Child Welfare: States Use Flexible Federal Funds, But Struggle to Meet Service Needs
Released: 2013-01-30T00:00:00

Letter

Background

In 2011, an estimated 6.2 million children were referred to child welfare agencies by sources including educators, law enforcement officials, and relatives because they were allegedly maltreated. After an initial screening process, agencies conducted abuse or neglect investigations and assessments on behalf of more than half of these children. Over 675,000 children were found to be the victims of abuse or neglect. Many of the children (both victims and non-victims) who were referred to child welfare agencies, as well as their caregivers and families, received some child welfare services, such as in-home services and counseling or other mental health services. Child welfare agencies also conduct activities referred to in the report as non-service related. These non-service-related activities include investigating allegations of abuse or neglect (known as child protective investigations), providing case management for children at home or in foster care, training staff, and administering programs. Further, child welfare agencies make payments to caregivers of children in foster care (maintenance payments) and to adoptive parents of former foster children and other eligible children with special needs (adoption subsidies).

Child Welfare Services

Children referred to child welfare agencies as well as their families may need a variety of services. Families may need services to prevent child abuse or neglect, or to help stabilize the family if abuse or neglect has occurred so that the child can safely remain at home. If it is not in a child’s best interest to remain at home, the child may be placed in foster care. In these cases, services may be offered to help the family reunite. If reunification is not possible, services may be needed to encourage adoption and support adoptive families. Some common types of child welfare services are listed in table 1, below.

Child welfare agencies secure services in a variety of ways. Child welfare agency staff may provide some services directly in addition to carrying out typical case management duties. Child welfare agencies may also rely on contractors, also called purchased service providers. Another way child welfare agencies secure services is by relying on partner agencies, such as behavioral health agencies and public housing authorities. These agencies serve families in the child welfare system in addition to clients who are not in the child welfare system. Child welfare agencies also refer individuals for medical services. Medical services may be supported in a variety of ways, including through Medicaid or private health insurance.

Figure 1, below, is an example of how a child welfare agency might meet—using various providers and funding sources—a hypothetical family’s diverse service needs.

States are chiefly responsible for funding and administering child welfare programs. Most states administer their child welfare programs centrally. However, in some states, local agencies administer their own child welfare programs, with supervision from the state. To varying degrees, these agencies use a combination of state, local, and federal funds to support their programs. According to a survey of states funded by the Annie E. Casey Foundation and Casey Family Programs, in state fiscal year 2010, 46 percent of all child welfare expenditures were from federal sources, while 43 percent and 11 percent were from state and local funds, respectively. Among federal funds used for child welfare purposes, states use a combination of funding designated solely for child welfare purposes and other sources of funding with broader aims.

Federal Funds Dedicated to Child Welfare

Title IV-B is the primary source of federal child welfare funding available for child welfare services, representing about 9 percent of dedicated federal child welfare appropriations ($730 million of $8 billion) in fiscal year 2012. In addition to child welfare services, Title IV-B funding may also be used for a variety of other activities, such as child protective investigations and case management. Child welfare agencies may spend Title IV-B funds on behalf of any child or family. They receive these funds primarily though two formula grant programs: the Stephanie Tubbs Jones Child Welfare Services program (CWS) under Subpart I of Title IV-B, and the Promoting Safe and Stable Families child and family services program (PSSF) under Subpart II. About $281 million in CWS funds and $328 million in PSSF funds were provided to states, territories, and tribes in fiscal year 2012.streams are similar, as seen in table 2, below, although CWS funds may be used for a broader array of activities. States may spend CWS funds on any service or activity that meets the program’s broad goals, which include protecting and promoting the welfare of all children. Ninety percent of PSSF funds must be spent within four required categories: The purposes of Title IV-B’s two main funding family support, family preservation, time-limited family reunification, and adoption promotion and support.

Funds authorized under Title IV-E of the Social Security Act make up the large majority of federal funding dedicated to child welfare, with funds chiefly available for specific foster care and adoption expenses, but not for services. Congress appropriated $7.1 billion under Title IV-E in fiscal year 2012 (89 percent of federal child welfare appropriations), in general to partially reimburse states for expenditures on behalf of eligible children and youth who are in foster care, have left care for adoption or guardianship, or are aging out of care without adoptive homes. Title IV-E funds may be used to reimburse states for a portion of room and board (maintenance) expenses for eligible children in foster care, and for the costs of subsidies to parents who adopt eligible children with special needs (adoption assistance). States participating in the Guardianship Assistance Program may also receive Title IV-E reimbursement for a portion of assistance payments provided to relatives who become guardians (known as kinship guardians) of eligible children in foster care. States may also use Title IV- E funds to support case planning for eligible children in foster care, and for administration and training costs associated with eligible foster children and children adopted out of foster care. Additionally, states may use Title IV-E funds available through the Chafee Foster Care Independence Program and Education and Training Vouchers to support youth who are transitioning out of foster care without a permanent home, youth who have been adopted out of foster care after age 16, and youth who have entered into kinship guardianships after age 16.

