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Funding Resources for Child Welfare

1. Title IV-E, Federal Foster Care and Adoption Assistance is a federal program administered by state and local public child welfare agencies that is for poor children. The program is an open-ended entitlement funded with a combination of federal and state/local matching funds and is authorized under Title IV-E of the Social Security Act.
   
   Eligibility
   
   Title IV-E foster care requires that the child must have been a recipient of or eligible for AFDC (based on the State AFDC standards that were in place on July 16, 1996) during the month a petition was filed to remove the child (eligibility month) or the month a VPA (Voluntary Placement Agreement) is signed. The child must have lived in the home of a specified relative within six months of the eligibility month and be deprived of parental support. In addition, there must be a court order that finds: (1) Continuation in his/her own home would be "contrary to the welfare of the child" and (2) reasonable efforts were made to prevent the removal of the child from his/her family or to facilitate the return of the child who has been removed. Title IV-E adoption assistance eligibility follows Title IV-E eligibility for foster care with a few exceptions.
   
   Title IV-E is a federal reimbursement for some of the federally eligible foster care or adoption expenses that the state has already paid. Title IV-E is not a grant. Reimbursement is limited to three areas and the funding formula is different for all three:
   
   
   • Maintenance(45CFR1356.60(a)
   • Administration(45CFR1356.60(c)
   • Training (45CFR1 356.60 (b)
   
   Maintenance is the board and room payment made to licensed foster parents, group homes and residential child care facilities. For children that are Title IV-E eligible, the federal government reimburses the state for 50% to 83% of the costs and the state pays the balance. The federal portion is called the "Federal Financial Participation" or FFP. The FFP for Title IV-E foster care and adoption assistance (maintenance) is the same as Medicaid (Title XIX) that is called the Federal Medical Assistance Percentage or FMAP. A specific state's FMAP is based primarily on each state's per capita income. The higher the state's per capita income, the lower the FMAP. If the child is not Title IV-E eligible, the state is responsible to pay for the entire cost of care with other sources.
   
   Administration includes those activities necessary for the proper and efficient administration of the Title IV-E state plan. Examples of reimbursable administrative activities included in federal regulations include:
   
   
   • Referral to services
   • Determination of Title IV-E eligibility
   • Preparation for and participation in judicial determinations
   • Placement of the child
   • Development of the case plan
   • Case reviews
   • Case management and supervision
   • Recruitment and licensing of foster homes and institutions
   • Rate setting
   • Costs related to data collection and reporting
   • Proportionate share of related agency overhead
   
   The state currently makes its claim to the federal government for administrative reimbursement based on the total administrative cost, the results of the Random Moment Time Study (RMTS), the percentage of Title IV-E eligible children (often known as the penetration rate), and 50% FFP for administration.
   
   When states contract with private agencies to help them carry out public child welfare responsibilities (such as conducting home studies for special needs adoption), they claim reimbursement, based on the percentage of Title IV-E eligible children in foster care or adoption assistance times 50% FFP for administration.
   
   Training includes the cost of providing short and long term training at educational institutions as well as in-service training for personnel employed by or preparing for employment by the state (including a Tribe) or a local public agency administering the Title IV-E state plan. Training also includes the cost of short term training for current or prospective foster or adoptive parents and members of state (or tribal) licensed or approved child care institutions providing care to foster or adopted children.
   
   The state currently makes its claim for training reimbursement based on the total training cost, times the percentage of Title IV-E eligible children and times 75% FFP for training. The state is responsible for the balance or non-federal share.
   
   
2. Title IV-B - Subpart 1 - Child Welfare Services of the Social Security Act was first established in 1935. The specific federal regulations are in 45CFR1 357. Congress is authorized to appropriate $325,000,000 annually and in FY 2003 appropriated $290,088,000. The allotment to each state is based on the state's population under age 21 as compared to other states and the "allotment percentage of the state" (primarily the state's per capita income). States must submit a five year, "Child Welfare Services Plan" that is jointly developed with the federal government. The Plan requires several assurances and commitments by the state. Funds received may be spent on a wide variety of child welfare related services and are considered very flexible. Annual status reports regarding the Plan are required. States are limited to the amount of Title IV-B, Subpart 1 money they can spend on foster care maintenance payments, adoption assistance payments, and day care necessary for employment, to the total amount of Title IV-B money the state received in FY 1979. At that time, the total national IV-B appropriation was $141,000,000. Federally recognized Indian Tribes that submit a five year Child Welfare Service Plan along with the necessary assurances are eligible for a portion of the State's allotment based on an enhanced population factor. There is a 25% non-federal match required.
   
