meeting 
those requirements. The law further directed HHS to specify a method 
for determining the amount of financial penalties that would be 
imposed in cases of substantial nonconformity. However, Congress also 
mandated that before such penalties could be imposed, States must be 
given an opportunity to implement a corrective action plan, and 
required that HHS provide the States with necessary 
technical assistance.

FEDERAL CONFORMITY REVIEW SYSTEM

	The 1994 legislation directed HHS to promulgate regulations 
establishing the new review system by July 1, 1995, to take effect on 
April 1, 1996. After pilot testing the system in several States, HHS 
proposed regulations in the Federal Register of September 18, 1998, 
and issued them as final on January 25, 2000, with an effective date
of March 27, 2000. Two types of reviews were established: child and 
family services reviews of activities funded by both titles IV-B and 
IV-E to determine system wide State compliance with Federal law; and 
title IV-E eligibility reviews to determine the eligibility of State 
expenditures for foster care or related activities for Federal 
reimbursement under title IV-E.

Child and family services reviews: the process
	The child and family services review primarily measures 
outcomes and results, and allows States to undertake corrective action 
if they are not found in substantial conformity with the law. HHS 
established three outcomes for children and families and seven 
specific criteria as indicators of States' conformity with Federal 
law:

1.	Child safety
-	children are first and foremost protected from abuse and 
        neglect, and 
-	children are safely maintained in their own homes whenever 
	possible 	and appropriate;
2.	Permanency for children
-	children have permanency and stability in their living 
	situations, and
-	the continuity of family relationships and connections is 
	preserved for children;
3.	Child and family well-being
- 	families have enhanced capacity to provide for their 
	children's needs,
-	 children receive appropriate services to meet their 
	educational needs, and
-	 children receive adequate services to meet their physical and 
	mental health needs.

	In addition, the review system measures State performance on 
the following seven systemic factors that reflect a State's capacity 
to deliver services leading to improved outcomes for children and 
families. These factors are:

1.	Statewide information system on children in foster care;
2.	Case review system for all children in foster care;
3.	Standards to protect the health and safety of children in 
	foster care and an identifiable quality assurance system;
4.	Staff development and training program;
5.	Service array for children and families;
6.	Agency responsiveness to the community; and
7.	Foster and adoptive parent licensing, recruitment, and 
	retention.

	The child and family services review is conducted by a joint 
Federal-State team, and a full review consists of two steps: first, a 
statewide assessment conducted by the State members of the team, and 
second, an onsite review conducted by the joint Federal-State team. 
The statewide assessment examines each of the seven systemic factors 
listed above; assesses State performance in each of the three child 
and family outcomes listed above, using statewide data, and analyzes 
the State's performance in meeting national standards established for 
these outcomes; assesses characteristics of the State agency that 
enable it to deliver services that lead to improved outcomes; and 
assesses the State's strengths and areas that require further 
examination during the onsite review.
	HHS has developed national numerical standards to measure 
State performance on several of the criteria related to child and 
family outcomes, based on data reported by the States through the 
National Child Abuse and Neglect Data System (NCANDS) and the Adoption 
and Foster Care Analysis and Reporting System (AFCARS). The standards 
are set at the 75PthP percentile of all States' performance in all or 
parts of 1997 and 1998, and States are required to meet these 
standards to demonstrate substantial conformity with Federal law.  
Both the standards, and the outcomes for which standards are 
established, may change over time, as the availability and quality of 
data change.  As most recently revised by HHS, the national standards 
are as follows (State performance in meeting these standards is 
summarized in Table 11-17):
	
	For the child safety outcome:
-	percent of children with substantiated or indicated child 
	abuse or neglect reports, for whom a subsequent abuse or 
	neglect report is substantiated or indicated: standard -
	no more than 6.1 percent;
-	percent of foster children who are the subject of  
	substantiated or indicated abuse or neglect by a foster 
	parent or facility staff:  standard - no more than 
	0.57 percent.
	
	For the child permanency outcome:
-	of children who entered foster care during a review period, 
	the percent who reentered within 12 months of a prior foster 
	care episode:  standard - no more than 8.6 percent;
-	of children in foster care less than 12 months, the percent 
	who had no more than two placement settings:  standard - no 
	less than 86.7 percent;
-	of foster children who were reunified with their parents, 
	the percent who were reunified in less than 12 months:  
	standard - no less than 76.2 percent;
-	of foster children who were adopted, the percent who left 
	foster care in less than 24 months:   standard - no less 
	than 32 percent.

	Sources of information to determine whether a State is in 
substantial conformity with Federal law include at a minimum: specific 
case records on children and families served by the agency; interviews 
with the children and families; interviews with caseworkers, foster 
parents, and service providers for the cases selected for review; and 
interviews with "key stakeholders," including individuals involved in 
developing the State's child and family services plan, courts, 
administrative review bodies, guardians ad litem, and other 
individuals or organizations with responsibility for representing the 
best interests of children.
	The onsite review examines a sample of cases (drawn randomly 
from AFCARS and NCANDS data) that may range in size from 30 to 50. The 
sample size may be increased to ensure that all program areas (i.e., 
children in foster care, children and families receiving in-home 
services) are adequately represented. If discrepancies appear between
the statewide assessment and the findings of the onsite review, the
State may submit additional data or the State and HHS may jointly 
review additional cases, up to a specified maximum.
	A State is considered in substantial conformity with regard to 
the three child and family outcomes (and seven associated criteria), 
if its performance meets the appropriate national standard; and if 
each of the outcomes is "substantially achieved" in 95 percent of 
cases examined during an onsite review (90 percent for an initial 
review).  The compliance level for each of the cases, including the 
extent to which relevant statutory and regulatory requirements or 
assurances were met, is determined through a review of the written 
records and interviews with the involved children and families, 
case managers and any major service providers.
	A State is determined in substantial conformity with the seven 
systemic factors if the Statewide Assessment, and subsequent on-site 
review interviews with stakeholders, indicate the required service 
capacity is in place and that no more than one of the specified 
statutory or regulatory requirements associated with each of those 
seven factors fails to function.  (Table 11-18 lists each of the 
factors with its associated requirements.)
	If a State is found not to be in substantial conformity with 
any of the outcome or systemic factors, the HHS regulations require 
development and implementation of a corrective action plan before 
financial penalties may be assessed. The plan must be approved by HHS. 
States subject to a mandatory program improvement plan must report 
quarterly to HHS on their progress, and have a specified time in 
which to complete the plan, based on the seriousness and complexity of 
the remedies required to correct program deficiencies. In general, the 
maximum time allowed to complete the program improvement plan is 
2 years, although HHS may grant 1-year extensions in rare 
circumstances. Priority goes to correcting deficiencies that affect 
child safety, which must be addressed in less than 2 years.
	For States that are not in substantial conformity, HHS must 
determine the amount of Federal funds to be withheld from that State 
as a penalty. HHS will not actually withhold these funds while an 
approved program improvement plan is in effect, if the State is 
actively implementing the plan. HHS can suspend the withholding of 
funds for no longer than 3 years, or the amount of time allowed for 
completing the improvement plan, whichever is shorter. Ultimately, 
funds are withheld for those States that fail to complete their plan 
by the specified date, or for States that fail to submit quarterly 
progress reports, or if reports indicate that the State is not 
making satisfactory progress toward achieving the steps outlined in 
the plan.
	The amount of Federal funds to be withheld from a particular 
State can vary, depending on the extent of the State's nonconformity. 
Penalties are calculated as a percentage of the following pool of 
funds: the State's allotment of title IV-B funds (both subparts 1 
and 2) for the year(s) to which the withholding applies; and 10 
percent of the State's Federal reimbursement claims for 
administrative costs related to foster care under title IV-E, for 
the years to which the withholding applies.
	In the case of a first finding of substantial nonconformity, 
the amount to be withheld equals 1 percent of the pooled amount 
described above, for each of the seven criteria associated with child 
and family outcomes and for each of the seven systemic factors subject 
to review. For example, if a State does not substantially achieve two 
of the seven child and family outcome indicators, then 2 percent of 
the pooled amount of funds it would otherwise receive would be 
withheld. Likewise, if a State is not in substantial conformity with 
one of the systemic factors, then 1 percent of the pooled amount would
be withheld. The maximum penalty is 14 percent of the pooled amount 
(i.e., 1 percent for each of the 14 factors). 
	If a State completes a program improvement plan but is found 
to be in substantial nonconformity during a second full review, the 
amount of pooled funds to be withheld increases to 2 percent for each 
of the child and family outcomes  or systemic factors that are not 
achieved, for a maximum penalty of 28 percent. In the case of a third 
finding of nonconformity, after completion of a program improvement 
plan, the penalty increases to 3 percent for each factor, for a 
maximum of 42 percent. If a State refuses to develop a program 
improvement plan altogether, it is subject to the maximum 42 percent 
withholding. Once funds are withheld from a State, the withholding 
continues until a subsequent full review finds the State in 
substantial conformity or until the State successfully completes a 
program improvement plan developed as a result of the subsequent 
review.
	All States are required to complete an initial full review 
under the regulation within the 4-year period that began March 27, 
2000. Those States that are found to be in substantial conformity 
must complete a subsequent full review every 5 years, and submit a 
completed statewide assessment 3 years after their last onsite review. 
This assessment must be reviewed by the State and HHS to determine 
the State's continuing substantial conformity, but is not subject to 
formal HHS approval. If an initial or subsequent full review finds 
that a State is not in substantial conformity, the State must develop 
and implement a program improvement plan and must begin a subsequent 
full review 2 years after the plan is approved.
	If HHS has any information suggesting that a State is no 
longer operating in substantial conformity, it may conduct an inquiry 
and request data from the State and may, depending on the outcome of 
the inquiry, require a full or partial review at any time, regardless 
of when the State was last reviewed. Moreover, if HHS learns that a 
State is not complying with a title IV-B or IV-E requirement that is 
outside the scope of the child and family services review, it may 
conduct an inquiry and institute a partial review at any time, which 
could result in a mandatory program improvement plan and potentially 
a financial penalty.
	Final determinations of substantial nonconformity, and 
withholding or reduction of funds, may be appealed to the HHS 
Departmental Appeals Board within 60 days of the State receiving 
notice of the nonconformity. States may seek judicial review of an 
adverse decision by the Board in Federal district court.