The funds provided under Title IV-E serve as an open-ended entitlement to support the costs of caring for eligible children in foster care. However, there is no similar entitlement to preventive services for children at risk of entering into foster care. Experts and policymakers have expressed concerns that the federal funding structure for child welfare encourages reliance on foster care and does not grant states flexibility to support services designed to reduce the need for foster care. However, Congress authorized HHS to waive certain Title IV-E funding restrictions so that states with approved demonstration projects may spend those funds more flexibly. In order to be granted a waiver, states must demonstrate that their projects are cost-neutral to the federal government, among other requirements. States must also conduct an evaluation (carried out by an independent contractor) of project success in improving child and family outcomes. HHS’ authority to issue these waivers lapsed in 2006 but was renewed by Congress in 2011.

Congress also appropriated $189 million in fiscal year 2012 (2 percent of federal child welfare appropriations) under the Child Abuse Prevention and Treatment Act (CAPTA) and a variety of other programs and initiatives, much of which was not directed explicitly to child welfare agencies and could be available to partner agencies and community- based organizations as well. These programs and initiatives included competitive grants for purposes including eliminating barriers to adoption and providing services to abandoned children.

Selected States Used Title IV-B Funds to Support a Wide Array of Services, and Strategies for Using These Funds Varied

Officials from the four states we studied reported spending Title IV-B CWS funds in state fiscal year 2011 to support a variety of services and other activities, and they told us they largely spent PSSF funds for services in the program’s four required expenditure categories. With respect to CWS, Virginia used these funds for case management costs for children in foster care who were not eligible for Title IV-E funding. Florida allocated over two thirds of CWS funds for case management costs for children living at home, out of the home, or with adoptive families. Florida spent almost one third of CWS funds on children’s legal services, and limited funds on administration and training. Minnesota officials reported spending CWS funds on licensing staff, other state level expenses, quality assurance, and program administration. New Mexico largely spent CWS funds on foster care maintenance payments, which is permitted in limited circumstances. States report annually to ACF on how they plan to spend Title IV-B funds within specific categories. For fiscal year 2012, states nationwide planned to spend 32 percent of CWS funds on child protective investigations and related activities. Other common planned expenditure categories were family preservation services (18 percent), family support services (13 percent), time-limited family reunification services (11 percent), and foster care maintenance payments (10 percent).

States reported spending 93 percent of PSSF funds in these categories for fiscal year 2009. States are not required to report actual expenditures for the CWS program. material supports, such as emergency rent assistance. For instance, one Virginia locality reported spending PSSF family support funds for a home visiting program designed to reduce the risk of abuse and neglect by first- time mothers, and a parenting academy for individuals ordered by the court to attend parenting classes and others found to have neglected or abused their children.

Minnesota distributed some PSSF funds to localities through competitive matching grants targeted at two service areas, and additional funds to all localities for differential response initiatives. The first of these areas focused on family group decision-making practices designed to increase family involvement in decisions about their children’s care needs. The second of these areas focused on services to “screened out” families, or families who would not otherwise qualify for ongoing case management or services due to relatively low abuse or neglect risk levels. Some funds were also distributed to localities to support their differential response practices. Minnesota officials said the state began encouraging localities to implement differential response in the early 2000s, and PSSF funds played an integral role in these efforts. State officials said that because Minnesota localities administer and largely fund their own child welfare programs, they had to find creative ways to develop incentives for localities to adopt a differential response model. They decided to leverage PSSF funds along with funding from a private donor to initiate a 4-year pilot project that established differential response in 20 counties.

New Mexico officials told us their next round of family support contracts would be targeted at services to birth families, but services would also be available to foster families. develop this strategy to improve its performance. The state’s family preservation contracts covered up to 4 months of intensive in-home services designed to prevent the need to remove children to foster care in families with high levels of safety and risk concerns in eight counties. In addition, time-limited family reunification contracts covered intensive services designed to enable families in 11 counties to reunite with children in foster care within 4 months of referral. New Mexico used PSSF adoption promotion and support funds statewide for activities including home studies, parent training, and a social networking site for adoptive parents.