   
3. Title IV-B - Subpart 2 - Promoting Safe and Stable Families is a capped entitlement and was first passed into law as a part of the Omnibus Reconciliation Act of 1993. In the 2001 reauthorization (Public Law 107-133), the program was extended for five years and language was added that allowed congress to appropriate an amount up to $200 million in addition to the base total of $305,000,000. In FY 2003 the total amount of funds available through this program was $404,350,000. Each state's share is based on the average monthly number of children receiving food stamp benefits for the most recent 3 federal fiscal years. As a general rule, at least 20% of the money must be spent in each of four categories: 1) family preservation, 2) community-based family support services, 3) time limited family reunification services and 4) adoption promotion and support services. A description of how these funds are to be expended must be included in the state's five year Child Welfare Services Plan. There is a 25% non-federal match required. Also 1 % is set aside for federally recognized Indian Tribes or Organizations. The money awarded to Tribes is based on child population and granted only to tribes that are sufficient in size to generate at least $10,000 and who submit a five year Child Welfare Services Plan.
   
   
4. Child Abuse and Neglect Prevention and Treatment Act (CAPTA) are funds authorized by Congress, not an entitlement, and must be appropriated annually. During FY 2003 a total of $21,870,000 was appropriated. Receipt of these funds requires that they must be spent on child protection activity. The amount of money a state receives is based on it's child population. In accepting these funds, a state must in its state law, meet certain requirements related to child abuse and neglect. These requirements deal with quality issues for the delivery of child protection services.
   
   
5. Chaffee Independence Program (Independent Living), formally known as the Title IV-E Independent Living Initiative, the Foster Care Independence Act of 1999 (now known as the Chaffee Independence Program) was signed into law on December 14, 1999. The new law brought major changes in Independent Living funding and regulations. The highlights are:
   
   
   • $140 million capped entitlement which requires a 20% state match
     
     
   • Allocation formula is based on number of children in foster care for the most recent fiscal year with a minimum of $500,000 for every state.
     
     
   • States may use the funds in "any manner that is reasonably calculated to accomplish the purposes" of the program.
     
     
   • Those eligible include foster children, without regard to their eligibility for Title IV-E, who are likely to remain in foster care until age 18.
     
     
   • States must use a portion of their funds for assistance and services for former foster children age 18 to 21 who left foster care because they reached age 18.
     
     
   • States may use up to 30% of their program funds for room and board for former foster children age 18 to 21 who left foster care because they reached age 18.
     
     
   • Optional Medicaid coverage for youth up to age 21 who were in foster care at age 18. States may amend their Medicaid State Plan to cover this optional group. States have flexibility in the extent of coverage including presumptive eligibility.
   
   In 2001, as part of the reauthorization of the Promoting Safe and Stable Families program (Public Law 107-133), a new tuition voucher program entitled, "Educational and Training Vouchers for Youths Aging Out of Foster Care" was created to assist these youth in their educational needs. The law amended section 477 of Title IV-E and provided an authorization of $60 million funding. The dollars are discretionary and congress must approve funding each year. In FY 2003 the voucher program was funded for the first time at $41.7 million.
   
   These funds are allotted to states under the same formula used to distribute the general Chafee program. States use the funds for youth defined by the program as eligible:
   
   
   • Youth otherwise eligible for services under the State Chafee program
     
     
   • Youth adopted from foster care after attaining age 16
     
     
   • Youth participating in the voucher program on their 21st birthday until they turn 23 years old, as long as they are enrolled in a post secondary education or training program and are making progress toward completion of that program
   
   
6. Temporary Assistance for Needy Families (TANF) is a capped state entitlement block grant which provides states great flexibility to provide assistance to needy families with children and was created with the passage of the "Personal Responsibility and Work Opportunity Reconciliation Act of 1996." There is no state match required, but there is a MOE (Maintenance of Effort) requirement. It replaced Aid to Families with Dependent Children (AFDC). As a result the "Emergency Assistance" component of the old AFDC and its "open-ended" entitlement status was eliminated. The funds expended on the EA program were rolled into each state's share of TANF. However, states that had an EA program in their Title IV-A (AFDC) state plan prior to September 30, 1995 or at state option, August 21, 1996, are able to use the state's TANF funds for any of the purposes that were included in that state plan. In many states TANF funds used for child welfare services rival the amount claimed for Title IV- E. These states use TANF funds for non IV-E eligible foster care maintenance payments and a range of reunification, early intervention and secondary prevention services including, but not limited to, intensive in- home services, parent aides, respite care and a variety of "wrap around" services. The authorization for the TANF block grant expired in 2002 and congress is still attempting to enact a long term extension.
   
