State: California Will Lose $320 Million in Child Welfare Funding if Waiver Ends

Nine California counties currently have Title IV-E waivers, which provide child welfare agencies with greater flexibility in how they can spend federal child welfare money. But that arrangement is due to come to an end in September, leading to concerns about the impact on child welfare budgets in those counties.

According to California child welfare officials, the state’s foster care system will take a big hit if federal Title IV-E waivers are allowed to expire at the end of September.

“Our counties are likely to see a decrease of federal funds in the neighborhood of $320-some odd million at the conclusion of the waiver,” said Greg Rose, deputy director of the Children and Family Services Division of the California Department of Social Services (DSS), in a state budget hearing last week.

Title IV-E is the major federal funding mechanism for foster care, used by county and state child welfare agencies to cover the costs of the care and supervision of children in out-of-home placements. Since 2006, some jurisdictions across the country have been able to use a waiver that allows flexibility for a fixed funding amount, which can be used on services and supports beyond just the cost of foster care placements and their administration.

The passage of the Family First Prevention Services Act last year brought bold changes to the financing of child welfare. With the new law, the federal government is now opening up the Title IV-E entitlement to include some prevention services for families at risk of having their children enter foster care.

But even with flexibility on the horizon, Los Angeles County is leading a coalition of other waiver counties and states in an effort to maintain the status quo. A bill introduced in the Senate by Sens. Dianne Feinstein (D-Calif.) and Marco Rubio (R-Fla.) would extend the waiver arrangement until 2021.

In California, the nine counties under the waiver — which comprise more than half of all foster children in the state — include Alameda, Butte, Lake, Los Angeles, Sacramento, San Diego, San Francisco, Santa Clara and Sonoma counties.

According to a recent Child Trends national survey of how states used waiver funds in 2016, 73 percent of waiver funds were spent on children eligible under Title IV-E foster care. Of the remaining 27 percent, 10 percent was spent on services and activities not previously allowable under Title IV-E, and the rest was used for children who would not have been eligible for services without the waiver.

California was one of three waiver states that did not respond to the Child Trends survey, but according to data obtained from California DSS by The Chronicle of Social Change, California spent about 77 percent of its total waiver dollars on services and activities reimbursable under Title IV-E in eight quarters from December 2015 until September 2017.

Rose of the DSS said that California is “likely to implement the federal [Families First Act] law in 2021,” leaving waiver counties in a bind over the next two years barring any federal legislation to extend the waiver.

Rose said all nine waiver counties in California do have a “phase-down plan” to adjust to the potential end of the waiver.

But he said the state is now shifting to looking at how it can implement the Family First Act. That means waiting on the Department of Health and Human Services to expand a short list of approved models and program for prevention that are eligible to receive cost sharing from the federal government. Rose said that the list has little crossover with what waiver counties are now employing for prevention and early intervention services.

“Clearly, we’ll be using the next two years until 2021, in addition to lining up to what we need to do to implement [the congregate care reform portion of the Family First Act] … we will be working on a way to look at how could some of these young people who are candidates [for foster care] and their families get services and at the same time, we’ve been lobbying the government to expand the list [of approved programs] … We will be doing what we can to work with our county colleagues to maximize whatever we can from the new federal law.”

John Kelly contributed to this story.

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Jeremy Loudenback
About Jeremy Loudenback 320 Articles
Jeremy is the child trauma editor for The Chronicle of Social Change.