Foster Care |
Children are eligible for grants under the Aid to Families with Dependent Children-Foster Care (AFDC-FC) program if they are living with a foster care provider under (1) a court order or (2) a voluntary agreement between the child's parent and a county welfare or probation department. Children in the foster care system can be placed in either a foster family home (FFH) or a foster care group home (GH). Both types of foster care provide 24-hour residential care. Foster family homes must be located in the residence of the foster parent(s), provide services to no more than six children, and be either licensed by the Department of Social Services (DSS) or certified by a foster family agency. Foster care group homes are licensed by the DSS to provide services to seven or more children.
We recommend the adoption of supplemental report language requiring the department to (1) collect data to estimate the number of foster children placed in foster family agency homes due to a shortage of nonagency foster family homes and the net costs of these placements compared to the costs if nonagency homes were available, and (2) make recommendations, if appropriate, to reduce the incidence of placing foster children in a higher-cost placement than is warranted by the county's assessment.
County welfare departments have the responsibility of placing children in foster care homes. The homes fall into three categories: group homes, foster family agency (FFA) homes, and foster family homes. Foster family agencies are nonprofit organizations that recruit foster parents, certify them for participation in the program, and provide training and support services. There are approximately 225 FFAs in the state. As Figure 1 shows, they are reimbursed at a rate that falls between the grants paid to nonagency foster family homes and the average rate for group homes.
| Figure 1 | ||
| Foster Care Grants and Caseloads | ||
| 1998-99 | ||
| Type of Placement | Caseload a | Grant Level |
| Foster family home | 79,000 | Basic grant: $375 - $528b Specialized care increment: $0 - $1,872c |
| Foster family agency | 17,800 | $1,362 - $1,607b |
| Group home | 6,700 | $1,254 - $5,314d |
| a Excludes approximately 4,800 foster children supervised by county probation departments (primarily in group homes) and approximately 4,100 foster children placed in county shelters, medical facilities, specially licensed small family homes, and specialized pilot projects. | ||
| b Varies with age of child. Amount includes grant to parent and FFA support services. | ||
| c Varies within and among the counties. | ||
| d Varies with "rate classification levels," which generally reflect levels of service. | ||
We note that in comparing these rates, it is important to recognize that most counties provide "specialized care increments" that supplement the grants to foster family homes in cases where the child needs special support services. Thus, for such children, the cost difference between an FFA and the nonagency home may be much smaller than the differences in the basic rate. (Currently, the department does not have sufficient data to estimate the average amount provided for specialized care increments.) We also note that funding for administrative support is included in the FFA reimbursement rate but is provided to counties separately from the basic cash grant.
Foster family agencies were established to serve as alternatives to group home placement. In the course of our review of the foster care program, however, several county administrators indicated that frequently they must resort to an FFA placement for children who, according to the county's assessment, should be placed in a nonagency home at a lower cost. This occurs because the FFAs compete with the counties in recruiting foster parents, and in some areas the county has a shortage of parents and the FFA has a surplus. The county administrators indicate that by offering support services and the potential for higher payments, the FFAs have attracted a sufficient number of potential parents to the point that county social workers have little choice but to place a child with the FFA even where a county foster family home would be the more appropriate choice.
Figure 2 (see next page), while not conclusive, provides some evidence that FFAs have been serving as an alternative to nonagency foster family homes as well as group homes. It shows that between 1989 and 1998, the growth of FFAs in the state has been accompanied by a decrease in the proportion of both nonagency homes and group homes. Unfortunately, there are no data that directly document the extent to which the counties are placing foster children in FFA homes at a higher cost than is warranted by the county assessment. We believe that such a determination is feasible, however, through a survey of the county welfare/children's services departments. (We note that such an assessment should take into account the specialized care increments, where applicable.) Consequently, we recommend the adoption of supplemental report language requiring the department to conduct such an analysis.
We further recommend that if the analysis documents the problem discussed above, the department make recommendations to address it. In doing so, the department could consider a variety of alternatives. These include increasing the recruitment allowance provided to the counties, establishing FFA rates above and below the existing rates to provide more flexibility in matching services to the assessments, and requiring all potential foster parents to register with the county in order to establish a closer link between the parents and the agency that conducts the assessments.
We also suggest that the department investigate the option, available to counties under current law, whereby the counties themselves can apply to act as licensed FFAs. This is an action recently taken by San Mateo County. The department should attempt to determine the impact of this policy in order to assess to what degree it has affected the county's ability to recruit potential foster parents and to make appropriate placements of foster children.