Most States Rely on Flexible Federal Funding to Provide Additional Support for Child Welfare Services

States Use TANF, SSBG, and Medicaid to Fund Services Also Covered by Title IV-B

Nationally, most states supplement Title IV-B funds with other federal funding that is not dedicated to child welfare, according to expenditure data states reported to ACF. States use widely varying approaches and make different choices about how to spend the federal dollars they receive due to a variety of competing demands. As seen in figure 2 below, our selected states each used different combinations of federal funds not dedicated to child welfare to support services and other activities covered under Title IV-B in state fiscal year 2011. These funding sources were chiefly TANF, SSBG, and Medicaid. Officials in these states told us that they first used the most restrictive federal sources for activities that meet funding criteria and, after those costs were covered, they used more flexible sources to support services and other activities as needed.

Most states across the country, including two of our selected states, chose to use TANF funding for child welfare services and other activities covered by Title IV-B. TANF is a federal block grant that supports four overarching goals, one of which is to provide assistance to needy families so that children can live in their homes or the homes of relatives. Because TANF funds can be spent on essentially any service for eligible families that aims to achieve one of the program’s four goals, it offers states flexible funding that can be used to support child welfare activities. According to national data reported by states to ACF, in the spring of 2011, 31 states spent TANF funds, including state maintenance of effort funds, for purposes covered by Title IV-B. For fiscal year 2011, we estimate these expenditures to have been at least $1.5 billion. Moreover, nationally states reported spending these funds for a variety of purposes. For example, 16 states reported using TANF funds for in-home services, family preservation services, or both. Another 9 states reported using TANF for child protective investigations and related activities. Among the four states we studied, Virginia spent TANF funds on family support and family preservation programs. Florida used TANF for a number of different purposes including case management, child protective investigations, and a state-sponsored home visiting program. New Mexico and Minnesota, in contrast, did not use TANF for child welfare. New Mexico officials said that their state had a relatively high poverty rate and spent most of its TANF funds on cash assistance.result, New Mexico officials said they had few TANF funds available for other purposes—including child welfare.

Most states, including all four of our selected states, also used SSBG funds for child welfare services and other activities. SSBG is a federal block grant under which states are provided funding to support a diverse set of policy goals. abuse and neglect, preventing or reducing inappropriate institutional care, and achieving or maintaining self-sufficiency. In addition to their annual SSBG allotments, states are permitted to transfer up to 10 percent of their TANF block grant to SSBG. According to ACF data, 44 states including the District of Columbia spent fiscal year 2010 SSBG funding (including TANF transfer funds) in three reporting categories covered by Title IV-B. (Fiscal year 2010 was the most recent year for which national SSBG expenditure data were available.) Specifically, 35 states reported spending $377 million for services to children in foster care and other related activities, which accounted for 13 percent of total SSBG expenditures. Covered activities included, but were not limited to, counseling, referral to services, case management, and recruiting foster parents. Thirty-nine states also reported using $290 million in SSBG funds (10 percent) for child protective investigations and related activities, such as emergency shelter, initiating legal action (if needed), case management, and referral to service providers. Twenty-two states reported spending $31 million on adoption services and other activities, such as counseling, training, and recruiting adoptive parents.

For fiscal year 2012, Congress appropriated $1.7 billion in SSBG funds. the states we selected to study used SSBG for services and other activities covered by Title IV-B. In state fiscal year 2011, New Mexico used SSBG for purposes including administrative costs associated with child protective investigations, foster care, and adoptions. In that same year, Florida spent SSBG funds on purposes including child protective investigations, child legal services, and the state’s hotline for reporting abuse and neglect.

Nationwide, some child welfare agencies also claimed federal Medicaid reimbursement for services they provide to Medicaid beneficiaries. The amount of federal Medicaid reimbursement claimed by child welfare agencies is unknown. Under the Medicaid targeted case management benefit, child welfare agencies can be reimbursed for case management activities designed to assist targeted beneficiaries in gaining access to needed medical, social, educational, and other services. One of our selected states, Minnesota, claimed $24 million in federal reimbursement for Medicaid targeted case management for children at risk of placement in foster care and their families in calendar year 2011. Another selected state, Virginia, reported claiming $1.9 million in federal Medicaid reimbursement for targeted case management activities related to children in foster care in state fiscal year 2011. Child welfare agencies may also obtain federal reimbursement for services they provide to Medicaid beneficiaries covered under home and community-based service waivers. Under these waivers, states may cover a wide range of services and other activities to allow targeted individuals, such as children with developmental disabilities or serious emotional disturbances who would otherwise require institutional care, to remain at home or live in a community setting. Among our selected states, Minnesota claimed $1.8 million in federal reimbursement for services to children with disabilities under a home and community-based services waiver in calendar year 2011. Child welfare agencies can also claim federal Medicaid reimbursement for administrative case management activities, including making Medicaid eligibility determinations. Two of our selected states— Florida and New Mexico—claimed federal Medicaid reimbursement for administrative costs associated with case management activities. For example, Florida claimed $1.3 million in federal reimbursement for activities that included applying for Medicaid benefits and arranging appointments.

