Child Welfare Funding in FY2018
Released: 2018-07-30T00:00:00

Summary:
Child welfare services are intended to prevent the abuse or neglect of children; ensure that children have safe, permanent homes; and promote the well-being of children and their families. For FY2018, an estimated $9.5 billion in federal support was made available for child welfare purposes. Comparable funding for FY2017 is estimated at $9.3 billion.
At least $100 million of the FY2018 increase was provided as discretionary appropriations intended to address the impact of parental substance abuse on children and the child welfare system and to help implement the Family First Prevention Services Act (Div. E., Title VII, of P.L. 115-123). About $37 million in additional discretionary funding was provided to enable the U.S. Department of Health and Human Services to provide full incentive payments to states that are increasing the rate at which children who are otherwise expected to remain in temporary foster care are placed in permanent adoptive families or with a legal guardian. Finally, mandatory funding made available under the Title IV-E foster care, prevention, and permanency program is expected to increase by some $111 million in FY2018. The bulk of this increase is expected to provide ongoing assistance to children who leave foster care for permanent adoptive or guardianship families. Spending on foster care is not projected to grow and Title IV-E funding for prevention activities (as provided for by the Family First Prevention Services Act) is not available before FY2020.
FY2018 began on October 1, 2017, but full funding levels for it were not determined until enactment, on March 23, 2018, of the Consolidated Appropriations Act, 2018 (P.L. 115-141). In the interim, funding to continue child welfare programs in FY2018 was provided via short-term funding measures, including P.L. 115-56 (through December 8, 2017), P.L. 115-90 (through December 22, 2017), P.L. 115-96 (through January 19, 2018), P.L. 115-120 (through February 8, 2018), and P.L. 115-123 (until March 23, 2018).

paragraphs: C hild welfare services are intended to prevent the abuse or neglect of children; ensure that children have safe, permanent homes; and promote the well-being of children and their families. As the U.S. Constitution has been interpreted, states bear the primary authority for ensuring the welfare of children and their families. At the same time, the federal government has shown long-standing interest in helping states improve their services to children and families and, through the provision of federal funds, compels states to meet certain child welfare requirements. 
For FY2018, an estimated $9.5 billion in federal support was made available for child welfare purposes. Comparable funding for FY2017 is estimated at $9.3 billion. The increase reflects additional discretionary program funding provided by the Consolidated Appropriations Act of 2018 (FY2018 omnibus, P.L. 115-141 ) to address the impact of parental substance abuse on children and the child welfare system, to help implement the Family First Prevention Services Act (Family First; Div. E., Title VII, of P.L. 115-123 ), and to pay incentives to states that increase the rate at which children leave foster care for permanent adoptive or legal guardianship families. Additionally, mandatory funding made available under the Title IV-E foster care and permanency program is expected to increase in FY2018, primarily for support of adoption assistance.
This report begins with an overview of FY2018 federal funding made available for child welfare programs. Next, it shows program-level funding provided in FY2018 and several recent fiscal years in Table 1 . The report then discusses in greater detail the purposes and distribution of the additional FY2018 discretionary funding provided for child welfare programs.
subsections: section_title: FY2018 Funding Overview
paragraphs: Federal child welfare funding for FY2018 is expected to be $9.5 billion. This amount includes $8.3 billion in open-ended mandatory dollars and $1.2 billion in combined capped mandatory and discretionary funding. 
subsections: section_title: Funding for Foster Care and Permanency Support
paragraphs: Most child welfare funding is authorized under Title IV-E of the Social Security Act for support of children in foster care, including ensuring that they are afforded certain protections while in care, and for assistance to children who leave foster care for new permanent families via adoption or legal guardianship. For FY2017, the federal government's budget authority for Title IV-E foster care and permanency totaled $8.2 billion, and for FY2018 may exceed $8.3 billion (+$111 million). All of the increase is tied to expected growth in program spending for adoption assistance and kinship guardianship assistance (+$195 million), while obligations for foster care are projected to decline (-$85 million). 