Our recommendation can be implemented by adoption of the following supplemental report language in Item 5180-001-0001:
The department shall (1) collect data to estimate the number of foster children placed in foster family agency homes due to a shortage of nonagency foster family homes and the net costs of these placements compared to the costs if nonagency homes were available, and (2) make recommendations, if appropriate, to reduce the incidence of placing foster children in a higher-cost placement than is warranted by the county's assessment. The department shall submit its report to the Department of Finance, the Joint Legislative Budget Committee, and the appropriate fiscal and policy committees of the Legislature by March 1, 2000.
The Food Stamps Program provides food stamps to low-income persons. With the exception of the recently-enacted state-only program (discussed
below), the cost of the food stamp coupons is borne by the federal government ($1.6 billion). Administrative costs are shared between the federal
government (41 percent), the state (44 percent), and the counties (15 percent). Federal Restrictions on Benefits For Noncitizens. The federal welfare legislation enacted in 1996 made legal noncitizens (with certain exceptions for
refugees, veterans, and those who had worked for 40 quarters) ineligible for food stamps. Subsequent federal legislation--the Agricultural Research,
Extension, and Education Reform Act of 1998--restored federal benefits to certain noncitizens. Specifically, effective November 1, 1998, the new
legislation restored federal eligibility to noncitizens lawfully residing in the U.S. prior to August 22, 1996 who (1) are under the age of 18 or (2) were at
least 65 years of age as of August 1996. Initial State Program for Noncitizens. The Legislature enacted a temporary state-only program to provide food stamp benefits to certain noncitizens,
effective September 1997. Specifically, Chapter 287, Statutes of 1997 (AB 1576, Bustamante) created the state-only California Food Assistance Program
(CFAP), which provides food stamps to noncitizens under the age of 18 or over the age of 64 who were residing in the United States prior to August 22,
1996. Under CFAP, the state purchases the food stamp coupons from the federal government and distributes them to eligible recipients. This program is to
sunset on July 1, 2000. State Program Expanded in 1998. Partially in response to the 1998 federal legislation that essentially restored federal benefits to nearly all of the
noncitizens that were covered by CFAP, Chapter 329, Statutes of 1998 (AB 2779, Aroner) expanded the CFAP to cover (1) noncitizens legally residing in
the U.S. prior to August 1996 between the ages of 18 and 64 and (2) certain noncitizens who arrived in the U.S. after August 1996. Adult recipients of this
program are subject to a specified work requirement. Like the original program, the expanded CFAP sunsets in July 2000. 1999-00 Budget. For 1999-00, the average monthly caseload for CFAP is estimated to be about 85,000 persons. The budget proposes an appropriation of
$73.6 million from the General Fund for the cost of coupon purchases and an additional $5.2 million for program administration. The total is a decrease of
$13.5 million from estimated expenditures in 1998-99, mostly attributable to a lower caseload due to the full-year effect of federal restoration of benefits
for children and the elderly. We note that $53 million of the proposed expenditure for 1999-00 counts towards meeting the federal maintenance-of-effort
requirement for the California Work Opportunity and Responsibility to Kids program. The Supplemental Security Income/State Supplementary Program (SSI/SSP) provides cash assistance to eligible aged, blind, and disabled persons. The
budget proposes an appropriation of $2.4 billion from the General Fund for the state's share of the SSI/SSP in 1999-00. This is an increase of
$183 million, or 8.1 percent, over estimated current-year expenditures. This increase is due primarily to the full-year cost of grant increases provided in
the current year, caseload growth, modest state costs for the cost-of-living adjustment (COLA) to be provided in January 2000, and an increase in the
federal administrative fee. In November 1998, there were 324,318 aged, 21,671 blind, and 687,655 disabled SSI/SSP recipients. In addition to these federally eligible recipients, the
state-only program for immigrants (described below) is estimated to provide benefits to about 2,000 legal immigrants during November 1998. The General Fund cost of providing the statutory Supplemental Security Income/State Supplementary Program cost-of-living adjustment will be
$12.5 million above the budget estimate due to an upward revision in the California Necessities Index. We also estimate an additional General Fund
cost of $19.5 million because the budget overestimates the U.S. Consumer Price Index. These issues should be addressed in the May revision of the
budget. Background. Pursuant to current law, the Governor's budget proposes to provide the statutory COLA to the SSI/SSP grant in January 2000. The state
COLA is based on the California Necessities Index (CNI) and is applied to the combined SSI/SSP grant. It is funded by both the federal and state
governments. The federal portion is the federal COLA (based on the U.S. Consumer Price Index, or the CPI) that is applied annually to the SSI portion of
the grant. The remaining amount needed to cover the state COLA is funded with state monies. Based on its assumptions concerning both the CNI and CPI,
the budget includes $8.4 million for providing the statutory COLA for six months effective January 2000. The CNI Has Been Revised. The January 2000 COLA is based on the change in the CNI from December 1997 to December 1998. The Governor's
budget, which is prepared prior to the release of the December CNI figures, estimates that the CNI will be 2.08 percent, based on partial data. Our review
