Citizens Budget Commission
The State of Municipal Services in the 1990s
Social Services in New York City
- FOREWORD
- EXECUTIVE SUMMARY
- INTRODUCTION
- BACKGROUND
- Job Opportunities
- Drug Abuse
- The AIDS Epidemic
- Persons in Poverty
- Resource Allocation
- INCOME SUPPORT SERVICES
- The Programs
- The Benefits
- The Turnaround in Caseload
- HOMELESS SERVICES
- Poor Performance in Aiding Families
- Improvement in Services to Single Adults
- CHILD WELFARE
- Failings in Child Protective Services
- Fewer Preventive Services
- Prolonged Foster Care
- CHILD CARE
- The Programs
- The Expansion of Services
- The Changing Mix of Services
- Longer Waiting Lists and Increased Demand
- FUTURE CONCERNS
Founded in 1932, the Citizens Budget Commission (CBC) is a nonpartisan,
nonprofit civic organization devoted to influencing constructive
change in the finances and services of New York State and New
York City government. This report was prepared under the auspices
of the CBC's Municipal Services Committee, which I chair. The
other members of the Committee are Harold I. Berliner, Alan M.
Berman, Jeremiah Blitzer, Mark Brossman, Daniel J. Gross, Peter
C. Hein, Jerome E. Hyman, William F. McCarthy, Frank J. McLoughlin,
Frances Milberg, John R. Miller, Philip L. Milstein, Steven M.
Polan, Adam R. Rose, Edward L. Sadowsky, Lee S. Saltzman, Barbara
Z. Shattuck, Ronald G. Weiner, Eileen S. Winterble, and Lawrence
B. Buttenwieser, ex-officio.
The Municipal Services Committee was created in the wake of the
1970s fiscal crisis to monitor and report on the manner in which
City agencies used scarce public resources to produce services.
By 1994 the Committee had supervised the preparation of 39 reviews
of municipal agency performance, covering nine servicesthe uniformed
agencies (fire, police, correction and sanitation), mass transit,
education, health care, social services, and parks. In January
1994 the CBC released a report on the HRA that made 13 recommendations
to improve social services and save at least $560 million annually.
The recommendations included: Enhancing analytical capability
and using new technology; using incentive contracts to increase
child support collections; instituting a large-scale work experience
program for all employable public assistance clients; phasing-in
mandatory managed care for Medicaid; testing a new capitation-like
payment system for foster care; and, using federal funds to expand
the child care voucher program.
This year the CBC began a new series of reports to assess how
municipal agencies fared during an extended period of fiscal retrenchment,
fiscal years 1990 to 1996. The first, on the Department of Correction,
was released in June. This report on the City's social services
agencies is second in a series that also will include the Fire
Department, the Board of Education, the Police Department and
the Sanitation Department.
This report was written by Charles Brecher, Executive Vice President and Director of Research, Sheilah M. Kane, Research Assistant, and Dean Michael Mead, Assistant Director of Research. The report was prepared for publication by Nicolette Macdonald, Publications Coordinator.
--Bud H. Gibbs, August 11, 1997
The City of New York, with financial aid from the State and federal
governments, is responsible for meeting the basic needs of its
indigent residents. Because more than 1.8 million, or about one
of every four, New Yorkers have incomes below the federal poverty
threshold, this is a formidable task. In fiscal year 1996 the
three relevant municipal agenciesthe Human Resources Administration
(HRA), the Department of Social Services (DSS), and the Department
of Homeless Services (DHS)spent over $8.0 billion and employed
nearly 24,000 workers.
This report assesses how the fiscal difficulties of the 1990s
affected the way in which the City of New York provided basic
social services. It reviews the City's performance in providing
income maintenance benefits, employment services, shelter to the
homeless, protection and care for abused and neglected children,
and subsidized child care opportunities for children in low-income
families. Two general conclusions can be drawn from the available
evidence. First, the number and quality of child care opportunities
increased significantly. Second, misguided policies and weak implementation
of better policies led to the denial of assistance to some needy
persons.
Background
Analysis of the delivery of social services is informed by knowledge of underlying economic and social realities, as well as the level of resources committed to these services. Changes in three factors are particularly relevant to New York City's populationavailable job opportunities, patterns of drug abuse, and debilitating medical problems such as AIDS.
The national recession of 1990-1991 led to a loss of 1,160,000
jobs or 1 percent of total employment. This was followed by a
strong and enduring national recovery adding nearly nine million
jobs through 1996. In New York City the recession began earlier
and hit harder. Job losses continued into 1993 with the decline
eventually totaling 327,000 or 9 percent. The local recovery was
slow and modest: From 1993 to 1996 only 76,000 jobs were added,
leaving an extraordinary net loss of 251,000 jobs since 1990.
Moreover, few of the jobs regained are suitable for low-skilled
workers.
Data on drug abuse present a mixed picture. Emergency room incidents
involving illicit drugs increased dramatically between 1990 and
1995from 12,600 to over 20,000 for cocaine, and from 3,800 to
more than 11,000 for heroin. However, the number of births in
New York City to women using cocaine (particularly "crack"
cocaine) declined from a peak of 3,168 in 1989 to 1,288 in 1994.
The AIDS epidemic, which spread alarmingly during the 1980s and
early 1990s, began to slow in the mid-1990s. By the end of 1996
over 92,000 persons in New York City had been diagnosed with AIDS,
of whom almost 62,000 had died. However, the number of new cases
started falling after 1994, from almost 15,000 to under 11,000
in 1996.
Given these substantial problems, it is not surprising that an
estimated 1.8 million, or one in four, New York City residents
lived in poverty in 1994, a much higher rate than nationally or
elsewhere in New York State. Of this group, 772,000 or 43 percent
were children.
Spending for social services (excluding Medicaid) grew steadily
from 1990 to 1994, but declined in fiscal years 1995 and 1996.
Growth in the 1990-1994 period averaged 7 percent annually in
nominal dollars and 3 percent in constant dollars. The constant-dollar
reductions were 4 percent in 1995 and 6 percent in 1996. Preliminary
figures for fiscal year 1997 suggest the downward trend continued.
Expenditure reductions were driven in part by cuts in full-time
staffing from 31,909 to 23,837 during 1990-1996, as well as by
less spending on child welfare and cash benefits. Expenditures
for homeless services and child care rose substantially and steadily
during the period.
Income Support Services
A series of welfare reforms at the federal and State levels resulted
in a significant revamping of the public assistance programsthe
federal Aid to Families with Dependent Children (AFDC) and the
State Home Relief (HR) program for single adults. Most significantly,
receiving cash benefits was tied to participation in work or training
programs by employable adults. In 1995 the City initiated its
New York City Work, Accountability, You (NYC WAY) program to meet
the new requirements. The NYC WAY program combines a longer and
more arduous eligibility review with greatly enhanced fraud detection
and participation in the Work Experience Program (WEP), in which
recipients work in a municipal or nonprofit agency.
During the 1990-1996 period, two important changes were made
in income support services. First, the purchasing power of cash
benefits declined. The inflation-adjusted maximum benefit for
a family of three fell 10 percent. However, only the value of
Food Stamps increased between 1990 and 1996; absent Food Stamps,
the basic, shelter and energy allowances declined 18 percent.
Second, after substantial increases in the public assistance rolls, they began to shrink in 1996. Public assistance cases increased 49 percent from 372,000 in 1990 to over 555,000 in 1995, but then declined 12 percent in 1996. The reduction was most striking among Home Relief cases (23 percent), while the reduction in Aid to Families with Dependent Children was modest (4 percent). The turnaround is partly due to improved economic circumstances. However, although job placements increased, they still accounted for a relatively small share (about one-fifth) of the caseload decline.
A more important explanation for the drop in public assistance
cases is the new eligibility and work requirements of NYC WAY.
The more vigorous eligibility screening procedures had the positive
effect of rooting out persons fraudulently receiving benefits.
Unfortunately, those procedures also reduced the rolls through
the inappropriate closing of cases. The City has failed to provide
data relating directly to inappropriate closings, but other information
suggests the problem is serious. The number of fair hearings requested
by public assistance clients rose 43 percent in 1996 despite the
decline in the number of cases, demonstrating rising dissatisfaction
with administrative decisions.
Homeless Services
The City provides temporary shelter to homeless families and
single adults. Its performance was dichotomous--dismal failure in
aiding homeless families mixed with modest success in improving
the shelter system for single adults.
Homeless families
There were more homeless families living in temporary shelters
in 1996 than ever before5,700 on average per night, or 78 percent
more than in 1990. This figure rose while the number of new families
entering temporary housing fell more than one-third between 1993
and 1996. The explanation for this paradox is that it took the
City longer to place families in permanent housing; the average
stay in temporary housing lengthened 11 weeks, from 147 to 223
days.
Fewer families entered temporary housing because the City made
it more difficult for them to do so. Three Emergency Assistance
Units (EAUs) were closed, leaving only one in the Bronx. Further,
families were required to call the Homeless Hotline before they
could receive services from the EAU. Once families gained access
to the EAU, they were not promptly referred to sheltersin 1996
three out of four families waited more than two days for temporary
housing, many of them sleeping on desks and chairs in the EAU
offices. Consequently, the City had paid $6 million in fines by
the end of 1996.
