ACYF-CB-IM-97-05 7/7/97

ACF Administration for Children and Families	U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES Administration for Children, Youth and Families
	1. Log No.: ACYF-CB-IM-97-05	2. Issuance Date: 7/7/97
	3. Originating Office: Children's Bureau
	4. Key Words: Adoption 2002, Adoption Assistance, Incentive Payment,Baseline, Guardianship, Permanency

INFORMATION MEMORANDUM

TO: State Agencies Administering Title IV-E of the Social Security Act

SUBJECT: Procedures for Establishing Adoption and Guardianship Baselines to Implement the Presidential Initiative, Adoption 2002

PURPOSE: The purpose of this Information Memorandum is to provide information to the States about setting up adoption and guardianship baseline data and estimates of future targets in expectation of new legislation and as part of implementing the President's Adoption Initiative, Adoption 2002.

LEGAL AND RELATED REFERENCES: H.R. 867; Sections 471(a)(6) and 474 of the Social Security Act; Adoption 2002, A Response to the Presidential Executive Memorandum on Adoption, Issued December 14, 1996.

INTRODUCTION: The President's Adoption 2002 Initiative is a collaborative undertaking between the State and Federal governments to double the number of children adopted or placed annually in other permanent homes over a five year period. The joint effort is meant to engage Federal, State and local governments, child welfare and adoption professionals, community leaders and other interested citizens in creative and meaningful activities to improve the lives of children by creating permanent homes for them.

This initiative would provide incentive funds to States as the number of adoptions increases each year. It also provides a process to address the barriers and challenges that exist in the child welfare system and encourages States to build on their current practices, strengthen services and improve the ability of the system to respond to the permanency needs of individual children.

BACKGROUND: From ADOPTION 2002, A Response to the Presidential Executive Memorandum on Adoption, issued December 14, 1996:

"To set numerical targets leading to a doubling in the number of children who are adopted or placed in alternative permanent homes by the year 2002:

By September 30, 1997, the Department, through its Regional Offices, and collaboratively with the States, will establish preliminary numerical targets for adoption and guardianship. All States will establish both preliminary baseline data for fiscal year 1997 on the number of adoptions and guardianships and proposed annual incremental targets for fiscal years 1998-2002, leading to a national doubling in the annual number of adoptions and guardianships completed by fiscal year 2002."

************

: "... Based on this proposal, each State would receive a bonus for every child adopted from the State foster care system above the baseline or the annual starting point. A supplemental bonus would be paid to the extent these increases were among children adopted from the State foster care agency who receive assistance under a title IV-E adoption subsidy agreement (i.e., a special needs child)."

From H.R. 867 (Camp/Kennelly as enacted by the House of Representatives);the language in this bill is consistent with the Department'sproposal:

"... Except as provided in subparagraph (B), the Secretary shall determine the numbers of foster child adoptions and of special need adoptions in a State during each of fiscal years 1997 through 2002, for purposes of this section, on the basis of data meeting the requirements of the system established pursuant to section 479 [AFCARS], as reported by the State...."
"... For purposes of the determination described in subparagraph (A) for fiscal year 1997, the Secretary may use data from a source or sources other than that specified in subparagraph (A) that the Secretary finds to be of equivalent completeness and reliability...."

************

IN GENERAL.--Except as provided...the adoption incentive payment payable to a State for a fiscal year under this section shall be equal to the sum of--
1. "$4,000, multiplied by the amount (if any) by which the number of foster child adoptions in the State during the fiscal year exceeds the base number of foster child adoptions for the State for the fiscal year: and
2. "$2,000, multiplied by the amount (if any) by which the number of special needs adoptions in the State during the fiscal year exceeds the base number of special needs adoptions for the State for the fiscal year."

The purposes for establishing baselines are twofold;

to determine the number of children each State needs to have adopted or placed in legal guardianship to achieve the goal of doubling the number of permanent placements by the year 2002;and
to establish the number for determining the number and level of the incentive payments to States if HR 867 or a similar bill is enacted.

FEDERAL/STATE COLLABORATION:

Adoption 2002 is guidance that can be used by any State to increase the numbers of children adopted. The plan calls ultimately for States to double the numbers of finalized adoptions completed during the year 2002.

Child Welfare System--Background and Current Status

Prior to discussions of the initiatives and targets, there needs to be recognition of how each State's child welfare system focuses on adoption and guardianship and related permanency issues such as post adoption services, recruitment, court procedures, termination of parental rights (TPR) and appeals, adoptive parent resources, systems improvements, availability and reliability of AFCARS data and other data sources, policies regarding kinship care, etc.

