ACYF-CB-IM-03-06

ACF Administration for Children and Families	U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES Administration for Children, Youth and Families
	1. Log No.: ACYF-CB-IM-03-06	2. Issuance Date: November 24, 2003
	3. Originating Office: Children's Bureau
	4. Key Words: FY 2004 Child Welfare Demonstration Projects

INFORMATION MEMORANDUM

To:	State Agencies Administering or Supervising Administration of Titles IV-B and IV-E of the Social Security Act
Subject:	Child Welfare Demonstration Projects for Fiscal Year 2004
Legal and Related References	Title IV-B of the Social Security Act Title IV-E of the Social Security Act Section 1130 of the Social Security Act, as amended by Public Law 105-89, Public Law 108-40 and Public Law 108-89.
Purpose:	The purpose of this Information Memorandum is to announce that the U.S. Department of Health and Human Services (Department) is inviting States to submit proposals for new child welfare waiver demonstration projects for consideration in fiscal year 2004. The Information Memorandum informs interested parties of: (1) the procedures the Department expects States to employ in involving the public in the development of proposed demonstration projects under Section 1130; (2) the procedures the Department will follow in receiving and reviewing demonstration proposals; and (3) the principles and procedures the Department will follow in exercising its discretion to grant demonstration projects under the authority in Section 1130(a) of the Social Security Act (the Act).
Due Date:	For fiscal year 2004 demonstrations, Letters of Intent should be submitted by December 19, 2003 and proposals submitted by January 23, 2004. The Department advises States that the current legislative authority for approving new child welfare demonstration projects will expire on March 31, 2004. While Congress may enact legislation to extend the authority beyond that date, submitting materials by the due dates mentioned above will provide a better assurance of consideration within the current fiscal year, prior to the expiration of the legislative authority. Letters of Intent and proposals should be submitted to Dr. Susan Orr, Associate Commissioner, Children's Bureau, Administration on Children, Youth and Families, U.S. Department of Health and Human Services, Room 2068, 330 C Street, S.W., Washington, D.C. 20447, ATTN: Child Welfare Demonstration Projects. States are asked to provide a copy of their proposals to their respective ACF Regional Administrators. A list of the names and addresses of Regional Administrators may be found at Appendix II.
For Further Information:	See the ACF Website at http://www.acf.hhs.gov/programs/cb/ or contact Gail Collins, Children's Bureau, Administration on Children, Youth and Families, HHS at (202) 205-8552.

Supplementary Information:

Section 1130 of the Social Security Act (Act), as amended, provides the Department of Health and Human Services with authority to approve up to ten State child welfare demonstration projects per year. These demonstration projects involve the waiver of certain requirements of titles IV-E and IV-B, the sections of the Act that govern foster care and adoption assistance and related expenses for program administration, training, and automated systems, as well as the Chafee Foster Care Independence Program (independent living services), child welfare services, and the Promoting Safe and Stable Families program.

The Child Welfare Demonstration Project authority was first authorized by Congress in 1994 and then was expanded and extended as part of the Adoption and Safe Families Act (ASFA) of 1997 (Public Law 105-89). The ASFA authorized the Department to approve up to ten State child welfare demonstrations in each of the five fiscal years (FYs) 1998 - 2002. The legislative authority to approve new projects lapsed at the end of FY 2002 and was not reinstated until June 30, 2003, when the President signed into law P.L. 108-40, the Welfare Reform Extension Act of 2003, which included a provision extending the Secretary's authority to approve new child welfare waiver demonstration projects through fiscal year 2003. Because this law was enacted late in the fiscal year, it was not practicable for the Department to solicit, review and approve new demonstration projects before September 30, 2003, when the authority was again set to expire. However, on October 1, 2004, the President signed into law P.L. 108-89, a law to extend the Temporary Assistance for Needy Families (TANF) Program and certain other provisions, including the child welfare demonstration authority, through March 31, 2004. Therefore, the Department is now inviting proposals for new child welfare demonstration projects. It is likely that the Congress will consider additional legislation, extending the child welfare authority beyond March 31, 2004. Should this occur, the Department will notify States of the length of the extension and any other changes to the legislative authority.

In exercising its discretionary authority to approve new demonstration projects, the Department has developed a number of policies and procedures for reviewing proposals. In order to ensure a sound, expeditious and open decision-making process, the Department will be guided by the policies and procedures described in this Information Memorandum in accepting and reviewing proposals submitted pursuant to Section 1130 of the Act.

