Vermont is missing out on huge opportunities for federal money for child welfare services — perhaps millions of dollars, lawmakers fear — because of a 43-year-old IT system. And due to flaws in that very system, officials say it’s also impossible to know how much funding Vermont has lost out on.

“The total monetary impact remains unknown,” said Family Services Division head Aryka Radke in an email, since the system “lacks the sophistication to determine the exact amount of inaccessible federal funds.”

Reporting requirements for federal grant programs have outstripped the state’s data capabilities, leading to losses in a number of areas related to child welfare, according to Matthew Bernstein, the state’s Child, Youth and Family Advocate. Meanwhile, the timeline for upgrading the system has only extended, and advocates point to longstanding failures in services stemming from the platform’s frailty.

Vermont’s primary child welfare information system is supposed to manage basic information about minors in state custody and their placements, and a second related program organizes child abuse reporting and case notes. Both were created before 2000. VTDigger has previously reported that such IT limitations create real difficulty for foster parents and other care providers trying to ensure the health and wellbeing of their charges.

Gov. Phil Scott’s proposed budget for the next fiscal year would have the state jettison or reduce matching funds for several family service programs, as Vermont’s noncompliance with federal data standards rules out eligibility for certain federal grants. Advocates say the administration’s approach to the problem is shortsighted, both for the children in the state’s care, and the financial health of child service programs.

Rep. Anne Donahue, I-Northfield, the House Human Services Committee’s ranking member, called the system’s effect on families “horrific at many levels,” and said the issue’s urgency should cut through lawmakers’ nerves over a tight state budget this legislative session.

“We are losing millions of dollars of federal funds by not having a system that can meet federal requirements,” she said.

Advocates and lawmakers believe Vermont is among the states furthest behind in the process of meeting decade-old standards for child welfare information systems. Radke said many other states are experiencing issues or delays in satisfying such rules.

The state’s primary federal funding losses stem from a pot of money that assists states in facilitating foster care systems, adoption and outreach programs related to child welfare. The funds are awarded in a complex system of matching grants and reimbursements, and contain rigorous standards for eligibility that often hinge on states closely tracking children’s path through care.

Following changes to such eligibility requirements in 2021, Vermont’s federal revenue reports for reimbursing group care programs fell precipitously, according to a report from Bernstein’s office. The drop is “largely” a result of the state’s technical limitations, Radke said.

Experts say Vermont’s child welfare IT system, which predates the internet, doesn’t easily absorb data that wasn’t required by child welfare officials in the 1980s — like mental health diagnoses. And the infrastructure is sometimes fragile — in December, the entire system experienced a three-day catastrophic failure after a botched update to its server.

The financial burden of transitioning from existing decades-old IT to a federally approved system is potentially enormous. So far, the state has directed just shy of $8 million toward the project, with matching funds available from the federal government. But the project’s total cost could rise to $50 million, Bernstein’s office has estimated. Radke said both the cost and timeline of the project are “unknown.”

Bernstein noted that decades ago, the state declined a 90% match the federal government offered to states for bringing their data systems up to speed. He argued the state should use what money it has already set aside to make smaller, immediate improvements at the most problematic points of the system.

The Vermont Department for Children and Families issued a request for proposals last year to begin the process of contracting out the improvements. Advocates said the department has taken this step at least twice before, in 2018 and 2022, but Radke said she was confident of a breakthrough this spring.

‘Critical services’

Gov. Scott’s proposed budget for the 2027 fiscal year does not include appropriations to continue developing the system, an omission that Rep. Laura Sibilia, I-Dover, called “inexplicable.”

Sibilia, who sits on both the House Energy and Digital Infrastructure Committee and the Joint Information Technology Oversight Committee, said she had concerns about the state’s approach to a number of much-needed technological updates.

“We do not have a good system in place … for replacing IT, software,” she said.

Donahue said she is most worried about the immediate impacts of shoddy information systems for vulnerable children across the state, such as an inability to adequately track the use of restraints and seclusion in some care settings.

“I fully recognize one-time monies are in short supply this year,” Donahue said. “But it’s hard for me to imagine (a need) more critical than this one.”

She added that some federally supported programs the state currently cannot access are an important part of providing comprehensive care.

“These are really critical services that we are not offering at all,” Donahue said.

Scott’s budget book recommends the elimination of over $1 million in state funds toward the Family First Prevention Services Act After Care program, which was intended to provide services to kids exiting residential treatment programs. But since the state Department for Children and Families was not able to “draw down” corresponding federal funds, the program never got off the ground in Vermont.

State contributions to a related program focused on trying to keep kids with their families and out of state custody where possible is reduced by half (over $500,000) in Scott’s proposal. The requirements to access federal funding for the program are “impossible using the current (Vermont) case management system,” reads the administration’s justification.

Nonetheless, Radke said the state will use the remaining funds to continue work on a new motivational interviewing program, a counseling initiative she said was approved by the federal government in 2022.

“When asked to provide potential cuts to our budget, we prioritized preserving existing services to children, youth, and families to the extent possible, which is why these were chosen,” Radke said of the recommended changes.

In general, Bernstein said, prevention practices are key not only for individual families in Vermont but for the state’s fiscal responsibility.

“Prevention dollars have been shown nationwide to be incredibly efficient,” he said.

Radke agreed, citing a “steady decline” of minors in state custody in recent years.

“Even with the elimination of these funds, DCF is still looking to expand evidence-based prevention services,” the budget book reads after describing the cuts.

Bernstein isn’t sure.

“Is it?” he said in an emailed response to the administration’s language. “I see multiple cuts in prevention funds, deep investments in congregate and locked facilities, and a move to increase punitive measures on children and youth.”

Alongside reductions explicitly tied to data system limitations, Scott’s budget separately recommends reductions in support services for families who adopt children privately as well as decreased funding for a series of parenting workshops organized by Prevent Child Abuse Vermont.

Rep. Theresa Wood, D-Waterbury, who chairs the House Human Services Committee, called the latter reduction “ludicrous.”

“They have tons of data to support the work that they’ve done,” she said.

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This story was originally published by VTDigger and distributed through a partnership with The Associated Press.