Child and family services reviews: the results
	Reviews were conducted in 32 States (including the District of 
Columbia) during fiscal years 2001 and 2002, with 13 scheduled for 
fiscal year 2003 (including Puerto Rico) and the final seven scheduled 
for fiscal year 2004.  A HHS summary of the first 32 States indicates 
that State performance has been strongest on safety-related outcomes 
and has needed the most improvement in the outcomes related to 
permanency and well-being.  On systemic factors, State performance has 
been the weakest in areas related to the case review system.  No State 
so far has been found in substantial conformity on all outcomes and 
factors; therefore, most States are in some stage of developing or 
implementing a program improvement plan.  HHS has posted on its web 
site the final reports of most States that have completed a child and 
family services review.
	Tables 11-16 through 11-18 summarize the results of the 32 
child and family service reviews (CFSRs) conducted in fiscal years 
2001 and 2002.  Table 11-16 shows the number of States that were or 
were not in substantial conformity on the safety, permanency, and 
well-being outcomes and the number of States that showed a particular 
indicator as a strength or an area needing improvement.  Table 11-17 
shows the number of States that met the national numerical standards 
established for the safety and permanency outcomes (see discussion 
above for explanation of standards), and Table 11-18 shows the number 
of States that were in substantial conformity on the seven systemic 
factors and the associated required elements.

TABLE 11-16 -- SUMMARY OF FY2001 AND FY2002 CHILD AND FAMILY 
SERVICES REVIEW FINDINGS ON SAFETY, PERMANENCY, AND WELL-BEING 
OUTCOMES

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

TABLE 11-17 -- SUMMARY OF FY2001 AND FY2002 CHILD AND FAMILY SERVICES 
REVIEW FINDINGS ON NATIONAL STANDARDS FOR SAFETY AND PERMANENCY 
OUTCOMES

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

Title IV-E eligibility reviews
	Like the child and family services reviews, title IV-E 
eligibility reviews are conducted by a Federal-State team and include 
an onsite review. From AFCARS data, HHS officials select a random 
sample of 80 cases, plus a 10 percent "oversample" of 8 additional 
cases, from the pool of children eligible for federally funded foster 
care maintenance payments. Cases from the oversample are used to 
replace any cases in the basic sample that are found to be invalid for 
some reason. The State submits to HHS the complete payment history for 
all cases in the sample and the oversample prior to the onsite review.
	The Federal-State team reviews the sample to determine whether 
any cases are ineligible under title IV-E. In an initial review, a 
State is considered in substantial compliance with the law if no more 
than 8 cases (from the sample of 80) are determined to be ineligible. 
In a subsequent review, a State is considered in substantial 
compliance if no more than 4 cases (again, from a sample of 80) are 
found ineligible.
	If a State is found in substantial compliance, it is not 
subject to another review for 3 years. If a State is not found in 
substantial compliance, it must develop a program improvement plan 
followed by a secondary review. The program improvement plan must be 
developed by the joint Federal-State team, identify weaknesses to be 
corrected and steps to correct them, and specify a timetable for 
achieving these steps. However, in contrast to the child and family 
services review, the program improvement plan for a title IV-E 
eligibility review can last no longer than 1 year, unless enactment of 
State legislation is required, in which case an extension of one 
legislative session may be granted.
	In the secondary review, HHS draws a sample of 150 cases (plus 
a 10 percent oversample) from AFCARS data, for review by the joint 
Federal-State team. The team calculates for the sample both an 
ineligibility error rate and a dollar error rate. If neither of these 
error rates, or only one, is more than 10 percent, a disallowance is 
assessed for the ineligible cases in the sample. If both error rates 
exceed 10 percent, an extrapolated disallowance is assessed based on 
the State's entire foster care population.
	The following title IV-E State plan requirements and 
regulations, which relate to the eligibility of children and foster 
care providers, are subject to review: 
1.	For each child, there must be judicial finding that 
	"reasonable efforts" were made by the State to prevent 
	removal of the child and  to finalize a permanency plan, and 
	that remaining in the biological home would be "contrary to 
	the welfare" of the child;
2.	If a child was placed through a voluntary placement agreement, 
	the agreement must meet specified criteria;
3.	The State agency must have responsibility for the child's 
	placement and care;
4.	The child must be placed in a licensed foster family home or 
	child care institution; and
5.	The child must meet Aid to Families with Dependent Children 
	(AFDC) requirements, as in effect on July 16, 1996.
	Compliance with State plan requirements regarding licensing 
	authorities and criminal background checks are also reviewed.

INTERETHNIC AND INTERJURISDICTIONAL ADOPTION PROVISIONS

	States are separately subject to penalties if they violate 
certain provisions of 
law that were enacted to eliminate barriers to adoption. Specifically, 
States may not discriminate in adoption or foster care placements on 
the basis of race, color or national origin, and also may not deny or 
delay a child's adoptive placement when an approved family is 
available outside of the jurisdiction that has responsibility for 
handling the child's case. The law establishes specific penalties for 
violations of these provisions.

Interethnic provisions
	Regarding discrimination on the basis of race or ethnicity, 
Congress initially enacted the Multiethnic Placement Act (MEPA) in 
1994 (Public Law 103-382), which prohibited any agency or entity that 
received Federal assistance from discriminating on the basis of the 
child's or the potential adoptive or foster parents' race, color, or 
national origin. However, as enacted in 1994, MEPA originally allowed 
agencies to consider the child's cultural, ethnic, or racial 
background, and the capacity of the prospective parents to meet the 
child's needs, as one of the factors used to determine the child's 
best interest. The 1994 legislation also provided a right of action in 
U.S. district court for individuals who were aggrieved by a MEPA 
violation and deemed noncompliance with MEPA to be a violation of 
title VI of the Civil Rights Act. In addition, the 1994 law amended 
title IV-B of the Social Security Act to add, as a State plan 
requirement, that States must provide for the diligent recruitment of 
potential foster and adoptive families that reflect the ethnic and 
racial diversity of children who need homes.
	In 1996 Congress revised the interethnic discrimination 
provisions as part of the Small Business Job Protection Act (Public 
Law 104-188). The 1996 law repealed the prior MEPA provision that 
allowed consideration of a child's cultural, ethnic, or racial 
background in making placement decisions. Further, the law amended 
title IV-E of the Social Security Act to provide that neither the 
State nor any other entity that receives Federal funds may 
discriminate in adoption or foster care placements on the basis of 
race, color or national origin. The law specified a penalty for 
violations of this State plan requirement equal to 2 percent of 
Federal title IV-E funds for a first violation, 3 percent for a 
second violation, and 5 percent for a third or subsequent violation. 
Private agencies that violate the interethnic provisions are required 
to pay back any Federal funds received. Under the current law, private 
individuals may continue to seek relief in U.S. district court. 
However, Public Law 104-188 provides that no action may be brought 
more than 2 years after the alleged violation occurs. None of these 
interethnic provisions affect the application of the Indian Child 
Welfare Act.
	The final child welfare review regulations, published by HHS 
on January 25, 2000, did not establish a specific monitoring system 
for the antidiscrimination provisions of MEPA, as amended by the 1996 
law. However, the regulations established a procedure for responding 
to reports of violations of these provisions, and for enforcing the 
law in cases where violations are found to have occurred. (In March 
2003, HHS issued an information memorandum, "to reiterate support" for 
these antidiscrimination provisions and to note that penalties may be 
imposed in cases of violation.) Specifically, whenever HHS becomes 
aware of a possible violation, either through a child and family 
services review or filing of a complaint or any other mechanism, it 
refers the case to the Department's Office for Civil Rights (OCR) for 
investigation. If, on the basis of OCR's investigation, a violation 
actually has occurred, enforcement action will be taken, based on the 
nature of the violation.
	If OCR (or a court) finds that a State has discriminated 
against an individual, on the basis of race, color, or national origin 
in the course of a foster or adoptive placement, a penalty is assessed 
for the quarter in which the State is notified of the violation. The 
penalty equals 2 percent of the State's total title IV-E funds for the 
quarter in the case of a first violation in a given fiscal year, and 
continues for subsequent quarters in that fiscal year until the State 
ompletes a corrective action plan or comes into compliance. In the 
case of a second violation in the same fiscal year, the penalty 
equals 3 percent, and 5 percent for a third or subsequent violation 
in a given fiscal year. Violations that remain uncorrected at the end 
of the fiscal year may be subject to another review and additional 
penalties.
	If a MEPA violation results from a State's statute, 
regulation, policy, procedure, or practice, and no individual is 
directly affected, the State has 30 days to develop and submit a 
corrective action plan for HHS approval. If the State hasn't completed 
the plan and come into compliance within 6 months of HHS approving 
the plan, penalties are assessed. Findings of MEPA violations and 
related financial penalties may be appealed to the HHS Departmental 
Appeals Board, and States may seek judicial review of an adverse 
decision by the Board in Federal district court.
	OCR has investigated alleged MEPA violations in a number of 
States and counties and these investigations usually have been 
resolved without fines through negotiation of corrective actions. In 
November 2003, however, HHS issued its first MEPA violation fines 
based on an OCR investigation in Hamilton County, Ohio. A $1.8 
million fine was assessed against that county and the State of Ohio 
based on OCR findings that the county denied or delayed adoption in 
16 individual transracial cases and that it systematically applied 
additional requirements for parents interested in transracial 
placements, as well as considered the racial make-up of the 
neighborhoods in which prospective parents interested in transracial 
adoption lived. OCR also found that the State of Ohio had violated the 
law when it issued certain administrative rules governing transracial 
adoption and foster care.

Interjurisdictional provisions
	As amended in 1997 by the Adoption and Safe Families Act 
(Public Law 105-89), title IV-E provides that States may not deny or 
delay a child's placement for adoption if an approved family is 
available outside the jurisdiction responsible for the child's case. 
Further, States must provide an opportunity for a fair hearing to 
anyone whose allegation of a violation of this provision is denied by 
the State or not acted upon promptly. The law (as amended by Public 
Law 105-200) specifies that the same penalty structure applicable to 
violations of the interethnic provisions described above also applies 
to violations of this provision. 
	HHS did not specifically address enforcement of this 
interjurisdictional provision in the January 25, 2000 child welfare 
monitoring regulations.  However, the Department issued a program 
instruction on October 7, 2002 outlining the following procedures.  If 
HHS becomes aware of a potential violation of the law's 
interjurisdictional provisions, it will conduct a partial review 
giving the State an opportunity to demonstrate compliance and allowing 
the State 6 months to complete a corrective action plan if a violation 
is found.  If the State fails to come into compliance within 6 months, 
then penalties will be imposed as authorized in law.  If an individual 
violation is found through the fair hearing process, HHS will impose a 
penalty after allowing the State an opportunity to exhaust legal 
remedies; however, there is no provision for a corrective action 
plan in this case.

