The 2025-26 Budget

CWS-CARES

Summary

Though Project Costing More and Taking Longer Than First Planned… The Child Welfare Services-California Automated Response and Engagement System (CWS-CARES) information technology (IT) project still continues over a decade after the state approved it in January 2013. CWS-CARES replaces the federally noncompliant Child Welfare Services/Case Management System (CWS/CMS) with a federally compliant IT system at an approved baseline cost of $1.7 billion ($850 million General Fund)—an increase of $1.3 billion ($659 million General Fund) since project inception—with hundreds of millions of dollars in other project-related costs not captured in the approved baseline. The administration expects the first version (V1) of CWS-CARES to launch statewide in October 2026, replacing CWS/CMS, and the second version (V2) of CWS-CARES to launch statewide in April 2028. Multiple iterations of project plans, many of them adopting different approaches to development and implementation, have continued to delay this project at a significant cost to the state—CWS-CARES remains the costliest and longest running IT project still in the state’s current IT project portfolio.

…It Is Making Progress, With Critical Milestones Coming in 2025-26. The CWS-CARES IT project is continuing to make progress towards completion of CWS-CARES V1 by October 2026 including the completion of 13 of 37 milestones (a measure of the project’s scope), improvements in design processes, and preparation for user readiness and adoption activities. An immense amount of work remains in 2025-26, however, with 22 of the 24 remaining milestones for CWS-CARES V1 scheduled for completion by the end of 2025, meaning any unexpected work could delay the timely completion and implementation of CWS-CARES V1.

Completion of Remaining Milestones More Difficult Due to Project Risks. In addition to the number of milestones remaining to complete CWS-CARES V1, there are a number of risks to the project that could make its completion more difficult:

• Reduced Federal Financial Participation (FFP). The federal Administration for Children and Families (ACF) reduced FFP for project costs by nearly half last year because the project had not adhered to its schedule. ACF plans to conduct a project review in May that will determine whether the project is now on track. If they decide the project is not on track, the administration projects the loss of FFP in 2025-26 may require an additional $79.3 million General Fund that is not currently accounted for in the Governor’s 2025-26 budget proposal.

• Unanticipated Work Uncovered Through User Testing. From this month through the middle of next year, the project will conduct four, months-long testing sessions in which the project’s new “holistic design” approach to improve milestone design (amid other changes) will be tested by users. Each testing session could uncover some possible rework and other risks that, if they accumulate and/or are significant enough, could increase costs and delay completion of CWS-CARES V1 by October 2026.

• Unexpected Defects or Deficiencies Identified During the Production Pilot. Two months prior to the statewide rollout of CWS-CARES V1, a production pilot with a select number of counties will test CWS-CARES as the system of record (while other counties will remain on CWS/CMS). Any significant defects or deficiencies that are identified during the four- to six-week production pilot could delay statewide rollout of CWS-CARES V1 two weeks later.

Project Completion Required for Implementation of Several Child Welfare Priorities, Making Legislative Oversight of Paramount Importance. The completion of CWS-CARES V1 also unlocks a number of legislative priorities for child welfare programs such as implementation of the tiered rate structure (TRS); county claiming of federal Title IV-E funding for eligible prevention services; and collection of additional data required that could help, for example, reduce racial and ethnic disparities and disproportionalities in the state’s child welfare program. Delayed completion of CWS-CARES V1 likely would defer these legislative priorities for child welfare programs.

Consistent Underspending of Appropriations Warrants Different Approach to Project Funding in 2025-26. The Governor’s 2025-26 budget requests up to $349.4 million ($176.4 million General Fund) for the CWS-CARES IT project in 2025-26—$256.5 million ($129.9 million General Fund) in the appropriation and up to $92.9 million ($46.5 million General Fund) in allowable augmentations. However, the project continues to underspend its appropriations: In 2023-24, the project expects to spend $141.3 million of its $186.3 million budget—a $45 million difference (or 24 percent), and in 2024-25, the project is projected to spend $180.3 million of its $210.8 million budget—a $30.4 million difference (or 14 percent). Moreover, the proposed provisional budget bill language (BBL) uses prior year savings to allow for an augmentation, rather than an offset, of project funding and additional funds do not require a determination of satisfactory progress consistent with legislative intent.

