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entitled 'Child Welfare: Enhanced Federal Oversight of Title IV-B Could 
Provide States Additional Information to Improve Services' which was 
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Report to the Chairman, Subcommittee on Human Resources, Committee on 
Ways and Means, House of Representatives:

United States General Accounting Office:

GAO:

September 2003:

Child Welfare:

Enhanced Federal Oversight of Title IV-B Could Provide States 
Additional Information to Improve Services:

GAO-03-956:

GAO Highlights:

Highlights of GAO-03-956, a report to the Chairman, Subcommittee on 
Human Resources, Committee on Ways and Means, House of 
Representatives 

Why GAO Did This Study:

In 2001, states determined that over 900,000 children were the victims 
of abuse or neglect. In fiscal year 2003, subparts 1 and 2 of Title IV-
B of the Social Security Act provided $697 million in federal funding 
for services to help families address problems that lead to child 
abuse and neglect. This report describes (1) the services provided and 
populations served under subparts 1 and 2; (2) federal oversight of 
subpart 1; and (3) existing research on the effectiveness of services 
unique to subpart 1—that is, when states used subpart 1, but not 
subpart 2, to fund programs in a particular service category. The 
report focuses primarily on subpart 1 because little research exists 
on this subpart, while studies have been conducted on subpart 2. 

What GAO Found:

On a national level, GAO’s survey showed that the primary emphases of 
subparts 1 and 2 vary somewhat, but the range of services offered and 
the types of families served overlap significantly. No single category 
of service was funded solely by either subpart. In fiscal year 2002, 
states used subpart 1 funds most frequently for the salaries of child 
welfare agency staff, administrative and managerial expenses, child 
protective services, and foster care maintenance payments. Subpart 2 
primarily funded family support, family preservation, family 
reunification, and adoption support services. Programs funded by the 
two subparts served similar types of populations—predominantly 
children at risk of being abused or neglected and their parents, as 
well as children in foster care and their parents.

HHS’s oversight focuses primarily on states’ overall child welfare 
systems and outcomes, but the agency provides relatively little 
oversight specific to subpart 1. For example, HHS works with states to 
establish goals to improve the safety and well-being of children and 
measure progress toward those goals. However, HHS has limited 
knowledge about how states spend subpart 1 funds. States submit an 
annual estimate about how they plan to use their subpart 1 funds in 
the upcoming year, but provide no data on actual expenditures. HHS 
reports that it reviews these estimates for relatively limited 
purposes. We also found that HHS regional offices pay little attention 
to statutory limits on the use of subpart 1 funds for foster care 
maintenance and adoption assistance payments. For example, 9 of the 10 
HHS regional offices do not monitor states’ compliance with these 
limits. As a result, HHS approved projected 2002 spending plans for 15 
states that reported estimated spending amounts that exceeded the 
limits by over $30 million in total. 

While GAO’s survey data revealed no unique service categories funded 
by subpart 1 on a national level, 37 states reported unique subpart 1 
service categories within their state. Little research is available on 
the effectiveness of the services in these categories, such as 
hotlines to report child abuse and emergency shelter services. No 
states conducted rigorous evaluations of these services, although 
several states provided some information on outcomes.

What GAO Recommends:

GAO recommends that the Secretary of the Department of Health and 
Human Services (HHS) (1) provide guidance to ensure that HHS regional 
offices provide appropriate oversight of subpart 1; (2) consider the 
feasibility of collecting data on states’ use of these funds to 
facilitate program oversight; and (3) use the information gained 
through enhanced oversight of subpart 1 in designing its proposed 
child welfare option, which would allow states to use other federal 
child welfare funds for services allowed under Title IV-B. HHS 
generally agreed with GAO’s findings, but did not fully concur with 
these recommendations. 

www.gao.gov/cgi-bin/getrpt?GAO-03-956.

To view the full product, including the scope and methodology, click 
on the link above. For more information, contact Cornelia Ashby at 
(202) 512-8403 or ashbyc@gao.gov.

[End of section]

Contents:

Letter:

Results in Brief:

Background:

The Primary Emphases of These Subparts Vary Somewhat, but the Range of 
Services and Types of Families Served Overlap Significantly:

HHS Focuses Oversight on Overall Child Welfare System, but Has Limited 
Knowledge about States' Use of Subpart 1 Funds:

Some Unique Subpart 1 Service Categories Exist at the State Level, but 
Little Research Exists on the Effectiveness of These Services:

Conclusions:

Recommendations:

Agency Comments:

Appendix I: Scope and Methodology:

Appendix II: Comments from the Department of Health and Human Services:

Appendix III: GAO Contacts and Acknowledgments:

GAO Contacts:

Acknowledgments:

Related GAO Products:

Tables:

Table 1: Selected Requirements to Obtain Grants under Subparts 1 and 2 
of Title IV-B:

Table 2: Fiscal Year 2002 Expenditures for Subparts 1 and 2 Service 
Categories:

Table 3: Populations Targeted by Services Funded by Subparts 1 and 2 of 
Title IV-B in Fiscal Year 2002:

Table 4: Number of States Using Funds from Each Subpart of Title IV-B 
to Target Specific Populations:

Figures:

Figure 1: Percentage of Subpart 1 Funds Used for Staff Salaries 
Dedicated to Each Type of Staff Position in Fiscal Year 2002:

Figure 2: Survey Data on States' Preferences between Subparts 1 and 2 
of Title IV-B for Different Program Components:

Figure 3: Fifteen States with Approved CFS-101s with Fiscal Year 2002 
Subpart 1 Spending Estimates that Exceeded Limits for Foster Care 
Maintenance and Adoption Assistance Payments:

Figure 4: Ten States That Reported Fiscal Year 2002 Subpart 1 
Expenditures Exceeding Limits for Foster Care Maintenance and Adoption 
Assistance Payments:

Abbreviations:

ACF: Administration for Children and Families: 

APSR: Annual Progress and Services Report: 

CFSR: Child and Family Services Review:  

CPS: child protective services:  

HHS: Health and Human Services: 

HIPPY: Home Instruction for Parents of Preschool Youngsters:

United States General Accounting Office:

Washington, DC 20548:

September 12, 2003:

The Honorable Wally Herger 
Chairman 
Subcommittee on Human Resources 
Committee on Ways and Means 
House of Representatives:

Dear Mr. Chairman:

In 2001, child protective services (CPS) staff in state child welfare 
agencies determined that over 900,000 children had been the victims of 
abuse or neglect by their parents or other caretakers.[Footnote 1] 
Title IV-B of the Social Security Act is the primary source of federal 
funding for services to help families address problems that lead to 
child abuse and neglect and to prevent the unnecessary separation of 
children from their families. Title IV-B is divided into two parts. 
States can use subpart 1 funds on almost any child welfare activity. 
Subpart 2 provides grants to states for similar types of child welfare 
services, such as family support services to enhance family stability 
and services to help parents reunify with a child in foster care, but 
is more restrictive in how the funds can be spent. In fiscal year 2003, 
appropriations were $292 million for subpart 1 and $405 million for 
subpart 2.[Footnote 2]

Title IV-B represents a small percentage of total federal spending on 
child welfare activities. Most federal funding for these activities 
comes from Title IV-E of the Social Security Act and is devoted 
primarily to paying for the room and board of children in foster care-
-known as foster care maintenance payments. Title IV-B dollars can also 
be used for foster care maintenance payments, but are more frequently 
used for other types of services. As the Congress has enacted various 
pieces of legislation to help move children from foster care into 
permanent homes more quickly, it has emphasized the need for states to 
use Title IV-B funding to provide supportive services needed to 
preserve and reunify families. In 1980, for example, the Congress 
increased appropriations for subpart 1, but enacted limits on the use 
of these funds for foster care maintenance payments and adoption 
assistance payments to encourage states to use the additional funding 
for services to families.[Footnote 3] In addition, while states could 
already use subpart 1 funds for services targeted in the new subpart 2 
program, the creation of subpart 2 was motivated in part by the fact 
that few states used a significant share of their subpart 1 funds for 
these types of services. The Department of Health and Human Services' 
(HHS) Administration for Children and Families is currently developing 
a child welfare option that would allow states to use Title IV-E funds 
for the same range of services allowed under Title IV-B.

Because of your interest in the services states are providing to meet 
the needs of families,[Footnote 4] you asked us to examine the 
following: (1) How do the services provided and populations served 
under subpart 1 compare with those under subpart 2? (2) What has the 
federal government's role been in overseeing the use of Title IV-B 
subpart 1 funds? (3) What does the research say about the effectiveness 
of services unique to subpart 1?

To answer these questions, we sent two surveys to child welfare 
directors to obtain information on how they use Title IV-B funds. To 
obtain a breakdown of state spending for subparts 1 and 2, we sent the 
first survey to all 50 states and the District of Columbia and received 
responses from 47 states[Footnote 5]. We sent the second survey to the 
30 states that provided sufficient data on their first survey within 
the timeframe that allowed us to conduct the second survey. We received 
responses from 17 states, providing detailed information on the 3 
services they reported as receiving the most subpart 1 funding and the 
3 services they reported as receiving the most subpart 2 funding. 
Because the data from these states may not be representative of all 
states, we have used data from the second survey to provide examples of 
the types of children and families served by Title IV-B. We also 
conducted site visits in California, New Jersey, Ohio, and Washington, 
where we interviewed state and local officials and service providers to 
obtain more in-depth information on the services provided and the types 
of children and families served. These states represent both geographic 
diversity and diversity in how states used subpart 1 funds. In 
addition, these states were identified as using innovative CPS tools or 
processes. Further, we reviewed applicable laws and regulations; 
interviewed HHS central and regional office officials about their 
oversight activities with regard to Title IV-B; reviewed results from 
HHS's assessments of state child welfare agencies, known as Child and 
Family Services Reviews (CFSR); reviewed the literature assessing the 
effectiveness of child welfare services; and interviewed child welfare 
experts.

Results in Brief:

On a national level, our survey showed that the primary emphases of 
subparts 1 and 2 vary somewhat, but the range of services offered and 
the types of families served overlap significantly. Our survey found 
that no single category of service was funded solely by subpart 1 or 
subpart 2 in fiscal year 2002. In response to our survey, states 
reported spending about 28 percent of subpart 1 funds on the salaries 
of child welfare agency staff--primarily social work staff who can 
provide a variety of services, including CPS investigations, recruiting 
foster parents, and referring families for needed services. The next 
three largest spending categories--administration and management 
expenses, such as rent and utilities; CPS services; and foster care 
maintenance payments--accounted for about 43 percent of subpart 1 
spending. In comparison, states spent over 80 percent of subpart 2 
dollars on the four mandated service categories--family support, family 
preservation, family reunification, and adoption promotion and support 
services. States reported funding services with subparts 1 and 2 that 
serve similar populations--primarily children at risk of abuse and 
neglect and their parents, as well as children living in foster care 
and their parents. While none of the four states we visited could 
provide data on the extent to which the same families participated in 
services funded by subparts 1 and 2, officials in three of these states 
believed that the two subparts generally served the same types of 
children and families. Officials in almost all HHS regional offices 
said that they believe that the two subparts offer a good balance in 
allowing states some flexibility to address state needs and targeting 
some federal funds toward services to keep families together.

HHS's oversight focuses primarily on states' overall child welfare 
systems and outcomes, but the agency provides relatively little 
oversight specific to subpart 1. For example, HHS regional offices work 
with states to establish overall goals to improve the safety, 
permanency, and well-being of children and measure progress toward 
those goals. Using its CFSR process, HHS also evaluates how well states 
are achieving positive outcomes for children and has found that many 
states do not have strong outcomes with regard to providing the 
services families need. However, HHS has limited knowledge about how 
states spend their subpart 1 funds. HHS does not collect data on 
subpart 1 expenditures, requiring instead that states submit annual 
estimates about how they plan to use their subpart 1 funds in the 
upcoming year. HHS regional offices reported that they review these 
estimates for relatively limited purposes, such as ensuring that states 
provide required matching funds. Several HHS officials noted that they 
do not review the spending plans for subpart 1 as closely as subpart 2 
because subpart 1 has few restrictions on how funds can be used. We 
also found that HHS regional offices pay little attention to statutory 
limits on the use of subpart 1 funds for foster care maintenance and 
adoption assistance payments.[Footnote 6] For example, 9 of HHS's 10 
regional offices do not monitor states' compliance with these limits. 
As a result, HHS approved projected 2002 spending plans for 15 states 
with planned spending amounts that exceeded these limits. In response 
to our survey, 10 states reported a total of over $15 million in actual 
2002 subpart 1 expenditures that exceeded the spending limits and were 
thus out of compliance with the law.

Little research is available on the effectiveness of unique services 
funded by subpart 1 at the state level because few states have 
evaluated these services. While our survey data reveal no unique 
categories of services funded by subpart 1 on a national level, 37 
states generally reported 1 or 2 categories of services that were 
uniquely funded by subpart 1 within their state--that is, they used 
subpart 1, but not subpart 2, to fund services in particular 
categories. The most common unique categories were CPS, foster care 
maintenance payments, and staff salaries. Within the CPS category, for 
example, unique services include professional assessments of a 
caregiver's parenting skills, telephone hotlines to report child abuse 
and neglect, and short-term shelter placement services. We contacted 
the states with unique service categories other than administration, 
salaries, and foster care maintenance and adoption assistance payments 
and none of these states had conducted rigorous evaluations of these 
services, although several states provided some outcomes data for the 
services included in these categories. Our literature review on the 
effectiveness of child welfare practices identified research for some 
of these unique service categories, such as certain family preservation 
programs, but only two specific services included in a unique subpart 1 
category were identified in the research. For example, research on a 
service that works with parents to prepare their children for school 
and to enhance parent-child interactions has shown mixed results.

We are recommending that the Secretary of HHS (1) provide the necessary 
guidance to ensure that HHS regional offices are providing appropriate 
oversight of subpart 1, (2) consider the feasibility of collecting 
basic data on states' use of these funds to facilitate its oversight of 
the program and to provide guidance to help states determine 
appropriate services to fund, and (3) use the information gained 
through enhanced oversight of subpart 1 to inform its design of the 
child welfare option that would allow states to use Title IV-E funds 
for the same range of services allowed under Title IV-B. HHS's 
Administration for Children and Families (ACF) generally agreed with 
our findings, but did not fully concur with our recommendations. While 
ACF agreed with our recommendation to provide the necessary guidance to 
ensure that its regional offices monitor states' use of Title IV-B 
subpart 1 funds, it said that these limits no longer serve a useful 
purpose. ACF disagreed with our recommendation to consider collecting 
data on subpart 1 expenditures. ACF believes its current level of 
oversight is commensurate with the scope and intent of subpart 1, 
noting that its oversight efforts are more appropriately focused on the 
CFSR process. We believe, however, that assessing the feasibility of 
collecting some basic data on states' subpart 1 expenditures could 
enhance ACF's overall oversight of states' child welfare operations and 
outcomes. ACF did not comment on our recommendation to use such data to 
inform the design of its child welfare option.