Background

State child welfare systems throughout the country continue to face many challenges in meeting the complex needs of the children and families they serve. Over the past several years, the Nation has made important strides in reforming child welfare services. The passage of ASFA and other legislative reforms, the development of national outcome measures, and the implementation of the new, results-oriented Child and Family Services Review (CFSR) process have solidified a national consensus on the key goals for child welfare: assuring children's safety, meeting children's needs for timely permanency in a loving family, and promoting child and family well being. States and the Federal government have also developed policies and programs and an infrastructure to track progress toward meeting them. There has also been notable progress in some areas, most notably in the area of adoption, with the annual number of children adopted from foster care increasing from 31,000 in FY 1997 to 51,000 in FY 2001.

The CFSR, combined with improved data collection overall, is providing more and better information than ever before about the current state of child welfare services, both strengths and weaknesses. The CFSR is the Federal government's process for monitoring the performance of State child welfare agencies with regard to State plan requirements that affect the outcomes of services for children and families. Through this process, the Administration for Children and Families partners with States to conduct comprehensive assessments of child welfare practice and outcomes, using a combination of quantitative and qualitative information. Each review includes a comprehensive statewide self-assessment phase, followed by a week-long, intensive review of a sample of cases and interviews with State and local stakeholders. The reviews assess State performance on seven outcomes within the domains of safety, permanency and well-being, as well as seven systemic factors. At the conclusion of the review, the Federal government prepares a report identifying whether or not the State was found to be in substantial conformity on each of the outcomes and systemic factors. States must prepare a Program Improvement Plan to address any area in which the State is not in substantial conformity.

As of the end of FY 2003, 43 States, plus the District of Columbia and Puerto Rico, have been reviewed. By March 31, 2004, all the remaining States will have been reviewed. The standards used for reviewing States are high and, based on the findings to-date, the Department anticipates that all States will need to enter into Program Improvement Plans.

While the reviews have identified both strengths and areas needing improvement in each State, some common themes have emerged from the reviews:

All States are struggling to help children in foster care move on to more permanent living arrangements in a timely manner, whether it is through adoption, reunification with their parents, or placement with other relatives.
In a number of States, children lack stability in their living arrangements, moving from one temporary placement setting to another.
In all States, both the child welfare agencies and the courts play important roles in helping children to achieve timely permanency, and both must work together to make improvements in this area.
States are also having a difficult time in meeting the well-being needs of children and their families. One example is the need for greater attention to the mental health needs of children, including conducting routine assessments of children's mental health and providing appropriate services where needed.
The lack of access to critical services is also a major problem in many States, particularly States with large rural populations. Without access to the services they need, many families are unable to care for their children properly and, in many situations, this prolongs the amount of time that State child welfare agencies must provide alternate care for children.
Another issue that States need to examine is the availability of services that are culturally and linguistically accessible to families. The reviews are revealing what other research has shown - that children of color, including Hispanic as well as African American children, are over-represented in the foster care system. States must continue to work to make available services that meet the needs of the culturally diverse child welfare population, including providing access to service providers who speak Spanish and other languages spoken by families being served by the child welfare system.
In many States, the reviews have also identified a need for child welfare agencies to pay much greater attention to fathers and their roles in caring for their children. This includes involving fathers in case planning and service delivery.
Further, the CFSR results show important differences in the level of services provided to intact families, as opposed to families whose children are in foster care, often with less attention to the intact families. Many States will need to strengthen the up-front preventive services they provide to intact families if they are to be successful in preventing the unnecessary break-up of families and in protecting those children who remain at home rather than being placed in foster care.
The reviews have also identified some important areas where the efforts of State child welfare agencies efforts are leading to improved outcomes for children and families. For example, across the more than 1500 cases reviewed in FY 2001 and FY 2002, the Department identified a strong positive relationship between frequent caseworker visits with the children in their caseloads and improved outcomes for those children, including more timely permanency for children in foster care, which is one of the most difficult areas for States to address effectively.

Objectives

The Department encourages States to use the flexibility under the demonstrations as a vehicle to test innovative alternatives and new approaches that will produce positive outcomes for children, youth and their families. The child welfare demonstration authority provides an opportunity for States to design and test a wide range of approaches that respond to the unique needs of their own child welfare systems and to respond in a creative and targeted manner to areas identified through the CFSR as in need of improvement. In addition to providing States with greater flexibility in the use of their Federal child welfare funds to implement new strategies, the demonstration projects include a strong evaluation component that will help States to learn the extent to which new interventions are successful in addressing identified areas.

