Child Welfare: Federal Oversight of State IV-B Activities Could  
Inform Action Needed to Improve Services to Families and	 
Statutory Compliance (23-MAY-06, GAO-06-787T).			 
                                                                 
For federal fiscal year 2004, state and local child protective	 
services staff determined that an estimated 872,000 children have
been victims of abuse or neglect. Title IV-B subparts 1 and 2	 
authorize a wide array of child welfare services with some	 
restrictions on states' use of funds. This testimony discusses:  
(1) how states used Title IV-B dollars to serve families under	 
subparts 1 and 2; (2) the extent that federal oversight ensured  
state compliance with spending requirements under subpart 1; and 
(3) what the research said about the effectiveness of service	 
states have provided to families using Title IV-B funds. This	 
testimony was primarily based on a 2003 report (GAO-03-956).	 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-06-787T					        
    ACCNO:   A54600						        
  TITLE:     Child Welfare: Federal Oversight of State IV-B Activities
Could Inform Action Needed to Improve Services to Families and	 
Statutory Compliance						 
     DATE:   05/23/2006 
  SUBJECT:   Child abuse					 
	     Child welfare					 
	     Children						 
	     Federal funds					 
	     Federal/state relations				 
	     Funds management					 
	     Surveys						 

******************************************************************
** This file contains an ASCII representation of the text of a  **
** GAO Product.                                                 **
**                                                              **
** No attempt has been made to display graphic images, although **
** figure captions are reproduced.  Tables are included, but    **
** may not resemble those in the printed version.               **
**                                                              **
** Please see the PDF (Portable Document Format) file, when     **
** available, for a complete electronic file of the printed     **
** document's contents.                                         **
**                                                              **
******************************************************************
GAO-06-787T

     

     * Background
     * States Used Subparts 1 and 2 to Support Similar Services and
          * States Emphasized Different Services under Subparts 1 and 2
               * Subpart 1 Services
               * Subpart 2 Services
          * States Emphasized Different Populations Served Under Subpart
          * HHS Officials and States Supported Flexibility of Title IV-B
     * Federal Oversight Insufficient to Ensure State Compliance wi
          * HHS Had Little Information about States' Use of Subpart 1 Fu
          * HHS Regional Offices Were Unaware of Spending Limits or Did
     * Little Research Existed on the Effectiveness of Title IV-B S
     * Prior Recommendations
     * GAO's Mission
     * Obtaining Copies of GAO Reports and Testimony
          * Order by Mail or Phone
     * To Report Fraud, Waste, and Abuse in Federal Programs
     * Congressional Relations
     * Public Affairs

Testimony

Before the Subcommittee on Human Resources, Committee on Ways and Means,
House of Representatives

United States Government Accountability Office

GAO

For Release on Delivery Expected at 2:00 p.m. EDT

Tuesday, May 23, 2006

CHILD WELFARE

Federal Oversight of State IV-B Activities Could Inform Action Needed to
Improve Services to Families and Statutory Compliance

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

GAO-06-787T

United States Government Accountability Office

Washington, DC 20548

Mr. Chairman and Members of the Subcommittee:

I am pleased to be here today to present information from our 2003 report
on how states used funds authorized under Title IV-B of the Social
Security Act to help families address problems that lead to child abuse
and neglect and subsequent separation of children from their families.1
For federal fiscal year 2004, child protective services (CPS) staff in
state and local child welfare agencies reported investigating or assessing
an estimated 3 million allegations of child maltreatment and determined
that approximately 872,000 children had been the victims of child abuse or
neglect by their parents or other caregivers. Established in 1935, Title
IV-B first authorized funds to states that could be used to provide a wide
array of child welfare services including those necessary to investigate
reports of child maltreatment, remove children from their home and place
them with a temporary foster family, help preserve or reunify families,
and place children who cannot be safely reunified with their families in
an adoptive home.