Title IV-E funding for these purposes is authorized on a mandatory and "open-ended" basis. Under this kind of authorization, the law stipulates that states, territories, or tribes operating a Title IV-E program are entitled to receive reimbursement for a part of every dollar spent on behalf of an eligible child and for an eligible program purpose. 
In February 2018, Congress passed Family First. Among other changes to child welfare programs, it authorizes— as of FY2020 —open-ended and mandatory Title IV-E funding for a part of the cost of providing certain time-limited substance abuse and mental health treatment services and in-home parent skills based programs. These services and programs may be made available to children and their parents or kin caregivers to prevent the need for children to enter foster care. Separately, Family First authorizes— as of FY2019— open-ended and mandatory funding for state kinship navigator programs. While none of this Family First-authorized Title IV-E funding is available in FY2018, as is discussed later in this report, some funding provided as part of the FY2018 omnibus is intended to support implementation of Family First. 
section_title: Funding for Child and Family Services and Related Activities
paragraphs: Funding for child welfare services to children and families and for related research and evaluations, demonstration projects, and incentive payments totaled $1.2 billion for FY2018. This funding is authorized primarily in Title IV-B and in certain sections of Title IV-E of the Social Security Act, as well as in the Child Abuse Prevention and Treatment Act (CAPTA). Some additional support is made available through Adoption Opportunities, and the Victims of Child Abuse Act. 
Most of this funding is counted as discretionary, with the funding level determined each year as part of the appropriations process. Some of this funding is considered as "capped mandatory" because the law entitles states to receive a portion of a total funding level that is specified in the program's authorizing law (and thus that total funding is provided in annual appropriations acts). 
subsections: section_title: Discretionary Increases Respond to the Opioid Crisis and Other Issues
paragraphs: The $1.2 billion in total capped mandatory and discretionary child welfare funding for FY2018 is $140 million above comparable funding provided in FY2017. This is due to increases in discretionary funding. Specifically, the FY2018 omnibus ( P.L. 115-141 ) provided increased discretionary funding as follows:
$60 million in additional CAPTA state grants funding, with instructions for states to "prioritize" development of plans of safe care for infants identified as substance-exposed; $40 million in additional Title IV-B (Promoting Safe and Stable Families) funding to (1) support state and tribal kinship navigator programs, (2) increase support for grants to regional partnerships to improve outcomes for children affected by parental substance abuse, and (3) expand the ability of the U.S. Department of Health and Human Services (HHS) to provide technical assistance to states in implementing the evidence-based requirements included in the Family First Prevention and Services Act (Div. E., Title VII, of P.L. 115-123 ); $37 million in additional funds to make Adoption and Legal Guardianship Incentive Payments (authorized in Title IV-E of the Social Security Act); and $3 million in additional funding for Court Appointed Special Advocates (CASAs) (under the Victims of Child Abuse Act).
 Table 1 provides a snapshot of child welfare funding provided in each of FY2014-FY2018. Funding is shown by program or program component and within the part of the law where the program is authorized. The amount shown is the level appropriated in the final appropriations bill for the given fiscal year, or, in the case of Title IV-E foster care, adoption assistance, and kinship guardianship, it is based on the budget authority provided in that legislation or the most recent level of funds obligated under the program during that year. 
At the federal level, nearly all of this funding is administered by the Children's Bureau, which is an agency within HHS's Administration for Children and Families (ACF). The only exception to this concerns the several grant programs authorized under the Victims of Child Abuse Act. Funding for these programs is administered federally by the Office of Justice programs at the Department of Justice.
section_title: Purposes and Distribution of Additional FY2018 Discretionary Funding
paragraphs: Most of the increase in discretionary funding for child welfare was provided with the opioid crisis in mind. Substance use disorders often impair parenting, and as such are a perennial challenge for child welfare agencies. They may be accompanied by mental health challenges or depression, and can lead to unemployment or otherwise limit the ability of parents to provide for the physical and developmental well-being of their children.
