Child Welfare Services

Temporarily Suspend Budgeting Practice to Achieve General Fund Savings

Existing Budgeting Practice. In preparing the budget for CWS, DSS adjusts proposed funding for social worker staffing upwards when the caseload increases, but does not adjust funding downward when the caseload actually decreases. The practice of not adjusting the budget to reflect caseload decline is commonly known as the “hold harmless” approach, although DSS technically refers to this as the “base funding adjustment.” Because of the way the hold harmless provision works, the number of social workers funded by the state for the counties remains unchanged despite workload decreases. In other words, if an individual county’s caseload is declining, its number of caseworkers is nonetheless held at the prior–year level. At the same time, if another county’s caseload is increasing, the state provides that county with funds to hire additional caseworkers. Therefore, on a statewide basis, despite an overall caseload decline, the funding for basic social worker support continues to grow.

We note that the Child Welfare Services Workload Study, which was required by the Legislature through Chapter 785, Statutes of 1998 (SB 2030, Costa), determined that CWS social workers had too many cases to effectively ensure the safety and well–being of the children for which they were responsible. The SB 2030 Study, as it is commonly known, proposed the establishment of minimum and optimal caseload standards for social workers. The hold harmless provision has been one way for the Legislature to provide additional funding to counties to try to meet these SB 2030 standards.

For 2009–10, DSS reviewed the estimated caseloads per CWS component and included $22.8 million ($9.7 million General Fund) in the budget for 37 counties with declining caseloads, pursuant to the hold harmless funding provision. We note that this does not include the two counties—Alameda and Los Angeles—participating in the federal Title IV–E Child Welfare Waiver Demonstration Capped Allocation Project.

Suspend Hold Harmless. Given the General Fund shortfall, we recommend suspending the hold harmless budgeting methodology for two years. This would result in General Fund savings of about $9.7 million in 2009–10, with similar savings in 2010–11. Temporarily suspending hold harmless targets CWS expenditure reductions to those counties with declining caseloads that need fewer resources and would not reduce existing social worker caseload ratios in any county. In addition, this temporary suspension of the hold harmless provision would bring the budgeting practice for CWS in line with the state’s normal budgeting practice for a variety of caseload programs. When the state’s fiscal situation is better, the Legislature could revisit the workload standards and budgeting methodology for the CWS program to decide whether to continue the hold harmless provision or implement a different method to fund the program at the workload standards the Legislature desires.