Despite earlier plans to cease housing homeless families in hotels,
there were 944 families in hotels on average in 1996, 164 percent
more than in 1990. Of these, about one-third were housed in substandard
hotels.
Homeless adults
The average number of single adults in shelters declined 22 percent
from 8,750 to 6,850. A significant factor in this decline was
the City's construction of 23 new, single-room occupancy buildings
between 1992 and 1995.
The quality of shelter for adults improved as the City reduced
its reliance on low-quality barracks-style facilities and added
more specialized residences. This progress was not matched, however,
by improvements in services to homeless adults. Placements in
permanent housing increased slightly, but employment placements
of residents declined 60 percent, and 28 percent fewer shelter
residents were accepted in the federal Supplemental Security Income
program due to City assistance.
The City provides three types of child welfare services: Child
Protective Services (CPS), the investigation of reports of child
abuse and neglect; preventive programs, which provide services
to stressed families to help them function better and to prevent
the removal of children from their homes; and foster care, which
consists of alternative homes (with families, group homes, or
institutions) for children whose parents are unavailable or unable
to provide a safe home for their children. The City and its contracted
foster care agencies also arrange adoptions for children who cannot
be reunited with their parents.
Child Protective Services
Reports of child abuse and neglect received by the City decreased
annually between 1990 and 1995, falling 14 percent from 55,158
to 47,571. As often happens after high-profile child abuse cases,
the death of Elisa Izquierdo spurred an increase (11 percent)
in 1996, bringing abuse reports to almost 53,000. Even more remarkably,
the number of substantiated cases of abuse or neglect resulting
from these reports fell two-thirds from 29,342 to 10,135.
Absent other evidence, the decline in substantiated cases would
be good news. However, the drop was accompanied by a sharp cut
in staffthe workload doubled from 12 cases per worker to 24, despite
the drop in reports. This cut likely had an effect on the quality
of the investigations. Specifically, the staff reductions led
to less timely initiation of investigations, and the staff cuts
and other budget cuts created incentives for workers to err on
the side of failing to "found" a report rather than
refer the case for preventive services or foster care.
Preventive services
With fewer reported and substantiated cases, preventive services
contracted. The annual number of new families entering preventive
programs fell 19 percent from 15,300 to 12,400. Furthermore, the
City itself identified fewer families in need of preventive service:
The share of families in contract preventive services who were
referred by the City fell from 53 to 32 percent.
The City does not maintain, or will not disclose, meaningful
information about the nature of the preventive services it provides
and funds. In the face of reductions in available resources, it
is possible that the quality of these services declined. This
is suggested by the increase in the number of children in preventive
services who eventually required foster care placement, from 480
in 1990 to 1,441 in 1996.
Foster care
From 1990 to 1992 the number of children in foster care increased
23 percent from 40,126 to 49,283, but from then to 1996 the figure
dropped to 42,003. The decline in foster care cases is generally
consistent with the drop in substantiated reports of abuse and
neglect.
The most favorable outcome of foster care is a prompt return
of the child to his or her family. Unfortunately, during the 1990-1996
period this aspect of foster care quality deteriorated. The average
length of stay more than doubled from 2.1 to 4.4 years. Moreover,
once a decision to pursue adoption was made, it took over three
years to complete, one-third longer than in 1990.
The City provides subsidies for three types of child care. "Informal"
arrangements include care by relatives, friends and baby sitters.
One type of "formal" or regulated arrangement in center-based
care, including group day care and Head Start. The other is family
day care, persons caring for a number of unrelated children in
their own homes.
The City performed well in expanding child care services. Subsidized
opportunities increased 18 percent to over 70,000 in 1996. Importantly,
growth was concentrated in programs that offer higher quality
services and the option of full-day care. In addition, child care
vouchers, which give families greater choice, more than tripled
to pass 3,900 in 1996.
Vouchers provided by the City's Agency for Child Development
were overwhelmingly used for group day care (88 percent). By contrast,
vouchers issued by the Office of Employment Services to parents
participating in welfare-to-work programs were predominantly used
for informal care (83 percent). This is cause for concern because
the quality of informal care typically is inferior. Also worrisome
is the 16 percent growth in waiting lists for child care. Consistently
during the period, one out of four children requesting a child
care subsidy did not receive one.
The social service environment is undergoing rapid changes that
will tax even the best managers. In this light, and based on this
assessment of municipal performance, the Citizens Budget Commissionhas
identified eight areas of concern for the future.
- Managing an expanded WEP Program productively. The HRA
did an admirable job of expanding the WEP program in recent years.
The City should continue to focus on managing expansion of the
WEP program so that it functions productively. Suitable tasks
should be identified for the participants, and they should be
adequately supervised. If well run, WEP can deliver significant
benefits to citizens in the form of valuable services, as well
as to participants in the form of a credible work record to aid
in subsequent job searches.
- Striking a better balance between fraud control and inappropriately
denying benefits to the indigent. There is evidence that elements
of the NYC WAY initiative are causing otherwise eligible indigent
New Yorkers to be denied cash benefits. A better balance is needed
between anti-fraud concerns and the goal of providing needy residents
a reliable source of cash income. Administrative procedures could
be revised to avoid inappropriate rejection of applications and
inappropriate closing of cases.
- Maintaining an adequate benefit package for the needy. The
value of the combination of cash benefits and Food Stamps given
to indigent New Yorkers did not keep pace with inflation in the
1990s. The standard of living supported by these benefits is now
significantly below the federal poverty level. In order to protect
the most needy from additional hardship, welfare benefits should
not be allowed to deteriorate further.
- Providing shelter for homeless families. The DHS did not
do an adequate job of providing homeless families with temporary
housing. Some were deterred from seeking aid, and many others
were forced to wait in the EAUs for days before being placed.
The management of the department was so poor that taxpayers paid
millions of dollars in fines imposed by the courts because of
the City's ineptitude. During fiscal year 1997 new procedures
were implemented by the DHS to address some of these problems,
but even greater efforts are warranted.
- Discovering and rectifying child abuse and neglect in a timely
way. In the recent past, under-staffing and other practices
in the provision of child protective services created incentives
for workers to err on the side of avoiding a finding requiring
intervention. As a result, preventive services and supportive
activities were reduced. The creation of the new ACS and increases
in its budget may be rectifying this troublesome situation.
- Limit foster care to the time necessary and appropriate.
Recent years saw a sharp increase in the average time a child
spends in foster care. This is a cause for concern because long
stays may not be necessary; instead they may result from fiscal
incentives related to per diem payments for care and poor supervision
of foster care caseloads. Previous experiments with alternative
payment arrangements for care, which provide incentives for foster
care agencies to shorten lengths of stay in a prudent manner,
were encouraging; new expanded initiatives should be tried.
- Expanding child care capacity to keep pace with workfare initiatives.
Federal requirements for work-related activity by public assistance
recipients will place new demands on the City to provide adequate
child care to these clients. To meet these new demands the City
will have to make difficult resource allocation decisions. Careful
consideration should be given to choosing among serving more children
with inexpensive, lower-quality informal care, fewer children
with more comprehensive programs like Head Start, or a mixture
of services along with more regulation of informal care to improve
its quality.
- Expanding use of computer technology and capacity for program analysis. The City's social service agencies have been slow to introduce new technologies and to utilize evaluation to manage service delivery. More sophisticated record-keeping, combined with the capacity for skillful analysis, would produce meaningful information to guide the formation and implementation of less expensive, higher-quality programs.
The City of New York, with financial aid from the State and federal
governments, is responsible for meeting the basic needs of its
indigent residents. Because more than 1.8 million, or about one
of every four, New Yorkers have incomes below the federal poverty
threshold, this is a formidable task. In fiscal year 1996 the
three relevant municipal agencies-the Human Resources Administration,
the Department of Social Services and the Department of Homeless
Services-spent over $8.0 billion and employed nearly 24,000 workers
to aid the indigent.
How have the fiscal difficulties of the 1990s affected the way
in which municipal government provides basic social services?
This report addresses the question by reviewing the City's performance
in providing income maintenance benefits, employment services,
shelter to the homeless, protection and care for abused and neglected
children, and subsidized day care for children in low-income families.1
The evidence points to two, quite different, general conclusions:
- Due in large part to expanded federal aid, subsidized child
care opportunities increased significantly in number and quality,
with many more children receiving care through programs that emphasize
educational objectives. Although there is justifiable concern
for the future adequacy of local child care capacity as recent
federal welfare reform legislation requires more single parents
to work, the record of the recent past is clear improvement.
- For services other than child care, policy changes and new administrative practices have restricted access to benefits and services. Those actions that reduced fraud and abuse are desirable and praiseworthy. However, there is evidence that some of these policies and practices denied assistance to some needy persons, an outcome which is undesirable.