of the actual data, however, indicates that the CNI will be 2.36 percent. The CPI is Overestimated. The Governor's budget estimates that the CPI will be 2.6 percent for federal fiscal year (FFY) 1999. Based on our review of
the consensus economic forecasts for 1999, we estimate that the CPI will be 2.3 percent. This reduction in the CPI raises the state cost of providing the
statutory COLA because it effectively reduces federal financial participation toward the cost of the state COLA, which is applied to the entire grant. Cost of Providing COLA Underestimated. Taken together, the higher CNI and lower CPI (in relation to the Governor's budget) raise the General Fund
cost of providing the statutory COLA from $8.4 million to about $40.4 million in 1999-00--an increase of $32 million ($12.5 million for the CNI revision
and $19.5 million from overestimating the CPI). The administration should address these issues in the May revision of the budget. Figure 1 (see next page) shows SSI/SSP grants on January 1, 2000 for both individuals and couples as displayed in the Governor's budget and our
projection based on the actual CNI and our estimate of the CPI. Based on our projection, grants for individuals will increase by $16 to a total of $692 per
month and grants for couples will increase by $28 to a total of $1,229. As a point of reference we note that the federal poverty guideline for 1998 is $671
per month for an individual and $904 per month for a couple. Thus, the grant for an individual would be 3 percent above the 1998 poverty guideline and
the grant for a couple would be 36 percent above the guideline. (We note that the poverty guidelines are adjusted for inflation annually.)
Governor's Budget and LAO Projection Federal welfare reform and related legislation made elderly legal noncitizens in the U.S. prior to August 1996, who are not disabled, ineligible for
SSI/SSP. This legislation also made noncitizens arriving after August 1996 (with certain exceptions) ineligible for SSI/SSP. Chapter 329, Statutes of 1998
(AB 2779, Aroner) created the Cash Assistance Program for Aged, Blind, and Disabled Legal Immigrants (CAPI). This program provides state-funded
benefits at the SSI/SSP grant levels, less $10 for individuals and $20 for couples, to any legal noncitizen who has been denied federal benefits solely on
the basis of their immigration status. With respect to legal noncitizens arriving in the United States after August 22, 1996, CAPI benefits are restricted to
individuals (1) who are sponsored by a U.S. citizen, and (2) the sponsor has died, is disabled, or is abusive to the noncitizen. The state reimburses the
counties for all administrative costs incurred in making the CAPI benefit payments to individuals. The program is to sunset in July 2000. The 1999-00 Governor's Budget proposes an appropriation of $21.3 million from the General Fund for benefit payments and $1.4 million for county
administration of the CAPI. The average monthly caseload is projected to be about 2,900 during 1999-00. Chapter 307, Statutes of 1995 (AB 908, Brulte) requires that Supplemental Security Income/State Supplementary Program (SSI/SSP) grants be
reduced by 4.9 percent in the "low-cost" counties. This reduction has not been implemented because it would have brought SSP grants below the
federal maintenance-of-effort level. We estimate, however, that by January 2002 the annual cost-of-living adjustments pursuant to current law will
raise SSP grants to a level that will trigger the implementation of the regional 4.9 percent reduction. We present alternatives for the Legislature to
consider regarding the regional grant reduction. Background. Chapter 307 requires that grants for both California Work Opportunity and Responsibility to Kids (CalWORKs) and SSI/SSP be reduced by
4.9 percent in the "low-cost" counties (specifically, the 41 counties where the lowest quartile rent was below $400 per month in 1990.) This reduction was
designed to achieve a regional grant differential between "low-cost" and "high-cost" counties. The grant reduction was implemented for the CalWORKs
program in January 1997 but has never been implemented for SSI/SSP because such a reduction would violate the federal maintenance-of-effort (MOE)
requirement. Specifically, federal law requires that the state SSP portion of the combined SSI/SSP grant be "maintained" at or above its 1983 level. Failure
to comply with the MOE requirement would result in the loss of federal Medicaid funding. Because of the federal MOE requirement, the monthly SSP grant for individuals must be at least $156.40. (Although there are different grant levels for
couples and other persons in specific circumstances, for illustration purposes this discussion is limited to the grant levels for individuals.) Implementation
of the regional grant reduction--which under state law is fixed at 4.9 percent of the combined SSI/SSP grant as of June 30, 1995--would reduce the
monthly SSP grant for individuals by $30.11. Thus, in order to implement this reduction without violating federal law, SSP grants must first be at least
$186.51, or $30.11 above the MOE. As of January 1999, the total maximum SSI/SSP monthly grant for an individual is $676 ($500 SSI and $176 SSP). Under current state law, a COLA is
applied to the SSI/SSP grant each January. The state COLA is based on the CNI and is applied to the combined SSI/SSP grant. It is funded by both the
federal and state governments: the federal portion is the federal COLA (based on the CPI) that is applied annually to the SSI portion of the grant. The
remaining amount needed to cover the state COLA is funded with state monies and applied to the SSP portion of the grant. Based on current law, and our
estimates for the CNI and CPI , we believe that application of the statutory COLA will result in the SSP grant exceeding $186.51 as of January 2002.