Recommend Reduced Initial Appropriation and Adoption of Placeholder Provisional BBL With Additional Funding Based on Progress. We recommend the Legislature reduce the CWS-CARES IT project’s requested 2025-26 appropriation to $185.2 million ($94.2 million General Fund), and reappropriate $45.6 million ($22.8 million General Fund) in prior-year savings from 2023-24 to 2025-26. We also recommend that the Legislature adopt placeholder provisional BBL that conditions any remaining augmentations of up to $118.5 million ($59.4 million General Fund) on the determination of satisfactory progress.

Background

CWS-CARES IT Project Will Replace CWS/CMS With Federally Compliant IT System. California’s primary IT system for child welfare services—CWS/CMS—does not comply with federal Comprehensive Child Welfare Information System (CCWIS) requirements. Adopted in August 2016, federal CCWIS requirements seek to improve child welfare services program data exchange, management, and quality; federal and state reporting; and program administration at Title IV-E agencies. To meet these requirements, the state approved the CWS-CARES IT project in January 2013 to replace CWS/CMS with a federally compliant CCWIS. The project is led by the Department of Social Services (DSS) and the Office of Technology and Solutions Integration (OTSI) in coordination with other state, county, local, and tribal government entities.

Project Cost Currently Estimated at $1.7 Billion ($850 Million General Fund). Since 2013, the CWS-CARES IT project’s approved baseline cost, schedule, and scope has been updated six times, as shown in Figure 1. (A number of small amendments and version changes also updated baseline project information.) The current approved baseline cost of the project is $1.711 billion, of which $856 million is General Fund. (Title IV-E agency costs for planning, development, and implementation of a CCWIS are eligible for FFP of 50 percent.) The baseline cost, however, does not include:

• $251 million for the development, implementation, maintenance, and operations of CARES-Live—a subset of functionalities launched during prior iterations of the CWS-CARES IT project, including the state’s Child and Adolescent Needs and Strengths assessment tool.

• $31 million for an interface between the California Statewide Automated Welfare System and CWS-CARES.

• $15 million for CWS-CARES automation of the TRS, which we discuss in more detail in a later text box.

Adding these project-related costs to the approved baseline cost brings the actual total cost to over $2 billion. (The administration is currently further refining project costs, however, and will update the current project documentation in the coming months.)

Project Schedule Plans Completion of CWS-CARES V1 in October 2026, Following Production Pilot in First Quarter of 2026-27. The CWS-CARES IT project is separated into two versions: V1 and V2. CWS-CARES V1, planned for completion in October 2026, will replace CWS/CMS with a federally compliant CCWIS. (The remainder of this post will focus on the completion of CWS-CARES V1.) CWS-CARES V2, planned for completion in April 2028, further supports CCWIS compliance through continued work on additional system interfaces, data exchanges with Child Welfare Contributing Agencies, and external county systems. Prior to completion of CWS-CARES V1 in October 2026, the project plans to conduct a production pilot with at least three counties over four to six weeks. During this production pilot, these counties will use CWS-CARES V1 for child welfare program activities, and report defects or deficiencies to the project team. After a two-week stabilization period following the production pilot (which assumes there are no severe system defects or deficiencies), the project will launch CWS-CARES V1 statewide.

Project Scope Measured in Milestones Based on Child Welfare Service Areas. Milestones are one of the primary measurements of project scope completion used by the CWS-CARES IT project. The latest project plan—Special Project Report (SPR) 6—identifies 37 milestones for the project to complete CWS-CARES V1, categorized into eight child welfare service areas (that is, broad categories of program activities or functions). Figure 2 provides a list of the CWS-CARES V1 milestones by child welfare service area.

