Child Welfare: Federal Oversight of State IV-B Activities Could Inform Action Needed to Improve Services to Families and Statutory Compliance
Released: 2006-05-23T00:00:00

Letter

Background

Title IV-B of the Social Security Act authorizes funds to states to provide an array of child welfare services to prevent the occurrence of abuse, neglect, and need to place children in foster care. The Administration for Children and Families within HHS is responsible for the administration and oversight of federal funding to states for child welfare services under Title IV-B. HHS headquarters staff are responsible for developing appropriate policies and procedures for states to follow in obtaining and using federal child welfare funds, while staff in HHS’s 10 regional offices are responsible for providing direct oversight of state child welfare systems. No federal eligibility criteria apply to the children and families receiving services funded under Title IV-B. The amount of subpart 1 funds a state receives is based on its population under the age of 21 and the state per capita income, while subpart 2 funding is determined by the percentage of children in a state whose families receive food stamps.

Subpart 1 provides grants to states for child welfare services, that are broadly defined. Subpart 1 funds are intended for services that are directed toward the accomplishment of the following purposes: protect and promote the welfare of all children; prevent or remedy problems that may result in the abuse or neglect prevent the unnecessary separation of children from their families by helping families address problems that can lead to out-of-home placements; reunite children with their families; place children in appropriate adoptive homes when reunification is not possible; and ensure adequate care to children away from their homes in cases in which the child cannot be returned home or cannot be placed for adoption.

Subpart 2 services are similar to those allowed under subpart 1, although the range of services allowed under subpart 2 is more limited in some cases. For example, time-limited family reunification services can only be provided during a child’s first 15 months in foster care, while no such restriction is placed on the use of subpart 1 funds. In addition, states must spend a “significant portion” of their subpart 2 funds on each of four service categories: Family preservation service. Services designed to help families at risk or in crisis, including services to (1) help reunify children with their families when safe and appropriate; (2) place children in permanent homes through adoption, guardianship, or some other permanent living arrangement; (3) help children at risk of foster care placement remain safely with their families; (4) provide follow- up assistance to families when a child has been returned after a foster care placement; (5) provide temporary respite care; and (6) improve parenting skills.

Family support services. Community-based services to promote the safety and well-being of children and families designed to increase the strength and stability of families, to increase parental competence, to provide children a safe and supportive family environment, to strengthen parental relationships, and to enhance child development. Examples of such services include parenting skills training and home visiting programs for first time parents of newborns.

Time-limited family reunification services. Services provided to a child placed in foster care and to the parents of the child in order to facilitate the safe reunification of the child within 15 months of placement. These services include counseling, substance abuse treatment services, mental health services, and assistance to address domestic violence.

Adoption promotion and support services: Services designed to encourage more adoptions of children in foster care when adoption is in the best interest of the child, including services to expedite the adoption process and support adoptive families.

Federal child welfare funding has long been criticized for entitling states to reimbursement for foster care placements, while providing little funding for services to prevent such placements. When the Congress enacted the Adoption Assistance and Child Welfare Act of 1980, it created a new funding source for foster care and adoption assistance under Title IV-E of the Social Security Act. Title IV-E provides an open-ended entitlement for foster care maintenance payments to cover a portion of the food, housing, and incidental expenses for all foster children whose parents meet certain federal eligibility criteria. Title IV-E also provides payments to adoptive parents of eligible foster children with special needs. While states could still use Title IV-B funding for foster care and adoption assistance for children ineligible under Title IV-E, the law established a dollar cap on the amount of Title IV-B funds that states could use for three categories of service: foster care maintenance payments, adoption assistance payments, and child care related to a parent’s employment or training. The law requires that the total of subpart 1 funds used for these categories cannot exceed a state’s total 1979 subpart 1 expenditures for all types of services. The intent of this restriction, according to a congressional document, was to encourage states to devote increases in subpart 1 funding as much as possible to supportive services that could prevent the need for out-of- home placements. However, this restriction applies only to the federal portion of subpart 1 expenditures, as the law provides that states may use any or all of their state matching funds for foster care maintenance payments.

