Report: Foster Care Reforms Will Cost More Money

Texas is pushing ahead with controversial reforms to the scandal-plagued foster care system despite a recent report that the overhaul is over budget.

A recent cost evaluation by state consultant reported that Texas hasn’t put enough funding toward the system and, as the Observer reported in May,  more funding will be necessary to keep the new system sustainable.

The Texas Legislature passed the foster care reform in 2011. It allowed the Department of Family and Protective Services, responsible for foster care regulation and administration, to shift some duties to private companies. These so-called lead companies would oversee privately contracted child-placing agencies responsible for recruiting and monitoring foster homes. Each lead company would oversee placing agencies in a certain part of the state. One main goal of the overhaul is to keep children closer to their homes.

But the Legislature had one caveat: the new system couldn’t cost any additional money, meaning lead companies must provide more services for the same amount of money that the state was spending on the old system. One company has already pulled out of its contract with the state, in part due to funding issues.

“There are clearly issues related to funding. Cost neutrality, I think, is very difficult.”

The Health and Human Services Commission, which oversees the department, contracted in July with the Boston-based Public Consulting Group to do a two-month study of “Foster Care Redesign,” as the overhaul is officially called. The report concluded that the system needs more money. “Additional resources are necessary to build an infrastructure to support and maintain a successful [lead company],” the recently-released report stated, adding that funds could come from alternative sources, like outside fundraising. The report recommended that Texas amend the 2011 reform legislation to require the new system to spend the same amount of money over the span of two years, instead of one year, to give the department more flexibility. The report also noted Texas is the only state attempting a foster care system overhaul without expecting to add funding.

The consulting group presented the study’s results at a Friday meeting of stakeholders who advise the state on how to implement, regulate and track the progress of the overhaul.

“We seem to have a very firm understanding that this isn’t a cost-neutral model. That to achieve what we want takes more money,” said Judge Scott McCown, director of the Children’s Rights Clinic at the University of Texas at Austin. “So I’m confused, when are we gonna tell people that this isn’t cost-neutral? When are we gonna fashion a plan for more money? … I just don’t know what we’re doing, it seems like a march of folly for me.”

Family and Protective Services Commissioner John Specia said later during the meeting that his staff is figuring out how best to ask the Legislature for more money during the upcoming 2015 session. At a recent legislative budget hearing, Specia included a one-time request for $1.6 million in funding for the overhaul. But that amount is just a placeholder, Specia said Friday. Nothing is final yet.

“I’m being pretty frank with the Legislature,” he said. “There are clearly issues related to funding. Cost neutrality, I think, is very difficult. Unfortunately we don’t have the hard numbers to say what does that mean,” Specia said. “I’ve got to be able to articulate what we get for the extra dollars they give us and we’re working on that.”

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