The harmful consequences have two related sources--misguided policies
and weak implementation of sounder policies. More stringent and
elongated eligibility procedures for public assistance imposed
since 1995 and the sharp increase in caseloads for child protective
workers during fiscal years 1992-1996 are important examples of
imprudent policies. The increased length of stay in foster care
and the multi-million-dollar fines for unjustifiable delays in
sheltering homeless families are dramatic illustrations of mismanagement.
The remainder of this report elaborates upon these conclusions,
presenting the data that support them as well as other relevant
information. The body of the report is organized into five sections.
The first presents background information relating to the economic
and social conditions in the city during the 1990-1996 period
and the municipal resources allocated to social welfare services.
The next four sections examine, sequentially, income maintenance
and related employment services, homeless services, child welfare
services, and child care. A conclusion identifies concerns for
the future.
Social services are intended to help deal with the problems of
society's less fortunate members, whose misfortunes arise from
multiple causes. Analysis of the delivery of social services is,
accordingly, enhanced by an understanding of underlying economic
and social realities as well as the level of resources committed
to these services. Changes in three such basic factors are particularly
relevant to New York City's population-available job opportunities,
patterns of drug abuse, and debilitating medical problems such
as AIDS.
Probably the most important economic fact about New York City
in the 1990s was the sharp drop in employment opportunities, especially
for less-skilled workers. This was rooted in national economic
trends, but had an especially dramatic impact on the local labor
market.
A national recession spanning 1990 and 1991 led to a national
loss of 1,160,000 jobs or 1 percent of total employment. This
was followed by a strong and enduring national recovery adding
nearly nine million jobs through 1996, an 8 percent increase over
1991.2
In New York City the recession began earlier, in September 1989,
and hit harder. (See Table 1.) Job losses continued into 1993
with the decline eventually totaling 327,000 or 9 percent of the
1989 base. Moreover, the local recovery was slow and modest. From
1993 to 1996 only 76,000 jobs were added, and indications are
the gain through 1997 will reach about 93,0003. Thus, the net loss
is an extraordinary 251,000 jobs.
Many of the lost jobs, but few of the recently added jobs, were
ones for which less-skilled workers qualify. The changing skill
mix of the local economy is hard to quantify, but is reflected
in data on average wages. From 1990 to 1996 average earnings per
worker in the city rose 34 percent from $34,371 to $46,040 annually;
in inflation-adjusted terms the growth was 11 percent, reflecting
the higher levels of productivity and greater skill requirements
of the emerging economy. The same fact is reflected in the changing
industrial mix of the local economy, with the share of jobs in
manufacturing falling from about 10 percent to 8 percent in the
1990-1996 period.
Addiction to illegal drugs, notably heroin and cocaine (especially,
crack cocaine), impairs a person's ability to function normally,
and thus greatly increases an individual's chances of becoming
economically dependent and engaging in harmful behavior such as
child abuse and neglect. Therefore, trends in drug abuse may be
closely tied to demand for social services.
Some observers believe there was an increase of epidemic proportions
in the use of "crack" cocaine among inner-city populations
in the late 1980s and early 1990s, followed by a decline during
the mid-1990s which was only partly offset by a resurgence in
heroin addiction. Understandably, systematic data on drug abuse
are not available, but the sketchy evidence only partially supports
this view. The data most consistent with this belief relate to
births to women using cocaine. Such births rose from 1,364 in
1986 to a peak of 3,168 in 1989, and declined to 1,288 in 1994
(the latest year for which data are currently available).
Other data suggest a more stable, and even rising, rate of cocaine
and heroin addiction in the 1990s. Periodic analyses by the federal
Department of Justice revealed that the share of arrestees in
Manhattan testing positive for some type of illicit drug was 83
percent in 1988, 82 percent in 1994 and 84 percent in 19954. In
1995 cocaine remained the dominant type of illicit drug among
arrestees, with 69 percent testing positive compared to 20 percent
testing positive for heroin and 24 percent for marijuana.5
Monitoring of persons seeking treatment in hospital emergency
rooms in the New York City area also suggests the drug abuse problem
did not wane.6 Incidents involving patients who use cocaine jumped
from 12,633 in 1990 to 21,085 in 1993 and remained above 20,000
in 1994 and 1995. Incidents involving patients who used heroin
rose steadily from 3,810 in 1990 to 11,185 in 1994 and were over
11,000 in 1995.
Acquired Immune Deficiency Syndrome (AIDS), a disabling and fatal
disease, emerged at the end of the 1970s and soon spread rapidly.
As the disease becomes more disabling, persons who may have previously
been self-supporting often lose the ability to continue working
and to stay at home without assistance. The need for assistance
with income support, housing and personal care among persons with
AIDS led the New York City Department of Social Services to create
a separate unit for AIDS services in July 1987.
The scale of the problem increased dramatically in the 1980s. Before 1981, 48 adults were diagnosed with AIDS or related illnesses in New York City; by 1985 the figure was 6,352. By 1990 there were 44,374 such adults, and at the end of 1996 there were 92,253. Of this group, 61,643 had died, leaving 30,610 adults living with AIDS in New York City at the end of 1996.
A positive aspect of the story is that more effective medical
treatments, greater understanding of the ways in which the disease
is spread and strong efforts to educate the public about the disease
led to a recent decline in new cases. The number of new cases
reported annually rose relentlessly from 849 in 1983 to 7,334
in 1992. Because of an expansion of the AIDS surveillance definition,
new diagnoses doubled to 14,965 in 1993, but that year appears
to have been a turning point. New cases fell to 12,637 in 1994
and 10,536 in 1995, and were 10,946 in 1996.7
Unemployment, addiction and serious disease are prominent among
the causes of poverty. Since New York City is characterized by
a high incidence of these problems, it is not surprising that
it also has a large (in both an absolute and relative sense) number
of persons living in poverty.8-9
In 1994, the latest year for which data are available, an estimated
1,810,000 New Yorkers lived in poverty, or about one of every
four. The incidence of poverty in New York City (26 percent) was
higher than the average for all central cities in the United States
(21 percent) and far above the overall national average (15 percent)10.
Among the persons in poverty in New York City, fully 772,000 or
43 percent were children under age 19. Of all the children living
in the city, an estimated 44 percent were in households with incomes
below the poverty level; in contrast, the comparable national
figure was 22 percent.
Short-run trends in the number of persons living in poverty are
difficult to track accurately. The 1994 estimate of 1,810,000
in New York City is quite close to the 1990 Census figure of 1,839,000;
this suggests a relatively stable number of low-income people.
However, interim annual surveys based on a relatively small sample
suggest the number fell in 1991 and 1992 (despite the recession),
rose sharply in 1993, and then fell in 1994. It is difficult to
determine the extent to which these annual fluctuations represent
an accurate picture of economic reality or the extent to which
they are a result of the sampling techniques. A reasonable conclusion
from the available data is that for most of the 1990s about one
of four New Yorkers lived in poverty.
The Human Resources Administration (HRA) has been the City of
New York's principal social service agency since its creation
by executive order in 1966.11 The Administrator of the HRA also
serves as the Commissioner of the Department of Social Services
(DSS), a separate entity established in the City Charter to represent
the five boroughs on behalf of the New York State Department of
Social Services. The separation between the HRA and the DSS is
largely a legality; in practice, the DSS functions as part of
the HRA.
In the 1990-1996 period two new agencies were created to take over parts of the HRA's responsibilities. In fiscal year 1994 the Department of Homeless Services (DHS) was created to provide shelter to homeless adults and families. In February 1996 the Administration for Children's Services (ACS) was established to deliver the child welfare services previously provided by the HRA, to handle the child support enforcement responsibilities previously vested in the HRA, and to administer the Head Start program. In December 1996 the other child care programs operated by the HRA were also transferred to the ACS.
Table 2 summarizes the resources allocated to the relevant social
service agencies. Excluding Medicaid purchases, the three agencies
spent a total of $5.9 billion in fiscal year 1996.12 Of this total
about $2.4 billion or 41 percent represented cash benefits to
public assistance recipients. (See Figure 1.) Another $1.1 billion
or 19 percent represented compensation for the nearly 24,000 employees
of the three municipal agencies. Payments to private child welfare
agencies for foster care, adoption subsidies, and related services
required nearly $1.0 billion or 16 percent, and purchases of child
care services required $368 million or about 6 percent. Contracts
for shelter services for the homeless received $226 million, but
this sum was supplemented by services provided at shelters operated
directly by the municipal agencies.
Overall spending for social services (less Medicaid) grew steadily
from 1990 to 1994, but was cut in fiscal years 1995 and 1996.
Growth in the 1990-1994 period averaged 7 percent annually in
nominal dollars and 3 percent in constant dollars. The constant-dollar
reductions were 4 percent in 1995 and 6 percent in 1996. Preliminary
figures for fiscal year 1997 suggest the downward trend continued.13
Spending for municipal agency staff and for purchased child welfare
services followed the overall pattern, but resources allocated
for the other major items deviated from the general trend. Employee
compensation grew 4 percent from 1990 to 1994, but most of the
increase was for fringe benefits such as health insurance. Salary
and wage costs were nearly stable as the number of employees fell
from 31,909 to 26,250.14 From 1994 to 1996 spending was lowered
9 percent as the number of workers was cut further to 23,837.