The current epidemic of opioid abuse has been accompanied by an increase in the number of infants who, having been exposed to drugs in-utero, experience a set of withdrawal symptoms after birth referred to as neo-natal abstinence syndrome (NAS). Separately, the number of children entering foster care, and for whom parental drug abuse is associated with their entry to care, has been growing. During FY2016, nearly 274,000 children entered foster care (up from 251,000 in FY2012). For more than one-third (92,000) of those children, drug abuse by a parent was associated with their removal from the home. Many child welfare administrators believe the increase in children and families in need of services is a consequence of the opioid crisis, and some research shows a statistical relationship between increased drug overdose rates and drug-related hospitalizations, and higher rates of child abuse and neglect reports, substantiated child abuse, and entry to foster care. 
As of the last day of FY2016, the number of children remaining in foster care had grown to 437,000 (compared to 397,000 on the last day of FY2012). Traditionally, kin caregivers have helped mitigate the strain on child welfare agencies brought on by a drug epidemic by providing care that enables children to remain outside of foster care or to leave care more quickly. At the same time, studies of kin caregivers have shown that they may have limited income, be older, and may have their own service needs (e.g., health care). In the current opioid epidemic, state child welfare agencies are again seeking help from kin caregivers. 
subsections: section_title: Increased Support for CAPTA State Grants
paragraphs: Funding for CAPTA state grants was $25.3 million in FY2017 and increased to $85.3 million for FY2018. Generally, states must use CAPTA state grant funds for any of 14 categories of spending intended to improve the way the state receives and responds to reports of child abuse and neglect, and they must provide certain assurances to HHS regarding the policies they have in place to carry out child protection activities. 
The explanatory statement that accompanied the FY2018 omnibus spending measure ( P.L. 115-141 ) notes that the additional $60 million in FY2018 funding for these grants is to help states "improve their response to infants affected by substance use disorder and their families." While the additional CAPTA state grant funds are not strictly limited to this use, the explanatory statement does direct states to "prioritize" development of plans of safe care for substance-exposed infants. 
Under current law, as part of receiving CAPTA state grant funds, states are required to have policies in place for the development of a plan of safe care for infants who are identified as affected by "substance abuse or withdrawal symptoms." Under the amendments to CAPTA by the Comprehensive Addiction and Recovery Act of 2016 (CARA, P.L. 114-122 ), these plans are expected to protect the safety and well-being of such infants by addressing the health and substance use disorder treatment needs of the infants and the affected families or caregivers. Additionally, the CARA amendments to CAPTA direct states to develop monitoring systems to determine how local entities are providing services or referrals under such plans and as required by state policy. 
Close to half of the states (23) were initially unable to provide assurances to HHS of their compliance with the plan of safe care requirements as amended by CARA, thus putting their receipt of CAPTA state grant funds in jeopardy. However, in May 31, 2018, program instruction, HHS's Children's Bureau noted that all states had taken the compliance steps necessary to receive their FY2018 CAPTA funding. Therefore, the only additional step required to receive the full amount of FY2018 funding was for each state to include in their Annual Progress and Services Report (which was due to the HHS-Children's Bureau by June 30, 2018) how they intend to use the increased FY2018 CAPTA funding, with a priority on developing, implementing, or monitoring plans of safe care. States have five years from the first day of the fiscal year in which these CAPTA funds are awarded to use them. This means they have until September 30, 2022, to expend FY2018 CAPTA funds.
subsections: section_title: Technical Assistance
paragraphs: The explanatory statement also directs HHS to provide "necessary technical assistance, monitoring and oversight to assist and evaluate State's activities on plans of safe care," and it requests that an update on those activities be provided to Congress in early 2019. As noted above, states have met the minimum compliance standards for this CAPTA requirement. However, a Government Accountability Office (GAO) survey conducted last year found that a majority of states agreed that it would be "extremely to very helpful" to receive additional technical assistance regarding developing, implementing, and monitoring plans of safe care for substance-exposed infants. Related topics for which states sought further guidance or information included requirements for health care providers to notify child protective services (CPS) of substance-affected infants; assessing risks and needs of substance-affected infants and their families; specific needs of infants prenatally exposed to opioids or diagnosed with neonatal abstinence syndrome (NAS); interagency collaboration, and services to address the needs of substance-affected infants and their families; and data collection or information sharing. 