Child welfare agencies nationwide also accessed other federal funding sources dedicated to child welfare to support services and other activities. These other dedicated federal funding sources included CAPTA and ACF discretionary grants. CAPTA funds can be used for a wide variety of purposes. For example, among our four selected states, New Mexico used a $136,000 CAPTA state grant for purposes including training, investigations, and case management in state fiscal year 2011. Florida spent about $1.4 million in CBCAP funds to support its chapter of a child abuse prevention organization, parent leadership and support groups, a child abuse prevention month campaign, and fatherhood initiatives.

Other government entities whose missions intersect with those of child welfare agencies may also use federal funds for purposes covered under Title IV-B for children and families they serve. These entities, such as behavioral health agencies, housing authorities, and the courts, typically serve a broader population than children and families affected by abuse or neglect. However, some serve children and families who are also in the child welfare system. These entities may access a variety of federal funds to benefit these children and families. For example:

Behavioral health agencies that oversee home visiting programs may use Maternal, Infant, and Early Childhood Home Visiting Program funds to provide home visiting services to families at risk of abuse or neglect. They may also access Substance Abuse Prevention and Treatment Block Grant funds for substance abuse treatment for individuals in the child welfare system, including pregnant women and women with dependent children.

Housing authorities that participate in the U.S. Department of Housing and Urban Development’s (HUD’s) Family Unification Program may provide housing vouchers to families at risk of losing their children to foster care or who face difficulty achieving family reunification due to inadequate housing.

Courts receive Court Improvement Program formula grants to improve the handling of child abuse and neglect cases.

Some States Have Waivers that Permit Them to Use Title IV-E Funding for Services Covered under Title IV-B

Although states are generally prohibited from funding services, such as parenting classes and substance abuse treatment, with Title IV-E funds, ACF has granted waivers permitting some states to do so. As of October 2012, 14 states had implemented or were approved to initiate Title IV-E waiver demonstration projects that allow them to use those funds for services covered by Title IV-B. These projects were designed to test new financing and service delivery approaches that may result in lower foster care costs and increased available funding for new or expanded services. States with waivers are required to ensure that their Title IV-E expenditures under the waiver do not exceed what they would have spent without a waiver. These states would be solely responsible for covering additional costs incurred if the number of children in foster care, or costs of caring for such children, exceeded state estimates. States with active and recently approved waivers have used various methods to determine that their projects were cost neutral. First, states with flexible funding waivers agree to receive a capped (or fixed) amount of Title IV-E funding in exchange for flexibility to use those funds for an expanded array of services, similar to a block grant. In other states, the amount of funding received for children participating in the waiver project is determined by the average amount of funding received for children in a control group who are not receiving waiver services, ensuring that funding for the waiver group is comparable to what it would have been without the waiver.

The goals of each Title IV-E waiver project vary and include: (1) reducing the time children and youth spend in foster care and promoting successful transition to adulthood for older youth, (2) improving child and family outcomes, and (3) preventing child abuse and neglect, and the re-entry of children and youth into foster care. ACF encouraged states to develop projects that included evidence-based and evidence-informed practices to promote children’s social and emotional well-being and to collaborate with state Medicaid agencies when possible. Approved waiver projects reflect these priorities in a variety of ways (see figure 3). For instance, Illinois plans to provide specialized training to parents and other caregivers of very young children in Cook County who exhibit effects of trauma, using a control- and treatment-group design. Wisconsin plans to implement post-reunification support services, including evidence-based therapies designed to address trauma (trauma-informed care), for families reunified after foster care.

Among the four states we studied, only Florida had an active Title IV-E demonstration waiver project. Florida’s waiver demonstration project was implemented in 2006 as part of a statewide reform effort that included transferring management of child welfare cases to community-based lead agencies that work with a network of purchased service providers after the state has concluded its initial child protective investigation. Florida’s demonstration waiver goals are to: (1) improve child and family outcomes, (2) expand the array of community-based services and increase the number of children eligible for services, and (3) reduce administrative costs related to service provision.

Vargo et al., IV-E Waiver Demonstration Evaluation Final Evaluation Report SFY 11-12, a Title IV-E waiver evaluation submitted to the Florida Department of Children and Families, March 15, 2012. these placement expenditures.funding restrictions such as these seem misaligned with federal policy principles and fail to create incentives for states to invest in services designed to prevent foster care placement. In New Mexico, a state official said that increased Title IV-E flexibility would allow them to expand investments in services that prevent foster care placement. At the same time, another state official said that Title IV-E funds were an important source of guaranteed support for children in foster care, and cautioned that New Mexico may have difficulty ensuring that adequate resources are devoted to those children if Title IV-E funds are used for different purposes. Some experts and policymakers have also suggested reforms to how child welfare services are funded and have put forth proposals that would change the way states can use Title IV-E funding. These proposals include instituting various mechanisms for allowing states to increase their focus on services that aim to keep families together while also preserving adequate funding for those children who must be placed in foster care.