The Congress has passed various laws over the years emphasizing the need
for states to use Title IV-B funding to provide supportive services to
preserve and reunify families. In 1980, for example, the Adoption
Assistance and Child Welfare Act established a dollar cap on the amount of
child welfare funds that states could use under Title IV-B for foster care
and certain other activities to encourage states to use additional funding
for services to families. In 1993, the Congress established the family
preservation and family support services program under Title IV-B subpart
2, authorizing funding to states for family preservation and
community-based family support services. The Adoption and Safe Families
Act of 1997 further encouraged spending on family support services by
reauthorizing subpart 2, renaming it Promoting Safe and Stable Families,
and expanding the types of programs on which states were authorized to
spend Title IV-B funds to include adoption promotion and support services
and time-limited family reunification services. In fiscal year 2006, the
Congress appropriated $287 million for child welfare services under
subpart 1 and $394 million for family support services under subpart 2.2
These funds are administered to states by the Department of Health and
Human Services' (HHS) Administration for Children and Families (ACF).

1GAO, Child Welfare:Enhanced Federal Oversight of Title IV-B Could Provide
States Additional Information to Improve Services, GAO-03-956 (Washington,
D.C.: Sept. 12, 2003).

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

My testimony today is primarily based on information included in our 2003
report. Specifically, I will be discussing: (1) how states used Title IV-B
dollars to serve families under subparts 1 and 2; (2) the extent that
federal oversight ensured state compliance with spending requirements
under subpart 1; and (3) what the research said about the effectiveness of
services states have provided to families using Title IV-B funds.

In summary, while overlap exists, states reported using Title IV-B subpart
1 funds primarily to staff and administer child welfare programs and serve
families in the foster care system, while states reported using subpart 2
funds primarily for prevention and support services for families at risk
of child abuse and neglect. It is difficult, however, to clearly
differentiate among the various service categories and populations served.
HHS provided relatively little oversight in how states spent federal funds
under subpart 1, and at least 10 states spent a total of over $15 million
over the legislated cap for foster care and adoption assistance payments.
Although the predominance of federal funding spent for foster care and
adoption assistance has long been cited as providing a disincentive to
preserve and reunify families, little research is available on the
effectiveness of the services subpart 1 funds provide and HHS evaluations
of services funded under subpart 2 have generally shown no or little
effect. Similarly, the extent that differences in how states spent funds
to support children and families resulted in better or worse outcomes for
children is unknown.

To help address this information gap, our 2003 report recommended that the
Secretary of HHS consider the feasibility of collecting and using data on
states' use of Title IV-B subpart 1 funds. We made this recommendation not
only to facilitate federal oversight and analysis of how states' spending
patterns correlate to child outcomes, but also so that HHS could use this
data to inform the design of alternative funding proposals that would give
states more flexibility in spending federal child welfare funds. We also
recommended that the Secretary provide the necessary guidance to ensure
compliance with statutory restrictions on the use of Title IV-B subpart
1funds. ACF agreed with our findings and implemented guidance to states
reminding them of the statutory requirements for subpart 1 spending.
However, ACF disagreed with our recommendation to consider collecting data
on subpart 1 expenditures. ACF believed that its level of oversight was
commensurate with the scope and intent of subpart 1, noting that its
oversight efforts were more appropriately focused on reviews of the
states' overall child welfare systems. ACF did not comment on our
recommendation to use such data to inform the design of an alternative
financing option.

Our review was based on two surveys to child welfare directors to obtain
information on how they use Title IV-B funds. We also visited four
states-California, New Jersey, Ohio, and Washington-where we interviewed
state and local officials and service providers. We also held discussions
with HHS headquarters and regional office officials and child welfare
experts. We reviewed results from HHS's assessments of state child welfare
agencies as well as the literature assessing the effectiveness of various
child welfare services.

                                   Background

Title IV-B of the Social Security Act authorizes funds to states to
provide an array of child welfare services to prevent the occurrence of
abuse, neglect, and need to place children in foster care. 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 Title IV-B. HHS headquarters staff are responsible
for developing appropriate policies and procedures for states to follow in
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. No federal eligibility criteria apply to the
children and families receiving services funded under 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 whose
families receive food stamps.

