Definition
Finance refers to receiving and allocating funds and conducting resource development activities designed to build capacity and sustain a system of care.
Financing a system of care is a complex process, since each participating agency has unique funding sources and mandates which often specify goods or services to be provided for a targeted group of individuals. Identifying and coordinating funding sources is crucial to:
- Operating an organized system of care
- Gaining efficiencies in using public funds
- Decreasing duplication of effort
- Maximizing funds that can be used as match to Federal funds.
Included in each of the Infrastructure Toolkits are useful products and documents generated by the nine grant sites that enhance each toolkit for the reader. Each toolkit includes the following categories: Definition, Goals, System of Care Principles and Values, Activities and Questions to Consider, Key Partners, Voices from the Field, Sustainability Tips and Tasks, Resources and an Example from the Field, all relating to a specific infrastructure component. Additionally, the Voices from the Field sections include quotes and statements from systems of care practitioners who were interviewed. Finally, activities and questions have been enhanced and updated to help serve as a guide as you approach any particular infrastructure component.
Language Use
The world of finance has its own language and some terms like blended or braided funds that deserve definition:
- Blended Funding: Oftentimes used at the State or county level where a variety of flexible funding streams are brought together or pooled on behalf of an individual or program.
- Braided Funding: Oftentimes used at the State or county level where categorical funding streams are brought together but not combined to support individuals or programs.
Why Use a Finance Toolkit?
This Finance toolkit will provide guidance in developing financial strategies to sustain your system of care. It will also provide guidance on developing a continuous quality improvement program to support your finance efforts, how to maximize efforts to engage senior level decision-makers around financing approaches, and optimizing stakeholder involvement in the financial wherewithal of your system of care. In order to be successful in developing the variety of services and supports necessary to serve children and families involved in your child welfare-led interagency system of care, it necessitates sophisticated financial management. Within a system of care you need to become adept at “braiding” and “blending” funds to maximize resources across agencies. The myriad of funding streams, match requirements for Federal and State dollars, foundation funds, and private funding sources can be overwhelming to the fiscal novice. This toolkit will give you examples of successful funding strategies that have allowed child welfare agencies to be successful in meeting the dynamic needs of children and families while being prudent fiscal managers. Also, you will be exposed to people in the child welfare and system of care fields who have shared their stories of how they built a responsible funding base in order to effectively provide services and supports for children and families involved in the child welfare system.
Systems of Care Principles and Values
The following are just a few ways systems of care principles and values might be evident in your community with regards to financing your system of care:
- Children with multiple needs are able to receive a range of services funded by numerous agencies as part of a global, individualized case plan designed to increase safety, permanency, and well-being.
- Funds pay for services that meet the unique needs of the child, youth, and/or family.
- Child welfare staff have access to a broad set of service options for children and youth in their care. These services are part of the community-based system of care and are accessible, regardless of who funds them, to families and children in the child welfare system.
- Children, youth, and families have access to a full array of services and supports, including a family-based team process for designing and coordinating services.
- Financial strategies are monitored and analyzed to determine their ability to improve efficiency and meet desired outcomes.
- Agencies that fund or provide services are committed to systems of care principles and values.
Goals
- Increase flexible funding through utilization of a consolidated, independent resource pool with contributions from public child-serving agencies.
- Apply financing strategies to develop optimum service and financial accountability.
- Expand services.
- Develop a flexible fund that can support unique services and supports for children and families that may not exist in a formal program. For example, a child who has been sexually abused may need Taekwondo lessons to regain mastery of her body.
- Where possible, reallocate resources to support services that keep children and youth in their homes and local school communities.
- The system of care is organized and managed efficiently and effectively.
- Maximize funding spent on the population of focus within the State, county, city, tribal community, or neighborhood.
- Monitor expenditures and assess the effectiveness of services funded to support systems of care.
The pre-planning phase is marked by becoming familiar with all the existing funding streams within your child welfare agency as well as other child-serving agencies within your system of care. By doing a fiscal environmental scan, you can begin to see where there are funds that are not being leveraged to their full capacity or where there might be funding opportunities that are not currently being pursued. Another aspect of the pre-planning phase is to have the key stakeholders become familiar with the various limitations and/or restrictions of various funding streams. Many times you will hear interagency partners reveal that they had no idea that child welfare agencies could or could not do something because of Federal or State guidelines. Many interagency partners base their sense of why things were done certain ways on assumptions about child welfare agencies. By the end of this phase, there should be very little left to assumptions and much of the discussion around finances will be based on fact. This is a big step forward in building trusting working relationships among partners.