STATE PERFORMANCE REPORTS

	The Adoption and Safe Families Act (Public Law 105-89) 
required the Secretary of HHS, in consultation with Governors, State 
legislatures, State and local public officials, and child welfare 
advocates, to develop a set of outcome measures that could be used to 
assess State performance in operating programs under titles IV-B and 
IV-E. The law required that these outcome measures include length of 
stay in foster care, number of foster care placements, and number of 
adoptions. The law also required that HHS develop a system for rating 
State performance on these outcome measures and publish an annual 
report on each State's performance, examining the reasons for high 
and low performance and making recommendations for how State 
performance could be improved.  As of October 2003, the outcome 
reports for 1998, 1999, and 2000 had been issued.
	HHS published preliminary outcomes and measures to be studied 
on February 2, 1999, and published a final list of child welfare 
outcomes and measures on August 20, 1999.  Some of the outcomes and 
measures were revised for the 1999 outcome report (published in 
February 2002).  See the notes for Table 11-19, which identifies the 
child welfare outcomes and measures, for further details on the 
changes.  

TABLE 11-19 -- CHILD WELFARE PERFORMANCE OUTCOMES AND RELATED 
MEASURES

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

FEDERAL WAIVERS OF TITLE IV-B AND IV-E PROVISIONS

	To provide States flexibility to design innovative child 
welfare programs, Congress enacted a provision in 1994 (Public Law 
103-432) that authorized the Secretary of HHS to approve up to 10 
demonstration projects requiring waivers of provisions under titles 
IV-B and IV-E. This authority was established by section 1130 of the 
Social Security Act and was subsequently amended by the Adoption and 
Safe Families Act (ASFA) in 1997.  ASFA allowed HHS to approve an 
additional 10 demonstration projects in each of fiscal years 1998-
2002. The Secretary was authorized to waive any provision of either 
title IV-B or title IV-E if necessary to enable the State to carry out 
its demonstration project, with some exceptions, such as provisions 
that would compromise child safety.  Demonstrations are limited to 
5 years, although the Secretary may grant extensions of up to five 
years.  They must include an evaluation component and be cost-neutral 
to the Federal Government.  The authority to grant new waivers under 
this program had expired with fiscal year 2002 but in June 2003 was 
reauthorized through the end of fiscal year 2003 (P.L. 108-40) and in 
October 2003 through March 31,2004 (P.L. 108-89).
	As of December 2003 a total of 25 projects had been 
implemented in  17 States for waiver agreements that were approved 
between 1996 and 2001. All of the projects involve waivers of Title 
IV-E provisions. No new waivers have been approved since 2001. 
However, HHS issued an Information Memorandum in November 2003 
calling for States to submit new proposals and it expects to approve 
new demonstration projects prior to the scheduled expiration of its 
waiver-granting authority in March 2004. States have broad discretion 
on the type of waiver projects they can propose and implement. To 
date States have undertaken projects in 8 categories: assisted 
guardianship/kinship permanence (7 States); capped IV-E allocations 
and flexibility to local agencies (4 States); services to substance-
abusing caretakers (4 States); managed care payment systems (5 
States); intensive service options (2 States); adoption services 
(1 State); tribal administration of IV-E funds  (1 State); and 
enhanced training for child welfare staff (1 State).
	Table 11-20 summarizes the 25 waiver projects that are ongoing 
or have been completed/terminated. Of these, 8 (located in 6 States) 
have been completed or were terminated early by the State and as of 
December 2003 there were 17 ongoing demonstration projects located in 
12 States. Nine of the ongoing projects  (in 7 States) were operating 
on the basis of a short-term extension pending HHS review of their 
final evaluation reports and a decision on a full 5-year extension. 
	As of December 2003, each of the 5 managed care projects had 
been completed (Michigan) or were ended by the State (Colorado, 
Connecticut, Washington, Maryland) and no State had requested an 
extension of these waivers. All 4 States (Indiana, North Carolina, 
Ohio, Oregon) that implemented capped IV-E allocation projects had 
also completed their initial demonstration projects but were 
continuing them after seeking waiver extensions. Five of the 7 States 
that implemented assisted guardianship/kinship permanence projects had 
completed the original demonstration and each sought an extension. As 
of December 2003, Delaware's guardianship project had been denied an 
extension; Illinois's guardianship project was extended for a full 
five years (effective January 1, 2004); guardianship projects in 
Maryland, North Carolina and Oregon were operating under short-term 
extensions of the waiver (and New Mexico and Montana continued their 
original projects). Four States implemented projects designed to test 
provision of services to substance abusing caretakers. As of December 
2003, Delaware's request for an extension of its waiver for this 
project had been denied, Maryland had terminated its project in this 
area, and Illinois and New Hampshire continued implementation of 
these projects. Two States, California and Mississippi, implemented 
intensive services projects; as of December 2003, California had 
received approval to extend its project on a short term basis and 
Mississippi's project was ongoing. Maine implemented the sole 
adoption- related project and, as of December 2003, had been granted 
short-term approval to extend the project. Projects to test the tribal 
administration of Title IV-E funds (New Mexico) and for enhanced 
training for child welfare staff (Illinois) were also ongoing as of 
the end of 2003. 

TABLE 11-20--SUMMARY OF APPROVED STATE CHILD WELFARE WAIVER 
DEMONSTRATIONS CALIFORNIA

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

RECENT TRENDS AFFECTING CHILD WELFARE POPULATIONS AND PROGRAMS

	Certain social problems and trends are inextricably linked 
with the child welfare system and its clients, and data and 
information on these issues are sometimes used as indicators of the 
need for child protection and preventive services for families. Most 
children enter foster care as a result of child abuse or neglect; 
thus, data on the incidence and trends of maltreatment are of great 
interest to child welfare practitioners and policymakers. Likewise, 
substance abuse is cited as a factor in many of the cases coming to 
the attention of child welfare agencies, so that information on 
substance abuse among families with children and responses to the 
problem of substance abuse is also of interest. Kinship care also 
is a phenomenon that has had a significant impact on the child 
welfare system. In addition, as a major policy change affecting 
low-income families with children, the welfare reform law of 1996 
has implications for both the child welfare system and its clients. 
These issues are described briefly below.

CHILD ABUSE AND NEGLECT

Child Abuse Prevention and Treatment Act
	Between 1963 and 1967, every State and the District of 
Columbia enacted some form of child abuse and neglect reporting law. 
The model reporting law disseminated by the U.S. Children's Bureau 
facilitated the States' rapid adoption of these laws; after 1974 
reporting laws were modified to conform to the standards established 
by the Child Abuse Prevention and Treatment Act of 1974 (CAPTA). CAPTA 
provides formula grants to States to help support their child 
protective service systems ($22 million in fiscal year 2003), in 
exchange for which States must comply with various requirements 
related to the reporting, investigation, and treatment of child 
maltreatment cases. The law also authorizes Federal discretionary 
research and demonstration projects ($34 million in fiscal year 2003), 
grants to States for community-based family resource and support 
services ($33 million in fiscal year 2003), and grants to States to 
improve investigation and prosecution of child maltreatment cases 
(funded through a $20 million set-aside of the victims of crime fund).
	CAPTA requires States to have procedures for reporting known 
or suspected cases of child abuse or neglect, for investigating such 
reports, and for taking immediate steps to protect children who might 
be in danger. The law requires States to provide immunity from 
prosecution for individuals who make good faith reports of suspected 
abuse or neglect, and to provide confidentiality of records. States 
also must have procedures for public disclosure of information about 
cases of abuse or neglect which result in a child's death or near-
death. State CAPTA plans must provide for cooperation with law 
enforcement officials, courts, and human service agencies, and for the 
expungement of records in cases that are false or unsubstantiated. 
Further, States must appoint a guardian ad litem, who may be an 
attorney or court-appointed special advocate, to represent children 
in judicial proceedings.
	The 1996 reauthorization of CAPTA (Public Law 104-235) 
required States to establish citizen review panels, composed of 
volunteer community representatives, to evaluate State and local 
child protection activities. In addition, the law required States 
to have procedures for expedited termination of parental rights (TPR) 
in any case of an abandoned infant, and to have procedures for 
individuals to appeal an official finding of abuse or neglect. States 
are required to provide that efforts toward family reunification are 
not mandatory for a surviving child with a parent who committed or 
aided in the murder or voluntary manslaughter of another of their 
children, or who committed a felony assault that resulted in serious 
bodily injury to any of their children. States are required to provide 
that conviction of any of these felonies will constitute grounds for 
TPR. CAPTA also requires States to have procedures for responding to 
cases of medical neglect.
	CAPTA was most recently amended and reauthorized in 2003 
(Public Law 108-36) and the new law added a number of State 
requirements. Specifically, in requesting basic CAPTA grants, States 
must assure that they will: require that health care providers 
involved in delivery of an infant who was prenatally exposed to an 
illegal drug and is affected by this substance abuse report the 
child's birth to child protective services and require that a "safe 
plan of care" for this newborn be developed; have triage procedures 
for the appropriate referral of children who are not at risk of 
imminent harm to a community organization or voluntary preventive 
service; disclose confidential information to Federal, State, and 
local government entities (or their agents) if the information is 
needed to carry out their lawful duties to protect children; have 
provisions to ensure that alleged child maltreatment perpetrators 
promptly are informed of the allegations made against them; develop 
(within 2 years of the law's enactment) provisions for criminal 
background checks of all adults in prospective adoptive and foster 
care homes; have provisions for improving the training, retention, and 
supervision of caseworkers; have provisions to address training of 
child protective service workers on their legal duties in order 
to protect the legal rights and safety of children and families; and 
develop procedures for referral of child maltreatment victims under 
3 years of age to the statewide early intervention program (for 
developmental assessment and services) operated under Part C of the 
Individuals with Disabilities Education Act (IDEA).

Child abuse and neglect statistics
	The 1996 CAPTA amendments required States (to the "maximum 
extent practicable") to submit annual aggregate data to HHS on child 
maltreatment for inclusion in the National Child Abuse and Neglect 
Data System (NCANDS). States with the capacity to do so may also 
submit case-level data. NCANDS was established by the 1988 amendments 
to CAPTA and has published annual reports each year beginning with 
1990, although prior to the 1996 amendments States participated in 
NCANDS on a voluntary basis. Other sources of national data on child 
maltreatment have included the American Association for Protecting 
Children (of the American Humane Association), which collected 
information from 1976 to 1987, and Prevent Child Abuse America 
(formerly called the National Committee to Prevent Child Abuse), which 
has been conducting an annual survey of States since 1986. Finally, 
HHS has periodically funded the National Incidence Study of Child 
Abuse and Neglect (NIS), which collects data on children who have been 
investigated by child protection agencies, but also includes 
information from community professionals on children who were either 
not reported to child welfare agencies or whose cases were not 
investigated. The NIS has been conducted three times, in 1980, 1986, 
and 1993.  The most recent CAPTA amendments (Public Law 108-36) 
require that HHS conduct a fourth NIS.
	The latest data available from NCANDS are for 2001, and 
include aggregate data from all States and the District of Columbia 
and case-level data from 39 States.  Data for 2001 show that 2.7 
million reports of possible maltreatment were made to child welfare 
agencies in that year (U.S. Department, 2003). Almost two-thirds of 
these reports were investigated, and 903,000 children were estimated 
to have been victims of abuse or neglect, for an incidence rate of 
12.4 per 1,000 children. These numbers mark a continuation of a 
downward trend that began in 1993, when more than 1 million children 
were substantiated as victims, for an incidence rate of 15.3 per 1,000 
children. Table 11-21 shows NCANDS data on the incidence of children 
alleged to have been victims, and substantiated or indicated 
victimization, by State, in 1998 and 2001, and the percent change 
between those years. Chart 11-1 illustrates nationwide changes in 
the incidence of substantiated or indicated maltreatment between 
1990, when NCANDS began, and 2001, and also shows trends in the 
incidence of physical abuse and neglect between 1996 and 2001.