Background:

Title IV-B of the Social Security Act, established in 1935, authorizes 
funds to states to provide a wide array of services to prevent the 
occurrence of abuse, neglect, and foster care placements. In 1993, the 
Congress created a new program as subpart 2 of Title IV-B (now known as 
Promoting Safe and Stable Families), which funds similar types of 
services but is more prescriptive in how states can spend the funds. No 
federal eligibility criteria apply to the children and families 
receiving services funded by Title IV-B. The amount of subpart 1 funds 
a state receives is based on its population under the age of 21 and the 
state per capita income, while subpart 2 funding is determined by the 
percentage of children in a state who receive food stamps.

In fiscal year 2003, the Congress appropriated $292 million for subpart 
1 and $405 million for subpart 2. These federal funds cover 75 percent 
of states' total Title IV-B expenditures because states must provide an 
additional 25 percent using nonfederal dollars. Title IV-B funding is 
relatively small compared with the other federal and state funds used 
for child welfare services. According to the most recent data 
available, states spent an estimated $10.1 billion[Footnote 7] in state 
and local funds for child welfare services in state fiscal year 2000, 
while federal Title IV-E expenditures in federal fiscal year 2000 were 
$5.3 billion. In comparison, Title IV-B appropriations in federal 
fiscal year 2000 were $587 million. Title IV-E[Footnote 8] provides an 
open-ended individual entitlement for foster care maintenance payments 
to cover a portion of the food, housing, and incidental expenses for 
all foster children whose parents meet certain federal eligibility 
criteria.[Footnote 9] Title IV-E also provides payments to adoptive 
parents of eligible foster children with special needs.[Footnote 10] 
States may choose to use Title IV-B funds to provide foster care 
maintenance or adoption assistance payments for children without regard 
to their eligibility for these payments under Title IV-E.[Footnote 11]

The Administration for Children and Families within HHS is responsible 
for the administration and oversight of federal funding to states for 
child welfare services under Titles IV-B and IV-E. HHS headquarters 
staff are responsible for developing appropriate policies and 
procedures for states to follow in terms of obtaining and using federal 
child welfare funds, while staff in HHS's 10 regional offices are 
responsible for providing direct oversight of state child welfare 
systems.

In 2000, HHS established a new federal review system to monitor state 
compliance with federal child welfare laws. One component of this 
system is the CFSR, which assesses state performance in achieving 
safety and permanency for children, along with well-being for children 
and families. The CFSR process includes a self-assessment by the state, 
an analysis of state performance in meeting national standards 
established by HHS, and an on-site review by a joint team of federal 
and state officials. Based on a review of statewide data, interviews 
with community stakeholders and some families engaged in services, and 
a review of a sample of cases, HHS determines whether a state achieved 
substantial conformity with (1) outcomes related to safety, permanency, 
and well-being, such as keeping children protected from abuse and 
neglect and achieving permanent and stable living situations for 
children and (2) key systemic factors, such as having an adequate case 
review system and an adequate array of services. States are required to 
develop program improvement plans to address all areas of 
nonconformity.

Subpart 1:

Subpart 1 provides grants to states for child welfare services, which 
are broadly defined. Subpart 1 funds are intended for services that are 
directed toward the accomplishment of the following purposes:

* protect and promote the welfare of all children;

* prevent or remedy problems that may result in the abuse or neglect of 
children;

* prevent the unnecessary separation of children from their families by 
helping families address problems that can lead to out-of-home 
placements;

* reunite children with their families;

* place children in appropriate adoptive homes when reunification is 
not possible; and:

* ensure adequate care to children away from their homes in cases in 
which the child cannot be returned home or cannot be placed for 
adoption.

When the Congress enacted the Adoption Assistance and Child Welfare Act 
of 1980, it established a dollar cap on the amount of subpart 1 funds 
that states could use for certain services and created Title IV-E of 
the Social Security Act. This legislation limited the total subpart 1 
funds states could use for three categories of services: foster care 
maintenance payments, adoption assistance payments, and child care 
related to a parent's employment or training. While appropriations for 
subpart 1 increased from $56.5 million in 1979 to $163.6 million in 
1981, the law requires that the total of subpart 1 funds used for 
foster care maintenance, adoption assistance, and child care payments 
cannot exceed a state's total 1979 subpart 1 expenditures for all types 
of services. The intent of this restriction, according to a 
congressional document, was to encourage states to devote increases in 
subpart 1 funding as much as possible to supportive services that could 
prevent the need for out-of-home placements.[Footnote 12] However, this 
restriction applies only to the federal portion of subpart 1 
expenditures, as the law notes that states may use any or all of their 
state matching funds for foster care maintenance payments.

Subpart 2:

In 1993, the Congress established the family preservation and family 
support program under Title IV-B subpart 2, authorizing grants to 
states to provide two categories of services: family preservation and 
community-based family support services. The Adoption and Safe Families 
Act of 1997 reauthorized the program, renaming it Promoting Safe and 
Stable Families and adding two new service categories: adoption 
promotion and support services and time-limited family reunification 
services. Through fiscal year 2006, the Congress has authorized $305 
million in mandatory funding for subpart 2 and up to $200 million 
annually in additional discretionary funding. In fiscal year 2002, the 
Congress appropriated $70 million in discretionary funding for the 
program.[Footnote 13]

The definitions of the four subpart 2 service categories are:

* Family preservation services: Services designed to help families at 
risk or in crisis, including services to (1) help reunify children with 
their families when safe and appropriate; (2) place children in 
permanent homes through adoption, guardianship, or some other permanent 
living arrangement; (3) help children at risk of foster care placement 
remain safely with their families; (4) provide follow-up assistance to 
families when a child has been returned after a foster care placement; 
(5) provide temporary respite care; and (6) improve parenting skills.

* Family support services: Community-based services to promote the 
safety and well-being of children and families designed to increase the 
strength and stability of families, to increase parental competence, to 
provide children a safe and supportive family environment, to 
strengthen parental relationships, and to enhance child development. 
Examples of such services include parenting skills training and home 
visiting programs for first time parents of newborns.

* Time-limited family reunification services: Services provided to a 
child placed in foster care and to the parents of the child in order to 
facilitate the safe reunification of the child within 15 months of 
placement. These services include: counseling, substance abuse 
treatment services, mental health services, and assistance to address 
domestic violence.

* Adoption promotion and support services: Services designed to 
encourage more adoptions of children in foster care when adoption is in 
the best interest of the child, including services to expedite the 
adoption process and support adoptive families.

These services are similar to those allowed under subpart 1, although 
the range of services allowed under subpart 2 is more limited in some 
cases. For example, time-limited family reunification services can only 
be provided during a child's first 15 months in foster care, while no 
such restriction is placed on the use of subpart 1 funds. In addition, 
states must spend a "significant portion" of their subpart 2 funds on 
each of the four service categories. HHS program instructions require 
states to spend at least 20 percent of their subpart 2 funds on each of 
the four service categories, unless a state has a strong rationale for 
some other spending pattern. By statute, states can spend no more than 
10 percent of subpart 2 funds on administrative costs. A congressional 
document notes that states already had the flexibility to use subpart 1 
funds for family support and family preservation services, but that few 
states used a significant share of these funds for these 
services.[Footnote 14] In creating subpart 2, the Congress did not 
revise any components of subpart 1.

State Plan Requirements for Subparts 1 and 2:

To receive Title IV-B funds, states are required to submit a 5-year 
child and family services plan to HHS. These plans have a number of 
specific reporting and procedural requirements. While several of the 
requirements are similar for subparts 1 and 2, states are required to 
provide information about more aspects of their child welfare systems 
under subpart 1. Some of the major requirements are outlined in table 
1.

Table 1: Selected Requirements to Obtain Grants under Subparts 1 and 2 
of Title IV-B:

Subpart 1: To receive subpart 1 funding, states must submit to HHS a 5-
year plan outlining the goals of the child welfare agency and annual 
reports describing the progress made toward those goals. In this plan, 
states must:

Subpart 1: * Specify the goals that will be accomplished by the end of 
the 5-year plan, specific and measurable objectives that will be 
undertaken to achieve each goal, and describe the methods to be used in 
measuring annual progress in meeting these goals; 

Subpart 1: * Describe the child welfare services provided and the 
geographic areas where they are available; 

Subpart 1: * Describe the steps taken to provide child welfare services 
and to make progress in developing new services and expanding access to 
services; 

Subpart 1: * Consult with appropriate public and community-based 
organizations in designing programs; 

Subpart 1: * Ensure that the state will administer the plan in 
accordance with methods determined by HHS to be proper and efficient; 


Subpart 1: * Provide reports and participate in evaluations as required 
by HHS; 

Subpart 1: * Describe activities undertaken for children adopted from 
other countries and report certain data on those children who enter 
state custody due to the disruption or dissolution of such an 
adoption; 

Subpart 1: * Ensure that the state will develop plans for the effective 
use of cross-jurisdictional resources to facilitate timely adoptions 
for children waiting to be adopted; 

Subpart 1: * Provide for the diligent recruitment of foster and 
adoptive families that reflect the racial and ethnic diversity of 
children in the state who need foster or adoptive homes; 

Subpart 1: * Describe specific measures taken to comply with the Indian 
Child Welfare Act; 

Subpart 1: * Ensure that the state has implemented policies and 
procedures that allow expeditious decisions about permanent placement 
for children who are abandoned at birth; 

Subpart 1: * Ensure that the state operates a case review system for 
each child in state-supervised foster care;

Subpart 1: * Ensure that the state operates a statewide information 
system to provide information about children in foster care; 

Subpart 2: * To receive subpart 2 funding, states must 
submit to HHS a 5-year plan outlining the goals of the child welfare 
agency and annual reports describing the progress made toward those 
goals. In this plan, states must:


Subpart 2: * Specify 
the goals that will be accomplished by the end of the 5-year plan, 
specific and measurable objectives that will be undertaken to achieve 
each goal, and describe the methods to be used in measuring annual 
progress in meeting these goals.

Subpart 2: * Describe the 
child welfare services provided and the geographic areas where they are 
available and the populations to be served.


Subpart 2: * Describe how subpart 2 funds will be used to 
develop or expand services covered by subpart 2.

Subpart 2: * Consult with 
appropriate public and community-based organizations in designing 
programs.

Subpart 2: * Ensure that the state will administer the plan in 
accordance with methods determined by HHS to be proper and efficient.

Subpart 2: * Provide reports and participate in evaluations as 
required by HHS.

Subpart 2: * Ensure that the safety of children will be the 
paramount concern in administering and conducting services.

Subpart 2: * Ensure that, at the 
end of the 5-year period covered by the state's child welfare plan, 
states review with appropriate public and community-based organizations 
the progress made toward goals, publish a report on the progress, and 
develop new goals for the program.

Subpart 2: * 
Ensure that federal funds provided under subpart 2 will not supplant 
federal or nonfederal funds for existing services that promote the 
purposes of subpart 2.


Subpart 2: * Ensure that no more than 10 percent of 
expenditures will be used for administrative costs.

Subpart 2: * Explain how 
organizations were selected to provide family support services and how 
these organizations meet the requirement that family support services 
be community based.

Source: Title IV-B of the Social Security Act and 45 CFR 1357.

Note: Bolded text indicates where subpart 2 requirements differ from 
those pertaining to subpart 1.

[End of table]

Alternative Financing Mechanisms for Child Welfare Services:

Federal child welfare funding has long been criticized for entitling 
states to reimbursement for foster care placements, while providing 
little funding for services to prevent such placements. HHS is 
currently developing a legislative proposal to give states more 
flexibility in using Title IV-E foster care funds for such preventive 
services. Under this new proposal, states could voluntarily choose to 
receive a fixed IV-E foster care allocation (based on historic 
expenditure rates) over a 5-year period, rather than receiving a per 
child allocation. The fixed allocation would be an estimate of how much 
a state would have received in Title IV-E foster care maintenance 
funds. States could use this allocation for any services provided under 
Titles IV-B and IV-E, but would also have to fund any foster care 
maintenance payments and associated administrative costs from this 
fixed grant or use state funds.

Since 1994, HHS has also been authorized to establish child welfare 
demonstrations that waive certain restrictions in Titles IV-B and IV-E 
and allow states a broader use of federal funds. States with an 
approved waiver must conduct a formal evaluation of the project's 
effectiveness and must demonstrate the waiver's cost neutrality--that 
is, a state cannot spend more in Title IV-B and IV-E funds than it 
would have without the waiver. Projects generally are to last no more 
than 5 years. HHS's authority to approve these waivers is scheduled to 
expire at the end of fiscal year 2003.

The Primary Emphases of These Subparts Vary Somewhat, but the Range of 
Services and Types of Families Served Overlap Significantly:

On a national level, our survey showed that the primary emphases of 
subparts 1 and 2 vary somewhat, but the range of services offered and 
the types of families served overlap significantly. According to our 
survey data for fiscal year 2002, states spent subpart 1 funds most 
frequently on the salaries of child welfare agency staff--primarily 
social work staff who can provide a variety of services, such as CPS 
investigations, recruiting foster parents, and referring families for 
needed services. The next three largest categories--administration and 
management expenses, CPS services, and foster care maintenance 
payments--accounted for about 43 percent of subpart 1 funding. Subpart 
2 funds, in comparison, were used primarily to fund programs within its 
required service categories--family support, family preservation, 
family reunification, and adoption promotion and support services. Some 
social work staff whose salaries were funded with subpart 1 may provide 
similar services to families as the staff in these programs funded by 
subpart 2. On a national basis, however, no service category was solely 
funded by either subparts 1 or 2. The programs funded by subpart 1 and 
2 dollars served similar types of children and families. States used 
the majority of funds from each subpart to provide services to children 
at risk of abuse and neglect and their parents, as well as foster 
children and their parents. Officials in most HHS regional offices said 
that they believe that the current structure of Title IV-B offers a 
good balance in allowing states some flexibility to address state needs 
and targeting some federal funds toward services to keep families 
together and prevent children from entering foster care.

While the Distribution of Funds Differs Somewhat, Some Overlap in 
Service Categories Exists:

Although no category of service is funded solely by either subparts 1 
or 2 dollars, somewhat different spending patterns emerged with regard 
to the distribution of these funds among the categories. The states 
responding to our survey reported spending about 28 percent of subpart 
1 funds in fiscal year 2002 on the salaries of child welfare agency 
staff, with an additional 43 percent used for administration and 
management expenses, foster care maintenance payments, and direct CPS 
services (see table 2). In comparison, states used over 80 percent of 
subpart 2 dollars to fund services in its mandated service categories-
-family support, family preservation, family reunification, and 
adoption promotion and support services.[Footnote 15] However, neither 
subparts 1 nor 2 funded a unique category of service at the national 
level.[Footnote 16] For example, states typically reported using 
subpart 1 to fund CPS programs; however, 5 states used subpart 2 
dollars to fund programs in this category.