   
7. Title XX Social Service Block Grant is authorized by Congress and is appropriated annually. It is not an entitlement. The funds are administered by the state social service agency and there is great flexibility in how the funds can be expended. Most states use these funds for a combination of childcare, child welfare and services to the elderly. The amount of money granted to each state is based on the state's proportional population. There are minimal reporting requirements. A total of $2.38 billion was appropriated nationally in FY 1996 but has been reduced in successive years to a level of $1.7 billion by FY 2003. When there are national budget reductions, this source of federal appropriation is very vulnerable to the reduction.
   
   
8. Title XIX - Medicaid is an open-ended entitlement program that provides medical services to Medicaid eligible children under certain conditions. Each state's Medicaid program is different and unique to that state. The Federal Medical Assistance Percentage (FMAP), which is established at the beginning of each federal fiscal year, is based primarily on the state's per capita income and ranges between 50% and 83%.
   
   Within the federal regulations, states have great flexibility in how they administer Medicaid. Some Medicaid services are mandated while others are optional. States vary greatly in which services they select under the optional category. Title IV-E eligible foster care and all special needs adoption children have categorical eligibility for Medicaid. In addition, states usually cover non Title IV-E eligible foster children and children from low income families under the "medically needy option." In those states, almost all foster children are Medicaid eligible.
   
   Mandated Medicaid services include hospital, pharmaceutical services, nursing home and clinic services. In addition there are a variety of 11 "optional services" that states may choose from to include in their Medicaid program. Medicaid eligible children may receive these services when prescribed by a "practitioner of the healing arts." Usually this is a physician or a clinical psychologist, but in some states may also include a social worker or other specified professional.
   
   EPSDT (Early, Periodic, Screening, Diagnosis and Treatment) services must be included in every state plan. If the screening team prescribes a Medicaid reimbursable service that is not included in the state's Medicaid plan, the prescribed service is still eligible for federal Medicaid reimbursement for that particular Medicaid eligible client.
   
   Two of the "optional services" that some state child welfare agencies have negotiated with the state's Medicaid Division to provide are "Targeted Case Management" and "rehabilitation services."
   
   Under Medicaid, "Case Management Services" mean services which assist individuals eligible under the plan in gaining access to needed medical, social, educational, and other services. "Targeted Case Management" allows the state to provide case management to a "targeted" group such as child welfare, foster care, adoption or mental health. The state Medicaid plan must address: "target group, areas of the state in which services will be provided, comparability of services, definition of services, qualifications of providers, free choice of providers and assurance that payment for case management services under the plan does not duplicate payments made to public agencies or private entities under other program authorities for this same purpose."
   
   The federal definition of rehabilitation service is, "rehabilitation service, except as otherwise provided under this subpart, includes any medical or remedial services recommended by a physician or other licensed practitioner of the healing arts within the scope of his practice under the state law, for maximum reduction for physical or mental disability or restoration of a recipient to his best possible functional level." This very broad definition provides many opportunities for children served in the public and private child welfare system. Examples of Medicaid reimbursable rehabilitation services that relate to child welfare currently being funded in one or more states include: residential treatment centers, therapeutic family foster care and intensive in-home services.

• CCDBG (Child Care Development Block Grant)
• Mental Health Service Block Grant
• Substance Abuse Block Grant
• OJJDP (Office of Juvenile Justice and Delinquency Prevention)
• Children's Justice Act
• Court Improvement Project (usually funded through the State Supreme Court)
• Variety of federal discretionary grants
• Title V of the Social Security Act (Maternal and Child Health)
• Section 426 Grants (Universities for training in child welfare)

• Private foundations - a number of private foundations have specific and special concerns regarding the provision of child welfare services. Some of these foundations have committed significant funds to public, tribal and private non-profit agencies that are interested in specific "reform" issues.
  
  
• United Way
  
  
• Private individual donations

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