Federal Funding for Child Welfare

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Often overlooked in the health care debate is the impact of child abuse and neglect on children, their families and, yes, on already-overstrained government budgets. Despite the provision of billions of dollars a year in federal funding for child welfare, several states still struggle to meet the needs of at-risk children and families, according to the Government Accountability Office (GAO).

Federal Child Welfare Funding Overview

Federal funding for state child welfare programs comes from five main sources: Titles IV-B and IV-E of the Social Security Act, the Social Services Block Grant program, Temporary Aid to Needy Families (TANF), and Medicaid.

Under federal regulations, states must provide matching funds in order to claim funding from most of these programs. (Also See:Truth About Government Grants)
  • Title IV-B funds can be used for state child abuse prevention services and for programs intended to support and preserve families and/or to reunite children with their families. According to the Congressional Research Service report, Funding for Child and Family Services Authorized Under Title IV-B of the Social Security Act, the states received a total of $730 million in Title IV-B funding during FY2012. Title IV-B funding is "capped," that is, Congress, as part of the federal budget process, allocates a fixed amount of funding to each state each year. Title IV-B is the primary source of federal funding designated for child welfare services that is available to states.
  • Title IV-E funds can be used for foster care programs, adoption assistance programs, training child welfare workers, and for programs to assist young people making the transitioning from living in foster care to living independently as adults. As the largest single source of federal child welfare funding, combined annual federal and state spending on Title IV-E programs typically exceeds $6 billion. Annual federal Title IV-E funding to each state varies based on the total number of children projected to receive assistance and the number of children currently in foster care.

    • Temporary Assistance to Needy Families (TANF) and Social Security Block Grant (SSBG) funds can be used by the states to fund an array of services and programs, including child welfare. Federal funding to the states from the TANF and SSBG varies annually based on the states' demonstrated need. Average annual funding to states for child welfare averages over $2 billion from TANF and over $1.5 billion from SSBG.
    • Medicaid is a joint federal/state program administered by each individual state. Medicaid provides health care benefits to low-income people who have no medical insurance or inadequate insurance. Medicaid recipients must also be either pregnant, care for a child or children with a disability, or be responsible for children under 19 years of age. Medicaid also assists in funding the State Children's Health Insurance Program. Unlike Medicare, which is funded totally by the federal government, Medicaid funds spent by the states are matched by the federal government. The FY2008 federal budget allocated $204 billion for Medicaid reimbursements to the states.
    According to the Child Trends' State Child Welfare Policy Database, combined United States spending on child welfare services in FY2006 totaled almost $26 billion. Over $12 billion came from the federal government, $11 billion from the state governments and almost $3 billion from local governments.

    Yet, Some States Struggle to Meet Needs

    Despite this flow of government funds, the GAO reported that over 675,000 remained victims of abuse or neglect during fiscal year 2011. "Although states augment these funds with state, local, and other federal funds, some children and families may not receive the services they need," noted the GAO in its report to Congress, Child Welfare: States Use Flexible Federal Funds, But Struggle to Meet Service Needs.

    While the over $6 billion in total annual Title IV-E funding to the states far exceeds the approximately $740 million from Title IV-B, the law specifies that Title IV-E funds can only be used for purposes such as providing room and board payments for children in foster care and subsidies to adoptive parents, and generally cannot be used for Title IV-B child welfare services, such as abuse prevention and family preservation.

    As a result, found the GAO, some states are forced to divert portions of their Temporary Assistance for Needy Families (TANF) and Social Services Block Grant (SSBG) funds, as well as Medicaid, for child welfare purposes covered under Title IV-B.

    However, as is often the case with massive federal social welfare programs, application of the rules is often inconsistent. Specifically, the GAO found that 14 states have gotten federal waivers allowing them more flexibility in using their Title IV-E funds to improve child and family outcomes. For example, Florida received a waiver allowing it to use some of its some Title IV-E funds for in-home services designed to prevent foster care placement.

    In addition, the GAO found that state child welfare agencies faced wide variety of often insurmountable challenges in securing other services, like substance abuse treatment and assistance with material needs, such as housing.

    The GAO cited a recent U.S. Department of Health and Human Services (HHS) survey showing that some 85% of children age 10 and under at risk of emotional, behavioral, or substance abuse problems had not received related services in over a year.

    In four states studied by the GAO, local child welfare officials reported experiencing multiple "service gaps" making it harder for them to preserve or reunite families and generally harming child wellbeing. Officials in one locality reported 2- to 3-month wait times for substance abuse services and officials in 6 of 13 localities reported waiting lists for substance abuse treatment services.

    "Due to the chronic nature of the disease, delays in receiving services may make it more difficult to reunify families within mandated deadlines," noted the GAO.

    The GAO's report to Congress was investigative in a nature and offered no recommendations for congressional action.
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