[Federal Register: January 11, 2008 (Volume 73, Number 8)] [Proposed Rules] [Page 2081-2142] From the Federal Register Online via GPO Access [wais.access.gpo.gov] [DOCID:fr11ja08-13] [[Page 2081]] ----------------------------------------------------------------------- Part II Department of Health and Human Services ----------------------------------------------------------------------- Administration for Children and Families ----------------------------------------------------------------------- 45 CFR Part 1355 Adoption and Foster Care Analysis and Reporting System; Proposed Rule [[Page 2082]] ----------------------------------------------------------------------- DEPARTMENT OF HEALTH AND HUMAN SERVICES Administration for Children and Families 45 CFR Part 1355 RIN 0970-AC23 Adoption and Foster Care Analysis and Reporting System AGENCY: Administration on Children, Youth and Families (ACYF), Administration for Children and Families (ACF), Department of Health and Human Services (DHHS). ACTION: Notice of proposed rulemaking (NPRM). ----------------------------------------------------------------------- SUMMARY: The Administration for Children and Families (ACF) is proposing to amend the Adoption and Foster Care Analysis and Reporting System (AFCARS) regulations at 45 CFR 1355.40 and the appendices to part 1355 to modify the requirements for States to collect and report data to ACF on children in out-of-home care and in subsidized adoption or guardianship arrangements with the State. This proposed rule also implements the AFCARS penalty requirements of the Adoption Promotion Act of 2003 (Pub. L. 108-145). DATES: In order to be considered, we must receive written comments on this notice of proposed rulemaking on or before March 11, 2008. ADDRESSES: Interested persons are invited to submit written comments regarding this proposed rule via regular postal mail to Kathleen McHugh, Director, Division of Policy, Children's Bureau, Administration on Children, Youth and Families, Administration for Children and Families, 1250 Maryland Avenue, SW., Suite 800, Washington, DC 20024. Please be aware that mail sent to us may take an additional 3-4 days to process due to changes in mail handling resulting from the anthrax crisis of October 2001. If you choose to use an express, overnight, or other special delivery method, please ensure first that they are able to deliver to the above address. You may also transmit comments electronically via e-mail to CBComments@acf.hhs.gov or via the Internet at: http://www.regulations.gov. We urge you to submit comments electronically to ensure they are received in a timely manner. Please be sure to include identifying information on any correspondence. To download an electronic version of the rule, you should access http://www.regulations.gov/. Comments will be available for public inspection Monday through Friday 8:30 a.m. to 5 p.m. at the above address by contacting Miranda Lynch at (202) 205-8138. Comments that concern information collection requirements must be sent to the Office of Management and Budget at the address listed in the Paperwork Reduction Act section of this preamble. A copy of these comments also may be sent to the Department representative listed above. FOR FURTHER INFORMATION CONTACT: Kathleen McHugh, Director of Policy, Children's Bureau, Administration on Children, Youth and Families, (202) 401-5789 or by e-mail at kmchugh@acf.hhs.gov. Do not e-mail comments on the Notice of Proposed Rulemaking to this address. SUPPLEMENTARY INFORMATION: The preamble to this notice of proposed rulemaking is organized as follows: I. Background on Foster Care and Adoption Data Collection II. Consultation and Regulation Development III. Overview of Major Revisions to AFCARS IV. Section-by-Section Discussion of NPRM V. Impact Analysis VI. List of Subjects I. Background on Foster Care and Adoption Data Collection In 1982, the Department, through a grant to the American Public Human Services Association (formerly the American Public Welfare Association), implemented the Voluntary Cooperative Information System (VCIS) to collect aggregate information annually about children in foster care and special needs adoption from State child welfare agencies. While some States reported data to VCIS, by 1986, Congress and other stakeholders recognized that there were a number of weaknesses in VCIS. Namely, VCIS was criticized for intermittent reporting by the States; the use of a variety of reporting periods; a lack of common definitions for data elements; a lack of timeliness of the data, poor data quality, and the collection of aggregate data which had limited analytic utility. As a result of these and other concerns, the President signed Public Law 99-509 on October 21, 1986, which in part added section 479 to title IV-E of the Social Security Act (the Act). Section 479 of the Act describes the series of steps that the Department of Health and Human Services (DHHS) was required to take to establish a national data collection system for adoption and foster care. We were required to develop a system that avoids unnecessary diversion of resources from agencies responsible for adoption and foster care and assures that the data collected is reliable and consistent over time and across jurisdictions through the use of uniform definitions and methodologies. Furthermore, the law required the system to provide comprehensive national information on the demographic characteristics of adopted and foster children and their parents (biological, foster and/or adoptive parents); the status of the foster care population (including the number of children in foster care, length of placement, type of placement, availability for adoption, and goals for ending or continuing foster care); the number and characteristics of children placed in or removed from foster care; children adopted or with respect to whom adoptions have been terminated; children placed in foster care outside the State which has placement and care responsibility; and, the extent and nature of assistance provided by Federal, State and local adoption and foster care programs and the characteristics of the children to whom such assistance is provided. The President signed into law the Omnibus Budget Reconciliation Act of 1993 (Pub. L. 103-66) on August 19, 1993. Public Law 103-66 provides States with the opportunity to obtain title IV-E funds to plan, design, develop, and implement a Statewide Automated Child Welfare Information System (SACWIS). On December 22, 1993, ACF published final rules to establish the AFCARS and implement SACWIS. In the AFCARS final rule we required States to submit certain data to us on a semi-annual basis about children in foster care and adoptions that involve the State agency. The rule required States that chose to develop a SACWIS to ensure that their system could report information to AFCARS. We also set forth data standards that each State must meet to be considered in compliance with the AFCARS requirements. States were required to report the first AFCARS data to us for FY 1995. However, it was not until FY 1998, when we implemented AFCARS financial penalties for a State not submitting data or submitting data of poor quality that the data became stable enough for ACF and others to use for a wide variety of purposes. The President signed the Adoption and Safe Families Act of 1997 (Pub. L. 105-89) in November 1997, which required the use of AFCARS data for two specific activities: The calculation of Adoption Incentive Payments (section 473A of the Act) and the Child Welfare Outcomes Annual Report (section 479A of the Act). Since that [[Page 2083]] time, data from AFCARS also has been used to provide samples for the Child and Family Services Reviews (CFSR) and title IV-E reviews; to develop outcome and performance measures for the CFSR, the Office of Management and Budget's Program Assessment and Rating Tool (PART) and the Government Performance and Results Act (GPRA); to calculate State allocations for the Chafee Foster Care Independence Program (section 477 of the Act); to generate short- and long-term budget projections; to conduct trend analyses for