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

           o  protect and promote the welfare of all children;
           o  prevent or remedy problems that may result in the abuse or
           neglect of children;
           o  prevent the unnecessary separation of children from their
           families by helping families address problems that can lead to
           out-of-home placements;
           o  reunite children with their families;
           o  place children in appropriate adoptive homes when reunification
           is not possible; and
           o  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.

Subpart 2 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
four service categories:3

           o  Family preservation service. 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.
           o  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.
           o  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.
           o  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.

3HHS 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 patterns. By statute,
states can spend no more than 10 percent of subpart 2 funds on
administrative costs.

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. When the Congress enacted
the Adoption Assistance and Child Welfare Act of 1980, it created a new
funding source for foster care and adoption assistance under Title IV-E of
the Social Security Act. Title IV-E provides an open-ended 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.4 Title IV-E also provides payments to
adoptive parents of eligible foster children with special needs.5 While
states could still use Title IV-B funding for foster care and adoption
assistance for children ineligible under Title IV-E, the law established a
dollar cap on the amount of Title IV-B funds that states could use for
three categories of service: foster care maintenance payments, adoption
assistance payments, and child care related to a parent's employment or
training. The law requires that the total of subpart 1 funds used for
these categories 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.6 However, this restriction
applies only to the federal portion of subpart 1 expenditures, as the law
provides that states may use any or all of their state matching funds for
foster care maintenance payments.

4States 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 AFDC 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.

5Special 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.

For the fourth consecutive year, the President's budget proposes a Child
Welfare Program Option. HHS developed the proposal to give states more
flexibility in using Title IV-E foster care funds for preventive services
such as those under Title IV-B. Under this 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. 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. No legislation to enact this option
has been introduced.

 States Used Subparts 1 and 2 to Support Similar Services and Populations, but
                           Funding Emphasis Differed

While overlap exists, states reported using subpart 1 funding primarily
for costs to staff and administer child welfare programs and serve
families in the foster care system, while states reported using subpart 2
funding for family support services and to serve families at risk for
child abuse and neglect. Officials in almost all of HHS's regional offices
supported retaining the current balance between allowing states some
flexibility in use of funds and targeting some resources toward
prevention. States reported in our survey that flexibility was important
to meet the needs of their child welfare systems, and thus generally
preferred the financing structure of subpart 1 over subpart 2

States Emphasized Different Services under Subparts 1 and 2

While states funded similar services under subparts 1 and 2, most states
reported using subpart 1 funds primarily to pay for costs associated with
operating child welfare programs, while most states reported using subpart
2 funds for family services as shown in table 1. For example, states used
over 44 percent of subpart 1 funds to pay for staff salaries and costs to
administer and manage programs. In contrast, states spent over 71 percent
of subpart 2 funds for services to support, preserve, and reunify
families.

6Staff 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).

Table 1: States' Reported Use of Federal Funds Under Title IV-B, fiscal
year 2002

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.

aWhen 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. 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, thus
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.

bStates 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.

cAlthough 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.

dThe 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.

  Subpart 1 Services

The majority of subpart 1 funds were spent on staff salaries, and
Washington officials said that in their state, over half of these costs
paid for staff providing direct services to children and families.
Overall, states reported that nearly half of Title IV-B funds used for
staff salaries supported social worker positions in child protective
services. Another 20 percent of funds supported positions for other social
workers. The remaining costs supported other staff including those
providing supervision of caseworkers and legal services. (See fig. 1.)

Figure 1: Proportion of Title IV-B Funds States Reported Using to Support
Staff Salaries under Subpart 1 by Position, Fiscal Year 2002

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

Percentages do not total to 100 due to rounding.

