CHAPTER IX:
FUNDING FOR CALIFORNIA'S DEPENDENCY SYSTEM

Managing and Financing Systems Reform in Child Welfare Services

Fred Wulczyn, Ph.D., Co-Director of the Multi-State Data Archive Project, University of Chicago, Chapin Hall Center for Children, delivered the following address on June 12, 1997 to a Public Policy Forum organized by the California Department of Social Services.

There is a funding dilemma in the child welfare system. Public agency management planning and resource allocation needs to put money where it needs to be spent. You get what you pay for, and today we are funding foster care - not child welfare. The federal budget allocates 18% of the child welfare dollars to prevention, and 82% to board and maintenance payments.

Also, the fee for services approach to foster care creates a systemic funding dilemma that punishes providers for doing the work of child welfare. As soon as children are returned home or to the community, payments stop. Dr. Wulczyn recommended instead a "capitated ring". The level of reimbursement for services would be preset for a predefined population and period of time. Within the capitated ring, the provider can spend money on whatever services meet the needs of the population.⁽¹⁵³⁾

Two Important Trends to Note in Funding for Child Welfare Services

First, state funding for child welfare services has not kept up with caseload increases. This means that some children and families do not receive services to remediate the negative effects of maltreatment. The second is the increasing role of federal funding for child welfare services, from 20.7% in 1989 to 61.1% in 1994... ⁽¹⁵⁴⁾

From 1989 to the current year, state spending for Child Welfare Services grew by 55%, adjusted by inflation and state population of zero to fourteen year olds. Mandated child abuse reports, however, have been increasing at a much faster rate than the child population as a whole. Therefore, the amounts budgeted have been falling behind the number of children and families needing services.

STATE FUNDING

State Funding for child protection is allocated to five major accounts.

I. State Child Welfare Services (CWS) include:

1. Emergency Response to abuse allegations;

2. Family Maintenance Services to children (and their families); while the children remain with their families;

3. Family Preservation and Support Services are intensive services for families whose children may be removed without them; remain in existing out-of-home placements for longer periods of time, or would be placed in more restrictive out-of-home placement and

4. Family Reunification Services which provides services to children in foster care who are temporarily removed to facilitate possible reunification.

CWS can fund the direct costs of emergency shelter care for a child for up to thirty days after removal from a parent's home.

Family Preservation and Support Services: AB558, Chapter 105 Statutes 0/1988:

In 1988, the California legislature authorized a pilot project which was geared toward avoiding or limiting the out-of-home placement of children who have experienced child abuse or neglect within the family. Beginning in 1994-95, federal funds were made available.

How the State of California Determines Funds for Child Welfare Services

Each year, the state bases funding for county dependency services on estimates of the number of cases that each county will encounter in the next fiscal year, projected from caseload data from that county from the most recent thirty-six month period. This translates into the presumed number of social workers needed to manage those cases.⁽¹⁵⁵⁾

County Welfare Directors Association Report

In October, 1997, the County Welfare Directors Association voted unanimously to seek support of the legislature and the California Department of Social Services for immediate workload relief for Child Welfare Services (CWS) social workers in California. The Association argues that the State laws and regulatory expectations have grown in magnitude and complexity. The complexity of child abuse cases has also grown without any workload relief. The child welfare system is at a point of near collapse.⁽¹⁵⁶⁾

CWDA argues that the present state system for establishing county child welfare funding is outdated for two reasons.

1. The worker caseload targets were developed in the 1980's and enhanced in the early 90's and are now unmanageably high, given the changes that have impacted California's counties since the standards were developed. These changes include:

• dramatic demographic changes;

• the impact of increased abuse of drugs in families;

• the growth in the numbers of children living in poverty;

• the increasingly litigious environment in the courts, resulting in more court reports and hearings, continuances and appeals (which all involve case workers);

• new legislation intensifying mandates, reducing case management timelines and directing outcomes (such as concurrent planning with accelerated timelines);

• new workloads created by juvenile court and appellate decisions, such as frequency of social worker/child visits and requirements to transport children long distances to regularly visit incarcerated parents;

• increased state and community expectations for services, such as: Family Preservation services, Healthy Start services, domestic violence intervention services, relative searches, and other prevention services; and

• the CWS/CMS automated system which has brought benefits, but also has: increased the workload of case-carrying workers, increased county administrative costs.

The workload is assigned as follows:

Emergency Response Assessments	320 children per month
Emergency Response	15.8 children per month
Family Maintenance	35 children per month
Family Reunification	27 children per month
Permanent Placement	54 children per month

California's caseload targets are found to be high, when compared to caseload targets established over the last few years in other states, often as a result of lawsuits attacking the quality of the administration and staffing of a state's child welfare program.

