Misplaced Priorities? More Potential Savings at DHS

38 Cents of Every Shelter Care Dollar Spent on Unused Beds

At a time when budgets are tight and programs are being cut within the Department of Human Services, one would assume that Juvenile Shelter Care would be a place where excess capacity could be trimmed to help maintain other services. That is not the case.

This means 38 percent of the state’s budget for helping troubled youth through this program does not help kids.

Through the first 10 months of FY 2009, the state has spent $5.25 million of general fund dollars on shelter care services to Iowa juveniles. Of this amount, just over $2 million was spent on unused beds. This means 38 percent of the state’s budget for helping troubled youth through this program does not help kids.

During the 81st General Assembly, legislators encouraged the Department of Human Services to implement a new payment system for Shelter Care services. Rather than pay on a fee for service manner, the state instead guaranteed payment for a certain number of beds each day. The state also created an emergency pool of bed days that could be used when a facility was over its guaranteed amount.

But during the administrative rules process, shelter care facility administrators and Senator Jack Hatch contended that the emergency pool of 25 beds were supposed to be guaranteed as well. So, the state began paying for 277 beds each day at Iowa’s 22 youth shelters.

Usage of these beds has been a growing problem for DHS. Since 2005, the juvenile justice system has been reducing the usage of shelters. Even during its first year in action, the number of guaranteed beds was more than the actual used. Now in 2009, usage has dropped significantly. In April, only 177 beds were used on a daily basis. One facility used just 2.97 beds per day while being guaranteed payment for 8.

DHS has worked to reduce the number of guaranteed beds. Since last fall, DHS has worked out agreements with the shelters to reduce the number of guaranteed beds to 248 a day. Some facilities, like Children’s Square in Council Bluffs, have taken some of their payments for unused beds and developed alternative programs for troubled youth.

With the excess capacity in the system, one would expect it would be an area where belts could be tightened. That’s not the case with shelter care. Not only was the shelter care funding held harmless in the FY 2010 budget, the program received a mysterious $500,000 earmark in the Standings Bill. The increase was made at the behest of the Governor’s office, who also demanded that $10 million of the Culver Stimulus I-Jobs package be dedicated for the construction or renovation of shelter facilities.

While other DHS programs are being reduced and DHS facilities face potential layoffs, it is very surprising that one program would get a 10.6 percent increase in funding. But Shelter Care was the big winner in the child welfare budget. The big question is whether kids in Iowa will benefit from this windfall.