short- and long-term program planning; and to respond to requests for information from the Congress, other Federal agencies, States, media and the public about children in foster care and children being adopted. Due to a settlement of several States' appeals of AFCARS penalties, ACF discontinued withholding Federal funds for a State's failure to comply with AFCARS requirements in January 2002 (see ACYF-CB-IM-02-03). However, late in 2003 the President signed the Adoption Promotion Act of 2003 (Pub. L. 108-145), which required ACF to institute specific financial penalties for a State's noncompliance with AFCARS requirements. We notified States in ACYF-CB-IM-04-04 issued on Feb. 17, 2004, that we will not assess penalties until we issue revised final AFCARS regulations, the subject of this proposed rule. II. Consultation and Regulation Development In the preamble to the AFCARS final regulation issued in 1993, we indicated that we would revisit the regulations to assess how we may improve AFCARS (58 FR 67917). This proposed rule is the culmination of that process. We undertook an intensive review of every aspect of AFCARS in developing the proposals in this NPRM. We analyzed the types of technical assistance requested by and provided to States, our findings from AFCARS assessment reviews, and reports from the past several years issued by the Government Accounting Office (GAO) and the Department's Office of the Inspector General (OIG) on AFCARS-related issues. ACF also consulted with the public through a variety of focus groups and a Federal Register notice (68 FR 22386, April 28, 2003) seeking comments. More than 80 people participated in the focus groups, and over 40 individuals and groups submitted written comments in response to the Federal Register announcement. Thirty-two States, 15 national organizations and 20 interested members of the public provided comments through one or more of these mechanisms. During consultation we solicited feedback on: The specific strengths of AFCARS; The specific weaknesses of AFCARS or suggestions for areas of improvement, including ideas about how the suggested improvement could be made and how the Federal government could facilitate the changes; Data elements currently in AFCARS that could be deleted and any elements that should be added; Strategies to improve data quality for AFCARS, including the use of incentives; and How the AFCARS data files are structured and submitted. Many stakeholders recognized that AFCARS has considerable strengths that include, but are not limited to: The ability to produce timely reports that estimate the number of children in foster care and those being adopted; the ability to support in-depth analyses of case-level data; and the ability to generate information that had not been anticipated when AFCARS was established. However, commenters also noted that expansion of the use of AFCARS data has highlighted areas that need improvement. For example, there are substantive gaps in the areas covered by the current data elements such as information about adoption disruptions, the placement experiences of sibling groups, the demographics and assistance provided to children under adoption assistance agreements, where children are placed when they are placed out-of-State, and the identification of the different populations served by child welfare agencies (e.g. children in out-of-home care due primarily to their involvement with juvenile justice or their need for mental health services). In particular, stakeholders point out that data from AFCARS is insufficient to support expanded analysis of data for the CFSRs and other performance measures. Many commenters also believe that we need to refine some of the definitions of AFCARS data elements and their response categories (e.g. expand reasons for exit), and how these and other changes in data elements might be facilitated in the future. In addition to the need for new and refined data elements, stakeholders noted that the data structure of AFCARS may need to be revised to take advantage of advances in information technology and/or to make possible the utilization of a wider variety of analytical techniques. The section-by-section summary provides more discussion on how specific comments factored into our proposal. III. Overview of Major Revisions to AFCARS In this NPRM we are focusing our improvements on five general areas: Restructuring the data to capture more information over time; expanding the reporting populations; capturing greater detail on children in out-of-home care; improving the quality of data; and eliminating unnecessary data and inefficiencies in the data submission process. Restructuring Data We propose that AFCARS data support longitudinal data analysis by capturing more comprehensive information on a child's experiences in a State's foster care system. The existing AFCARS requires that States report some living arrangement, provider, and permanency information relative to the child's most recent experiences in his/her most recent foster care episode only. We propose instead, that States collect and report information on: (1) The timing and circumstances of each of the child's removals from home and placements in out-of-home care, (2) the timing and type of each permanency plan decision (e.g., reunification or adoption) made for a child, (3) the time span and nature of each living arrangement the child experiences while in foster care, (4) details on each foster family home provider, if applicable, and (5) the timing and circumstances of each of the child's exits from out-of-home care. Expanding Reporting Populations We propose to expand the foster care reporting population to include, generally, all children who have been placed away from their parents or legal guardians for whom the State title IV-B/IV-E agency has placement and care responsibility. In doing so, we are also renaming the reporting population as the ``out-of-home care reporting population.'' This reporting population includes children who are in living arrangements that are not traditionally considered foster care under our title IV-B and IV-E program rules. Children who are under the placement and care responsibility of the State agency and are placed in juvenile justice facilities and other living arrangements which are non-reimbursable under title IV-E such as psychiatric treatment facilities are included in the revised AFCARS out-of-home care reporting population. In the existing regulation, children who were in juvenile justice facilities and other facilities not traditionally considered [[Page 2084]] foster care were included in AFCARS in limited circumstances. We also have expanded our reporting population to include children who are the subject of a guardianship subsidy agreement, whereas these children are not currently reported to AFCARS. Capturing Greater Detail We have added and clarified a number of elements so States may provide us with greater detail on the demographics and circumstances of children in out-of-home care. These changes are designed to permit enhanced analysis of the factors that may affect a child's permanency and well-being and include: New elements that allow us to identify certain populations of children who are dealing with issues other than child maltreatment, such as children who are involved in the juvenile justice system prior to and during their out-of-home care stay and those who are out of their own homes to obtain mental health services; New elements for States to update information on the circumstances affecting the child and family during the child's out-of- home care stay; New elements that allow us to identify where more than one family member is in out-of-home care, such as sibling groups and minor parents who have their children with them in out-of-home care; New elements to better describe the household composition of the homes from which children are removed and the location and type of living arrangements in which children are placed by the State agency; Elements that tell us about a child's well-being including new elements on immunizations and educational performance as well as clarified elements on