For the fourth consecutive year, the President’s budget proposes a Child Welfare Program Option. HHS developed the proposal to give states more flexibility in using Title IV-E foster care funds for preventive services such as those under Title IV-B. Under this proposal, states could voluntarily choose to receive a fixed IV-E foster care allocation (based on historic expenditure rates) over a 5-year period, rather than receiving a per child allocation. States could use this allocation for any services provided under Titles IV-B and IV-E, but would also have to fund any foster care maintenance payments and associated administrative costs from this fixed grant or use state funds. No legislation to enact this option has been introduced.

States Used Subparts 1 and 2 to Support Similar Services and Populations, but Funding Emphasis Differed

States Emphasized Different Services under Subparts 1 and 2

While states funded similar services under subparts 1 and 2, most states reported using subpart 1 funds primarily to pay for costs associated with operating child welfare programs, while most states reported using subpart 2 funds for family services as shown in table 1. For example, states used over 44 percent of subpart 1 funds to pay for staff salaries and costs to administer and manage programs. In contrast, states spent over 71 percent of subpart 2 funds for services to support, preserve, and reunify families.

The majority of subpart 1 funds were spent on staff salaries, and Washington officials said that in their state, over half of these costs paid for staff providing direct services to children and families. Overall, states reported that nearly half of Title IV-B funds used for staff salaries supported social worker positions in child protective services. Another 20 percent of funds supported positions for other social workers. The remaining costs supported other staff including those providing supervision of caseworkers and legal services. (See fig. 1.)

Percentages do not total to 100 due to rounding.

The remaining subpart 1 funds were split fairly evenly among administration and management, child protective services, and foster care maintenance payments: Administration and management comprised the second largest category of subpart 1 expenditures, accounting for almost 17 percent of subpart 1 dollars. These services included rent and utilities for office space, travel expenses for agency staff, and staff training.

Child protective services represent the third largest category of subpart 1 expenditures. States reported using about 16 percent of their subpart 1 funds to provide a variety of CPS services, such as telephone hotlines for the public to report instances of child abuse and neglect, emergency shelters for children who needed to be removed from their homes, and investigative services.

States reported using nearly 11 percent of their subpart 1 funds to make recurring payments for the room and board of foster children who were not otherwise eligible for federal reimbursement. For example, New Jersey officials reported spending over half of the state’s subpart 1 funds on foster care maintenance payments.

Subpart 2 Services

States reported using over 70 percent of their subpart 2 dollars on serving families, with nearly half of these funds used to fund family support and prevention services. These services included mentoring programs to help pregnant adolescents learn to be self-sufficient, financial assistance to low- income families to help with rent and utilities, parenting classes, child care, and support groups provided by community-based resource centers.

The remaining subpart 2 funds were split fairly evenly among family preservation, family reunification, and services to support and preserve adoptive families.

Family preservation services accounted for nearly 12 percent of subpart 2 dollars. Services provided by Washington state in this category included counseling and parent training services for up to 6 months for families with children who were at risk of being placed in foster care.

Adoption support and preservation services accounted for over 11 percent of subpart 2 dollars. With these funds, states provided services such as counseling for children who were going to be adopted, family preservation services to adoptive families, and respite care for adoptive families. Officials in Ohio reported using almost half of its subpart 2 dollars for adoption services, including post adoption services and services to recruit families for children in need of homes.

Family reunification services accounted for over 9 percent of subpart 2 funds. These services included supervised visitation centers for parents to visit with their children who were in foster care and coordinators for alcohol and drug treatment services for families whose primary barrier to reunification was substance abuse. New Jersey funded a supervised visitation program that offered parenting education, counseling, transportation, and support groups and was located in a private home, allowing families to visit together in a homelike setting and engage in more natural interactions.

States Emphasized Different Populations Served Under Subparts 1 and 2

States served similar populations under subparts 1 and 2; however, states reported using most subpart 1 funds primarily to serve families whose children had been removed from the home, while most subpart 2 funds were reported to serve families with children at risk of removal due to child abuse or neglect, as shown in table 2. For example, states used 42 percent of subpart 1 funds to serve children in foster care and/or their parents. In contrast, states used 44 percent of subpart 2 funds for children at risk of child abuse and neglect and/or their parents.

