KEY POINTS
- The majority of federal child welfare funding is distributed across at least 14 federal programs or grants, including Title IV-E foster care.
- Federal funding accounts for less than half (43 percent) of total state child welfare agency spending; most funding comes from state and local funds.
- No one source of federal funding covers all services under the child welfare continuum of care and multiple programs cover the same services and stages of the continuum.
- States braid and sequence their federal child welfare funding, increasing administrative complexity to avoid duplication and maximize funding.
- Program-specific requirements for these 14 federal funding streams create an estimated reporting burden of over 30,000 hours for each state and require data to be entered across multiple different systems.
- Improved coordination and simplification of administrative requirements for federal funding streams could help states more effectively and efficiently provide child welfare services.
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BACKGROUND
Of total state child welfare agency spending, about 57 percent comes from state and local sources, with 43 percent coming from federal funding sources. Although federal funding accounts for a minority of total child welfare spending for jurisdictions, it is distributed through multiple mandatory and discretionary funding streams established by Congress and implemented by the executive branch over time to address different policy goals. As a result, related funding streams may operate under different rules, processes, requirements, and reporting structures.
The brief examines 14 federal child welfare funding streams from HHS: Title IV-E (foster care, adoption assistance, kinship guardianship assistance, prevention services, kinship navigator programs, and the Chafee Program including Education and Training Vouchers), Title IV-B (Subpart 1: Child Welfare Services, and Subpart 2: Promoting Safe and Stable Families), CAPTA (Title I State Grant Program and Title II Community-Based Child Abuse Prevention), TANF, SSBG, and Medicaid/CHIP.
The analysis focuses on federal funding streams and does not address non-federal child welfare funds, which constitute the majority of state child welfare agency spending. It also focuses on impacts for states and does not examine impacts on territories or tribes.
CHILD WELFARE SERVICES EXIST WITHIN A CONTINUUM OF CARE AND VARY WIDELY IN SCOPE AND BUDGET, BUT NO ONE FUNDING STREAM COVERS ALL SERVICES ON THE CONTINUUM
Child welfare services exist within a continuum of care that includes primary prevention, child welfare intake, investigation and assessment, family preservation, child placement, permanency, and transitions out of the system. Federal funding streams vary in how broadly they can be used across this continuum. Title IV-B Subpart 2, TANF, and SSBG have allowable uses that cover most services across the continuum. Title IV-E provides funding across several stages but is divided among several programs; for example, it covers certain prevention services only for families with children at imminent risk of entering foster care, not broader prevention services. Other funding, such as CAPTA Titles I and II, covers many parts of the continuum but not transitions out of the system.
Table: Child Welfare (CW) Service Across a Continuum of Care
Continuum of Care | Services |
Primary prevention | Voluntary community-based services |
Child welfare intake | Documentation of suspected child abuse or neglect (e.g., report and intake) |
Investigation and assessment | Screening and investigation; Family assessment |
Family preservation | Foster care prevention; Early intervention services |
Child placement | Foster care; Extended Foster Care; Kinship care |
Permanency | Family reunification services; Adoption; Adoption promotion and support; Kinship guardianship; Kinship caregiver support; Another planned permanency living arrangement |
Transitions out of the system | Transitional and independent living services |
While No One Funding Stream Covers All Services Under the Continuum, Many Cover the Same Services (See Interactive Graphic)
Many federal funding sources target similar populations or services but differ in eligibility rules or allowable uses. For example, CAPTA Title II, Title IV-B Subparts 1 and 2, and Title IV-E prevention services can all cover foster care prevention and early intervention services, though how specific programs are funded may differ across states.
To Address this Fragmentation of Funding, States Often Braid and Sequence Funds, Increasing Administrative Complexity
States combine multiple funding streams to serve children and families. Braiding refers to combining multiple funding streams with separate tracking and reporting for each source, requiring cost allocation systems and program-specific tracking. Sequencing refers to using separate funding streams at different points along a continuum, one following another. TANF and SSBG are well-suited for braiding and sequencing because they individually provide flexibility across several parts of the continuum. This process often requires shared governance across departments or agencies, and states may not be accessing some federal funding, intentionally or unintentionally, due to varying needs and budget constraints.
MULTIPLE, VARYING ADMINISTRATIVE AND REPORTING REQUIREMENTS ACROSS FEDERAL CHILD WELFARE FUNDING SOURCES CAN CREATE BURDEN FOR STATES
Each funding stream has its own requirements, including matching and maintenance of effort (MOE) requirements, capped or open-ended funding, eligibility rules, cost allocation requirements, and reporting and audit requirements. For example, Title IV-E foster care, adoption, guardianship assistance, and prevention services are open-ended entitlements requiring child-specific eligibility and quarterly reimbursement claims. Title IV-B Subparts 1 and 2 and CAPTA Title II require a non-federal match. TANF imposes MOE requirements and work-participation accountability. SSBG has no match or MOE requirements but requires detailed expenditure reporting.
Title IV-E prevention services are also subject to a payer of last resort provision, requiring other funding sources to be used before Title IV-E funds, which can be administratively demanding since this determination must be made and documented for each child and service.
There are Significant Reporting and Paperwork Burdens Associated with Child Welfare Funding Streams
Reporting requirements often require entering information into separate data systems with different data definitions, reporting periods, staffing constraints, and validation requirements. The Adoption and Foster Care Analysis and Reporting System (AFCARS) has the largest reporting burden, estimated to require over 18,000 annual burden hours per state — equivalent to the working hours of more than eight full-time employees. Because AFCARS data is also used for other Title IV-B reporting systems, those systems have significantly lower burden estimates. Across all other systems outside AFCARS, states spend nearly an additional 15,000 hours reporting data.
CONCLUSION
Despite federal funds covering less than half of state spending on child welfare, structural fragmentation across the 14 funding streams creates significant reporting burdens and administrative complexities for states, which may also create difficulty aligning funding with local needs. There may be an opportunity to better align federal funding sources and simplify administrative requirements to promote state flexibility and decrease burden, as well as an opportunity for researchers to better understand how fragmentation manifests gaps in the care continuum at the state level.
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