While an important tool for individual States, the child welfare waiver demonstrations also are intended to contribute to the national evidence base on effective strategies for serving children and families coming to the attention of child welfare agencies. By generating improved knowledge, the demonstration projects can lead to improvements in the delivery, effectiveness and efficiency of services within States and across States and can inform the development of future national policies and program directions.

Since 1996, 17 States have implemented 25 child welfare waiver demonstration project components through 20 title IV-E waiver agreements. (Some States have multiple waiver agreements, and some waiver agreements have multiple components.) Several States have either completed or chosen to terminate early some or all of their demonstration project components. Currently, 12 States have active demonstration projects involving 17 programmatic components. Among the innovations being tested are assisted guardianship/kinship permanence, managed care/capitated payment systems, the flexible use of Federal funds at the community level, intensive service options, substance abuse services, and tribal administration of title IV-E foster care funds. (Additional information on the previously approved demonstrations may be found at http://www.acf.hhs.gov/programs/cb/programs_fund/index.htm#child)

While the Department is committed to working with States to consider a range of proposals, it may disapprove or limit proposals on policy grounds or because the proposal creates potential constitutional problems or violates civil rights laws or equal protection requirements. The Department encourages States to consider innovative approaches that have not yet been tested or strategies that could assist the child welfare field in building a knowledge base on new and creative practices. However, the Department also recognizes the utility of testing interventions in more than one location and, therefore, invites States to submit proposals to replicate interventions being tested elsewhere. In addition, the Department is requiring that States address how the proposed demonstration will address the findings of the State's Child and Family Services Review (including the statewide assessment, final report or Program Improvement Plan, as appropriate, depending on the status of the State in the CFSR process.)

General Considerations

The guiding principles for the implementation of a child welfare demonstration project remain largely unchanged from the original announcement for child welfare demonstration projects that was published in the Federal Register on June 15, 1995. The only major addition is the last requirement described below (added as part of ASFA) that States provide health insurance to adopted children with special needs in order to be approved for a demonstration project. Projects conducted under this authority must, according to statute:

Be consistent with the purposes of titles IV-B and IV-E of the Social Security Act in providing child welfare services, including foster care and adoption, that is:

-	assure the safety of children and protect the rights of children and their families; and
-	ensure permanency for children through intensive family preservation and support or through reunification or adoption or other permanency efforts;

Be cost-neutral to the Federal government for the duration of the project period;
Ensure that benefit eligibility to a qualified child or family will not be impaired; and
Provide health insurance coverage to any child with special needs (as determined under section 423(c)) for whom there is in effect an adoption assistance agreement between a State and an adoptive parent(s).

Preferences

Section 1130(a)(3), as amended, provides that certain types of proposals must be considered. They are proposals for:

-	a project designed to identify and address barriers that result in delays to adoptive placement for children in foster care;
-	a project designed to identify and address parental substance abuse problems that endanger children and result in the placement of children in foster care. This would include the placement of children with their parents in residential treatment facilities (including residential treatment facilities for post-partum depression) that are specifically designed to serve parents and children together in order to promote family reunification and that can ensure the health and safety of children in such placements; and
-	a project designed to address kinship care.

The Department will consider any such proposal, in accordance with all the requirements of the law and the priorities outlined in this Information Memorandum.

The Department is interested in proposals that would test policy alternatives that are unique, that differ in their approach to serving families and children, or that differ in significant ways from other proposals. Also of interest are proposals that address issues or topics already being studied, provided the proposed new demonstration holds promise for furthering the state of knowledge on that topic. The Department will give preference to proposals that provide for a rigorous evaluation of the proposed demonstration, preferably using a design based on random assignment.

In the event that more proposals are received than can be approved under the existing limitation of ten new demonstration projects per year, the Department may give preference to States that have not previously been approved for a child welfare demonstration project. However, States with already approved waiver demonstrations are, nonetheless, encouraged to propose additional demonstration projects.