In our survey, we asked states for more detailed information about the populations served by programs under subparts 1 and 2, such as demographic and socioeconomic characteristics. However, few states were able to provide this data. For selected subpart 1 services, 10 states were able to estimate the extent to which the same children and families also received services under subpart 2: four states reported that generally none or almost none of the recipients also received a service funded by subpart 2, three states reported that generally less than half of the recipients received subpart 2 services, one state reported that all or almost all recipients received subpart two states provided varying estimates for different subpart 1 services.

HHS Officials and States Supported Flexibility of Title IV-B Funding

Officials in almost all of HHS’s regional offices supported retaining the current balance between allowing states some flexibility in use of funds and targeting some resources toward prevention, regardless of whether federal funding sources are combined under alternative financing options. One regional official noted that the current financing structure of subpart 1 gives states the flexibility to address unexpected circumstances affecting the child welfare system—for example, the need to develop substance abuse treatment programs for parents affected by the cocaine epidemic of the 1980s. Other regional officials noted that the spending requirements under subpart 2 helped ensure that states used some funds on family support services and prevention activities to help preserve families and keep children from entering foster care.

States reported in our survey that flexibility was important to meet the needs of their child welfare systems, and thus generally preferred the financing structure of subpart 1 over subpart 2, as shown in figure 2.

Federal Oversight Insufficient to Ensure State Compliance with Title IV-B Spending Requirements under Subpart 1

HHS provided relatively little oversight specific to state spending under subpart 1. HHS does not collect data on subpart 1 expenditures, relying instead on cursory reviews of plans submitted by states that discuss how they intend to use their subpart 1 funds in the coming year. HHS regional officials reported that they review these plans for relatively limited purposes because there are few restrictions on how states can spend subpart 1 dollars. We also found that HHS regional offices had paid little attention to statutory limits in states’ planned use of subpart 1 funds. In response to our survey, 10 states reported actual 2002 subpart 1 expenditures that exceeded the spending limits by over $15 million in total.

HHS Had Little Information about States’ Use of Subpart 1 Funds

HHS received forms from states each year that showed how they planned to spend subpart 1 funds, but had little information on how states actually spent these funds. Officials from four HHS regional offices said that they generally reviewed the forms to ensure that states were requesting the total amount of subpart 1 funds to which they were entitled, and that they complied with the requirement to match 25 percent of subpart 1 funds with state funds. Most regional offices indicated that their review of the state submitted forms focused more on subpart 2 than subpart 1. For example, they reported reviewing planned subpart 2 spending to ensure that states complied with the requirement to spend at least 20 percent of funds on each of the service categories and spend no more than 10 percent of funds for administrative purposes. Several HHS officials said that they did not monitor subpart 1 funds as closely as other federal child welfare funds due to the relatively small funding amount and the lack of detailed requirements about how these funds could be spent.

Oversight of subpart 1 was further limited because spending plans states provided on the annual forms may not reliably show how states actually spent Title IV-B funds. HHS officials explained that states’ actual expenditures may vary from planned expenditures as states address unforeseen circumstances. The timing for submitting the annual forms also affected how well states could plan Title IV-B spending. HHS required states to submit their initial spending plans for the upcoming year by June 30, prior to states receiving information on program appropriations for the upcoming year. While we did not conduct a review comparing state submitted planned expenditures to actual expenditures for previous years, we did identify instances that suggested differences in planned and actual expenditures as well as data on actual expenditures that were not always accurate. For example, two states with county-administered child welfare systems said they could not reliably estimate planned spending by service category because the states did not collect expenditure data from county child welfare agencies that administer Title IV-B funds.

One regional official explained that the only way to determine how a state actually used its Title IV-B funds was to review its financial accounts. At the time of our review, three regional offices had indicated that they had begun asking states to provide Title IV-B expenditure data.

HHS Regional Offices Were Unaware of Spending Limits or Did Not Enforce Them

HHS regional offices paid little attention to the statutory limits on the use of subpart 1 funds for foster care maintenance and adoption assistance. Officials in only 1 of HHS’s 10 regional offices said that they ensured state plans complied with statutory spending limits for subpart 1. In contrast, 5 regional offices were unaware that any limits on the use of subpart 1 funds existed. Four other regional offices were aware that some limitations existed, but did not ensure state compliance with them.

