Skip to Highlights
Highlights

Policymakers have expressed concern over how costs to administer the Foster Care and Adoption Assistance programs are contributing to overall increased federal expenditures for these programs, estimated by the Congressional Budget Office to rise from about $6 billion in fiscal year 2003 to $8 billion in fiscal year 2008. The purpose of these programs is to provide financial support for the proper care of children who need placement outside their homes and find adoptive homes for children with special needs. They are authorized under Title IV-E of the Social Security Act and administered by the Department of Health and Human Services' Administration for Children and Families (ACF). GAO was asked to address (1) how the amounts and types of administrative costs changed from FY 2000 to FY 2004; (2) the reasons for differences in and among states in administrative spending and how these differences affect program services; and (3) whether HHS's oversight of administrative costs provides adequate controls over program spending.

Skip to Recommendations

Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Health and Human Services To better safeguard federal resources and ensure consistent federal support for state administration of foster care and adoption assistance, the Secretary of the Department of Health and Human Services should direct the Assistant Secretary for the Administration for Children and Families to expedite the development of the financial review guide regions use to monitor state claims for federal reimbursement and develop an effective means of communicating current policy and oversight findings across regions and states.
Closed - Not Implemented

Recommendation status is Closed - Not Implemented.

HHS reported that staff were in the process of developing a financial review guide consisting of best review practices. In FY09, HHS reported that the Administration for Children and Families (ACF) completed a manual with financial review information, for central office and Child Welfare grant programs in FY08 and expects to complete fiscal review manuals for Foster Care and Adoption Assistance by 2012. HHS will continue to use the Child Welfare Policy Manual and Program Instructions to communicate pertinent program policy to the regions and states. In FY10, ACF reported that they are working on revising the Foster Care and Adoption Assistance manual to include provisions of the Fostering Connections to Success and Increasing Adoptions Act of 2008 (P.L.110-351), which is now expected to be completed in 2014.
Department of Health and Human Services To better safeguard federal resources and ensure consistent federal support for state administration of foster care and adoption assistance, the Secretary of the Department of Health and Human Services should direct the Assistant Secretary for the Administration for Children and Families to coordinate with other HHS offices such as the Division of Cost Allocation and the Centers for Medicare and Medicaid Services to ensure consistent policy implementation across regions and states.
Closed - Implemented

Recommendation status is Closed - Implemented.

HHS described some existing coordination activities: it coordinates with the Division of Cost Allocation on a regular basis, and continues to communicate with Centers for Medicare & Medicaid Services (CMS) staff regarding current and proposed policy as it affects the tile IV-E foster care program, particularly around target case management and its associate costs. In FY09, HHS reported that ACF conducted two national training sessions on cost allocation guidance in FY08 to all regional grants staff who have foster care and adoption assistance oversight responsibilities.
Department of Health and Human Services To better safeguard federal resources and ensure consistent federal support for state administration of foster care and adoption assistance, the Secretary of the Department of Health and Human Services should direct the Assistant Secretary for the Administration for Children and Families to standardize the method states use to calculate the percentage of children served by foster care and adoption assistance programs that are eligible for federal reimbursement of administrative costs.
Closed - Not Implemented

Recommendation status is Closed - Not Implemented.

HHS believes this calculation is straightforward and does not think inconsistencies among regions regarding this calculation is a widespread problem. The agency reported that it would address this topic with regional staff to determine if there is a problem and how best to address it. However, HHS did not provide any updated information in FY07, FY08 or FY09 and, as of FY10, HHS noted "activity still in process," but did not indicate whether and how it worked with regional staff to address this issue.
Department of Health and Human Services To better safeguard federal resources and ensure consistent federal support for state administration of foster care and adoption assistance, the Secretary of the Department of Health and Human Services should direct the Assistant Secretary for the Administration for Children and Families to through ACF regional offices, remind states that reporting administrative costs by certain categories is a requirement and provide technical assistance to help states comply with the requirement.
Closed - Implemented

Recommendation status is Closed - Implemented.

HHS agreed to implement this recommendation. In FY09, HHS reported that the Administration for Children and Families (ACF) was developing a new Title IV-E reporting form and instructions for use by states and tribes, which will simplify and better categorize the reporting of state expenditures, including administrative costs. In FY10, HHS reported that it expects OMB approval of the new form by the end of the fiscal year. Use of the new form (Form 496) is expected to begin on October 1, 2010, and regional offices will provide technical assistance to states on completing the form.
Department of Health and Human Services To better safeguard federal resources and ensure consistent federal support for state administration of foster care and adoption assistance, the Secretary of the Department of Health and Human Services should direct the Assistant Secretary for the Administration for Children and Families to assess the relative risk of improper federal expenditures to states for administrative costs and redistribute oversight staff accordingly.
Closed - Not Implemented

Recommendation status is Closed - Not Implemented.

HHS will take this recommendation under advisement as it undergoes an organizational restructuring. In a FY09 update, HHS reports that the Administration for Children and Families is in the process of hiring 50 grants staff nationally who will be used to assess and act upon improper federal expenditures to states for administrative costs, in addition to performing other activities. However, HHS did not provide any information indicating that they had assessed the risk of improper federal expenditures to states for administrative costs or redistributed oversight staff according to risk of improper expenditures.

Full Report