The child welfare system encompasses a broad range of activities, including child protective services (CPS), which investigates reports of child abuse services to support and preserve families; and foster care for children who cannot live safely at home. maintenance expenses of foster care was estimated at about $3.6 billion in 1997. Additional federal funds are provided to states for a wide range of other child welfare and family preservation and support services, and these were estimated at about $500 million in 1997. As an integral part of the child welfare system, foster care is designed to ensure the safety and well-being of children whose families are not caring for them adequately. Beyond food and housing, foster care agencies provide services to children and their parents that are intended to address the problems that brought the children into the system. Agencies are also required to develop a permanency plan for foster children to make sure they do not remain in the system longer than necessary. Usually, the initial plan is to work toward returning the children to their parents. If attempts to reunify the family fail, the agency is to develop a plan to place the children in some other safe, permanent living arrangement, such as adoption or guardianship. According to federal statute, the court must hold a permanency planning hearing no later than 18 months after a child enters foster care. Proposed federal legislation would shorten this time frame to 12 months, in the hope of reducing the time a child spends in foster care. Some states have already adopted this shorter time frame. Children come to the attention of the child welfare system in two ways—either shortly after birth because they were exposed to drugs or alcohol in-utero or sometime later because they have been abused or neglected. Children with substance abusing parents enter foster care in either way. Many state statutes require that drug- or alcohol-exposed infants be reported, and some of these children are subsequently removed from the custody of their parents if an investigation determines that they have been abused or neglected. In some states, prenatal substance exposure itself constitutes neglect and is grounds for removing children from the custody of their parents. Large numbers of children in foster care are known to have been prenatally substance exposed. In an earlier study, we estimated that close to two-thirds of young foster children in selected locations in 1991 had been prenatally exposed to drugs and alcohol, up from about one-quarter in 1986. In both years, cocaine was the most prevalent substance that young foster children were known to have been exposed to, and the incidence of this exposure increased from about 17 percent of young foster children in 1986 to 55 percent in 1991. Moreover, among those who had been prenatally exposed who were in foster care in 1991, about one quarter had been exposed to more than one substance. The actual number of young foster children who had been exposed to drugs or alcohol in-utero may have been much higher because we relied on the mother’s self-reporting of drug or alcohol use or toxicology test results of the mother or infant to document prenatal exposure. Yet, not all children or mothers are tested at birth for drugs, and even when they are tested, only recent drug or alcohol use can be confirmed. Older children of substance abusing parents also may enter foster care because they have been abused or neglected as a result of their parents’ diminished ability to properly care for them. Abuse and neglect of children of all ages, as reported to CPS agencies, more than doubled from 1.1 million to over 2.9 million between 1980 and 1994, and a Department of Health and Human Services (HHS) report found that the number of CPS cases involving substance abuse can range from 20 to 90 percent, depending on the area of the country. For example, we recently found that about 75 percent of confirmed cases of child abuse and neglect in New York City involved substance abuse by at least one parent or caregiver. Many of these parents live in drug-infested and poor neighborhoods that intensify family problems. Neglect is most frequently cited as the primary reason children are removed from the custody of their parents and placed in foster care. According to the Office of Child Abuse and Neglect, the children of parents who are substance abusers are often neglected because their parents are physically or psychologically absent while they seek, or are under the influence of, alcohol and other harmful drugs. Sixty-eight percent of young children in foster care in California and New York in 1991 were removed from their parents as a result of neglect or caretaker absence or incapacity. No other reasons for removal accounted for a large portion of entries of young children into foster care. Physical, sexual, and emotional abuse combined accounted for only about 7 percent of removals of these young children. Parental substance abuse not only adversely affects the well-being of children, it also places additional strain on the child welfare system. The foster care population increased dramatically between 1985 and 1995 and is estimated to have reached about 494,000 by the end of 1995. As a consequence, foster care expenditures have risen dramatically. Between 1985 and 1995, federal foster care expenditures under title IV-E of the Social