Background:

The Department of Social and Health Services Children's Administration (Department) operates Child Protective Services that responds to reports of child abuse or neglect. The Department also operates the foster care system for children who are in out-of-home placements with caregivers and the adoption support program for children who have been adopted. Additionally, the Department contracts with multiple private providers for the purchase of various child welfare services, including: individual and group counseling or therapy; group care and behavioral health services; assessments; reunification services; and adoption services.

Foster Care Budgeting.

Budgeting for the foster care costs includes the use of caseload information developed by the Caseload Forecast Council and expenditure data for per capita cost estimates. The appropriations for foster care are increased or reduced depending on the forecasted caseload and per capita costs for certain services related to out-of-home care placements. When the foster care caseloads or per capita costs decline, the corresponding state and federal amounts are decreased from the Department's budget. The caseload and per capita changes for foster care are adjusted in the maintenance level of the budget.

Title IV-E Federal Funding and Demonstration Waivers.

The federal foster care program is authorized by Title IV-E of the Social Security Act with specific eligibility requirements and fixed allowable uses of funds, as set by the federal government. Title IV-E is an open-ended entitlement grant and is contingent upon an approved Title IV-E plan to administer or supervise the administration of the program. Generally, funds are available for monthly maintenance payments for: the daily care and supervision of eligible children in out-of-home care; certain services for eligible children; administrative costs to manage the program; training of staff and foster care providers; recruitment of foster parents; and costs related to the design, implementation, and operation of a statewide data collection system. States are required to match the Title IV-E funds with state funds; Washington's federal financial participation rate is 50 percent in federal fiscal year 2012.

A state's Title IV-E claims can increase as the number of children in foster care increases. However, the opposite also occurs: a state's Title IV-E claims can decrease as its foster care populations decline. Without a waiver, Title IV-E funding may not be used for prevention services or for services after a family has reunified in order to ensure that the reunification is a safe and permanent one.

The Child and Family Services Improvement and Innovation Act authorized the federal Secretary of Health and Human Services to approve up to 10 new child welfare demonstration projects per year, for federal fiscal years 2012-2014, not to last more than five years. The states selected for these demonstration projects must identify one or more specific goals pertaining to increased permanency, reducing time in out-of-home care, and maintaining children safely in their homes.

The Department convened a workgroup statewide advisory committee to make recommendations to the Children's Administration about the content of the waiver application. The Department plans to submit a completed waiver application during the summer of 2012.

Legislation was enacted in 2011 that required the Office of Financial Management, working with the Caseload Forecast Council and the Department, to provide a report to the Legislature regarding reinvesting savings from reduced foster care caseloads into services to prevent the need for, or reduce the duration of, foster care placements. The report recommended a foster care reinvestment approach where savings would only be available to reinvest if there were statewide savings in the foster care caseload for a fiscal year.

Sunset Reviews.

The Joint Legislative Audit Review Committee (JLARC) conducts sunset reviews, which assess the effectiveness and performance of a program or agency. The JLARC sunset reviews include a recommendation to either retain the program or agency as-is, modify the program or agency, or allow the program or agency to terminate.

Summary:

The Child and Family Reinvestment Account (Account) is created and may be used to: (1) safely reduce entries and prevent re-entry into the foster care system; (2) safely increase reunifications; (3) achieve permanency for children unable to reunify; and (4) improve outcomes for youth who age out of care. Revenues to the Account consist of savings from reductions in the foster care caseload and per capita costs and other public or private funds.

The Department of Social and Health Services Children's Administration (Department), in collaboration with the Office of Financial Management (OFM) and the Caseload Forecast Council, must develop a methodology for calculating state savings for deposit into the Account for the 2013-15 biennium. The methodology must include any relevant provision of a federal Title IV-E demonstration waiver. The savings calculation must be based on actual caseload and per capita expenditures.

The Department must report to the Legislature by December 1, 2012, and the methodology is deemed approved unless the Legislature enacts legislation to modify or reject it. Once the savings methodology is established, the Department must use it at the end of each fiscal year to calculate State General Fund savings to be transferred to the Account by the State Treasurer. The Department must report the savings to the Legislature and the OFM.

Nothing in the act prohibits the Caseload Forecast Council from forecasting the foster care caseload or the Department from including maintenance funding in its budget submittal for caseload costs that exceed the baseline. The savings calculated by the Department are not subject to the Savings Incentive Account process. The transfers into the Account are not subject to calculations for the expenditure limit. The Joint Legislative Audit Review Committee must conduct a sunset review of the act.

House	59	38
Senate	42	6	(Senate amended)
House	60	38	(House concurred)