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ARIZONA STATE LEGISLATURE

Fifty-first Legislature – Second Regular Session

SENATE HEALTH AND HUMAN SERVICES AND HOUSE OF REPRESENTATIVES REFORM AND HUMAN SERVICES COMMITTEE OF REFERENCE

FOR THE REVIEW OF

THE DEPARTMENT OF CHILD SAFETY - CHILDREN SUPPORT SERVICES

Minutes of Interim Meeting

Monday, November 10, 2014

House Hearing Room 1 -- 9:30 a.m.

Co-Chairman Townsend called the meeting to order at 9:36 a.m. and attendance was noted by the secretary.

Members Present

Senator Nancy Barto, Co-Chairman                           Representative Kelly Townsend, Co-Chairman

Senator David Bradley                                               Representative Sally Gonzales

Senator Katie Hobbs                                                   Representative Juan Mendez

Senator Kelli Ward                                        

Senator Kimberly Yee

Members Absent

                                                                                    Representative Steve Montenegro (excused)

Representative Steve Smith

Co-Chairman Townsend advised that the meeting will focus on three special reports required by Laws 2013 with regard to expenditures for children support services.

PRESENTATION ON CHILDREN SUPPORT SERVICES BY THE OFFICE OF THE

AUDITOR GENERAL

Foster Home Recruitment-Related Services Contracts

Jeremy Weber, Performance Audit Manager, Arizona Office of the Auditor General (Auditor General), explained that the reports primarily address historical performance by the former Division of Children, Youth and Families within the Arizona Department of Economic Security, which became the Arizona Department of Child Safety in May 2014.  He said that in today's presentations, the term "Department" refers to both the former division and the new department. 

Mr. Weber provided a handout encompassing special reports on foster home recruitment-related services contracts, transportation services and emergency and residential placements (Attachment 1).  He reviewed the following areas (Attachment 1, Pages 1 through 14):

• Expenditures for recruitment, retention, training, licensing and tracking of foster homes
• Assessment of whether the Department's contract process is the most appropriate means to provide these services
• Best performance measures

Mr. Weber stated that the Auditor General recommends that the Department improve the contracting process for foster home recruitment by implementing the following measures:

· Solicit input from all appropriate stakeholders in developing the new contracts

· Develop clearly defined and realistic performance measures that reflect contract goals

· Develop policies and procedures for monitoring contractor performance

· Modify the contracts' incentive structure

· Continue contacting other states, experts and consultants for assistance

Mr. Weber advised that the Department is in agreement with the Auditor General's findings and is in the process of implementing the necessary changes to develop new contracts.

Co-Chairman Barto inquired if the Department considered how other states manage their service contracts.  Mr. Weber responded in the affirmative.

Senator Ward questioned if Department policies include measures that incentivize contractors on the amount of occupied foster beds.  Mr. Weber answered in the affirmative but related that he is uncertain if the same measures will be included in future service contracts.

RESPONSE BY THE ARIZONA DEPARTMENT OF CHILD SAFETY

Eric Jorgensen, Deputy Director, Arizona Department of Child Safety (Department), concurred with the Auditor General's report and stated the necessity to improve processes for contracting foster home recruitment-related services.  He advised that the Department is currently in the process of rebidding contracts and responded to questions on the following topics:

• Performance guarantees
• Best practices of other states – Tennessee model, etc.
• Procurement measures
• Contract monitoring
• Institutional changes - embedding the Auditor General's recommendations
• Recruitment – faith-based interaction
• Contract development
• Placement types and procedures
• Contract rate structures and sanctions

PRESENTATION ON CHILDREN SUPPORT SERVICES BY THE OFFICE OF THE

AUDITOR GENERAL (CONTINUED)

Transportation Services

Marc Owen, Performance Audit Team Leader, Arizona Office of the Auditor General (Auditor General), reviewed the transportation services report addressing expenditures for transportation including detailed funded service costs, best performance measures and safeguards for processing transportation payments (Attachment 1, Pages 15 through 28).  He pointed out that as of October 2013, the Department contracted with 12 providers to transport children and families in the child protective services system.  These services include transportation to and from family visits, medical or counseling appointments, school, or other appointments as court-ordered or determined in clients' case plans.  Transportation providers are required to complete background and criminal records checks.  Mr. Owen noted that four out of five western states do not contract for transportation services for their child protective service clients and generally provide transportation through some combination of case workers, state workers, volunteers and/or foster parents.