Two regional offices said they did not monitor planned expenditures for subpart 1 because they had no data to calculate the spending limit for each state, and HHS had not provided guidance on how to enforce the limits. Officials in another region said that their office discontinued subpart 1 compliance reviews because they considered the limits to be meaningless because state and federal funds are fungible and state funds spent on child welfare services greatly exceeded subpart 1federal funds. In other words, any attempt to enforce the limits, according to these officials, would only lead to changes in how states accounted for state and federal funds.

Some states reported in our survey that they spent 2002 subpart 1 funds in excess of the statutory authority for foster care maintenance and adoption assistance payments. (See fig. 4.) While spending excesses were small in some states, they were large in others, ranging from a low of $27,000 in New Hampshire to nearly $4 million in Michigan. In total, reported actual spending by the 10 states exceeded the statutory limit by over $15 million.

Subsequent to our review, ACF issued guidance to states reminding them of the statutory spending limits for Title IV-B subpart 1 funds in November 2003. This guidance included information needed by each state to calculate its spending limit for foster care and adoption assistance payments, and day care related to employment or training.

Little Research Existed on the Effectiveness of Title IV-B Services

Research on the effectiveness of services provided under subpart 1of Title IV-B was limited, and HHS evaluations of subpart 2 services showed no or little effect on children’s outcomes. In our survey, 22 states reported providing services other than maintenance payments, staff salaries, or administration under subpart 1; however, none of these states had evaluated the outcomes of these services. One state official said that few states could afford to divert resources away from direct services to families in order to conduct formal program evaluations, given the tremendous service needs of families involved in the child welfare system.

Similarly, our literature review showed that few evaluations had been conducted, and evaluations that had been conducted produced mixed results. For example, one study evaluating a program in Texas to increase family literacy and prevent child abuse by enhancing parent-child interactions cited results showing positive effects on children’s measured competence and classroom behavior. However, evaluation of the same program in New York did not consistently show differences in outcomes for children and parents in the program compared to those in a control group.

HHS evaluations of subpart 2 services also have shown no or little effect, as reported by the Congressional Research Service. The Congress required HHS to evaluate the effectiveness of programs funded under subpart 2 as part of its initial approval of funding for family preservation and family support services. HHS focused on the use of subpart 2 funds in three large-scale evaluations. One looked at overall implementation issues for the program, the second looked at the effectiveness of two models of family preservation services (both providing relatively intensive casework), and the third looked at the effectiveness of a wide range of family support services. Overall, the findings were similar across all evaluation sites showing subpart 2 services provided no or little effect in reducing out-of-home placement, maltreatment recurrence, or improved family functioning beyond what normal casework services achieved. No similar large scale evaluations of time-limited reunification services or of adoption promotion and support services have been made.

Prior Recommendations

Our 2003 report recommended that the Secretary of HHS provide the necessary guidance to ensure that HHS regional offices are providing appropriate oversight of subpart 1, consider the feasibility of collecting data on states’ use of these funds to facilitate program oversight and guidance to states, and use the information gained through enhanced oversight of subpart 1 to inform its design of alternative child welfare financing options. ACF agreed with our findings and implemented guidance to states reminding them of the statutory requirements for subpart 1 spending. ACF disagreed with our recommendation to consider collecting data on subpart 1 expenditures. ACF believed that its level of oversight was commensurate with the scope and intent of subpart 1, noting that its oversight efforts are more appropriately focused on reviews of the states’ overall child welfare systems. ACF did not comment on our recommendation to use such data to inform the design of an alternative financing option.

Mr. Chairman, this completes my prepared statement. I would be happy to respond to any questions you or other Members of the Subcommittee may have.

Appendix I: GAO Contact and Acknowledgments

For further information regarding this testimony, please contact me at (202) 512-8403. Individuals making key contributions to this testimony include Lacinda Ayers, Diana Pietrowiak, and Michelle St. Pierre.

Appendix II: Related GAO Products

Lessons Learned for Protecting and Educating Children after the Gulf Coast Hurricanes. GAO-06-680R. Washington, D.C.: May 11, 2006.

District of Columbia: Federal Funds for Foster Care Improvements Used to Implement New Programs, but Challenges Remain. GAO-05-787. Washington, D.C.: July 22, 2005.