The discussions should be collaborative efforts emphasizing trends, patterns, past successes, and barriers.

States which have recently participated in successful adoption campaigns and pilot projects, with the help of technical assistance and support from the Federal government, can institutionalize and broaden those successful strategies or develop additional ones to:

place in adoptive homes the children who are still waiting;
free appropriate children for adoption;
develop programs to support the increased number of families who are adopting children with special needs; and
provide supportive services which will minimize the number of disruptions, displacements and dissolutions.

States that have not focused on improving their adoption systems will also receive technical assistance and may benefit from referrals and contacts with other similar or neighboring States that are more experienced.

AFCARS data for FY 1997 for the State should be jointly reviewed. The Regional staff will need to discuss with the States their confidence in using these data for the baseline. Inclusion of State program and data system staff as well as regional office program and data system staff is recommended to insure a mutual understanding of the completeness and accuracy of the AFCARS data.

Should the Regional/State team conclude that the AFCARS data are not reliable due to incompleteness, inaccuracy, etc., an alternative source of data may be considered for FY 1997. Discussion should also address steps to improve AFCARS data in the State for FY 1998 and after. Central Office statisticians are available for consultation in these matters.

Initial Strategies and Direction on Increasing the Number of Adoptions and Guardianships in the State

State and regional staff need to discuss possible State strategies to double the number of adoptions and guardianships by the year 2002. New activities should build on existing efforts, and include an incremental, phased approach, using multiple strategies. Consultation, as part of the strategy to increase awareness, support and collaboration, should include community leaders, parents, business and faith communities, adoption professionals, legal and judicial professionals, and Tribal representatives, as well as others outside the traditional child welfare system.

The State should identify which program areas they want to focus on initially. The areas highlighted in the initiative are:

Identification of barriers to permanency,
Development of targeted strategies to address these barriers and find permanent homes for children who have been in care a particularly long time,
Development of proposals to shorten the time between a child's placement in foster care and a decision for a permanent home for a child,
Development of proposals for alternative permanency arrangements such as guardianship, when adoption is not possible,
Sustained efforts to recruit families, and
Public education efforts and community mobilization.

The Attachment provides a suggested process for Regions and States to use in their discussions. This is intended to serve as general guidance, as the discussion and flow will vary from region to region, and State to State.

THE INCENTIVE BONUS:

As part of the Adoption 2002 Initiative, the President directed the Department to develop a proposal for a per-child financial incentive to States that increase adoptions from the foster care system. The proposed system, outlined below, would provide a per-child incentive to every State that increases its annual number of adoptions from the State child welfare system. There would be an additional incentive for every special needs child adopted in excess of the highest annual total since FY 1997.

The incentive funds will only be paid for finalized adoptions and will be available to States if Congress authorizes and appropriates the subsidy.

This incentive, as proposed, maintains an emphasis on special needs children. While the effort is to get twice as many children adopted from the State system, the emphasis continues to remain on those children for whom it is more difficult to find an adoptive placement and who tend to remain in foster care for long periods of time.

To qualify for incentive payments, a State would have to provide adoption data in accordance with the AFCARS legislative and regulatory requirements (except for the FY 1997 baseline). If a State is unable to provide AFCARS data on the number of adoptions and special needs adoptions for FYs 1998 through 2002, it would not receive incentive payments for those years.

The incentives described above, contingent on their Congressional passage as amendments to the title IV-E adoption assistance program, would be based on the actual performance of the State in achieving its goal each year.

The incentives will be paid to the States in the year following the year in which they are earned. The incentive money will be available for use by the State for any activity or service which is allowable under title IV-B, subparts 1 or 2, for children receiving foster care or adoption assistance payments. Regardless of when during the fiscal year the incentive funds are received, they must be expended by the end of the succeeding fiscal year.

It is suggested that when the incentive funds are awarded to the States, they should give serious consideration to distributing the awards to or sharing them with the counties, cities and localities which actually did the work and made it possible for the States to achieve their success.

Below are details for the proposed per-child adoption incentive. The example illustrates how the bonus would function.

Definitions

Adoption -- Adoption means the legalized adoption of a child who, at the time of adoptive placement, was in foster care under the responsibility or supervision of the State.

Established Baseline -- the largest number of children adopted from the State child welfare agency foster care program during a previous fiscal year beginning with FY 1997.

Established Title IV-E Baseline -- the largest number of special needs children whose adoptions were legalized during a previous fiscal year beginning with FY 1997.