children's health, behavioral and mental health conditions; Revised and new elements that enhance our understanding of domestic and intercountry adoptions, prior adoptions and adoption disruptions, displacements and dissolutions; and, Revised and new elements designed to better track State and Federal financial support of foster care, adoption subsidies, adoption nonrecurring costs and guardianships. Improving Data Quality We propose to improve AFCARS data quality in several ways. First, we propose to clarify many existing element descriptions that stakeholders informed us were problematic. Second, we propose to strengthen our assessment and identification of errors within a State's data file. In particular, we are proposing to develop cross-file checks to identify defaults and other faulty programming that result in skewed data across a State's entire data file. Finally, we propose to implement penalties for States that do not meet our file and data quality standards for AFCARS consistent with section 474(f) of the Act. Eliminating Unnecessary Features We propose to eliminate a number of features in the AFCARS regulation that are no longer useful to us or the States. We propose to dispose of State reporting of summary adoption and foster care files, merge most currently reported adoption information into the foster care data file and take technical submission requirements out of the regulation. These major changes to AFCARS along with all other features of the proposed database are detailed in the section-by-section discussion below. IV. Section-by-Section Discussion of NPRM The reader should note that the proposed regulations will replace in their entirety the existing AFCARS regulations at 45 CFR 1355.40 and the appendices to part 1355. Although we are retaining certain requirements of the existing AFCARS, such requirements are often set forth in different and new sections or paragraphs in this proposed rule. 1355.40 Scope of the Adoption and Foster Care Analysis and Reporting System In section 1355.40 we propose a scope statement for AFCARS. The proposed scope statement explains which entities must report data to ACF and the data that those entities must report. Section 1355.40(a) In paragraph (a), we propose that all State agencies that administer titles IV-B and IV-E of the Act collect and report information to AFCARS. This is consistent with the existing scope of AFCARS and our legislative authority in section 479 of the Act. Currently, all States, the District of Columbia and Puerto Rico operate title IV-B and IV-E programs. Section 1355.40(b) In paragraph (b), we describe the scope of the AFCARS requirements. We propose that a State collect and submit to us, on a semi-annual basis, information on a child's experiences in out-of-home care and information on children under adoption assistance and guardianship subsidy agreements. The scope of the proposed requirements is broader than the current AFCARS in three significant ways. First, the scope of the AFCARS out- of-home care reporting population, currently known as the ``foster care'' reporting population has changed to include, generally, all children who are living away from their parents or legal guardians for whom the State agency has placement and care responsibility. Currently, the AFCARS foster care reporting population focuses primarily on children in foster care settings as defined by the title IV-B and IV-E programs only. Second, we are expanding the scope of certain information to include a child's entire historical and current experience in out-of-home care so that we can establish a more comprehensive and longitudinal database. Currently State agencies report to AFCARS limited information on a child's most recent and first foster care episode during the report period. Finally, we propose that States report on children involved in adoption agreements and guardianship subsidy arrangements on an ongoing basis. At the present time, State agencies report to AFCARS information on finalized adoptions in which the State agency was involved at the point of finalization only. In large part, we are expanding the scope of AFCARS data in response to overwhelming support for doing so from stakeholders and to meet our program needs. The full extent of these proposed changes is explained further in subsequent sections on the reporting population and data elements. A few commenters suggested that ACF also consider expanding the scope of AFCARS to require State agencies to collect and report detailed information on children who receive child welfare services in their own homes. We believe that requiring States to report data on these activities to AFCARS exceeds our existing legislative authority in section 479 of the Act. Even so, we wish to note that AFCARS is not the sole data-related activity in child welfare that ACF manages. Through the National Child Abuse and Neglect Data System (NCANDS), States voluntarily provide us with data on child maltreatment and the extent to which the State child protective services agency provides services. We encourage State agencies to use the same unique person identifiers in AFCARS and NCANDS so that we can understand to what extent children receive prevention services before they must enter out- of-home care. In addition, we have proposed a mandatory reporting system under the Chafee Foster Care Independence [[Page 2085]] Program (section 477 of the Act) which, in part, will require States to submit detailed information on the independent living services they provide to youth who are in foster care, or who have aged out of foster care (see 71 FR 40346). In that NPRM we propose to require States to use the same unique person identifier (child case or record number) for reporting a child's independent living services as they do for AFCARS. We believe, therefore, that we have adequate provisions for States to report on how they serve our nation's most vulnerable children and families without exceeding our legislative authority for AFCARS. Section 1355.40(c) In paragraph (c) we define the scope of out-of-home care for AFCARS purposes which serves as a basis for the out-of-home care reporting population. ``Out-of-home care'' refers to children who have been placed away from their parents or legal guardians for a period of 24 hours or more and for whom the State title IV-B/IV-E agency has placement and care responsibility, regardless of the child's living arrangement. This is different than our programmatic definition of foster care in 45 CFR 1355.20, and thus the scope of the current AFCARS foster care reporting population (see 45 CFR 1355.40(a)(2) and appendix A to part 1355, section II) in a number of ways. The most significant difference between the two terms is that the proposed AFCARS definition of out-of-home care will include children who are placed away from their parents for whom the State title IV-B/IV-E agency has placement and care authority, irrespective of their living arrangement. This stands in contrast to the foster care definition used for the title IV- B and IV-E programs in 45 CFR 1355.20 and policy in the Child Welfare Policy Manual Section, which incorporates traditional foster care settings only (e.g., foster family homes, child care institution and group homes). We believe it is essential to develop a definition of out-of-home care for the purpose of data reporting distinct from the definition of foster care for the Federal child welfare programs, to meet their separate goals. The programmatic definition of foster care is for the purposes of describing the population for whom States must meet Federal child welfare requirements for safety, permanency and well-being as described in titles IV-B and IV-E of the Act and 45 CFR 1355, 1356 and 1357. Nothing in this proposal changes to whom the Federal child protection requirements apply. AFCARS, on the other hand, has as one of its central goals as described in section 479 of the Act, the ability to provide comprehensive national information on the dynamics of children in the foster care system, including ``the status of the foster care population (including the number of children in foster