The remaining subpart 1 funds were split fairly evenly among
administration and management, child protective services, and foster care
maintenance payments:

           o  Administration and management comprised the second largest
           category of subpart 1 expenditures, 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.7 
           o  Child protective services represent the third largest category
           of subpart 1 expenditures. States reported using 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.
           o  States reported using nearly 11 percent of their subpart 1
           funds to make recurring payments for the room and board of foster
           children who were not otherwise eligible for federal
           reimbursement. For example, New Jersey officials reported spending
           over half of the state's subpart 1 funds on foster care
           maintenance payments.

7This amount may be understated 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.

  Subpart 2 Services

States reported using over 70 percent of their subpart 2 dollars on
serving families, with nearly half of these funds used to fund family
support and prevention 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
utilities, parenting classes, child care, and support groups provided by
community-based resource centers.

The remaining subpart 2 funds were split fairly evenly among family
preservation, family reunification, and services to support and preserve
adoptive families.

           o  Family preservation services accounted for nearly 12 percent of
           subpart 2 dollars. Services provided by Washington state in this
           category included counseling and parent training services for up
           to 6 months for families with children who were at risk of being
           placed in foster care.
           o  Adoption support and preservation services accounted for over
           11 percent of subpart 2 dollars. With these funds, states provided
           services such as counseling for children who were going to be
           adopted, family preservation services to adoptive families, and
           respite care for adoptive families. 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 homes.
           o  Family reunification services accounted for over 9 percent of
           subpart 2 funds. These services included supervised visitation
           centers for parents to visit with their children who were in
           foster care and coordinators for alcohol and drug treatment
           services for families whose primary barrier to reunification was
           substance abuse. New Jersey funded a supervised visitation program
           that offered parenting education, counseling, transportation, and
           support groups and was located in a private home, allowing
           families to visit together in a homelike setting and engage in
           more natural interactions.

States Emphasized Different Populations Served Under Subparts 1 and 2

States served similar populations under subparts 1 and 2; however, states
reported using most subpart 1 funds primarily to serve families whose
children had been removed from the home, while most subpart 2 funds were
reported to serve families with children at risk of removal due to child
abuse or neglect, as shown in table 2. For example, states used 42 percent
of subpart 1 funds to serve children in foster care and/or their parents.
In contrast, states used 44 percent of subpart 2 funds for children at
risk of child abuse and neglect and/or their parents.

Table 2: Populations Served under Subparts 1 and 2 of Title IV-B as
Reported by States, Fiscal Year 2002

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.

aThe dollar totals in this table do not match those in table 1 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 from these states on the types of children and
families who received services funded by Title IV-B. 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.

In our survey, we asked states for more detailed information about the
populations served by programs under subparts 1 and 2, such as demographic
and socioeconomic characteristics. However, few states were able to
provide this data. For selected subpart 1 services, 10 states were able to
estimate the extent to which the same children and families also received
services under subpart 2:

           o  four states reported that generally none or almost none of the
           recipients also received a service funded by subpart 2,
           o  three states reported that generally less than half of the
           recipients received subpart 2 services,
           o  one state reported that all or almost all recipients received
           subpart 2 services, and
           o  two states provided varying estimates for different subpart 1
           services.

HHS Officials and States Supported Flexibility of Title IV-B Funding

Officials in almost all of HHS's regional offices supported retaining the
current balance between allowing states some flexibility in use of funds
and targeting some resources toward prevention, regardless of whether
federal funding sources are combined under alternative financing options.
One regional official noted that the current financing structure of
subpart 1 gives states the flexibility to address unexpected circumstances
affecting the child welfare system-for example, the need to develop
substance abuse treatment programs for parents affected by the cocaine
epidemic of the 1980s.8 Other regional officials noted that the spending
requirements under subpart 2 helped ensure that states used some funds on
family support services and prevention activities to help preserve
families and keep children from entering foster care.

States reported in our survey that flexibility was important to meet the
needs of their child welfare systems, and thus generally preferred the
financing structure of subpart 1 over subpart 2, as shown in figure 2.

8States face similar challenges addressing the service needs of families
caused by the current epidemic of methamphetamine use.