Security Act increased from $546 million to about $3 billion. We found that a greater portion of foster care expenditures in some locations shifted to the federal government between 1986 and 1991 because much of the growth in the population of young foster children involved poor families who were eligible for federal funding. Parental substance abuse is involved in a large number of cases. We have previously reported that an estimated 78 percent of young foster children in 1991 in selected locations had at least one parent who was abusing drugs or alcohol. Our recent interviews with child welfare officials in Los Angeles County, California, and Cook County, Illinois, have confirmed that the majority of foster care cases in these counties for children of all ages involve parental substance abuse. Officials in these locations stated not only that cocaine use among parents of foster children is still pervasive but that the use of other highly addictive and debilitating drugs, such as heroin and methamphetamines, appears to be on the rise. In addition, officials confirmed that use of multiple substances is common. In addition to the large number of foster care cases involving parental substance abuse, the complexities of these family situations place greater demands on the child welfare system. Most of the families of the young foster children in selected locations whose case files we reviewed had additional children in foster care, and at least one parent was absent. About one-third of the families were homeless or lacked a stable residence. Some had at least one parent who had a criminal record or was incarcerated, and in some families domestic violence was a problem. In addition, child welfare officials in Los Angeles and Cook Counties recently told us that dual diagnosis of substance addiction and mental illness is common among foster parents. The National Institute of Mental Health reported in 1990 that most cocaine abusers had at least one serious mental disorder such as schizophrenia, depression, or antisocial personality disorder. a woman with four children, all of whom were removed from her custody as a result of neglect related to her cocaine abuse. The youngest child entered foster care shortly after his birth. By that time, the three older children had already been removed from their mother’s custody. All four of the children were placed with their grandmother. The mother had a long history of cocaine abuse that interfered with her ability to parent. At least two of her four children were known to have been prenatally exposed to cocaine. She also had been convicted of felony drug possession and prostitution, lacked a stable residence, and was unemployed. The father was never located, although it was discovered that he had a criminal record for felony drug possession and sales. Despite the mother’s long history of drug use and related criminal activity, she eventually completed a residential drug treatment program that lasted about 1 year, participated in follow-up drug treatment support groups, and tested clean for over 6 months. In addition, she completed other requirements for family reunification, such as attending parenting and human immunodeficiency virus (HIV) education classes, and she was also able to obtain suitable housing. Although the mother was ultimately reunified with her youngest child, it took a considerable amount of time and an array of social services to resolve this case. The child was returned to his mother on a trial basis about 18 months after he entered foster care. The child welfare system retained jurisdiction for about another year, during which family maintenance services were provided. In addition, many foster children have serious health problems, some of which are associated with prenatal substance exposure, which further add to the complexity of addressing the service needs of these families. We found that over half of young foster children in 1991 had serious health problems, and medical research has shown that many of the health problems that these children had, such as fetal alcohol syndrome, developmental delays, and HIV, may have been caused or compounded by prenatal exposure to drugs or alcohol. children places on parents, who are at the same time recovering from drug or alcohol addictions. Some caseworkers find it difficult to manage the high caseloads involving families with increasingly complex service needs. Some states have experienced resource constraints, including problems recruiting and retaining caseworkers, shortages of available foster parents, and difficulties obtaining needed services, such as drug treatment, that are generally outside the control of the child welfare system. Caseworkers are also experiencing difficulties resolving cases. Once children are removed from the custody of their parents, they sometimes remain in foster care for extended periods. The problem of children “languishing” or remaining in foster care for many years has become a great concern to federal and state policymakers. While most children are reunified with their parents, adopted, or placed with a guardian, others remain in foster care, often with relatives, until they age out of the system. The circuitous and burdensome route out of foster care—court hearings and sometimes more than one foster care placement—can take years, be extremely costly, and have serious emotional consequences for children.