In 2018, Congress passed the Family First Prevention Services Act (FFPSA), expanding federal funding for evidence-based prevention services and limiting federal funding for congregate care placements. FFPSA aims to rebalance the system toward more prevention and preservation, and away from foster care and congregate care when possible. While a handful of states have already implemented the act, most are still in planning stages.

One question that states are asking, particularly considering the economic impact of the COVID-19 pandemic, is: “As we implement FFPSA, if we successfully reduce foster care placements and expenses, can we retain savings to invest in more prevention services to children and families?”

With proper planning actions, yes, states will be able to retain savings for future investment. In many states, budgets are allocated and managed through program-specific line items, such as for foster care, congregate care, family preservation services, and administration accounts. Funds that aren’t spent by the end of the fiscal year revert to the state general fund. This limits executive branch spending, preserves spending authority for state legislatures, and helps generate savings at the end of the fiscal year for rainy day funds or other emergency spending needs.

Reinvestment of savings is not required under FFPSA, but rebalancing the system toward more prevention and preservation—which is better for children than foster care or congregate care—will take sustained effort and funding over time. To create mechanisms to reinvest savings, state child welfare agencies could advocate for a relatively simple state budgetary fix: line item funding transferability.

Integrating line item funding transferability into planning can improve savings as well as long-term planning. A budgetary statement, such as “the Human Services Secretary may transfer funds between Foster Care Programs and Family Preservation Programs, provided that transfers shall not be made for administrative costs, as necessary and under an allocation plan,” included somewhere within the budget would allow states the flexibility needed to right-size their services and spending over time. Child welfare agencies will need to work directly with their state legislature to negotiate what is feasible in their state. Options to consider include requiring a report or allocation plan for the legislature, or creating a transferability cap such as no more than 10 percent of the line item. These recommendations may appeal to legislators while also improving conditions for agencies.

In the past, child welfare budgets have been hit hard by state funding reductions. Line item funding transferability could be one way to preserve funds and maintain momentum for rebalancing the system. While it is likely that most states will not see immediate savings from FFPSA, starting to advocate for this change now could pay off in the future.

Public Consulting Group (PCG) has a range of resources to support implementation of FFPSA. Visit our website to learn more: http://campaigns.pcgus.com/human-services/family-first/