End User System Testing (EUST) Provides Opportunity for System Users to Test Project Milestone Functionalities. After the project completes some number of its CWS-CARES V1 milestones, it provides an EUST session for future system users to test milestone functionalities. User feedback is collected during the EUST session, and then reviewed by the project thereafter to determine how to address defects or deficiencies before completion of CWS-CARES V1 and, where possible, plan future system enhancements. Figure 3 identifies five EUST sessions in the current project schedule, one of which is complete and four of which remain until completion of CWS-CARES V1. (The figure incorporates the shift of four milestones from EUST 2 into EUST 3 after the project’s transition to the holistic design approach, which we discuss in more detail later in the post.)

Several Legislative Priorities for Child Welfare Programs Dependent on CWS-CARES V1 Completion. The completion of CWS-CARES V1 not only replaces CWS/CMS with a federally compliant CCWIS, but also unlocks a number of legislative priorities for child welfare programs such as the implementation of the TRS; county claiming of federal Title IV-E funding for eligible prevention services; and the collection of additional data sought by the Legislature that could help, for example, reduce racial and ethnic disparities and disproportionalities in the state’s child welfare program. A nearby text box provides additional detail on each of these priorities.

Current Project Status

Project Changes

First EUST Identified Significant Rework of Initial Project Milestones Required for V1 Completion… The CWS-CARES IT project held its first EUST session in February and March 2024, after a one-month scheduling delay and the removal of six out of nine milestones from the EUST scope due to design and development delays. (Four of the six milestones are now expected to be tested in EUST 2, and the remaining two milestones are expected to be tested in EUST 3.) During the four-week EUST session, participants identified a significant amount of required rework prior to implementation of the three (and several other related) milestones. Some of the rework derived from insufficient testing and validation of milestone functionalities. Other rework became apparent when the participants and project identified interdependencies between different child welfare service areas and milestones. This level of rework highlighted the need for the project to incorporate user feedback earlier and more frequently in milestone design and development, and to plan milestones based on analysis of business processes and requirements across child welfare service areas.

…Leading Project to Transition to New Holistic Design Approach in 2024. To address the rework identified in EUST 1, reduce possible rework in future EUST sessions, and mitigate other potential risks to CWS-CARES V1 completion by October 2026, the project transitioned to a new project development and implementation approach—the holistic design approach. The project’s holistic design approach incorporates additional milestone design review focused on understanding how program processes work from start to finish under different scenarios. The additional design review incorporates user feedback, and looks across child welfare service areas to identify milestone interdependencies prior to their development. Milestone development after the design stage—that is, build, state and vendor testing, and preparation for EUST—largely remains the same. The project’s transition to its holistic design approach does not delay the expected CWS-CARES V1 completion in October 2026, but does (1) shift milestones from EUST 2 to EUST 3; (2) extend EUST 3 from four to six weeks (given the significant number of milestones in the EUST); and (3) require EUST 4 validation and training activities to occur at the same time, compressing the project time line.

Federal ACF Determined Project in Non-CCWIS Claiming Status. To receive federal funds for CWS-CARES IT project costs, the state must submit project planning documents for approval by the federal ACF. Once ACF approves the state’s planning documents, the project is eligible for FFP of 50 percent for all CCWIS-related planning, development, and implementation costs (that is, a CCWIS claiming status). Over the past year, however, ACF determined that the project is no longer eligible for CCWIS claiming status primarily because of its failure to make progress according to the schedule it submitted to ACF. (A nearby text box provides the time line of ACF’s decision.) The project’s current non-CCWIS claiming status now extends back to the beginning of federal fiscal year 2024 (beginning October 1, 2023), and will continue to reduce FFP for CWS-CARES IT project costs from 50 percent to 26.5 percent until ACF returns the project to its CCWIS claiming status and potentially allows retroactive claiming of costs at the higher FFP. Additional General Fund needed to cover the 23.5 percentage point reduction in FFP is expected to total $49.6 million in 2024-25. (We do not have an estimate of the additional General Fund needed for October 2023 to June 2024 at this time, but the amount needed was likely in the tens of millions of dollars.)

