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September 2005Vol. 6, No. 7Structure of Federal Foster Care Financing

A recent issue brief from the Office of the Assistant Secretary for Planning and Evaluation (ASPE) at the U.S. Department of Health and Human Services provides an overview of the current title IV-E Federal foster care funding structure and documents several key weaknesses. According to the authors, these weaknesses have resulted in a system that fails to consistently support the program's basic goals of safety, permanency, and well-being.

Six weaknesses in title IV-E Federal foster care funding are discussed:

  • Ongoing linkage to the old Aid to Families with Dependent Children program for historical reasons
  • Burdensome administrative paperwork for claiming Federal funds
  • Highly variable funding across States
  • No connection between increased funding for child welfare systems and better outcomes for children
  • Emphasis on foster care payments over preventive services
  • A financing structure that has not kept pace with a changing child welfare field

The Child Welfare Program Option (CWPO), proposed in the President's FY 2006 budget, is presented as a positive alternative to the current funding structure. The main advantage of the CWPO is the flexibility it would give to States to spend title IV-E money for services other than foster care maintenance payments.

The full text of this issue brief, How and Why the Current Funding Structure Fails to Meet the Needs of the Child Welfare Field, authored by L. Radel and ASPE staff, is available online at