Child Welfare: Better Data and Evaluations Could Improve Processes and Programs for Adopting Children with Special Needs. GAO-05-292. Washington, D.C.: June 13, 2005.

Indian Child Welfare Act: Existing Information on Implementation Issues Could Be Used to Target Guidance and Assistance to States. GAO-05-290. Washington, D.C.: April 4, 2005.

Foster Youth: HHS Actions Could Improve Coordination of Services and Monitoring of States’ Independent Living Programs. GAO-05-25. Washington, D.C.: November 18, 2004.

D.C. Child And Family Services Agency: More Focus Needed on Human Capital Management Issues for Caseworkers and Foster Parent Recruitment and Retention. GAO-04-1017. Washington, D.C.: September 24, 2004.

Child And Family Services Reviews: States and HHS Face Challenges in Assessing and Improving State Performance. GAO-04-781T. Washington, D.C.: May 13, 2004.

D.C. Family Court: Operations and Case Management Have Improved, but Critical Issues Remain. GAO-04-685T. Washington, D.C.: April 23, 2004.

Child and Family Services Reviews: Better Use of Data and Improved Guidance Could Enhance HHS’s Oversight of State Performance. GAO-04-333. Washington, D.C.: April 20, 2004.

Child Welfare: Improved Federal Oversight Could Assist States in Overcoming Key Challenges. GAO-04-418T. Washington, D.C.: January 28, 2004.

D.C. Family Court: Progress Has Been Made in Implementing Its Transition. GAO-04-234. Washington, D.C.: January 6, 2004.

Child Welfare: States Face Challenges in Developing Information Systems and Reporting Reliable Child Welfare Data. GAO-04-267T. Washington, D.C.: November 19, 2003.

Child Welfare: Enhanced Federal Oversight of Title IV-B Could Provide States Additional Information to Improve Services. GAO-03-956. Washington, D.C.: September 12, 2003.

Child Welfare: Most States Are Developing Statewide Information Systems, but the Reliability of Child Welfare Data Could be Improved. GAO-03-809. Washington, D.C.: July 31, 2003.

D.C. Child and Family Services: Key Issues Affecting the Management of Its Foster Care Cases. GAO-03-758T. Washington, D.C.: May 16, 2003.

Child Welfare and Juvenile Justice: Federal Agencies Could Play a Stronger Role in Helping States Reduce the Number of Children Placed Solely to Obtain Mental Health Services. GAO-03-397. Washington, D.C.: April 21, 2003.

Foster Care: States Focusing on Finding Permanent Homes for Children, but Long-Standing Barriers Remain. GAO-03-626T. Washington, D.C.: April 8, 2003.

Child Welfare: HHS Could Play a Greater Role in Helping Child Welfare Agencies Recruit and Retain Staff. GAO-03-357. Washington, D.C.: March 31, 2003.

Foster Care: Recent Legislation Helps States Focus on Finding Permanent Homes for Children, but Long-Standing Barriers Remain. GAO-02-585. Washington, D.C.: June 28, 2002.

District of Columbia Child Welfare: Long-Term Challenges to Ensuring Children’s Well-Being. GAO-01-191. Washington, D.C.: December 29, 2000.

Foster Care: HHS Should Ensure That Juvenile Justice Placements Are Reviewed. GAO/HEHS-00-42. Washington, D.C.: June 9, 2000.

Juvenile Courts: Reforms Aim to Better Serve Maltreated Children. GAO/HEHS-99-13. Washington, D.C.: January 11, 2000.

Foster Care: States’ Early Experiences Implementing the Adoption and Safe Families Act. GAO/HEHS-00-1. Washington, D.C.: December 22, 1999.

Foster Care: HHS Could Better Facilitate the Interjurisdictional Adoption Process. GAO/HEHS-00-12. Washington, D.C.: November 19, 1999.

Foster Care: Effectiveness of Independent Living Services Unknown. GAO/HEHS-00-13. Washington, D.C.: November 5, 1999.

Child Welfare: States’ Progress in Implementing Family Preservation and Support Services. GAO/HEHS-97-34. Washington, D.C.: February 18, 1997.

Child Welfare: Opportunities to Further Enhance Family Preservation and Support Activities. GAO/HEHS-95-112. Washington, D.C.: June 15, 1995.

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