The adoption incentive was created by the Adoption and Safe Families Act (ASFA) in 1997 and was expanded to some kinship placements because of the 2014 reauthorization.
States are awarded if they increase adoptions from foster care over the previous year. That incentive also includes now increased placements into Title IV-E kinship placements. The last reforms also shifted from rewarding an annual number to a rate to better recognize states that maintained adoptions despite a smaller foster care caseload (in some states).
Until the time of the Budget Control Act (BCA) which imposed strict spending caps, Congress would generally make up in appropriations if the previous year’s appropriations were not enough to pay each state that had earned incentives. So if, for example, states were awarded $45 million and Congress appropriated $39 million, appropriators would make up for the shortfall. After the BCA, appropriators stopped doing that, but HHS has continued to make up for last year’s shortfall by taking from this year’s appropriations.
Now we are at a critical mass. Last year states earned $55 million in adoption incentives and kinship incentives ($47 million was from adoptions), but HHS only had $5 million leftover to fulfill the 2016-based awards with FY2017 appropriations. States are still owed $50 million for last year’s 2017 results. Current appropriations for 2018 is likely at the same $39 to $38 million it has been at for several years. That means when the FY 2018 awards are announced in late September there will be less than zero funds available, unless HHS passes up funding or appropriators make it up with the final 2018 appropriations.
Congress needs to make up for the $50 million for FY 2017 as well as fund potential awards to be announced in September of this year.