Administration for Children’s Services (ACS) - New York City Council

Hon. Adrienne Adams Speaker of the Council

Hon. Diana Ayala Deputy Speaker and Chair of the Committee on General Welfare

NEW YORK CITY COUNCIL FINANCE DIVISION

Tanisha S. Edwards, Esq. Chief Financial Officer and Deputy Chief of Staff to the

Speaker

Nathan Toth Deputy Director

Eisha Wright Deputy Director

Paul Scimone Deputy Director

Dohini Sompura Unit Head

Daniel Kroop Senior Financial Analyst

Report on the Fiscal 2023 Preliminary Plan and the Fiscal 2022 Mayor's Management Report for the

Administration for Children's Services (ACS)

March 9, 2022

(Report prepared by Daniel Kroop)

Finance Division Briefing Paper

Administration for Children's Services

Table of Contents

ACS Fiscal 2023 Budget Snapshot...........................................................................................................1 ACS Financial Plan Overview...................................................................................................................1 Financial Summary..................................................................................................................................1

Federal COVID and Stimulus Funding ................................................................................................. 2 Fiscal 2023 Preliminary Budget Changes................................................................................................4 Headcount .............................................................................................................................................. 6 Fiscal 2023 Preliminary Mayor's Management Report .......................................................................... 7 Preliminary Capital Commitment Plan for Fiscal 2022 to Fiscal 2026....................................................8 Budget Issues and Concerns ................................................................................................................... 9 Appendices ........................................................................................................................................... 12

A. Budget Actions in the November and Preliminary Plans .......................................................... 12 B. Contract Budget.........................................................................................................................13 C. Program Areas ........................................................................................................................... 13

Adoption Services..........................................................................................................................13 Alternatives to Detention..............................................................................................................14 Child Care Services ........................................................................................................................14 Child Welfare Support ...................................................................................................................15 Department of Education Residential Care...................................................................................15 Foster Care Services ......................................................................................................................15 Foster Care Support.......................................................................................................................16 General Administration .................................................................................................................16 Head Start......................................................................................................................................17 Juvenile Justice Support ................................................................................................................17 Non-Secure Detention...................................................................................................................18 Placements ....................................................................................................................................18 Preventive Homemaking Services.................................................................................................19 Preventive Services .......................................................................................................................19 Protective Services ........................................................................................................................20 Secure Detention...........................................................................................................................21 D. Fiscal 2022 Council Initiatives and One-Time Funding.................................................................21

Finance Division Briefing Paper

ACS Fiscal 2023 Budget Snapshot

$2.72 B FY23 Budget

7,073 Headcount

($7.4 M)

FY22 Adopted Budget

524 Vacancies

($17.7M)

FY22 Current Budget

($8.6M)

Overtime Reduction PEG

Administration for Children's Services

($30.1M) PEGs

(227) Headcount Reductions

($17.9M) Revenue Swaps

Reduce Foster Care & Close to Home Slots

$511.3M Capital Committment Plan FY22- FY26

110 Projects

$65M Funding Moved to Outyears

ACS Financial Plan Overview

ACS' Fiscal 2023 Preliminary Budget of $2.72 billion represents 2.8 percent of the City's $98.5 billion budget. ACS' budget decreases by $7.3 million from the Fiscal 2022 Adopted Budget of $2.73 billion, which is the net result of achieving the Administration's three percent savings target and baselining $20 million in City tax-levy (CTL) for Fair Futures, a program that has been a longstanding priority of the Council. Key savings ? also known as Programs to Eliminate the Gap (PEGs) ? include reducing 227 vacancies in headcount, rightsizing foster care and Close to Home slots to align with smaller populations, and reducing overtime. The budget makes other recurring revenue maximizing efforts and realigns some budget codes to more accurately reflect actual year-to-date spending.

Overall, ACS is not being given greater resources to conduct its work in the recovery from COVID-19, however there are programmatic additions like Fair Futures, combined with continued positive practice developments that are improving some key metrics in areas like foster care and preventive services. Recent Council priorities, like the Family Enrichment Centers (FECs) expansion and PEG targets like overtime reduction, are also incorporated. Juvenile justice and child care could see further plan actions in the Fiscal 2023 Executive Budget as the new Administration places its imprint on the service continuum of the nation's largest child welfare agency.