care, length of placement, type of placement, availability for adoption, and goals for ending or continuing foster care),'' and ``the number and characteristics of children placed in or removed from foster care.'' Our experience with AFCARS is that the existing data on the number of children in foster care, the length of placements, and the characteristics of children as they move in and exit foster care is incomplete and often misleading without additional information about when children move from those out-of-home care living arrangements that are within the scope of foster care to detention facilities, psychiatric hospitals, assessment centers, and other facilities that are outside the scope of foster care. Particularly, as we have conducted AFCARS assessment reviews and CFSRs in many States, we have been challenged in pinpointing the scope of each State's foster care system and therefore, whether certain Federal child welfare requirements apply. By defining the AFCARS out-of-home care reporting population broadly, along with more specifically defining the type of living arrangements and circumstances of a child's stay in out-of-home care we believe that we can better track how and why children enter foster care, understand the dynamics of State foster care systems, and distinguish the subpopulation for whom State child welfare agencies are accountable to meet the Federal child protection requirements (section 422(b)(8)(A) of the Act). We have specified in this proposed regulation that for AFCARS, we are seeking information on children who are under the placement and care of the State agency and away from their parents for 24 hours or more. This timeframe has not changed. However, the timeframe was noted in an appendix to the regulation rather than in the regulation text itself. We see no reason to include children in AFCARS who have been out of their homes for fewer than 24 hours. The proposed regulatory definition of out-of-home care also clarifies that the term refers to children who are considered minors according to the State's age of majority. This proposal is consistent with existing AFCARS policy (Child Welfare Policy Manual 1.3) and our regulatory definition of children at 45 CFR 1357.10(c) for the programs under title IV-B of the Act. We understand that most States consider young people up to age 18 as children. Several States, however, consider older youth (i.e., up to age 21) who are in their placement and care responsibility as minors. 1355.41 Reporting Populations We propose to add a new section 1355.41 on reporting populations to this part. Section 1355.41(a) Out-of-Home Care Reporting Population In paragraph (a), we propose a new out-of-home care reporting population which identifies children States must include in an AFCARS out-of-home care data file. In general, we propose that State agencies must report information to AFCARS consistent with the AFCARS out-of- home definition; that is, all minor children who have been placed away from their parents or legal guardians for a period of 24 hours or more and for whom the State title IV-B/IV-E agency has placement and care responsibility. In subparagraphs (a)(1)(i) through (a)(1)(iv), we propose to expound on which children are included in the reporting population. Although some of the children described in these subparagraphs are covered implicitly in the reporting population as generally stated in paragraph (a)(1), the subcategories provide more detail on the scope of the reporting population. In subparagraph (a)(1)(i), we propose to clarify that the reporting population is inclusive of any child who is under the placement and care responsibility of another public agency that has an agreement under section 472(a)(2)(B) of the Act with the title IV-B/IV-E agency for the payment of foster care maintenance payments on the child's behalf. This provision is consistent with existing AFCARS regulations that define the foster care reporting population (Appendix A to 45 CFR 1355, Section II). Typically, State agencies enter these agreements with Indian tribes, and separate juvenile justice agencies or mental health agencies in order for the State to claim title IV-E on behalf of children who are otherwise eligible for the foster care maintenance payments program. These other public agencies do not submit information on children in the reporting population to ACF separately from the title IV-B/IV-E State agency. Rather, this information must be a part of the title IV-B/IV-E State agency's AFCARS submission. In subparagraph (a)(1)(ii), we propose to codify existing policy that a State [[Page 2086]] continue to collect and report information to AFCARS for as long as the State is making title IV-E foster care maintenance payments on the child's behalf, regardless of the State's age of majority (Child Welfare Policy Manual 1.3 2). Under the title IV-E program, the State is permitted to make foster care maintenance payments for young people who have attained 18 years of age, but not yet 19 years of age, who are full-time students expected to complete their secondary schooling or equivalent training before reaching age 19 (Child Welfare Policy Manual 8.3A.2 1). We acknowledge that this condition may require the State to report data beyond the State's age of majority as described in 1355.40(c). However, this provision is necessary to allow us to track the extent of assistance and the characteristics of all children for whom State agencies make Federal foster care maintenance payments consistent with section 479(c)(3)(D) of the Act. In subparagraph (a)(1)(iii), we propose to include in the out-of- home care reporting population a child under the State agency's placement and care responsibility who is in any living arrangement, regardless of whether that living arrangement is a traditional foster care setting. We explain that States are to include children in out-of- home care who are placed in settings such as detention facilities, psychiatric or other hospitals, and jails, but this is not an all- inclusive list. The specified facilities have been raised most frequently in questions by State agencies because some youth may transition in and out of traditional foster care settings and these facilities. We want to clarify explicitly that a child who is in a living arrangement that is not a traditional foster care setting is a part of the AFCARS out-of-home care reporting population if the child is away from his parents or legal guardians while under the State title IV-B/IV-E agency's placement and care, even if the child remains in that setting for the entire report period. We understand that, in practice, most State agencies may not have included these children in the AFCARS foster care population to date, since our current policy does not require this reporting. Our current policy requires only that a State report a child who moves from a traditional foster care placement to a juvenile justice placement, as long as the State intends to return the child to foster care (Child Welfare Policy Manual 1.3 12). As discussed previously, we believe that it is beneficial to compel State agencies to collect and report information to us on an ongoing basis when the child is under the State agency's placement and care responsibility away from his parents or legal guardians, regardless of the setting. We believe that doing so will allow us to follow a child through the various out-of-home placement settings that are connected closely to the foster care system but may not be managed by the State child welfare agency directly. Including these settings will permit States and ACF to complete longitudinal analyses of children's out-of- home care experiences, as advocated by States and others in the field. In addition, we believe that requiring State agencies to submit information on a child's entire experience while under the placement and care responsibility of the State, rather than having to generate information based on identifying select types of settings, will be less burdensome. We welcome comment on this proposal. The reader should note that although the State will report all children placed away from