The COVID-19 pandemic delivered a staggering blow to the U.S. economy, leaving millions of Americans unemployed. Low-income families were hit particularly hard and continue to struggle as the recovery rate for low-wage jobs lags behind that for high-wage jobs.
Prolonged periods of unemployment for low-income families carry a number of risks, most notably an increased threat of involvement with Child Protective Services due to conditions related to poverty. At a time when poor families are most in need, however, hundreds of millions of taxpayer dollars intended to help them are instead being used to prop up the child welfare bureaucracy.
The federal Temporary Assistance for Needy Families, or TANF program, is designed to help poor families achieve self-sufficiency through financial assistance and work opportunities.
Under TANF, taxpayer dollars are sent to the states to allow them to design and implement programs targeted at achieving four broad goals:
- Enabling children to be cared for in their own homes or the homes of relatives.
- End welfare dependence by increasing work and marriage.
- Reduce out-of-wedlock pregnancies.
- Encourage family formation.
Texas spends approximately one-third of its TANF dollars on child welfare services provided through the Department of Family and Protective Services. Of this, more than half is spent on administrative expenses, staffing and operations rather than direct services to children and families. In 2019, for instance, the state spent more than $118 million in TANF dollars on CPS staffing and an additional $35.9 million on department employee benefits. Roughly $10.8 million in TANF dollars were spent on information technology.
While it should be noted that the department’s single largest TANF expenditure is payments associated with the care and treatment of children in the foster care system, Texans are right to question why taxpayer dollars intended to support struggling families are being redirected to functions unrelated to this purpose. Is this the most efficient use of these funds? More importantly, if this money were spent on helping needy families rather than on administrative expenses and filling budget gaps, how many children could avoid ending up in foster care?
These questions are especially important considering the department is requesting a net budget increase of $89.4 million in state funds going into one of the tightest budget cycles in recent memory. Before approving this request, the 87th Legislature should take a close look at department spending and whether expenditures are achieving optimal outcomes for children and families. One tool the Legislature can use to aid in this analysis is known as an efficiency audit.
Unlike regular financial audits that only look at an agency’s balance sheet, efficiency audits go deeper to determine whether CPS expenditures are actually achieving the agency’s desired outcomes. The power of efficiency audits lies in their ability to drive better results while simultaneously achieving cost savings.
Oregon recently conducted an efficiency audit of its child welfare system to great success. Like Texas, Oregon was threatened with a federal lawsuit over the poor conditions in its foster care system. But unlike Texas, Oregon avoided the lawsuit due in large part to the reforms generated by the audit. The most striking improvement Oregon made was achieving the return of nearly 100 foster children who had been placed in expensive and dangerous out-of-state psychiatric facilities.
A similar audit of the Texas child welfare system would help the state comply with federal court orders in the ongoing foster care lawsuit by identifying waste, highlighting areas where expenditures are not generating the desired results, and ensuring that more money goes directly toward the primary goal of helping children and families.
Families across Texas are struggling due to the effects of the COVID-19 pandemic. When the Legislature convenes in January, it will be faced with difficult decisions concerning the state’s finances. While spending cuts are necessary to help Texans recover from the pandemic, these cuts need not come at the cost of helping those in need. Rather, the 87th Legislature can simultaneously rein in spending while improving how we care for our most vulnerable citizens by ensuring that money intended to help families and children actually gets to those in need of support rather than to wasteful bureaucracy.