Fiscal Year -- Fiscal year means Federal Fiscal Year (October 1 through September 30).

FY 1997 Baseline -- the number of children adopted from the State child welfare agency foster care program during Federal Fiscal Year 1997.

FY 1997 Title IV-E Baseline -- the number of children with finalized adoptions from the State child welfare agency who were eligible to receive title IV-E adoption assistance during Federal Fiscal Year 1997.

Guardianship -- Guardianship is permanent court-sanctioned custody of the child by someone other than the parent(s).

Special Needs Child(ren) -- A special needs child is one whose adoption has been legalized and for whom there is an adoption assistance agreement (including agreements for nonrecurring costs) in effect under section 473 of the Social Security Act.

Bonus Calculation

If HR 867 or similar legislation is enacted, every State which has an approved FY 1997 baseline will receive incentive funds based on the following:

For FY 1998: The sum, to be awarded [in FY 1999], of

$4,000 for every child adopted over the FY 1997 baseline and
$2,000 for every special needs child adopted over the FY 1997 title IV-E baseline.

For FY 1999 through FY 2002 [awarded in FY 2000 - 2003], a State's incentive would equal the sum of the following:

$4,000 for every child adopted over the established baseline, and
$2,000 for every special needs child adopted over the established title IV-E baseline.

Because the incentive funds cannot be calculated until all the AFCARS data have been submitted after the end of the fiscal year for which they will be awarded, they will not be paid out until the year following the year in which they have been earned. Thus, incentive funds earned in FY 1998 would be paid to the States in FY 1999, as soon as possible after their AFCARS submissions for FY 1998 have been processed and reviewed (probably in the fourth quarter)1.

The following matrix illustrates how the incentive works.

STATE	1997	1998	1999	2000	2001	2002	2003
XYZ	(*)	(*)	(*)	(*)	(*)	(*)	(*)
Estimated Baseline		100	130	130	131	165
Established IV-E Baseline		50	55	73	100	110
Incremental Targets		115	130	150	175	200
Total # of Adoptions	100	130	128	131	165	210
		(30)	(0)	(1)	(34)	(45)
# of IV-E Adoptions	50	55	73	100	110	160
		(5)	(18)	(27)	(10)	(50)

Bonus			(4,000x30)	00	(4,000x1)	(4,000x34)	(4,000x45)
($4000)			$120,000		$4,000	$136,000	$180,000

IV-E Bonus			$10,000		$54,000	$20,000	$100,000

Total Bonus			$130,000	000	$58,000	$156,000	$280,000

* The numbers in parentheses () indicate the number of adoptions above the established baseline.

Please note the following situations which are reflected in thematrix above:

Each year's awards are considered on their own.
Incentives are not paid out until the year after they have been earned.
Achievement or non-achievement of the incremental targets established by the State has no effect on the baseline or on the amount of the incentive.The are guideposts for State and local action.
No incentive funds are paid in FY 2000 because the number of adoptions in FY 1999 did not exceed the total number of adoptions in FY 1998, even though the number of IV-E adoptions increased substantially.
For FY 2000, the established baseline does not reflect the FY 1999 achievement(128), but reverts to the higher number for FY 1998 (130), while the IV-E established baseline reflects the higher achievement in FY 1999.
Even though the total number of adoptions in FY 2000 increased by only one, the incentive funds awarded in FY 2001 totalled $58,000 because of the substantial increase in title IV-E adoptions.

ESTABLISHING THE BASELINE AND INCREMENTS:

The proposed process for establishing adoption and guardianship baselines and increments is based on the following principles:

AFCARS is the primary source of data to determine baselines. Baselines figures should be derived through consultation among the States, Regional Office and Central Office statisticians and other relevant staff.
The setting of interim targets so States may reach the goal of doubling (a 100% increase) in adoptions and guardianships by the year 2002 should primarily be the responsibility of the States. Regional and Central Office staff can and should provide assistance, as appropriate, and requested.
Guardianships will be credited for the purpose of achieving the goals of Adoption 2002, but incentive funds will not be available for increases in the number of guardianships. Historically title IV-E has not allowed matching funds for subsidized guardianship, and the draft legislation speaks only to incentive funds for adoptions.

Developing FY 1997 Baselines

We are assuming that legislation similar to that proposed by the President in the FY 1998 budget will be enacted during this session of Congress. (The House of Representatives has passed H.R. 867.) However, even if there is no legislation, the Administration seeks to have the goals of Adoption 2002 met, with a doubling of adoptions and guardianships by that year.

