Attachment A



Appropriation #2004094                                                                                                                 $ 156,700.32

Since FY1999, the Family Support Program has been housed in each of the Countyís elementary schools and one middle school, and draws down federal funding based on the population of children served by the program who meet the eligibility criteria under the Title IV-E Pre-Placement Prevention Program, hereafter referred to as Title IV-E Program, for children at risk of placement outside of the home due to abuse, neglect or other risk factors.  The Family Support Programís federal funds have been the programís primary funding source; however, beginning in FY 2003 changes in the eligibility criteria have resulted in a gradual reduction of federal support.  In FY 2003 the Family Support Program was able to cover a deficit through a different federal source and an approved appropriation of $37,500 from the School Board in recognition of successful outcomes in the elementary schools.  In FY 2004, the Family Support Program also anticipated a deficit in IV-E reimbursement funds and requested and received a direct appropriation of $17,000 from the Board of Supervisors, as well as permission to use $70,111 in local Department of Social Services carry-over funds and $164,889 of federal reimbursement funds for overhead services provided by the County.  The federal government reimburses overhead costs to the County for services provided to the Department of Social Services, such as finance, information technology, county attorney, etc.  The Board approved the annual budgeting of these federal cost allocation reimbursement funds to the Family Support Program. With these additional funds, the Department of Social Services anticipated that the Family Support Program would have sufficient funds in FY 2004 to cover related expenditures. 


Title IV-E reimbursement changes that are being made at both the federal and state level are having a significant impact on the ability of the Family Support Program to continue to recover the required federal funds to sustain the program it has been up until now. In April 2004, at the national level, the Department of Health and Human Services Departmental Appeals Board ruled against the Missouri Department of Social Services on allowable IV-E costs,   The ruling against Missouri was anticipated to set a precedent for other states based on allowable administrative costs and expanded documentation for claiming federal reimbursement under the Title IV-E Program.  It was anticipated that the impact of this ruling for Virginiaís Title IV-E Program would be stricter criteria for determining reasonable candidates under the Title IV-E Program and reduced administrative costs allowable for federal reimbursement.   In June 2004, the Virginia Department of Social Services (VDSS) announced a proposed $7 million disallowance in federal reimbursement for FY 2003 administrative costs under Virginiaís Title IV-E Program and placed a hold on most administrative costs submitted for federal reimbursement.


In August 2004, VDSS proposed a $12 million deferral in federal reimbursement for administrative costs under Virginiaís Title IV-E Program and was working to develop a policy that would hopefully have all costs reimbursed to localities as early as September, and no later than December 2004. It is now anticipated that the IV-E funds will not be reimbursed until January, 2005.  However, federal and state auditors have indicated to the Department that Title-IV-E funds will only be available to serve children who meet stricter criteria of being reasonable candidates for foster care. The auditors are holding local programs to an increasingly narrow definition of candidacy that may impact current and future claims for the Family Support Program and limiting the amount of funds that will be reimbursed to the program for FY 2004.  In anticipation of federal reimbursements resuming in January 2005, albeit with stricter criteria that would reduce the amount of anticipated federal reimbursement, the Department is requesting local dollars of $156,700.32 to close the Family Support Programís FY 2004 budget and continue the program in Albemarle County schools to serve children who are at-risk of abuse and neglect, out-of-home placement and school failure.


Although this appropriation will address the FY04 shortfall, these ongoing changes in IV-E policies and reimbursement criteria at the federal level raise the question on whether the program can continue at its current level for FY2005 without another shortfall. The program currently consists of thirteen social workers in the Countyís elementary schools and one middle school on a full-time, twelve-month basis providing services to maintain children in their homes and reduce the possibility of out-of-home placement. 


In light of the stricter IV-E reimbursement requirements, the Department continues to explore other potential funding options for the Family Support Program that may provide future sustainability without significant local dollars.  These include Early Periodic Screening Diagnosis and Treatment (EPSDT) and Targeted Case Management and Administrative Services, both of which are funded under Medicaid.  Additionally, the Department is researching the use of private funds and other federal funding sources to support the program.  All of these options continue to require significant research and testing to determine their actual feasibility and are therefore not short-term solutions.   The Department anticipates that it will provide a status report for the current year funding to the Board in February when  more information is known.


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