Figure 2: State Reported Preferences for Financing Structure of Subparts 1
and 2 of Title IV-B

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

Federal Oversight Insufficient to Ensure State Compliance with Title IV-B
                     Spending Requirements under Subpart 1

HHS provided relatively little oversight specific to state spending under
subpart 1. HHS does not collect data on subpart 1 expenditures, relying
instead on cursory reviews of plans submitted by states that discuss how
they intend to use their subpart 1 funds in the coming year. HHS regional
officials reported that they review these plans for relatively limited
purposes because there are few restrictions on how states can spend
subpart 1 dollars. We also found that HHS regional offices had paid little
attention to statutory limits in states' planned use of subpart 1 funds.
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 Had Little Information about States' Use of Subpart 1 Funds

HHS received forms from states each year that showed how they planned to
spend subpart 1 funds, but had little information on how states actually
spent these funds. Officials from four HHS regional offices said that they
generally reviewed the forms to ensure that states were requesting the
total amount of subpart 1 funds to which they were entitled, and that they
complied with the requirement to match 25 percent of subpart 1 funds with
state funds. Most regional offices indicated that their review of the
state submitted forms focused more on subpart 2 than subpart 1. For
example, they reported reviewing planned subpart 2 spending to ensure that
states complied with the requirement to 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 said that they
did not monitor 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 these funds could be spent.

Oversight of subpart 1 was further limited because spending plans states
provided on the annual forms may not reliably show how states actually
spent Title IV-B funds. HHS officials explained that states' actual
expenditures may vary from planned expenditures as states address
unforeseen circumstances. The timing for submitting the annual forms also
affected how well states could plan Title IV-B spending. HHS required
states to submit their initial spending plans for the upcoming year by
June 30, prior to states receiving information on program appropriations
for the upcoming year. While we did not conduct a review comparing state
submitted planned expenditures to actual expenditures for previous years,
we did identify instances that suggested differences in planned and actual
expenditures as well as data on actual expenditures that were not always
accurate. For example, two states with county-administered child welfare
systems said they could not reliably estimate planned spending by service
category because the states did not collect expenditure data from county
child welfare agencies that administer Title IV-B funds.9

One regional official explained that the only way to determine how a state
actually used its Title IV-B funds was to review its financial accounts.
At the time of our review, three regional offices had indicated that they
had begun asking states to provide Title IV-B expenditure data.

9Most states administer their child welfare systems at the state level;
however a few states delegate administrative responsibility and control to
counties or other local entities. Several large states, such as
California, New York, Ohio, and Pennsylvania, are county-administered.

HHS Regional Offices Were Unaware of Spending Limits or Did Not Enforce Them

HHS regional offices paid little attention to the statutory limits on the
use of subpart 1 funds for foster care maintenance and adoption
assistance. Officials in only 1 of HHS's 10 regional offices said that
they ensured state plans complied with statutory spending limits for
subpart 1. In contrast, 5 regional offices were unaware that any limits on
the use of subpart 1 funds existed. Four other regional offices were aware
that some limitations existed, but did not ensure state compliance with
them.

Two regional offices said they did not monitor planned expenditures for
subpart 1 because they had no data to calculate the spending limit for
each state, and HHS had not provided guidance on how to enforce the
limits. Officials in another region said that their office discontinued
subpart 1 compliance reviews because they considered the limits to be
meaningless because state and federal funds are fungible and state funds
spent on child welfare services greatly exceeded subpart 1federal funds.
In other words, any attempt to enforce the limits, according to these
officials, would only lead to changes in how states accounted for state
and federal funds.

Some states reported in our survey that they spent 2002 subpart 1 funds in
excess of the statutory authority for foster care maintenance and adoption
assistance payments. (See fig. 4.) While spending excesses were small in
some states, they were large in others, ranging from a low of $27,000 in
New Hampshire to nearly $4 million in Michigan. In total, reported actual
spending by the 10 states exceeded the statutory limit by over $15
million.

