STATE OF WISCONSIN
Department of Health and Family Services
Division of Children and Family Services
        MEMO SERIES DCFS 98-13/Action
        October 9, 1998

     Re:  PAYMENT PROCEDURE FOR
           CHILDREN IN OUT-OF-HOME
           CARE PLACED VIA
           FOR-PROFIT CHILD PLACING
          AGENCIES
  
To: Area Administrators/Assistant Area Administrators
Bureau Directors
County Departments of Community Program Directors
County Departments of Developmental Disabilities
    Services Directors
County Departments of Human Services Directors
County Departments of Social Services Directors
Direct Services Supervisors
Licensing Chiefs/Section Chiefs
Tribal Chairpersons/Human Services Facilitators
From: Susan N. Dreyfus
Administrator

Document Summary

 This Memo requires counties to pay the foster parent directly for children placed via For-Profit Child Placing Agencies

Based on recent clarification of Federal Title IV-E regulations, the Department is issuing this memo. Title IV-E regulations state that if a child is placed in Out-of-Home Care via a For-Profit Child Placing Agency and the monthly payment for the child is paid to the Child Placing Agency which in turn pays the individual foster parent, the maintenance payment to the foster parent cannot be claimed as Title IV-E reimbursable. In addition, the payment made to the foster parent by the For-Profit Child Placing Agency is considered taxable income to the foster parent.

The number of payments in this category represents a significant amount of Title IV-E revenue which, as you know, is a primary source of funding for Community Aids and is affected by the new IV-E Incentive Program. A listing of current For-Profit Child Placing Agencies is attached and on an ongoing basis counties should determine at the time of contracting with a Child Placing Agency whether they are for-profit or not-for-profit. Please ensure the county splits the payment that is currently made to the For-Profit Child Placing Agencies into two payments as described in this memo. The county should make one payment to the Child Placing Agency for their administrative cost and the other payment directly to the foster parent for the maintenance cost. By doing so, the payment to the foster parent from the county may then be reimbursable for Title IV-E purposes and would no longer be considered taxable income to the foster parent. Payments to Not-For-Profit Child Placing Agencies can continue to be made in one payment to the agency. Entry of financial information into the Human Services Reporting System (HSRS) for children placed via a Child Placing Agency should not change. Regardless of whether the agency is For-Profit or Not-For-Profit, counties should continue, as noted in MEMO SERIES DCS 95-26 (copy attached) dated April 28, 1995, to enter into the HSRS Substitute Care Module the amount of the payment going to the foster parent.

Thank you very much for your assistance in this important effort.

REGIONAL OFFICE CONTACT: Area Administrator
CENTRAL OFFICE CONTACT: William R. Fiss
Deputy Administrator
DCFS
1 West Wilson Street
P. O. Box 8916
Madison, WI 53708-8916
(608) 266-3728

Attachments


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