Mr. Owen stated that the Auditor General recommends that the Department improve the contracting process for transportation services by developing and implementing the following:

• Performance measures to manage transportation services
• Accidents or safety incidents per vehicle mile
• No-shows per scheduled trip
• Average trip length and response time
• Performance measurement system
• Assess additional measures for managing and evaluating transportation services
• Define performance measures
• Develop and implement policies and procedures for using performance measurement data
• Increase safeguards to reduce risk of improper payments
• Formal written payment policies and procedures
• Prepayment review of invoiced services
• Supervisory review prior to payment

In closing, Mr. Owen advised that the Department is in agreement with the findings and plans to implement the recommendations in a different manner.

Senator Ward questioned if there is any indication of fraud or abuse in the transportation services system.  Mr. Owen answered in the negative, stating that the areas reviewed did not show or indicate any overpayments.

RESPONSE BY THE ARIZONA DEPARTMENT OF CHILD SAFETY

Eric Jorgensen, Deputy Director, Arizona Department of Child Safety, responded to Members' questions and related the following information:

• The Department is considering using request for proposals to manage transportation service contracts.
• Western states without transportation services utilize caseworkers which have much lower case loads than Arizona.
• The Department is considering using volunteers, as used in neighboring states, to provide transportation services.
• The transportation contract is a joint contract with the Arizona Department of Economic Security and is currently out for bid.
• The Department performs background checks on all drivers, performs spot audits and investigates all complaints concerning drivers.
• The Department only pays contracted drivers one way when clients do not show up for appointments.
• Case files are noted as noncompliant when clients do not show up for transportation or appointments.

PRESENTATION ON CHILDREN SUPPORT SERVICES BY THE OFFICE OF THE

AUDITOR GENERAL (CONTINUED)

Emergency and Residential Placements

Jeremy Weber, Performance Audit Manager, Arizona Office of the Auditor General (Auditor General), reviewed the Department's use of emergency and residential placements, also known as congregate care (Attachment 1, Pages 30 through 56).  He advised that the report addresses expenditures for congregate care placements, reasons for the use of these placements as opposed to foster homes and possible methods to reduce future congregate care placements.  There are three types of congregate care settings:

• Emergency shelters – provide temporary care upon removal
• Group homes – provide longer-term care and supervision
• Residential treatment centers – provide care, supervision and treatment for children with emotional, behavioral and substance abuse issues

Mr. Weber stated that congregate care is the least-preferred placement option for children placed in out-of-home care.  According to statute and Department policy, children removed from their homes should be placed in the least restrictive, most family-like setting possible such as with a relative or in a licensed foster care home.  He said that child welfare experts indicate that congregate care may be an appropriate placement for children in transition between placements or who require residential treatment; however, congregate care use should be limited because it can delay permanency and contribute to negative child welfare outcomes.  Mr. Weber said that the Department should continue taking actions to reduce the use of congregate care as the number of Arizona children placed in out-of-home care has increased considerably.  The number increased from approximately 10,000 children in September 2009 to nearly 16,000 children in March 2014.

Mr. Weber reviewed the growth of all out-of-home care placement types.  National data demonstrates that the growth in Arizona's out-of-home care and congregate care is contrary to most western states' experiences with the exception of Montana and Nevada.  Additionally, Arizona has increased the use of congregate care for younger children.  The percentage of children under the age of 13 with congregate care as their predominate placement type, where a child has spent more than 50 percent of his/her time during the first removal from home, increased from 4.9 percent in 2009 to 8.4 percent in 2013.  Mr. Weber related that children in Arizona are spending more time in congregate care with the median number of days increasing from 56 to 79 between federal fiscal years 2010 and 2012.  Increased congregate care use has contributed to a considerable increase in expenditures.  The Department's expenditures nearly doubled between fiscal years 2009 and 2013, from nearly $40 million to more than $79 million. 