Regional Offices and States should begin establishing baselines as soon as possible. Baselines must be established for all children adopted from the State agency foster care system not only for children who are adopted from the system with title IV-E adoption assistance. Baselines are also needed for children moving from the State foster care system into guardianship. By July 15, 1997, the Central Office statistical staff will develop and forward to the Regional Offices State-specific preliminary estimates of the FY 1997 baseline based on AFCARS (OMB No.0980-0267, expires 10/31/99).

The total number of adoptions will be based on AFCARS adoption data and the number of guardianships will be based on AFCARS foster care data from the "reason for discharge" element. The estimates for use in establishing the preliminary targets will be the sum of FY96B (April 1, 1996 to September 30, 1996) and FY97A (October 1, 1996 to March 31, 1997) data. These estimates may be updated based on amended State submittals of AFCARS data, conducted at the State's own initiative, covering the same time period. Regional Office staff will consult with Central Office statisticians and other relevant staff if the revised figures differ from the Central Office estimate.

If the State has not reported data to AFCARS or if the State, the Central Office statistical staff or Regional Office staff agree that the reported data are unreliable, the State may propose the use of alternative data sources to determine the baselines. The use of two independent data sources is preferred. Examples of possible data sources are:

Adoption and discharge data reported to the Voluntary Cooperative Information System (VCIS--OMB No. 0970-0129, expired 12/31/95);
ACF Form IV-E-12, the quarterly estimate and expenditure report for title IV-E (OMB No. 0980-0131, expired 1/31/95);
State adoption specialists' electronic or manual files and records;
State Foster Care Review Boards' electronic or manual files and records;
Data on discharge outcomes for children exiting the foster care system from foster care management information systems.
Bureaus of Vital Statistics records;2 and
State court records.

The Regional Offices will consult with the Central Office statisticians and other relevant staff prior to approving the data source(s) and the procedures to be used for establishing the FY 1997 baseline number. After the Regional Office staff approves the source and procedures, the State will develop its baseline estimates and provide a written description of the procedure that was used.

Guardianship data may be available through the courts or throughthe foster care review boards and through State agency files on discharges from foster care. While data on guardianships is not relevant for awarding bonuses, it is necessary to determine the baselines and establish the increments in order to measure the progress toward and the degree of successful achievement by 2002.

Assuming that the authorizing legislation for this initiative is passed by Congress and signed by the President in the near future, preliminary baselines will be established by September 30, 1997, and transmitted to Central Office by October 15, 1997.

Increments

In consultation with the Regional Offices, States will propose increments for FY 1998 through FY 2002 in both numbers and percentages. The increments will help the States manage and monitor its progress and help ACF project the likelihood of success and determine areas where additional assistance may be needed. The increments do not need to be equal for each year. The impact of child welfare demonstration waivers should be taken into consideration when developing and evaluating increments. Increments should lead to a doubling of the number of permanent placements, that is, a 100% increase, compared to the FY 1997 baseline in Federal fiscal year 2002. If a State believes that it can more than double the numbers and desires to establish yearly increments to do so, we will work with them on this effort.

The Regional Office/State consultations on the increments will begin after the preliminary FY 1997 baseline is agreed upon and approved by the Regional Office and transmitted to the Central Office (October 15, 1997). The baseline will be made final after the submission of the final AFCARS data for FY 1997 (November 14, 1997). Central Office statisticians and other relevant staff are available for consultation upon request by the Regional Offices for the review of increments. The plan for increments should be transmitted to the Central Office by November 30 1997.

Final Baseline and Increments

By February 15, 1998, the Central Office statisticians will provide the Regional Offices with the number of adoptions finalized from October 1, 1996 to September 30, 1997, and which were reported to AFCARS not later than the submittal for the reporting period ending September 30, 1997, and the number of guardianships which were completed from October 1, 1996, to September 30, 1997, and which were reported to AFCARS not later than the submmittal for the reporting period ending September 30, 1997.3

Those States which have been approved to use data other than AFCARS may revise their preliminary estimates based on additional information from the agreed upon data source(s) utilizing the agreed upon procedure. Revised figures should be submitted to the Regional Office by February 15, 1998. The final baseline must be approved by April 1, 1998.

States should develop procedures to measure their progress towards reaching the established increments. These procedures should be finalized and submitted to the Regional Office by July 1, 1998. It is recognized that as experience and knowledge are gained, States may choose to amend or supplement their procedures or change their incremental targets. The Regional Offices should work with the States in accomplishing this and then notifying Central Office. To reiterate, it would be the actual number of a State's adoptions, not the proposed increments, that would determine awards.