Purchases of child welfare services grew 28 percent from 1990
to 1994, then declined 9 percent from 1994 to 1996.
For cash benefits, the turnaround in spending occurred in 1995
rather than 1994. Expenditures rose 54 percent from 1990 to 1995,
then fell 10 percent in 1996. However, benefits for the Home Relief
program, which serves single adults and childless couples, began
to fall after 1994, with the decline reaching 29 percent by 1996.
Benefits for the Aid to Families with Dependent Children program
did not decline until 1996, and then by a lower 5 percent.
Unlike the other services, spending for child care grew almost
steadily over the 1990-1996 period. Expenditures at the end of
the period were 55 percent above the 1990 figure, with an 8 percent
increase in the last two years.
Purchases of services for the homeless increased steadily and
significantly (74 percent) over the 1990-1994 period, but the
cut in 1995 was followed by an increase in 1996. The 1995 reduction
seems related to changes in ways of caring for homeless families
associated with the creation of the DHS in 1995.
Partly offsetting the reductions in municipal staff and certain
types of purchased services was a steady increase in spending
under the category of other non-personnel items. These purchased
goods and services increased 34 percent over the 1990-1996 period,
with a 25 percent increase in the last two years.
How have these varying increases and decreases in resources affected
the services provided to the large population of indigent New
Yorkers? The next four sections consider the ways in which income
maintenance and employment services, homeless services, child
welfare services, and child care services have been altered since
1990.
The HRA's income support programs have two main goals:
(1) To provide to destitute adults and children sufficient cash to
sustain a minimally adequate standard of living; and (2) to help
employable adults gain financial independence through training
and employment. Income support programs have become intertwined
with the employment programs as successive welfare reforms have
tied receipt of cash benefits to participation in work or training
activities.
The first goal is addressed through two public assistance programsóthe
federally supported Aid to Families with Dependent Children (AFDC)
and the New York State Home Relief programs.15 Single-parent families
and two-parent families with an unemployed head of the household
can qualify for, respectively, AFDC or AFDC-Unemployed Parent
(AFDC-U) if they have children under 18 and incomes and assets
below a level set by the State. Home Relief (HR) covers single
adults, childless couples, and two-parent families in which the
head of the household is employed, if their income and assets
are below a level set by the State. The HR program is funded entirely
by New York State and its local governments. Food Stamps, which
are funded by the federal government, are available to all individuals
and families with incomes and assets below levels set by the federal
government.
Repeatedly revised federal and State requirements that employable
public assistance beneficiaries engage in some employment-related
activity have increasingly shaped income support services. The
federal Family Support Act of 1988 established requirements for
the provision of employment-related services to eligible AFDC
recipients and provided funding for these services. The Family
Support Act required that 7 percent of eligible recipients participate
in job-related activities at least 20 hours per week in federal
fiscal year 1991, increasing to 11 percent in 1993 and 20 percent
in 1995.
The Office of Employment Services (OES), a subdivision of the
HRA, administers the Begin Employment Gain Independence Now (BEGIN)
program, a City program initiated in fiscal year 1991 to comply
with the Family Support Act. BEGIN provides AFDC recipients with
services such as job clubs, career counseling, English-as-a-Second-Language
classes, and vocational training.
The federal Personal Responsibility and Work Opportunity Reconciliation
Act enacted in August 1996 stipulates that 25 percent of families
receiving benefits must participate in work-related activities
in federal fiscal year 1997. The required participation rate rises
by five percentage points each year through 2002 to reach 50 percent,
and the weekly work requirement increases to 25 hours in 1999
and to 30 hours in 2000.16
Work requirements established by the State for HR recipients
are more stringent than federal AFDC stipulations. In December
1989 the State mandated an Applicant Job Search Program requiring
HR applicants first to participate in a four-week independent
job search and, if unsuccessful, to participate in the Work Experience
Program (WEP) while continuing to look for work.17 Under WEP, HR
recipients work in a municipal or nonprofit agency under the supervision
of agency personnel. The OES administers WEP. The State required
that 22 percent of adults receiving HR participate in employment-related
activities during State fiscal year 1992, increasing to 50 percent
in 1995.
In City fiscal year 1995 the HRA began implementing its own work
initiative, called ìNew York City Work, Accountability,
Youî (NYC WAY). It has three main components-eligibility
verification, fraud reduction, and WEP. The NYC WAY program was
implemented in three phases. The first stage, launched between
January and March 1995, applied to new HR applicants.18 These individuals
were required to cooperate with an Eligibility Verification Review
(EVR) process upon application and then immediately placed in
job search activities. The EVR is an intensive assessment of applicant
eligibility that involves in-depth interviews, verification of
social security numbers, and clearances against the State Welfare
Management System, the State Department of Motor Vehicles and
federal Internal Revenue Service data. As a result of the review,
some applicants are selected for a home visit. After the EVR,
applicants complete the previously established public assistance
eligibility determination process at an HRA Income Maintenance
Center. After application approval all employable HR recipients
are directed to WEP assignments.19 The second phase, begun in July
1995, extended NYC WAY to include all current HR recipients and
applied the EVR to all new AFDC applicants. The third stage extended
WEP to include employable AFDC recipients beginning in April 1996.
There are four components to what are commonly called welfare
benefits: The basic allowance; the home energy allowance; the
shelter allowance; and, Food Stamps. The basic allowance is set
by the State Legislature, as is the home energy allowance, which
supplements the basic grant to cover heating and energy costs.
The shelter allowance is set by the State Social Services Commissioner;
it is the lower of a maximum amount varying with family size and
a household's actual rent. Food Stamps are issued for an amount
set by the federal government that varies with family income (and
counts public assistance benefits as part of that income). Table
3 shows that the maximum monthly benefit package for a family
of three rose 11 percent from fiscal year 1990 to fiscal year
1996, reaching $849. The growth was driven entirely by a 44 percent
increase in Food Stamps; the other three components were not raised
during the period.20
Adjusted for inflation, the value of the monthly benefits fell
10 percent. Excluding Food Stamps, the real value of the remaining
benefits declined 18 percent.
The total maximum benefit in 1990 amounted to 88 percent of the
federal poverty threshold. By 1996 the benefits had fallen to
81 percent of that minimal standard. In 1990 two-thirds of public
assistance households paid rents at or above the maximum shelter
allowance; as of 1996 more than three-quarters did. In summary,
in 1990 welfare benefits were not adequate to permit families
to purchase a minimally acceptable standard of living, and they
have become more inadequate since.
The most important and striking fact about income support services
in the 1990s was the turnaround in caseload beginning in 1995.
From 1990 to 1995 the number of persons receiving public assistance
(AFDC and HR) increased steadily; the overall growth was 38 percent
from 830,415 to 1,146,829. (See Table 4.) Measured in terms of
cases as opposed to individuals, the growth was 49 percent from
372,325 to 555,384; HR cases increased 66 percent, AFDC cases
35 percent and AFDC-U cases 295 percent. The rapid growth among
HR and AFDC-U cases was widely interpreted as consistent with
the decline in job opportunities for less-skilled individuals
associated with the recession and structural changes in the local
economy. The slower growth of AFDC cases continued a trend toward
more single-parent families and a larger share of such families
living with incomes below the poverty threshold.
Then in 1996 the trend was reversed. In that year the overall
caseload fell 12 percent, with a striking 23 percent decline in
HR cases and a 4 percent decline in AFDC cases, while AFDC-U cases
continued to increase. In absolute terms, the number of cases
dropped nearly 66,000.
More recent data indicate the downturn in 1996 was not an anomaly.
The number of persons receiving public assistance fell steadily
after fiscal year 1996, and stood at 908,314 as of April 1997,
or 60,000 lower than April 1996.21
Greater movement to self-sufficiency
The expansion of employment-oriented services
was dramatic. As shown in Table 5, the number of AFDC client entries
into employment-related activities rose from 34,485 in 1991 to
122,591 in 1996; for HR the corresponding figures were 55,944
and 95,655.22 However, most of this increase took place before 1996;
the increase in entries in 1996 was a smaller 9,059 for AFDC and
for HR there was a drop in entries from 1995.
Of course, enrollment in an employment-related activity is not
the same as gaining a job. Most employment-related activity for
AFDC clients was job counseling and training; for HR clients it
was predominantly WEP. In assessing movement to self-sufficiency
the more relevant measure is the number of job placements. Such
placements increased steadily with the expansion of employment
activities, but much of the increase was before 1996. Among AFDC
clients the 1996 increase in placements was 8,982, and among HR
clients, 3,115. These increased placements were equal to about
three-quarters of the decline in AFDC caseload, but equaled just
6 percent of the much greater decline in the HR caseload. (See
Figure 2.) Overall, increased job placements equaled less than
one-fifth of the decline in caseload.23
The likelihood that the decreased caseload was not matched by
increased self-sufficiency is also suggested by the growth in
non-public assistance recipients qualifying for Food Stamps. In
1996 this type of Food Stamps beneficiary increased 23,000 or
10 percent. This suggests most people no longer receiving public
assistance remain indigent and qualify for Food Stamps.
