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Budget and Policy Post
November 6, 2023

The 2023-24 California Spending Plan

Human Services


Child Welfare

California’s child welfare services system serves to strengthen families and protect the state’s children from abuse and neglect, often by providing temporary foster care placements for children who cannot safely remain in their home and services to safely reunify children with their families.

Budgeted Expenditures

Budgeted Child Welfare Spending Decreases by Around $350 Million General Fund in 2023-24. Total child welfare local assistance spending for 2023-24 is budgeted at around $1 billion General Fund ($9.8 billion total funds), including the Approved Relative Caregiver program, Kinship Guardianship Assistance Payment program, Adoption Assistance Program, foster care payments, continued implementation of Continuum of Care Reform (CCR), child welfare automation projects, extended foster care programs for non-minor dependents and programs for former foster youth, and other special programs—all implemented by the Department of Social Services (DSS). This amount represents a net decrease of around $350 million in General Fund compared to 2022-23, mostly due to the expiration of significant temporary funding in 2022-23 (such as $150 million one-time funds for grants to counties for family finding and engagement, and a temporary augmentation of $92.5 million for the Bringing Families Home program), partially offset by some new augmentations in 2023-24, which we describe in more detail below. A summary of year-over-year changes in child welfare local assistance budgeted expenditures is shown in Figure 1.

Figure 1

Changes in Local Assistance Funding for Child Welfare

Includes Child Welfare Services, Foster Care, AAP, KinGAP, and ARC (In Millions)

Total

Federal

State

County

Reimbursements

2023‑24 (July Allocation)

$9,754

$3,312

$1,061

$5,124

$256

2022‑23 (Revised Budget at May Revision)

9,756

3,387

1,415

4,740

214

Change From 2022‑23 to 2023‑24

‑$2

‑$74

‑$354

$384

$42

Note: Includes Child Welfare Services automation.

AAP = Adoption Assistance Program; KinGAP = Kinship Guardianship Assistance Payment; and ARC = Approved Relative Caregiver.

New Augmentations in 2023-24 Include Temporary and Ongoing Costs. The 2023-24 budget includes around $150 million General Fund for new child welfare activities and augmentations. The majority of this funding (around $143 million) is for one-time or limited-term purposes, while a smaller amount (around $7 million, increasing to about $25 million in the out-years) is ongoing. Figure 2 summarizes these new activities and we describe the augmentations in more detail below.

Figure 2

2023‑24 Child Welfare Local Assistance Augmentations

(In Millions)

Item

General Fund in 2023‑24

Child welfare automation‑related costs:

  • CWS‑CARES project increasea

$67

  • CWS‑CARES and CalSAWS interface

25

  • Federal penalties for non‑compliance

1

Net changes in CCR costs

40

FFAs one‑time funding

8

Implementing new legislationb

6

BH‑CONNECT (formerly CalBH‑CBC Demonstration)c

3

SILP housing supplementd

1

Total

$150

aCWS‑CARES may be augmented by an additional $35.1 million if the Department of Finance and Department of Technology determine that the project is making satisfactory progress towards completion, as defined in budget language and statute.

bAll items are funded on a one‑time or limited‑term basis, except for implementing new legislation, which is ongoing.

cBH‑CONNECT funding for child welfare under the Department of Social Services is projected to increase to $30 million at full implementation.

dSILP housing supplement funding is projected to increase to $18.8 million at full implementation.

CWS‑CARES = Child Welfare Services ‑ California Automated Response and Engagement System; CalSAWS = California Statewide Automated Welfare System; CCR = Continuum of Care Reform; FFAs = foster family agencies; BH‑CONNECT = Behavioral Health Community‑Based Organized Networks of Equitable Care and Treatment; CalBH‑CBC = California Behavioral Health Community‑Based Continuum Demonstration; and SILP = supervised independent living placement.