If for any reason initial baselines are not determined for a State for FY97, a State may choose to establish initial baselines in any year up to and including FY 2002. However, only AFCARS data can be used after FY 1997.

The following matrix indicates how the baselines and incremental targets for adoption and guardianship may be structured. This chart assumes the same information and achievements as the previous chart, but adds the incremental targets for adoption and guardianship and the goals and achievements for guardianship.

STATE XYZ	FFY 1997	FFY 1998	FFY 1999	FFY 2000	FFY 2001	FFY 2002
Adoption Baseline		100	130	130	131	165
Incremental Targets - Adoption		115	130	150	175	165
Guardianship Baseline		30	34	44	50	54
Incremental Targets - Guardianships	35	34	44	50	54
Total Baseline -- Adoption & Guardianship	130	164	174	181	219
TOTAL -- Incremental Taargets	140		169	195	228	260
*Total # Adoptions^ Legalized**	100	130	128	131	165	210
Total # Guardianships Approved	30	34	44	50	54	59
Total Placements	130	164	172	181	209	269@

* See previous matrix, row titled "Total # of Adoptions."

@ The goal of doubling the number of children placed in permanent homes has been exceeded, and would be considered achieved by any combination of adoptions and guardianships which total or exceed 260, in this illustration.

TECHNICAL ASSISTANCE:

The Department recognizes the need to provide the best information available to agencies, courts, institutions and professionals who make key decisions daily about children's futures. The President has requested from the Congress $21 million for FY 1998 and an additional $10 million for each of the following two years to develop and implement a technical assistance strategy. Some of the specific activities the Department expects to undertake, assuming the funds are appropriated, include:

Providing technical assistance to child welfare agencies and to courts to implement an outcome-focused approach based on the best interests of the child, permanency, timeliness, and quality of care.
Developing and disseminating materials such as:

model guidelines for family assessment;
guidelines for State legislation relating to terminating parental rights and guardianship;
legislative options for States developing stand-by guardianships for children with terminally ill parents;
curricula for collaborative training with agencies, attorneys, and judges;
effective judicial and agency practices;
recruitment and family development models;
information for courts and agencies related to the Multiethnic Placement Act(as amended) and the Indian Child Welfare Act;
guidelines for conducting administrative reviews; and
information on the adoption tax credit.
Convening Regional forums to encourage peer-to-peer exchanges of information and successful strategies.
Awarding grants to multi-State and intrastate collaboratives (operated by the States or other entities) that encourage placements across geographical boundaries, and to local collaboratives designed to recruit families for children with special needs.

INQUIRIES TO: ACF Regional Administrators

________________________________________

James A. Harrell
Acting Commissioner
Administration on Children, Youth and Families

Attachments & Endnotes

Attachment: Outline for Regional/State Consultation

Endnotes:

1. Under the AFCARS rules, States should enter their data into the system within 60 days of the event, entrance into or exit from foster care, finalization of adoption, etc. Accordingly, approximately 25% of each year's adoption data are not entered into the system and submitted to DHHS until the submittal date (May 15) for the reporting period following the end of the fiscal year (October through March). Thus final 1998 data does not become available until May 15, 1999. Subsequent data processing and verification makes it difficult to award the incentive funds prior to the last quarter of the Federal fiscal year. See also footnote # 3, below.

2. See The Flow of Adoption Information from the States published by the National Center for State Courts, 1994, for a discussion of this source of data and the courts as a source of adoption data. Data from vital statistics and the courts generally do not contain information on title IV-E status, on the child's special needs and whether or not the adoption was from a public agency. These sources will probably have to be used in conjunction with other data.

3. H.R. 867, as currently drafted, requires timeframes inconsistent with the submission and processing of AFCARS data. Accordingly, the ACF has requested a technical amendment to the bill; if it is accepted, the balance of this paragraph should read as follows:

: "FY 1997 AFCARS finalized adoption and guardianship data submitted not later than the sumittal for the reporting period ending March 31, 1998, will be made available to the States during June 1998, so that the final FY 1997 baseline may be determined and approved by August 1, 1998. Those States which have been approved to use data other than AFCARS may revise their preliminary estimates based on additional information from the agreed upon data source(s) utilizing the agreed upon procedure. Revised figures should be submitted to the Regional Office by June 15, 1998. The final baseline must be approved by August 1, 1998."