Table 2: Fiscal Year 2002 Expenditures for Subparts 1 and 2 Service 
Categories:

Service category: Staff positions; Subpart 1: Number of states: 25; 
Subpart 1: Amount of subpart 1 funding[A]: $70,965,578; Subpart 1: 
Percentage of subpart 1 funding: 27.6; Subpart 2: Number of 
states: 17; Subpart 2: Amount of subpart 2 funding[A]: $6,229,058; 
Subpart 2: Percentage of subpart 2 funding[B]: 2.4.

Service category: Administration and management; Subpart 1: Number of 
states: 16; Subpart 1: Amount of subpart 1 funding[A]: 43,143,097; 
Subpart 1: Percentage of subpart 1 funding: 16.8; Subpart 2: 
Number of states: 18; Subpart 2: Amount of subpart 2 funding[A]: 
11,614,667; Subpart 2: Percentage of subpart 2 funding[B]: 4.5.

Service category: Child protective services; Subpart 1: Number of 
states: 17; Subpart 1: Amount of subpart 1 funding[A]: 40,543,000; 
Subpart 1: Percentage of subpart 1 funding: 15.8; Subpart 2: 
Number of states: 5; Subpart 2: Amount of subpart 2 funding[A]: 
2,248,690; Subpart 2: Percentage of subpart 2 funding[B]: 0.9.

Service category: Foster care maintenance payments; Subpart 1: Number 
of states: 17; Subpart 1: Amount of subpart 1 funding[A]: 27,890,783; 
Subpart 1: Percentage of subpart 1 funding: 10.8; Subpart 2: 
Number of states: 2; Subpart 2: Amount of subpart 2 funding[A]: 
647,154; Subpart 2: Percentage of subpart 2 funding[B]: 0.3.

Service category: Multiple responses[C]; Subpart 1: Number of states: 
8; Subpart 1: Amount of subpart 1 funding[A]: 25,806,347; Subpart 1: 
Percentage of subpart 1 funding: 10.0; Subpart 2: Number of 
states: 4; Subpart 2: Amount of subpart 2 funding[A]: 3,503,585; 
Subpart 2: Percentage of subpart 2 funding[B]: 1.4.

Service category: Family support/prevention; Subpart 1: Number of 
states: 17; Subpart 1: Amount of subpart 1 funding[A]: 19,840,891; 
Subpart 1: Percentage of subpart 1 funding: 7.7; Subpart 2: 
Number of states: 28; Subpart 2: Amount of subpart 2 funding[A]: 
127,430,496; Subpart 2: Percentage of subpart 2 funding[B]: 49.8.

Service category: Counseling and mental health services; Subpart 1: 
Number of states: 2; Subpart 1: Amount of subpart 1 funding[A]: 
8,350,562; Subpart 1: Percentage of subpart 1 funding: 3.2; 
Subpart 2: Number of states: 5; Subpart 2: Amount of subpart 2 
funding[A]: 1,354,763; Subpart 2: Percentage of subpart 2 funding[B]: 
0.5.

Service category: Family preservation; Subpart 1: Number of states: 7; 
Subpart 1: Amount of subpart 1 funding[A]: 5,986,045; Subpart 1: 
Percentage of subpart 1 funding: 2.3; Subpart 2: Number of 
states: 23; Subpart 2: Amount of subpart 2 funding[A]: 30,308,896; 
Subpart 2: Percentage of subpart 2 funding[B]: 11.8.

Service category: Adoption subsidy payments; Subpart 1: Number of 
states: 7; Subpart 1: Amount of subpart 1 funding[A]: 4,657,546; 
Subpart 1: Percentage of subpart 1 funding: 1.8; Subpart 2: 
Number of states: 2; Subpart 2: Amount of subpart 2 funding[A]: 
737,412; Subpart 2: Percentage of subpart 2 funding[B]: 0.3.

Service category: Family reunification; Subpart 1: Number of states: 4; 
Subpart 1: Amount of subpart 1 funding[A]: 2,446,570; Subpart 1: 
Percentage of subpart 1 funding: 1.0; Subpart 2: Number of 
states: 26; Subpart 2: Amount of subpart 2 funding[A]: 23,625,973; 
Subpart 2: Percentage of subpart 2 funding[B]: 9.2.

Service category: Recruitment and training for foster/adoptive parents; 
Subpart 1: Number of states: 9; Subpart 1: Amount of subpart 1 
funding[A]: 2,260,061; Subpart 1: Percentage of subpart 1 funding: 0.9; 
Subpart 2: Number of states: 16; Subpart 2: Amount of subpart 
2 funding[A]: 6,828,885; Subpart 2: Percentage of subpart 2 funding[B]: 
2.7.

Service category: Adoption support and preservation services; Subpart 
1: Number of states: 2; Subpart 1: Amount of subpart 1 funding[A]: 
446,877; Subpart 1: Percentage of subpart 1 funding: 0.2; 
Subpart 2: Number of states: 27; Subpart 2: Amount of subpart 2 
funding[A]: 28,481,585; Subpart 2: Percentage of subpart 2 funding[B]: 
11.1.

Service category: Other; Subpart 1: Number of states: 11; Subpart 1: 
Amount of subpart 1 funding[A]: 4,817,180; Subpart 1: Percentage of 
subpart 1 funding: 1.9; Subpart 2: Number of states: 15; 
Subpart 2: Amount of subpart 2 funding[A]: 12,795,915; Subpart 2: 
Percentage of subpart 2 funding[B]: 5.0.

Service category: Total[D]; Subpart 1: Number of states: ; Subpart 1: 
Amount of subpart 1 funding[A]: $257,154,537; Subpart 1: Percentage of 
subpart 1 funding: 100.0%; Subpart 2: Number of states: ; 
Subpart 2: Amount of subpart 2 funding[A]: $255,807,079; Subpart 2: 
Percentage of subpart 2 funding[B]: 100.0%.

Source: GAO survey.

Notes: Percentages do not always total to 100 due to rounding.

Data on subpart 1 expenditures are based on survey responses from 46 
states and data on subpart 2 expenditures are based on survey responses 
from 44 states. While Pennsylvania responded to our survey, it did not 
provide expenditure data for subparts 1 or 2.

[A] When providing data for our survey, states were asked to indicate 
the single service category that best described the type of program 
funded by subparts 1 and 2. Thus, programs that fall into multiple 
service categories may not be fully captured. For example, one state 
indicated it funded a family support program, which includes some 
family preservation and reunification services. In addition, states may 
not have been consistent in categorizing services. For example, several 
HHS officials told us that the delineation between family support and 
family preservation services is not clear, so that two states providing 
the same services to the same types of families may report them in 
different categories. Inconsistencies such as these could have an 
effect on any measured differences among service categories.

[B] States may spend less than 20 percent of their subpart 2 funds on 
any of the required service categories if they have a strong rationale. 
Some HHS regional officials said that they approve exceptions to the 20 
percent requirement if a state is spending a significant amount of 
nonfederal funds on a subpart 2 service category.

[C] Although states were asked to indicate the single service category 
that best described the type of program funded by subparts 1 and 2, 
several states selected multiple program categories when responding to 
our survey. For example, Rhode Island reported that it funded a home 
visitation program and indicated that this program includes family 
support, health, and family reunification services. Thus, the responses 
from states that reported multiple categories for a program are 
represented by this category.

[D] The aggregate dollars reported in the service categories do not 
match the total allocations for subparts 1 and 2 in fiscal year 2002. 
States have 2 years to spend their Title IV-B allocations; as a result, 
expenditures in fiscal year 2002 may include dollars from a state's 
fiscal year 2001 Title IV-B allocation, as well as its fiscal year 2002 
Title IV-B allocation. Similarly, some fiscal year 2002 allocations may 
not have been spent until fiscal year 2003.

[End of table]

Subpart 1 dollars were most frequently used to fund staff salaries, 
with almost half of these funds designated for the salaries of CPS 
social workers. Another 20 percent of these funds were used for the 
salaries of other social workers (see fig. 1).[Footnote 17] During our 
site visit, Washington child welfare officials told us that they used 
over 50 percent of the state's subpart 1 funds for salaries of staff 
providing direct services, including CPS social workers, social workers 
who provide ongoing case management and support services to families 
involved with the child welfare agency due to concerns about abuse or 
neglect, social work supervisors, and clerical support staff. While 
states also reported using subpart 2 funds for staff salaries, only 2 
percent of subpart 2 dollars were used for this purpose. This 
comparison may underestimate the overlap in services funded by subparts 
1 and 2, however, because much of the costs of programs funded by 
subpart 2 is likely attributable to staff salaries. Similarly, some 
social work staff whose salaries are funded by subpart 1 likely provide 
a variety of services, such as family preservation services, recruiting 
foster families, and referring families for needed services, some of 
which may be similar to services funded by subpart 2.

Figure 1: Percentage of Subpart 1 Funds Used for Staff Salaries 
Dedicated to Each Type of Staff Position in Fiscal Year 2002:

[See PDF for image]

Notes: Some states spent subpart 1 funds on salaries, but could not 
provide information on the types of staff positions included.

[End of figure]

Percentages do not total to 100 due to rounding.

Administration and management comprised the second largest category of 
service, accounting for almost 17 percent of subpart 1 dollars. These 
services included rent and utilities for office space, travel expenses 
for agency staff, and staff training.[Footnote 18] Ohio, for example, 
used most of its subpart 1 dollars to fund state and county child 
welfare agency administrative expenses. In contrast, states spent less 
than 5 percent of their subpart 2 funds on administration and 
management.

CPS represents the third largest category of services that states 
funded with subpart 1. States used about 16 percent of their subpart 1 
funds to provide a variety of CPS services, such as telephone hotlines 
for the public to report instances of child abuse and neglect, 
emergency shelters for children who needed to be removed from their 
homes, and investigative services. During our site visit to California, 
for example, officials reported using about 40 percent of their subpart 
1 dollars to fund staff salaries and operating expenses associated with 
a variety of shelter care services provided by counties, such as 
emergency shelters and foster homes. A child is placed in one of these 
shelters when no other placement option is immediately available--for 
example, when an investigation in the middle of the night determines 
that the child is at immediate risk of harm or when a child runs away 
from a foster home. In comparison to states' use of subpart 1 funds, 
states reported using less than 1 percent of their subpart 2 dollars to 
fund programs within this service category.

States used nearly 11 percent of their subpart 1 funds to make 
recurring payments for the room and board of foster children who are 
not eligible for reimbursement through Title IV-E. For instance, New 
Jersey officials reported spending over 50 percent of the state's 
subpart 1 funds on foster care maintenance payments. Seventeen states 
spend subpart 1 funds on foster care maintenance payments, while only 2 
states reported using subpart 2 funds for this purpose, accounting for 
less than 1 percent of total subpart 2 expenditures.

States reported using half of their subpart 2 dollars to fund family 
support services. These services included mentoring programs to help 
pregnant adolescents learn to be self-sufficient, financial assistance 
to low-income families to help with rent and utility payments, and 
parenting classes, child care, and support groups provided by a 
community-based resource center. One California county we visited used 
subpart 2 to fund a network of family support services with the goal of 
strengthening communities and keeping families from becoming involved 
with the child welfare system. Funds were granted to community groups 
to provide support and improve the healthy development of families for 
different populations, such as grandparent caregivers and adolescent 
mothers. Washington funded a network of public health nurses and social 
service agencies to provide support services to families that are the 
subject of a report of abuse or neglect--these services are provided in 
lieu of, or following, a formal investigation when the level of risk to 
the child is not considered high. Over one-third of the states 
responding to our survey also reported using subpart 1 funds to provide 
family support services similar to those funded by subpart 2, although 
family support services only accounted for 8 percent of subpart 1 
expenditures. For example, New Jersey transferred about 27 percent of 
its subpart 1 funds to local child welfare agencies to provide family 
support services, which included parent education classes, 
transportation, and mentoring for children.

Family preservation services--designed to keep families together and 
prevent the need to place a child in foster care--represented the 
second largest service category funded by subpart 2. Washington used 
subpart 2 funds for its statewide family preservation program, which 
offers counseling and parent training services for up to 6 months to 
families with children who are at risk of being placed in foster care. 
In some cases, services provided in this category were similar to those 
in the family support category, but were intended to help keep families 
together. For example, Florida funded several neighborhood resource 
centers, which provide child care, parenting classes, adult education 
and training opportunities, mental health services, transportation 
services, and a food pantry. Although states primarily used subpart 2 
dollars to provide these services, states also reported using 
approximately 2 percent of subpart 1 funds on family preservation 
services.

In addition, states reported using about 11 percent of their subpart 2 
funds for adoption support and preservation services. With these funds, 
states provided services such as counseling for children who are going 
to be adopted, family preservation services to adoptive families, and 
respite care for adoptive parents. Officials in Ohio reported using 
almost half of its subpart 2 dollars for adoption services, including 
post adoption services and services to recruit families for children in 
need of adoptive homes. Similarly, Florida funded adoption support 
services for children with special needs who are awaiting adoption, 
including counseling, behavior modification, tutoring, and other 
services to expedite the adoption process. In contrast, less than 1 
percent of subpart 1 dollars were used to provide adoption support and 
preservation services.

Finally, states spent about 9 percent of their subpart 2 dollars on 
family reunification services. States funded a diverse array of family 
reunification programs, such as supervised visitation centers for 
parents to visit with their children and coordinators for alcohol and 
drug treatment services for families whose primary barrier to 
reunification is substance abuse. New Jersey funded a supervised 
visitation program that offers parenting education, counseling, 
transportation, and support groups and is located in a private home, 
allowing families to visit together in a homelike setting and engage in 
more natural interactions. One county we visited in California used 
subpart 2 funds for a shared family care program, in which the parent 
and child are placed together in a mentor home. The mentor provides a 
role model for good parenting behavior and provides hands-on parenting 
guidance to keep the family together, while a case manager ensures that 
family members receive services to address problems that could lead to 
the removal of the child, such as substance abuse or homelessness. 
Subpart 1 funds were used much less frequently for family reunification 
services; states reported using 1 percent of subpart 1 funds for these 
services.

Significant Overlap Exists among the Types of Children and Families 
Served by Subparts 1 and 2:

Significant overlap exists among the types of children and families 
served by these subparts, although certain populations are more closely 
associated with a particular subpart. Services funded by each subpart 
predominantly targeted children at risk of abuse or neglect and their 
parents, as well as children in foster care and their parents. States 
responding to our survey reported that services funded by subpart 1 in 
fiscal year 2002 most frequently served children living in foster care 
and/or their parents, while 9 percent of subpart 2 funds are used for 
services that target the same population (see table 3). Similarly, 
while subpart 2 services most commonly targeted children at risk of 
abuse and neglect and/or their parents, about 17 percent of subpart 1 
funds were also used for services aimed at this population. In 
addition, 9 percent of subpart 1 funds and 11 percent of subpart 2 
funds were used to fund services intended for both of these types of 
families.