Activities, Questions to Consider
Examples of finance pre-planning activities and tasks in your community might be to:
- Establish work groups.
- Does an interagency and family-involved committee meet to address fiscal issues?
- Do contracts and requests for proposals incorporate language that reinforces systems of care principles?
- Assess interagency resources available to support the new fiscal structure.
- Has an analysis been conducted of funds spent on children in out-of-state facilities from your State/county/city/tribal nation with an eye toward bringing those funds back into your State to help build services and supports within your system of care?
- Have all available funding resources been reviewed to secure home and community-based funding for your system of care?
- Have you looked at grant opportunities to enhance your short-term funding opportunities as you reorganize your system to be more home and community based?
- Focus on efficiency and effectiveness in system reform.
- Identify duplication of effort.
- Is there duplication of effort among participating agencies in service provision and training?
- Are non-child welfare activities being done that could be modified to meet child welfare needs? For example, Multi-Systemic Therapy is an evidenced-based practice that may be focused on youth at risk of involvement in the juvenile justice system. Broadening the eligibility of that program to youth in child welfare would provide a quality service without having to start another in-home intervention program within the child welfare agency.
Key Partners
The people who perform finance duties in your community might include:
- Interagency finance committee
- Administrative support
- Agency budget office staff
- Chief financial officer
- Governance body
Sustainability
- Make sure each member of your interagency governance team thoroughly understands each other’s funding mechanisms.
- Make sure that your research on possible finance strategies is broad and deep, including current system of care efforts and foundations that have focused on financing and child welfare.
- Look for financial disincentives in current policies that make it more attractive to send children away from the local community rather than serve them locally. Recommend altering those policies so the incentives are now for children to be served locally rather than out of county/State.
- The Child Welfare Information Gateway Website has a number of documents regarding financing strategies for child welfare.
Resources
Changes Needed in Federal Child Welfare Law to Better Protect Children and Ensure Them Nurturing Families (PDF - 186 KB)
Lists Federal and State policy recommendations for financing child welfare services that address issues such as prevention, eligibility requirements, kinship and guardianship care, youth who age out of care, post-permanency, and the workforce.
Child Welfare Finance Reform Principles
Casey Family Programs (2008)
Presents five principles to help guide State and Federal policymakers on the best ways to finance America's child welfare systems.
The planning phase is marked by the gathering of all key financial stakeholders to develop a plan of action regarding the financing of your system of care. Pilot projects, applications for Federal or foundation support, and brainstorming possible financial scenarios are all part of the planning phase. The key outcome of this phase is having a financial plan that key stakeholders agree upon and that all parties are ready to initiate.
Activities, Questions to Consider
Examples of finance planning activities and tasks in your community might be to:
- Develop a financial sustainability plan based on the community’s definition of sustainability.
- Has a financial plan been developed to seek funds from a number of sources (Federal, State, local, and foundations) to expand community-based services?
- Have you uncovered and are you beginning to change any financial disincentives in Federal/State or local policies to serve children locally?
- Analyze and assess.
- Have you looked at the following?
- Funding sources, such as Federal, State, local and private foundations
- How funds are spent
- How much money is available
- If there are mandates associated with funds
- Who controls various funds
- Spending flexibility
- Funding needs
- Policy disincentives to serve children locally
- Incentives for service providers
- Have you looked at the following?
- Establish connections with State finance officials (e.g., Temporary Assistance for Needy Families, Medicaid)
- Identify State and local general fund revenue that is not being used to match Federal money.
- Are there unmatched general fund dollars that could be used to draw down Federal revenue?
- Identify and develop creative refinancing strategies (redeployment of existing revenue, submission of Federal waivers, bringing children and youth back from out of State placements and having the funds stay with them).
- Identify and develop methods for efficiently reimbursing service providers.
- Assess existing mechanisms for tracking revenue, reporting expenditures, and implementing sound fiscal utilization.
- Identify non-service expenditures and determine how to sustain what is being purchased (staff development, training, operating and administrative costs)
- Identify and eliminate funding constraints, when possible.