Child Welfare Agencies Have Difficulty Securing Many Services Due to a Variety of Challenges

Gaps in Child Welfare Services Include Substance Abuse and Mental Health Services

Data from a national survey conducted by ACF indicate that not all children and families in the child welfare system receive the services they need. The survey included interviews with a sample of over 5,000 children and caregivers with child protective investigations closed between February 2008 and April 2009. Many of these children and caregivers reported that they had not received services for which they had a demonstrated need in the 12 months prior to being interviewed. For instance, an estimated 91 percent of caregivers who needed substance abuse services had not received them (see table 3). Additionally, an estimated 58 percent of younger children and 48 percent of adolescents at risk for behavioral, emotional, or substance abuse problems had not received any behavioral health services during this same time period.

ACF reviews of state child welfare systems also suggest that children and families may not receive the services they need. ACF’s most recent Child and Family Services Reviews, conducted from fiscal years 2007 to 2010, showed that 20 of 52 states did not have an appropriate range of services to adequately identify and address the needs of children and families. ACF defined an appropriate range of services as those that help create a safe home environment and enable children to remain at home when reasonable, and help find other permanent homes for foster and adopted children. ACF officials told us that, while the reviews do not include formal data on the availability of specific services, their reports on individual states indicate that the most commonly unavailable services included: behavioral health services, including child psychologists and psychiatrists; substance abuse treatment for adults and youth; housing; and domestic violence services. In a survey funded by Casey Family Programs, 25 out of 41 of state child welfare agencies responding reported waiting lists for at least one service provided by child welfare agencies or their purchased service providers. (This survey did not ask states about the length of time a child or family remained on the waiting list before receiving services.) These services included in-home services, home visiting services, and substance abuse assessment and treatment. The absence of a waiting list, however, does not necessarily indicate that services are available. A service provider may not maintain a waiting list even if there are families waiting to be served.

Officials from our 13 selected localities echoed these concerns. In response to a GAO data collection instrument, most of these localities reported key service gaps in the areas of substance abuse assessment and treatment services; assistance with material needs, such as housing and transportation; and in-home services (see figure 4).

Service gaps can negatively affect outcomes for children and their families. Specifically, according to officials in our 13 selected localities, previous GAO work, and some research, service gaps can complicate efforts to prevent placement in foster care, hinder chances of reunification after foster care, and harm child well-being.

Officials in our selected localities reported that difficulty securing high- quality, timely treatment for families with parental substance abuse problems can decrease the likelihood of recovery and reunification. In 6 of 13 selected localities, officials reported waiting lists for substance abuse treatment services. Officials in one of these localities noted that clients often wait 2 to 3 months for these services. Further, officials in five localities said that available inpatient services were of poor quality or too short in duration to meet client needs. New Mexico officials told us their state’s behavioral health entity covered a maximum of 30 days of inpatient substance abuse treatment, which they said is insufficient for long-term addicts.

Some research corroborates the views of local officials that lack of access to timely, intensive treatment may negatively affect a family’s chances of reunification. A 2007 study of nearly 2,000 women in Oregon who were substance abusers and had children in foster care found that mothers were more likely to be reunited with their children if they entered treatment quickly and spent more time in treatment. Similarly, in California, a study of more than a thousand mothers who participated in a drug treatment program in 2000 found that mothers who completed or spent at least 90 days in treatment were about twice as likely to reunify with their children as those who spent less time in treatment. GAO previously reported on family-centered residential drug treatment programs, which can last up to 24 months and may allow women to bring their children with them. These programs help women address issues underlying their substance abuse, build coping strategies, and enhance parenting skills, which can reduce chances that children will need to be removed to foster care. The Substance Abuse and Mental Health Services Administration (SAMHSA) evaluated performance data from residential treatment programs for mothers and found that 6 months after treatment ended, fewer children of participating women were living in foster care and most children who accompanied their mothers to treatment were still living with them.

Officials in several of our selected localities also said it could be difficult for families experiencing substance abuse to achieve reunification within Delays in receiving treatment can make it difficult mandated deadlines. for treatment to be completed within these deadlines. In addition, a previous GAO report found that mandated reunification deadlines can conflict with the amount of time required to successfully address the needs of these families.high-quality, evidence-based treatment is essential to achieving reunification within mandated timelines. Officials in one selected locality said they frequently terminate parental rights due to parents’ inability to establish sobriety within limited time frames. However, officials in another locality reported that judges are sympathetic to substance-abusing One ACF official told us that timely access to parents’ efforts to engage in services, and frequently extend their permanency deadlines.