Thus, at that time, the regional 4.9 percent grant reduction would be "triggered" because the reduction could be implemented without violating the federal
MOE requirement. Figure 2 shows the estimated SSI/SSP grants for individuals from January 1999 through January 2002, based on current law and our forecasts for the CNI
and the CPI. As the figure shows, grants will increase in both low-cost and high-cost counties in January 2000 and January 2001, reaching a total of $710
in that year. Then in January 2002, the grant in the low-cost counties will be reduced to $702, which is $30 less than the amount in the high-cost counties.
Compared to the preceding year (January 2001), the grant in the low-cost counties goes down by $8 rather than the $22 increase that would occur in the
absence of the statutory reduction.
SSI/SSP Grants for Individuals Based on Current Law Alternatives. Setting the level of the SSI/SSP grant is a policy decision for the Legislature. Given that the decision to impose a 4.9 percent grant reduction
in the low-cost counties was made during a period when the state was facing significant fiscal constraints, however, we anticipate that there will be
interest in revisiting the issue prior to implementation of the reduction. To facilitate the debate, we present two alternatives for consideration. One
alternative is to eliminate the 4.9 percent regional reduction by repealing current law. A second alternative would be to gradually phase-in the 4.9 percent
grant reduction by "freezing" the SSP portion of the grant in low-cost counties until the 4.9 percent differential between the high-cost and low-cost
counties is achieved. Under this alternative, the federal SSI portion would continue to increase, so grants in low-cost counties would go up each year, but
not as fast as in the high-cost counties where both the SSI and SSP portion of the grant would be increasing each year. Repeal Current Law. Compared to current law, this approach would have no fiscal impact in 1999-00 or 2000-01. In 2001-02, there would be a half-year
cost of approximately $55 million. The full-year cost in 2002-03 would be approximately $115 million and would continue at about that level, adjusted
each year for caseload changes. Under this approach, grants for individuals in low-cost counties would be identical to grants in high-cost counties and
remain just above the federal poverty guideline. Thus, there would be no regional grant differential to compensate for differences in the cost of living. Phase-in the 4.9 Percent Regional Reduction. Under current law, the entire 4.9 percent reduction would be implemented in January 2002. At that time a
recipient's maximum benefit will drop from $710 in 2001 to $702. An alternative would be to raise SSI/SSP benefits more slowly in the low-cost counties
than in the high-cost counties until a 4.9 percent differential between the high-cost and low-cost counties is achieved. To do this gradually, for example,
the SSP portion of the grant could be "frozen" at its current level ($176) while continuing to "pass through" the increase in the federal SSI portion each
year. Figure 3 (see next page) shows the annual SSI/SSP grant under this alternative from 1999 through 2005. As the figure shows, grants would increase
each year, thus eliminating the "cliff" effect of current law. We note, however, that this approach results in lower combined SSI/SSP grants in low-cost
counties in 1999-00 and 2000-01 than would be required by current law. Under this option, SSI/SSP grants for individuals would be at the poverty line in
January 2000, and would decline to about 97 percent of poverty in 2005.