their parents and legal guardians under its placement and care authority regardless of the child's living arrangements, States and ACF will be able to identify children who are in the narrower definition of foster care as defined by our program rules. This is because we are proposing to better categorize a child's living arrangements in the data elements. We will, therefore, be able to select samples for reviews or other analyses that look at foster care as used in the title IV-B and IV-E programs separately from other living arrangements. In subparagraph (a)(1)(iv), we require that a State continue reporting a child to AFCARS who is missing or has run away, is attending camp or on vacation, or is visiting with his immediate or extended family. In these situations, the child remains in out-of-home care under the agency's placement and care responsibility. These situations do not represent a State agency's need to move the child. Finally, in paragraph (a)(2) we propose that the State discontinue reporting a child to AFCARS if the State agency's placement and care authority ends (or is discharged), if the State agency returns the child home to his or her parents or legal guardians, or the child reaches the age of majority unless such a child continues to receive title IV-E foster care maintenance payments. The child has exited the reporting population for AFCARS purposes and has completed an out-of- home care episode in these circumstances. This provision is, in part, a departure from the existing regulation. Many States over the years and during consultation have highlighted the need for more definitive guidance on when the child should be considered to have exited the AFCARS reporting population. States have pointed out that when a child leaves the AFCARS reporting population is of critical importance in defining consistently the length of time a child stays in foster care, as well as re-entries into foster care, for the CFSRs and other Federal child welfare outcome measures. We propose to continue State reporting of information until the child is no longer under the agency's placement and care responsibility because we are interested in understanding the child's entire out-of- home experience. Children who are legally discharged from the State agency's placement and care responsibility have always been considered to have exited foster care under the existing AFCARS requirements. This would include children who may remain away from their parents or legal guardians but whose placement and care responsibility are transferred to another agency with no connection to the State agency. However, we propose for the first time that children who are returned home to their parents or guardians be excluded from the AFCARS reporting population. Previous policy suggested that a State report to AFCARS children who were returned home and supervised by the State agency in an after-care status for a period of six months, unless a court order indicated another time period (Child Welfare Policy Manual 1.2B.7 7 and 1.3 11). Because we do not have a specific response option for States to report children in an after-care status in the existing AFCARS, we have instructed States to report the child on a trial home visit. There is, however, a distinction between a child who is visiting home, whether to stay connected to his or her family or to try reunification, and a child who the State agency has returned home. We agree with the States that contend that even though a State may continue to have some ongoing role in supervising or monitoring the child in his home, the child is no longer in out-of-home care for all practical purposes, but is at home. Furthermore, some State courts do not discharge a State's placement and care responsibility routinely, or in a timely fashion; sometimes this event occurs months after a child is in his or her own home. We concur that children in these situations should not be considered to be part of the AFCARS out-of-home care reporting population so as not to distort a child's length of [[Page 2087]] stay in care. We welcome comments on this proposal. We also want to clarify here that the proposed out-of-home care reporting population does not include those children who are under the State agency's ``supervision'' authority, unlike the current regulation. We found the reference to supervision to be problematic because we never defined the term ``supervision'' further in AFCARS regulations or policy. Thus States have questioned whether the existing reporting population includes children in a variety of settings for whom the State agency has only a legal duty to supervise with no concurrent placement and care responsibility. We wish to be clear that children who are receiving services only in the homes of their parent or legal guardian(s) and children who may be placed away from their parents or legal guardians but for whom the State title IV-B/IV-E agency has no placement and care responsibility are not a part of the proposed AFCARS out-of-home care reporting population. Section 1355.41(b) Adoption Assistance and Guardianship Subsidy Reporting Population In subparagraph (b)(1), we propose that the State include information on all children for whom there is either a title IV-E adoption assistance agreement or a State adoption assistance agreement in effect during the report period. This includes children in a pre- adoptive living arrangement. Children under such adoption agreements are a part of the reporting population regardless of whether a financial subsidy is paid on the child's behalf. We believe that requiring State agencies to collect and report information on these populations is necessary since there is no reliable information on these populations other than State claims data for Federal adoption funds, which have substantial analytical limitations. As a result of successful adoption initiatives, some States now have more children receiving adoption assistance than receiving foster care maintenance payments. With the increased activity in adoption and the corresponding outlays for the program, there has been an increase in requests for information about the population from the Congress, States, the media, and other sources. There also is a growing need at the Federal level for information to use for planning and budget projection purposes. Children who are in out-of-home care and who are the subject of a title IV-E adoption assistance agreement are likely to show up in both the out-of-home care and adoption assistance subsidy files until the point of the finalization of the adoption. In part, this is because sections 473 and 475(3) of the Act require States to enter into title IV-E adoption assistance agreements with adoptive parents prior to the finalization of a child's adoption, during which time the child may remain in out-of-home care. This may be true of children under State adoption assistance agreements as well, depending on State requirements. However, we believe we need this duplication of data in order to get complete information on the child's out-of-home care and adoption assistance experiences. Since we understand that the time between when an adoption assistance agreement becomes effective and the finalization of the child's adoption is relatively short, we expect such duplication to be limited. We welcome comments on this proposal. In subparagraph (b)(2), we seek information on children on whose behalf a subsidy is paid pursuant to a guardianship agreement with the State agency because we are interested in providing a national picture of children in these arrangements for the first time. We are not proposing that States include in the reporting population children who may be the subject of a guardianship or guardianship agreement in which a financial subsidy is not paid to the child's guardian. We believe that non-subsidized guardianships are a small portion of the guardianship arrangements in which State agencies are involved, that States maintain little information on them and there exists no compelling interest for ACF to require States to report information on these arrangements. States provide guardianship subsidies to a legal guardian for the care and support of a child who may be at risk of entering foster care or who may have otherwise remained in foster care. Although there is no Federal requirement or entitlement funding for States to provide guardianship subsidies, we understand that more than half of the States provide these supports to encourage greater permanency for children for whom adoption and reunification have been ruled out. States have established subsidized guardianship programs using State and local funds and funds from the Temporary Assistance for Needy Families Program. Seven States have obtained a child welfare demonstration waiver pursuant to section 1130 of the Act to test the effectiveness of a subsidized guardianship program for children in foster care. The demonstration waivers provide States with greater flexibility to use title IV-B and title IV-E funds for services that can facilitate improved safety, permanency and well-being for children. (Our authority to permit States to conduct new waivers expired in March 2006). Our proposed reporting population includes children in any subsidized guardianship arrangement regardless of the source of funding. 