According to past GAO work and officials in selected localities, lack of affordable housing may also contribute to children’s removal into foster care or may prevent families from reunifying. In 2007, GAO surveyed 48 state child welfare directors about African American children in foster care. Officials from 25 states cited a lack of affordable housing options as one factor that contributed to disproportionately high rates of foster care placement among African American children in the child welfare system. This report found that affordable public housing is a critical support that can help low-income families stay together. 13 selected localities told us that a parent’s inability to obtain housing could prevent family reunification even if all other reunification criteria had been met. However, officials in one locality said they work with families to find them appropriate housing and would not keep a child from his or her parents based solely on the family’s housing situation.

Similarly, officials in 3 of our GAO previously reported that failure to provide services to address the trauma of abuse or neglect may negatively affect children’s well-being in both the short and long term. GAO reported that children may experience traumatic stress as a result of maltreatment, which significantly increases their risk of mental health problems, difficulties with social relationships and behavior, physical illness, and poor school performance. Early detection and treatment of childhood mental health conditions can improve children’s symptoms and reduce the likelihood of negative future outcomes, such as dropping out of school or becoming involved in the ACF has also made the social and emotional juvenile justice system.

GAO, African American Children in Foster Care: Additional HHS Assistance Needed to Help States Reduce the Proportion in Care, GAO-07-816 (Washington, D.C.: July 11, 2007). well-being of children receiving child welfare services an agency priority, and is encouraging child welfare agencies to focus on improving behavioral and social-emotional outcomes for the children they serve.

In Our Selected Localities, Service Gaps Were Caused by Factors Including Provider Shortages and Challenges Accessing Services of Partner Agencies

Provider Shortages

Officials from 8 of our 13 selected localities reported a shortage of substance abuse treatment providers. Some officials cited a shortage of treatment in general, while others discussed shortages of specific kinds of treatment. For instance, officials from six localities reported an inadequate number of inpatient treatment providers. Officials from two selected localities also reported particular difficulty finding providers that offered appropriate substance abuse treatment services for adolescents. In one Virginia locality with extremely high rates of substance abuse, officials said that in order to address this shortage, their local behavioral health agency had hired a counselor dedicated to treating youth with substance abuse problems. However, this counselor served five counties and had difficulty keeping up with demand.

Officials from nine selected localities as well as three state officials from our discussion group reported a shortage of mental health service providers. Officials from six localities and three state officials from our discussion group also noted shortages of certain types of specialists. For example, officials from multiple localities in three out of four selected states reported acute shortages of child psychiatrists. One state official who participated in our discussion group also reported particular difficulty finding mental health providers who offered evidence-based therapies specifically designed to address trauma in children. Officials in one Florida locality said that service providers in their community were interested in becoming trained in certain evidence-based practices, but found it too costly to do so. To address mental health provider shortages, Minnesota’s Department of Human Services contracted with the Mayo Clinic to provide phone-based psychiatric consultation services to primary care doctors across the state. Officials said the initiative would improve the quality of psychiatric care for children, including children in the child welfare system.

Officials in several localities across three states and from one state in our discussion group reported a shortage of mental health, substance abuse, and/or other service providers who accept Medicaid. GAO has previously reported on this issue. In a recent survey of states, GAO found that 17 states reported challenges ensuring enough mental health and substance abuse providers for Medicaid beneficiaries. Additionally, GAO found in 2011 that more than three times as many primary care physicians reported difficulty referring children enrolled in Medicaid or the Children’s Health Insurance Program (CHIP) to specialists as compared with privately-insured children.

Finally, provider shortages were cited as particularly challenging in rural areas. Officials in localities across all four selected states and two state officials from our discussion group reported provider shortages in rural areas. Officials from some rural localities described difficulty attracting and retaining service providers. A local Florida official said that one of his agency’s behavioral health purchased service providers had been advertising a child psychiatrist position for 5 years without success. In several localities, officials said provider shortages often result in families traveling long distances to receive services in more urban areas.

Inadequate health coverage among some children and families in the child welfare system also contributes to service gaps. In 6 of 13 localities, officials cited lack of health insurance as a factor contributing to difficulty securing medical services for families. Officials from selected localities reported that in some cases services were more difficult to obtain for parents than for their children, due to lack of health insurance. In addition, undocumented immigrants are not eligible for Medicaid and may lack private health insurance as well. Officials in several localities described particular difficulty obtaining services for these families. There are, however, a variety of approaches local officials reported using in order to obtain services for families. In some cases, agencies were able to turn to behavioral health agencies. And in one locality, officials said a local non-profit sometimes funded mental health assessments for clients without insurance. In other cases, officials said their agencies paid for these services with their own funds. Additionally, fewer parents in the child welfare system may lack health insurance after January 1, 2014, when states may expand eligibility for Medicaid coverage to non-elderly non-pregnant adults with incomes at or below 133 percent of the federal poverty level, as provided for under the Patient Protection and Affordable Care Act.