Key Partners
The people who perform finance duties in your community might include:
- Interagency finance committee
- Administrative support
- Agency budget office staff
- Chief financial officer
- Governance body
Sustainability
- Be creative in the brainstorming phase of developing your financial plan. Make sure you have members of your governance board who are willing to “think outside the box.”
- Connect the local system of care work with key players at the State and national levels.
- Make sure there is a financial strategic plan developed with clear benchmarks established for the plan’s implementation and subsequent monitoring.
- If you know of an example of someone who has put in place a legitimate creative funding mechanism that has allowed for increased funding and expanded services for children and families, it is worth investing the necessary funds to bring them in to meet with your system of care governance body to explain what they did. Knowledge is one of your greatest tools for growing your financial resources.
Resources
Kansas – Family Engagement Reimbursement Plan (PDF - 23 KB)
This is a 2-page document that outlines how Family and Youth Partners may receive an agreed upon partial reimbursement for their participation on councils, committees and/or workgroups.
Kansas – Community-based Services Overview (PDF - 27 KB)
This is a 5-page document that outlines the new direction of community-based child welfare contracts in Kansas. Areas addressed include the philosophical approach that will be in contract language (including many of the system of care principles), payment structure, and enhancements to the service delivery system related to being more child and family driven.
North Carolina – Memorandum of Understanding (PDF - 32 KB)
This is a 4-page document that outlines the memorandum of agreement between all child serving agencies within Alamance County to support a system of care approach. One key implementation strategy in the agreement includes, “To maximize existing resources and develop sustainable funding strategies among public agencies, as well as seek additional funding for early intervention and prevention programming.” Headings within the agreement include: Purpose, Core Values, Guiding Principles, Implementation of the Agreement and Scope of the Agreement.
The Need to Reauthorize and Expand Title IV-E Waivers
Casey Family Programs (2010)
Examines the outcomes and cost savings of child welfare demonstration projects to allow States to use Federal child welfare funding more flexibly to address issues such as assisted guardianship, kinship care, managed care, staff training, and more.
This phase is marked by the initiation of your financial plan. It might include new blending and braiding of funds around individual children and families that may have never happened before. It may include contracting with agencies and/or systems for the first time. Perhaps you have a Federal waiver for certain financial requirements and you are piloting that new mechanism, or you may be implementing a new Federal or foundation grant that puts in place new services and funding partnerships. Most importantly you are trying out new funding relationships and mechanisms. It will require close monitoring of these financial initiatives and likely will also necessitate adjustments and refinements to ensure optimum implementation of your funding strategy.
Activities, Questions to Consider
Examples of finance implementation activities and tasks in your community might be to:
- Determine cost effectiveness of services being purchased so revenue allocation is linked to outcomes.
- Have you researched what other States/counties are charging for each service you offer?
- Do you have the data on how much each service you offer cost in the previous fiscal year? Were there any counties where a particular service(s) cost(s) more or less than the average? Why?
- Identify and eliminate spending constraints, financial disincentives and fiscal barriers, when possible.
- Plan for and respond to gaps or changes in services or funding.
- Conduct resource development activities to obtain funding to support and sustain a system of care.
- Determine the feasibility and usefulness of submitting waivers (Medicaid, Title IV-E).
- Identify and eliminate duplication in spending.
- Develop and manage the systems of care budget.
- Develop a process for efficiently and effectively managing resources.
- Implement processes for sharing fiscal information with all relevant constituents.
- Do you put together an annual progress report on financing your system of care?
- Do you meet with the public youth-serving administrators on a regular and frequent basis to go over costs related to your system of care?
- Implement activities associated with the financial sustainability plan.
Key Partners
The people who perform finance duties in your community might include:
- Interagency finance committee
- Administrative support
- Agency budget office staff
- Chief financial officer
- Governance body
Sustainability
- Make sure that you document the expenditures and results of a flexible fund pool. This is a difficult funding pool to sustain. Therefore, you must have compelling data to suggest the benefits derived from having a flexible pool of funds available to individual children and families.
- Having a neutral facilitator can help break through financial barriers to jointly fund services and supports.
- Create an annual report of the financial status of your system of care.
- Make sure that you meet regularly and frequently with all top level child and youth serving agencies to go over the financial status of your system of care.
Resources
Effective Federal Child Welfare Funding Strategies
Allen (2007)
Discusses the four principles of finance reform and strategies for implementation.