For Individuals Under Phase-in of Regional 4.9 Percent Grant Reduction Conclusion. With respect to the 4.9 percent regional grant reduction, the Legislature has three broad options. The first option would be to retain current
law and implement the reduction which would probably occur in January 2002. The second option would be to repeal current law and eliminate the
regional grant differential. The third option would be to gradually phase-in the regional grant differential. We present one such approach to this latter
option whereby the SSP grant would be increased more slowly in the low-cost counties as compared to the high-cost counties until the 4.9 percent
differential is achieved. The budget (Item 5180-141) appropriates funds for the state and federal share of the costs incurred by the counties for administering the following
programs: (1) Food Stamps; (2) Child Support Enforcement; (3) Aid to Families with Dependent Children--Foster Care (AFDC-FC); (4) Special Adults,
including emergency assistance for aged, blind, and disabled persons; (5) Refugee Cash Assistance; and (6) Adoptions Assistance. The budget also
includes funding for the development, implementation, and maintenance of major welfare automation projects. Pursuant to the reorganization of the budget, Item 5180-141 does not include the county costs for administering the California Work Opportunity and
Responsibility to Kids (CalWORKs) program, because these costs are reflected in the CalWORKs program appropriation in Item 5180-101 (see our
analysis of CalWORKs). The budget proposes an appropriation of $323.9 million from the General Fund for county administration of welfare programs (excluding CalWORKs) in
1999-00. This represents a decrease of $9 million, or 2.7 percent, from estimated current-year expenditures. The budget proposes an appropriation of $36.8 million in the Department of Social Services for the state's share of the costs of four major welfare
automation projects. These projects are the Statewide Automated Welfare System (SAWS), the California Child Support Automation project, the
Statewide Fingerprint Identification System, and the Electronic Benefit Transfer program. The Health and Welfare Agency Data Center (HWDC) is
responsible for administering these projects. The SAWS--Los Angeles County Contract Amendment. We note that the budget does not reflect a request from Los Angeles County for $55.3 million
for a seven-year contract amendment pertaining to the development of the Los Angeles Eligibility Automated Determination Evaluation and Reporting
(LEADER) system for automating welfare. (LEADER is one of four SAWS consortia.) This request, which includes $29.2 million for 1998-99 and
$9.1 million for 1999-00, was made too late for inclusion in the budget, but is likely to be reflected in the May revision to the budget. Child Support Automation. The budget proposes General Fund spending of $6.3 million in 1999-00 for the costs associated with child support
automation. This is a reduction of $4.6 million (42 percent) from estimated expenditures for 1998-99. We note that development of the Statewide
Automated Child Support System (SACSS) was terminated in November 1997. Chapter 329, Statutes of 1998 (AB 2779, Aroner) requires (1) all counties
to transition into specified consortia for automation purposes and (2) the development of interim and long-term solutions for child support automation that
will meet federal requirements and minimize federal penalties. The reduction in spending for 1999-00 reflects completion of county transitions to
non-SACSS systems and reductions in one-time equipment purchases. For a discussion of the major welfare automation projects, please see our review of the HWDC in the General Government Section of this Analysis. The budget estimates that federal reimbursements to California will be reduced by $37.1 million in the current year and $52.8 million in the budget
year, due to the penalty on the state for not meeting the deadline for implementing a statewide child support enforcement automation system. The
budget proposes to pass the full penalty on to the counties, which is not consistent with current law. We recommend adjusting the budget to reflect the
state's proportional share, for a General Fund cost of $2.2 million in the current year and $3.2 million in the budget year. (Increase Item
5180-001-0001 by $2,645,000 and increase Item 5180-141-0001 by $537,000.) Due to the failure of the state to implement a statewide automated child support system, California is subject to federal penalties in the form of a
reduction in federal reimbursements for child support enforcement. Federal law allows the Secretary of Health and Human Services to waive the regular
penalty and instead impose an alternative penalty if states have made good faith efforts to meet the federal automation requirements. The budget assumes
that the alternative penalty will be enforced, resulting in a reduction in federal reimbursements of $37.1 million in the current year and $52.8 million in the
budget year. Current state law provides that federal penalties shall be considered a reduction in federal financial participation in county and state administrative costs
of the child support program. The budget, however, proposes to pass the full amount of the penalty on to the counties, with the state bearing no share. The administration has provided no explanation for this variation from the requirements of current law, with respect to allocating the penalty between the
state and county governments. Consequently, to be consistent with current law, we recommend that the budget be adjusted to reflect the state's
proportional share of the penalty and to backfill for the loss of federal funds. This would result in a General Fund cost of $2.2 million in the current year
and $3.2 million in the budget year, and county savings of the corresponding amounts. We also note that the budget assumes the counties will maintain the level of spending on the program to backfill for the federal reductions. Because the
counties are not required to backfill for reductions in federal funds, there is no assurance that the budget assumptions for county spending will be realized.