Financial Summary

The Fiscal 2023 Financial Plan presents a $2.72 billion budget for the Administration for Children's Services (ACS), and projects that agency spending will decrease 1.8 percent to $2.69 billion by the end of the Plan period in Fiscal 2026. As part of the PEG program, City funding decreases between Fiscal 2022 and Fiscal 2023, then remains relatively unchanged across the plan as those savings are baselined. The plan reflects a slight decrease in projected federal and State revenues beginning in Fiscal 2023, although reimbursements from State and federal grants are reflected on a lag, mainly due to the State and federal fiscal years differing from the City's.

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Finance Division Briefing Paper

Administration for Children's Services

Federal COVID and Stimulus Funding

ACS received a total of $46.7 million in federal COVID-related stimulus funding through two federal laws, the American Rescue Plan Act of 2021 (ARPA) and the Coronavirus Response and Relief Supplemental Appropriations Act of 2021 (CRRSAA), which impact Fiscal 2021-2025.1 This federal funding is primarily allocated over the plan to support the Indirect Cost Rate initiative, with $9.1 million in each year, for a total of $45.5 million. The Indirect Cost Rate Initiative intends to support 100 percent of the administrative overhead costs for social service community-based organizations (CBOs), and has total baselined funding of $14.9 million. In addition to the Indirect Cost Rate initiative, ARPA and CRRSSA supported $1.2 million for COVID-19 vaccines and COVID-related leave. Overall, federal COVID aid at ACS is not a major part of its Financial Plan, although ACS's portion of the Indirect Cost Rate initiative commitment is not funded past Fiscal 2026.

ACS also received additional revenues from the Families First Coronavirus Response Act (FFCRA) and the Coronavirus Aid, Relief, and Economic Security Act (CARES) Act. Through FFCRA, ACS received $8 million in payments in Fiscal 2020 to increase the Title IV-E care and maintenance federal reimbursement rate as a result of the 6.2 percent Federal Medical Assistance Percentages (FMAP) increase.2

Through the CARES Act, ACS received smaller amounts for COVID-related spending that is not necessary in future fiscal years. CARES funding includes $3.8 million from a Department of Justice (DOJ) grant funded as part of the Coronavirus Emergency Supplemental Funding, which the Mayor's Office of Criminal Justice (MOCJ) applied for and received on behalf of the City. DOJ funds cover costs in ACS' detention facilities, including nursing support at Crossroads and Horizon, tablets for students, contracted online tutoring, cleaning, and PPE. There is $1.4 million in DOJ funding in the Fiscal 2022 budget, with none in the outyears. A total of $1 million in CARES Act supplemental Title IV-B funding was used for technology and software to support remote participation in caseworker visits, family team meetings and court hearings, additional family support and assistance, and PPE.

The subsequent table shows ACS' Preliminary Budget by program area, type of spending, funding, and headcount as well as in Fiscal 2020-2022. The outyears, Fiscal 2024-2026, are largely similar to Fiscal 2023, however with deeper PEG savings.

Personal Services (PS) spending decreases by $22.2 million between the Fiscal 2022 Adopted Budget and Fiscal 2023 Preliminary Budget, driven by the headcount removal of 227 vacant full-time positions and overtime rightsizing. The vacancy reduction does not impact front-line roles like Child Protective Specialists (CPS) who conduct child welfare investigations. Other Than Personal Services (OTPS) spending increases by $14.8 million, driven by the baselining of Fair Futures and the regular intra-City transfer of funds for homemaking services from the Human Resources Administration (HRA).

The budget's baselining of Fair Futures reflects a long-standing Council priority now enhanced by the Mayor, who has stated the goal of expanding services through age 26, up from age 21 currently.3 Investments by the previous Mayoral Administration, such as the expansion of preventive Family Enrichment Centers (FECs), are maintained in the budget. Close to Home placement slots are removed

1 Independent Budget Office, Federal Covid Relief Spending, available online at: . 2 Federal Medical Assistance Percentages (FMAP) are the percentage rates used to determine the matching funds rate allocated annually to certain medical and social service programs by the federal government. 3 Office of the Mayor of the City of New York, The Blueprint to End Gun Violence, January 24, 2022, available online at: .