Lack of transportation is also a widespread impediment to obtaining services, especially in rural areas. Officials in all selected agencies that served rural areas reported difficulty with transportation for rural clients, and discussion group participants from two additional states reported similar difficulties. A number of local officials said that providing services in the home could help mitigate transportation challenges, as well as allow providers to better assess and address challenges in the home environment. Some officials noted that in-home services are typically more expensive than office-based services. However, officials in one Florida locality reported that they had made in-home services a budgetary priority due to transportation challenges in their area.

While state child welfare agencies receive reimbursement under Title IV- E for many costs related to children in foster care, funding for services designed to prevent the need to remove children from their homes and place them in foster care is more limited. State and local child welfare agencies may face difficult decisions when determining which of these prevention activities to prioritize and fund, particularly in light of the ongoing fiscal challenges states face. For instance, local officials in New Mexico described challenges in securing resources to provide services to children and families at risk of foster care placement. New Mexico state officials told us they contracted for services designed to avoid foster care placement or reunite families after foster care entirely with Title IV-B PSSF family preservation and reunification funds and did not allocate state or other federal funds to support these contracts. Because Title IV-B funds were limited, the state targeted services only to selected counties with the highest need. Officials in one New Mexico county said that most of their family preservation and reunification services were cut for fiscal year 2013, in part because they had been successful in reducing the number of children in foster care and were no longer considered a high need county.

Fiscal challenges have also affected child welfare partner agencies. For example, one ACF official we interviewed noted that most states have experienced budget cuts in social services, which affect both child welfare and substance abuse services. In addition, officials from SAMHSA told us that since 2008, states have had more difficulty maintaining state funding of behavioral health services.

Many localities experienced gaps in services provided by partner agencies, in some cases due to the fiscal constraints of those agencies. For example:

Officials in 7 of the 13 localities, as well as one state official from our discussion group, said that their local housing authorities had long waiting lists (in some cases up to 3 or 4 years) for Section 8 housing vouchers. As a result, families referred to the housing authority often did not receive assistance.

In a few localities, officials said that families with children in foster care could not obtain approval for public housing units until they had regained custody, which hindered efforts to reunite children with their families. One ACF official said that, in response to GAO’s inquiry, the agency initiated discussions with HUD about improving outreach to local housing authorities about this issue.

Officials in two localities in different states, as well as one state official from our discussion group, noted that their state Medicaid programs required diagnoses of mental health disorders to cover services, even for very young children (ages 0 to 3 years). Officials stated that these requirements could make obtaining needed services difficult in some cases, and could result in inappropriate diagnoses in other cases.

States may place appropriate limits on accessing services based on medical necessity or utilization control procedures. 42 C.F.R. § 440.230.

However, in some cases, selected child welfare agencies coordinated with other service agencies to improve families’ access to services. For example:

Three selected localities had coordinated with their local housing authority to apply for a grant through the federal Family Unification Program, which sets aside housing vouchers for families in the child welfare system.

Two selected localities had Family Dependency Treatment Courts, which coordinate court, treatment, and child welfare services for child welfare cases in which parental substance abuse is a primary factor.

One Virginia locality collaborated with partner agencies to use funding provided under the American Reinvestment and Recovery Act for homelessness prevention and rapid re-housing to help families at risk of eviction. As these funds were about to expire, they worked with community partners to identify other sources of funding to allow this homelessness prevention program to continue.

There are also other opportunities on the federal, state, and local level for child welfare and partner agencies to coordinate to improve service delivery for children and families in the child welfare system. For instance:

ACF awards regional partnership grants for projects designed to increase the well-being of, and improve the permanency outcomes for, children affected by substance abuse through interagency collaboration and program and service integration. In 2012, ACF awarded 17 new regional partnership grants and approved 2-year extensions for 8 of 53 grants awarded in 2007.

In September 2012, ACF awarded five grants totaling $25 million for collaborative partnerships between child welfare agencies and housing/ shelter organizations. Grants were awarded to projects focused on improving safety, family functioning, and child well-being in families at risk of homelessness and child maltreatment.

Also in 2012, ACF awarded nine grants totaling almost $29 million over 5 years for projects to improve the social and emotional well- being of children and youth in the child welfare system. The purposes of these grants, which are in the form of cooperative agreements, include improving adoption outcomes through interagency collaboration and supporting child welfare agencies in assessing children’s mental and behavioral health needs.

