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Legislators and LAO press CDSS on CWS CARES schedule, spending and federal enhanced participation rate
Summary
CDSS officials told the Senate Budget Subcommittee No. 3 that CWS CARES version 1 is in final development under a new "holistic design" approach and that a federal project demonstration is scheduled in mid-May to inform whether the project will return to enhanced federal participation.
Department of Social Services and Office of Technology officials updated the Senate Budget Subcommittee No. 3 on the California Automated Response and Engagement System (CWS CARES), the state's replacement for its legacy Child Welfare Services Case Management System (CWS/CMS).
CDSS said version 1 development is in final stages after the project shifted to a "holistic design" approach to reduce later rework and increase user engagement. Project staff said a federal demonstration for Administration for Children and Families reviewers was scheduled for the week of May 15 and that the department expects feedback within 60 days about returning the project to the enhanced federal financial participation (FFP) rate. The enhanced rate (historically about 50% federal share under CCWIS standards) affects the federal-state funding split for development costs; without enhanced participation the federal share would fall back to roughly 25% to 27%.
CDSS and technology partners said schedule adjustments and deeper user-engagement activities shifted some development into fiscal year 2025-26. Office of Technology staff said much of the work to complete the version 1 core build, training and county readiness activities will occur in 2025-26, and production pilot activities are planned before an October 2026 go-live. CDSS said it has been operating with internal savings to offset higher General Fund costs while awaiting federal approval but currently had no plan to offset a prolonged loss of enhanced federal participation beyond the current savings.
The Legislative Analyst's Office recommended the Legislature alter the 2025-26 funding approach by lowering the initial appropriation and increasing allowable augmentations, thereby subjecting a larger share of the project's total budget to satisfactory progress and heightened legislative oversight; LAO emphasized it would continue discussions with the administration to identify appropriate numbers without impeding project progress.
Why this matters: CWS CARES is the foundational IT system for child-welfare casework, payment and federal claiming. Schedule shifts and federal approval outcomes directly affect state costs, federal reimbursement rates and the department's ability to meet other policy milestones that depend on CARES functionality (for example, tiered-rate automation). Legislators expressed frustration about multi-year scheduling changes and past underspending on the project; LAO urged closer legislative oversight of future augmentations and progress milestones.
Next steps: CDSS will demonstrate the project to federal partners in May, aim to receive feedback within 60 days, continue county readiness work and coordinate monthly updates with legislative staff; LAO said it will continue negotiating oversight and funding mechanics with the administration.