For example :

• Alabama now has a court-ordered 24 cases per worker and one investigator for every 13.5 child abuse and neglect reports;

• Arkansas was ordered to reduce their caseload from 40 to 25 and now has 15 cases per worker;

• Colorado, due to a federal court ruling has a 17 cases per worker caseload;

• Massachusetts adopted a Governor's Commission recommendation of 18 cases per worker and is considering lowering it further.⁽¹⁵⁷⁾

2. Projection of the expected number of cases based on the prior three years does not work because the program is volatile, with sudden changes ranging from:

• new laws to new court decisions;
• shifts in philosophy in county juvenile courts;
• economic downturns; and
• exploding substance abuse.

These surges are not funded in a timely manner when funding is based on the past three years.⁽¹⁵⁸⁾

CWDA notes further that, in some years individual counties have received significantly increased allocations by the State in recognition of sizeable caseload growth (in the previous three-year period). Sometimes, however, the increased allocation has been received too late in the fiscal year to be effectively utilized by the county, or for the county to find the necessary county match, resulting in the total allocation not being used. Other reasons for counties not fully using their allocations are their inability to recruit and hire adequate numbers of social work staff and reluctance of county policy makers to add significant numbers of staff when the CWS funding stream is uncertain from year to year.

When a county fails to use state CWS funding due to lack of match, it can lead to the false impression in Sacramento that the county does not need all the child welfare funding made available to it.⁽¹⁵⁹⁾

CWDA adds that, tragically, the current method also fails to fund the program adequately for the provision of early intervention and prevention services. Increasingly, it seems that the price of admission a family must pay in order to obtain help with parenting and family functioning is that their child must be abused or a juvenile offender. It is now time for California to consider a stronger commitment to serving families in need of help to properly address the challenges or raising healthy, responsible children.

Finally, CWDA points out that, California requires counties to provide a match in order to access state/federal funding made available to them through the state budget process. If a county does not provide a full match, it loses part of the state and federal funding available. The fiscal distress experienced by counties in the last decade has meant that individual counties have at times been unable to provide the required match. This financial distress has been caused by:

• state recession;

• declining property values, producing reduced property tax revenue;

• shift of county and city revenues by the State of California to the State General Fund; and

• voter resistance to county tax and fee increase proposals.⁽¹⁶⁰⁾

Federal foster care dollars under Title IV-E (see below), however, may only be spent when an eligible child is placed out of home. If a child is left in the home or returned to the home with services to assist the child and the family, the county loses the federal match of 50%. (See also Appendix G: Recommendations of the County Welfare Directors Association (CWDA))

II. Aid to Families With Dependent Children-Foster Care (AFDC-FC)

Payment generally occurs after thirty days. This is the state's largest account in the child protection area. AFDC-FC pays for the board and care costs of a child's placement and related administrative costs of placing children in foster family homes, licenced group homes, and more intensive treatment facilities.

Average Foster Care Payments Per Child/Month.

	Foster Family Homes	Group Homes	SED	AAP
1996-97	$586	$2,705	$3,970	$452

SED: seriously emotionally disturbed
AAP: Adoptions Assistance Program

In buying power the per child payments for family foster care declined 7% since 1989-90 and group home payments decreased 9.6%.⁽¹⁶¹⁾

The cost of caring for abused and neglected children has risen more sharply than has the number of children in care combined with inflation. This difference is explained in part by the fact that the placement rate of children in more expensive group homes has risen faster than the placement rate in foster(family) homes. (See table in Appendix G)

III. Adoption Assistance Account distributes funds to reimburse counties for subsidies paid to families to facilitate the adoption of "difficult to place" foster children, such as: a member of a sibling group which should remain intact; or by virtue of race, ethnicity, color, language, age, or parental background x will have difficulty being placed without subsidy. The Governor launched the Adoptions Initiative which in 1996-97 and 1998-99 resulted in more adoptions of foster children, necessitating increased funding to cover increased county claims to the State's General Fund.

IV. Office of Child Abuse Prevention is the major budget item dedicated explicitly to child abuse prevention. Existing projects include data collection, research projects, and education programs in local communities and schools.

V. Emergency Preparedness and Injury Control Program (EPIC)

EPIC includes a variety of small programs and activities. Among other things, EPIC conducts control programs for prevention of unintentional and intentional injuries. Injury control program functions include educational and informational activities. EPIC programs especially relevant to children include domestic and community violence prevention. There is a small Childhood Injury Prevention Program (CHIPP) in the MCH branch.⁽¹⁶²⁾

Unintentional and intentional injuries are the leading cause of death among California boys and girls age 1-20. Injury prevention program funding for children is disproportionately low in relation to injuries and death. The state's contribution to the EPIC program is less than three-quarters of a million dollars.