Provisions Not Subject to Waiver

Section 1130 (b)(1) excludes certain provisions of titles IV-E and IV-B from waiver. They are:

Certain protections for children in foster care and their families, formerly required by section 427 of the Social Security Act (now section 422(b)(9), which, effective April 1, 1995, made those protections an element of a State's Child Welfare Services State Plan). These protections are fully explained in section 475 of the Act. This excludes from waiver: (1) all the protections having to do with periodic reviews of the status and progress of foster care cases; (2) permanency hearings (formerly called dispositional hearings) to determine or confirm the future plan for the child and to determine whether an independent living plan is needed for older children in care; (3) requirements that certain information be contained in a child's case plan; (4) protections for the child such as requirements that the placement be the most family-like setting and in close proximity to the parents' home; (5) protections for the family such as procedural safeguards to assure that parental rights are respected; and (6) the requirement that the State must file or join a petition for Termination of Parental Rights for children in care 15 of the last 22 months.
Section 479 that establishes the Adoption and Foster Care Data collection requirements.
Any provision of title IV-E to the extent that a demonstration project would impair the entitlement of any qualified child or family to benefits under Part E.

In addition, the Department has determined that it will exclude from waiver those provisions of sections 471 (a)(8) and (12) which provide for confidentiality and fair hearings, respectively. All other provisions may be waived at the discretion of the Secretary.

Limitations

Section 1130(a)(4), as amended, limits State eligibility for child welfare demonstration projects. The Secretary may not approve a demonstration project for any State that fails to provide health insurance coverage to any child with special needs (as determined under section 473(c) of the Act) for whom there is in effect an adoption assistance agreement between a State and an adoptive parent or parents.

Section 1130(a)(5) requires the Secretary to consider the effect of any proposed demonstration submitted by a State in which there is a court order in effect that determined that the State's child welfare program failed to comply with titles IV-B or IV-E of the Social Security Act or the U.S. Constitution. Therefore, the Department requires that all proposals must: (1) identify any such court order in effect; and (2) provide an analysis of whether that proposed demonstration would have any effect on any such court order and, if so, how.

Any State that has an approved demonstration and wishes to propose a new, additional child welfare demonstration should submit a new proposal. Extensions of existing child welfare demonstration projects will not be considered under this Information Memorandum. (There is a separate procedure for submitting requests to extend or amend already approved demonstration projects.)

Duration

Section 1130 (d) of the Act, as amended, limits the duration of the demonstration to not more than five years unless in the judgment of the Secretary, the demonstration project should be allowed to continue. The Department will consider demonstrations with a duration of less than five years and will work with States to:

Approve demonstration projects of sufficient duration to give new approaches a fair test. The duration of the approval should be commensurate with the magnitude and complexity of the project. For example, a large-scale program may require the full five years. Smaller projects, for example a one-to-several county demonstration effort, may demonstrate their effectiveness and utility in a shorter period of time;
Provide reasonable time for the preparation of meaningful analyses and the preparation of evaluation reports for the demonstration project; and
Determine a reasonable start date for the project, recognizing that new approaches often involve considerable start-up time.

Evaluation

Section 1130 (f) requires that each State authorized to conduct a demonstration project must obtain an evaluation by an independent contractor to assess the effectiveness of the project. The evaluation plan, at a minimum, must provide for:

a comparison of outcomes for children and families in the child welfare demonstration project and children and families being served under the existing State plan or plans, for the purpose of assessing the relative effectiveness of the project in achieving program outcomes; and
a comparison of methods of service delivery under the project and such methods under a State plan or plans, with respect to efficiency, economy and any other appropriate measures of program management; and
a comparison of the fiscal consequences of the project for State and local jurisdictions, families, other agencies, and the Federal government and an assessment of the cost effectiveness of the project.

Section 1130(e)(1) requires that the proposal include a description of both the children and families who would be served by the demonstration project and the services that would be provided. The Department is committed to testing a range of program strategies. The Department strongly encourages that the proposals provide for random assignment of children and families to groups served under the project and control groups. Experience has shown that the random assignment approach easily addresses both evaluation and cost-neutrality issues and is the most appropriate method of evaluation for demonstrating the effectiveness of interventions. However, the Department will consider other rigorous evaluation designs that provide reliable data for the duration of the demonstration project, for example, matched samples, regression discontinuity design or comparison groups. If a state chooses an evaluation option other than random assignment, the State must propose an equally reliable and effective cost-neutrality formula.

The evaluation of the approach to be implemented should be as unobtrusive as possible to the clients, while ensuring that critical lessons are learned from the demonstration effort.