Paying close attention to the results of your financial strategy will be key to ensuring that the financial mechanisms you have put in place are resulting in cost efficiencies and improved outcomes for children and families. There are several key questions that need to be answered by your quality improvement work:
- Is your financial strategy cost effective?
- Are you saving money while improving the quality of care for children and families?
- Is the process of packaging funds around a particular child and family efficient and effective?
- Are you maximizing the various Federal funding streams available to children and families?
- Is your evaluation team involved in shaping the kinds of questions that need to be answered?
Activities, Questions to Consider
Examples of finance continuous quality improvement activities and tasks in your community might be to:
- Create a financial logic model.
- Develop the benchmarks and outcomes that you want to see related to your financial plan.
- Track and monitor spending and outcomes for each child enrolled in your system of care as well as tracking the overall system of care-related expenditures.
- Develop regular financial reports that can be shared with key stakeholders, including agency leadership, that need to be aware of your results.
- Review the financial processes that drive reimbursement for services to ensure that they are efficient and supportive of the Federal, State, county, or tribal entities, service providers, and children and families served.
Key Partners
- The people who perform finance duties in your community might include:
- Interagency finance committee
- Administrative support
- Agency budget office staff
- Chief financial officer
- Governance body
Sustainability
- Have clearly defined outcomes and expectations tied to funding.
- Allow service providers to re-invest funds that they have saved into service and supports to enhance family outcomes.
Resources
Improving Child Welfare Agency Performance Through Fiscal Reforms: An Assessment of Recent Proposals
Geen (2003)
Summarizes what is known about how States finance child welfare services, assesses recently proposed solutions to the problems of State and Federal child welfare financing structures, and considers how financing data can be used in assessments of State performance.
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Example from the Field
Site
Oglala Lakota Nation, South Dakota
Goal
To establish a child welfare system of care composed of private, Federal, State, and tribal agencies that collaborate and blend funding to develop and implement an integrated system of services that includes child protection, child welfare, Temporary Assistance for Needy Families, community development services, adult protection, and other social, education, and community services as needed for children and families. The name of the organization is the Lakota Oyate Wakanyeja Owicakiya Pi Okolakiciye (Lakota People Helping Children), and it was established in 2003.
Strategy/Approach
What Was Done
Taking advantage of multiple funding streams resulted in development of an integrated financing implementation plan that included establishing a State-Tribal Title IV-E Agreement that would outline reimbursement guidelines, contracting child welfare services that are provided by the Bureau of Indian Affairs, contracting with Casey Family Programs for recruitment and licensure of family foster homes, providing training that can be reimbursed by the State of South Dakota under the 45 CFR 1356.60 (b), and accessing Title XIX Social Services Block Grant funding and Bureau of Indian Affairs Public Law 93-638 funding.
Other financing strategies included establishing partnerships and/or contracts with Indian Health Services, Education and Special Education, Mental Health, and Juvenile Justice to expand the availability of core services. Additionally, Casey Family Programs provided funding for a transition team (staff and activities) to ensure there would be a smooth process of transferring services from public, private, tribal, and Federal child welfare agencies into one integrated center. These financing strategies contributed to building capacity of the system of care, as well as its sustainability.
Who Was Involved
The entities represented in the strategic planning process included parents, community members, traditional healers, tribal child welfare, State child welfare, Bureau of Indian Affairs child welfare, and a private child welfare agency, Casey Family Programs. These entities entered into a partnership to work on the Transformation Project funded by Casey Family Programs.
Time Frame
The work to establish a system of care that was funded by multiple sources began in earnest in late 1999 and early 2000. To transition child welfare services provided by Casey Family Programs, the State, Bureau of Indian Affairs, and tribal child welfare to a tribally chartered, integrated child welfare model, Casey Family Programs committed funding to ensure there was a smooth transition process. This included paying current Casey Family Program staff to serve as the transition team.
Why This Approach Was Selected
The Federal, State, tribal, and private child welfare agencies concluded they were all doing the same work and helping the same individuals and that there was little communication or interagency collaboration among them. This led to development of an integrated child welfare model that was chartered by the Oglala Sioux tribal government in 2003. The 2001 Pine Ridge Child Welfare Needs Assessment Report identified barriers related to service delivery, such as lack of coordination and collaboration among agencies across the reservation, lack of culturally competent models, and minimal information sharing and exchange. Resources available to families were not shared readily.