  • CWS-CARES Project Increase. The 2023-24 budget package includes $67 million General Fund to continue implementing the Child Welfare Services - California Automated Response and Engagement System (CWS-CARES) project. CWS-CARES is the new child welfare comprehensive data system, which has been under development for about a decade. It will replace the state’s current system and will meet federal requirements for states’ comprehensive child welfare data systems. The augmentation included in the 2023-24 spending plan reflects recently updated cost estimates for the project. Furthermore, budget language specifies that an additional $35 million may be provided if the Department of Finance determines, in consultation with the Department of Technology, that the project is making satisfactory progress, as defined by budget language and statute. In total, project costs are now estimated to exceed $1.5 billion over the duration of CWS-CARES implementation, and the administration estimates that the first version of the system will launch in the next few years. The budget package also includes language around improving legislative oversight of the project by establishing project objectives, defining project completion and success, and requiring annual demonstrations and monthly meetings with the Legislature to monitor progress.

  • CWS-CARES and CalSAWS Interface. The spending plan also provides one-time funding of $25 million, with two years of spending authority, to support a bi-directional interface between the California Statewide Automated Welfare System (CalSAWS)—the state’s public benefits eligibility and payment system—and CWS-CARES. The interface will help ensure that the state’s child welfare data system meets federally required data exchange specifications around federal foster care eligibility.

  • Federal Penalties for Data Noncompliance. Federal child welfare reporting requirements specify 37 data elements that must be included in each state’s child welfare case management system. While the required data elements will be added to the new system (CWS-CARES), the new system will not be fully operational for a few years. Prior to CWS-CARES implementation, the state will pay fiscal penalties for noncompliance. The cost of the penalty in 2023-24 is about $1 million General Fund.

  • Net Changes in CCR Costs. Under 2011 realignment, the state pays for the net increase in costs of implementing CCR, which is a series of legislative reforms making fundamental changes to how the state approaches child welfare programs. The state began implementing CCR several years ago; the 2023-24 spending plan includes a net increase of around $40 million General Fund to continue implementation in 2023-24. This net increase in CCR costs reflects increases for the home-based family care rate and placement prior to approval, partially offset by decreases in net costs for child and family teams, resource family approval backlog funds, and other program areas.

  • FFA One-Time Funding Augmentation. The 2023-24 spending plan includes a one-time increase of $8 million for foster family agency (FFA) rates. FFA rates include the foster care maintenance payment for the resource family as well as an administrative portion paid to the FFA for social worker time and to help facilitate the additional supportive services provided by the agency. The administrative portion of FFA rates does not receive an upward adjustment.

  • Implementing New Legislation. Several pieces of legislation chaptered in 2022 require funding to implement. The 2023-24 spending plan includes around $6 million ongoing in total to implement new laws. Most of the new funding is to support additional social worker time to fulfill new requirements, such as additional reporting, documentation, and case management activities.

  • BH-CONNECT Child Welfare Components. The Behavioral Health Community-Based Organized Networks of Equitable Care and Treatment (BH-CONNECT) Demonstration is a five-year federal Medicaid waiver proposal being developed by the Department of Health Care Services (DHCS). Overall, the proposal includes a range of services and interventions aimed at supporting Medi-Cal beneficiaries with serious mental illness. A small component of the proposal would be funded under DSS, with the aim of delivering early interventions to reach children and families to help prevent entry into (or further involvement with) the child welfare system. Specifically, the 2023-24 spending plan includes around $3 million for child welfare social worker workload to begin to participate in child and family team meetings for Family Maintenance cases. (At full implementation, child welfare-focused activities also would include a home visiting program and funding for foster youth to participate in extracurricular activities, with annual funding around $30 million General Fund.) DHCS submitted the waiver proposal to the federal government in October 2023; many implementation details have yet to be finalized.

  • SILP Housing Supplement. The 2023-24 spending plan includes $1 million to begin implementing a housing supplement for foster youth in supervised independent living placements (SILPs). SILPs are a common placement type for older foster youth, including non-minor dependents. Current SILP rates do not account for regional variations in housing costs; the supplement will provide additional funding to youth residing in higher-cost counties. (The supplement will be implemented in a similar manner to a housing supplement currently provided for the Transitional Housing Program-Plus administered by the California Department of Housing and Community Development, which is another placement type for older, relatively more self-sufficient youth.) At full implementation in 2025-26, annual costs for the SILP housing supplement will be around $18.8 million.