TABLE 11-21--INCIDENCE OF CHILD MALTREATMENT ALLEGATIONS AND 
VICTIMIZATION, BY STATE, 1998-2001

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

	The long-term trend in child abuse reporting has been one of 
substantial growth, with the number of maltreatment reports more than 
quadrupling since 1976. However, increased reporting does not 
necessarily mean an equivalent increase in actual abuse or neglect. It 
is generally agreed that some part of the dramatic growth in reporting 
over the last two to three decades is due to greater public awareness 
and recognition of child abuse and neglect, especially since the 1960s 
and 1970s when States enacted mandatory reporting laws. Moreover, not 
all reports are substantiated, and the percentage of substantiated 
reports has declined over time. According to NCANDS data, 27.5 percent 
of investigations in 2001 resulted in a substantiated case of child 
maltreatment, and another 4.4 percent found that maltreatment was 
"indicated." Looking at data from earlier sources, 65 percent of child 
abuse or neglect reports were substantiated in 1976. However, 
researchers and professionals also agree that not all children who are 
victims of abuse or neglect are reported to child welfare agencies. 
According to the most recent NIS survey, more than 1.5 million 
children were victims of abuse or neglect in 1993 under the "harm" 
standard (i.e., children who have suffered demonstrable harm by 
objective measures), for a 67 percent increase from 1986, and a 149 
percent increase from 1980 (Sedlak & Broadhurst, 1996). The NIS also 
found that 2.8 million children could be counted in 1993 under the 
"endangerment" standard (a more subjective measure, including children 
who were not actually harmed but who might be considered at risk), 
which was almost double the number counted in 1986. The endangerment 
standard was not used in the 1980 NIS.

CHART 11-1 -- INCIDENCE OF CHILD MALTREATMENT, 1990-2001

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

Of child victims in 2001, more than 59 percent experienced neglect 
(including medical neglect), while almost 19 percent were physically 
abused. Almost 10 percent were sexual abuse victims and almost 
7 percent had been psychologically abused. Other forms of maltreatment 
were found for 19.5 percent of child victims in 2001, with some 
children falling into more than one of these categories. According to 
NCANDS data, the number of children who died in 2001 as a result of 
substantiated abuse or neglect was about 1,300, for an incidence rate 
of 1.8 child abuse-related deaths per 100,000 children in the general 
population.  These deaths included 18 that occurred in foster care.

SUBSTANCE ABUSE

	Substance abuse has been a major challenge facing the child 
welfare system, especially in the last 15-20 years. It is widely 
believed that the dramatic increase in foster care placements in the 
mid to late 1980s resulted, at least in part, from the introduction of 
crack cocaine. Children born drug exposed often enter substitute care 
shortly after birth, either because of their own medical problems or 
because of abuse or neglect by their parents. However, children 
exposed prenatally to drugs or alcohol are a small portion of the 
children affected by parental substance abuse. The abuse of alcohol, 
marijuana, cocaine, heroin, and hallucinogens, as well as the non-
medical use of prescription pain relievers, tranquilizers, stimulants, 
and sedatives by adults affects the welfare of children in a variety 
of ways.  Substance abuse can impair the priorities and judgment of a 
caretaker, leading to decreased supervision, assistance, and 
provision, and a high risk of child maltreatment.  Children of all 
ages typically enter foster care because of abuse or neglect, and 
substance abuse is a factor in many of these cases.  
	According to the most recent annual National Household Survey 
on Drug Use and Health (NHSDUH, formerly called the National Household 
Survey on Drug Abuse, published by the Substance Abuse and Mental 
Health Services Administration), 19.5 million people or 8.3 percent of 
the U.S. population over age 12 engaged in illicit drug use in 2002 
(SAMHSA, 2003).  The most commonly used illicit drug was marijuana 
(6.2 percent of the population), while slightly less than 1 percent of 
the population were current cocaine users.  About 2.6 percent of the 
over-age-12 population used psychotherapeutic drugs for nonmedical 
reasons. Among pregnant women aged 15 to 44, 3.3 percent had used 
illicit drugs in the month prior to being interviewed for the NHSDUH, 
compared with 10.3 percent of nonpregnant women in the same age group.  
More than half (51 percent) of Americans, or 120 million individuals 
over the age of 12, reported current use of alcohol, with 6.7 percent 
identifying themselves as heavy drinkers.
	An estimated 8.3 million children live with substance-abusing 
or substance-dependent parents, according to a congressionally 
mandated HHS study (U.S. Department, 1999a).  African-American parents 
have higher rates of illegal drug abuse than white parents, especially 
for cocaine, and substance abusing parents in general have less 
education, are less likely to be working full time, are less likely to 
be married, and more likely to be receiving welfare than other parents. 
Of all forms of parental substance abuse, alcohol abuse is the most 
prevalent. Although relatively few of the children in substance 
abusing families ever come into contact with the child welfare
system, substance abuse is a major factor in the child welfare 
caseload. For children with substantiated reports of abuse or 
neglect, HHS found that substance abuse is a factor in between one-
third and two-thirds of cases, and is a factor in two-thirds of the 
cases of children in foster care. While mothers and fathers are 
equally represented in substance abusing households with children, 
mothers more typically come to the attention of the child welfare 
system.
	The National Center on Addiction and Substance Abuse estimates 
that substance abuse and addiction account for some $10 billion in 
Federal, State, and local government spending, or 70 percent of the 
$14.4 billion in total child welfare spending in 1995 (National 
Center, 1999).  The National Center further estimates that hospital 
costs for newborns whose mothers abused illegal drugs amount to $360 
million annually, and that yearly health care costs and related 
services for children and surviving adults who suffer from Fetal 
Alcohol Syndrome are $2 billion.
	In a report mandated by Congress and released in 1999, HHS 
identified various barriers to meeting the needs of child welfare 
clients with substance abuse problems, including the different 
perspectives and philosophies of the substance abuse treatment and 
child welfare fields.  For example, differences exist with regard 
to the definition of "client," the establishment of reasonable 
expectations for outcomes and timetables, and responses to setbacks 
in treatment.  Additional barriers cited by HHS include certain 
Federal and State laws, the crisis environment affecting many child 
welfare agencies, shortages of substance abuse treatment facilities, 
the particular shortage of services appropriate for women with 
children, and confidentiality requirements.  HHS identified certain 
key features as important components of a comprehensive approach to 
addressing joint substance abuse and child maltreatment problems, 
including preventative services for children, training for 
caseworkers, enhanced risk assessment and referral capacity, increased 
access to substance abuse treatment, client retention, recognition of 
the importance of permanency for children, and support for ongoing 
recovery.

KINSHIP CARE

	The number of children living with relatives who are not 
their parents has increased in recent years, especially among minority 
populations. According to the Urban Institute's most recent National 
Survey of America's Families, 2.3 million children lived with 
relatives - apart from their parents - in three different types of 
arrangements in 2002: 76 percent in "private" kinship care, where the 
family made the arrangement with no involvement by a social services 
agency or court; 6 percent in "voluntary" kinship care, where a social 
services agency helped place the child with relatives but the court 
was not involved; and 17 percent in kinship "foster" care, where the 
child was formally placed with relatives by a social services agency 
with approval of the court (Urban, 2003).  However, of the more than 
half million children identified in this survey as having been placed 
in kinship care with the involvement of social service agencies 
(including more than 405,000 with court involvement), it appears most 
do not enter State-supervised foster care.  On the last day of fiscal 
year 2001, an estimated 131,000 children lived in State-supervised 
kinship fostercare (Ehrle, Geen and Main). Grandparents were the 
caregivers for more than half of kinship children (59 percent), and 
more than half of the children were minorities (43 percent African-
American and 17 percent Hispanic).  Slightly more than half (52 
percent) of the children were age 11 or older, and almost half (46 
percent) lived in the South.  Kinship children often lived with 
families with modest means (52 percent had incomes below 200 percent 
of the Federal poverty level), with a single caregiver (54 percent), 
and with caregivers over age 50 (52 percent). Almost a quarter of
kinship children lived with caregivers who lacked a high school 
degree.
	The Census Bureau also recently released data on grandparents 
living with their grandchildren, obtained from questions added to the 
2000 Census in response to a congressional directive in the 1996 
welfare reform law (Public Law 104-193) (U.S. Census, 2003).  Census 
found 5.8 million "coresident" grandparents (i.e., grandparents living 
with their minor grandchildren), of which 2.4 million were 
"grandparent caregivers" or people with primary responsibility for 
their grandchildren.  Of these grandparent caregivers, 39 percent had 
been caring for their grandchildren for five or more years. Among 
black grandparents living with their grandchildren, 52 percent were 
the primary caregiver, while 42 percent of white coresident 
grandparents were their grandchildren's primary caregiver. Hispanic 
coresident grandparents (of any race) were least likely to be primary 
caregivers (35 percent).  Younger grandparents (under age 60) were 
more likely to be primary caregivers than those age 60 or more; half 
of coresident grandparents under age 60 were primary caregivers, 
compared with 31 percent of those age 60 or older.  The majority of 
coresident grandparents (64 percent) were women, and 19 percent of 
grandparent caregivers were poor.
	Looking specifically at kinship foster care, the Urban 
Institute surveyed foster care administrators in 1999 to obtain 
information on State policies and found considerable variation among 
States (Urban, 2000). Almost all States gave preference to relatives 
over nonrelative foster care providers, and actively sought out 
relatives as preferred placements.  However, States defined "kin" 
differently, with 23 States and the District of Columbia limiting the 
definition to those related by blood, marriage or adoption, while 21
States have more expansive definitions and six States have no formal 
definition.  Licensing policy also varied among States, particularly 
with regard to the stringency of requirements applied to relative 
caregivers. According to a 2001 survey conducted by the Urban 
Institute, 15 States required kinship caregivers to meet the same 
licensing standards as nonrelative foster parents, 23 States waived 
certain licensing standards (typically training) for kinship 
caregivers, and 20 States (including 7 of those that waive standards) 
have a separate licensing process for relative caregivers that is 
less stringent than the process for non-relatives (Urban, 2002). All 
States provide full foster care payments to relatives who are 
licensed under the same standards that apply to non-relative foster 
care providers.  However, most States do not provide a full foster 
care payment to relatives who meet less stringent criteria that are 
developed specifically for kinship caregivers.  In some cases, these 
families may be eligible for Temporary Assistance for Needy Families 
(TANF) benefits.
	The U.S. General Accounting Office (GAO) reported in 1999 on 
quality and permanency issues raised by kinship care. Looking at open 
foster care cases in California and Illinois, as of September 1997, 
GAO found the quality of kinship care and other foster care was good 
and the experiences of children in both types of settings were 
comparable. GAO's review confirmed the generally held view that 
children in kinship care have more stability than children in other 
forms of foster care, but also found that caseworkers had somewhat 
less confidence that kinship care givers would enforce court-ordered 
restrictions on parental visits with their children. In addition, the 
two States held kinship caregivers to somewhat lower standards than 
other foster parents and provided a lower level of support to these 
families as well. Kinship care children in California spent about the 
same length of time in foster care as other foster children, while 
kinship care children in Illinois spent significantly less time in 
the system, according to GAO.
	More recently, HHS released a report to Congress on kinship 
care in response to a mandate in the 1997 Adoption and Safe Families 
Act (U.S. Department, 2000b). The report included a research review, 
and also identified the following principles to guide policy 
discussions on kinship care: the child welfare system should continue 
to focus on safety, permanency, and well-being of children; kinship 
placement decisions should be based on the best interests of the 
child; the child welfare system should not supplant family efforts or 
income assistance programs; and relatives should be viewed as 
potential resources but should be assessed on a case-by-case basis.