Initial Production Pilot Option Abandoned in 2024, but New Option Adopted in 2025. In September 2022, the Child Welfare Digital Services (CWDS) Board of Directors—the highest level of CWS-CARES IT project leadership—approved a statewide rollout of CWS-CARES V1, but only after completing a production pilot with a select number of counties using the new system. In September 2023, an initial plan to conduct the production pilot was approved by the CWDS Board of Directors. One of the outstanding decisions for the next version of the pilot plan was how to technically implement the production pilot. In 2024, the proof of concept for the production pilot implementation—in which the pilot counties could be required to perform more manual, dual entry of data into both CWS-CARES and CWS/CMS—was determined to be infeasible and a decision was made to no longer pursue it. During the remainder of 2024, the project considered a variety of options for how to technically implement the production pilot and, in January 2025, the CWDS Board of Directors voted to approve a “two systems of record” approach with less technical complexity. This approach means pilot counties will use CWS-CARES V1 as their system of record during the production pilot, while all other counties will continue to use CWS/CMS as their system of record. This approach will continue until CWS-CARES V1 is launched statewide.

Project Progress

As of January 2025, 13 of 37 Project Milestones Completed. Of the 37 milestones for the project to complete CWS-CARES V1, 13 milestones have been completed across five child welfare service areas as of January 2025. Of the remaining 24 milestones, 22 milestones are scheduled for completion by the end of 2025. Only two milestones—milestone 7.1 (Case Management Assessment) and milestone 26.1 (Facility Management System)—are currently delayed, but the status of each remaining milestone can change month-to-month. Figure 4 provides a breakdown of CWS-CARES V1 project milestones, completed and remaining, as of January 2025.

Many User Readiness and Adoption Activities Already Underway. In addition to the EUST sessions, the CWS-CARES IT project continues to engage its stakeholders through briefings, demonstrations, meetings, newsletters, and videos to ready future system users for its adoption. As the statewide launch of CWS-CARES V1 approaches, the project will provide a number of opportunities for training of future system users such as county regional training academies and the deployment of a mock version of CWS-CARES V1 with sample data for counties to evaluate how the new system will impact their business processes.

As of January 2025, $417.7 Million in Cumulative One-Time Project Expenditures. Of the $1.2 billion in one-time project costs approved in SPR 6 (out of the total cost of $1.7 billion, which includes continuing and future project costs), $417.7 million has been expended as of January 2025. This is 25 percent less ($139.1 million) than projected cumulative one-time project expenditures in January 2025 ($556.8 million) that were approved in SPR 6.

Governor’s Budget

$256.5 Million ($129.9 Million General Fund) Requested in 2025-26. DSS is requesting $256.5 million ($129.9 million General Fund) in 2025-26 to continue to develop and implement the CWS-CARES IT project. OTSI is also requesting a $150.1 million increase in its expenditure authority in 2025-26 to receive reimbursements from DSS for OTSI’s project-related activities. (OTSI also expects to request additional expenditure authority of $15 million at May Revision for the development and implementation of functionalities in CWS-CARES V1 associated with recently chaptered legislation.)

Additional $47.3 Million ($23.7 Million General Fund) for Vendor Costs Also Available Through Proposed Provisional BBL. Proposed provisional BBL also allows the Department of Finance (DOF) to augment the project’s appropriation by up to $47.3 million ($23.7 million General Fund) after completion of vendor contract negotiations. At least some contracts are currently in negotiations and, according to the administration, the augmentation amount ties with estimated budget year costs in current project documentation. (This is difficult to assess at this time because the administration is further refining project costs, and will update the current project documentation in the coming months.)

