Report 2015-502 Recommendation 3 Responses

Report 2015-502: Follow-Up—California Department of Social Services: Although Making Progress, It Could Do More to Ensure the Protection and Appropriate Placement of Foster Children (Release Date: July 2015)

Recommendation #3 To: Social Services, Department of

To ensure that counties' use of foster family agency placements is justified, Social Services should take action to implement the recommendation we previously made in our 2011 audit. Specifically, Social Services should continue working to revise its rates paid to foster family agencies and to ensure that it has reasonable support to justify each rate component, especially the administrative fee it currently pays these agencies.

Annual Follow-Up Agency Response From December 2017

On January 31, 2017, All County Letter (ACL) 17-11 provided information regarding Phase II implementation of the Home-Based Family Rate Structure. Phase I Implemented January 1, 2017 which required all FFAs to assess current and potential foster families using a Resource Family Approval (RFA) process. All rates now are determined based on a Level of Care Protocol described in ACL 17-11, which will justify the placement in any resource family including a FFA. The administrative component of the rate continues to be supported using FFA cost reports which captures the appropriate and allowable activities with the additions of the two new components to fund the RFA and services and supports. Phase I of the Rate Structure has been implemented. Phase II will be fully implemented by December 1, 2017 per ACL 17-11 and is fully automated in the SAWS.

Link to ACL 17-11: http://www.cdss.ca.gov/lettersnotices/EntRes/getinfo/acl/2017/17-11.pdf

  • Estimated Completion Date: December 2017

California State Auditor's Assessment of Annual Follow-Up Status: Partially Implemented


Annual Follow-Up Agency Response From November 2016

CDSS has issued All County Letter (ACL) 16-79, dated September 22, 2016, which describes the phased-in implementation of the new Home-Based Family Care (HBFC) rate structure for FFAs. Two components have been added to capture the new activities: Resource Family Approval and Services and Supports. The administrative component remains the same. Cost reports will be modified to track the new costs. The new HBFC rate structure will now standardize the rates paid to all resource families regardless of the HBFC setting; i.e., placed in a county resource family approved home or in an FFA. The child/youth's need for services will no longer be limited to the placement types. Additionally, FFAs will now expand their scope of services and supports to relatives and non-FFA homes.

  • Estimated Completion Date: July 2017

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented


1-Year Agency Response

Assembly Bill (AB) 403 requires Foster Family agencies (FFAs) to meet new program standards which include providing services to relative caregivers and county licensed homes, upon request by the county, and making available core services to children/youth. FFAs will also be required to become accredited by a nationally recognized accreditation agency. Since the authorization of AB 403, CDSS has released a revised rates structure with the May Revision budget on May 13, 2016 (Attachment 3). The revised rate structure creates a new basic rate which is applicable to all foster families including county licensed foster homes and relatives. Rates will be paid based on an assessment of the level of need. The rates structure was developed in accordance with the following framework:

- Rates will be a prospective pre-determined amount.

- Reasonable methods will be used for quantifying the costs of changes to the system.

- The rate structure is based on the needs of the youth and level of care.

- CDSS is committed to collecting cost data to quantify anticipated costs of the program changes, but budget realities may also impact the final rate setting revisions.

There are a considerable number of pre-implementation activities yet to be completed between now and January 1, 2017. CDSS will be issuing guidance to the providers and counties by July 2016, announcing the rates structure and rate amounts, revising costs reports in order to capture costs and revenue at a more detailed level and providing technical assistance to assist agencies with the transition. CDSS will continue to work with providers, stakeholders and counties.

  • Estimated Completion Date: January 1, 2017
  • Response Date: June 2016

California State Auditor's Assessment of 1-Year Status: Partially Implemented

Although Social Services provided us with its revised rates, it still needs to demonstrate that it has reasonable support to justify each rate component, as we recommended.


6-Month Agency Response

Assembly Bill (AB) 403 was passed in October 2015 and modifies the program expectations of foster family agencies as part of the continuum of home-based family settings. The revised rate system for Foster Family Agencies (FFAs) is being structured to support the new program changes outlined in AB 403. Pursuant to AB 403, a core set of services will be made available to all children placed in home-based family settings, without regard to the placement type (i.e. FFAs certified homes, county licensed homes and relatives). Placement decisions and services will be based on the needs of a child or youth and not prioritized by placement type. CDSS held six FFA/Continuum of Care Reform rates workgroup meetings from April 2015 through August 2015. The input obtained from these meetings provided valuable information for CDSS's consideration in developing the rate methodology, and offered suggested methods for reasonable documentation to justify the various components of the FFA rate, such as making revisions to the cost reports, exploring the value of provider time studies, and making modifications to FFAs program statements. CDSS will continue to work with stakeholders, counties, and foster care providers to implement a relevant and comprehensive rate system that meets the intent of the Continuum of Care/AB 403 and addresses the concerns identified in the 2011 audit.

  • Estimated Completion Date: January 2017
  • Response Date: December 2015

California State Auditor's Assessment of 6-Month Status: Partially Implemented


60-Day Agency Response

CDSS continues its efforts to change state statutes and regulations, and to revise and establish a new foster family agency rate methodology to be implemented as part of Continuum of Care Reform (CCR). These ongoing reform efforts also will establish a process to make placement decisions based on the needs of a child or youth and not on the placement type. Moreover, CDSS continues its work with stakeholders, counties, and foster care providers to revise the rate structure, so that it is relevant and comprehensive and aligned with the requirements of CCR and Assembly Bill 403.

  • Estimated Completion Date: January 2017
  • Response Date: September 2015

California State Auditor's Assessment of 60-Day Status: Partially Implemented


All Recommendations in 2015-502

Agency responses received are posted verbatim.


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