WELFARE REFORM

	Congress enacted landmark welfare reform legislation in 1996, 
the Personal Responsibility and Work Opportunity Reconciliation Act 
(Public Law 104-193), which has been of great interest to child 
welfare practitioners, researchers, and policymakers because of its 
potential implications for the child welfare system and its clients. 
The 1996 law replaced the 61-year-old program of Aid to Families with 
Dependent Children (AFDC) with a State-administered block grant of 
Temporary Assistance for Needy Families (TANF). Receipt of public 
assistance now is time limited and conditioned on participation in 
work activities (see section 7).
	The 1996 legislation had an immediate programmatic impact on 
child welfare agencies because of the legal connection between AFDC 
eligibility and title IV-E foster care and adoption assistance. As 
explained earlier, the law now limits title IV-E funding to those 
children who would have been eligible for the former AFDC Program as 
it existed on July 16, 1996. Thus, States must maintain these 
eligibility criteria, even though AFDC has been repealed, for use in 
determining title IV-E (and Medicaid) eligibility. Some analysts have 
observed that over time, these eligibility criteria could erode in 
value and the number of foster and adoptive children for whom States 
can claim Federal reimbursement may decrease.  
	The financing of welfare reform also has potential 
implications for child welfare. The law replaced an open-ended 
entitlement program with a capped block grant, while allowing foster 
care and adoption assistance under title IV-E to remain uncapped. 
There is overlap between the populations served by TANF and title IV-
E, raising the possibility that States might have an incentive to 
shift expenditures from TANF to the open-ended title IV-E program, 
particularly for kinship care families who might be able to meet 
Federal title IV-E eligibility criteria. Despite such apparent 
incentives, a third of children receiving TANF benefits in fiscal year
2001 were "child-only" cases (see section 7), which means the adult in
the household was not part of the assistance unit. In about two-thirds 
of these cases, the adult was a parent who was not eligible for TANF 
benefits because of immigration status or another reason, but slightly 
more than 30 percent of these children were living with grandparents 
or other relatives without their parents present in the household. 
Both welfare and child welfare analysts are particularly interested in 
the dynamics of this population and the extent to which these children 
and families resemble those in formal kinship foster care arrangements.
	Beyond these issues, child welfare professionals are closely 
watching the implementation of welfare reform to determine its impact 
on the well-being of children and families, especially as measured 
through changes in the incidence of child maltreatment or entry into 
foster care. Although relatively few welfare families ever come into 
contact with the child welfare system, a disproportionately large 
share of child welfare clients receive or have received cash 
assistance. Thus, changes in welfare programs that affect a small 
percentage of clients may have a significant impact on the size of the 
child welfare population and the workload of the child welfare system. 
HHS reported on the interaction between welfare assistance 
(specifically, receipt of AFDC), Medicaid, and foster care prior to 
enactment of welfare reform (U.S. Department, 2000a). Using 
administrative data from California, Illinois, and North Carolina in 
1995-96, HHS found that less than 3 percent of children who entered 
AFDC during the study period were subsequently placed in foster care. 
However, about 60 percent of the foster care entries in the three 
States during the study period were from AFDC families.
	Numerous evaluations have been conducted or are underway on 
the impact of welfare reform on various outcomes, including the 
transition of welfare recipients to work, the family formation 
patterns of welfare recipients, the economic status of families 
receiving or formerly receiving welfare, and the behavior and well-
being of children and adolescents (see appendix L). 
	Some research also has attempted to identify the impact of 
various welfare policies on specific child welfare outcomes.  For 
example, a comparative analysis of State-level data from 1990-1998 
suggests that certain welfare policies, including benefit size and 
work requirements, may affect child maltreatment rates and/or out-
of-home placement rates for children (Paxson and Waldfogel, 2001).  
This study's researchers reported that more generous welfare benefits 
are associated with significantly lower levels of neglect and smaller 
numbers of children in out-of-home care.  (Or conversely, reduced 
benefits are associated with higher levels of neglect and larger 
numbers of out-of-home placements.)  These researchers also reported 
that family cap policies, which typically mean that a family's 
benefit is not increased for an infant born 10 months or more after 
the family begins to receive cash aid, are associated with lower 
numbers of substantiated cases of maltreatment but increased numbers 
of out-of-home placements. 
	An experimental study in Delaware suggests a connection 
between strong work requirements and increased levels of child neglect
(Fein and Lee, 2000).  The Abt Associates evaluation of Delaware's 
pre-TANF waiver program found higher rates of neglect (after three 
years) among families that were subject to strong work requirements 
and time-limited benefits (as compared to those subject to the old 
cash aid program).  However, researchers who used administrative data 
to study the effect of welfare reform on the incidence of child 
maltreatment among Illinois children entering AFDC/TANF found a 
decline in reported child maltreatment after enactment of Federal 
welfare reform (Goerge and Lee, 2000).  For children who received cash 
benefits in the years 1994-1996 (during which Illinois instituted a 
Work Pays program to encourage employment among adult welfare 
recipients), the incidence of reported child maltreatment one year 
after first receiving cash benefits remained stable.  But for children 
who first received cash aid in 1997 - after Federal welfare reform was 
enacted - there was a 10 percent decrease in substantiated 
maltreatment cases.
	A study comparing Utah families who left TANF because of 
sanctions to those who left for other reasons found the sanctioned 
families were no more likely than non-sanctioned families to have a 
child welfare case opened at some time within three years after their 
cash aid ended (Derr & Cooley, 2002).  Both groups had relatively high 
involvement with the child welfare system, however, and among families 
with child welfare involvement, those that had been sanctioned were 
much more likely to have been found without adequate resources to 
support their families and to have an open child welfare case at the 
end of the three years.

NATIONAL FOSTER CARE AND ADOPTION INFORMATION

DATA COLLECTION SYSTEMS

	Historically, there has been a lack of reliable data on foster 
care and adoption. In fact, not every State even reported its average 
monthly foster care caseload under the federally assisted program 
until 1975. Moreover, before 1980 States were not required to collect 
data on nonfederally-assisted foster care, which in a typical State 
constitutes about half the cases in foster care. This lack of data was 
one of several concerns that Congress hoped to address with enactment 
of the Adoption Assistance and Child Welfare Act of 1980 (Public 
Law 96-272).
	The 1980 law imposed several requirements on States as a 
condition for incentive funds under the Title IV-B Child Welfare 
Services Program, including a one-time inventory of children in 
foster care and a statewide information system for tracking children 
in foster care.  HHS issued a policy information question (ACYF-
PIQ-82-06) which restated the law's requirement that States have an 
information system, but did not specify the system's content. Final 
regulations were never issued.
	Starting in 1982, HHS funded the American Public Human 
Services Association (APHSA, formerly the American Public Welfare 
Association) to conduct a voluntary annual survey of States, known as 
the Voluntary Cooperative Information System (VCIS). Until the mid-
1990s, VCIS was the only source of national data on the number and 
characteristics of children in foster and adoptive care. However, the
VCIS was of limited use for several reasons: (1) not all States 
participated fully in the survey; (2) reporting periods were not 
consistent among States; (3) there was a serious time lag between data 
collection and publication; and (4) data were available only in an 
aggregated, State-specific format, preventing the type of analysis 
that could be conducted with case-specific data.
	In response to the need for better data collection, Congress 
in 1986 approved an amendment to title IV-E (section 479) requiring
that an advisory committee be established and submit a report to 
Congress and HHS with recommendations for establishing, administering, 
and financing a system for collecting data on adoption and foster 
care.  The advisory committee submitted its final report in 1987, and 
in May 1989, HHS submitted an implementation plan to Congress. On 
September 27, 1990, HHS proposed regulations to implement the data 
collection system known as the Adoption and Foster Care Analysis and 
Reporting System (AFCARS). The population to be covered was children 
under the responsibility of the State child welfare agency and 
financing was to come from the title IV-E administrative cost match. 
States were to claim only that portion of their costs that related to 
children eligible for title IV-E, although the system would have 
required States to collect data on non-IV-E children as well.
	In 1993, as part of the Omnibus Budget Reconciliation Act 
(Public Law 103-66), Congress authorized an enhanced Federal matching
rate to States for certain costs related to data collection for 
fiscal years 1994-96. Welfare reform legislation enacted in 1996 
(Public Law 104-193) extended this enhanced match through fiscal 
year 1997. The statute specified that this enhanced match of 
75 percent was available for costs of planning, design, development 
and installation of statewide mechanized data collection and 
information retrieval systems, including costs of hardware, as long 
as the systems did the following: complied with HHS regulations; 
to the extent practicable, interfaced with State child abuse and 
neglect data collection systems and with AFDC (now TANF) data 
collection systems; and provided more efficient, economical, and 
effective administration of State child welfare programs, as 
determined by HHS.  The law also provided that ongoing operational
costs of State data collection and information retrieval systems 
would be matched at the 50 percent Federal rate available for 
administrative expenses under title IV-E. Further, the amendment 
specified that States may claim reimbursement for data collection 
systems without regard to whether they are used for foster and 
adoptive children who are not eligible for title IV-E assistance.
	On December 22, 1993, HHS published: (1) interim final rules 
for Statewide Automated Child Welfare Information Systems (SACWIS), 
issued in response to enactment of Public Law 103-66; and (2) final 
rules implementing AFCARS. Under the interim final rules for SACWIS, 
States were required to develop "comprehensive"' child welfare data 
collection systems, of which AFCARS must be a component, in order to 
qualify for Federal funding, including the 75 percent enhanced match. 
According to HHS, "comprehensive" means that a State SACWIS system 
must include child welfare services, foster care and adoption 
assistance, family preservation and support services, and independent 
living.
	State SACWIS systems must do the following, at a minimum:
1.	Meet the AFCARS data collection and reporting requirements;
2.	Provide for intrastate electronic data exchange with data 
collection systems operated under TANF, Medicaid, child support 
enforcement, and the National Child Abuse and Neglect Data 
System (NCANDS) (unless not practicable for certain reasons);
3.	Provide for automated data collection on all children in 
foster care under the responsibility of the State child welfare agency
to support implementation of statutory child protections and 
requirements;
4.	Collect and manage information necessary to facilitate 
delivery of child welfare services, family preservation and family 
support services, family reunification services, and permanent 
placement;
5.	Collect and manage information necessary to determine 
eligibility for the Foster Care, Adoption Assistance, and independent
living programs and to meet case management requirements for these 
programs;
6.	Monitor case plan development, payment authorization and 
issuance, and review and management including eligibility 
determinations and redeterminations; and
7.	Ensure confidentiality and security of information.
	In addition, optional SACWIS functions could include (if cost-
	beneficial) resource management, tracking and maintenance of 
	legal and court information, administration and management of 
	staff and workloads, licensing verification, risk analysis, 
	and interfacing with other automated information systems.
	Under the final AFCARS rules, States are required to collect 
case-specific data on all children in foster care for whom the State 
child welfare agency has responsibility for placement, care, or 
supervision, regardless of their eligibility for title IV-E. Further, 
States are required to collect data on all adopted children who 
were placed by the State child welfare agency, and on all adopted 
children for whom the State provides adoption assistance (ongoing 
payments or for nonrecurring expenses), care, or services either 
directly or by contract with other private or public agencies. States
must report data to HHS twice a year.
	Table 11-22 shows the status of State SACWIS projects as of 
November 2003.

