Options for Allocating State Child Welfare Dollars

to Wisconsin CountiesPrepared for the Wisconsin Department of Children and Families

Christine DurkinAdam Hartung

Sara KockJennifer Russ

Paul Waldhart

Problem● Current formula may not match resources to

need as effectively as it could

● To form our alternatives:● Literature review● Surveys● Interviews

● With other states● With Wisconsin counties

Overview● Current policy

● Alternatives

● Recommendation

● Cross-county collaboration

Background● State supervised, county administered system● Differences in demand for services

10 Lowest Poverty Counties

10 HighestPoverty Counties

Background● Funded with state and local dollars● Declining state revenues● Limiting property tax levy

Current PolicyIn 1986, Wisconsin allocated child welfare money based on:1.Total population2.Residents enrolled in Medicaid3.Property values

20111986

State Child Welfare Dollars

Alternatives● We examined two alternatives:

1. Risk Factor: More risk = More $2. Workload: More demonstrated need = More $

● We considered but eliminated:3. Updating the current formula4. Percent-For-Service: DCF reimburses counties a

percentage of service costs 5. Performance-Based Contracting: DCF purchases

outcomes, counties sell outcomes

Alternative #1: Allocation based on Risk Factors

Step 1County need for child welfare services = β1Number of children in single

parent families + β2Number of children living in poverty + ԑ(error)

Step 2County risk number = 0.33(Number of children in single-parent families

in county) + 0.67(Number of children living in poverty in county)

β1 / (β1+ β2) = 0.33 and β2 / (β1+ β2) = 0.67

0.33 + 0.67 = 100%

Alternative #1: Allocation based on Risk Factors

Step 1County need for child welfare services = β1Number of children in single

parent families + β2Number of children living in poverty + ԑ(error)

Step 2County risk number = 0.33(Number of children in single-parent families

in county) + 0.67(Number of children living in poverty in county)

Step 3County allocation = (County risk number / Sum of risk numbers for all

counties) x Total CFA funding available

Alternative #1: Allocation based on Risk Factors

Step 1County need for child welfare services = β1Number of children in single

parent families + β2Number of children living in poverty + ԑ(error)

Step 2532= 0.33 (400) + 0.67 (600)

Step 3$866,400= (532 / 35,000) x $57 million

Alternative #2: Allocation based on Workload

More cases and/or more labor-intensive cases = More $

●Children’s Research Center developed a framework●DCF would:

1. Calculate time spent on each service area per case2. Use eWiSACWIS to determine the number of cases 3. Calculate county workload (time per case x # of cases)4. Allocate funds based on county’s proportion

Example County Workforce Estimate

County Service Area

Number of Cases per

Month

Worker Hours/Caseper Month

Total Worker Hours

CPS IntakeScreened-In CPS Reports 127 1.1 140Screened-Out CPS Reports 75 0.3 22

CPS Investigation/AssessmentInvestigated Cases w/out Substantiation 95 8.1 773

Investigated Cases with Substantiation 23 13.4 309

Child and Family ServicesNew Child Case 13 9.5 127Ongoing Child Case 14 6.6 1,139

Total County Workload Demand in Worker Hours 2,512 hrsCounty Proportion of State Aid 6.2%

Goals● Effective

● Matches need with resources

● Minimal potential for cheating

● Equitable● Measures need

regularly● Equal spending per

person

Estimated County Allocation per Person, by Percent of County Population Living in Poverty

CURRENT POLICY

Estimated County Allocation per Person, by Percent of County Population Living in Poverty

CURRENT POLICY RISK FACTOR FORMULA

WORKLOAD METHOD

Goals● Effective

● Matches need with resources

● Minimal potential for cheating

● Equitable● Measures need

regularly● Equal spending per

person

● Lower Additional Cost to DCF ● Acceptable to Counties

● Methodology ● Magnitude of gains &

losses● Number of gainers &

losers

Magnitude of Changes in County Allocation, by Percent of County Population Living in