New administrative and work requirements
The new eligibility and work requirements associated with the NYC WAY program appear to be the major factors causing a decline in the public assistance caseload. These new procedures were implemented in the 1995-1996 period and coincide with the drop in caseload.
The NYC WAY initiative involved several new requirements for potential
and current beneficiaries. Applicants were screened more vigorously
for eligibility and referred to employment services more quickly;
current beneficiaries also were required to participate in employment-related
activities, with more frequent interviews scheduled with employment
counselors, and those not finding work were required to participate
in the WEP program. The scale of activity associated with NYC
WAY is reflected in the more than doubling of employment interviews
scheduled for HR clients in 1996 and the 20,773 or 28 percent
increase in WEP participation among HR clients in that year. (Refer
to Table 5.)
The expansion of WEP is a positive development previously recommended
by the Citizens Budget Commission.24 It has the dual benefit of
deterring abuse of benefits by clients who may be working surreptitiously
and of providing otherwise unemployed beneficiaries with work
experience and constructive activities during their day. When
targeted to employable clients and structured with adequate supervision,
WEP is a desirable program that warrants even further enlargement
to reach more of the AFDC population.
However, other administrative practices initiated in the last
two years may be less desirable. The effect of additional interviews
and screenings may be to cause indigent households to lose cash
benefits for failure to comply with new rules that have little
bearing on the need for cash assistance. A less intensive version
of these administrative practices was employed in the mid-1980s
and was criticized as unnecessary "churning" of the
welfare caseload in order to achieve short-run fiscal savings.25
Statistical evidence of such churning appears in administrative
records as higher rates of rejection of applicants, higher rates
of case closings for failure to comply with administrative rules,
and higher rates of case reopenings within short periods of their
closure. Such data, maintained by the HRA in the past and presumably
still recorded, has not been made available for this report. Presumably,
the figures would indicate, especially for HR cases, an increased
rate of denied applications, an increased rate of case closings
for failure to comply with administrative requirements, and a
greater number of closed cases reopened within 60 or 90 days.
To the extent these practices prevail, needy families and individuals
are being denied cash benefits inappropriately.
In the absence of relevant data, the City defends the administrative practices on the basis of its suspicions. According to the HRA: "We suspect that many of the tens of thousands that failed to show for their annual face-to-face re-certifications and other mandatory interviews, and also the thousands who request that their cases be closed, are also employed and therefore no longer in need of public assistance. As we have not had the resources to follow up on these cases, we cannot document and confirm these suspicions."26
Another set of statistical indicators suggesting inappropriate
denial of benefits relate to fair hearings requested by clients.
(See Table 6.) The number of fair hearings requested reflects
the level of dissatisfaction with administrative decisions.27 Initially
the number of fair hearings requested declined 15 percent in 1991,
then was fairly constant through 1995.28 In 1996, however, requests
rose 43 percent from 84,300 to 120,800, despite the drop in the
number of cases. Moreover, fair hearings requested increased as
a percentage of the average monthly caseload, growing from 8 percent
in 1995 to 21 percent in 1996 for HR employment-related requests,
and from 21 to 27 percent for other public assistance recipients.
Furthermore, HR income support-related requests increased from
12 to 17 percent.29 The number of fair hearings requested based
on OES decisions more than doubled in 1996, indicating substantial
objections to the aggressive implementation of work-related requirements.
The number of fair hearings held did not increase as quickly
as fair hearing requests29 percent from 52,912 in 1994 to 68,200
in 1996. Consequently, as a share of the fair hearings requested
they fell in 1996 from 71 percent to 56 percent. There are two
conflicting explanations for the disparity between the number
of requested fair hearings and the number actually conducted.
According to the Mayor's Office of Operations, it was due to a
40 percent reduction in income support staff available for processing
fair hearing requests. The Office of Operations explains that
the reduction in staffing was not the City's choice, but was the
result of injunctions preventing the City from reorganizing and
redeploying staff.30 In contrast, the HRA claims, "There is
no connection between the number of Income Support staff and fair
hearings held…[T]he discrepancy between hearings requested
and hearings held stems from the decision of recipients not to
complete the fair hearing process."31
The information on the timely implementation of fair hearing decisions
also indicates a decline in the quality of program administration.
The percentage of fair hearing decisions implemented within 30
days for public assistance cases and within 10 days for Food Stamp
cases improved in 1991, but worsened thereafter. Timely implementation
for public assistance cases decreased from a peak of 96 percent
in 1991 to 68 percent in 1996, a 40 percent drop. The figure for
Food Stamps dropped from 96 percent in 1991 to 90 percent in 1996.
In other words, when fair hearings were held and a decision rendered,
the City was increasingly unable or unwilling to implement the
decisions.
The City's services to the homeless are organized around two
different populations-families and single adults. Families are
screened and provided temporary housing until a more permanent
arrangement can be made; single adults are assigned to municipally-sponsored
shelters each night they are homeless.
Prior to 1993 homeless services were provided by the HRA. Its Special Services for Adults unit had responsibility for homeless single adults; its Crisis Intervention Services unit was responsible for aiding homeless families. The HRA's reliance on substandard hotels as a source of temporary housing for families led to much criticism and dissatisfaction, leading the City Council to create the new DHS in 1993 with a mandate to eliminate reliance on these hotels and improve services in other ways. While the DHS took over responsibilities previously under the Crisis Intervention Services and the Special Services for Adults units, the HRA retained responsibility for efforts made by Diversion Teams located at Income Maintenance centers to reduce the need for homeless services to families, and for shelter services to victims of domestic violence. Although the DHS repeatedly failed to achieve the objective set by the City Council of eliminating reliance on substandard or "noncompliant"32 hotels, the DHS was reauthorized in 1995 until 1996, and then in 1996 had its charter extended to July 1998.33
Overall, the record of homeless services in the 1990-1996 period
is a mixture of dismal failure in aiding homeless families and
modest success in improving the shelter system for single adults.
As described more fully below, there were more homeless families
in temporary quarters in 1996 than ever before despite the fact
that access to temporary housing for families was restricted by
administrative practices. (See Figure 3.) The City continued to
provide many families shelter in substandard hotels, and the average
time before the City found them a more permanent arrangement increased
significantly. In contrast, the number of homeless single adults
declined somewhat and the lessened need for shelter space was
used as an opportunity to reduce reliance on the lowest quality
facilities.
Poor Performance in Aiding Families
Whether at the HRA or the DHS, managers of services to families pursued three strategies to improve performance. First, the Diversion Teams and other mechanisms were used to try to prevent the need for temporary placements by better screening and otherwise aiding families while they still have housing options. Second, alternatives to hotels and other low-quality housing were sought to improve temporary living conditions for those requiring assistance. Third, greater access to the supply of permanent housing was sought in order to speed the out-placement of homeless families. Regrettably, it proved difficult to implement these strategies, and in some cases they backfired.
Efforts to reduce the need for placements begin with aid provided
by contracted Homelessness Prevention Services and by HRA Diversion
Teams. In 1992, the HRA granted contracts to nonprofit agencies
to prevent families from becoming homeless and entering the shelter
system. Nonprofits run these Homelessness Prevention Programs
in 10 Income Support (IS) centers throughout the city.34 The staff
offer assistance in the form of advocacy on behalf of the families,
legal representation in Housing Court, referrals to other services,
and assistance with public assistance and housing subsidy applications.
If the Homelessness Prevention Program is unable to help the family
avoid homelessness, the next step is an HRA Diversion Team. Families
may also seek assistance directly from Diversion Teams without
first consulting a Homelessness Prevention Program.
As of Spring 1996, the HRA staffed Diversion Teams in 38 IS Centers
and at the Emergency Assistance Unit (EAU).35 Created in 1993, these
teams work with families requesting shelter. To maximize their
impact, the HRA required that all families seeking shelter first
consult with a Diversion Team before reporting to an EAU. Diversion
Teams perform a task similar to the nonprofit agencies. The means
at their disposal include supplemental cash grants, mediating
between "doubled-up" families, pursuing alternative
doubled-up living situations, and assisting families in Housing
Court.36 If the Diversion Team also is unable to prevent a family
from becoming homeless, a staff member then refers the family
to an EAU. Beginning in November 1994, any family that did not
consult with a Diversion Team must call the Homeless Hotline for
a referral before being allowed access to the EAU.37
The EAUs are facilities from which homeless families are placed
in temporary quarters. During the early 1990s, the HRA closed
the EAUs in Brooklyn, Queens and Manhattan, leaving only one EAU
in the Bronx. Families were further discouraged from seeking aid
from the DHS by the extended amount of time they must spend at
the EAU before placement. Many families were detained at EAUs
for several days, sleeping with their children at the EAU offices.
