Additional Child Welfare Funding and Restructuring Raises Additional Questions

NDHHSOn Friday, the Nebraska Department of Health and Human Services announced that the state will be providing an additional $5.5 million in the current fiscal year ending June 30, 2011 and an additional $7.4 million in the next fiscal year starting July 1, 2011 to the state’s faltering child welfare privatization effort.  Also on Friday, KVC, one of the remaining two lead agencies in the privatization, announced that it eliminated 75 positions.  This announcement was reminiscent of one made in October of 2010 when HHS announced a “one-time” injection of $19 million (above contract levels) into the privatization and a reduction in HHS staff.

Nebraska Appleseed has had concerns from the beginning that the reform is underfunded and strongly believes that an investment of resources in the right places is needed.  However, we question the injection of additional funds into a system that is clearly struggling, particularly at a time when current program and fiscal audits have not yet been completed.  In addition, following a legislative session in which significant cuts were made to valuable programs and services, when providers are facing significant rate-cuts and other uncertainties, and a number of subcontractors still have not been paid on sizable outstanding debts from terminated child welfare contracts, we have questions about where this additional money is coming from.  Friday’s announcement also heightens our concerns about whether there is adequate infrastructure to manage the system safely and effectively.

The state is at a juncture to reevaluate this reform and construct a child welfare system that truly meets the needs of children and families.  The Legislature’s Health and Human Services and Performance Audit Committees are currently conducting evaluations of the system and a financial audit is underway.  Stakeholders have come together and have given their time to discuss tough issues and make recommendations.  Unfortunately, despite rhetoric to the contrary, HHS continues to plow forward without the benefit of evaluation, in disregard of community input, and in denial of the harm that this privatization has caused – to children and families in the system, to the state’s service array and local community-based agencies, and to private agency and state employees.  We once again call upon the state to slow down and stabilize the system and to allow pending assessments to be completed before continuing down this path.

Press Coverage: Lincoln Journal Star | Omaha World Herald

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