Prior Year Savings of $45.6 Million ($22.8 Million General Fund) Available Through Proposed Provisional BBL if Project Progress Deemed Satisfactory. Proposed language also allows DOF, in consultation with the California Department of Technology, to augment the project’s appropriation by up to $45.6 million ($22.8 million General Fund) using prior year project savings. This augmentation requires DOF to consider whether the project is making satisfactory progress towards completion of milestones, incorporation of end user feedback, progress towards user adoption; and provide 30-day written notification of the Joint Legislative Budget Committee (JLBC) that confirms DOF’s consideration of satisfactory progress before any augmentation is authorized. (The Legislature first adopted this language in 2023-24 and has since adopted it to provide additional project oversight.)

It is important to note that the General Fund amounts in both the requested appropriation and the augmentations allowable under the proposed provisional BBL assume that ACF will return the project to a CCWIS claiming status in 2025-26, meaning 50 percent FFP for development and implementation costs. Figure 5 provides a breakdown of the CWS-CARES IT project budget proposed in 2025-26. This breakdown would require the requested $256.5 million and nearly all of the $92.9 million in augmentations allowable under the proposed provisional BBL.

Assessment

Though Progress Made, Project Development and Implementation Enters Critical Period in 2025-26. The project continues to make progress towards the completion of CWS-CARES V1 by October 2026—including the completion of milestones, improvements in design processes, and preparation for user readiness and adoption activities. The project also faces an immense amount of work ahead of it, with 22 of the 24 remaining milestones for CWS-CARES V1 scheduled for completion by the end of 2025. Furthermore, the second EUST session is scheduled to begin in March 2025, which will test whether the holistic design approach and other changes to reduce possible rework and mitigate other risks have been successful. ACF also plans to conduct a virtual project review in May that will determine whether the project is on track to complete CWS-CARES V1 according to its project schedule and return to a CCWIS claiming status (thereby, receiving the level of federal fund support that the budget currently assumes). Alongside all of this work, the project will need to continue its user readiness and adoption efforts, including a revised plan that more thoroughly details how to technically implement the production pilot. Unanticipated outcomes from these events (such as additional work identified during EUST 2 in March 2025) or slippage in the project schedule (including delays caused by changes in other IT projects and/or systems) could domino into a further delay of the CWS-CARES V1 completion date, higher General Fund costs, and a deferral of legislative priorities for child welfare programs. The coming budget year is a critical period for the CWS-CARES IT project, and warrants close legislative scrutiny.

Project Continues to Underspend Its Appropriations, Raising Questions About Proposed Levels of Funding in 2025-26. One such area for legislative scrutiny is the project’s continued underspending of its appropriations over the past two budget years—2023-24 and 2024-25. According to most recent estimates, the project expects to spend $141.3 million of its $186.3 million budget in 2023-24—a $45 million difference (or 24 percent)—and is projected to spend $180.3 million of its $210.8 million budget in 2024-25—a $30.4 million difference (or 14 percent). Figure 6 shows the underspending of the project’s appropriations in 2023-24 and 2024-25 by budget item.

There are a variety of reasons for this underspending. Some of the budget items have longer expenditure time lines that extend across multiple years. For example, Core Constituent Participation (CCP) cost expenditures are based on county reimbursement claims submitted to DSS, which are submitted within 30 days after the end of a calendar quarter but can be adjusted up to 12 months after the initial claim is submitted. (CCP funding helps future system users participate in EUST sessions and other activities focused on user adoption.) Other budget items, such as contract services, are contingent on work order authorizations that require multiple levels of review and sign-off by the project. A number of budget items also have been impacted by delays in the project schedule as well as efforts to address those delays, such as the transition to holistic design. Nonetheless, this level of underspending raises questions about how likely it is the project will spend up to $349.4 million in combined funding from the requested appropriation and allowable augmentations in 2025-26. Efforts by the administration to further refine project costs and update current project documentation, as well as continued negotiations with project vendors and pending decisions by ACF about FFP, limit what answers the project can provide as the Legislature considers this proposal.

