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State study recommends changes to combat rising costs of Children's Services Act

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A state commission recommended sweeping changes Monday to the Children’s Services Act following years of cost increases without a proportional increase in the number of children being served.

The Children’s Services Act was enacted in 1992 to streamline funding for at-risk children in Virginia. The legislation pooled state money from four child-serving agencies and eight different funding streams, including those from the education, juvenile justice, behavioral health and social services departments. Localities were required to create interdisciplinary teams to coordinate services to at-risk children and eliminate duplication between providers.

In fiscal year 2019, the CSA program served 15,645 children statewide at a cost of $427 million. In fiscal year 2020, which ended June 30, the state served 360 fewer children at a cost of about $447 million, according to data from the Office of Children’s Services, the department that oversees the program statewide.

These cost increases, which have continued since 2014, prompted the Joint Legislative Audit and Review Commission to study CSA and the use of private special education day school placements, which has largely been the driver in spending growth.

CSA spending on private special education placements has more than doubled since 2010, growing about 14% per year from $81 million to $186 million. It accounts for nearly half of all CSA spending.

Children who are placed in private special education are those who cannot be adequately served by their public school system. Sometimes these children exhibit disruptive behaviors like kicking, screaming, throwing objects, acting aggressively toward other students or staff, destroying property or running away. Some students in private placements have been diagnosed with autism or other learning challenges that require more intensive instruction.

Local school districts’ individualized education program teams, with input from parents, make placement decisions for students with disabilities or behavioral challenges. CSA programs do not have control over these placements but are required to pay for them, according to the JLARC study.

The Virginia Department of Education is also responsible for inspecting and licensing private day schools and publishing their performance measures.

JLARC staff recommended the General Assembly consider transferring the funds used for special education placements to the Department of Education by July 1, 2022. JLARC staff said that the department would most likely need to implement the plan in phases, but that it would be a more logical administrator of these funds.

The commission also found that the Office of Children’s Services does not have the authority to ensure that local programs are working effectively.

Virginia law does not require the office to regularly monitor local CSA programs and only allows it to step in when a program is noncompliant. Audits are completed every three years but do not assess the effectiveness of local programs. According to JLARC, some local programs view CSA as a funding source, rather than as a comprehensive planning tool for at-risk children as the legislation intended.

JLARC recommended requiring the Office of Children’s Services to actively monitor and work with local programs to improve their performance and outcomes.

One focus could be the localities’ use of so-called nonmandated funds. Children served by CSA are categorized into mandated and nonmandated populations. The state and localities are required to pay in full for the services for children in the former category, who include foster children, children at risk of being placed in foster care, and students with disabilities in private special education day schools.

Localities can choose to serve nonmandated children, who often have similar issues but present less severe risks. According to JLARC’s study, nearly half of Virginia’s localities choose not to provide nonmandated services — most of them smaller, rural localities that cannot afford the local match required by the state.

By not serving these children, a locality could be delaying intervention for at-risk youth whose problems could eventually escalate. About two thirds of the localities who serve nonmandated children reported that the services prevented children from moving into a mandated category, which are typically more expensive.

JLARC recommended the General Assembly require localities to use all of the funds allotted for nonmandated children. The commission estimated this would result in localities serving an additional 346 children statewide at a cost of about $1.6 million in state and local spending.

Alison Graham is The Secular Society Investigative Fellow at The Roanoke Times.


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Alison Graham covers Roanoke County and Salem news. She’s originally from Indianapolis and a graduate of Indiana University.

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