The costs of the required independent evaluation of each State's demonstration project will be excluded from the cost-neutrality calculation. In addition, the costs for the development of the proposal and the evaluation design, as well as the costs of the evaluation itself, may be charged to title IV-E administrative costs without cost allocation, so that States may claim a full 50 percent of these costs as title IV-E administrative costs.

The Department has awarded a national contract to collect information from the approved demonstration projects; to produce annual reports for the Department and the general public; to collect, synthesize and report on the results of the individual States' evaluations; to organize an annual meeting of demonstration States and their evaluators; to assist selected States in resolving evaluation problems; to assist the Department in assuring that States with approved demonstrations are informed of and able to profit from the experience of other demonstration States; and to prepare a national summary of the child welfare demonstrations at the completion of the project periods. All States proposing a demonstration must provide an assurance that they will agree to cooperate and collaborate in this evaluation effort.

Cost-Neutrality

Section 1130 (g) requires that the demonstration project be cost-neutral over the period of the demonstration, that is, the total amount of Federal funds used to support the demonstration over the approved project period will not exceed the amount of Federal funds that would have been expended by the State under the State plans approved under Parts B and E of title IV of the Act, if the Demonstration project were not conducted. The Department will determine at the beginning of each demonstration that the project can be reasonably expected to be cost-neutral over its projected duration. The Department will work with a State to devise a method for calculating cost-neutrality in advance of approval, so that the project will be cost-neutral as the demonstration progresses, and the State will not be at risk of accumulating any debt under the demonstration. The Department has developed a fairly standardized formula for tracking cost-neutrality that may be used by most States and will share this methodology with the States as part of its technical assistance efforts. The Department will continue to examine quarterly claims and otherwise monitor demonstration projects to track interim results and spending and to assure Federal cost-neutrality as the demonstration project progresses.

The Department expects to participate only to a very limited extent in the financing of any project that requires significant "up-front" expenditures in excess of that amount in order to produce a return on the investment in the later stages of the demonstration. The Department will impose a cap on the payment of costs for "up-front" expenditures, at a maximum of roughly five percent above the amount derived by the cost-neutrality formula for a particular quarter or cumulatively from the beginning of the project. Payment to a State above the amount determined to be cost-neutral for the quarter will be limited to the early quarters of the project. The determination that a project will be cost-neutral in concept will be made before a demonstration project begins.

The Terms and Conditions will prescribe a standardized formula by which each State calculates and claims the amount of title IV-E and IV-B funds to which it would otherwise have been entitled in the absence of the demonstration. Typically, the project evaluation will also provide data necessary for the calculation of cost-neutrality, another reason for the emphasis on a reliable method of evaluation and the strong preference for a random assignment methodology.

States are expected to use any Federal funds that are saved or freed up under a demonstration and that are not expended for purposes approved as part of the demonstration for child welfare purposes authorized by parts B and E of title IV. In order to be able to claim the full amount of title IV-E Federal Financial Participation (FFP) for any title IV-E funds that would be allowed under the cost-neutrality formula, a State must first expend sufficient non-Federal funds for such child welfare purposes. States will continue to claim FFP for non-demonstration title IV-E activities under the standard procedures.

Along with other project results, fiscal effects of the project will be carefully monitored as a key element of the evaluation as the demonstration project progresses. A demonstration will not be approved if the Department determines that up-front costs present too great a risk to the maintenance of cost-neutrality over the life of the project. Should the Department determine, in the course of a demonstration, that State costs exceed a cost-neutral amount, the Department will discuss with the State any modification the State may need to take to ensure cost-neutrality.

States may be required to adapt relevant aspects of a demonstration to changes in Federal legislation within a reasonable period of time.

State Notice Procedures

The Department recognizes that individuals and groups who may be affected by a demonstration project have a legitimate interest in learning about proposed projects and must have an opportunity to provide input into the decision-making process prior to the time a proposal is approved by the Department. The Department requires that States notify the public that a child welfare demonstration project is being proposed and provide an opportunity for comment.