Figure 4: States Reporting Actual Expenditures in Excess of Statutory
Authority for Foster Care Maintenance and Adoption Assistance Payments
under Title IV-B, Subpart 1, Fiscal Year 2002

Subsequent to our review, ACF issued guidance to states reminding them of
the statutory spending limits for Title IV-B subpart 1 funds in November
2003. This guidance included information needed by each state to calculate
its spending limit for foster care and adoption assistance payments, and
day care related to employment or training.

      Little Research Existed on the Effectiveness of Title IV-B Services

Research on the effectiveness of services provided under subpart 1of Title
IV-B was limited, and HHS evaluations of subpart 2 services showed no or
little effect on children's outcomes. In our survey, 22 states reported
providing services other than maintenance payments, staff salaries, or
administration under subpart 1; however, none of these states had
evaluated the outcomes of these services. One state official said that few
states could afford to divert resources away from direct services to
families in order to conduct formal program evaluations, given the
tremendous service needs of families involved in the child welfare system.

Similarly, our literature review showed that few evaluations had been
conducted, and evaluations that had been conducted produced mixed results.
For example, one study evaluating a program10 in Texas to increase family
literacy and prevent child abuse by enhancing parent-child interactions
cited results showing positive effects on children's measured competence
and classroom behavior. However, evaluation of the same program in New
York did not consistently show differences in outcomes for children and
parents in the program compared to those in a control group.

HHS evaluations of subpart 2 services also have shown no or little effect,
as reported by the Congressional Research Service.11 The Congress required
HHS to evaluate the effectiveness of programs funded under subpart 2 as
part of its initial approval of funding for family preservation and family
support services. HHS focused on the use of subpart 2 funds in three
large-scale evaluations. One looked at overall implementation issues for
the program, the second looked at the effectiveness of two models of
family preservation services (both providing relatively intensive
casework), and the third looked at the effectiveness of a wide range of
family support services. Overall, the findings were similar across all
evaluation sites showing subpart 2 services provided no or little effect
in reducing out-of-home placement, maltreatment recurrence, or improved
family functioning beyond what normal casework services achieved.12 No
similar large scale evaluations of time-limited reunification services or
of adoption promotion and support services have been made.

10The Home Instruction for Parents of Preschool Youngsters (HIPPY) program
has a goal to prevent academic underachievement of children when they
enter school. HIPPY works with parents in their homes or in parent groups
to increase the degree of literacy in the home. The program also seeks to
prevent child abuse by enhancing child-parent interactions and focuses on
economically disadvantaged parents who may not be involved in parenting
programs.

11Congressional Research Service, The Promoting Safe and Stable Families
Program: Reauthorization in the 109th Congress, April 7, 2006., pp. 10-18.

                             Prior Recommendations

Our 2003 report recommended that the Secretary of HHS provide the
necessary guidance to ensure that HHS regional offices are providing
appropriate oversight of subpart 1, consider the feasibility of collecting
data on states' use of these funds to facilitate program oversight and
guidance to states, and use the information gained through enhanced
oversight of subpart 1 to inform its design of alternative child welfare
financing options. ACF agreed with our findings and implemented guidance
to states reminding them of the statutory requirements for subpart 1
spending. ACF disagreed with our recommendation to consider collecting
data on subpart 1 expenditures. ACF believed that its level of oversight
was commensurate with the scope and intent of subpart 1, noting that its
oversight efforts are more appropriately focused on reviews of the states'
overall child welfare systems. ACF did not comment on our recommendation
to use such data to inform the design of an alternative financing option.

Mr. Chairman, this completes my prepared statement. I would be happy to
respond to any questions you or other Members of the Subcommittee may
have.

12U.S. Department of Health and Human Services, Evaluation of Family
Preservation and Reunification Programs, Final Report (Volumes 1 and 2),
Dec. 2002.