Systems of Care Principles
Systems of care principles and values were the basis for the strategic planning process and for the development of the official guidance documents, including the charter and bylaws. The principles are clearly outlined as the guiding tenets in the charter document, which included development of services that were comprehensive, community-based, individualized, culturally appropriate, and provided in the least restrictive environment. The governance structure had broad representation from child-serving agencies, elders, parents, and community people.
Lessons Learned
- Understand that integration of financial resources is a critical element of infrastructure development.
- Ensure that the implementation plan clearly defines and describes the governance process, staffing requirements, and legal entity structure, and includes an integrated financial resources pool.
- Partner with tribal government and community leadership from the beginning. Obtain a tribal resolution to sanction the change work with a well-documented needs report.
- Identify resources for planning as an essential beginning point and obtain resource commitments from involved agencies and programs to fund specific aspects of planning and development.
- Fund a full-time system of care coordinator to maintain and support group commitment to the process. The importance of this person’s role cannot be underestimated, particularly for developing partnerships to blend and/or braid funds. The system of care coordinator is the point person for the work, which includes managing the project, being a community organizer, leading focus groups, navigating the politics, knowing the protocol, and accessing resources. In the case of the Oglala Lakota Nation example, the system of care coordinator’s understanding of the vision and commitment to the work was powerful.
- Engage the facilitators and leaders from the natural support system of the culture and community (e.g., establish a Lakota traditional/spiritual leader as a content expert/leader).
Barriers and Facilitators
- Beginning everything with a prayer and asking for the wisdom of the ancestors was powerful in overcoming barriers in this example.
- Effective collaborations were a challenge to establish. Overcoming turf issues in a tribal/rural setting is daunting; however, a skilled coordinator can overcome these.
Acknowledgements
The National Technical Assistance and Evaluation Center for Systems of Care would like to thank the numerous individuals whose hard work and dedication made this toolkit a possibility. Thank you to the Children’s Bureau staff, specifically Bethany Miller and Pamela Johnson (retired), Federal Project Officers, for their guidance and support throughout the writing and editing process. A special thank you goes to the following people for graciously volunteering to be interviewed for the Voices from the Field Section of the toolkit: Rich Weisgal, Contra Costa County, California; Beth Evans, Children & Family Services Administrator, Kansas; and Fred Wulczyn, Chapin Hall Center for Children, New York. Many thanks to the representatives from the nine Systems of Care grant communities of the Improving Child Welfare Outcomes through Systems of Care demonstration initiative who willingly shared sample products and tools which have been highlighted in the Resources Section. Finally, we thank the members of Infrastructure Toolkit Workgroup, who all brought their expertise to the table:
- Susan Franklin, Program Manager, Jefferson County, Colorado, Department of Human Services
- Beth Evans, Children and Family Services Administrator, Kansas Department of Social and Rehabilitation Services
- Angela Braxton, Parent Leader, Kansas
- Peggy Taylor, Evaluator, Kansas
- Angela Mendell, Casework Supervisor, Bladen County, North Carolina
- Marie Parrott-Withers, Parent/Provider, North Carolina
- Helen Spence, System of Care Outreach Coordinator, Foster/Adoptive Parent, Dauphin County, Pennsylvania
- Ervin Talley, Community Member, Bedford-Stuyvesant, New York City, New York
- Kamelia No Moccasin, Oglala Lakota Tribe, South Dakota
- Paula Loud Hawk (deceased), Caseworker, Lakota Oyate Wakanyeja Owicakiya Pi Okolakiciye (Helping Children of the Lakota People), Oglala Lakota Tribe, South Dakota
- Nicole Bossard, Technical Assistance Team Leader, National Technical Assistance and Evaluation Center
- Gary De Carolis (Chair), Senior Consultant, National Technical Assistance and Evaluation Center
- Elleen Deck, Technical Assistance Liaison, National Technical Assistance and Evaluation Center
- Janet Griffith, Senior Fellow, National Technical Assistance and Evaluation Center
- Ethleen Iron Cloud Two Dogs, Technical Assistance Liaison, National Technical Assistance and Evaluation Center
- Caitlin Murphy, Analyst, National Technical Assistance and Evaluation Center