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JLARC Releases Report on Children’s Services Act

Members of the Joint Legislative Audit and Review Commission (JLARC) were briefed by Commission staff on November 9 on the results of an extensive review of the Children’s Services Act (CSA) approved in 2019. JLARC staff were directed to review the administration of CSA, with a particular focus on private special education services, as well as state and local oversight of the program, and to determine whether changes would be warranted to improve the efficiency and effectiveness of services provided to children and families. JLARC staff recommended several major changes to the program, including allowing CSA funding to be used for services delivered within public schools and transitioning the administration of private day placement funding from CSA to the Virginia Department of Education.

JLARC staff concluded that spending on private special education day school placements has been the primary factor in overall CSA spending growth, more than doubling since FY 2010 and representing 44 percent of all CSA spending in 2019. Rising costs are attributable to increases in enrollment (which has grown by 50 percent over the past ten years due to larger numbers of children being newly enrolled in private day placements each year, children being placed at younger ages, and children spending more time in private placements); rate increases; and increases in the use of services provided by private day schools (such as attendance for more school days per year and use of additional related services, such as speech therapy). The report points out that Virginia relies on out-of-school placements to a greater degree than 37 other states, and cites the prohibition on use of CSA funds in the public school setting as a contributing factor in hampering local school divisions’ ability to serve children with special needs, as well as potentially limiting public schools’ ability to offer transition services to ease students’ return to public school from a private placement. Staff recommended that the legislature consider allowing CSA funds to be used within the public school setting to fund services that a student’s Individualized Education Program (IEP) team determines are necessary to prevent a more restrictive out-of-school placement, or to help students transition back to public school from a residential or private day placement. VACo has historically supported enhancing local school divisions’ ability to serve children with high-level needs.

JLARC staff also recommend the transfer of funding for private special education day placements to the Virginia Department of Education, arguing that CSA serves merely as a funding stream for these placements, while the placement decision rests with the IEP team in the local school division. This change could have significant effects on local budgets, particularly if the long-standing sum-sufficiency provisions associated with private day placements were revisited, or local match rates were revised. In recognition of the potential negative effects on localities, the report recommends that the legislature consider providing for the transfer of funds, paired with a directive to the Department of Education to develop a detailed plan to administer the funding so that it provides services for children with the most severe needs who are at risk of an out -of-school placement, ensures equal access to all school divisions, and “minimizes the fiscal impact of the new funding policy on localities.”

The report also discusses the role of the Office of Children’s Services (OCS), suggesting that it largely oversees program compliance rather than promoting program effectiveness. It recommends directing OCS to take a more active role in monitoring local programs’ performance and assisting underperforming programs; in advance of such an expansion of the Office’s responsibilities, it would be required to develop a plan for any staffing and operations modifications that would be necessary.

Other recommendations in the report include:

  • Requiring private special education day schools to report tuition rates annually as a condition of receiving state funds and directing the state entity supervising the program to develop a standardized reporting process and template to enable rate comparisons.
  • Requiring local CSA programs to report data to OCS on timeliness for enrolling children in services so that OCS could provide assistance to programs with relatively long waits for services. JLARC staff found that although the service planning process conducted by the Family Assessment and Planning Team is generally beneficial, there may be a delay in the start of services in some localities; the report notes that more data is needed to determine the reasons for this variation.
  • Requiring local CSA programs to serve children in the “non-mandated” eligibility category. This is another recommendation with potential impact on local budgets.
  • Directing the State Executive Council to assess the potential creation of a competitive grant fund to address gaps in services.
  • Directing OCS to work with the Department of General Services and the Office of the Attorney General to determine potential benefits of statewide contracts for children’s services and develop contracts to be made available to local programs “where beneficial and feasible.” VACo has historically supported additional assistance with contracting, particularly for smaller localities.

The full report is available at this link; JLARC staff’s presentation may be found at this link.

VACo Contact: Katie Boyle

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