Appendix I: GAO Contact and Acknowledgments

For further information regarding this testimony, please contact me at
(202) 512-8403. Individuals making key contributions to this testimony
include Lacinda Ayers, Diana Pietrowiak, and Michelle St. Pierre.

Appendix II: Related GAO Products Appendix II: Related GAO Products

Lessons Learned for Protecting and Educating Children after the Gulf Coast
Hurricanes. GAO-06-680R. Washington, D.C.: May 11, 2006.

District of Columbia: Federal Funds for Foster Care Improvements Used to
Implement New Programs, but Challenges Remain. GAO-05-787. Washington,
D.C.: July 22, 2005.

Child Welfare: Better Data and Evaluations Could Improve Processes and
Programs for Adopting Children with Special Needs. GAO-05-292. Washington,
D.C.: June 13, 2005.

Indian Child Welfare Act: Existing Information on Implementation Issues
Could Be Used to Target Guidance and Assistance to States. GAO-05-290.
Washington, D.C.: April 4, 2005.

Foster Youth: HHS Actions Could Improve Coordination of Services and
Monitoring of States' Independent Living Programs. GAO-05-25. Washington,
D.C.: November 18, 2004.

D.C. Child And Family Services Agency: More Focus Needed on Human Capital
Management Issues for Caseworkers and Foster Parent Recruitment and
Retention. GAO-04-1017. Washington, D.C.: September 24, 2004.

Child And Family Services Reviews: States and HHS Face Challenges in
Assessing and Improving State Performance. GAO-04-781T. Washington, D.C.:
May 13, 2004.

D.C. Family Court: Operations and Case Management Have Improved, but
Critical Issues Remain. GAO-04-685T. Washington, D.C.: April 23, 2004.

Child and Family Services Reviews: Better Use of Data and Improved
Guidance Could Enhance HHS's Oversight of State Performance. GAO-04-333.
Washington, D.C.: April 20, 2004.

Child Welfare: Improved Federal Oversight Could Assist States in
Overcoming Key Challenges. GAO-04-418T. Washington, D.C.: January 28,
2004.

D.C. Family Court: Progress Has Been Made in Implementing Its Transition.
GAO-04-234. Washington, D.C.: January 6, 2004.

Child Welfare: States Face Challenges in Developing Information Systems
and Reporting Reliable Child Welfare Data. GAO-04-267T. Washington, D.C.:
November 19, 2003.

Child Welfare: Enhanced Federal Oversight of Title IV-B Could Provide
States Additional Information to Improve Services. GAO-03-956. Washington,
D.C.: September 12, 2003.

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.

(130583)

This is a work of the U.S. government and is not subject to copyright
protection in the United States. It may be reproduced and distributed in
its entirety without further permission from GAO. However, because this
work may contain copyrighted images or other material, permission from the
copyright holder may be necessary if you wish to reproduce this material
separately.

GAO's Mission

The Government Accountability Office, the audit, evaluation and
investigative arm of Congress, exists to support Congress in meeting its
constitutional responsibilities and to help improve the performance and
accountability of the federal government for the American people. GAO
examines the use of public funds; evaluates federal programs and policies;
and provides analyses, recommendations, and other assistance to help
Congress make informed oversight, policy, and funding decisions. GAO's
commitment to good government is reflected in its core values of
accountability, integrity, and reliability.

Obtaining Copies of GAO Reports and Testimony

The fastest and easiest way to obtain copies of GAO documents at no cost
is through GAO's Web site ( www.gao.gov ). Each weekday, GAO posts newly
released reports, testimony, and correspondence on its Web site. To have
GAO e-mail you a list of newly posted products every afternoon, go to
www.gao.gov and select "Subscribe to Updates."

