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). 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. 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. 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.