As we have discussed in previous analyses of this program, there is a strong relationship between county administrative effort and child support
collections. Thus, if the counties reduce their spending below the amount assumed in the budget, collections could be affected and the associated General
Fund savings (in CalWORKs grant expenditures) could be less than budgeted. We also note, on the other hand, that the estimated amount of federal reimbursements after the penalty, when combined with state and federal incentive
payments that are distributed to the counties, exceeds the budget estimates for administrative spending. This suggests that most of the counties probably
have the ability to meet the budget expectations for administrative spending in spite of the federal penalty. The federal government has levied penalties (in the form of reduced reimbursements) against California for failure to implement a statewide child
support automation system. Current state law prohibits passing the federal penalty onto Los Angeles County because the county has implemented its
component of the statewide automation system. The budget proposes to pass Los Angeles County's proportional "share" of the penalty onto the other
counties rather than the state. Los Angeles County, with the approval of the federal administration, has developed and implemented its own child support automation system as part of
the required statewide system. Because of this, Chapter 404, Statutes of 1998 (SB 1410, Burton) provides that no portion of the federal penalty for delayed
implementation of the statewide system shall be assessed against Los Angeles County (unless the county system fails to interface with the statewide
system, which has not been implemented). The federal government has applied penalties (in the form of reduced reimbursements) to California for failure to implement a statewide child support
automation system. The reduced reimbursements mean fewer federal funds for county administration of the child support system. (Although the federal
administration certified the Los Angeles County system, this did not reduce the federal penalty on the state.) Chapter 329, Statutes of 1998 (AB 2779, Aroner) permits the Department of Social Services (DSS) to backfill with state funds "any dollar reduction to
county administrative funding," subject to the availability of funds in the annual budget act. The budget, however, proposes to pass Los Angeles County's
proportional "share" of the penalty (about $8 million in the current year and $11 million in the budget year) onto the other counties. We do not believe that it is reasonable to expect the other counties (rather than the state) to backfill for the reduction in federal reimbursements
attributable to Los Angeles County's share of those reimbursements. Furthermore, it is not clear whether this was the Legislature's intent in enacting SB
1410, even though separate legislation governing the allocation of the federal penalty, in general, gives the department this discretion. Consequently, we
recommend that the Legislature address this issue in the budget hearings. The Child Welfare Services (CWS) Program provides services to abused and neglected children and children in foster care and their families. The CWS
Program provides: Data collection problems make it difficult to forecast Child Welfare Services caseloads, but we believe the budget forecast overstates current-year
caseload and understates the budget year. Additional data should permit a better estimate in the May revision of the budget. The budget forecasts that CWS caseloads will increase by 7.2 percent in 1998-99, which is somewhat higher than the annual growth rate in recent years.
Because of data collection problems associated with the implementation of the new statewide automation system--the Child Welfare Services/Case
Management System--the department indicates that only two complete months of current-year data are available, making forecasting more difficult than in
the past. As a result, the decision was made to (1) base the current-year estimate on last year's May revision estimate for the current year and (2) assume no
caseload growth in the budget year. The CWS caseload generally has been characterized by annual growth rates of roughly 4 percent since 1992-93. Based on this trend, we believe that it is
unrealistic to assume no caseload growth in the budget year. On the other hand, the department indicates that based on a few months of data, caseloads for
the current year are running below the budget forecast (a 7.2 percent increase over the prior year). Because additional monthly data will be available for the May revision of the budget, the department will be able to provide a better forecast at that time.
Consequently, we suggest that the budget subcommittees wait until the May revision to consider the appropriation for CWS basic caseloads. We recommend reducing General Fund support for the Independent Living Program by $4.9 million in 1998-99 and $5.7 million in 1999-00 because
the budget exceeds the amount needed to fully fund the program. (Reduce Item 5180-151-0001 by $ 5,733,000.) The Independent Living Program (ILP) provides training designed to prepare youths for emancipation from foster care. Chapter 311, Statutes of 1998 (SB
933, Thompson) extended eligibility for the program from ages 16 through 18 to ages 16 through 21. The 1998-99 Budget Act augmented funding for the
program in order to serve all eligible foster care participants. The budget proposes $24.9 million ($11.4 million General Fund) to support the ILP in 1998-99 and $28.7 million ($15.2 million General Fund) in the
budget year. The proposal is the estimated amount needed to fully fund the program. We believe that the budget proposal goes beyond the amount needed to fully fund the program for two reasons. First, it is based on an assumption that all
eligible foster care youths will choose to participate in the program, even though participation is voluntary. In our view, this assumption is unrealistic. We