Table 3: Populations Targeted by Services Funded by Subparts 1 and 2 of 
Title IV-B in Fiscal Year 2002:

Population served: Children in foster care and/or their parents; 
Subpart 1: No. of services: 33; Subpart 1: Amount of subpart 1 funding: 
$34,732,673; Subpart 1: Percent of funding: 42; Subpart 2: No. 
of services: 46; Subpart 2: Amount of subpart 2 funding: $15,218,065; 
Subpart 2: Percent of funding: 9.

Population served: Children at risk of child abuse and neglect and/or 
their parents; Subpart 1: No. of services: 28; Subpart 1: Amount of 
subpart 1 funding: 13,751,328; Subpart 1: Percent of funding: 17; 
Subpart 2: No. of services: 133; Subpart 2: Amount of subpart 
2 funding: 73,996,404; Subpart 2: Percent of funding: 44.

Population served: Programs serving multiple populations; Subpart 1: 
No. of services: 21; Subpart 1: Amount of subpart 1 funding: 
11,949,444; Subpart 1: Percent of funding: 14; Subpart 2: No. 
of services: 43; Subpart 2: Amount of subpart 2 funding: 18,119,756; 
Subpart 2: Percent of funding: 11.

Population served: Children at risk of child abuse or neglect and/or 
their parents and children living in foster care and/or their parents; 
Subpart 1: No. of services: 12; Subpart 1: Amount of subpart 1 funding: 
7,077,448; Subpart 1: Percent of funding: 9; Subpart 2: No. of 
services: 39; Subpart 2: Amount of subpart 2 funding: 17,606,172; 
Subpart 2: Percent of funding: 11.

Population served: Programs serving all populations; Subpart 1: No. of 
services: 5; Subpart 1: Amount of subpart 1 funding: 7,513,368; Subpart 
1: Percent of funding: 9; Subpart 2: No. of services: 7; 
Subpart 2: Amount of subpart 2 funding: 11,028,464; Subpart 2: Percent 
of funding: 7.

Population served: Children waiting for adoption, adopted children, and 
adoptive parents; Subpart 1: No. of services: 9; Subpart 1: Amount of 
subpart 1 funding: 4,153,271; Subpart 1: Percent of funding: 5; 
Subpart 2: No. of services: 54; Subpart 2: Amount of subpart 2 
funding: 27,340,372; Subpart 2: Percent of funding: 16.

Population served: Other populations, such as delinquent teens and 
foster parents; Subpart 1: No. of services: 10; Subpart 1: Amount of 
subpart 1 funding: 3,492,142; Subpart 1: Percent of funding: 4; 
Subpart 2: No. of services: 16; Subpart 2: Amount of subpart 2 
funding: 3,336,070; Subpart 2: Percent of funding: 2.

Population served: Total[A]; Subpart 1: No. of services: 118; Subpart 
1: Amount of subpart 1 funding: $82,669,674; Subpart 1: Percent of 
funding: 100%; Subpart 2: No. of services: 338; Subpart 2: 
Amount of subpart 2 funding: $166,645,301; Subpart 2: Percent of 
funding: 100%.

Source: GAO survey.

Note: This analysis is based on survey responses from 35 states with 
state-administered child welfare systems that provided population data 
for their subpart 1 services and 39 states with state-administered 
child welfare systems that provided population data for their subpart 2 
services. Therefore, these data can only be generalized to states with 
state-administered child welfare systems.

[A] The dollar totals in this table do not match those in table 2 
because we do not have population data from states that completed the 
county-administered survey. Due to the differences in information 
available from states with county-administered child welfare systems, 
we did not request data in the first county-administered survey on the 
types of children and families who received services funded by Title 
IV-B--these data were to have been obtained on the second survey. In 
addition, we did not collect data on the populations served for the 
category of staff salaries, and we excluded population data for the 
category of administration and management expenses since these expenses 
are not targeted to a particular population of children and families.

[End of table]

The overlap in populations observed at the national level can also be 
seen when looking at the children and families targeted by individual 
states. We found that individual states frequently funded programs with 
each subpart that served the same types of children and families. For 
example, all 20 states that used subpart 1 dollars to fund services for 
children at risk of abuse or neglect and/or their parents also used 
subpart 2 dollars to fund a program serving this same population type 
(see table 4). Alaska, for instance, used subpart 1 dollars to fund a 
broad family support program, which provided services to children at 
risk of abuse and neglect and their parents. The state also used 
subpart 2 funds to provide another family support program, which 
provides similar services to the same types of children and families. 
In addition, 17 states funded one or more individual services with 
funds from both subparts, so that subparts 1 and 2 were serving the 
same children and families.

Table 4: Number of States Using Funds from Each Subpart of Title IV-B 
to Target Specific Populations:

Population type: Children in foster care or parents with children 
living in foster care; Number of states providing services for this 
population type with subpart 1 funds[A]: 20; Number of states providing 
services for this population type with subpart 2 funds[A]: 29; Number 
of states providing services for this population type with both subpart 
1 and subpart 2 funds: 15.

Population type: Children at risk of child abuse or neglect and parents 
with children at risk of child abuse and neglect; Number of states 
providing services for this population type with subpart 1 funds[A]: 
20; Number of states providing services for this population type with 
subpart 2 funds[A]: 34; Number of states providing services for this 
population type with both subpart 1 and subpart 2 funds: 20.

Population type: Children waiting for adoption, adopted children, and 
adoptive parents; Number of states providing services for this 
population type with subpart 1 funds[A]: 8; Number of states providing 
services for this population type with subpart 2 funds[A]: 26; Number 
of states providing services for this population type with both subpart 
1 and subpart 2 funds: 5.

Population type: Foster parents; Number of states providing services 
for this population type with subpart 1 funds[A]: 5; Number of states 
providing services for this population type with subpart 2 funds[A]: 7; 
Number of states providing services for this population type with both 
subpart 1 and subpart 2 funds: 3.

Source: GAO survey.

Note: This analysis is based on survey responses from 35 states with 
state-administered child welfare systems that provided population data 
for their subpart 1 services and 39 states with state-administered 
child welfare systems that provided population data for their subpart 2 
services. Therefore, these data can only be generalized to states with 
state-administered child welfare systems. Due to the differences in 
information available from states with county-administered child 
welfare systems, we did not request data in the first county-
administered survey on the types of children and families who received 
services funded by Title IV-B--these data were to have been obtained on 
the second survey.

[A] We did not collect data on the populations served for the category 
of staff salaries. In addition, we excluded population data for the 
category of administration and management expenses since these expenses 
are not targeted to a particular population of children and families.

[End of table]

In our second survey, we requested more detailed information about the 
populations served by programs funded by subparts 1 and 2, such as 
demographic and socioeconomic characteristics. However, few of the 17 
states responding to the second survey were able to provide this kind 
of data. When asked about selected subpart 1 services, 10 of the 17 
states were able to estimate the extent to which the same children and 
families receiving the identified service funded by subpart 1 also 
received services funded by subpart 2. Of children and families 
receiving the identified subpart 1 service,

* four states reported that generally none or almost none of the 
recipients also received a service funded by subpart 2,

* three states reported that generally less than half of the recipients 
received subpart 2 services,

* one state reported that all or almost all recipients received subpart 
2 services, and:

* two states provided varying estimates for different subpart 1 
services.[Footnote 19]

While none of the states we visited were able to provide data about the 
extent to which the same children and families were receiving services 
funded by both subparts 1 and 2, state officials in each of these 
states recognized some overlap among the types of populations 
participating in these services. Officials in California and New Jersey 
told us that they use subpart 1 for services to families that are 
involved with the child welfare agency due to a report of abuse or 
neglect, while services funded by subpart 2 target a broader 
population, including families who are at risk of abusing their 
children. However, while some of the subpart 2 programs these officials 
described focused on this at risk population, many of them were 
targeted to families who were already involved with the agency. 
Officials at a California child welfare agency told us that all of the 
services provided by subparts 1 and 2 are targeted toward the same 
high-risk communities in which many people are involved with the 
agency, and they considered it likely that families receiving subpart 1 
services have also received subpart 2 services in the past or will at 
some time in the future. Washington officials noted that children and 
families involved with the child welfare agency may receive multiple 
services, some of which may be funded by subpart 1 and some of which 
may be funded by subpart 2. Finally, although Ohio does not track 
clients served, one state official estimated that the types of children 
and families served by the programs funded by subparts 1 and 2 overlap 
by 100 percent.

One New Jersey state official described the services funded by subparts 
1 and 2 as part of a continuum of child welfare services, such that 
some population overlap is to be expected. In New Jersey, services 
funded by subpart 1 target families who are experiencing difficulties 
that may jeopardize the safety and well-being of their children. 
Programs funded by subpart 2 may also serve these families. However, 
they also target families who are not currently having difficulties, 
but who could become involved with the child welfare agency in the 
future. In addition, some subpart 2 programs serve adopted children, 
many of whom were previously involved with the child welfare agency and 
received services funded by subpart 1. None of the states we visited 
could provide data on the numbers of children and families who 
participated in services funded by subparts 1 and 2 dollars.

HHS Officials Believe Title IV-B Offers Flexibility While Targeting 
Prevention Activities, and States Emphasize the Need for Flexibility:

Given the overlap observed between the two subparts, we discussed the 
potential advantages and disadvantages of consolidation with HHS 
regional officials and asked states for their perspective on our 
survey. Officials in almost all of HHS's regional offices said that 
Title IV-B should maintain its current balance between allowing states 
some flexibility and targeting some resources toward prevention. 
Officials in all regional offices told us that they believe states need 
some flexibility to use Title IV-B funds to address state specific 
child welfare needs as is currently the case under subpart 1. One 
regional office noted that subpart 1 gives states the flexibility to 
address unexpected circumstances affecting the child welfare system--
for example, by developing substance abuse treatment programs to 
address the needs of parents affected by the cocaine epidemic of the 
1980s. Similarly, officials in three states we visited felt strongly 
that the flexibility to direct the use of subpart 1 funds for state 
priorities was important and they would not want to lose this 
flexibility in any consolidated program. Our survey results also 
indicate that the flexibility to use subpart 1 to meet the needs of 
their child welfare systems is important to states. For example, when 
asked about their preference between subparts 1 and 2 with regard to 
different program components, 24 and 26 states, respectively, reported 
that they preferred subpart 1 when considering (1) spending 
restrictions on the percentage of funds that can be used for specific 
services and (2) allowable spending categories (see fig. 2). When asked 
about the advantages and disadvantages of Title IV-B's current 
structure, several states cited the spending restrictions of subpart 2 
as a disadvantage, while a couple of states mentioned the flexibility 
associated with subpart 1 as an advantage.

Figure 2: Survey Data on States' Preferences between Subparts 1 and 2 
of Title IV-B for Different Program Components:

[See PDF for image]

Note: Data on state preferences are based on responses from 46 states, 
although they did not all respond to each item.

[End of figure]

At the same time, officials in 8 of HHS's 10 regional offices also 
stressed the importance of subpart 2 to ensure that states use some 
funds on family support services and prevention activities to help 
preserve families and keep children from entering foster care. Several 
regional offices expressed concern that, in the absence of the minimum 
spending requirements outlined in subpart 2, states would neglect 
preventive services, while using Title IV-B funds for more urgent 
services, such as CPS or foster care. One state we visited expressed 
opposition to consolidation for this reason, arguing that keeping a 
separate subpart 2 was important to ensure that states fund some 
prevention services. State and county officials in this state noted 
that subpart 2 represents an important federal investment in prevention 
services and expressed concern that states would use all available 
funds to provide services to families already involved with the child 
welfare agency unless funds were specifically targeted for services to 
support families at risk of abusing or neglecting their children. In 
addition, on our survey, several states cited the prevention focus of 
subpart 2 as an advantage of Title IV-B's current structure.

Officials in 8 of HHS's regional offices said that they believe that 
the current structure of Title IV-B offers a good balance between 
flexibility and targeting resources toward prevention.[Footnote 20] 
Officials in the other 2 regional offices told us that Title IV-B 
provides a good mix of flexibility and a focus on services considered 
to be federal priorities. One regional office noted that a consolidated 
Title IV-B program could be structured to offer this balance. For 
example, a consolidated program could require some minimum spending 
levels for the current subpart 2 categories, but also set aside some 
funds that states could use for a broader array of child welfare 
services. In addition, most of the regional offices did not believe 
that consolidation would lead to any significant administrative 
savings. For example, several regional offices explained that 
consolidating the subparts would not reduce HHS's oversight 
responsibilities, while another noted that consolidation would have 
little impact on HHS regional or state offices, which are staffed and 
organized to manage multiple sources of funding. Another regional 
office noted that the planning and reporting requirements for the two 
subparts are already consolidated in the planning documents states 
submit to HHS.

State and local child welfare officials in one state, along with 
officials at 2 HHS regional offices, commented that increasing the 
funds available for service provision was more critical than 
consolidating the two subparts. They believe that states need more 
federal funds to provide services to prevent foster care placements, 
such as an increase in funds available under Title IV-B or more 
flexibility to use Title IV-E funds to provide services, rather than 
paying primarily for foster care maintenance payments as it currently 
does. Since 1994, states have been able to apply for demonstration 
waivers to use federal child welfare funds to test innovative foster 
care and adoption practices without regard to certain restrictions in 
Titles IV-B and IV-E. For example, four states are using demonstration 
waivers to create fixed Title IV-E budgets for counties within the 
state in which funds can be used more flexibly for prevention and 
community-based services not traditionally reimbursed by Title IV-E. 
However, HHS's authority to approve such waivers is scheduled to expire 
at the end of fiscal year 2003. States may soon have another mechanism 
to use Title IV-E funds to provide preventive services through the 
child welfare option HHS is currently proposing.

HHS Focuses Oversight on Overall Child Welfare System, but Has Limited 
Knowledge about States' Use of Subpart 1 Funds:

HHS's oversight focuses primarily on states' overall child welfare 
systems and outcomes, but the agency provides relatively little 
oversight specific to subpart 1. For example, HHS regional offices work 
with states to establish overall goals to improve the safety, 
permanency, and well-being of children and measure progress toward 
those goals. However, HHS has limited knowledge about how states use 
their subpart 1 funds. HHS does not collect data on subpart 1 
expenditures and instead requires states to submit annual estimates 
about how they plan to use their subpart 1 funds in the upcoming year. 
HHS regional offices reported that they review these estimates for 
relatively limited purposes, with several HHS officials noting that 
they do not review the spending plans for subpart 1 as closely as 
subpart 2 because subpart 1 has few restrictions as to how these funds 
can be used. We also found that HHS regional offices pay little 
attention to statutory limits on the use of subpart 1 funds for foster 
care maintenance and adoption assistance payments.[Footnote 21] As a 
result, HHS approved projected 2002 spending plans for 15 states that 
reported planned spending amounts that exceeded these spending limits. 
In response to our survey, 10 states reported actual 2002 subpart 1 
expenditures that exceeded the spending limits by over $15 million in 
total.

