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DSS Announces Mid-Year Budget Reductions

December 28, 2009

The Louisiana Department of Children & Family Services today, in response to Executive Order BJ 2009-21, announced that it was reducing its spending of state general funds by $14.1 million, while at the same time ensuring that certain core areas - such as ensuring children are safe - will be protected from budget reductions.

"In light of the current budget situation, DSS faces tough decisions at a time when our citizens need our vital, core services the most," DSS Secretary Kristy Nichols said. "With a newly announced mid-year budget shortfall and a projected $2 billion in shortfalls over the next few years, DSS has worked hard over the past year to reduce costs, streamline services to improve overall efficiency and develop a plan for investing our available funds in those core services that are vital to the needs of Louisiana families and children."

The overall budget for DSS is approximately $1.1 billion dollars, with the majority being federal funding. Only 17 percent of DSS' overall budget comes from state general funds, or $186 million.

In identifying savings, DSS examined contracts, realigned resources, reduced additional overhead and administrative costs and identified programs where funding had been under utilized.

Reductions in state general funds (SGF) identified to cover the mid-year reduction include:

Office of Community Services - $5.84 million

• Use of federal funds for allowable child welfare expenses thereby freeing state general fund dollars - $3.6 million
• Utilization of federal funds for foster and adoptive recruitment activities - $794,954
• Reduction in non-essential portions of OCS contracts, administrative costs and under-utilized programs- $1.5 million

Office of Family Support - $6.43 million

• Means of financing swap of federal dollars for SGF for child care and TANF administrative costs - $3.48 million
• Elimination of child care assistance for individuals searching for employment. Clients previously eligible for child care assistance through Job Search may be eligible for TANF cash assistance, which would automatically make them eligible for child care assistance - $1.9 million
• Elimination of incentive bonus payments for family day homes to register with DSS and the Department of Education (DoE) Food Program. DSS continues to encourage Family Child Day Care Providers to enroll in the DoE Food Program and anticipates adding this as a requirement for CCAP registration in the future - $300,317
• Reduction in administrative costs through hiring freeze - $757,764

Office of the Secretary - $1.14 million

• Reduction in contracts, administrative costs and funding held for fiscal year close - $948,906
• Reduction in leased spaces - $392,942

Louisiana Rehabilitation Services - $706,845

• Reduction in leased space, administrative costs, and staff positions, along with the implementation of a hiring freeze - $366,954
• Increased use of statutory dedication funds and client cost share - $339,891

"By carefully examining our core operations, business practices and the way clients access our services, we have learned that by reorganizing, re aligning and modernizing our department, we can increase access to services for our clients and emerge as a stronger, more efficient department in the face of state budget difficulties," Nichols said.

For example, DSS plans to network with community partners to increase options for clients in accessing services, while at the same time consolidating offices and reducing additional costs.

In addition, the loss of stimulus and surplus funds will result in shortfalls in child care funding in future budget years. In anticipation of these shortfalls, DSS is looking at taking steps that might include waiting lists, increasing co-payments, and increasing participation hours.