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Finance Division Briefing Paper

Administration for Children's Services

in a Program to Eliminate the Gap (PEG), and no additional resources are added to alternatives to detention.

ACS Financial Summary

Dollars in Thousands

FY20

FY21

FY22

Preliminary Plan

Actual

Actual

Adopted

FY22

FY23

Spending

Personal Services

$552,940

$536,355

$537,722

$515,025

$515,506

Other Than Personal Services

2,093,420 1,997,752 2,193,874

2,226,955 2,208,727

TOTAL

$2,646,360 $2,534,107 $2,731,596 $2,741,980 $2,724,233

Budget By Program Area

Adoption Services

$221,242

$204,613

$273,522

$236,144

$236,180

Alternatives To Detention

6,265

5,756

1,041

1,141

1,041

Child Care Services

541,262

474,689

521,172

510,353

503,187

Child Welfare Support

85,990

85,281

54,125

54,079

54,059

Dept. of Ed. Residential Care

94,363

89,597

96,201

96,201

96,201

Foster Care Services

557,948

543,860

620,745

640,776

637,274

Foster Care Support

41,745

41,542

51,700

51,729

51,700

General Administration

177,487

191,054

212,441

226,615

226,707

Head Start

358

7,252

0

2,967

0

Juvenile Justice Support

8,746

14,654

16,030

16,694

16,030

Non-Secure Detention

19,217

16,539

18,359

18,367

18,367

Placements

122,109

111,984

149,464

135,566

136,484

Preventive Homemaking Svcs.

25,644

26,511

23,652

29,707

29,707

Preventive Services

346,838

340,699

328,059

329,946

328,297

Protective Services

338,939

324,906

317,931

341,979

342,076

Secure Detention

58,207

55,170

47,153

49,715

46,923

TOTAL

$2,646,360 $2,534,107 $2,731,596 $2,741,980 $2,724,233

Funding

City Funds

$948,271

$818,340

$995,229

$951,300

$889,098

State

834,212

821,408

704,299

754,132

746,414

Federal - Other

858,922

890,495 1,031,726

1,030,140 1,082,325

Other Categorical

140

0

0

0

0

Intra City

4,817

3,864

343

6,408

6,397

TOTAL

$2,646,360 $2,534,107 $2,731,596 $2,741,980 $2,724,233

Budgeted Headcount

Full-Time Positions

7,039

6,847

7,300

7,073

7,073

Full-Time Equivalent Positions

20

16

51

53

53

TOTAL

7,059

6,863

7,351

7,126

7,126

*The difference of Fiscal 2022 Adopted Budget compared to Fiscal 2023 Preliminary Budget.

*Difference FY22-FY23

($22,216) 14,853

($7,362)

($37,342) 0

(17,985) (66) 0

16,529 0

14,266 0 0 8

(12,981) 6,055 238

24,145 (230)

($7,362)

($106,131) 42,115 50,599 0 6,055

($7,362)

(227) 2

(225)

The current Fiscal 2022 budget, at $2.74 billion, remains higher than the Fiscal 2023 or Fiscal 2022 Adopted Budgets. This is the net of increases in the November 2021 Plan (reflecting State revenues for Fair Futures and the indirect rate modification) and PEGs introduced in the Fiscal 2023 Preliminary Budget.

Changes by Program Area

? Adoption Services decreases by $37.3 million between the Fiscal 2022 Adopted Budget and the Fiscal 2023 Preliminary Budget, due to the ongoing decrease in families receiving the subsidy payments.

? Child Care Services decreases by $18 million, driven by the absence of $9.2 million in one-time funding for low-income Special Child Care Funding (SCCF) vouchers. An itemized list of Fiscal 2022 Council initiatives and one-shots is listed in Appendix D.

? Foster Care Services increases by $16.5 million due to the baselining of Fair Futures.

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