section_title: Distribution
paragraphs: CAPTA state grant funding is awarded to the 50 states, the District of Columbia, Puerto Rico, and four additional territories. Each of these 56 jurisdictions receives a base amount of $50,000 and remaining funds are distributed based on a jurisdiction's share of the national child population. The increased CAPTA state grant funding triggers a modification to this distribution that will ensure that no state (including the 50 states, DC, or Puerto Rico) receives an award of less than $150,000. There is no cost sharing or state match requirement in this grant program.
section_title: Grants for Kinship Navigator Programs
paragraphs: Kinship navigator programs are intended to help kin caregivers identify and access services and supports they need to care for children living with them and themselves. The FY2018 omnibus ( P.L. 115-141 ) included $19 million in discretionary funding to allow states and tribes to develop, enhance, or evaluate kinship navigator programs. This funding was included in the FY2018 discretionary appropriation made for the Promoting Safe and Stable Families (PSSF) program. The explanatory statement notes that "as parents struggle with opioid addiction and substance use disorder, more grandparents and relative caregivers are taking primary responsibility for the care of children." 
According to the omnibus ( P.L. 115-141 ), the FY2018 funding for kinship navigators is also provided to assist states in developing programs that meet the evidence-based practice standards that are included in the Family First Prevention Services Act (Title VII, Div. E of P.L. 115-123 ), which was enacted in February 2018. Under that law, states will be able to claim federal support for fully 50% of their kinship navigator programs beginning with FY2019. However, they may only claim this funding for kinship navigator programs that have been found to meet "promising," "supported," or "well-supported" evidence standards. Further, beginning with FY2019 the kinship navigator programs supported via Title IV-E dollars must do each of the following:
establish information and referral systems that link kinship caregivers to other kin caregivers/support groups, public benefit eligibility and enrollment information, and relevant training and legal services; be planned and operated in consultation with kin caregivers, youth raised by kin, organizations representing kin caregivers, and relevant public and private agencies; provide outreach to kinship care families; and promote public and private partnerships to increase knowledge about the needs of kinship families (including families fostering teen parents) and improve services to them. 
Jurisdictions seeking to receive these FY2018 funds were instructed to submit documentation indicating this as of July 20, 2018, along with a brief outline describing how they intend to use the funds. Additionally, HHS notes that while all the navigator programs should be planned so they will, in the end, include all of the activities listed above, a jurisdiction does not need to ensure that all of these activities will immediately be a part of their navigator programs. The FY2018 funds may be used to support kinship navigator activities during FY2018 and FY2019 (October 1, 2017–September 30, 2019). 
subsections: section_title: Distribution
paragraphs: The FY2018 omnibus makes any state (including DC), territory, or tribe that has an HHS-approved plan to operate a foster care prevention and permanency program under Title IV-E is eligible to receive some of this funding. Specifically, the law provides that every eligible state (including DC) and territory choosing to participate must receive a minimum grant of $200,000 and every eligible tribe choosing to participate must receive a minimum grant of $25,000. The remaining funds are to be allocated to these participating jurisdictions based on applicable formulas used in the PSSF program. Unlike the kinship navigator funding that will be available under the Title IV-E program (as of FY2019), there is no matching requirement for jurisdictions receiving the FY2018 funding for kinship navigators. Forty-five states, the District of Columbia, two territories, and eight tribes submitted requests for this funding by the July 20 deadline. HHS has determined it may be "more flexible" on the deadline for jurisdictions that did not submit by that date and expects it may still receive a few more applications.
section_title: Increased Support for Regional Partnership Grants to Improve Outcomes for Children Affected by Parental Substance Abuse
paragraphs: P.L. 115-141 also included an additional $19 million to increase support for grants to regional partnerships to improve outcomes for children affected by parental substance abuse. This funding for regional partnership grants (RPGs) was also included in the PSSF discretionary funding account for FY2018 and was provided in addition to the separate $20 million in PSSF mandatory funding reserved annually for the regional partnership grant program. 
