Statement of National Governors Association

The National Governors Association respectfully submits its current Child Welfare policy (HHS-14. Child Welfare Services) for inclusion in the official hearing record on Improving the Child Welfare System. NGA appreciates the opportunity to weigh in on the challenges confronting our child welfare programs, and the direction needed to ensure the safety and well-being of all children who come into contact with the Child Welfare system.

14.1 Preamble

The nation's Governors believe that, whenever possible, children are best cared for by their families in a safe and stable environment. Further, Governors support the goals of safety, permanency, and well-being for all children who come into contact with the child welfare system, and are committed to accountability to promote positive outcomes for children and families.

Throughout the nation, states and territories have made significant progress in shifting towards a child welfare system based on outcomes and accountability. States and territories are currently working to develop and implement new, innovative approaches to addressing the issues of safety, permanency, and well-being for children. All 50 states and Puerto Rico have completed their initial Child and Family Service Review (CFSR), and have implemented program improvement plans to increase their performance.

Governors are proud of the dramatic increases in the number of adoptions from the public child welfare system over the past few years and of the reforms they are implementing to address the CFSR outcomes. The federal method of rewarding this progress, however, actually creates a disincentive to those states that had high rates of adoptions from the public child welfare sector during the baseline year. Despite this progress, Governors believe that changes to the current system of child welfare financing could help to further improve states' ability to provide critical child welfare services to families and to meet the required outcomes. A strong federal-state partnership is needed for the entire range of child welfare services—from prevention and protective services to family services, foster care, independent living services (generally ages 18-25), and adoption assistance. While maintaining the Title IV-E entitlement, Governors believe states should be given greater flexibility in the administration of child welfare programs and in deciding how Title IV-E dollars are spent.

14.2 Current Program Challenges and Recommendations

Greater flexibility in the child welfare system would allow states and territories to develop a more coordinated approach to serving children and families, to more effectively direct existing resources where they are most needed, to more appropriately address family situations on a case-by-case basis, and to reach desired outcomes. The financing structure and current challenges of the child welfare system have become increasingly complex, and these new complexities call for reform.

Governors applaud recent efforts by Congress and the Administration to explore options for greater funding and administrative flexibility for state child welfare systems, and urge continued work in this direction while maintaining the Title IV-E entitlement and the protections for children contained in federal law. Any change in the financing structure of the child welfare system should be developed in consultation with states. In addition, while Governors are committed to improvement in the child welfare system, change in the federal financing of the system should not come at the expense of other valuable human services programs that are also crucial to families in need.

14.2.1 Flexibility in the Use of Title IV-E Funds

Challenges. While the Adoption and Safe Families Act of 1997 (ASFA) created a number of new mandates on states and territories, and set high expectations regarding outcomes, no additional federal funds were provided to meet these requirements. Greater flexibility could help states and territories maintain compliance with ASFA requirements and continue achievement of the ASFA outcomes of safety, permanency, and well-being.

The current child welfare financing structure does not support the desired outcomes and goals of the child welfare system. Specifically, the majority of federal funding for child welfare programs is targeted towards out-of-home care, with a much smaller portion of federal funds focused on services that protect child safety, prevent the need for out-of-home placement, promote family stability or reunification when appropriate, and promote adoption.

Recommendations. While preserving the Title IV-E entitlement, Congress should consider expanding the allowable use of Title IV-E funds beyond room and board payments so that states and territories could more appropriately tailor services to the needs of specific families. For example, additional options for use of funds could include prevention services, substance abuse treatment, post-adoption services, educational assistance for child welfare staff, post guardianship services, services to young adults who age out of foster care (generally ages 18-25), and emergency funding to help keep families together. In addition, Congress should restore the reimbursement of administrative costs for activities related to placements of IV-E eligible children with relatives who are unable to be licensed as foster parents.

With a majority of the foster care and adoption placements done through contracts with private and nonprofit agencies, Governors believe that states should be eligible to utilize Title IV-E funds for the purpose of training contract workers and be reimbursed at the same rate as their state agency workers, with private and nonprofit agencies providing the required matching funds.

14.2.2 Flexibility in Addressing Substance Abuse, Domestic Violence, and Mental Health Issues

Challenges. The majority of children who enter the child welfare system have families with alcohol and drug problems. States and territories also face the growing concern of increasing numbers of children from families with domestic violence and mental health issues.

Recommendations. Given the increasing number of children entering the child welfare system from families with substance abuse, domestic violence, and mental health issues, Governors believe Congress and the Administration should explore options within existing programs to increase state flexibility in order to address these issues.

14.2.3 Title IV-E Reimbursement, Income Eligibility, and Geographic Location

Challenges. The federal government should have a commitment to all children in foster care and adoption regardless of a family's income and regardless of the participating jurisdiction in which the child lives. Because of the link between Title IV-E and the former Aid to Families with Dependent Children (AFDC) rules, many children are not eligible for federal foster care assistance. Further, basing eligibility on the outdated "look back" date of July 16, 1996, poses a heavy administrative burden on states and has the unintended consequence of causing fewer children to be eligible for federal foster care assistance. In addition, funding for foster care services in the territories is subject to an arbitrary funding cap. States, local governments, and territories are committed, nonetheless, to providing fundamental protection services to all children, meaning that, in many cases, states, local governments, and territories are primarily responsible for funding services.