Proposed Provisional BBL Inadequate to Address Funding-Related Questions. Additional funding-related questions are raised by the proposed provisional BBL, including (1) the use of prior year savings to augment, rather than offset, project funding; (2) the required determination of satisfactory progress for some funding, but not other funding; and (3) the absence of any mechanism to adjust General Fund costs if the project continues in a non-CCWIS claiming status into 2025-26. We provide more detail on these questions below:

• Budget Year Costs Not Offset By Prior Year Savings. The administration assumes, as shown in Figure 5, that the project will need the requested appropriation and nearly all of the allowable BBL-related augmentations proposed in 2025-26 to cover its costs. However, as shown in Figure 6, the project continues to underspend its appropriations across several budget items due to a number of factors. As such, it is unclear why the project would not offset its more precise budget year costs (for some other expenses and equipment and personal services, as examples) with prior year savings, and instead require subsequent authorization to approve additional funding if project costs start to exceed the appropriation.

• Availability of Prior Year Savings Conditioned on Satisfactory Progress, but Not Additional Vendor Costs. Any prior year savings augmentation also requires DOF to determine whether the project is making satisfactory progress based on three criteria. However, authorization of additional funding to cover increased costs due to vendor contract negotiations does not require this determination. The Legislature adopted this provisional BBL (as well as corresponding trailer bill language) in 2023-24 because of its concern about the lack of progress towards completion of the project after a decade of development and implementation. This concern remains, particularly as the number of legislative priorities dependent on the completion of CWS-CARES V1 increases over time. Any augmentation—from additional funding for vendor costs or other project workload—should be subject to a determination of satisfactory progress that is consistent with legislative intent.

• More General Fund Costs Possible if Non-CCWIS Status Continues Into 2025-26. ACF plans to conduct a virtual project review in May that will determine whether the project is on track to complete CWS-CARES V1 according to its project schedule. Up to 60 days after the virtual review (approximately mid-July 2025), ACF will decide if the project can return to a CCWIS claiming status with 50 percent FFP, or if the non-CCWIS claiming status with 26.5 percent FFP remains in place. In either case, there is no mechanism in the proposed provisional BBL to adjust the General Fund costs of the project for the updated claiming status. If the non-CCWIS claiming status remains in place, the administration expects an additional $79.3 million General Fund would be needed to cover project costs in 2025-26. If ACF decides the project can return to a CCWIS claiming status, the administration expects to retroactively claim FFP and potentially reduce General Fund project costs by up to $49.6 million in 2024-25. (This reflects retroactive claiming for 2024-25. At least some 2023-24 General Fund project costs also could be reduced, but we do not have an estimate at this time.)

Project’s Transition to Holistic Design Approach and New Pilot Option Remain Works in Progress. Over the past several months, the project’s holistic design approach and its impacts on the milestone design process have become clearer. For example, from September to December 2024, the project logged over 300 items of feedback across four child welfare service areas and incorporated some of them into the design and development of milestones scheduled for testing during EUST 2. This earlier, more frequent incorporation of user feedback into milestone design and development is consistent with the intent of the new approach and, together with a number of other preparation and training efforts, should reduce the rework from EUST 2. Also, the new production pilot option appears more feasible than some of the previous options considered that required counties to perform at least some manual, dual entry in both CWS-CARES and CWS/CMS. Reduced technical complexity also might encourage some counties to become pilot counties (if they meet the selection criteria). However, the holistic design approach and production pilot option remain works in progress that require further planning, refinement, and testing. Continued oversight of these important components of the project by the Legislature is needed as the project approaches the CWS-CARES V1 completion date.