These measures reduced the number of new families provided assistance,
in part by successfully diverting families from entering the homeless
system, but there appears to be associated harm to those in need
in the delays and discouragement in seeking service. Data are
not available for earlier years, but from 1993 to 1996 the number
of families entering temporary housing was cut more than one-third
from 14,691 to 9,450. (See Table 7.) This is related to the poor
job the City did in aiding people in a timely way by moving them
from the EAUs to acceptable temporary housing. In 1993 less than
half of the families arriving at the EAU were placed within 24
hours. This figure improved the next year, but in fiscal year
1995 only one-third of families were referred in 48 hours,
and in 1996 just 26 percent.38 In other words, three of four
families in 1996 spent more than two days waiting for shelter,
many of them sleeping on desks and chairs in the EAU offices.
This abysmal performance is baffling because the decline in the
number of families seeking assistance should have made it easier
for intake workers to place families quicker.
The disgraceful performance at the EAUs led to court cases and
court-imposed fines on the City for failure to place families
within 24 hours. Fines of $50 the first night and $100 per night
thereafter were in effect from 1991 to 1994; the fines were reinstated
in 1996 and raised to $150 per night for the second and subsequent
nights. By the end of 1996 the City had paid more than $6 million
in fines.39
While the diversion strategy backfired in the form of heavy fines
and denied services, the efforts to improve the quality of temporary
placements also were not fully successful. The City's self-set
goals were to eliminate reliance on hotels and to eliminate use
of congregate shelters (Tier I shelters), which did not give families
adequate space and privacy. The last of the Tier I shelters were
converted to higher-quality facilities in 1993, but the DHS continued
to be dependent on hotels. In 1996, 944 families were housed in
hotels and about one-third of those families were in noncompliant
hotel units.40 The number of families in hotels in 1996 was more
than double the number in 1990 and down only modestly from the
peak in 1993 when outrage led to the creation of the DHS.41
On a positive note, the City added 41 shelters in the 1990s to
its stock of higher-quality Tier II facilities, reaching a total
of 78 in June 1996.42 Consequently, the share of families staying
in these facilities grew from 68 percent in 1990 to 72 percent
in 1996. The City also augmented the number of specialized residences.
The HRA opened a shelter for pregnant women and another for childless
couples in March 1990. It then opened another in 1992 and five
more in 1993. Despite a series of openings and closings of shelters,
the City maintained the number of specialized residences at eight
through 1996. Specialized residences housed a small share of the
families-between 5 and 7 percent.
Another important development in the type of temporary shelter
offered to families was the establishment of reception and assessment
centers. In February 1993 the HRA opened the first assessment
center in Brooklyn.43 These centers are temporary shelters designed
for families whose housing issues cannot be resolved by income
support Diversion Teams or by the EAU staff. The assessment centers
give caseworkers additional time to determine whether a familyís
housing problem can be resolved and, if not, to determine the
best type of shelter placement. The HRA opened assessment centers
in the Bronx and Queens in April 1993, and the DHS launched a
Manhattan site during fiscal year 1994. The HRA also opened the
first reception centers in April 1993 in the Brooklyn and Queens
assessment centers. These facilities offered immediate temporary
housing to families after business hours when the income maintenance
centers are closed. However, in fiscal 1995, the DHS phased out
the reception centers. Together the assessment and reception centers
housed an average of 5 percent of the families in temporary housing.
The third strategy of seeking more placements in permanent housing
also did not work as intended. Some success was achieved in the
sense that the number of families relocated to permanent housing
was about 6 percent greater in 1996 than in 1990, but the latest
figure was still below the 1994 high. Recent efforts were complicated
by the elimination in 1995 of some federal funding for housing.
More importantly, increased out-placements did not lead to a smaller
caseload. If fewer families were entering the shelters, and roughly
the same number (or more) were relocated from the shelters, then
one would expect there to be fewer families in the shelters. But
the average number of families in temporary housing actually increased
to reach an all-time high of 5,693 in 1996 compared to 3,196 in
1990. The explanation of this seeming contradiction is that many
families were spending much longer periods in the shelters before
out-placement. The average length of time families lived in "temporary"
housing grew 52 percent or almost 11 weeks from 147 days in 1990
to 223 days in 1996.
The extended length of stay in temporary housing was not only
a burden on the affected families; it also was an added fiscal
burden for local taxpayers. Temporary housing is far more expensive
than subsidized permanent housing. The City spends approximately
$100 per day per family for Tier II facilities,44 and the average
cost to house a family in a hotel (based on four noncompliant
hotels used in August 1996) was $77 per night,45 not including meal
supplements. On a monthly basis these costs amounted to $3,000
and $2,310, respectively. A federal Section 8 housing voucher
for a family of four, by contrast, was $761 per month. The public
assistance housing allowance for a family of three in New York
City was $286 per month, and even with the maximum Jiggets
relief the benefit was no more than $572 monthly.46 Even after one
takes the landlord bonuses and moving expenses that the City provides
into consideration, a year in a subsidized apartment is much less
expensive than the same amount of time in a Tier II facility or
a hotel.
Improvement in Services to Single Adults
In contrast to the trend among families, the average number of
adults lodged per night fell 22 percent from 1990 to 1996. (See
Table 8.) The total census dropped steadily from 8,750 in 1990
to 6,219 in 1995, and then increased by about 600 people to reach
6,848 in 1996. The vast majority of sheltered adults were men,
and a 24 percent reduction in their number drove the overall trend.
The average number of women lodged per night decreased 9 percent.
The decreasing single adult census may be related to the improving
economy and the provision of specialized services and housing
to clients with AIDS, but the most significant reason likely was
the City's construction of additional SRO units over the period.
The City planned in the late 1980s to build 5,000 new SRO units
for special homeless populations, including the mentally ill,
the elderly, people with AIDS, and people who have completed drug
treatment.47 Between 1992 and 1995, the City built 23 new SRO facilities
and renovated another, though it is unclear how many additional
units the facilities provided.48 While the most recent upswing in
the census was concurrent with the implementation of NYC WAY and
its closing of many HR cases, it is not possible conclusively
to link them causally.
The quality of services to homeless adults can be measured by
the type of shelter provided. The City reduced the number of persons
housed in low-quality, barracks-style congregate facilities. During
the Summer of 1992, the HRA made progress by reducing the number
of beds in the two largest armory shelters for men by 35 percent
or 1,370 beds.49 Overall, such capacity was lowered 44 percent from
4,500 in July 1989 to 2,508.50 In fiscal year 1993 the HRA opened
STAR II, a shelter with a drug-abuse treatment program, and in
1994 three new contracted shelters with 183 beds opened.51 Furthermore,
the congregate facilities that remained in use were significantly
upgraded, so that most adults now sleep in dormitory-style spaces
with partitions, rather than in large open areas.
These developments suggest the City improved the quality of shelter available to single adults. One available indicatoróthe percentage of adults in shelters that provide additional servicesómight support this theory. However, it is unavailable prior to 1995, and should therefore be assessed cautiously. From 1995 to 1996 these "program" shelter beds rose from 39 percent to 52 percent of all adults sheltered.52 Overall, the City appears to have made progress in improving the types of shelter available to homeless adults.
The progress in upgrading the quality of the municipal shelters
was not matched by improvements in other aspects of services to
homeless adults. Three important dimensions are the rate at which
shelter clients are placed in permanent housing, the extent to
which employment services help shelter residents find a job, and
the ability of the DHS to assist shelter residents to apply for
federal Supplemental Security Income (SSI) benefits.
The City did slightly better placing single persons in more permanent
housing from the DHS shelters. In 1996 it placed 1,934 adults
or 8 percent more than in 1990. With respect to employment services,
the available data point to a deterioration in service. The annual
number of employment placements dropped from 1,167 in 1990 to
468 in 1996; this rate of decline is three times steeper than
the decrease in the number of homeless adults in the shelters.
The DHS fared no better with SSI-overall, 28 percent fewer shelter
residents were accepted in SSI with DHS assistance. The decline
was particularly sharp in the last two years-66 percent from 412
in 1994 to 142 in 1996.
For most of the 1990s, the HRA's Child Welfare Administration
(CWA) was responsible for New York City's child welfare services.
Following the highly-publicized death of a young girl, Elisa Izquierdo,
who had been known to the CWA, Mayor Rudolph W. Giuliani signed
Executive Order 26 in January 1996, creating the Administration
for Children's Services (ACS).
Despite the change in the social services organizational chart,
the three main areas of child welfare services remained the same.
The first is child protective services (CPS), the investigation
of reports of child abuse and neglect and initial case monitoring.53
The second is preventive programs, which provide services to stressed
families to help them function better and to prevent the removal
of children from their homes. The third area, foster care, consists
of alternative homes (with families, group homes, or institutions)
for children whose parents are unavailable or unable to provide
a safe home for their children. The ACS and contracted foster
care agencies also attempt to reunify families, and arrange adoptions
for children who cannot be reunited with their parents.
The dominant trend of the 1990s was a contraction in child welfare
services. Both the number of families receiving preventive services
and the number of children in foster care were reduced. To the
extent this reflects less abuse and neglect among New Yorkers-and
there is evidence this is the case-the reduced services were a
positive development. However, there is also evidence suggesting
services were not provided to some needy children because of fiscal
and other limitations, and that some resources were misused due
to excessive lengths of stay in foster care.
