DHHS presents child-welfare budget shift toward prevention, highlights Family First investments

Chairman Deaver and members of the Senate Appropriations Committee heard a briefing from the Department of Health and Human Services’ Children and Family Services unit on the agency’s budget, funding sources and program redesign, including Family First Prevention Services, kinship supports and qualified residential treatment program use.

Kelsey Lehi, licensing unit administrator for Children and Family Services (CFS), told the panel the division relies on a mix of federal dollars (including Title IV-E) and state general fund dollars and that roughly 88% of the division’s budget is passed through to providers.

Lehi said Title IV-E eligibility remains a major offset to state spending. “The IV-E numbers are about 42 percent tribal IV-E cases and then of that number 2 58 percent of those cases are state funded,” she said, explaining that the federal FMAP and IV-E rules determine cost shares. Lehi added that IV-E eligibility thresholds remain low, reflecting older AFDC standards in federal rules.

Why it matters: the CFS presentation framed a multi-year shift from higher-cost placements to prevention and family-based care. Committee members were shown data CFS said demonstrate fewer out-of-state placements (the agency said there are currently zero children placed out of state) and higher use of kinship and family foster care, changes officials linked to the Family First Prevention Services Act and other redesign work.

Budget and program details

- Funding mix: Lehi said the division’s “primary funding sources are Title IV-E federal dollars” and state general fund dollars, with roughly a 50/50 split in some program lines. She emphasized that most CFS dollars flow directly to provider contracts and day-to-day service delivery.

- Kinship ND: CFS described Kinship ND as a prevention program funded under Family First. Lehi said the kinship reimbursement program provides up to $800 per child to help relatives who take in a child with short-term needs (clothing, bedding and similar expenses). “It's just up to $800 to support the reimbursement program,” she said.

- Costs across the continuum: CFS provided examples of monthly costs by placement type. Lehi cited an average monthly cost for QRTP placements in state fiscal year 2024 of roughly $8,000 per child and noted that the deeper a child is into the system, the higher the monthly cost. She also said most children (the division’s slide cited 95%) are in the least-restrictive setting available.

- QRTPs and facility changes: Lehi said Family First implementation reduced reliance on congregate care and created federal criteria for QRTPs (accreditation, trauma-informed clinical models and placement time limits). She said North Dakota’s facilities and providers — including Home on the Range and Dakota Boys and Girls Ranch — adapted to the federal standards and that the state was among the earlier adopters of Family First models.

- Adoption delinked funds and legal representation: Lehi and agency budget staff discussed “delinked” adoption funds — federal savings states may reinvest — and showed a plan to redirect those dollars into post‑adoptive services, guardianship supports, workforce stipends and similar programs. Agency staff described a proposed legal representation pilot included in the executive budget: roughly $700,000 total (a 50/50 federal/state split in the material shown) to contract for family legal representation in two positions, to be run in partnership with the state defender’s office and other providers.

- CHINS and juvenile diversion: committee staff and HHS fiscal staff said the House added $750,000 for juvenile diversion services into House Bill 1012; Jessica Thomason (HHS) confirmed the addition and said the appropriation was meant to support juvenile diversion tied to CHINS/truancy policy discussions. (The committee transcript includes discussion and staff confirmation but does not record a committee vote on HB 1012 during the hearing.)

Population, equity and tribal relationships

- Disproportionate representation: CFS reported that Native American children constitute a high share of the foster-care population (presentation slides reported about 51% of children in care). The division said tribal Title IV-E agreements produce an 83/17 federal/state reimbursement split for tribal Title IV-E cases, and that tribal child protection practice remains under tribal CPS rules when tribes assert jurisdiction.

- Placement preference and ICWA: Lehi noted the Indian Child Welfare Act (ICWA) placement preferences apply when a child is an enrolled member of a tribe. She said the zone or the tribe may request tribal jurisdiction for a case and that tribal social service offices deliver child-welfare services within tribal jurisdictions.

Staffing, redesign and performance

- Licensing and standardization: Lehi described centralizing licensing functions within CFS (historically conducted at the county/zone level) and said centralization improved consistency for foster-home licensing statewide.

- Safety framework and prevention: the division described adoption of a safety‑framework practice model (safety, prevention, permanency, well-being) and showed data CFS said indicate fewer long-term congregate placements, fewer out-of-state placements and increased use of prevention services and treatment foster care.

- Metrics and outcomes: presenters highlighted quarterly tracking of placement types, time in care (slides cited federal timelines, including a 12-month federal goal to return children to parents where possible) and increased exits to reunification, kinship and adoption in recent years.

What was asked and what remains open

Senators pressed CFS on several issues. Senator Cleary asked whether the zone-based structure makes licensing work easier or harder; Lehi said the zone-to-state redesign improved consistency and that she would follow up with comparative cost information. Senator Davidson asked whether pandemic-era changes affected some trend lines (for example, parent incarceration); Lehi cautioned against speculation while noting pandemic-era disruptions contributed to trends. Committee members repeatedly requested more granular roll-ups for how delinked adoption dollars would be spent and asked the agency for line-item breakout and reports to appropriators.

Ending

CFS officials told the committee they can supply further detail on funding breakdowns, placement cost averages and the composition of Title IV-E cases. The division briefed the committee on a multi-year redesign that agency staff say has reduced reliance on congregate placements while increasing prevention and kinship supports.