HHS Refines TANF Reporting on Child Welfare Spending

On July 31, the Administration for Children and Families (ACF) in HHS issued new standards for how Temporary Assistance for Needy Families (TANF) funds are spent with a refinement in regard to child welfare spending. Beginning with the FY 2015 first quarter report (report quarter ending December 31, 2014, due February 14, 2015), TANF-ACF-PI-2014-02 (OMB approved Form ACF-196R State TANF Financial Report Form) should eventually lead to greater detail in regard to TANF funds used for foster care, adoption assistance and guardianship payments as well as other spending on child welfare services.

States have a great deal of flexibility in how they spend their federal TANF funds on families and on child welfare services. National surveys by Child Trends and others have indicated that, nationally, over 20 percent of federal funding for child welfare services comes from the TANF block grant. States vary in their utilization of TANF funding with some not allocating any TANF funds for child welfare services to some states such as Texas usually drawing more than 40 percent of their child welfare funding from the TANF block grant.
When AFDC was eliminated in 1996 and converted into a block grant some states had already been using it as a partial source of funding for child welfare services. AFDC was the sole funder of foster care in the 1960s and 1970s until Title IV-E was created in 1980.

When AFDC was converted into the fixed TANF block grant to states in 1996, each state’s permanent allocation of federal TANF funds was based on an average of what states had been spending in AFDC in the previous years. For states that were operating an Emergency Assistance or “EA” program as part of AFDC, that spending was incorporated into the state’s TANF grant. States are allowed to use federal TANF funds for the same services they had funded under AFDC and EA. That is significant because many of the approximate 30 states that had an EA program used some of the short-term EA funding for non-IV-E eligible foster care, adoption assistance and juvenile justice. That meant that under the new TANF spending requirements states could spend the flexible TANF funds on any program or services that fit the four purposes of the act (including purpose one, “provide assistance to needy families so that children may be cared for in their own homes or in the homes of relatives.”) as well as services authorized under the AFDC law.

Although the Child Trends surveys show states getting more than 20 percent of child welfare funds from TANF, those numbers are not verified under current annual TANF spending reports. Yearly reports by state TANF agencies show states spending TANF funds under the categories of: cash assistance and non-assistance and within these two large categories are spending on child care, transportation and a few other categories including “other.” Child welfare is not specifically reported and may fall into various categories such as other, assistance and non-assistance.
In recent years Congress has been seeking more detail especially as some states reduce their support for families more historically typical of welfare: families headed by a parent and a child or children. Under the new reporting requirements states will begin to break out TANF spending by:

Relative Foster Care Maintenance Payments and Adoption and Guardianship Subsidies: basic assistance provided for a child or children that the child welfare agency has legal responsibility and is living with a caretaker relative; or children living with legal guardians. This category includes ongoing adoption subsidies. All expenditures are for cases not eligible for IV-E foster care assistance or subsidies.

Assistance Authorized Solely Under Prior Law: activities that are not consistent with the four purposes of TANF but are an allowable use of federal TANF funds but are activities which the state was allowed to spend on under the AFDC. These include foster care assistance, Juvenile Justice Payments, and Emergency Assistance Authorized under section a state’s AFDC or Emergency Assistance state plan.

States will also report in a separate category Child Welfare Services which include:
• Family Support/Family Preservation/Reunification Services, (community-based services, provided to families involved in the child welfare system that are designed to increase the strength and stability of families so children may remain in or return to their homes. Services include respite care for parents and relative caregivers; individual, group, and family counseling; parenting skills classes; case management),
• Adoption Services (services and activities designed to promote and support successful adoptions including pre- and post-adoptive services to support adoptive families, as well as adoptive parent training and recruitment), and
• Additional Child Welfare Services (other services provided to children and families at risk of being in the child welfare system, or who are involved in the child welfare system. This includes independent living services, service coordination costs, legal action, developing case plans, assessment/evaluation of family circumstances, and transportation to or from any of the services or activities described above.

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