TRENDS IN FOSTER CARE CASELOADS

	The incidence of all children in the United States who are in 
foster care has increased from 3.9 per 1,000 in 1962 to an estimated 
7.1 per 1,000 in 2001, although the 2001 incidence rate is a decline 
from the estimated peak of 7.5 per 1,000 in 1999. The incidence of 
children in foster care fluctuated during the 1960s and 1970s, 
although it was the same (3.9 per 1,000) in 1982 as it was 20 years 
earlier. From 1982 to 1999, the incidence rose steadily each year, and
sometimes climbed sharply.  For example, in the 2 years between 1987 
and 1989, the incidence rose from 4.5 per 1,000 to 5.6 per 1,000.  
The incidence of children in foster care declined in both 2000 and 
2001 (see Table 11-23).

TABLE 11-22 - STATUS OF DEVELOPMENT OF STATEWIDE AUTOMATED CHILD 
WELFARE INFORMATION SYSTEMS (SACWIS), NOVEMBER 2003

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

	The number of children in federally-assisted foster care has
grown significantly in the years since funding first became available 
under AFDC in the early 1960s. The number grew from 1962 to 1976, then 
decreased from 1976 to 1983. Between 1983 and 1998, the number of 
foster care children funded under title IV-E increased steadily, but 
has declined in each year from 1999 to 2001 (Table 11-23).

TABLE 11-23 -- U.S. FOSTER CARE AND IV-E FOSTER CARE POPULATIONS AND 
FOSTER CARE INCIDENCE IN U.S. POPULATION AGES 0-18, 1962-2001

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

Multistate data on caseload trends
	More detailed information is available on trends in foster 
care caseloads through the Multistate Foster Care Data Archive at the 
Chapin Hall Center for Children. Using State administrative data, 
Chapin Hall has conducted analyses of foster care dynamics from 1983 
through 2001. The most recent analysis, looking at trends between 1990 
and 2001, is based on data from nine States: Alabama, California, 
Illinois, Maryland, Michigan, Missouri, New Jersey, New York, and Ohio 
(Chapin Hall, 2003). (Additional States have participated in the 
archive, but only the above States are included in the following 
discussion.  Moreover, California data on exits from foster care were 
excluded from the analysis discussed below because of a change in 
their information system.)  In general, Chapin Hall has reported in 
recent years that caseload growth has become more a function of longer 
lengths of stay and changes in the composition of the caseload, rather 
than the marked increases in admissions that characterized the late 
1980s. 
	Chapin Hall found that caseload growth in the late 1980s 
coincided with a change in the age distribution of children entering 
the system for the first time, with a dramatic increase in infants and 
a decrease in adolescents. Infants remain the single largest group of 
children entering care; however, the proportion of children entering 
care who were under age 1 decreased from nearly 25 percent in 1990-
1993 to 20 percent for children entering in 1998-2001. Children 
entering as infants had incidence rates (per 1,000 children) that were 
four to five times higher than children ages 1-17; likewise, regardless 
of age, children entering care in primary urban areas had higher 
incidence rates than children in other areas. Looking at age, race or 
ethnicity, and children's geographic location, Chapin Hall researchers 
found African-American infants in primary urban areas had the highest 
incidence of foster care and the greatest likelihood of entering foster 
care.  Looking at types of placement, Chapin Hall found that 47 percent 
of first placements were with non-relatives in 1994, increasing to 
58 percent of first placements for children who entered in 2000. About 
21 percent of first placements were in congregate care throughout the 
period from 1990-2001, while kinship care rose from 23 percent of first 
placements in 1990 to 25 percent in 1994, but since declined to 
20 percent in each of 2000 and 2001.
	To further understand the dynamics of State foster care 
caseloads, Chapin Hall examined the length of time that children 
remained in care during their first spell and found that a quarter of 
the children, regardless of their year of entry, had completed their 
first spell (i.e., exited from the system) within the first 4 months 
of placement.  However, first spells had lengthened over time, with 
25 percent of children who entered care in 1990 having completed their 
first spell in less than  3 months.  Again, regardless of their year 
of entry, half of the children completed their first spell within 
13 to 16 months, and, between 1994 and 1999, the length of time 
required for 75 percent of children to complete their first spell 
decreased from almost 45 months to less than 32 months.  Researchers 
found that children who entered foster care from primary urban areas 
had longer initial spells than children from other areas; children 
entering as infants also had significantly longer initial spells than 
older children; and African-American children had longer spells than 
children of other races or ethnicities.  Children placed in kinship 
care stayed longer than children in non-relative foster care, and 
children in congregate care had shorter spells than children in other 
types of placements.
	Children who entered the system as infants had the highest 
rates of adoption, with the likelihood of adoption decreasing each 
year after the first birthday. Children who entered at age 14 or older 
were less likely than younger children to exit through family 
reunification, and the likelihood of exiting to the home of a relative 
decreased for children who entered care at age 8 or older.  White and 
Hispanic children who left care were more likely to be reunified with 
their families than African-American children, who in turn were more 
likely to be adopted or exit to the home of a relative.  Finally, 
Chapin Hall researchers looked at children who reentered foster care 
within 2 years of exiting, and found that children with longer 
initial spells in care were less likely to reenter care than those 
with shorter initial spells.  Infants were least likely to reenter, 
and children who entered care between the ages of 6 and 17 were the 
most likely to reenter.  Children discharged from congregate care had 
the highest rates of reentry within 2 years, while children 
discharged from kinship care had the lowest rates.

Circumstances of foster children at one year after entry
	As discussed earlier, the 1996 welfare reform law authorized 
a national longitudinal study of children at risk of abuse or neglect 
or identified as victims, and HHS responded by establishing the 
National Survey of Child and Adolescent Well-Being (NSCAW).  In 
October 2003, the first NSCAW report on individual case-level data 
was released, providing information on 700 children who had been in 
foster care for one year (HHS, 2003).  These children are a subset of 
the total NSCAW population of more than 6,200 children who have come 
in contact with the Nation's child welfare system.
	Researchers found that the majority of children at one year 
after entry into foster care were 6 years old or older (32 percent 
were between ages 6 and 10, and 27 percent were 11 or older), 
24 percent were between 1 and 2 years old, and  17 percent were 
between the ages of 3 and 5. The single largest group of children 
were African-American (45 percent); 31 percent were white; and 
17 percent were identified as Hispanic.
	Neglect was identified as the most serious form of m
altreatment for  60 percent of the children in this cohort. Physical
abuse was identified as the most serious form of maltreatment for 
10 percent of the children; sexual abuse for  8 percent; emotional, 
moral/legal, or education abuse, or abandonment for  14 percent of 
the children; and 8 percent entered foster care for reasons other than
abuse or neglect, such as domestic violence, or access to mental 
health services.
	At one year in foster care, 44 percent of the children were 	
in non-relative foster homes, and 24 percent were in kinship foster 
care.  Another 7 percent were in group homes or residential placements, 
and about a quarter of the children had actually gone home by the time 
of their interview.  Researchers attributed this last result to the 
likelihood of a timely one-year permanency review that resulted in 
reunification.
	Caregivers reported that more than a quarter of the children 
had lasting or recurring physical or mental health problems, and 
assessments of the children's developmental functioning showed scores 
marginally below the norm on almost all measures.  Researchers 
suggested this last finding might also result from the high 
likelihood that the children came from poor backgrounds.  Children 
generally showed low social skills, low daily living skills, and a 
high degree of behavior problems.
	The majority of caregivers (62 percent) were age 40 or older, 
with kinship caregivers more likely to be 60 or older and caregivers 
in group homes more likely to be under 40.  Racially, caregivers 
generally matched the children; 42 percent were African-American, 
36 percent were white, and 15 percent were Hispanic.  Somewhat less 
than half (45 percent) of caregivers were single and somewhat more 
than half (53 percent) were married, and more than half (56 percent) 
had no education beyond high school.  A little over a third 
(36 percent) did not work; the remainder worked full or part-time.  
Almost half had fewer than three years experience as a foster parent, 
although non-relative caregivers had more experience 
than kin.
	At one year after entry into foster care, children age 6 or 
older generally reported that they liked the people they were living 
with (90 percent) and felt like part of the family (92 percent), 
though about 11 percent had attempted to run away. Half the children 
wanted their current placement to become their permanent home; 
however, 58 percent believed they would live with their parents again 
and more than half of the children wanted to see their parents more 
often.  Children in group homes were less happy with their placements 
than children in family foster care, and children in kinship care 
reported more contact with their parents and were less likely to have 
attempted to run away.
	Child welfare workers reported the most common risk factor at 
the time of placement was the lack of a second supportive caregiver 
in the family.  Workers referred biological parents most often to 
Medicaid for services, with income assistance, child care, mental 
health and substance abuse services also frequently needed by 
families.  Almost a quarter of the children had received some type of 
"specialty" mental health service during their year in foster care, 
with children in group care and white children more likely to receive 
such services.  About a third (36 percent) of children with clinical 
or borderline test scores on at least one standardized test received 
special education, although most of these children  (92 percent)
received special education or supplementary services, such as 
assessment, tutoring or counseling.
	Of children in foster care for one year, about a quarter had 
a permanency plan of family reunification, while another quarter had 
already returned home, as noted above.  Reunification efforts had been 
made at some time during the year for 84 percent of children whose 
permanency goal was not reunification at the one-year point. Only 
about 8 percent of children had never had a reunification plan.  
Children whose most serious type of maltreatment was "failure to 
supervise" were more likely to have a current reunification plan than 
children who had suffered from "failure to provide."  Among children 
who had not yet gone home, children in group care were more likely to 
have reunification plans than children in kinship foster care. In 
addition, most foster parents (68 percent) had considered adopting 
their foster child, assuming adoption became an option for the child.
	Unlike caregivers, child welfare workers were relatively 
young, with more than half under age 40.  Almost half (46 percent) 
were white, 32 percent were black, 11 percent were Hispanic, and 
12 percent identified themselves as "other."  About 60 percent of 
workers had a bachelor's degree, with 40 percent of those in social 
work.  Another 20 percent had a master's in social work, and 
16 percent had a master's in another field of study.  