Failings in Child Protective Services
The first contact that City caseworkers have with an abused or
neglected child typically occurs through a report of alleged child
maltreatment. Reports of child abuse and neglect received by the
City decreased annually between 1990 and 1995, falling 14 percent
from 55,158 to 47,571. (See Table 9.) As often happens after high-profile
child abuse cases, the death of Elisa Izquierdo spurred an increase
(11 percent) in 1996, bringing abuse reports to almost 53,000.
The number of children covered by these reports of alleged child
maltreatment also declined, from 88,334 in 1990 to 75,017 in 1995,
before increasing to 85,432 in 1996.
The New York State Central Register hotline classifies as "high-risk"
those reports that contain allegations indicating that the child
may be in imminent danger. Social service regulations mandate
that CPS caseworkers follow a special protocol for responding
to these reports. The number of high-risk reports decreased 23
percent from 22,402 in 1990 to 17,276 in 1996. High-risk reports
also comprised a shrinking percentage of all abuse reports, falling
from 41 percent to 33 percent.
As allegations of abuse and neglect became fewer, the share determined
to be actual instances of abuse or neglect also diminished. The
percentage of "cases founded" fell from 41 percent in
1990 to 30 percent in 1993. Beginning in 1994 the measure changed
to "reports founded," but still continued to decline,
from 23 percent to 20 percent in 1996. These New York City rates
were far lower and declined much faster than national rates. For
the rest of the U.S., the share of reports substantiated fell
from 43 percent to 36 percent between calendar years 1990 and
1995.54
Consequently, while allegations of abuse increased 11 percent
from 1995 to 1996, founded reports actually decreased 24
percent from 13,357 to 10,135. Overall, the number of founded
cases or reports of abuse or neglect fell nearly two-thirds from
29,342 in 1990. Remarkably, this enormous decrease is likely understated,
because figures for earlier years relate to cases, which often
combine more than one report of abuse or neglect. If the 1990
figure were adjusted by the average ratio of reports to cases,
then there would have been 42,546 substantiated reportsthe 1996
figure is fully three-quarters lower.55
Absent other evidence, the general decline in abuse and neglect
reports and in founded cases would be good news.56 However, these
trends were accompanied by a sharp cut in CPS staff, and this
cut likely had an effect on the quality of the investigations.
Specifically, the staff reductions led to less timely initiation
of investigations, and the staff cuts and other budget cuts created
incentives for workers to err on the side of failing to "found"
a report rather than refer the case for preventive services or
foster care.
Over the 1990-1996 period, the CWA reduced its average available CPS staff 30 percent from 760 to 532 caseworkers. While decreasing numbers of reports suggest that less staff were needed, caseload ratios are a more accurate indication of whether or not the level of staff reductions was appropriate. The benchmark for caseloads in this field is the Child Welfare League of America (CWLA) standard of 12.57 Between 1990 and 1996, the average protective worker caseload soared from 12 to 24, or double the CWLA benchmark. Moreover, the number of new cases per worker per month also increased over the seven-year period. Although the rate was close to the CWLA standard of four in 1990 and 1991, it fluctuated between six and seven thereafter. The caseloads apparently rose to a point that lowered the quality of services intended to protect children's lives.
An important indicator of quality is the percentage of abuse and
neglect allegations investigated within the State-mandated 24-hour
time limit. This indicator remained above 99 percent for all but
one year, dipping to 98.8 percent in 1995. Although this is a
high rate of compliance, it is important to remember that even
a small percentage of noncompliance represents delays in assistance
to hundreds of children whose lives may be in danger. For example,
the fact that caseworkers did not respond promptly to 0.9 percent
of abuse reports in 1996 suggests that approximately 480 reports
involving 770 children were not investigated within the proper
time frame, leaving those children in situations of unknown risk
for 24 hours or more.
Even more troubling is the City's record of compliance with the
rapid response protocol for high-risk reports. This rate of compliance
deteriorated during the 1990s despite decreases in both the number
of high-risk reports and in the percentage of all reports classified
as high-risk. Compliance fell from almost 99 percent in fiscal
year 1990 to 95 percent in fiscal year 1996. That 5 percent failure
rate means that caseworkers did not respond promptly to about
860 of the most serious reports of abuse, leaving at least that
many children in uninvestigated, potentially dangerous situations
for too long.
The City did improve the promptness with which investigations
were completed once initiated. For the 1993-1996 period (earlier
data are not publicly available), the share of determinations
made within 60 days increased from 55 percent to 68 percent. While
reports were investigated more quickly, they often were investigated
inadequately. A review by the State DSS of child protective services
found severe short-comings.58 Among its many criticisms, four were
particularly damning.
First, only 90 percent of investigations were begun within 24
hours; this is markedly different from the over 99 percent rate
reported by the City (refer to Table 9), and suggests many more
children are endangered by the City's sluggish response than previously
thought. Second, initial contact with the family did not occur
within 24 hours in one of five cases of reported abuse or neglect,
and in one of six the caseworker's assessment of imminent danger
to the children was deemed inadequate because of insufficient
information or failure to make face-to-face contact, among other
reasons. Third, caseworkers did not execute all the required elements
of an investigation in more than half the cases. Investigations
were judged to be insufficient to arrive at a determination in
one-quarter of all cases; worse yet, investigations were insufficient
in two of five unfounded reports. Fourth, and perhaps most startling,
caseworkers did not remove children in imminently dangerous situations
7 percent of the time, and legal petitions to remove children
were not filed in one-fourth of the cases in which such action
was considered necessary to protect the children. The ACS responds
to this audit by saying the State DSS's conclusions substantially
overstated the severity of the problem. The source of this overstatement
was the CWA's inability to fully document its child protective
casework.59
Less clear is the impact of reduced staffing on the rate at which
reports are founded. (See Figure 4.) Caseworkers with relatively
limited training must make difficult judgments in a brief period,
frequently based on less than complete evidence. The decision
to handle a case as unfounded rather than assemble the evidence
to prove a finding of abuse and neglect with its associated court
actions may be influenced by staff workload. The most concrete
evidence is a memorandum from the CWA's Bronx borough director
to child protective supervisors warning them to stop opening new
cases of reported abuse without closing extant cases.60 The memorandum
instructed the caseworkers "to follow this simple mathematical
equation (for every opening you should have two closings/transfers),"
regardless of the merits of each individual case. Such a standard
operating procedure would explain the reduction in founded cases,
just as clearly as it endangers the lives of abused and neglected
children.
Preventive programs serve families that are experiencing difficulties
in order to help them function better and to prevent removal of
the children. Substantiated abuse cases that are not directed
to foster care are placed in preventive care. In addition, families
can be referred by other service providers, like hospitals and
schools. City preventive caseworkers provide services to some
families, but the majority of families are supervised by private,
nonprofit agencies funded by City contracts.
The falling number of reported and, more importantly, substantiated
cases of abuse or neglect is associated with a declining number
of cases entering preventive services. Between 1990 and 1996 the
annual number of new families receiving care fell 19 percent from
15,316 to 12,407.61 The City itself identified fewer families as
candidates for preventive service: The share of families in preventive
services referred by the CWA fell from 53 percent to 32 percent.62
The shortcomings in the City's abuse and neglect investigations
likely hastened this decline. Because many cases involving preventive
services remain with the agency for a long time, the total preventive
services caseload declined more slowly. The average number of
active cases being served fell 5 percent from a monthly average
of 14,039 in 1990 to 13,286 in 1996.63
Two new preventive programs were established in the 1990s. The
Family Rehabilitation Program was launched in 1990 to serve families
with children at risk because of parental substance abuse. This
program combined intensive counseling services with substance
abuse treatment. However, its budget was cut in later years, and
the substance abuse component was eliminated in 1996 because State
funding was lost.64 In December 1991 the CWA created the Family
Preservation Program to offer four to eight weeks of intensive
counseling and support in the homes of families with children
at imminent risk of being placed in foster care.65 Together these
programs served 2,100 families or 8 percent of all families receiving
preventive care in 1996.
Beyond this data, the City does not maintain, or will not disclose,
meaningful information about the nature of the preventive services
it provides and funds. Without such information it is difficult
for both agency managers and outside monitors to assess the quality
and effectiveness of the preventive services supported by taxpayer
dollars. It appears that in the face of reductions in available
resources the quality of these services declined. This is suggested
by the increase in the number of children in preventive services
who eventually required foster care placement; the number rose
steadily from 480 in 1990 to 1,576 in 1995 before dropping to
1,441 in 1996.66 The ACS offers an alternative explanation of the
increase, suggesting it was the result of "contract providers
increasingly focusing on families with the highest need, who face
the greatest risks for placement."67
Foster care is an alternative living situation for children whose
parents are unable to care for them or are unavailable to do so.
While children are in foster care, caseworkers attempt to assist
the families and foster parents with their needs so that the family
can be reunited. If this proves impossible, caseworkers pursue
adoption. As with preventive services, the City provides directly
some foster care services (for about one-third of the children),
but contracts with voluntary agencies for the majority.