Regional partnerships are collaborations of two or more agencies (one must be the child welfare agency administering the Title IV-E foster care program or a tribal child welfare agency) in a defined region or area. Since the RPG program was launched in September 2006, more than 80 partnerships have been funded in at least 36 states, including some tribal areas. Of those, 21 grantees in 19 states are currently being funded. The additional FY2018 RPG support provided in P.L. 115-141 is expected to enable HHS to award up to 10 additional competitive grants. Each grantee is expected to receive between $1.5 million and $1.9 million in funds to be spent across a 36-month period. Grantees must provide some matching funds. Applications for this competitive grant funding are due August 13, 2018.
Strategies used to improve outcomes for children and families affected by substance use disorders in the initial round of RPGs included strengthening or expanding services to families with substance abuse concerns; providing more timely access to treatment services (residential treatment and out-patient/home-based); enhancing or creating court-based drug treatment programs; creating better service integration; and improving knowledge, skills, and collaboration across practice areas. Additionally, grantees quickly learned the importance of strengthening their recovery services, especially through implementing or enhancing peer/parent mentors, recovery coaches, or other substance abuse specialists; providing key supportive services, particularly housing (the lack of which grantees noted directly impacts the ability of families to be reunited) as well as medical and health care services; integrating services to adults and children to serve the family as a whole; better identifying child-specific needs and connecting them to services (e.g., early childhood development); and designing services to identify and address effects of trauma on both the adults and children served. Subsequent RPG awards announced in 2012 and 2014 required grantees to implement evidence-based or evidence-informed programs, including trauma-informed services. An ongoing cross-site evaluation of grantees initially funded in 2012 and 2014 has tracked measures of child and parent well-being as part of assessing program impacts.
section_title: Increased Technical Assistance Funding to HHS for Implementation of the Family First Prevention Services Act
paragraphs: Of the increased discretionary PSSF funding, $2 million is reserved to HHS for research and evaluation activities. These funds may be used to identify, establish, and disseminate practices that meet the evidence-based standards that will apply to foster care prevention services—including substance abuse and mental health treatment services and in-home parent skills-based programs. Under the recently enacted Family First Prevention Services Act, those services are authorized to be supported under the Title IV-E program beginning with FY2020.
section_title: Increased Funding for Adoption and Legal Guardianship Incentive Payments
paragraphs: States earn Adoption and Legal Guardianship Incentive Payments if they increase the rate at which children who would otherwise remain in foster care are safely placed in new permanent families via adoption or legal guardianship. The FY2018 omnibus roughly doubled funding for these incentive payments—increasing the overall funding from $37 million in FY2017 to $75 million in FY2018. Because the amount of incentive payments earned by states in the most recent award cycle exceeded the amount of funding HHS had on hand to pay those awards, this funding enables HHS to make states whole for awards already earned and will allow some funds on hand to be used to make payments for a new award cycle later this year.
Specifically, the most recent awards were announced in September 2017 (for adoptions and legal guardianships completed in FY2016). In that year, 47 states (including DC) earned incentive payments totaling $55 million. However, HHS had just $5 million available to make the incentive awards. Accordingly, $50 million of the FY2018 funding for these incentive payments (provided as part of P.L. 115-141 ) was used by the HHS-Children's Bureau to complete full awards to states for FY2016 performance. The remaining FY2018 appropriated funds (circa $25 million) remain available for awards to states related to increases in adoptions or legal guardianships completed in FY2017. Those performance awards are expected to be announced in August or September 2018. Appendix C provides a funding history for the program, and shows incentives earned by state.
section_title: Increased Support for Court Appointed Special Advocates
paragraphs: Subtitle II of the Victims of Child Abuse Act authorizes funding to strengthen Court Appointed Special Advocates (CASA) programs. Funding for CASA grew to $12 million in FY2018 (the full authorization level for the program) compared to $9 million in FY2017.