1355.42 Data Reporting Requirements We propose to add a new section 1355.42 on data reporting requirements, including the report periods for the data files, general provisions for collecting and submitting the out-of-home care and adoption assistance and guardianship subsidy files, and record retention rules to comply with AFCARS requirements. Section 1355.42(a) Report Periods and Deadlines In paragraph (a), we propose that each State submit an out-of-home care data file and an adoption assistance and guardianship subsidy data file to ACF on children in the reporting populations on a semi-annual basis. The report periods extend from April 1 to September 30 and from October 1 to March 31 of each Federal fiscal year. These report periods are the same as in the existing AFCARS. Several stakeholders suggested that we consider moving to annual, or even less frequent reporting, rather than semi-annual reporting of AFCARS data. Many commenters were concerned about the perceived complications of ACF compiling an annual file from two semi-annual submissions for the purposes of the CFSRs and the annual outcomes report to Congress. We want to assure States that we are able to create an annual file. We believe that some States' concerns about compiling an annual file were related to their inability to replicate the information from ACF precisely. ACF has recently started using a readily-available software program. The logic associated with this software's de-duplication function is readily transferable to other software packages; therefore, States will be able to replicate the annual files more easily. Finally, we expect that the new requirements proposed here for using a permanent and encrypted person identification number (see proposed 45 CFR 1355.43(a)(4), 1355.43(a)(5) and 1355.44(a)(3) in this NPRM) will aid both our own and States' ability to create annual files. Further, we believe that an annual submission would hamper our ability to provide timely data and analysis to stakeholders and would not meet our needs. A six-month submission process [[Page 2088]] is preferable because AFCARS is now linked inextricably to a number of ACF priorities and legislative requirements, including the CFSRs and title IV-E eligibility reviews. For example, most States are monitoring their progress in achieving the steps of their CFSR program improvement plans on a quarterly basis. Because States submit AFCARS twice a year, we can provide States with their results on the statewide data indicators every six months for comparison. A move to annual submissions would mean that a State would not be able to use AFCARS data to see how it has improved as timely. Annual data would add six additional months to the time it would take ACF to verify whether a State has achieved the agreed upon amount of improvement for a CFSR program improvement plan. Also, annual AFCARS submissions would mean that our period under review for the CFSR onsite review would need to be extended and we could not review States as frequently because they are tied to the AFCARS report period. Finally, the title IV-E eligibility reviews require that we select a sample of children who received foster care maintenance payments during a six-month period that coincides with the State's most recent AFCARS submission (45 CFR 1356.71). In formulating the title IV-E reviews, we chose a recent six- month AFCARS period specifically so that we would review recent cases of children in foster care. We also propose in paragraph (a) that State agencies submit their data files to us within 15 calendar days of the end of the report period. If this date falls on a weekend, the State must submit their files by the end of the following Monday. This is a change from the current AFCARS, which allows a 45-day period in which State agencies may prepare their data files for submittal to ACF. Although some stakeholders requested more time to prepare their files, we believe that the shorter time frame is workable and will also better meet State and Federal needs for data. As mentioned earlier, AFCARS data is used extensively in a number of ACF priorities and requirements, including the Child and Family Service Reviews. If ACF receives the data a month earlier than we do now, we will be better able to analyze the data for use in CFSR data profiles and program improvement plans. Also, since adoption incentive funds are tied to how well States perform in increasing their adoptions as seen in the AFCARS data, we can award adoption incentive funds to States sooner. The vast improvements in automation in the field of child welfare strengthen our belief that a State can prepare data files within 15 days. Now States can record and verify data in a more timely fashion than when the original AFCARS regulation was issued. Finally, we have provided significant technical assistance to States to encourage ongoing quality assurance checks on the data recorded in their information systems. We believe that State agencies will be able to meet this shorter time frame for submitting data with continued and routine use of our data quality utilities. We welcome comment on the shorter submission time frame. Finally, in paragraph (a) we require that State agencies submit their data to us in two separate data files. Currently, State agencies must submit four data files (Appendices A and B to 45 CFR 1355): (1) A detailed foster care file with information on a child in foster care during the report period; (2) a detailed adoption file with information on all children adopted during the report period in whose adoption the State agency has some involvement; (3) a foster care summary file in which the State indicates the total number of foster care records and the age distribution of children in those records; and, (4) an adoption summary file in which the State indicates the total number of adoption records and the age distribution of the children adopted. We propose to eliminate the existing foster care and adoption summary files because they are no longer necessary. ACF originally intended to use the summary files to verify the completeness of a State's data submissions and to ensure that the file was not corrupted during transmission. The summary files also were to serve as a quick count of the number of children in foster care and those being adopted. However, because the summary files contain aggregate data, the number of children who entered, were discharged, were adopted, were served or were in care on a specific day cannot be determined. Further, we are able to use new technology that is better able to verify the completeness of a State's data submission without requiring the State to generate summary files. The proposed out-of-home care data file contains the majority of information that State agencies report to us currently in the detailed foster care and adoption data files. We propose to discontinue the submission of voluntary adoption data and eliminate the separate adoption