Group Challenges State Cuts to Foster Care

     SAN FRANCISCO (CN) – The California Alliance of Child & Family Services claims in Federal Court that the state is violating the Child Welfare Act of 1980 by insufficiently funding foster care.



     The Alliance claims the Department of Social Services and its Children & Family Services Division are shortchanging third-party, licensed agencies that care for foster children, denying them cost-of-living increases, forcing them to seek other funding, cut corners on care or eliminate services altogether.
     “We’ve already fought this battle and won big,” said Alliance attorney William Abrams, of Bingham McCutchen LLP, told Courthouse News. “The next, and last, part of this is for the Foster Family Agencies. The pity is that we have kids here who need help. These are kids who don’t have anybody to stand up for them.”
     Related litigation has compelled the state to live up to its obligation under the Child Welfare Act. A Federal Court ruling found that “substantial compliance” isn’t enough.
     Under the Child Welfare Act, states cooperate to meet the costs of care for foster children. A state participating in the program must provide “foster care maintenance payments” to foster agencies to cover all costs associated with foster child care, not just a portion of the cost.
     “To become eligible for federal funding, a state must submit a plan for financial assistance to the Secretary of the U.S. Department of Health & Human Services for approval,” according to the new complaint. “As a prerequisite for DHHS approval, the submitting state must agree, among other conditions, to administer its foster care program pursuant to the Child Welfare Act, related regulations and policies promulgated by the Secretary of DHHS.”
     In 2008, a federal court ruled in California Alliance of Child & Family Services v. Allenby that 80 percent payments to Foster Group Homes (FGHs) to cover costs was good enough, but the 9th Circuit, on appeal, did not agree.
     “The Child Welfare Act does not qualify the term ‘cover’ (for example, by saying ‘help cover the cost’). Therefore, payment of only 80 percent – or any amount less than full coverage of costs – won’t do, and violates the Act,” the court ruled. It permanently enjoined the state from implementing a 10 percent reduction in foster care maintenance payments planned for the 2009-10 budget.
     A previous complaint against the state for cutting back benefits to Foster Family Homes (FFHs), filed by three other advocacy groups, also ended with the court ordering the state to honor its obligation to cover all costs associated with foster child care.
     Abrams told Courthouse News that federal funds the state gets for foster child care are dedicated and must be used for that purpose.
     Abrams said he was not sure where the money went, if it was not being used for its intended purpose.
     “The state uses it for other purposes,” he said. “I don’t know what they are spending it on, if anything.”
     Cutting costs on foster childcare would have a significant impact on the quality and availability of care for children taken out of homes, some suffering from physical and emotional issues that require trained and licensed professionals to provide care.
     “The state has failed to provide agencies adequate funding as required by the federal Child Welfare Act, forcing the agencies to choose between finding alternative funding mechanisms, providing lower-quality care or eliminating services to the detriment of thousands of foster children,” according to the complaint.
     It claims that the Foster Family rate-setting system violates the Child Welfare Act, by failing to adjust for cost-of-living increases.
     “Initially, the foster care maintenance payment rates were, by DSS’ design, pegged to the California Necessities Index (CNI),” the complaint states. “An annual cost-of-living adjustment, or COLA, was automatically applied to rates to reflect any increase in the CNI. This reliance on a standard annual inflation index relieved the state of the burden of performing a periodic review of rates, as required by the Child Welfare Act.”
     The automatic application of the annual CNI-based COLA was eliminated in 1990 and “any increase in FFA rates required positive and discretionary action by the state, ‘subject to available funds,'” according to the complaint.
     As a result, the state has increased FFA rates only four times in the past 21 years.
     The Alliance wants the state ordered to make appropriate maintenance payments to FFA’s, and wants it enjoined from using the FFA rate-setting system to establish foster care maintenance payments, and to implement a payment system that complies with the Child Welfare Act.
     (Editor’s Note: A previous version of this story reported that the previous case involving foster care funding also was filed by the California Alliance. It was not. That case was filed by the California State Foster Parent Association, the California State Care Providers Association, and Legal Advocates for Permanent Parenting. Attorneys in that case (3:07-cv-05086-WHA)were from the Legal Children’s Advocacy Institute and, pro bono, from Morrison and Foerster. Courthouse News apologizes for the error.)

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