Appendix A. Distribution of FY2018 PSSF Funding
The Promoting Safe and Stable Families (PSSF) program receives some capped mandatory funding and is also authorized to receive funding on a discretionary basis. The bulk of this combined PSSF funding is provided for formula grants to states (including DC), territories, and tribes for provision of four categories of child and family services: family support, family preservation, family reunification, and adoption promotion and support. However, in each year a portion of the funding (mandatory, discretionary, or both) is reserved for the State Court Improvement Program (CIP); tribal court improvement; monthly caseworker visit grants; regional partnership grants (RPGs) to improve outcomes for children affected by parental substance abuse; and program-related research, evaluation, and technical assistance. For FY2018, additional PSSF funding was provided to support kinship navigator programs and to increase funding reserved for RPGs and technical assistance. Separately, existing PSSF funds were tapped to support development of increased electronic interstate case processing capacity.
 Table A-1 shows FY2018 PSSF funding by activity (including whether the funding was provided on a mandatory or discretionary basis, or both). For FY2018, the total PSSF appropriation was $445 million, including $345 million in mandatory funds and just under $100 million in discretionary funding. However, PSSF mandatory funding is subject to sequestration applied to nonexempt, nondefense accounts (6.6% for FY2018). This reduced mandatory funding available to about $322 million and overall PSSF funding to about $422 million. 
Appendix B. Currently Funded Regional Partnership Grants (RPGs)
HHS expects to award the additional $19 million in RPG funding provided in the FY2018 omnibus ( P.L. 115-141 ) to 10 partnerships before the end of September 2018. (For more information, see the funding opportunity online at https://www.grants.gov/web/grants/view-opportunity.html?oppId=304263 . )
As shown below, there are 21 grantees in 19 states that are currently receiving RPG funding. This funding was initially awarded in September 2014 (4 grantees) or September 2017 (19 grantees) and each grantee is expected to receive funding across a five-year period (based on continued reservation of mandatory PSSF funds). 
Appendix C. Adoption and Legal Guardianship Incentive Payments
Incentive payments for increased permanency via adoption were established by the Adoption and Safe Families Act (ASFA, P.L. 105-89 ). Incentive payments for establishing permanency via legal guardianship were added as of earnings year FY2014 ( P.L. 113-183 ). The law provides that data reported by a state as of August must be used to calculate incentive payments for performance during the previous fiscal year. Accordingly, incentive payments earned in a given fiscal year (e.g., FY2017) are initially announced for award at the end of the succeeding fiscal year (e.g., FY2018). 
 Table C-1 shows the funding and total incentive payments awarded under the Adoption and Legal Guardianship Incentive Program since it was established by ASFA. Incentive payments earned for FY2017 are expected to be announced by September 2018 and, as shown in Table C-1 , about $25 million in FY2018 funding is available to make those payments. (Incentive payments earned for FY2016 were announced in September 2017. See Table C-2 for awards by state.) 
Awards by State for FY2016 Performance
In numerous recent years, not enough funding was available for HHS to make full payment to states at the time the initial award was announced. Accordingly, HHS prorated an initial award amount and used appropriations in a subsequent year to make states whole. For example, in September 2017 HHS had $5.3 million in program funds to award. Accordingly, it provided this amount on a prorated basis to each state that earned an award (for FY2016 performance) and in April 2018, following the appropriation of full-year program funding, it awarded the remaining funds. 
 Table C-2 shows incentive payments awarded for state performance in FY2016 (the most recent year available) by category of awards earned. Those categories, and the measure used to determine whether an increase is achieved, have varied over the years. For more information on the current categories and the categories previously used, see CRS Report R43025, Child Welfare: The Adoption Incentive Program and Its Reauthorization . The incentive structure described in this report (as included in H.R. 4980 (113 th Congress)) was subsequently enacted in the Preventing Sex Trafficking and Strengthening Families Act ( P.L. 113-183 ) and is currently in use.