Last week the Government Accountability Office (GAO) issued a long-awaited report on whether states are reinvesting the significant savings they realized when the federal Adoption Assistance program was de-linked from the AFDC eligibility standards.


The GAO report: CHILD WELFARE: Better Data and Guidance Could Help States Reinvest Adoption Savings and Improve Federal Oversight indicated that, since 2015, $516 million in savings from the expanded Adoption Assistance program has been reinvested by states into other child welfare services.  There is much confusion on the reinvestment requirements and whether all states are meeting the intent of the federal law as outlined in 2008, 2011, 2016 and 2018.


This story began in 2008 when Congress enacted the Fostering Connections to Success Act.  One part of that law created a ten-year phase out of the Adoption Assistance link to the 1996 AFDC eligibility standards.  Because there would be significant savings for all fifty states as the federal government expanded it share of Adoption Assistance, Congress directed states to reinvest savings.


According to the GAO report, there has been $843 million that accrued in adoption savings and $516 million spent of that total between 2015 and 2019. States spent $224 million of these savings on post-adoption or post-guardianship (“post-permanency”) services, $67 million on services for youth at risk of entering foster care (“preventative services”), and $225 million on other child welfare services.


The report stated, “half (23 of 52) of the states reported…at least one significant challenge to reinvesting their adoption savings, most often citing early spending difficulties such as needing time to understand the new requirements and competing state budget priorities. Most of the 28 states that received technical assistance from the Children’s Bureau in fiscal year 2019 reported it was helpful, but 22 states wanted more assistance…10 of these states had not yet spent 30 percent of their cumulative savings on required services.”


One of the obstacles cited was that the Children’s Bureau and states claimed there was no specific date to reinvest such savings so neither the Children’s Bureau or state agencies felt they had the power or need to compel annual reinvestments.


The 2016 amendments to the reinvestment requirements were accompanied by a Senate Finance Committee report that said in part, “states would be required to calculate the savings (if any) resulting from expanding eligibility for Title IV–E adoption assistance using a methodology specified by HHS, or one proposed by the state and approved by HHS. Each state would be required to report annually to HHS on—1) the method it used to calculate the savings (regardless of whether any savings were found); 2) the amount of any savings identified, and 3) how any such savings are spent. (See article “Why Did the GAO Review State Reinvestment of Adoption Assistance Savings,” on the history of this).


The GAO report was mandated by the 2018 Family First Act.