Recommendations

Change the Funding Approach Proposed for the CWS-CARES IT Project. As summarized in Figure 7 and the following bullet points, we recommend the Legislature change the proposed funding approach for the CWS-CARES IT project. The total amount of funding across both the appropriation and the allowable augmentations would not change but, if adopted, the Legislature would have more confidence in the progress of the project before approving additional funding.

• Reduce the Requested Appropriation, Reappropriate Prior Year Savings in 2025-26. We recommend the Legislature reduce the requested appropriation for the CWS-CARES IT project in two ways, the net effect of which would be an appropriation for the project of $185.2 million ($94.1 million General Fund) and a reappropriation of $45.6 million ($22.8 million General Fund) in 2025-26:

• Subtract $25.7 Million, or 10 Percent, ($13 Million General Fund) to Reflect the Project’s Historical Underspending, Make Available as Additional Funding Based on Progress. We recommend the Legislature reduce the requested appropriation for the CWS-CARES IT project of $256.5 million ($129.9 million General Fund) in 2025-26 by 10 percent ($25.7 million [$13 million General Fund]) to $230.8 million ($116.9 million General Fund). This reduction is based on historical underspending of project appropriations (between 14 and 24 percent), but balanced against the project’s increased workload in 2025-26. We recommend that the $25.7 million ($13 million General Fund) be added to the placeholder provisional BBL as additional funding that is available based on a determination of satisfactory progress.

• Subtract $45.6 Million ($22.8 Million General Fund), Reappropriate Same Amount of Prior Year Savings in 2025-26. We recommend the Legislature use $45.6 million ($22.8 million General Fund) in prior year savings proposed in provisional BBL as an augmentation to instead cover the project’s budget year costs in the requested 2025-26 appropriation. This reappropriation would not change the total amount in 2025-26, but would require a separate reappropriation item in the budget and a commensurate reduction in the requested appropriation in 2025-26.

Reject Proposed Provisional BBL for Additional Vendor Costs and Prior Year Savings… We also recommend the Legislature reject proposed provisional BBL to augment the project’s appropriation by up to $47.3 million ($23.7 million General Fund) after completion of vendor contract negotiations, and by up to $45.6 million ($22.8 million General Fund) using prior year savings. Consistent with our first recommendation, prior year savings should instead be used to cover budget year costs in the requested 2025-26 appropriation. Additional vendor funding after contract negotiations should instead be added to placeholder provisional BBL on condition of, at a minimum, the determination of satisfactory progress.

…And Adopt Placeholder Provisional BBL to Address Funding-Related Questions and Make Additional Funding Available Based on Progress. We recommend that the Legislature instead adopt placeholder provisional BBL with up to $118.5 million ($59.4 million General Fund) in additional funds available based on the determination of satisfactory progress in the proposed provisional BBL. (The $118.5 million [$59.4 million General Fund] includes the $47.3 million [$23.7 million General Fund] for additional vendor costs, $45.6 million [$22.8 million General Fund] previously from prior year savings (but now available as additional funding), and $25.7 million [$13 million General Fund] from the reductions based on the project’s historical underspending.) Additionally, we recommend the placeholder provisional BBL include 30-day JLBC notification requirements regarding, at a minimum, (1) the final determination made by ACF as to the project’s CCWIS claiming status in 2025-26 and associated impacts on the General Fund costs of the project, and (2) any potential changes or delays in the project schedule and/or scope that will likely defer the implementation of other legislative priorities for the state’s child welfare program.

Maintain Current Legislative Oversight Requirements. We recommend that the Legislature continue to use all of the oversight tools at its disposal to monitor this project throughout 2025-26, to include the annual development progress demonstrations and monthly legislative updates and meetings available under state law. We also recommend the Legislature review the updated project documentation that is pending the administration’s further refinement of project costs as soon as it becomes available during the 2025-26 budget process.