NATIONAL DATA ON FOSTER CARE AND ADOPTION

	As described earlier, States now are required to participate 
in a mandatory data collection system known as AFCARS. Tables 11-24 
through 11-48, below, present national and State AFCARS data on the 
following: (1) total numbers of children in foster care, including 
numbers of children entering and exiting the system; (2) 
characteristics of children in foster care and conditions of their 
placement; (3) characteristics of foster children who are awaiting 
adoption; and (4) number and characteristics of children who have been 
adopted through the public child welfare system, including their 
relationship with their adoptive parents.
	Over the years, States have made great strides in collecting, 
analyzing and submitting child welfare data to the Federal Government 
for inclusion in AFCARS. Nonetheless, State capacity to collect and 
report valid data in a nationally consistent format continues to be 
a challenge. As States transition from older, payment-focused systems 
to more comprehensive, child-focused systems, they face difficult 
implementation decisions, while also addressing such issues as 
training workers, revising manuals, and synchronizing paper and 
automated information systems. Many States have been and continue to 
be engaged in the development and implementation of SACWIS. The 
construction of a SACWIS normally requires sequential stages of 
development; i.e., planning, design, development, and implementation. 
Until a State's SACWIS is fully utilized by staff, operational 
statewide, and all programming errors have been corrected, care should 
be exercised in utilizing their data (see Table 11-22 for the status 
of individual States' SACWIS development). 
	This year's Green Book contains numerous expanded tables that 
provide State AFCARS data on a single item across three years.  HHS 
has indicated that child welfare data reported by States have improved 
in each of these years and readers are advised to keep this in mind as 
they compare information across these years. HHS provides ongoing 
technical assistance to States to promote continued improvement 
of AFCARS data reports, (and child abuse data reported in NCANDS), and 
to assist States in implementing SACWIS systems. This technical 
assistance includes services provided by the National Resource Center 
for Information Technology in Child Welfare.

Number of children in foster care
	Table 11-24 illustrates the "flow" of children through the 
foster care system in 1982-2001; i.e., the number of children in care 
at the start of each year, the number who entered or exited foster care 
during the course of the year, the total number of children served 
during the year, and the number of children who remained in care at 
the end of the year. These numbers indicate steady increases in the 
foster care population that were most dramatic in the late 1980s and 
that continued until 2000 and 2001; declines occurred in both those 
years (also see chart 11-2). It should be remembered that these data 
reflect the total foster care population and are not limited to those 
children receiving subsidies under title IV-E. For State-by-State 
estimates of the percent of title IV-E eligible children, see  
Table 11-7.  
	
TABLE 11-24 -- NUMBER AND MOVEMENT OF SUBSTITUTE CARE CHILDREN, 
FISCAL YEARS 1982-2001 

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

	Table 11-25 shows the number of children who entered and 
exited care during fiscal years 1999, 2000, and 2001, and the total 
number of children in care on September 30 of each of those three 
years, by State.  Table 11-26 lists the average monthly number of 
children in foster care, by State, who received Federal funding under 
title IV-E for the years 1993, 1997, 1999, and 2002. These figures 
are lower than AFCARS estimates of the total number of children in 
foster care because they do not include the substantial number of 
children who were not eligible for Federal funding (primarily because 
they were not from AFDC-eligible homes).

Characteristics of children in foster care
	Much of the data collected on children in foster care reflect 
three different groupings of children: children who entered foster care 
during the study period; children who left care during the study period; 
and children who remained in care on the last day of the study period. 
Table 11-27 presents data on the age composition of children in these 
three categories, for all States combined, in fiscal years 1999, 2000, 
and 2001; and Table 11-28 presents data, by State, on the ages of 
children who were in care on September 30, 2001. Table 11-29 shows the 
racial and ethnic composition of children in each category, for all 
States combined, in fiscal years 1999, 2000, and 2001, while 
Table 11-30 shows these data, by State, for children who remained 
in care on September 30 of 1999, 2000, and 2001.

TABLE 11-25 -- NUMBER OF CHILDREN ENTERING AND EXITING CARE DURING 
FISCAL YEAR, AND NUMBER OF CHILDREN IN CARE ON SEPTEMBER 30, BY 
STATE: FISCAL YEARS 1999-2001

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

TABLE 11-26 -- TITLE IV-E FOSTER CARE AVERAGE MONTHLY NUMBER OF 
CHILDREN, SELECTED FISCAL YEARS, 1993-2002

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

TABLE 11-27 -- AGES OF CHILDREN ENTERING AND EXITING CARE DURING 
FISCAL YEAR, AND IN CARE ON SEPTEMBER 30, FISCAL YEARS 1999-2001
	
	

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]	

TABLE 11-28 -- AGES OF CHILDREN IN CARE ON SEPTEMBER 30, 2001, BY STATE

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

TABLE 11-29 -- RACE/ETHNICITY OF CHILDREN ENTERING AND EXITING CARE 
DURING FISCAL YEAR, AND IN CARE ON SEPTEMBER 30, FISCAL 
YEARS 1999-2001

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

TABLE 11-30 -- RACE/ETHNICITY OF CHILDREN IN CARE ON SEPTEMBER 30, BY 
STATE,  FISCAL YEARS 1999-2001

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

Characteristics of foster care
	As Table 11-31 shows, 44 percent of the children who were in 
foster care on September 30, 2001, had permanency plans of 
reunification with their families, while 22 percent had plans of 
adoption. For 9 percent of the children, the permanency plan was 
long-term foster care. (Table 11-31 shows these data for children in 
care at the end of fiscal years 1999, 2000, and 2001; Table 11-32 
shows these data, by State, for children in care on September 30, 
2001.)  As for the living arrangements of these children, Table 11-33 
shows that on September 30, 2001, slightly less than half were in 
foster family homes with people unrelated to them, while another 
18 percent were in foster care with relatives, and 15 percent of these 
children were either in a group home or institution. (Table 11-33 
shows these data for each of fiscal years 1999 through 2001, while 
Table 11-34 shows them, by State, for children in care on 
September 30, 2001.)  As shown in Tables 11-35 and 11-36, less than 
two-thirds of the children in care on September 30, 2001, had 
experienced between one and two placements during their current spell 
in foster care, while 22 percent had experienced three or four, and 
17 percent had experienced five or more.  (See Table 11-35 for 
aggregate data on placements in 1999, 2000, and 2001; Table 11-36 
shows placement data by State for children in care on 
September 30, 2001.)

TABLE 11-31 -- PERMANENCY PLANS OF CHILDREN IN CARE ON SEPTEMBER 30, 
FISCAL YEARS 1999-2001

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

TABLE 11-32 -- PERMANENCY PLANS OF CHILDREN IN CARE ON 
SEPTEMBER 30, 2001, BY STATE  

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

TABLE 11-33 - PLACEMENT SETTINGS OF CHILDREN IN CARE ON SEPTEMBER 30, 
FISCAL YEARS 1999-2001 

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

  

TABLE 11-34 - PLACEMENT SETTINGS OF CHILDREN IN CARE ON SEPTEMBER 30, 
2001, BY STATE 

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

TABLE 11-35 -- NUMBER OF PLACEMENTS OF CHILDREN IN CARE ON 
SEPTEMBER 30, FISCAL YEARS 1999-2001

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

TABLE 11-36 -- NUMBER OF PLACEMENTS (FOR CURRENT EPISODE) OF CHILDREN 
IN CARE ON  SEPTEMBER 30, 2001, BY STATE

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

	The amount of time that children spend in foster care is an 
issue of public policy concern. As shown in Table 11-37, children who 
left care during a given fiscal year had generally shorter lengths of 
stay from the time of removal from home than those children who 
remained in care at the end of the fiscal year.  Table 11-37 shows 
aggregate data on length of stay for children who exited care during 
fiscal years 1999 through 2001, and children who remained in care on 
the last day of each fiscal year. Table 11-38 shows the length of 
stay, by State, for children in care on September 30, 2001.

TABLE 11-37 -- LENGTH OF STAY FOR CHILDREN EXITING CARE DURING FISCAL 
YEAR AND FOR CHILDREN IN CARE ON SEPTEMBER 30, FISCAL YEARS 1999-2001

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

TABLE 11-38 -- LENGTH OF STAY FOR CHILDREN IN CARE ON SEPTEMBER 30, 
2001, BY STATE

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

	Finally, Table 11-39 shows the reasons for discharge for 
children who left foster care during fiscal years 1999, 2000, and 2001, 
and indicates that a slightly decreasing majority of these children 
were reunified with their families (58 percent in fiscal year 1999 and
56 percent in fiscal year 2001). Another 18 percent were adopted in 
fiscal year 2001, 10 percent left to live with other relatives, and  
7 percent were emancipated (i.e., "aged out"').  Table 11-40 shows the 
discharge reasons, by State, for children in care on September 30, 
2001.