believe that some foster youths will choose not to attend the training program, perhaps on the basis that they have received adequate guidance from their
foster parents. Secondly, the budget assumes that all individuals who participate in the program in the current year will choose to participate again in the
following year if they have not emancipated from foster care. We believe that this also is an unrealistic assumption, as many of these foster youths are
likely to view repeat participation as unnecessary. Both of these factors will affect the participation rate for the ILP. Unfortunately, it is difficult to estimate the degree of voluntary participation because in
past years the program was not fully funded and therefore it is not known to what degree the lack of funding was responsible for nonparticipation. Absent
such data, we believe that it would be more reasonable to assume an overall participation rate of 80 percent for the budget year (as applied to the baseline
and expansion components of the program) rather than the 100 percent rate assumed in the budget. Accordingly, we recommend adjusting the budget to
reflect this assumption, which would result in a General Fund savings of $4.9 million in the current year and $5.7 million in 1999-00. The department administers a statewide program of services to parents who wish to place children for adoption and to persons who wish to adopt
children. Adoptions services are provided through state district offices, 28 county adoptions agencies, and a variety of private agencies. Counties may
choose to operate the Adoptions Program or turn the program over to the state for administration. There are two components of the Adoptions Program: (1) the Relinquishment (or Agency) Adoptions Program, which provides services to facilitate the
adoption of children in foster care; and (2) the Independent Adoptions Program, which provides adoption services to birth parents and adoptive parents
when both agree on placement. In addition to the Adoptions Program, the Adoptions Assistance Program (AAP) provides grants to parents who adopt "difficult to place" children. State
law defines these children as those who, without assistance, would likely be unadoptable because of their age, racial or ethnic background, handicap, or
because they are a member of a sibling group that should remain intact. Delays in implementing the statewide child welfare automation system could prevent the department from meeting the August 1999 reporting
deadline to qualify for federal adoptions incentive payments. We recommend that the department (1) consult with the federal administration on
possible alternative means of submitting the required data, should it become necessary, and (2) provide the budget subcommittees with a status report
on this issue during the hearings. The federal Adoptions and Safe Families Act of 1997 (PL 105-89) authorizes the Secretary of Health and Human Services to make incentive payments to
states that increase the number of adoptions of children in foster care. The incentive payment amounts to $4,000 per child, plus an additional $2,000 for
each special needs adoption, although the total amount allocated to the states is capped at $20 million annually through federal fiscal year (FFY) 2003.
Chapter 1056, Statutes of 1998, (AB 2773, Committee on Human Services) indicated the intent of the Legislature that incentive payments allocated to
California be used for post-adoptions services. In order to qualify for the incentive payments authorized for adoptions in FFY 1998 (October 1997-September 1998), states must report the number of
finalized adoptions to the federal administration by August 1, 1999. The federal statute requires that the states report their qualifying adoptions via the
federal Adoption and Foster Care Automated Reporting System (AFCARS). In California, the new statewide Child Welfare Services/Case Management
System (CWS/CMS) was designed to meet the AFCARS reporting requirements. The CWS/CMS is operating in all counties, but the department indicates that due to start-up and implementation problems, adoptions data reporting
currently are incomplete and may not be accurate. Thus, at the time this analysis was prepared, the department was uncertain whether the state will be able
to meet the August 1999 deadline. We recommend that the department provide the budget subcommittees with a status report on this issue during the hearings. We further recommend that
prior to the hearings, the department consult with the federal administration on the possibility of using alternative means of reporting--such as a sample of
CWS/CMS counties or the use of a database separate from the new statewide automation system--in the event that the CWS/CMS problems cannot be
resolved in time to meet the deadline. This would help to guard against the possibility that technical reporting problems will prevent the state from
receiving funds that it otherwise would earn on the basis of its performance. In its proposal to eliminate the Substance Abuse/HIV Child Adoption Program for a General Fund savings of $1 million, the budget incorrectly
states that the program is scheduled to sunset at the end of the current year. Because this is a new program established by statute in the current year
and the administration has no policy rationale for eliminating it, we recommend continuing the program. We withhold recommendation on the
appropriation, pending receipt of information from the department on estimated current-year expenditures for the program. We further recommend adoption of supplemental report language requiring the department to submit reports on the program's implementation,
outcomes, and effectiveness. Background. In 1989, the Legislature established the Options for Recovery pilot project, which provided funds for the recruitment, training, and respite
care for foster parents to care for children who have medical problems related to drug or alcohol exposure or to AIDS. The program was made permanent