The Commissioner of ACF’s Administration on Children, Youth and Families told us the agency is encouraging states to collaborate with state Medicaid agencies to solve issues affecting families in the child welfare system, including barriers to accessing Medicaid-funded mental health services for infants. As an example, he said ACF’s most recent Title IV-E waiver announcement encouraged state child welfare agencies to submit proposals in conjunction with state Medicaid agencies. According to the Commissioner, six out of nine approved waiver proposals explicitly indicate a partnership with the state Medicaid agency.

In fiscal year 2012, SAMHSA awarded 16 grants totaling almost $16 million to implement systems of care (which involve collaboration across government and private agencies, providers, and families) for children and youth with serious emotional disturbances. According to agency officials, 14 grantees were coordinating with child welfare agencies to address service development, funding, and access to care for children and youth in the child welfare system and those at risk of abuse or neglect.

Concluding Observations

Child welfare agencies, like other state agencies, operate in an environment of ongoing fiscal constraint. They must make difficult choices about how to allocate their limited resources to support services critical to ensuring children’s safety and well-being. Despite their use of Title IV-B funding in combination with other federal dollars to supplement their state and local funds, these agencies continue to struggle to meet the complex needs of children not in foster care and their families. Given current state and federal fiscal constraints, they will likely continue to struggle. The waivers HHS has granted to some states to use their Title IV-E funding more flexibly may provide useful information about the effects of shifting available resources from foster care costs to support services intended to reduce the need for foster care without increasing funding overall.

Agency Comments and Our Evaluation

We provided a draft of this report to the Secretary of Health and Human Services for review and comment. HHS indicated in its general comments, reproduced in appendix I, that it agreed with GAO’s finding that gaps exist in services to address the effects of child maltreatment, and provided additional information about the agency’s emphasis on trauma-informed care and its efforts to encourage child welfare agencies to respond more effectively to trauma. The agency also agreed with GAO’s concluding observations that ongoing fiscal constraints contribute to challenges in meeting the needs of children and families, and offered two steps child welfare agencies could take to more effectively use available resources: (1) identify currently funded services that do not yield desired results and shift resources toward evidence-based programs and practices; and (2) use outcomes (specifically those related to child well- being), rather than services delivered, to measure program success. Our report did not address the effectiveness of specific services; however we agree that information about effective practices is an important tool that child welfare agencies can use to determine how best to allocate available funds. Additionally, our work has long shown that using outcomes is an important component of measuring program success.

HHS also discussed the use of TANF funds for child welfare purposes in its comments, and noted that in addition to the services described in our report, TANF funds are spent on foster care maintenance payments and adoption subsidies, as well as relative foster care maintenance payments and guardianship subsidies. Because this report focuses on expenditures for services typically covered under Title IV-B, we did not include maintenance payments and adoption subsidies in the scope of our review. We have clarified that, due to the similarity among these payment types, we excluded relative maintenance payments and guardianship subsidies as well. HHS also noted that states may spend federal TANF funds on purposes authorized solely under prior law that do not meet a TANF purpose, and that many of these expenditures are for child welfare purposes. We have also clarified that our analysis includes these expenditures, as appropriate. Finally, HHS described planned revisions to its TANF expenditure reporting form to capture more detailed information about how states spend TANF funds on child welfare payments and services. We have not reviewed these plans; however, we recently recommended that HHS develop a detailed plan and specific timelines to help monitor its progress in revising these TANF reporting categories.

In addition to these general comments, HHS also provided us with technical comments that we incorporated, as appropriate.

We are sending copies of this report to relevant congressional committees, the Secretary of Health and Human Services, and other interested parties. In addition, this report will be available at no charge on GAO’s website at http://www.gao.gov.

If you or your staffs have any questions about this report, please contact me at (202) 512-7215 or brownke@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. GAO staff that made key contributions to this report are listed in appendix II.

Appendix I: Comments from the Department of Health and Human Services

Appendix II: GAO Contact and Staff Acknowledgments

GAO Contact

Staff Acknowledgments

In addition to the contact name above, the following staff members made key contributions to this report: Elizabeth Morrison, Assistant Director; Lauren Gilbertson; James Lloyd; Erin McLaughlin; Ellen Phelps Ranen; and Deborah Signer. Also contributing to this report were: Susan Anthony, Jeff Arkin, Carl Barden, James Bennett, Jessica Botsford, David Chrisinger, Kim Frankena, Ashley McCall, Phillip McIntyre, Jean McSween, Almeta Spencer, Hemi Tewarson, James Rebbe, and Carolyn L. Yocom.