Budget Language Makes Other Policy Changes

In addition to providing the DSS child welfare augmentations summarized above, the 2023-24 budget package also includes budget-related legislation enacting some specific child welfare policy changes and making technical changes to previously funded initiatives:

Adoption Facilitators. Budget associated language repeals statutory provisions relating to adoption facilitators and expressly states that an adoption facilitator that continues to operate on or after January 1, 2024 shall be deemed an unlicensed adoption agency. Unlicensed adoption agencies are not able legally to engage in specified activities related to adoptions. In addition, spending plan language authorizes DSS to refer unlicensed adoption agencies to law enforcement and allows individuals to bring civil actions against these agencies. Finally, the language requires the department to create a section on its website dedicated to educating the public on unlicensed adoption agencies.

Kin-GAP. Budget-related legislation makes technical clarifications and amendments to statutory definitions, particularly related to approved relative homes, for the federal and state Kinship Guardianship Assistance Payment Programs (Kin-GAP). Language specifies that approved relative homes include a relative approved as a resource family or a tribally approved home. With respect to state Kin-GAP, language includes within that definition the home of a relative that has been assessed by the juvenile court and into which the court has authorized placement. Language also revises the definition of a “relative” under Kin-GAP to include an adult who meets the definition of an extended family member under the federal Indian Child Welfare Act (ICWA).

Tribally Approved Homes Compensation Program. The 2022-23 budget created the tribally approved homes compensation program, which provides funding to federally recognized Indian tribes to assist in funding the costs associated with recruiting and approving homes for the purpose of foster or adoptive placement of an Indian child pursuant to ICWA. The 2023-24 budget package includes language to amend the requirement that a tribal-state agreement be in place by May 1 of the previous fiscal year. This change allows tribes to begin receiving funding as soon as they submit an annual letter of interest.

Tribal Dependency Representation Program. The 2022-23 budget also created the tribal dependency representation program to provide funding to assist any federally recognized tribe in California in funding legal counsel to represent the tribe in the juvenile court. As part of the 2023-24 budget package, budget-related legislation makes changes to the allocation methodology, based on feedback from tribal representatives during initial consultations between the department and tribes.

Bringing Families Home Program. Budget-related legislation amends a number of definitions for the Bringing Families Home program, which is a housing support program for families involved with the child welfare system who are experiencing or at risk of experiencing homelessness. In particular, language expands the definition of “homeless” to include an individual or family who is fleeing, or is attempting to flee, domestic violence, dating violence, sexual assault, stalking, or other dangerous or life-threatening conditions; has no other residence; and lacks the resources or support networks to obtain other permanent housing. The bill also makes certain changes to the existing definition of “permanent housing” for purposes of the program. Finally, language extends the waiver of the local funding match requirement (implemented as part of funding augmentations for the program provided in 2021-22 and 2022-23) through June 30, 2025 and extends deadline for the department to adopt regulations implementing all provisions to July 1, 2024.

Children’s Crisis Continuum Pilot Projects. The 2021-22 budget provided $60 million one time to fund pilot projects for counties to expand the array of placement types and services available for children experiencing acute behavioral health crises. Given the significant time that was needed for the department to develop the initial program guidance and for counties to prepare their proposal submissions, 2023-24 statutory changes make amendments that require that the pilot programs be implemented for five years from the date grant recipients are selected (rather than five years from the date of the program’s appropriation). Language also makes other statutory deadline changes for proposal submission, grant disbursement, and reporting.