in 1997 by Chapter 606, Statutes of 1997 (AB 67, Escutia). From 1995 to 1997, the federal Department of Health and Human Services funded a demonstration project in Los Angeles County to promote the
adoption of children who were exposed prenatally to alcohol or drugs. The evaluation was based on clients' ratings--which were favorable--but no other
outcome-based study was done. New Program. In September 1998, the Legislature enacted Chapter 1014 (AB 2198, Washington) and appropriated $1 million from the General Fund to
extend the Options for Recovery services to adoptive and preadoptive parents. To be eligible for the funds, counties must submit a plan for approval by
the Department of Social Services. The department, however, has not implemented the program, indicating that the delay is due to higher priorities and a
lack of staff resources. The department plans to prepare the required all-county letters with the goal of allocating funds by this April. Budget Proposal. The budget proposes to eliminate the new adoptions program in 1999-00, indicating that it is scheduled to sunset at the end of the
current year. In fact, however, there is no statutory sunset date for this program. While acknowledging the error, the Department of Finance indicates that
the administration will continue to propose elimination of the new program because it is "discretionary" (that is, subject to annual budget act
appropriations) and there was a need to achieve savings. LAO Recommendations. The administration has provided no policy basis for eliminating the program and no rationale for distinguishing it from other
existing programs supported by the General Fund or from the original Options for Recovery program. As a new program which has yet to be implemented,
it is obviously too early to determine whether it will accomplish its purpose. Consequently, we recommend that the program be continued so the
Legislature will have an opportunity to assess its performance. We withhold recommend on the amount of the appropriation, pending receipt of
information from the department on estimated current-year expenditures and the possibility of reappropriating unexpended current-year balances in the
budget year. In order to facilitate the Legislature's oversight of the program, we further recommend adoption of supplemental report language requiring the department
to submit a report by March 1, 2000 on the program's implementation, and a subsequent report by December 30, 2000 on the program's outcomes and
effectiveness, and the extent to which it has accomplished its purposes. We note that if necessary, the department can use the resources of its Research
Branch to help prepare these reports. We suggest adoption of the following supplemental report language: The department shall submit a report to the Legislature, by March 1, 2000, on the implementation of the Substance Abuse/HIV Adoptions program. The
department shall submit a subsequent report by December 30, 2000 on the program's outcomes, and an assessment of its effectiveness and the degree to
which it has accomplished its goals.
Food Stamps Program
California Food Assistance Program
Supplemental Security Income/State Supplementary Program
Budget Underestimates Cost of Providing Statutory COLA
The SSI/SSP Grant Levels
Figure 1 SSI/SSP Maximum Monthly Grants
January 1999 and January 2000 Recipient Category
January 1999
January 2000
Change From 1999
Governor's Budget
LAO Projection a
Amount
Percent Individuals
SSI
$500
$513
$512
$12
2.4% SSP
176
177
180
4
2.3 Totals
$676
$690
$692
$16
2.3% Couples
SSI
$751
$770
$768
$17
2.3% SSP
450
456
461
11
2.4 Totals
$1,201
$1,226
$1,229
$28
2.3% a Based on actual California Necessities Index increase (2.36 percent) and projected U.S. Consumer Price Index increase (2.3 percent). Cash Assistance Program for Aged, Blind, and Disabled Legal Immigrants
Alternatives for the Regional 4.9 Percent Grant Reduction
To provide some perspective on the impact of this grant reduction in the low-cost counties, we compare grants to our projections for the federal poverty
guideline. As of January 2002, the grant for an individual in the low-cost counties would be about 96 percent of the federal poverty guideline, the grant for
an individual in the high-cost counties would be just above the poverty guideline, and the grants for couples in both regions would be about 30 percent
above the poverty guideline.Figure 2 Projected Maximum Monthly
1999 Through 2002
January 1999
January 2000
January 2001
January 2002 High-cost counties SSI
$500
$512
$527
$543 SSP
176
180
183
189 Totals
$676
$692
$710
$732 Low-cost counties SSI
$500
$512
$527
$543 SSP
176
180
183
159 Totals
$676
$692
$710
$702
Compared to current law, this alternative would result in General Fund savings of about $13 million in 1999-00, and $39 million in 2000-01. During the
subsequent four fiscal years, there would be annual General Fund costs that peak at approximately $55 million in 2002-03 and decline to less than
$20 million in 2004-05.Figure 3 Projected Maximum Monthly SSI/SSP Grants
1999 Through 2005
January
1999
January
2000
January
2001
January
2002
January
2003
January
2004
January
2005 High-cost counties SSI
$500
$512
$527
$543
$560
$577
$595 SSP
176
180
183
189
195
201
207 Totals
$676
$692
$710
$732
$755
$778
$802 Low-cost counties SSI
$500
$512
$527
$543
$560
$577
$595 SSP
176
176
176
176
176
176
176 Totals
$676
$688
$703
$719
$736
$753
$771
County Administration of Welfare Programs
Automation Projects
Budget Proposes No State Share Of Federal Penalty on Automation
Budget Assumes Other Counties Will Absorb Los Angeles County "Share" of Federal Penalty
Child Welfare Services
Child Welfare Caseload Forecast Should Be Revised
Independent Living Program Is Overbudgeted
Adoptions
State Reporting Problems Could Jeopardize Receipt of Federal Adoptions Incentive Payments
No Clear Rationale for Proposal to Eliminate New Program
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