TABLE 11-39 -- DISCHARGE REASONS FOR CHILDREN EXITING CARE, FISCAL 
YEARS 1999 - 2001

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

TABLE 11-40 -- DISCHARGE REASONS FOR CHILDREN EXITING CARE, BY STATE, 
FISCAL YEAR 2001

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

Characteristics of children waiting for adoption
	Tables 11-41 through 11-43 show, by State, characteristics of 
children who were waiting for adoption at the end of fiscal year 2001; 
i.e., children in foster care who had permanency plans of adoption 
and/or whose parental rights had been terminated. Children whose 
permanency plans were emancipation are not included in these tables. 
As the tables show, nearly 60 percent were between the ages of 6 and 
15 (Table 11-41), less than half (42 percent) were black (Table 
11-42); and almost half (48 percent) had been in foster care for 
3 years or longer (Table 11-43).

TABLE 11-41 -- AGE DISTRIBUTION OF CHILDREN WAITING FOR ADOPTION, BY 
STATE, FISCAL YEAR 2001

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

TABLE 11-42 - RACE/ETHNICITY OF CHILDREN WAITING FOR ADOPTION, BY STATE, 
FISCAL YEAR 2001

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

TABLE 11-43 - LENGTH OF STAY FOR CHILDREN WAITING FOR ADOPTION, BY STATE,  
FISCAL YEAR 2001

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

Number and characteristics of adopted children
	The Adoption and Foster Care Analysis and Reporting System 
(AFCARS) collects data on children who were adopted with the 
involvement of public child welfare agencies (see Table 11-44). As 
explained earlier, this is not necessarily the same as the number of 
adoptions reported by States for purposes of earning adoption incentive 
payments, which are based specifically on adoptions of children from 
foster care. Table 11-45 compares the racial and ethnic composition of 
children who were adopted through the child welfare system in fiscal 
year 2001 with the race and ethnicity of children who were waiting for 
adoption during that year. Black children were the largest racial 
group among children waiting for adoption (42 percent), but somewhat 
more white children than black children (38 percent compared with 
35 percent) had actually been adopted in fiscal year 2001.

TABLE 11-44 -- NUMBER OF AGENCY-INVOLVED ADOPTIONS BY STATE, SELECTED 
FISCAL YEARS 1995-2002

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

TABLE 11-45 -- RACE/ETHNICITY OF CHILDREN WAITING FOR ADOPTION AND 
ADOPTED, FISCAL YEAR 2001

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

	Additional State-by-State information on children adopted 
through the public child welfare system is shown in tables 11-46 
through 11-48, including race/ethnicity, age at the time of adoption 
finalization, and the prior relationship between adoptive parents and 
children. Readers should note that most children who are adopted out 
of foster care are adopted by their foster parents (Table 11-48).

TABLE 11-46 -- RACE/ETHNICITY OF CHILDREN ADOPTED IN FISCAL 
YEAR 2001, BY STATEP

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

TABLE 11-47 -- CHILD'S AGE AT ADOPTION FINALIZATION, BY STATE, 
FISCAL YEAR 2001 

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

TABLE 11-48 -- PRIOR RELATIONSHIP OF ADOPTIVE PARENT(S) TO CHILD, BY 
STATE, FISCAL YEAR 2001 

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

TRENDS IN CHILD WELFARE AND FOSTER CARE COSTS

	Federal spending under the title IV-E Foster Care Program has 
increased significantly since it began in 1981. Based on 
Administration estimates, Federal title IV-E expenditures have 
increased more than fourteenfold, from $309 million to $4.5 billion, 
between 1981 and 2002. Funding for the title IV-B Child Welfare 
Services Program increased by almost 80 percent from 1981 to 2002  
($163.6 million to $292 million). Funding for the title XX Social 
Services Block Grant (SSBG), which States may use for child welfare 
services, has fallen.
	In recent years, an increasing proportion of title IV-E costs 
has been expended on child placement services, administration, and 
training. Table 11-49 shows HHS and Congressional Budget Office (CBO) 
estimates of title IV-E expenditures through fiscal year 2008.

TABLE 11-49 -- PROPORTION OF TITLE IV-E FOSTER CARE EXPENDITURES SPENT 
ON CHILD PLACEMENT, ADMINISTRATION, AND TRAINING, FISCAL 
YEARS 1989-2008

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

	Table 11-50 shows Federal foster care expenditures by State in 
1991, 1996, 1999, and 2002. Between 1991 and 2002, total foster care 
expenditures increased by 129 percent. Over this same time period, 
foster care maintenance costs increased by 68 percent. Because of the 
large increase in administrative and child placement costs relative to 
maintenance costs, the share of total costs represented by maintenance 
costs decreased between 1991 and 2002.
	In an effort to gain more complete information on total child 
welfare spending, including sources in addition to titles IV-B and 
IV-E of the Social Security Act, the Urban Institute has conducted a 
series of State surveys; 51 States responded to the most recent survey 
with information about spending in fiscal year 2000 (Urban, 2002b). The 
survey found that States spent $20 billion in that year, and 
researchers estimated that Federal funds accounted for 49 percent of 
total spending, State funds also constituted 39 percent, and local 
sources accounted for 11 percent. Of Federal expenditures, 50 percent 
was from title IV-E but only 5 percent was from title IV-B.  
Nontraditional funding sources played a significant role; 17 percent 
of Federal expenditures for child welfare came from Temporary 
Assistance for Needy Families funds, 15 percent was from the Social 
Services Block Grant, and 8 percent was from Medicaid.  Other sources 
included Supplemental Security Income. The report also found that the 
financing of child welfare services varies considerably by State, and 
that the largest single category of expenditure was for out-of-home 
care, accounting for 45 percent of all child welfare spending in 
fiscal year 2000.

TABLE 11-50 -- FEDERAL FOSTER CARE EXPENDITURES BY STATE, SELECTED 
FISCAL YEARS 1991-2002

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

LEGISLATIVE HISTORY

	(For legislative history before 1996, see previous editions 
of the Green Book.)

	During the 104th Congress, comprehensive welfare reform 
legislation was enacted that contained provisions affecting child 
welfare (Personal Responsibility and Work Opportunity Reconciliation 
Act, Public Law 104-193). The centerpiece of the welfare reform 
legislation was the repeal of AFDC and creation of a new block grant 
to States for Temporary Assistance for Needy Families (TANF). As a 
condition of receiving TANF funds, States must operate Foster Care 
and Adoption Assistance Programs under title IV-E of the Social 
Security Act. However, eligibility for title IV-E historically has 
been linked to AFDC eligibility. Thus, Public Law 104-193 provides 
that foster or adoptive children are eligible for title IV-E subsidies 
if their families would have been eligible for AFDC, as it was in 
effect in their State on June 1, 1995. (Technical amendments enacted 
in 1997, Public Law 105-33, subsequently changed this date to 
July 16, 1996.) Children eligible for SSI continue to be eligible for 
title IV-E adoption assistance, and foster and adoptive children 
continue to be eligible for Medicaid.
	Public Law 104-193 also amended title IV-E to enable for-
profit child care institutions to participate in the Federal Foster 
Care Program; extended the enhanced Federal matching rate for certain 
data collection costs through fiscal year 1997; mandated HHS to 
conduct a national random sample study of children in the child 
welfare system; and required States, as a component of their 
title IV-E plans, to consider giving preference to adult relatives in 
determining a foster or adoptive placement for a child.
	In 1997, Congress enacted the most significant changes to 
titles IV-B and IV-E of the Social Security Act since they were 
established in their current form in 1980. This legislation, the 
Adoption and Safe Families Act (Public Law 105-89), was intended to 
promote adoption and ensure safety for children in foster care. The 
law established that a child's health and safety must be of paramount 
concern in any efforts made by the State to preserve or reunify the 
child's family. The law retained, but clarified the requirement that 
States make "reasonable efforts" to preserve or reunify a child's 
family, establishing exceptions to this requirement. Also to promote 
safety, Public Law 105-89 required States to conduct criminal 
background checks for all prospective foster or adoptive parents, and 
required States to develop standards to ensure quality services that 
protect children's health and safety while in foster care. To promote 
permanency, the law required States to make reasonable efforts to 
place children, in a timely manner, who have permanency plans of 
adoption or another alternative to family reunification, and to 
document these efforts. Further, provisions were intended to eliminate 
interjurisdictional barriers to adoption. Public Law 105-89 changed 
the name of dispositional hearings to "permanency" hearings, and 
required that they occur within 12 months of a child's placement in 
foster care, rather than the first 18 months. The law also revised the 
list of permanency goals, eliminating specific reference to long-term 
foster care, and required that foster parents, preadoptive parents, 
and relative care givers be given notice and opportunity to be heard 
at reviews and hearings.
	The Adoption and Safe Families Act required that States 
initiate or join proceedings to terminate parental rights on behalf 
of children who have been in foster care for 15 of the most recent 
22 months, although certain exceptions are allowed. The law also 
authorized incentive payments to States to increase the number of 
foster and special-needs children who are placed for adoption. The 
law contains some provisions intended to expand health insurance 
coverage for special-needs adopted children who are not eligible 
under title IV-E, and also reauthorized and renamed the Family 
Preservation and Family Support Program. The program was authorized 
through fiscal year 2001, as the Promoting Safe and Stable Families 
Program. In addition, Public Law 105-89 established a new outcome 
measures reporting system for States, and authorized an expansion of 
the child welfare waiver demonstration authority established earlier.
	Public Law 106-169 was enacted during the 106th Congress, 
revising the Independent Living Program and renaming it in honor of 
the late Senator John Chafee. The legislation provided greater 
flexibility to States in their use of funds to help older foster 
children obtain the education and employment services necessary 
for a successful transition to adult living, increased the 
entitlement ceiling for the program, and revised the State allocation 
formula. The law also established an option under Medicaid for States 
to cover certain former foster care youth aged 18-20.
	Public Law 107-133 reauthorized the Promoting Safe and Stable 
Families program for 5 years (FY2002-FY2006) at an annual mandatory 
funding level of $305 million, and authorized additional 
discretionary funds of up to $200 million annually. The law also 
granted new program authority for HHS to fund programs that mentor 
children of prisoners and expanded the Foster Care Independence 
Program by authorizing new discretionary funds for education and 
training vouchers.
	Public Law 108-145 reauthorized adoption incentive payments 
to States to increase adoptions of foster children and children with 
special needs.  The law added an additional incentive to increase 
adoptions of foster children ages 9 or older; mandated a report by 
HHS on State efforts to promote adoption or other permanency options 
for foster children; and authorized penalties for States that fail 
to submit AFCARS data to HHS.

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