A process that facilitates public involvement and input promotes sound decision-making. There are many ways that States can solicit such input and the Department will accept any process that:

Includes the holding of one or more public hearings at which the most recent working proposal is described and made available to the public and time is provided during which comments can be received;
Uses a commission or other similar process, where meetings are open to members of the public in the development of the proposal;
Results from enactment of a proposal by the State legislature prior to submission of the demonstration proposal, where the legislature holds one or more public hearings and the outline of such proposal is contained in the legislative enactment;
Provides for formal notice and comment in accordance with the State's Administrative Procedure Act, provided that such notice must be given at least 30 days prior to submission;
Includes notice of the intent to submit a demonstration proposal in newspapers of general circulation and provides a mechanism for receiving a copy of the working proposal and a reasonable opportunity, e.g., 30 days, to comment on the proposal; or
Includes any other similar process for public input that would afford an interested party the opportunity to learn about the contents of the proposal and to comment on it.

The State child welfare demonstration project shall include a description of the process that was used in the State to obtain public input. If the Department determines that the process was inadequate to meet the standards set forth above, the State can resolve the inadequacy by posting a notice in the newspaper of widest circulation in each city with a population of 100,000 or more, or in the newspaper of widest circulation in the State if there is no city with a population of 100,000, indicating that a demonstration proposal has been submitted. Such notice shall describe the major elements of the proposed demonstration and any changes in benefits, payments, responsibilities or provider selection requested in the proposal. The notice shall indicate how an interested person can obtain copies of the proposal and shall specify that written comments will be accepted by the State. The State should maintain a record of all comments received through this process.

States must advise the public that comments regarding the proposed child welfare demonstration project can be made directly to ACYF. Written comments can be submitted to the Children's Bureau, ACYF, Room 2068, 330 C Street, S.W., Washington, D.C. 20447.

States that materially revise their proposals after they are first submitted to the Department may be required to solicit public comment on any modification of consequence on which the public otherwise had no opportunity to comment.

As noted above, all decisions about approval of a child welfare demonstration proposal will be delayed until both the State-level and the Federal-level aspects of the public comment process are completed.

Proposal Submission Procedures

A two-step procedure is provided to speed the review process and focus the Department's programmatic and technical assistance efforts. The steps, described below, involve the State submitting a letter of intent, followed by a full proposal at a later date. The Department will begin working with a State to respond to specific questions upon receipt of its letter of intent. While the Department will review proposals not preceded by a letter of intent, the two-step process will facilitate provision of technical assistance to States and assist the Department in planning for the review of all proposals.

Please note that any State interested in being approved for a demonstration project in FY 2004 is asked to submit a letter of intent and proposal, even if one was previously submitted for consideration in FY 2002 or an earlier year. Because a significant amount of time has elapsed since proposals were last considered, the Department wishes to assure that proposals or letters previously submitted remain of interest to the State.

Letter of Intent

States interested in a child welfare demonstration are urged to submit a letter of intent by December 19, 2003. The letter of intent should indicate the State's intention to submit a proposal, and briefly describe the demonstration project, how it relates to the findings of the State's CFSR, and the method of evaluation that the State is considering.

Proposals

Proposals for new child welfare demonstration projects should be submitted by January 23, 2004. Proposals submitted after that date will be considered, but are unlikely to be approved before the expiration of the current legislative authority on March 31, 2004.

Proposals will be easier to review and will require less time for negotiation and approval, to the extent that they are developed with the active involvement of both programmatic and financial officials from the State and address all of the following points:

State the problem and clearly describe the proposed project. This description should include an explanation of the issue to be addressed and the intervention proposed. The proposal should outline the specific goals and outcomes the State expects to realize at the end of the demonstration effort, including how service provision will have changed for children and families.
Describe how the proposed project responds to the findings of the State's Child and Family Service Review (including the statewide assessment, final report or Program Improvement Plan, as appropriate, depending on the status of the State in the CFSR process).
Articulate the hypothesis that will be tested through the implementation of the program evaluation.
Delineate the proposed program intervention with a description of the nature and scope of services that will be provided by the proposed project.
Present specific and well-developed goals and outcomes that the State will use to measure the performance of the project.
Identify the target population to be served. Present demographic information, including the geographic area(s) in which the proposed project will be conducted; a description and an estimate of the number of children or families who would be served by the proposed project; and the estimated number of title IV-E cases involved.
Present a rigorous evaluation plan (preferably employing random assignment) that will enable the State to accurately determine the impact and effectiveness of the program intervention. Include a description of the evaluation design. If the State proposes an alternative to random assignment, the proposal must explain why random assignment is not appropriate and describe how the State's proposed alternative methodology would meet evaluation needs. The evaluation design must include a clear statement of the evaluation questions.
Present a reliable method of ensuring cost-neutrality. Include an estimate of the costs or savings of the project, along with a description of the basis for projecting that the project would be cost-neutral overall. Please note that during the course of the demonstration project a State may not make any procedural changes that would have the effect of nullifying the function of a control group in providing a means to assure cost-neutrality.
Identify the steps taken to assure county, local or judicial cooperation as required by the project.
State the period during which the proposed project will be conducted.
State the statutory and regulatory requirements for which waivers will be needed to permit the proposed project to be conducted, and a specific proposal regarding the provision(s) of parts B or E of title IV for which the State proposes a demonstration project.
Describe any similar project already underway in the State that is supported by State or foundation funds and/or a statement of the State's ability successfully to implement the demonstration project.
Address whether/how the demonstration will affect the State's automated child welfare information system.
Describe methods used to obtain public input.
Describe any court order in effect anywhere in the State by which a court has determined that the State's child welfare program failed to comply either 1) with State child welfare laws or 2) with title IV-B, title IV-E or the Constitution, along with an analysis of whether the proposed demonstration project would have any effect on any such court order, and if so, how.
Provide an assurance that the State provides health insurance coverage for all special needs children for whom the State has entered into an adoption assistance agreement.

Either at the time the proposal is submitted, or at least by the time the State responds to the Issue Paper for its proposal, the State must supply a copy of letters of agreement between the State and any county, municipality, foundation, private agency or any other governmental organization that is to be a participant in the child welfare demonstration project.

As proposals are received a brief description will be posted on the ACF Website, at http://www.acf.hhs.gov/programs/cb. This information will, among other things, enable State officials and others to judge for themselves the nature and extent of competition for child welfare demonstrations.

Technical Assistance

The Children's Bureau will provide all interested States with a technical assistance package that will include, among other things:

A guide to the evaluation of child welfare demonstrations (including descriptions of methodologies the Department prefers and the reasons therefore, samples of the evaluation provisions of approved Demonstrations, and information about resources that might be helpful to a State in designing a demonstration and constructing an evaluation plan);
Examples of cost-neutrality designs on which the Department and States have reached agreement in the past;
Samples of other key provisions of Terms and Conditions the Department has approved for child welfare demonstration projects in the past; and
A checklist of the elements required in a proposal.

Upon receipt of a Letter of Intent from a State, Administration on Children, Youth and Families (ACYF) staff will contact the appropriate State official to offer a conference call in which both Central Office and Regional Office staff will participate. If the State accepts the offer, the State can use the opportunity to describe further the nature and scope of the demonstration it is considering, its approach to evaluation, and to raise specific questions. Without making commitments at that point, ACYF staff will endeavor to answer questions concerning evaluation, cost neutrality, and the provisions of this Information Memorandum. ACYF staff will also refer interested States to published materials or other States that may be helpful to them. Technical assistance will also be available to any State that submits a proposal even though the State did not submit a Letter of Intent.

These pre-submission contacts are regarded as technical assistance to a State. They are an effort to help a State achieve its own purposes consistent with the priorities identified in this Information Memorandum and to anticipate, try to avoid or solve potential problems. Such contacts are not waiver negotiation sessions, and neither the State nor ACYF would be bound by any positions taken or tentative agreements reached in such a session.

Pre-approval consultation with a State (at any time before a proposal is submitted or while a proposal is under consideration) can include providing assistance related to preparing a proposal, answering specific questions regarding cost-neutrality and cost-allocation issues, working with a State to consider the scope of its project and options for evaluation, and referring a State to other sources of assistance for the formulation of evaluation plans. Federal staff will not, however, participate in determining the basic nature of a State's demonstration project.

After approval of a child welfare demonstration, Federally provided technical assistance will remain available through the ACF Regional and Central Offices and, to a limited extent, through Federally funded technical assistance providers. A major priority for Federally funded technical assistance will be to support the evaluations of approved demonstration projects.

Review of Proposals

The Department intends to review proposals as promptly as possible after receipt. Proposals will be reviewed by Federal officials, who will also consider comments received from outside experts (if any) and from the general public. Regional Office staff will be asked to contribute to the review of proposals submitted by States in their respective Regions. The review process and all discussions and other activities leading up to a final decision will be managed by the Children's Bureau. If the initial review discloses basic questions or issues with a proposal, the State may be contacted for more information or to resolve the problem so that the process can continue. States will be permitted a reasonable period of time to address any issues raised during the initial review.