HHS Focuses Much of Its Oversight on States' Overall Child Welfare 
Systems and Outcomes:

HHS focuses much of its programmatic oversight on the overall child 
welfare system in each state, rather than focusing specifically on 
subpart 1 or any other federal funding source. In discussing their 
oversight of subpart 1, several HHS officials at headquarters and in 
the regional offices emphasized the importance of reviewing the overall 
child welfare system and the outcomes achieved, rather than 
scrutinizing individual programs outside of that context. A major 
component of HHS's subpart 1 oversight is having the regional offices 
actively work with states to develop appropriate goals for their child 
welfare systems and ensure that available funds, including subpart 1, 
are used to support those goals. To receive Title IV-B funding, HHS 
requires states to submit a Child and Family Services Plan, which 
covers a 5-year period and describes the state's goals and objectives 
toward improving outcomes related to the safety, permanency, and well-
being of children and families. This 5-year plan includes a description 
of services and programs the state will pursue to achieve these goals.

In addition to the 5-year plan, HHS requires states to submit an Annual 
Progress and Services Report (APSR) each year to discuss their progress 
in meeting the goals outlined in their plans and revise the goals as 
necessary. Regional HHS staff review this planning document to ensure 
that they meet all the technical requirements outlined in the annual 
program instructions issued by HHS. For example, states must certify 
that, in administering and conducting services under the 5-year plan, 
the safety of the children to be served shall be of paramount concern. 
In addition, some regional offices reported that they review the 
state's objectives and goals to determine if they are reasonable, 
assess the progress the state has made in achieving these goals and 
objectives, and determine whether child welfare services are 
coordinated with the efforts of other agencies serving children. Some 
regional officials noted that states are still struggling to use these 
documents appropriately for planning purposes. These officials told us 
that instead of focusing on outcomes and collecting data to measure 
progress toward those outcomes, frequently states simply describe their 
current programs.

In addition to reviewing planning documents, all of the regional 
offices consult regularly with states to discuss child welfare issues 
and provide technical assistance.[Footnote 22] For example, the 
regional office may provide guidance on how to comply with specific 
program regulations or how to develop a 5-year plan that will function 
as a strategic plan for the state's child welfare agency. Two regional 
offices told us that they also conduct site visits to states as part of 
their oversight. One regional office reported visiting states in its 
region to gain a better understanding of each state's child welfare 
services. This allows the regional office to share good ideas with 
other states and to ensure that states are working on areas the 
regional office has identified as in need of improvement. Other 
regional offices reported that they would like to conduct site visits 
to states under their purview, but a lack of travel funds prevented 
them from doing so.

The CFSR process is an additional tool HHS uses to ensure that states 
conform with federal child welfare requirements and to help states 
improve their child welfare services. Staff at one regional office 
described the CFSR as a thorough review of the services funded by 
different federal programs, such as Title IV-B. They consider the CFSR 
an important complement to a state's planning documents--it gives them 
an opportunity to determine whether states are providing the services 
they report in their planning documents and whether those services are 
adequate and appropriate to meet the needs of the state's children and 
families.

CFSR results for the past 2 years indicate that states have not 
performed strongly in terms of assessing families to determine what 
services they need and providing those services. While 21 of the 32 
states that underwent a CFSR in 2001 or 2002 were considered to have an 
appropriate array of services for families, HHS found that the 
accessibility of services was a particular weakness in that many 
services were either not available statewide or had long waiting lists 
or other barriers to accessibility. When HHS reviewed case files, 
however, it determined that 31 of these states needed improvement in 
terms of assessing family needs and providing services to meet those 
needs. When asked about HHS's role in guiding states' use of subpart 1 
funds to address weaknesses identified by the CFSRs, an HHS official 
told us that the agency provides technical assistance to states to help 
them determine the most effective use of their resources. However, the 
official also pointed out that HHS gives states a lot of latitude to 
determine the most appropriate use of their subpart 1 funds and that 
the agency cannot become too involved in state budget decisions given 
the complexities of the budget processes for states.

HHS Has Little Information about States' Use of Subpart 1 Funds:

HHS has little information about states' use of subpart 1 funds. Each 
year, HHS requires states to submit a form CFS-101, which includes 
state estimates of the amount of subpart 1, subpart 2, and other 
federal funds the state plans to spend in the upcoming year on 
different categories of services (such as family support or CPS). The 
descriptions provided by regional office staff of their review of these 
estimates indicate that they review them for relatively limited 
purposes. Officials in 4 of the regional offices told us that they 
generally use the CFS-101 data to ensure that states request the total 
amount of subpart 1 funds to which they are entitled and that they 
comply with the requirement to match 25 percent of subpart 1 funds with 
state funds. Most regional offices indicated that their reviews of the 
CFS-101s focus more on subpart 2 than subpart 1. For example, they 
reported that they review states' planned subpart 2 spending more 
closely to ensure that states are meeting the requirement that they 
spend at least 20 percent of funds on each of the service categories 
and spend no more than 10 percent of funds for administrative purposes. 
Several HHS officials reported that they do not monitor the use of 
subpart 1 funds as closely as other federal child welfare funds due to 
the relatively small funding amount and the lack of detailed 
requirements about how the funds can be used.

Moreover, the CFS-101 estimates may not provide reliable data as to how 
states are using subpart 1 funds. HHS officials explained that the CFS-
101 data are estimates and that states' actual expenditures may vary 
from these estimates, as they address unforeseen circumstances. The 
timing for submitting the CFS-101 also affects how well states can 
estimate their planned subpart 1 spending. HHS requires states to 
submit their initial CFS-101 for the upcoming fiscal year by June 30, 
which forces states to estimate their planned spending before the final 
spending amounts for Title IV-B and other federal funds have been 
appropriated.[Footnote 23] Some regional officials indicated that they 
did not know how well states' CFS-101 estimates reflect their actual 
subpart 1 spending. We did not conduct a review of the reasonableness 
of the data states submit on their CFS-101s, but we did identify a few 
instances that suggested that the data are not always accurate. Two 
states with county-administered child welfare systems told us that they 
do not have reliable data to allow them to accurately estimate planned 
spending.[Footnote 24] A child welfare official in one of these states 
told us that its CFS-101 data represented its "best guess" as to how 
subpart 1 funds will be used, because the state distributes these funds 
to county child welfare agencies and does not collect any data on how 
the counties use these funds. The other state told us that its current 
CFS-101 data are most likely based on county data from several years 
ago and that counties may now be spending subpart 1 funds on different 
services.

HHS does not require states to provide any additional data about their 
use of subpart 1 funds, such as their subpart 1 expenditures for 
specific services.[Footnote 25] As a result, several regional offices 
noted that they have no way of knowing how states actually spend their 
subpart 1 funds. An official from one regional office explained that 
the only way to determine how a state actually uses its Title IV-B 
funds is to review its financial accounts, which HHS does not do. Some 
regional officials suggested that it would be helpful to have actual 
expenditure data for both Title IV-B subparts, especially to determine 
if states were actually using 20 percent of their subpart 2 funds for 
each of the four required service categories. Three regional offices 
indicated that they have begun asking states to provide Title IV-B 
expenditure data.

HHS Regional Offices Are Unaware of Subpart 1 Spending Limits or Do Not 
Enforce Them:

Given that HHS's subpart 1 oversight focuses primarily on a state's 
overall child welfare goals and outcomes, the regional offices pay 
little attention to the statutory limits on the use of federal subpart 
1 funds for foster care maintenance and adoption assistance payments. 
Most HHS regional offices do not review the CFS-101s for compliance 
with the statutory limits. In addition, HHS's annual program 
instruction, which details what information states must include in 
their CFS-101 submittals and serves as the basis for the regional 
offices' review of subpart 1 spending, does not mention the subpart 1 
limits.

Only 1 of HHS's 10 regional offices told us that it compares states' 
planned subpart 1 spending reported on the CFS-101 with the actual 
dollar limit for each state to ensure that states observe the statutory 
limits. This office used an HHS program instruction for 1979 listing 
each state's subpart 1 allocation to determine the ceiling on foster 
care maintenance and adoption assistance payments.[Footnote 26] In 
contrast, 5 regional offices were unaware that any limits on the use of 
subpart 1 funds existed, although 1 of these offices indicated that it 
generally did not consider it appropriate for states to use subpart 1 
funds for foster care maintenance payments because subpart 1 should be 
used to fund services for families. Nonetheless, this office approved a 
CFS-101 for 1 state that exceeded the statutory limits. Four other 
regional offices were aware that some limitations with regard to foster 
care maintenance and adoption assistance payments existed, but did not 
ensure that states complied with the limits.

These 4 regional offices provided several reasons for why they did not 
monitor states' planned spending for compliance with the subpart 1 
limits. Two regional offices indicated that HHS had provided no 
guidance as to how such limits should be enforced or that no data were 
available to calculate subpart 1 limits for each state. The third 
regional office reported that it did not have the specific ceiling 
amounts for each state. However, officials in this office said they 
reviewed planned subpart 1 spending for foster care maintenance and 
adoption assistance payments on the CFS-101 to determine if they had 
increased from the previous year. If the amounts had not increased, the 
regional office assumed that someone had checked the amounts previously 
and that they were within the limits. This regional office approved 
CFS-101s for 2 states in the region that reported planned subpart 1 
spending for foster care maintenance and adoption assistance payments 
in excess of the limits. The fourth regional office told us that, in 
the past, it had a list of the maximum spending limits for each state 
in its region and that it had previously checked states' CFS-101s to 
ensure that planned spending did not exceed the limits. However, the 
regional office no longer conducts such reviews; regional officials 
said that they consider the limits to be meaningless because state 
funds spent on child welfare services greatly exceed subpart 1 funds. 
In other words, any attempt to enforce the limits would only lead to 
changes in how states accounted for their funds--if a state was 
spending $1 million in state funds on CPS investigations and $1 million 
in subpart 1 funds for foster care maintenance and adoption assistance 
payments, the state could simply switch state and subpart 1 funding so 
that state funds paid for the foster care maintenance and adoption 
assistance payments, while subpart 1 funding paid for CPS 
investigations.

This lack of review led HHS to approve CFS-101s for 15 states that 
reported fiscal year 2002 planned subpart 1 expenditures for foster 
care maintenance and adoption assistance payments that exceeded the 
statutory limits (see fig. 3).[Footnote 27] The dollar amounts by which 
the subpart 1 spending estimates surpassed the limits were small in 
some cases, but large in others. For example, Georgia reported that it 
planned to spend $1,497,000 of subpart 1 funds for these purposes in 
2002, which would exceed its statutory limit by $1,558. At the other 
extreme, Florida's CFS-101 indicated that it planned to spend over $9 
million, which was more than $7 million over the maximum allowable 
spending of $1.9 million. In total, these 15 states submitted planned 
subpart 1 spending estimates for foster care maintenance and adoption 
assistance payments that would exceed the statutory limits by over $30 
million. Moreover, 13 of these 15 states submitted fiscal year 2003 
CFS-101s with planned subpart 1 spending above the statutory ceiling, 
which were approved by HHS.

Figure 3: Fifteen States with Approved CFS-101s with Fiscal Year 2002 
Subpart 1 Spending Estimates that Exceeded Limits for Foster Care 
Maintenance and Adoption Assistance Payments:

[See PDF for image]

[End of figure]

Several regional offices noted that they judge the appropriateness of 
subpart 1 spending on foster care maintenance and adoption assistance 
payments in the context of a state's overall child welfare system. For 
example, these regional offices said that they are not concerned about 
a state planning to spend significant proportions of its subpart 1 
funds on foster care maintenance and adoption assistance payments if 
they believed the state had a strong child welfare system with an 
appropriate array of services. Regional office staff said they would, 
however, ask a state to reconsider its funding strategy if the state 
were performing poorly. However, many of the states with approved CFS-
101 subpart 1 estimates above the statutory ceilings did not achieve 
strong outcomes on their CFSR evaluations with regard to providing 
needed services and having an appropriate array of services. HHS has 
conducted CFSRs on 12 of the 15 states with approved CFS-101s over the 
subpart 1 spending limits and determined that appropriately assessing 
family needs and providing services to address those needs was an area 
needing improvement in 11 of the 12 states. In addition, 6 of the 12 
states were also determined to need improvement in terms of having an 
appropriate array of services to meet the needs of families in the 
state.[Footnote 28]

We also compared our survey data on states' fiscal year 2002 subpart 1 
expenditures for foster care maintenance and adoption assistance 
payments with the statutory limits and found that 10 states reported 
spending subpart 1 funds on these payments that exceeded the legal 
limits (see fig. 4). As with their planned spending estimates, states' 
subpart 1 actual spending for foster care maintenance and adoption 
assistance payments exceeded the statutory limits by varying amounts. 
Michigan, for example, reported on our survey that it spent over $6 
million on foster care maintenance payments in fiscal year 2002--well 
over its $2.2 million limit for such payments--while New Hampshire's 
use of subpart 1 for foster care maintenance and adoption assistance 
payments was only about $27,000 above its limit. In total, these 10 
states reported subpart 1 expenditures for foster care maintenance and 
adoption assistance payments that exceeded the statutory limits by over 
$15 million. Our survey results may underestimate the number of states 
with subpart 1 spending over the statutory limits, because several 
states reported on our survey that they used subpart 1 for foster care 
maintenance or adoption assistance payments, but were not able to 
identify the specific dollar amount of subpart 1 funds used for these 
purposes.

Figure 4: Ten States That Reported Fiscal Year 2002 Subpart 1 
Expenditures Exceeding Limits for Foster Care Maintenance and Adoption 
Assistance Payments:

[See PDF for image]

[End of figure]

Four of these 10 states with subpart 1 expenditures over the statutory 
limits were also part of the 15 states with CFS-101s that indicated 
planned spending above the limits.[Footnote 29] The remaining 6 states 
did not report estimated subpart 1 spending over these limits.[Footnote 
30] For example, Colorado did not report any planned subpart 1 spending 
for foster care maintenance or adoption assistance payments. On our 
survey, however, the state reported using over $3 million in subpart 1 
funds for these purposes, well over its $700,000 limit.