Recommendations. Congress, in consultation with states, should explore options to eliminate the outdated "look back" provision that ties AFDC eligibility to eligibility for federally reimbursed foster care or subsidized adoption under Title IV-E, and should review the impact of Title IV-E funding caps in territories on access to vital services. While recognizing that this could be a costly endeavor, Governors believe that ideally all children in care, including abandoned infants, and regardless of family income or jurisdiction, should be treated equally. At a minimum, the Title IV-E income eligibility level should be adjusted for inflation to address the current problem of fewer children being eligible for foster care each year because eligibility is based on the AFDC income level as of July 16, 1996.

14.2.4 Title IV-E Waiver Authority

Challenges. The recent congressional decision to allow the waiver structure for Title IV-E to expire places a severe strain on states to provide services that promote child well-being and family permanency, such as assisted guardianship, tribal administration, and post-adoption services. In order to most effectively address the needs of children and families, state innovation should be encouraged rather than prohibited.

Recommendations. Governors strongly urge Congress to reauthorize Title IV-E waiver authority. The waiver process should be viewed as an opportunity to provide states with greater flexibility to achieve broad system change to better serve children and families, not as just an opportunity to test and evaluate new ideas. Governors are supportive of increased waiver authority within the child welfare system.

14.3 Collaboration with Other Health and Human Service Programs and the Courts

Given the increasingly interconnected nature of human service programs, states and territories rely on other federal funding streams to assist in providing coordinated services to families. These include Title XX/Social Services Block Grant (SSBG) and Temporary Assistance for Needy Families (TANF), especially in the areas of kinship care and family preservation; and Medicaid, which is often used for targeted case management. Despite these growing demands, funds for Title XX/SSBG have been significantly reduced over the past few years—directly impacting child welfare programs in many states. In addition, the transfer from TANF to Title XX should be as flexible as possible with at least the maintenance of the 10 percent transfer amount.

Increasingly, states' abilities to use Medicaid funding to implement targeted case management for children in the child welfare system have been restricted. Governors encourage the Administration to make it easier for states to use Medicaid funding to implement targeted case management for children in the child welfare system. The federal CFSR has identified a need for the states and federal government to focus on improving physical and mental health outcomes for children in the child welfare system. Governors believe that targeted case management under Medicaid is a viable resource that the Administration should encourage states to use to achieve these outcomes, rather than discouraging its use.

Governors also recognize that it is not possible for states to be in compliance with the new outcomes and timelines as set forth in ASFA without adequate resources for, and cooperation and collaboration with, the courts. Congress and the Administration should, to the extent possible, encourage such collaboration.

14.4 Federal Reimbursement of Kinship Care and Guardianship

Governors believe that in many cases there are a number of viable options for children in need of care, including kinship care. While kinship care and other guardianship arrangements are currently reimbursable under TANF, Governors believe that Congress should consider amending Title IV-E to provide states the option of seeking further federal reimbursement for children who would otherwise be in subsidized federal foster care. Such assistance would provide greater permanency and stability to children and families. The federal government should also authorize state child protection agencies to run national criminal history background checks to ensure that children are not being placed in the home of someone with a history of violent crimes or sexual offenses.

14.5 Title IV-B Funding

Funding for front-end and preventive services, such as those funded through Title IV-B, have remained stagnant, with only small increases at best. Even when accessing Title IV-B funds, the mechanism is very prescriptive and discourages innovative practice. Governors encourage increased federal support for preventive services through Title IV-B funding.

14.6 Reinvestment Program for Disallowance

States are subject to a fiscal penalty (disallowance) if, upon completion of a primary or secondary Title IV-E foster care eligibility review or a CFSR, they are found to not be in substantial compliance with federal regulations and requirements. When states are assessed these disallowances, they must return the federal funds that have already been received to provide foster care to abused and neglected children, eliminating the opportunity for states to use the funds to correct the deficiencies found in the reviews and improve the program. Governors support a reinvestment program that would permit states to dedicate penalty dollars to correct the deficiencies, which would also support states' other efforts and initiatives to improve their child welfare system.

14.7 Court Involvement and Title IV-E Eligibility

There are occasions when a parent is actively responsible and appropriately planning for his or her child's future by executing such a document. In order for a child in these circumstances to currently become Title IV-E eligible, there would have to be court action with the requisite judicial determinations concerning best interests of the child and actions taken by the state agency to prevent placement of the child.

14.8 Family Placement and Title IV-E

Eligibility Governors encourage and support relative placements. Governors encourage the federal Administration for Children and Families to approve Title IV-E state plan amendments that permit a child to be determined Title IV-E eligible based upon the home from which he or she is removed or in the home of some other specified relative with whom he or she lived at some point during the six months prior to the child's removal. Many family members step forward to help care for a child when parents cannot. This can occur several months or more prior to involvement by state child welfare agencies. For these situations, it is possible that a child will be found ineligible for Title IV-E foster care because family members struggled for an extended period of time prior to seeking financial assistance or placement in foster care from the state child welfare agency.