Mr. Weber reviewed the following factors that contributed to an increase in congregate care use:

• Inadequate supply of foster homes
• Not enough foster homes for older children, special needs children and sibling groups
• Lack of oversight of foster home recruitment
• Department could better support foster families
• Various Department practices
• Permanency planning
• Use of independent living and long-term foster care as permanency goals
• Insufficient permanency planning activities
• Providing foster parents with inadequate or inaccurate information about children
• Systemic Department problems reported by the Governor's CARE Team
• Heavy caseloads
• High staff turnover
• Insufficient training
• Culture that did not adhere to standard processes
• Inadequate access to behavioral health services.
• Inadequate support in family setting could result in placements disruptions
• Foster parents face difficulty in obtaining behavioral health services for chidren

Mr. Weber informed the Committee that the Auditor General reviewed literature on the efforts of Connecticut, Maine, Tennessee, Virginia and New York City to reduce congregate care use.  Tennessee reformed its congregate care system as a result of a lawsuit settled in 2001.  Actions taken by Tennessee include the following:

· Revising foster home recruitment to find homes for teenagers and children with special needs

· Implementing a validated child assessment tool

· Implementing policies to limit congregate care entry and length of stay

· Implementing a continuum model for contracted placement services

· Using performance-based contracts

Tennessee has reported that the percentage of children in out-of-home care that were placed in congregate care decreased from 22 percent in 2001 to 9 percent in 2009.

Mr. Weber said that in Arizona, the Department has taken some of the following actions to reduce congregate care use:

· Improving foster home recruitment

o Working with faith-based groups

o Improving performance-based contracts

o Commissioning a study on foster home closure and retention

o Using federal funding to help redesign the congregate care system

o Partnering with Arizona State University (ASU) on several improvement areas

In conjunction with the Department's plan, the Auditor General's recommendations include:

· Continue to assess potential actions to reduce the number of children entering out-of-home care

· Develop and implement a comprehensive approach to reduce congregate care use considering strategies used by other jurisdictions and reasons for increased congregate care use

· Monitor and assess outcomes of efforts

Mr. Weber stated that the Department is in agreement with the Auditor General's findings and plans to implement the recommendations.  In response to a question, he advised that the Auditor General did not specifically look at figures on the amount of children that were solely placed in congregate care.

RESPONSE BY THE ARIZONA DEPARTMENT OF CHILD SAFETY

Eric Jorgensen, Deputy Director, Arizona Department of Child Safety, reiterated that the Department agrees with the Auditor General's findings.  He responded to Members' questions and concerns with regard to the following matters: 

• Failure to keep up with an increased population
• Deficient foster care recruitment efforts
• Poor support for foster care providers
• Failure to accurately communicate children's needs to foster care providers
• Standards for foster care providers
• Deficient behavioral health services
• Trepidations with therapeutic foster care
• Poor incentive system
• Support for social workers/case workers
• Guidelines for kinship care
• Placements in congregate care
• Disruptions in the case system
• Sanctions for behavioral health services
• Partnership with ASU for training
• Retention and hiring practices for staff
• Reduction of case workers' work load
• Standards for cultural training such as the federal Indian Child Welfare Act
• Backlog of cases
• Standards for caseloads
• Reduction of congregate care

Mr. Jorgensen related that the Department will continue to look at ways to improve case management services to meet forthcoming challenges and achieve standard case load goals.

Co-Chairman Townsend requested Heather Franek to address the Committee.

Heather Franek, Inspector General, Arizona Department of Child Safety (Department), gave background and advised that her role is to bring in a continuous quality improvement program and institute a "high performance culture" within departmental operations.

Senator Ward questioned the accountability measures for the Department.  In response, Ms. Franek advised the Committee of the Department's reporting procedures and outlined the procedures of the assessment and audit groups to ensure accountability of internal and external vendors.

Co-Chairman Townsend complimented Ms. Franek on her work ethic and occupational experience.

Without objection, the meeting adjourned at 11:28 a.m.

__________________________________________

Abby Selvey, Committee Secretary

November 20, 2014

(Original minutes, attachments and audio on file in the Office of the Chief Clerk; video archives available at http://www.azleg.gov)

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                        COR - SENATE HHS AND HOUSE RHS

                        November 10, 2014

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