Some Unique Subpart 1 Service Categories Exist at the State Level, but 
Little Research Exists on the Effectiveness of These Services:

Little research is available on the effectiveness of unique services 
funded by subpart 1 because few states have evaluated these services. 
While our survey data revealed no unique categories of services funded 
by subpart 1 on a national level, 37 states reported categories of 
services that were uniquely funded by subpart 1--that is, the 
individual state used subpart 1, but not subpart 2, to fund services in 
a particular category. For example, Delaware funded two CPS programs 
with subpart 1--assessments of a caregiver's parenting ability and 
legal services to represent the child welfare agency in court cases--
but did not use any subpart 2 funds for this service category. We 
contacted the states with unique service categories in their states 
(other than administration, staff salaries, adoption assistance 
payments, or foster care maintenance payments) and none of these states 
had conducted rigorous evaluations of these services, although several 
states provided some data on the effectiveness of services included in 
these categories. Our literature review on the effectiveness of child 
welfare practices identified research for some of these unique service 
categories, such as certain types of family preservation programs. With 
two exceptions, however, it did not identify any evaluations of the 
specific services included in these categories.

The most common service categories for which individual states used 
only subpart 1 funds were CPS, foster care maintenance payments, and 
staff salaries. The 37 states generally reported 1 or 2 unique 
categories, with 14 states reporting 1 unique category and 1 state 
reporting a high of 6 categories.[Footnote 31] Examples of unique 
subpart 1 services in the CPS category include specialized 
investigations of reports of child abuse or neglect, telephone hotlines 
to report incidents of child abuse or neglect, and temporary shelter 
services for children removed from their homes at times when no other 
placement option is available, such as evenings and weekends. States 
also provided other types of services that were funded uniquely by 
subpart 1. For example, Minnesota provided intensive in-home services 
to prevent children from being placed in foster care, North Carolina 
contracted for legal services with the state's Attorney General's 
office, and Maine helped adopted youth pay for post-secondary education 
costs.

Our review of child welfare literature and Internet sites that 
identified promising child welfare practices found few studies that 
evaluated the effectiveness of the specific services that states funded 
uniquely with subpart 1 funds. Based on the information provided on our 
survey, we identified evaluation research on two of these services. 
Texas used subpart 1 to fund its Home Instruction For Parents of 
Preschool Youngsters (HIPPY) Program. The goal of HIPPY is to prevent 
academic underachievement of children when they enter school. HIPPY 
works with parents in their homes or in parent group meetings to 
increase the degree and variety of literacy experiences in the home. 
The program also seeks to prevent child abuse by enhancing parent-child 
interactions and focuses on economically disadvantaged parents who may 
not be involved in parenting programs. While Texas has not formally 
evaluated this program, the model has been evaluated in other states. 
Strengthening America's Families, a Web site about effective family 
programs to prevent juvenile delinquency funded by the Office of 
Juvenile Justice and Delinquency Prevention, cites HIPPY as a model 
program for which evaluations have shown positive effects on children's 
measured competence and classroom behavior at the end of second grade 
for children who participated in HIPPY compared with children with no 
formal preschool experience.[Footnote 32] In addition, a 1999 article 
summarizing research on the HIPPY program found mixed results. For 
example, an evaluation in New York found that children whose parents 
participated in HIPPY in 1990 outperformed control group children on 
measures of classroom adaptation and reading scores 1 year later, but 
children whose parents participated in HIPPY in 1991 had similar 
outcomes as children in the control group. The article suggested that 
variability in how the program is implemented and in parental 
commitment to the program may explain the mixed results.[Footnote 33]

Missouri funded an alternative response system with subpart 1 funds, 
which offers assessment services (rather than an investigation) for 
families that are the subject of a report of abuse or neglect when the 
risk to the child is not considered high to determine if the family 
needs services to reduce the risk of harm to the child. By responding 
to low risk reports of abuse or neglect in a nonaccusatory manner, the 
goal is to encourage families to collaborate in identifying their needs 
and cooperate with supportive services. A 1998 evaluation of Missouri 
counties testing the state's alternative response system found that the 
safety of children was not compromised by the lack of an investigation 
and that, compared to counties that were not using the alternative 
response system, needed services were delivered more quickly, 
subsequent reports of abuse or neglect decreased, and the cooperation 
of families improved. An evaluation of Minnesota's alternative response 
systems has also shown promising results. For example, initial results 
from the randomized experimental evaluation showed an increase in the 
use of community services with no increase in subsequent reports of 
abuse or neglect.

Of the 37 states that reported unique subpart 1 service categories, we 
asked the 22 states with unique subpart 1 service categories other than 
foster care maintenance payments, adoption assistance payments, staff 
salaries, or administration, whether they had evaluated the 
effectiveness of the programs included in their unique categories. None 
of these states had conducted rigorous evaluations of the effectiveness 
of these services using randomly selected control groups.[Footnote 34] 
One official explained that few states can afford to divert resources 
from providing direct services to conducting formal evaluations of 
programs, given the tremendous service needs of families involved with 
the child welfare system.[Footnote 35]

However, 5 states provided some information on the outcomes of the 
services they funded uniquely with subpart 1. North Dakota used subpart 
1 dollars to uniquely fund a component of its family preservation 
program--family focused services--which the state characterized as a 
family reunification service. The state provided us with a draft 
evaluation report of its family preservation program, which includes 
this specific service. The family preservation program is intended for 
families with children at risk of being placed in foster care and 
offers a range of services, including parent aides who provide hands-on 
parenting education and therapists who are available 24 hours a day to 
work with the family in the home to address the issues that may result 
in the children being removed from the home. The evaluation of its 
total family preservation program found that families receiving 
services and the social worker involved with the families both reported 
improved family functioning upon completion of the services compared to 
their functioning prior to the services. The study also found that 
fewer children were at risk of being placed in foster care upon 
completion of services. However, the evaluation did not include any 
control group to determine if these results would have been achieved if 
families had not received these services.[Footnote 36]

Massachusetts used some of its subpart 1 funds to pay for a contractor 
to operate a telephone service for reports of child abuse or neglect 
that are received in the evenings and on weekends. Officials from 
Massachusetts provided an internal study conducted in February 2000 
that discussed problems with this telephone service, most notably 
limited staff and resources to handle an increasing volume of calls. 
The report recommended several actions to improve the operation of the 
telephone service, including an increase in staff to field telephone 
calls, upgrading the telephone system so that fewer people receive a 
busy signal, and increasing the number of beds available for emergency 
placements in the evenings and on weekends. Arizona also funded its 
child abuse telephone hotline uniquely with subpart 1 funds and 
provided the following statistics. In fiscal year 2003, 69 percent of 
calls to the hotline were answered without any wait. Of the calls that 
were not answered directly, the average wait time was 3.5 minutes and 
about 13 percent of calls were abandoned. In addition, quality 
assurance staff reviewed over 17,000 calls for which it was determined 
that the report did not meet the state's criteria for a CPS report 
requiring investigation and changed only 15 of these to a CPS report.

Missouri funded several CPS services with subpart 1 funds, including 
intensive in-home services for children at imminent risk of removal 
from the home-and family-centered services for families for whom an 
investigation determined services are needed to eliminate the risk of 
harm to the child. Missouri provided two annual reports for fiscal year 
2002 that provide some data on the outcomes of these services. Consumer 
surveys indicated that many families found the intensive in-home 
services useful, and the annual report on the intensive in-home 
services indicated that 88 percent of at-risk children were still with 
their families when services ended after approximately 6 weeks. In 
addition, 79 percent of children who exited the program in 2001 were 
still at home 1 year after services ended. With regard to family 
centered services, the annual report indicated that over 70 percent of 
families had achieved their goals at the time their case was closed. 
Wisconsin used subpart 1 to fund a Youth Aids Program, in which the 
state provides grants to counties to provide services to prevent the 
placement of children in correctional facilities and other out-of-home 
care. The state has not evaluated services provided by the counties, 
but a 1995 report notes that in the first several years of operation, 
this program produced major reductions in institutional placements and 
helped encourage the development of community-based 
resources.[Footnote 37] Over time, however, an increase in youth crime 
has led to large increases in institutional and out-of-home care, so 
that much of Youth Aids funding at the time was reported to be used for 
out-of-home placements.

Conclusions:

Despite its relatively small funding level compared to other funding 
sources for child welfare services, Title IV-B represents an important 
federal commitment to providing supportive services to help preserve 
and reunify families. The primary emphases of the two subparts vary 
somewhat, but the range of services offered and the types of families 
served overlap significantly. In part because of the relatively small 
funding involved and the flexible nature of the funding, HHS does not 
provide in-depth oversight specific to Title IV-B subpart 1. Instead, 
HHS focuses much of its oversight efforts on states' progress toward 
the overall goals of their child welfare systems and the outcomes 
achieved by these systems. While this type of oversight is appropriate, 
HHS could provide valuable assistance to states by obtaining more 
concrete data about states' use of these funds and synthesizing these 
data with CFSR data on states' outcomes with respect to properly 
identifying the service needs of children and families and providing 
needed services. Such analyses could allow HHS to develop information 
on how investments in certain types of services correlate to improved 
outcomes for children, which could be shared with states to help them 
more effectively target their spending.

HHS could also use this enhanced knowledge of Title IV-B to help 
develop an appropriate accountability strategy for its newly proposed 
child welfare option. If enacted, the additional spending flexibility 
proposed--given the size of the Title IV-E allocations that would 
become available for spending on a variety of child welfare services--
could have a significant impact on a state's child welfare system. 
Given the limited information available about the services funded with 
subpart 1 and the effectiveness of these services, as well as HHS's 
findings about the ability of states' to meet families' needs, ensuring 
that states use this flexibility to provide effective services will be 
critical to the success of this option. Opportunities also exist for 
HHS to continue to encourage states to conduct evaluations of the 
programs the states implement.

Recommendations:

We recommend that the Secretary of HHS provide the necessary guidance 
to ensure that HHS regional offices monitor states' use of Title IV-B 
subpart 1 funds for compliance with statutory restrictions on the use 
of these funds. In addition, we recommend that the Secretary consider 
the feasibility of collecting basic data on states' use of these funds 
to facilitate its oversight of the program and to provide guidance to 
help states determine appropriate services to fund. For example, an 
analysis of how states' spending patterns correlate to outcomes--both 
positive and negative--from the CFSRs could yield useful information 
for this purpose.

Given that HHS is currently developing the new child welfare option 
that would allow states to use Title IV-E dollars for services similar 
to those provided under Title IV-B subpart 1, we further recommend that 
the Secretary use the information gained through enhanced oversight of 
subpart 1--as well as information it may have on states' use of subpart 
2 funds--to inform its design of this option. For example, HHS could 
use this information to help states determine the most appropriate 
services to provide under this option.

Agency Comments:

We provided a draft of this report to HHS for comment. The Department's 
Administration for Children and Families provided comments. These 
comments are reproduced in appendix II. ACF also provided technical 
clarifications, which we incorporated when appropriate.

ACF agreed with our recommendation that the Secretary of HHS provide 
the necessary guidance to ensure that HHS regional offices monitor 
states' use of Title IV-B subpart 1 funds for compliance with statutory 
restrictions on the use of these funds. ACF agreed to provide guidance 
to the regional offices to enable them to enforce the statutory limits 
on subpart 1 funds. However, ACF also noted that this limitation no 
longer serves a useful purpose and is incompatible with the current 
proposal to offer states much more flexibility in using other federal 
child welfare dollars. ACF said that it plans to explore ways to 
provide states flexibility with respect to the subpart 1 limits.

ACF disagreed with our recommendation to consider the feasibility of 
collecting basic data on states' use of subpart 1 funds. ACF said that 
it believes that its level of oversight is commensurate with the scope 
and intent of the program and minimizes states' reporting requirements. 
Rather than using information on Title IV-B expenditures to help states 
most effectively use their resources, ACF believes that its oversight 
is more appropriately focused on the CFSR process, which requires 
states to develop actions in response to weaknesses identified by the 
CFSR and which measures the impact of these actions on actual outcomes. 
In ACF's opinion, analyzing how states' spending patterns correlate to 
CFSR results is not useful, given the lack of a direct relationship 
between the relatively small Title IV-B funding levels and the broad 
outcome areas of safety, permanency, and well-being. In addition, ACF 
noted that any data collected on subpart 1 expenditures would be 
outdated because states have 2 years to spend Title IV-B expenditures 
and are not required to report final expenditures until 90 days after 
the 2-year period has ended.

We believe, however, that assessing the feasibility of collecting some 
basic data on states' subpart 1 expenditures could enhance ACF's 
overall oversight of states' child welfare operations and outcomes. 
While the impact of states' program improvement efforts under the CFSR 
process is unknown because states are just getting these efforts 
underway, the service deficiencies identified by the CFSRs suggest that 
states could benefit from some guidance on the services that are 
associated with positive CFSR outcomes. An analysis of how states' 
spending patterns correlate to CFSR outcomes need not be limited to 
subpart 1 spending; such an analysis could help to identify effective 
services (regardless of funding source) that are associated with 
positive CFSR outcomes and help states target their subpart 1 and other 
funding sources more effectively. Furthermore, we do not believe that 
2-year old data on subpart 1 expenditures are necessarily outdated; 
rather, we believe such data would provide better information on 
states' use of subpart 1 funds than states' current estimates of 
planned spending. In addition, ACF could request expenditure data for a 
shorter period, such as a year or a quarter or whatever time period 
best fits states' other reporting requirements.

ACF did not comment on our recommendation that it use the information 
gained through enhanced oversight to inform its design of its child 
welfare option. However, we believe that guidance on services 
associated with positive CFSR outcomes could also help states that 
choose to participate in the proposed child welfare option to manage 
their fixed Title IV-E funding. ACF also commented on our finding that 
the services provided and families served under subparts 1 and 2 
overlap to some extent. Specifically, ACF noted that by not permitting 
the funds, services, and families to overlap, ACF would significantly 
impede the functionality of the continuum of child welfare services 
funded by Title IV-B and other federal funding streams and possibly 
lead to families not receiving needed services. While we described the 
overlap in services provided and families served, we did not state or 
imply that such overlap was inappropriate or unnecessary.

We also provided a draft of this report to child welfare officials in 
the 4 states we visited (California, New Jersey, Ohio, and Washington). 
Officials from California and Washington provided a few technical 
clarifications that we incorporated, while New Jersey and Ohio did not 
have any comments. In addition, Washington expressed concern that our 
recommendations for HHS to (1) ensure that the regional offices monitor 
states' use of subpart 1 funds for compliance with the statutory limits 
and (2) consider collecting data on states' use of these funds will add 
to the reporting burden of states without providing additional funds to 
offset that burden. We recommended that HHS consider the feasibility of 
collecting such data and would expect HHS to take into account the 
burden placed on states in making this decision.

We are sending copies of this report to the Secretary of HHS, 
appropriate congressional committees, state child welfare directors, 
selected county child welfare directors, and other interested parties. 
We will also make copies available to others upon request. In addition, 
the report will be available at no charge on GAO's Web site at http://
www.gao.gov.