Following the initial review and responses to any basic questions as described above, a series of questions will be prepared and sent to the State. These questions will involve issues of programmatic substance that have been raised within the Department and will outline any problems or issues that may impede approval or that may complicate agreement on the scope, nature, cost neutrality and evaluation of the proposed demonstration project. The Department will request that States respond in writing to these questions.

Where issues remain or problems cannot be resolved, the Department will continue its efforts to achieve agreement on any proposal that meets the requirements of the law and the preferences described in this Information Memorandum, and that the Department believes proposes a project that ultimately may be recommended to the Secretary for approval. Such efforts can include additional conference calls, exchanges of written statements and arguments, review and comment on draft Terms and Conditions prepared by the Children's Bureau, and face-to-face meetings. However, the Department or the State may terminate the process if it appears that agreement cannot be reached.

Decisions

ACYF will recommend to the Secretary approval of proposals that meet the requirements of the statute. The Terms and Conditions for a proposed child welfare demonstration will not be recommended for approval without the concurrence of the State that submitted the proposal and the Federal Office of Management and Budget. ACYF will also assure that other HHS components, as appropriate, and any other relevant Federal agencies have reviewed the Terms and Conditions. States will be informed of the Secretary's decisions as they are reached.

If the Department determines it is necessary, an agreement might be negotiated between a State and the Department to implement the demonstration project at some date in the future. For example, if some action of the State legislature is required as an integral element of a demonstration, it might be possible to conditionally approve the project pending action by the legislature.

Federal Role

The overall management of child welfare demonstration projects will be the responsibility of the Children's Bureau in Washington, D.C. ACF Regional Office staff will have the principal responsibility for on-site liaison. Proposals for additions or modifications to the Terms and Conditions of any approved child welfare demonstration, including proposals for extension of the duration of any demonstration, are to be addressed to the Children's Bureau in Washington, D.C., with a copy sent to the appropriate ACF Regional Administrator.

State program managers for the demonstration projects and the project evaluators are required to attend an annual two-day meeting in Washington, D.C. to discuss the demonstration projects' development and progress. The cost of attendance for the State program mangers will be excluded from the cost-neutrality calculation and will be chargeable to title IV-E administrative costs without cost allocation. Travel costs for the project evaluators should be included in the contract that the State has with its evaluator.

Administrative Record

The Department will maintain an administrative record which will generally consist of: the formal demonstration application from the State; correspondence sent to the State regarding issues/problems with the application and the State's response; public and congressional comments sent to the Department and any Department responses; the Department's decision memorandum regarding the granting or denial of a proposal; and the final Terms and Conditions and demonstration projects sent to the State and the State acceptance of them.

The Department regards all correspondence (including the program questions), once they have been sent to a State, and all Terms and Conditions for child welfare demonstrations, once they have been approved by the Secretary, as public documents, and will make arrangements for providing copies of them to any requester. The Department also regards a State's proposal for a child welfare demonstration, along with any written modifications to a proposal, as public documents once they have been submitted to the Department and expects the State to make copies of the proposals and their modifications available to any requester.

Implementation Reviews

As part of the Terms and Conditions of any demonstration proposal that is approved, the Department may require periodic assessments of how the project is being implemented. The Department will review, and when appropriate investigate, documented complaints that a State is failing to comply with requirements specified in the Terms and Conditions in implementing any approved demonstration project.

Legal Effect

This Information Memorandum, like the notice employing similar language that was originally published in the Federal Register of June 15, 1995, is intended to inform the public and the States regarding procedures the Department ordinarily will follow in exercising the Secretary's discretionary authority with respect to State demonstration proposals under section 1130. This Information Memorandum does not create any right or benefit, substantive or procedural, enforceable at law or equity, by any person or entity, against the United States, its agencies or instrumentalities, the States, or any other person.

/s/
_________________
Joan E. Ohl
Commissioner
Administration on Children, Youth and Families

Attachments

Appendix I	Section 1130 of the Social Security Act HTML or PDF (87 KB)
Appendix II	Names and Addresses of ACF Regional Administrators HTML or PDF (78 KB)
Appendix III	Summary of the Currently Approved Child Welfare Demonstration Projects HTML or PDF (212 KB)