Order by Mail or Phone

The first copy of each printed report is free. Additional copies are $2
each. A check or money order should be made out to the Superintendent of
Documents. GAO also accepts VISA and Mastercard. Orders for 100 or more
copies mailed to a single address are discounted 25 percent. Orders should
be sent to:

U.S. Government Accountability Office 441 G Street NW, Room LM Washington,
D.C. 20548

To order by Phone: Voice: (202) 512-6000 TDD: (202) 512-2537 Fax: (202)
512-6061

To Report Fraud, Waste, and Abuse in Federal Programs

Contact:

Web site: www.gao.gov/fraudnet/fraudnet.htm E-mail: [email protected]
Automated answering system: (800) 424-5454 or (202) 512-7470

Congressional Relations

Gloria Jarmon, Managing Director, [email protected] (202) 512-4400 U.S.
Government Accountability Office, 441 G Street NW, Room 7125 Washington,
D.C. 20548

Public Affairs

Paul Anderson, Managing Director, [email protected] (202) 512-4800 U.S.
Government Accountability Office, 441 G Street NW, Room 7149 Washington,
D.C. 20548

www.gao.gov/cgi-bin/getrpt? GAO-06-787T .

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
[email protected].

Highlights of GAO-06-787T , a testimony to Chairman, Subcommittee on Human
Resources, Committee on Ways and Means, House of Representatives

May 23, 2006

CHILD WELFARE

Federal Oversight of State IV-B Activities Could Inform Action Needed to
Improve Services to Families and Statutory Compliance

For federal fiscal year 2004, state and local child protective services
staff determined that an estimated 872,000 children had been victims of
abuse or neglect. Title IV-B subparts 1 and 2 authorize a wide array of
child welfare services, with some restrictions on states' use of funds.
This testimony discusses: (1) how states used Title IV-B dollars to serve
families under subparts 1 and 2; (2) the extent that federal oversight
ensured state compliance with spending requirements under subpart 1; and
(3) what the research said about the effectiveness of services states have
provided to families using Title IV-B funds.

This testimony was primarily based on a 2003 report (GAO-03-956).

What GAO Recommends

The 2003 report recommended that the Secretary of Health and Human
Services (HHS) consider collecting data on states' use of Title IV-B
subpart 1 funds, use these data in its design of alternative financing
options, and provide the necessary guidance to ensure state compliance
with statutory restrictions on the use of subpart 1 funds. HHS's
Administration for Children and Families (ACF) agreed with the report's
findings and implemented the recommendation to provide guidance to states.
ACF disagreed with the recommendation to collect data from states and did
not comment on using these data for its financing option.

States used Title IV-B funds to provide a broad range of services to
prevent the occurrence of abuse, neglect, and foster care placements in
addition to other child welfare services. While there was some overlap,
states reported using Title IV-B subpart 1 funds primarily to operate
child welfare programs and serve families in the foster care system, while
states reported using subpart 2 funds primarily for family services
targeted to families at risk of child removal due to abuse and neglect.
Some costs to operate programs included direct services to children and
families. For example, nearly half of subpart 1 staff costs paid salaries
for social worker positions in child protective services. Family services
under subpart 2 included those to support, preserve, and reunify families
by providing mentoring programs, financial assistance to help with rent
and utilities, parenting classes, child care, and support groups.

States Reported Use of Federal Funds under Title IV-B, Fiscal Year 2002

Source: GAO survey.

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

HHS provided relatively little oversight specific to state spending under
subpart 1. HHS did not collect data on subpart 1 expenditures and regional
officials paid little attention to statutory limits in states' planned use
of funds. In response to GAO's survey, 10 states reported actual 2002
subpart 1 expenditures that exceeded the spending limits by over $15
million in total.

Research is limited assessing the effectiveness of services provided under
Title IV-B. In GAO's survey, 22 states reported providing services other
than foster care and adoption assistance payments, staff salaries, or
administration under subpart 1; however, none of these states had
sufficiently evaluated the outcomes of these services. Similarly, GAO's
literature review showed that few evaluations had been conducted, and
evaluations that had been conducted showed mixed results. HHS evaluations
of subpart 2 services also have shown no or little effect in reducing
out-of-home placement, maltreatment recurrence, or improved family
functioning beyond what normal casework services achieved.
*** End of document. ***