If you have any questions, or wish to discuss this report further, 
please call me at (202) 512-8403 or Diana Pietrowiak at (202) 512-6239. 
Key contributors to this report are listed in appendix III.

Sincerely yours,

Cornelia M. Ashby 
Director, Education, Workforce, and Income Security Issues:

Signed by Cornelia M. Ashby: 

[End of section]

Appendix I: Scope and Methodology:

To determine how the services provided and populations served under 
subpart 1 compare with those under subpart 2, we surveyed child welfare 
directors in all 50 states and the District of Columbia. We sent a 
survey to all states to obtain information on how they use Title IV-B 
funds. We also sent a second survey to certain states that responded to 
the first survey. We pretested both survey instruments in New 
Hampshire, Rhode Island, and Wisconsin and obtained input from several 
other states and from a Department of Health and Human Services (HHS) 
official. In January 2003, we mailed a copy of the first survey to the 
states, asking for specific data on state spending and populations 
served for subparts 1 and 2, as well as their opinions about the 
current structure of Title IV-B. To address differences in the 
administrative structure and reporting systems of state child welfare 
agencies, a different version of this survey was sent to states with 
county-administered child welfare systems.[Footnote 38] We received 
responses from 47 states, although some states were unable to provide 
complete information.[Footnote 39] To encourage as many states as 
possible to complete the survey, we conducted follow-up telephone calls 
to states that did not respond to our survey by the initial deadline. 
After a state responded to the first survey, we mailed the second 
survey, requesting more detailed information on the three services 
receiving the largest portions of subpart 1 funding and the three 
services receiving the largest portions of subpart 2 funding. The 
second survey also asked for copies of any existing evaluations of the 
effectiveness of these services. We sent the second survey to the 30 
states that provided sufficient data on their first survey by mid-April 
2003 and received responses from 17 states.[Footnote 40]

We did not independently verify the information obtained through either 
survey. The responses of the 47 states to the first survey can be used 
to explain how the 50 states and the District of Columbia in general 
used Title IV-B funds. Since we received responses from only 17 states 
for our second survey, they may not be representative of all states. 
Consequently, we have used these data only as examples or for 
illustrative purposes. As a result, we based our analyses of the 
populations of children and families served on data from our first 
survey. However, states that completed the county-administered version 
of the survey did not provide data on the types of children and 
families who received services funded by Title IV-B and were not 
included in these analyses. As a result, the data on populations served 
by subparts 1 and 2 cannot be generalized to states with county-
administered child welfare systems.

Data from both surveys were double-keyed to ensure data entry accuracy, 
and the information was analyzed using statistical software. On the 
first survey, we asked states to describe the nature of each service 
and select one service category that best characterized each program 
funded by Title IV-B, using the following choices: child protective 
services (CPS), family support/prevention programs, parent training 
programs, health programs, educational programs, substance abuse 
programs, counseling and mental health services, domestic violence 
programs, formal family preservation programs, family reunification 
programs, recruitment and training for foster/adoptive parents, 
adoption preservation services, administration and management, foster 
care maintenance payments, adoption subsidy payments, and other.

The data were analyzed using states' self-identified categories except 
in the following situations: (1) if a state clearly described a program 
as funding salaries for staff at the child welfare agency, we included 
these data under the staff category; (2) if a state used the "other" 
category for a service that clearly fell into one of the existing 
categories (writing in "foster care maintenance payments," for 
example), we revised the survey response to reflect the actual 
category; (3) if it appeared that a state mistakenly checked the wrong 
box; for example, we changed the category from CPS to family 
reunification if the program was described as a family reunification 
service; (4) if a state checked multiple categories, we reported these 
programs separately under "multiple responses;" (5) if a state did not 
check any categories, we selected a service category that best fit the 
description of the program and used "other" if the description did not 
clearly fall into one of our categories; and finally (6) if a state 
clearly described the use of Title IV-B funds as administrative, but 
categorized it in another category, we revised the survey to indicate 
that the funds were used for administration and management. Some states 
explained that Title IV-B funds were used to cover administrative 
expenses for a particular program and characterized the use of these 
funds based on the nature of the program. For example, a state might 
have selected family preservation program when Title IV-B funds were 
used for administrative expenses for that program.

As noted earlier in the report, we recognize that some states may not 
have separately identified administration or management expenses 
associated with a program and may have included these expenses in the 
program costs. For reporting purposes, we combined several service 
categories for which states reported spending small percentages of 
Title IV-B funds, such as parent training and substance abuse services, 
and reported these dollars in the "other" category.

We recognize that the service categories used are not necessarily 
mutually exclusive. For example, several HHS officials told us that the 
delineation between family support and family preservation services is 
not clear, so that 2 states providing the same services to the same 
types of children and families may report them in different categories. 
In addition, because the survey for states with state-administered 
child welfare systems asked them to choose one service category for 
each program, the reported service categories may not fully capture all 
relevant programs that fall into more than one service category. 
Inconsistencies in how states categorized services could have an effect 
on any measured differences between service categories.

To obtain more in-depth information on the services provided and the 
types of children and families served under Title IV-B, we conducted 
site visits in California, New Jersey, Ohio, and Washington. We 
selected these states to represent a range of geographic locations and 
subpart 1 spending patterns. In addition, because preliminary data 
indicated that significant subpart 1 funds were devoted to CPS, we 
selected states that used innovative CPS tools or processes. However, 
the experiences of these states are not necessarily representative of 
the experiences of any other state. During these site visits, we 
interviewed state and local child welfare officials and service 
providers and reviewed relevant documentation.

To learn about the federal government's role in overseeing subpart 1, 
we reviewed applicable laws and regulations and interviewed HHS central 
office officials. We also conducted interviews with HHS officials in 
all 10 HHS regional offices to discuss their oversight activities and 
reviewed results from HHS's CFSR reports. In addition, we reviewed 
states' CFS-101s for fiscal year 2002 and compared states' planned 
subpart 1 spending for foster care maintenance, adoption assistance, 
and child care payments with states' final subpart 1 allocations for 
fiscal year 1979 as reported on an HHS program instruction from that 
year. States are required to submit the CFS-101 by June 30 of the 
preceding year--June 30, 2001, for fiscal year 2002. At that time, 
federal appropriations for Title IV-B and other federal child welfare 
funds often are not yet finalized, so states base their estimates on 
the previous year's allocation. States must submit a revised CFS-101 by 
June 30, 2002, to request any additional fiscal year 2002 Title IV-B 
funds that might be available to them once appropriations are 
finalized. In addition, states can request additional Title IV-B funds 
if other states do not use the total funds to which they are entitled. 
In most cases, we reviewed the final revised CFS-101s approved by HHS. 
For one state, we used the initial CFS-101 approved by HHS because it 
included planned subpart 1 expenditures that exceeded the limits for 
foster care maintenance and adoption assistance payments, but the 
revised CFS-101 did not. Although the revised CFS-101 did not show the 
state planned to exceed the limit, we used the initial CFS-101 to show 
that HHS had previously approved a spending plan that did not comply 
with the statutory limits.

We used our survey results to identify services unique to subpart 1--
that is, categories of services funded by subpart 1 that are not funded 
by subpart 2. While no category of service was unique to subpart 1 at 
the national level, some states funded unique categories of services 
within their state with subpart 1. In our second survey, we asked 
states to provide a copy of any evaluations they had conducted of the 
three largest services funded by subpart 1. If we did not have survey 
data for one of the identified services, either because we did not send 
a second survey to the state or because the second survey did not ask 
for data on the particular service, we contacted the state directly to 
ask if any evaluation had been conducted.

In addition, to identify other evaluations on the effectiveness of the 
services in these unique categories, we conducted a literature review 
and interviewed child welfare research experts. The reports and 
Internet sites we reviewed included the following:

* Strengthening America's Families: Effective Family Programs for the 
Prevention of Delinquency (http://www.strengtheningfamilies.org/html/
programs_1999/programs_list_1999.html).

* Child Welfare League of America's Research to Practice Initiative 
(http://www.cwla.org/programs/r2p/).

* Casey Family Programs: Promising Approaches to Working with Youth and 
Families (http://www.casey.org/whatworks/).

* Promising Practices Network on Children, Families, and Communities 
(http://www.promisingpractices.net/).

* U. S. Department of Health and Human Services, "Emerging Practices In 
the Prevention of Child Abuse and Neglect" (Washington, D.C.: n.d.).

We conducted our work between August 2002 and July 2003 in accordance 
with generally accepted government auditing standards.

[End of section]

Appendix II: Comments from the Department of Health and Human 
Services:

DEPARTMENT OF HEALTH & HUMAN SERVICES:

ADMINISTRATION FOR CHILDREN AND FAMILIES Office of the Assistant 
Secretary, Suite 600:

370 L'Enfant Promenade, S.W. Washington, D.C. 20447:

DATE: AUG 21 2003

TO: Cornelia M. Ashby:

Director, Education, Workforce, and Income Security Issues General 
Accounting Office:

FROM:

Wade F. Horn, Ph.D. Assistant Secretary for Children and Families:

SUBJECT: Comments on the GAO Draft Report, "Child Welfare: Enhanced 
Federal Oversight of Title IV-B Could Provide States Additional 
Information to Improve Services," (GAO-03-956):

Attached are the Administration for Children and Families' comments on 
the GAO Draft Report, "Child Welfare: Enhanced Federal Oversight of 
Title IV-B Could Provide States Additional Information to Improve 
Services,"( GAO-03-956).

Should you have questions regarding our comments, please contact Susan 
Orr, Associate Commissioner of the Children's Bureau, Administration on 
Children, Youth and Families, at (202) 205-8618.

Attachment:

COMMENTS OF THE ADMINISTRATION FOR CHILDREN AND FAMILIES (ACF) ON THE 
GENERAL ACCOUNTING OFFICE'S DRAFT REPORT, "CHILD WELFARE: ENHANCED 
FEDERAL OVERSIGHT OF TITLE IV-B COULD PROVIDE STATES ADDITIONAL 
INFORMATION TO IMPROVE SERVICES," GAO-03-956:

The Administration for Children and Families (ACF) appreciates the 
opportunity to comment on the General Accounting Office's (GAO) draft 
report.

GAO Recommendations:

GAO recommends that HHS provide the necessary guidance to ensure that 
HHS regional offices monitor states' use of Title IV-B subpart 1 funds 
for compliance with statutory restrictions on the use of these funds.

In addition, GAO recommends that HHS consider the feasibility of 
collecting basic data on states' use of these funds to facilitate its 
oversight of the program and to provide guidance to help states 
determine appropriate services to fund. For example, an analysis of how 
states' spending patterns correlate to outcomes - both positive and 
negative - from the Child and Family Services Reviews (CFSRs) could 
yield useful information for this purpose.

Given that HHS is currently developing a new child welfare option that 
would allow states to use Title IV-E dollars for services similar to 
those provided under Title IV-B subpart 1, GAO further recommends that 
HHS use the information gained through enhanced oversight of subpart 1 
- as well as information it may have on states' use of subpart 2 funds 
- to inform its design of this option. For example, HHS could use this 
information to help states determine the most appropriate services to 
provide under this option.

ACF Comments:

In response to the GAO recommendation that HHS (1) provide the 
necessary guidance to ensure that HHS regional offices are providing 
appropriate oversight of subpart 1, ACF agrees to provide guidance to 
the regional offices to enable them to enforce the statutory 
limitations on Title IV-B funds. However, as GAO notes in its report, 
this Administration has proposed a legislative change to provide 
unprecedented flexibility in the use of Title IV-E foster care dollars. 
Furthermore, when Congress restricted the amount of Title IV-B funds 
that could be spent on foster care maintenance and adoption assistance 
payments, it did so at the 1979 appropriation level of $56.5 million. 
The FY 2003 appropriation of slightly over $290 million represents a 
five-fold increase in funds since 1979, thereby 
reducing to approximately 20 percent the amount of these funds that 
states may spend on foster care maintenance payments, adoption 
assistance payments and for child care under Title IV-B, subpart 1. 
(This does not take into account the impact of inflation on the 
statutory limit of $56.5 million over the past 24 years or on states' 
foster care rates.) ACF questions whether this outdated limitation 
serves a state's need for flexibility in funding Child Welfare Services 
and does not believe that currently there is a useful purpose for this 
restriction. ACF intends, therefore, to explore avenues to provide 
states flexibility with respect to this provision.

Our level of oversight for the use of Title IV-B funds is commensurate 
with the scope and intent of the program. ACF disagrees with the 
recommendation that we collect data on subpart 1 to help states 
determine appropriate services to fund.

In response to the GAO recommendation that HHS (2) consider the 
feasibility of collecting basic data on states' use of these funds to 
facilitate program oversight and to provide guidance to help states 
determine appropriate services to fund, when ACF developed the 
regulations and guidance to implement Title IV-B, ACF considered the 
feasibility of asking states to provide us with actual expenditures 
rather than estimates. ACF decided to ask for estimates to reduce state 
information collection requirements. In addition, there is a two-year 
expenditure period under Title IV-B, which means states would not have 
to report final expenditures until 90 days after the two-year period 
had ended, at which point the information is too outdated to be useful. 
ACF sees no reason to mandate states to report information that is not 
required in statute.

The GAO recommendations are based on the premise that states need help 
in determining how to best use their Title IV-B funds, and that there 
are ample funds for all services needed in the State. The report seems 
to conclude that Federal help will resolve the issues raised in the 
CFSRs as they relate to the lack of family assessments and services.

Our attention to outcomes in the CFSRs is the appropriate mechanism for 
meeting our stewardship responsibilities for Title IV-B programs. ACF 
implements this approach through the Program Improvement Plan (PIP) 
process, which requires states to identify actions they will take to 
remedy weaknesses identified as a result of the CFSR. This process is 
already in place and includes the regulatory requirement at 45 CFR 
1355.35(f) to integrate the PIP with the State's Child and Family 
Services Plan. Use of funds and resources committed to achieving the 
identified outcomes are factored into the PIP process. Overall, we do 
not see how actual expenditure information or additional data will help 
improve the outcomes in the CFSRs since we already collect ample 
information through that process.

The recommendation that "an analysis of how states' spending patterns 
correlate to outcomes from the CFSRs" is unrealistic given the lack of 
direct relationship of Title IV-B funding to the broad outcome areas of 
safety, permanency and well-being that are influenced by the unique 
blend of services funded by a variety of sources that states use to 
meet the needs of families. The CFSR does review many of the major 
requirements of Title IV-B subparts 1 and 2 from a systemic view; 
however it does not necessarily review case level outcome information 
based on services allocated to these programs.