data file. Rather, children who are adopted from out-of-home care will be included in the out-of-home care data file, and children for whom the State agency has been involved in their adoption by entering into an adoption assistance agreement will be included in the adoption assistance and guardianship subsidy data file (some children will be reported in both files). The current separate adoption data file was developed originally to permit State agencies to submit data on all adoptions (inclusive of private, independent, or international adoptions in which the State agency was not involved) without the data appearing erroneous due to duplicated information that may have resulted from States' obtaining the data from a variety of sources. For example, had States obtained their data on all adoptions from court records and incorporated that data into the foster care data file, public agency adoptions would have been duplicated. This strategy was based on the premise that State agencies would voluntarily submit data on adoptions outside of the public agency. However, just a few States have submitted non-public agency adoption data consistently, making the information unusable. Section 1355.42(b) Out-of-Home Care Data File In paragraph (b), we provide instructions on how the State must report the out-of-home care information under the proposed 45 CFR 1355.43. Specifically, in paragraph (b)(1), we propose that a State provide us with the most recent information for the elements regarding general information, child information, and parent or legal guardian information (proposed 45 CFR 1355.43(a), (b) and (c)). This means that in each file submission we are seeking current, point-in-time data for these elements similar to the time frame for most elements in the existing AFCARS. This information is largely demographic in nature, and tends to remain static over a six-month report period or even longer. For example, information on the child's parent, such as race, ethnicity and date of birth, does not change over the course of a report period. In paragraph (b)(2), we propose that a State submit recent and historical information for the elements regarding removal information, living arrangements and provider information, permanency plans and ongoing circumstances, general exit information, and exit to adoption information (proposed 45 CFR 1355.43(d), (e), (f), (g) and (h), respectively). This information is required, unless the exception described below applies. This means that for every file submission, we are seeking information on the child's lifetime experience while in out-of-home care in the State's placement and [[Page 2089]] care responsibility as described through the reporting of these elements. This will allow ACF to develop a comprehensive picture of a child's lifetime experience with entries, living arrangements, permanency plans, and exits while in the State's child welfare system. This is in contrast to the existing AFCARS, which requires that a State submit certain detailed information on the child's current foster care episode and current placement setting only. We want to be clear that we propose that State agencies submit recent and historical information pertaining to removals, permanency plans and circumstances, living arrangements and exits every report period rather than updates on children who were in out-of-home care before or who remain in out-of-home care from one report period to the next. This is because we have learned from the existing structure of AFCARS that gaps in information raise numerous questions about the child's experiences and make the data more difficult to analyze. Part of our goal in developing this proposed regulation is to eliminate features of the existing AFCARS that hinder the collection of reliable, quality data. If we were to ask State agencies to report only changes in the child's living arrangements, permanency goals, entry into or exit from out-of-home care we would not have a way to verify that the child's experiences have, in fact, remained the same. We also believe that this approach is less burdensome on States. Although sending a child's history involves submitting more data to us than an update as children exit and re-enter out-of-home care and their living arrangements and permanency plans change, we believe that it is less complicated and therefore requires fewer State resources than the alternative. In other words, sending a child's full history requires the State to submit all the information it has on these elements, rather than figure out a way to cull out only the information that has changed each report period. We propose to get more comprehensive data for certain elements in response to our own need for data and in response to stakeholders' requests that ACF consider how to move AFCARS towards gathering some longitudinal information. Many States noted that they already have this capability. A number of States also asserted that the breadth of this information allowed them to conduct more sophisticated analysis on what happens to a child, or groups of children in foster care. Further, States and other stakeholders saw this type of information as critical to the CFSRs. In particular, stakeholders believe that longitudinal data would better inform CFSR measures such as time in foster care, foster care re-entries and the stability of foster care placements. For example, once we have information on all out-of-home care episodes a child experiences, we can potentially analyze data to determine whether children entering out-of-home care for the first time after a certain point in time have more positive outcomes than those who entered out- of-home care earlier. Also, we can potentially use the data to improve upon our placement stability measure by not only analyzing the number of placements that a child experiences in an episode, but the type of placements as well. Further, with the richness of data that longitudinal information can provide, ACF and States can be better informed in developing and implementing program improvement plans to address compliance issues raised during a CFSR. In light of the results of the first round of CFSRs and the challenges that are ahead for States in implementing changes to their child welfare systems, we find the potential to have improved data for use in the CFSR and other priorities a compelling reason for proposing these changes. We welcome comments on this approach. We chose to propose gathering comprehensive data on removals, permanency plans and ongoing circumstances, living arrangements and exits after considering whether a more limited approach to developing longitudinal data would meet our needs for data, as well as those of the States. The limited option would require a State to submit detailed removal, permanency plan, living arrangement and exit information on the child's four most recent out-of-home care episodes. We also considered requiring detailed living arrangement information on the child's four most recent living arrangements only. Under this option, the State would inform us how many total removals and living arrangements the child had experienced. We considered four out-of-home care episodes because our analysis of existing AFCARS data suggests that the vast majority (approximately 99 percent) of children in the existing foster care reporting population have no more than four foster care episodes. This option would allow us to capture almost all foster care episodes without requiring State agencies to submit extensive histories on children. We similarly thought that limiting the number of living arrangements that State agencies would report to AFCARS would minimize the burden of this approach. Ultimately, we decided that this more narrow approach was not sufficient. One problem with a limited longitudinal database was that we would have no information on the children who present some of the more significant challenges to States. Children who experience high numbers of multiple living arrangements or frequently enter and exit out-of-home care are some of the nation's most vulnerable children. Furthermore, these children often require States