Reporting on Development of CCR Permanent Rates Structure. As part of implementing CCR, the state is required to develop a new foster care maintenance payment rates structure to replace the previous age-based and group home rates structure. New rates must be based on the assessed level of need of individual youth (“level of care”), with youth requiring higher levels of behavioral health supports and other more therapeutic and intensive services receiving higher rates. Since 2017, the state has been implementing interim level of care rates for resource families, Short-Term Residential Therapeutic Programs, FFAs, intensive services foster care, and other specialized models of foster care. Statute specifies that these interim rates will expire December 31, 2024, and that the permanent, ongoing level of care rate structure will be established by January 1, 2025. The administration plans to propose the new rate structure as part of the 2024-25 Governor’s budget. Leading up to this proposal, the 2023-24 spending plan adopts supplemental report language regarding consultation between the administration, Legislature, and stakeholders on the time line for implementation of the forthcoming CCR permanent rates structure.

Beyond DSS, the 2023-24 spending plan includes a number of actions related to foster youth across other budget areas, as described below. This list does not capture all elements of the budget that may affect foster youth and child welfare-involved families (for example, new funding for the Homeless Housing, Assistance, and Prevention Grant Program includes a 10 percent youth set aside, but these funds are not targeting foster youth in particular). Rather, we highlight budget actions that directly impact foster youth:

Developmental Services: Regional Center Coordinators for Foster Youth. Chapter 815 of 2018 (AB 2083, Cooley) requires each county to develop and implement a Memorandum of Understanding (MOU) outlining the roles and responsibilities of the various local entities that serve children and youth in foster care who have experienced severe trauma. MOUs involve county child welfare agencies, behavioral health, education, developmental services, and other entities. As part of implementing AB 2083, beginning in 2019-20, the state provided funding to the Department of Developmental Services for 15 staff specifically to coordinate with other local and state agencies serving foster youth with qualifying developmental disabilities who are served by regional centers. The 2023-24 spending plan augments this funding by $1.6 million on an ongoing basis, for a total of 30 foster youth coordinators to staff regional centers.

Higher Education: Scholarship Augmentations for Foster Youth. The 2023-24 spending plan includes an ongoing augmentation of $5.2 million to increase college and university scholarships for current and former foster youth. The budget-related legislation related to higher education programs increases the Community Colleges Student Success Completion Grant for full-time students who are current or former foster youth to $5,250 per semester. (Previous award amounts were $1,298-$4,000 per semester.) In addition, budget-related legislation ensures that current or former foster youth enrolled at California State University and University of California campuses receive the maximum Middle Class Scholarship award amount for which they are eligible by specifying that foster youth’s awards are not subject to certain reductions based on available funding.

Health Care: Mandatory Managed Care Enrollment of Foster Youth. Budget legislation related to health programs makes changes to exemptions from mandatory enrollment in managed care plans. Under the state’s Medi-Cal rules, foster youth are required to enroll in a managed care plan when they reside in a county with only one local health plan. In other counties, foster youth can instead receive services on a fee-for-service basis. As part of a recent state effort to renegotiate Medi-Cal’s managed care contracts, many more counties will have only one local health plan. This higher count includes a handful of large counties that will transition to a new “Single Plan” model, with different regulations than other counties. Prior to the budget package, the changes necessitated the transition of foster youth from fee-for-service to managed care in most of the affected counties, but not in the counties switching specifically to a Single Plan model. The 2023-24 budget-related legislation now applies this mandatory managed care enrollment requirement to counties with a Single Plan model, effective January 1, 2025. Along with this change, the spending plan also places requirements on Medi-Cal managed care plans and DHCS for the transition of this population to managed care related to continuity of care and continued timely access to care.

Specialty Mental Health: Delay of Presumptive Foster Care Mental Health Transfer. Chapter 402 of 2022 (AB 1051, Bennett) changes the requirements around presumptive transfer of responsibility for specialty mental health service provision for foster youth placed in congregate care settings. Specifically, AB 1051 requires the placing county to retain responsibility for providing specialty mental health services to the youth—rather than transferring that responsibility to the county where the youth is placed—for out-of-county placements, with limited exceptions. Budget-related legislation included with the 2023-24 budget package now delays the implementation of this change from July 1, 2023 to July 1, 2024.