PovertyRISK FACTOR FORMULA WORKLOAD METHOD

Percent of County Population Living in Poverty

Highest Poverty Counties

Lowest Poverty Counties

Highest Poverty Counties

Lowest Poverty Counties

Changes in County Allocation, by Percent of County Population Living in Poverty

Percent of County Population Living in Poverty

RISK FACTOR FORMULA WORKLOAD METHOD

Decreased CFA No Change in CFA Increased CFA

Highest Poverty Counties

Lowest Poverty Counties

Highest Poverty Counties

Lowest Poverty Counties

Implementation Considerations● Leaky bucket

● Receiving more state dollars may reduce county funding

● County levy limits● Larger burden on counties who cannot raise revenue● Solution: “No harm” exemption

● Large fiscal impacts on counties● Significant declines would be hard to absorb● Solution: Gradual implementation

RecommendationRisk Factor Formula●Effective:

● Matches resources to need● Data manipulation unlikely

●Equitable: ● Updated yearly ● Counties with similar poverty rates treated alike

●Low additional cost to DCF●Counties likely will find it moderately acceptable

County Interviews and SurveysIn-person interviews with county Human Services Departments● 2 small (Marquette and Richland)● 3 medium (Dodge, Rock, and Sauk)● 2 large (Milwaukee’s BMCW and Dane)

On-line survey to all counties on cross-county collaborations for CPS● 11 responses from across the state

County Interviews and Surveys

Four themes from counties1.The importance of block grants and flexibility 2.The role of local decision-making3.Differences between BMCW and counties4.Constraints of state mandates

Cross-County Collaborations

Suggestions for collaboration●High-Risk or Catastrophic Case Insurance Pool●Access and intake●Training

● Foster care training for parents● Specialized and high-cost services ● Use of teleconferencing for training

Cross-County Collaborations

Some counties still won’t give up local control●Screen-in discretion ●Out-of-county institutions ●Debate over where to locate a new regional service hub or institution

Cross-County CollaborationsHow DCF can facilitate ●“Lay the groundwork” for the first meeting ●Provide information collected by DCF●Reduce or help navigate state mandates●If DCF provides new funds:

● Help fund portions of specialized staff ● Grants for start-up services/institutions for

multi-county collaborations

Cross-County Collaborations

Problems to avoid●Too many changes at once●Poor budgeting and unrealistic expectations●Lack of buy-in among stakeholders●Unaccountable governing bodies

Conclusion● We explained:

● CPS demands and funding● Two alternatives● Themes from county interviews and surveys

● We recommend:● DCF adopt the Risk Factor Formula● DCF encourage and facilitate cross-county

collaboration

For further informationContact the La Follette School’s publications office at

608-263-7657 or publications@lafollette.wisc.edu

Or see www.lafollette.wisc.edu/publications/workshops.html

Thank you

APPENDIX SLIDES

Alternative #1Risk Factor Coefficient Summary

Risk Factors Coefficients Standard Error

Number of Children Living in Poverty 0.0795*** (0.0129)

Number of Children in Single-Parent Families 0.0386** (0.0157)

Constant 14.83 (19.66)

Number of Observations 72 Counties

R-Squared 0.974*** p<0.01, ** p<0.05, * p<0.1Source: Authors, calculated using DCF (2010) and ACS (2010) data

Estimated County Allocation per Person Under Current Policy, by Percent of County Population

Living in Poverty

Estimated County Allocation per Person Under Risk Factor Formula, by Percent of County

Population Living in Poverty

Estimated County Allocation per Person Under Workload Method, by Percent of County

Population Living in Poverty

Magnitude of Changes in County Allocation using The Workload Method, by Percent of

County Population Living in Poverty

Note: 1st quartile are those counties with highest levels of poverty

Highest Poverty Counties

Lowest Poverty Counties

Changes in County Allocation using Risk Factor Formula, by Percent of County Population

Living in Poverty

Note: 1st quartile are those counties with highest levels of poverty

Highest Poverty Counties

Lowest Poverty Counties

Changes in County Allocation using Workload Method, by Percent of County Population

Living in Poverty

Note: 1st quartile are those counties with highest levels of poverty

Highest Poverty Counties

Lowest Poverty Counties

Background● State supervised, county administered system● Differences in demand for services

Background● Funded with state and local dollars● Declining state revenues● Limiting property tax levy

Estimated County Allocation per Person, by Percent of County Population Living in Poverty

CURRENT POLICY

Estimated County Allocation per Person, by Percent of County Population Living in Poverty

CURRENT POLICY RISK FACTOR FORMULA

WORKLOAD METHOD