to expend more of their resources to address their problems. In paragraph (b)(3), we propose an exception to the requirement to report complete information on all out-of-home care episodes for children in the reporting population. The exception applies to those children who had an out-of-home care episode prior to the effective date of the forthcoming final rule. Specifically, the exception applies to: (1) Children who are in out-of-home care on the effective date who also had a prior episode before the final rule goes into effect, and (2) children who enter out-of-home care after the effective date who had a prior episode before the final rule goes into effect. For such children, we are proposing that the State report the child's removal dates, exit dates and exit reasons (1355.43(d)(1), (g)(1), and (g)(3) respectively) for each out-of-home care episode that occurred before the final rule effective date. The exception does not apply to a child's ``open'' or ongoing episode that coincides with the effective date of the final rule; for such children we propose that a State report all information described in paragraphs (b)(1) and (b)(2) during that ongoing out-of-home care episode. As time passes after the final rule goes into effect, this provision will apply to a diminishing number of children who are in the out-of-home care reporting population. We propose this exception to the general rule to report complete information in order to strike a balance between our desire for recent and historical information on all children in out-of-home care in accordance with the proposed new AFCARS elements with the challenge that some State agencies may face in gathering this information for a child's previous contacts with the State child welfare system before these new rules go into effect. We chose to have State agencies report at least the child's prior removal and exit dates and exit reasons, because we believe these elements are most critical to our ability to construct certain cohorts of children for analysis in the CFSRs and other outcome-based activities. Further, States [[Page 2090]] currently collect this information in the normal course of their casework activities for children in foster care and report some information for these elements under the existing AFCARS. Our expectation is that for children who experience an out-of-home care episode prior to the implementation of the proposed new AFCARS, States will report more than the minimum information required by the exception. We expect, but do not require, States to provide as much information as they have in their case files and information systems on the child's out-of-home care episodes that occur before the effective date of the final rule and at least as much information as they report currently under the existing AFCARS. States that do not provide this additional information will not be penalized. States that provide it with errors will not be penalized either. From our review of States with a SACWIS, we have found that many States are collecting comprehensive information and information that pertains to the proposed new elements. Therefore, we believe that it is reasonable to expect States to provide us with information on the new elements regarding prior episodes even in the absence of a mandate. In fact, we considered establishing different exceptions to the requirement to report comprehensive information for those States that have an operational SACWIS versus those that do not because we believe that the type of information they are able to collect and report is more complete and robust than other States. Even so, since this is the first time we are requiring certain information in AFCARS, we believe that we must allow all States an equal opportunity to collect the proposed information for children who already are known to the State. Finally, we acknowledge that even though we propose that States report a child's removal and exit dates and exit reasons of the out-of- home care episodes that occur prior to the final rule effective date, this limited information will be newly required for some children in certain circumstances. In particular, since we propose to expand the reporting population to include children who are in out-of-home care settings that are not considered foster care under our program rules, States have not consistently reported removal and exit dates and exit reasons for AFCARS purposes. Further, since the existing AFCARS requires that States report the date of first and latest removal and exit reason for the most recent foster care episode in a six-month period, some children may have interim removal dates and exit dates and reasons that States currently are not reporting to us. We still believe, however, that while this proposed reporting may be newly required, States generally have this information as a matter of course in their own information systems and this requirement would not produce an undue burden. We welcome comment on this provision. Section 1355.42(c) Adoption Assistance and Guardianship Subsidy Data File In paragraph (c), we propose that the State submit recent, point- in-time information for all elements in this data file. This information is needed only at a given point in the report period because it is static over time. For example, adoption subsidies may remain the same over many years or for the duration of the adoption assistance agreement, unless the parent requests a change in the amount of the subsidy, or the child's circumstances change. Section 1355.42(d) Reporting Missing Information In paragraph (d), we propose how the State must report missing information. If the State agency fails to collect the information for an element, the State agency must report the element as blank or missing. The State agency may not develop program codes that default or map information that caseworkers did not collect or enter into the State's information system to a valid response option. This is the case even when there may be a response option for an element that allows the State to indicate that the information has not yet been determined or is unknown. This provision is consistent with ACF's longstanding practice; however, States have pointed out that there is no official guidance on this issue. Therefore, we wish to state unequivocally that this practice of defaulting is not permitted. For example, we propose that the State indicate the specific permanency plan for a child or indicate that the permanency plan has not yet been determined for the child. If the State's information system is programmed in a way to allow the worker to select various plans (i.e., adoption, reunification, etc.) or not input the information at all (i.e., leave the information blank), the State agency may not report to ACF the child's plan as ``not yet determined,'' when the State does not have any information. Rather, the State may only report that the plan is ``not yet determined'' if the State has programmed its information system in a way that allows the worker to select that he/she has actually not yet determined the plan. Section 1355.42(e) Electronic Submission In paragraph (e) of this section we propose that States submit their data files to ACF electronically, consistent with ACF's specifications. States currently submit their data files to us electronically; however, we are removing from the regulation a number of technical specifications that detail how States must submit their files electronically (see appendix C to part 1355). Instead, we will issue technical requirements and specifications through official ACF policy subsequent to our issuance of the final rule. We have learned through our experience with the existing AFCARS that it is prudent not to regulate the technical specifications for transmitting data. As technology changes, we must be able to keep pace with the most current, practical and efficient transmission methods that will meet State and Federal needs. We are particularly interested in exploring new technologies due to the enactment of the E-Government Act of 2002 (Pub. L. 107-347). This law focuses the Federal government on using improved intern