The issues attributed to findings from the CFSRs such as lack of 
services available statewide, long waiting lists and improvement needed 
in assessing needs and providing services to meet those needs would 
generally have very little direct relationship to Title IV-B funding. 
Because Title IV-B funding represents such a small percentage of 
potential funding available to states compared to Medicaid and other 
Federal, state, and local funding streams, it would be a leap to 
associate the CFSR findings to Title IV-B oversight issues. The PIP 
process is a far more comprehensive process to address issues such as 
those outlined above because it involves and commits stakeholders to 
activities that directly impact the outcomes rather than simply one 
agency and funding stream.

The GAO report points out the overlap with respect to services provided 
and families served, as the statutory purposes of both programs are 
very similar and are meant for the same type of children and families. 
Also, as noted, because of overlapping categories for services (i.e., 
some family preservation services could also be considered family 
support services, or many time-limited reunification services may also 
be claimed as family preservation or support services) and the 
different categorical program definitions by different states, ACF 
cannot know specifically how much of one service versus another is 
being provided. However, both subparts under Title IV-B, along with the 
Child Abuse Prevention and Treatment Act, Title IV-E, and Title XX, 
fund a continuum of care in child welfare. By not permitting the funds, 
services, and families to overlap, we would significantly impede the 
functionality of the continuum, thereby creating potential situations 
where families would not receive the necessary services.

[End of section]

Appendix III: GAO Contacts and Acknowledgments:

GAO Contacts:

Diana Pietrowiak (202) 512-6239 Michelle St. Pierre (617) 788-0558:

Acknowledgments:

In addition to those named above, Melissa Mink and J. Bryan Rasmussen 
made key contributions to the report. Anne Rhodes-Kline, Alison Martin, 
Luann Moy, and George Quinn, Jr., provided key technical assistance.

[End of section]

Related GAO Products:

Child Welfare: Most States Are Developing Statewide Information 
Systems, but the Reliability of Child Welfare Data Could be Improved. 
GAO-03-809. Washington, D.C.: July 31, 2003.

D.C. Child and Family Services: Key Issues Affecting the Management of 
Its Foster Care Cases. GAO-03-758T. Washington, D.C.: May 16, 2003.

Child Welfare and Juvenile Justice: Federal Agencies Could Play a 
Stronger Role in Helping States Reduce the Number of Children Placed 
Solely to Obtain Mental Health Services. GAO-03-397. Washington, D.C.: 
April 21, 2003.

Foster Care: States Focusing on Finding Permanent Homes for Children, 
but Long-Standing Barriers Remain. GAO-03-626T. Washington, D.C.: April 
8, 2003.

Child Welfare: HHS Could Play a Greater Role in Helping Child Welfare 
Agencies Recruit and Retain Staff. GAO-03-357. Washington, D.C.: March 
31, 2003.

Foster Care: Recent Legislation Helps States Focus on Finding Permanent 
Homes for Children, but Long-Standing Barriers Remain. GAO-02-585. 
Washington, D.C.: June 28, 2002.

District of Columbia Child Welfare: Long-Term Challenges to Ensuring 
Children's Well-Being. GAO-01-191. Washington, D.C.: December 29, 2000.

Foster Care: HHS Should Ensure That Juvenile Justice Placements Are 
Reviewed. GAO/HEHS-00-42. Washington, D.C.: June 9, 2000.

Juvenile Courts: Reforms Aim to Better Serve Maltreated Children. GAO/
HEHS-99-13. Washington, D.C.: January 11, 2000.

Foster Care: States' Early Experiences Implementing the Adoption and 
Safe Families Act. GAO/HEHS-00-1. Washington, D.C.: December 22, 1999.

Foster Care: HHS Could Better Facilitate the Interjurisdictional 
Adoption Process. GAO/HEHS-00-12. Washington, D.C.: November 19, 1999.

Foster Care: Effectiveness of Independent Living Services Unknown. GAO/
HEHS-00-13. Washington, D.C.: November 5, 1999.

Child Welfare: States' Progress in Implementing Family Preservation and 
Support Services. GAO/HEHS-97-34. Washington, D.C.: February 18, 1997.

Child Welfare: Opportunities to Further Enhance Family Preservation and 
Support Activities. GAO/HEHS-95-112. Washington, D.C.: June 15, 1995.

FOOTNOTES

[1] Child protective services activities typically include reviewing 
reports of alleged child abuse and neglect, investigating those that 
meet the state's criteria as a potential incident of abuse or neglect 
to determine if the alleged incident occurred, and, in some cases, 
referring families to needed services and removing the child from the 
home, if necessary.

[2] States are required to provide matching funds in order to receive 
federal Title IV-B dollars.

[3] Adoption assistance payments are provided to parents adopting a 
child with special needs, such as a physical or mental disability, to 
assist with the costs of services required to meet the child's needs. 
The subpart 1 limits also apply to child care services to support a 
parent's employment or training.

[4] This report focuses primarily on subpart 1 because little, if any, 
research has been conducted on how subpart 1 funds have been spent on 
child welfare services. In contrast, a number of studies have been 
conducted on the services provided under subpart 2.

[5] We did not receive responses from the District of Columbia, 
Indiana, Kentucky, or Montana. 

[6] The statutory limit also includes payments for child care services 
required due to a parent's employment or training needs. However, only 
2 states reported any planned subpart 1 spending on this type of child 
care service for fiscal year 2002. For this report, we mention only 
foster care maintenance and adoption assistance payments when referring 
to subpart 1 limits, although we did include planned spending on child 
care in our analyses of states' planned subpart 1 spending.

[7] Urban Institute, The Cost of Protecting Vulnerable Children III: 
What Factors Affect States' Fiscal Decisions? (Washington, D.C.: n.d.).

[8] In fiscal year 2002, total Title IV-E spending was approximately 
$6.1 billion. The state matching rate for these payments is based on a 
state's per capita income and ranges from 50 percent to 83 percent. 

[9] States are entitled to Title IV-E reimbursement on behalf of 
children who would have been eligible for Aid to Families with 
Dependent Children (AFDC) (as AFCD existed on July 16, 1996), but for 
the fact that they were removed from the home of certain specified 
relatives. While the AFDC program was replaced by the Temporary 
Assistance for Needy Families program in 1996, eligibility for Title 
IV-E payments remains tied to the income eligibility requirements of 
the now defunct AFDC program. In addition, certain judicial findings 
must be present for the child, and all other requirements included in 
section 472 (a) and (b) of the Social Security Act must be met, in 
order for the child to be eligible for Title IV-E foster care 
maintenance payments. 

[10] Special needs are characteristics that can make it difficult for a 
child to be adopted and may include emotional, physical, or mental 
disabilities, emotional disturbance, age, or being a member of a 
minority race. To qualify for an adoption subsidy under Title IV-E, a 
state must determine that the child cannot or should not return home; a 
state must make a reasonable, but unsuccessful effort to place the 
child without the subsidy; and a specific factor or condition must 
exist that makes it difficult to place the child without a subsidy. 

[11] Foster care maintenance payments funded by Title IV-B would 
require 25 percent in matching state funds.

[12] Staff of the House Committee on Ways and Means, 106th Congress, 
Background Material and Data on Programs Within the Jurisdiction of the 
Committee on Ways and Means (Comm. Print 2000).

[13] Some subpart 2 funds are reserved for specific activities. For 
example, $10 million in mandatory funds and 3.3 percent of 
discretionary funds in each fiscal year are reserved for grants to 
state courts to improve child welfare proceedings. In addition, 1 
percent of mandatory funds and 2 percent of discretionary funds are 
reserved for grants to Indian tribes. 

[14] Staff of the House Committee on Ways and Means, 106th Congress, 
Background Material and Data on Programs Within the Jurisdiction of the 
Committee on Ways and Means (Comm. Print 2000).

[15] The adoption promotion and support services category includes the 
recruitment and training of foster and adoptive parents, adoption 
support services, and adoption preservation services.

[16] Although no unique service categories are funded exclusively by 
either subpart at the national level, states did report individual 
service categories that were funded by subpart 1, but not subpart 2. 
However, no national trend emerged among the types of services that 
were funded uniquely by subpart 1.

[17] The survey data reported in this category reflect the salaries of 
staff affiliated with the child welfare agency. These figures do not 
include the salaries of child welfare agency staff dedicated to a 
specific program, which may be embedded within some of the other direct 
service categories, such as family support and family preservation. In 
addition, a state may use Title IV-B funds to contract with an 
organization to provide a particular program, which may include salary 
expenses as well as direct service expenditures.

[18] This amount may be underestimated, since some states may not have 
separately reported administrative expenses associated with a specific 
program. For example, officials in one state reported that the total 
spending for a family support program included salaries for agency 
staff, overhead expenses, and related staff travel.

[19] The second survey requested information about the three services 
receiving the largest portions of subpart 1 funding, so states 
generally only estimated the extent to which recipients of these 
services also received services funded by subpart 2. These data are not 
necessarily representative of other subpart 1 services or other states.

[20] Several officials noted that allowing a little more flexibility 
with the 20 percent spending requirement for subpart 2 could provide 
some additional flexibility to states without having to seek approval 
from HHS. For example, staff in one regional office suggested that 
requiring states to spend no less than 10 percent and no more than 40 
percent of subpart 2 funds in any service category would offer this 
additional flexibility.

[21] The statutory limit also includes payments for child care services 
required due to a parent's employment or training needs. However, only 
two states reported any planned subpart 1 spending on this type of 
child care service for fiscal year 2002. For the purposes of this 
report, we mention only foster care maintenance and adoption assistance 
payments when referring to subpart 1 limits, although we did include 
planned spending on child care in our analyses of states' planned 
subpart 1 spending.

[22] In addition, HHS funds eight national resource centers to 
disseminate information on best practices and provide technical 
assistance to help states implement federal legislation intended to 
ensure the safety, permanent placement, and well-being of children who 
enter the child welfare system. 

[23] For example, the CFS-101 for fiscal year 2002 was due by June 30, 
2001. Because they are submitted before final appropriations have been 
enacted, a state might not request the full amount of funds to which it 
is entitled, if the final appropriation is greater than the state's 
initial estimate. States must submit a revised CFS-101 by June 30, 
2002, to request any additional fiscal year 2002 Title IV-B funds that 
might be available to them once appropriations are finalized. In 
addition, states can request additional Title IV-B funds if other 
states do not use the total funds to which they are entitled. 

[24] While most states administer their child welfare systems at the 
state level, a handful of states delegate administrative responsibility 
and substantial control to counties or other local entities. Several 
large states, such as California, New York, Ohio, and Pennsylvania, are 
county-administered.

[25] States are required to submit general reports on their total 
subpart 1 expenditures, but these provide no data on how the funds are 
actually used. Per instructions from the Office of Management and 
Budget, agencies must require states receiving federal grants to 
complete a financial status report (SF 269), providing general 
information on state expenditures. For example, the form might indicate 
that a state spent $10 million in subpart 1 funds in a specific fiscal 
quarter, but it provides no details on how the $10 million was used. 

[26] Each state's ceiling on the use of subpart 1 funds for foster care 
maintenance and adoption assistance payments is based on its total 1979 
subpart 1 expenditures for all types of services.

[27] In most cases, we reviewed the final revised CFS-101 approved by 
HHS. For 1 state, however, we used the initial CFS-101 approved by HHS 
because it included planned subpart 1 expenditures that exceeded the 
limits for foster care and adoption assistance payments. Although the 
revised CFS-101 did not show that the state planned to exceed the 
limit, we used the initial CFS-101 to show that HHS had previously 
approved a spending plan that did not comply with the statutory limits. 
In addition, we were unable to determine whether the planned fiscal 
year 2002 subpart 1 spending for 5 other states exceeded the limits 
because HHS approved their CFS-101s with flawed data. These 5 states--
Iowa, Nevada, New Hampshire, New Jersey, and New Mexico--all reported 
planned subpart 1 spending for foster care maintenance and adoption 
assistance payments in excess of the statutory limits. However, 
although states are supposed to separately estimate planned spending 
for the federal portion of their subpart 1 funds on the CFS-101, these 
5 states included the state match and/or other funds in their 
estimates. In these cases, we could not determine whether the spending 
plans exceeded the statutory limits for federal subpart 1 funds. States 
are allowed to use all of their state matching funds for foster care 
maintenance or adoption assistance payments.

[28] Nine of the 12 states were also cited as needing improvement in 
ensuring that needed services are accessible to families in all areas 
of the state and 8 of the 12 states were categorized as needing 
improvement in terms of individualizing services to meet the unique 
needs of individual families.

[29] Of the 15 states with planned spending above the limits, 8 
reported subpart 1 expenditures within the statutory limits, 4 reported 
subpart 1 expenditures above the limits, and 3 did not separately 
identify foster care maintenance and adoption assistance payments on 
their surveys. 

[30] Four of the 6 states included state matching funds in their CFS-
101 estimates, so we could not determine whether the spending plans for 
those states exceeded the statutory limits.

[31] Virginia did not provide any data on its subpart 2 spending, so we 
were not able to determine whether the state uniquely funded any 
service categories with subpart 1. New York does not receive any 
subpart 2 funds, so we considered all services funded by subpart 1 to 
be unique.

[32] See http://www.strengtheningfamilies.org/html/programs_1999/
22_HIPPY.html.

[33] The Future of Children, "The Home Instruction Program for 
Preschool Youngsters (HIPPY)" (Los Altos, CA: Spring/Summer 1999).

[34] While few states had evaluated their unique subpart 1 services, 4 
of the 17 states responding to our second survey indicated that they 
had evaluated other subpart 1 services that were not unique.

[35] Some national research exists for some of the unique service 
categories at the state level; however, the extent to which the 
research is applicable to the specific services in the unique subpart 1 
categories is difficult to determine. For example, in some cases, the 
service in a unique subpart 1 category was not based on the same model 
that was evaluated or states did not provide sufficient information on 
our survey to determine whether the program was based on this 
particular model. Therefore, we do not discuss this research in our 
report. 

[36] A number of evaluations of similar types of family preservation 
programs have found that children in control groups also had low rates 
of out-of-home placement, raising questions about the effectiveness of 
these services. 

[37] Ira M. Cutler, Alexandra Tan, and Laura Downs, State Investments 
in Education and Other Children's Services: Case Studies of State 
Innovations (n.p.: September 1995), http://www.financeprojectinfo.org/
Publications/studies.html (downloaded Jul. 8, 2003).

[38] The following 7 states completed the county-administered survey 
version: Colorado, Georgia, Maryland, Minnesota, New York, 
Pennsylvania, and Wisconsin.

[39] We did not receive responses from the District of Columbia, 
Indiana, Kentucky, or Montana. 

[40] The 17 states that responded to the second survey were Arkansas, 
Delaware, Florida, Hawaii, Illinois, Kansas, Louisiana, Massachusetts, 
New Mexico, North Dakota, Oklahoma, South Dakota, Texas, Utah, Vermont, 
Washington, and Wyoming.

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