(For more information, see Appendix D: More About funding for California's Dependency System)

COUNTY FUNDING

County Trial Court Funding

Until this year County costs included juvenile court costs for dependency issues. In 1997 the Legislature agreed to assume responsibility for county trial court funding. Thus the State will now appropriate funds each year in the General Fund Budget for the county court operations. The Judicial Council will recommend the amounts for each county, on the advice of the Council's Trial Court Budget Commission. These recommended amounts will be based on standards, minimum service levels, and planning goals for county courts, established by the Judicial Council. The Council supported this change because it was seen as a means of providing consistency among the County Courts. Counties will annually pay to the state an amount equal to their expenditures for the courts and county fine and forfeiture receipts in fiscal year 1994-95. Beginning in 1998-9, the state will provide local governments additional relief of approximately $350 million.⁽¹⁶³⁾

Drug and Alcohol Treatment Programs: Although many children enter the Dependency System because of the drug or alcohol abuse by their parents, only a very small portion of child welfare dollars is spent on drug and alcohol abuse treatment services. The services relied upon by the dependency system for substance abuse treatment are largely community resources. These services are overburdened. County drug and alcohol administrators surveyed by the Department of Drug and Alcohol Programs estimated they would need a 150% increase in funding to provide drug and alcohol services to those eligible people who would seek services if they were available.⁽¹⁶⁴⁾

This has a significant impact on the county budget, since children remain in out-of-home placement if the substance abuse is not controlled.⁽¹⁶⁵⁾

See also County Welfare Directors Association Report above for discussion of County matching of funds for caseworkers.

FEDERAL CONTRIBUTIONS

All child protection programs in California are heavily dependent upon federal funding.

1. Title IV-E Foster Care pays 51.23% of the cost to AFDC-FC of the placement for children from families who are eligible, that is have incomes that qualified them for AFDC funding.

2. Title IV-B covered about 55.5% of the total costs of California's Child Welfare Services in 1996-97 but it is expected to drop back to 52.7% in 1997-98.

3. Title IV-E Adoption Assistance Program pays 30% of the costs of adoption and 51.23 % of adoption assistance in California

4. 15% of the costs of Office of Child Abuse Prevention are paid by the Federal Government.⁽¹⁶⁶⁾

CALIFORNIA'S TITLE IV-E CHILD WELFARE WAIVER DEMONSTRATION PROJECT

Background

As noted above, Title IV-E foster care funds are based on the number of federally eligible foster children in California and reimburse the state and counties what they pay for foster care. These funds are restricted to the board and care costs of the out-of-home placement and cannot be used for other program services. On the other hand, Title IV-B monies which fund Child Welfare Services are capped and funding for these services have not kept up with the needs of children and families.

California's Title IV-E Child Welfare Waiver Demonstration Project was approved by the federal Department of Health and Human Services (DHHS) on August 19, 1997, permitting implementation of three pilot projects serving approximately four thousand foster children in as many as 32 counties or locations over the next five years. Key sections of federal and state statute which currently limit the use of foster care funds will be waived, allowing the California Department of Social Services (CDSS) and participating counties to use available dollars with the flexibility needed to test innovative and more effective methods of providing welfare services. The three project components are as follows:

The Extended Voluntary Placement Component will extend federal funding for voluntary placements from the present one-year restriction for a further six to twelve months under specific conditions, with management review and approval. This change will allow children with a good chance for reunification to stay in temporary care for more than a year. It is also expected to reduce court and casework costs. (See also Chapter I: The Juvenile Court, the section on Voluntary Placements)

The Kinship Permanence Component will allow specified adolescent children living in long-term, stable, relative placements to continue receiving a federal foster care payment after guardianship is established and dependency is dismissed, provided specific conditions are met. This is expected to promote permanency and reduce court and case management costs. (See also the Chapter III: California Child Welfare Services, the sub-chapter on Kinship Care)

The Intensive Services Component will permit participating counties to use Title IV-E funds for service costs necessary to reduce out-of-home placements and/or divert children in placement to permanent, family settings. (For more on this see Chapter III: California Child Welfare Services, the sub-chapter on Wraparound Services)

Intent

The waiver is an attempt to provide more flexibility to the counties. It is hoped that the project will promote permanence for children and families, divert some children and families from the juvenile court system, and facilitate the provision of services to children who are in permanent placement in families in the child's community at no additional cost to the federal, state, or county government.⁽¹⁶⁷⁾ The project has been designed to be cost neutral to federal, state and county governments.

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