In 2016, relatively few child welfare agencies focused prevention spending on substance abuse and mental health services

February 5, 2019

A new report from Child Trends finds that child welfare agencies were less likely to focus child maltreatment prevention spending on substance abuse and mental health services than other preventive services in state fiscal year (SFY) 2016. The top prevention services funded by child welfare agencies in SFY 2016 were skill-based programs for parents, caseworker visits and administration (including information and referral services), and financial supports (such as assistance with transportation, housing, child care, and more)—services that are vital to children and families.

“While other state entities may fund mental health and substance abuse services, it’s notable that these services are less commonly funded by child welfare agencies given the widespread need for such services,” said Kristina Rosinsky, lead author of the report and a child welfare expert at Child Trends. “The extent to which child welfare agencies will fund these services moving forward may change due to the Family First Prevention Services Act, which will provide more federal dollars to child welfare agencies for mental health and substance abuse services.”

The report provides a national and state-by-state analysis of the composition of, and changes in, child welfare agency expenditures. The report surveyed states to understand child welfare agency expenditures by funding source, what services are funded, and how recent legislation impacts child welfare agency expenditures.

From SFY 2006 to SFY 2016, total child welfare agency spending in the United States fell by 1 percent, even as it rose by 5 percent from SFY 2014 to SFY 2016. Additionally, child welfare agency spending remains predominately financed by state and local sources: 56 percent of all dollars spent by child welfare agencies came from state and local, not federal, sources in SFY 2016, a proportion that held steady from SFY 2006 to SFY 2016.

The report also examined how states use Title IV-E waivers, which allow states to test innovative approaches to child welfare service delivery and financing by giving them the opportunity to use federal Title IV-E funds (the largest source of funding for child welfare agencies) more flexibly. The report finds that child welfare agencies used 27 percent of Title IV-E waiver expenditures for activities for children or services not traditionally eligible under Title IV-E (e.g., in-home services, prevention services, and evidence-based programs). States with waivers must still provide and pay for traditionally eligible services (such as foster care), which limits how much of their waiver dollars can go to new, innovative services. By law, these waivers will expire in 2019.

“Every state’s approach to financing child welfare services is unique. This research provides critical information to stakeholders who want to understand the financing landscape in their state, or nationwide,” said Sarah Catherine Williams, co-author of the report and a child welfare expert at Child Trends. “The sources of child welfare agency funding differ widely from state to state based on the characteristics and needs of the child welfare population, the availability of state and local funding sources, and the extent to which other state agencies use federal funding streams that child welfare agencies also access.”

This report was supported by the Annie E. Casey Foundation and Casey Family Programs.