The trend in the scale of foster care service was an initial
period of growth for three years followed by a decline in the
number of children in care in the following four years. From 1990
to 1992 the average monthly census increased 23 percent from 40,126
to 49,283. (See Table 10.) In March 1992 the total population
reached 49,996 children, the highest census during the seven-year
period. By 1996, however, the census had dropped 15 percent to
42,003.
The decline in foster care cases is consistent with the drop in
substantiated reports of abuse and neglect. In fact, the number
of new children entering foster care fell 54 percent from 17,252
in 1990 to 7,949 in 1995. In 1996, however, the number of new
entries rose 20 percent to 9,549. This recent upswing probably
reflects a change in administrative practice to err in favor of
the safety of the child over preserving the family in making removal
decisions. This shift in practice followed the death of Elisa
Izquierdo, and reversed an earlier policy favoring keeping families
together. The change in approaches is evidenced in the steady
decline in court cases filed to remove children involuntarily
from their families-59 percent, from 11,010 in 1990 to 4,510 in
1995, before rising slightly in 1996 after the policy shift.
In addition, one-fourth more children were discharged from foster
care in 1996 than in 1990. Indeed, during fiscal years 1992-1996,
12,050 more children were discharged than entered. The combination
of fewer entries and more exits should have resulted in a much
smaller foster care population.
Why then did the monthly average number of children in foster
care decline by only 7,363 during the period? The answer lies
in how long children stayed in the system awaiting adoption or
reunification with their families. (See Figure 5.) The average
time spent by children in foster care in 1996 was three-fifths
longer than in 1991-4.3 years versus 2.7 years. As the average
stay in foster care increased, the children in foster care got
older on average. Whereas close to half of the foster care population
was five years old or younger in 1990, only one-third were in
1996. The share of children between six and 12 years of age increased
from one-third to two-fifths, those 13 to 17 years old from 16
to 21 percent, and those 18 to 21 years from 4 to 6 percent.
Children in foster care reside in two general kinds of living
situations-kinship care and nonrelative care. Kinship foster care
involves placement of a child with a relative other than the mother
or father. Kinship care rose dramatically in the late 1980s and
early 1990s, fueling the overall growth in foster care. More than
three-quarters of the increase in foster care in the 1990-1992
period occurred in the kinship program. Similarly, kinship accounted
for two-thirds of the subsequent decline through 1996. At its
peak in 1992, 44 percent of foster care children were in kinship
care arrangements.
The decline in kinship care has both positive and negative aspects.
An essential problem with kinship care is that it is open to abuse.
Some people favored kinship care because they viewed it as a way
to increase family income; foster care maintenance payments are
higher than the public assistance payments received when the children
live with their mother. Fewer kinship arrangements may mean less
of this kind of fiscal abuse. On the other hand, for children
whose family situation genuinely merits temporary removal to foster
care, the opportunity to stay with a known relative can be beneficial.
For such children, less kinship means lower quality foster care.
Nonrelative care takes several forms. Foster boarding homes are
families who care for children in need of placement. They house
about half of the children in foster care. Roughly the same number
of children lived with foster families in 1996 as in 1990. Congregate
care facilities include group homes, group residences and institutions.
The number of children in congregate care fell 14 percent during
the period, driven by a 22 percent reduction in group home placements.
Foster care boarding agencies experienced funding cuts in 1995 and 1996. Prior to 1995 the City paid these agencies the Maximum State Aid Reimbursement Rate (MSAR), or boarding rate. As part of citywide budget reductions, the CWA cut its payments to boarding agencies to 95 percent of the MSAR for the first half of 1995 and to 97 percent for the second half. The following year, New York State instituted the Family and Children's Services Block Grant, which reduced State funding for child protective, preventive, foster care and adoption services. In response, the City cut spending in these areas, with foster care receiving a 15 percent reduction.68 Part of this decrease in foster care spending took the form of an additional 10 percentage point reduction in the foster care boarding rate to 87 percent of the MSAR.
Regardless of the setting, perhaps the most important measure
of quality in foster care is length of stay. Foster care represents
formative childhood years spent in non-permanent situations, which
can be developmentally detrimental. It is preferable for children
to have a sense of permanency, either with their natural parents
or with a new family. As previously discussed, the average length
of stay for all children in foster care increased from 2.7 years
in 1991 to 4.3 years in 1996 (data for 1990 are not available).
Moreover, the average length of stay for discharged children more
than doubled from 2.1 years in 1990 to 4.4 years in 1996.
The quality of the care provided by foster homes is difficult
to assess, and little or no information exists that captures the
appropriateness of placements or the treatment of children in
care. One measure that is available, however, is the number of
abuse and neglect reports that name foster parents or agency staff
as the perpetrators of child abuse. This figure decreased 18 percent
during fiscal years 1990-1996.
The available measures for adoption services show quality worsening
between 1990 and 1996. Once a decision to pursue adoption for
a child was made, the average length of time to complete adoption
was more than three years in 1996, nearly one-third longer than
in 1990. In recent years the City was the culprit. Between 1994
and 1996 the average time to adopt for cases handled by contract
agencies declined from 3.3 to 3.1 years. (The City did
not have data for earlier years.) By contrast, adoptions conducted
directly by the City increased from three years to longer than
four-and-a-half years.
Although other municipal agencies provide specialized child care
services, the HRA has been the dominant source of publicly supported
child care in New York City.69 Throughout fiscal years 1990 to 1996,
the HRA administered subsidized child care opportunities through
three divisions-the Agency for Child Development, the Office of
Income Support, and the Office of Employment Services. In December
1996 the Administration for Children's Services absorbed the Agency
for Child Development.
During the 1990-1996 period the number of child care opportunities
supported by the HRA increased, and the quality of these services
generally improved. As will be shown below, total child care subsidies
increased 18 percent to reach over 70,000 children in 1996. Moreover,
an increased number of children were in programs emphasizing educational
objectives and providing the option of full-day care.
Nationally, publicly subsidized child care serves multiple
policy objectives. One is to help enable low-income, working parents
to afford the child care they need in order to work. Another is
to support parents, especially single parents, in their transition
from welfare to work. A third is to provide services to children
in unstable family situations. Finally, it can promote the educational
development of all young children.
To understand well New York City government's provision of child
care, it is helpful to be aware of the three different types of
care-informal arrangements, center-based care, and family day
care. Informal arrangements include care by relatives, friends,
baby-sitters and nannies. "Informal" denotes the contrast
between these arrangements and care in programs that are regulated
by states' laws. "Formal" arrangements encompass both
center-based and family care. Center-based programs include center
(or group) day care and Head Start.70 Family day care refers to
persons who care for a number of unrelated children in their own
homes.71 The regulations for day care centers and family day care
homes vary from state to state.72
Another important distinction between types of child care programs
is full-time versus part-time. While most group day care programs
offer the option of full-time or part-time care, early childhood
education programs such as Head Start or Pre-Kindergarten typically
only offer a half day.73 This is a crucial issue for working parents.
Parents who work and enroll their children in these programs must
coordinate an additional child care arrangement for their children.
Another scheduling issue is related to the hours of operation
of programs. Parents who work non-conventional hours have difficulty
finding formal child care arrangements because most programs operate
from 8 am to 6 pm.
New York City offers a full array of child care options to qualifying
parents.74 The Agency for Child Development (ACD) manages group
and family day care contracts and limited purchase of service
(LPOS) agreements and administers child care voucher payments.75
The HRA's Office of Employment Services (OES) provides payments
for parents who need child care because they are participating
in welfare-to-work activities. The Office of Income Support (OIS)
within the HRA also participates in the provision of subsidized
child care through its administration of child care payments for
employed public assistance recipients.
The ACD also administered Head Start, a federal early childhood
education program, during the period studied in this report (it
is now administered separately in the ACS). Head Start provides
comprehensive developmental services, which include education,
socio-emotional development, physical and mental health, and nutrition,
to low-income preschool children aged three to five.76 In addition,
Head Start offers social services to the families of children
in the program. The ACD oversaw the majority of the federal Head
Start grants in New York City. The discussion below will focus
on the ACD and the OES, because data are not available for the
OIS. Unfortunately, comprehensive system-wide data do not exist.77
The funding for these child care programs comes from the federal,
State and City governments and from the fees that some parents
pay. The amount that the City pays for care is based on
market rates set by the State Department of Social Services. These
market rates indicate the maximum amount that the State will pay
for subsidized day care and are equal to the 75th percentile of
fees reported by child care providers in New York City in bi-annual
surveys. Although the City historically paid its contracted providers
more than the market rate, it recently reduced its payments to
near or below the market rate. For vouchers, it paid the lesser
of either the market rate or the rate charged by the provider.
In July 1995 the weekly market rate for children age two and under
was $215 for center-based care, $127 for family care, and $46
for informal care subsidized by the OES.78 Rates for older children
were lower, ranging from an OES-subsidized informal care rate
of $40 to $148 weekly for center care.
Depending on a family's income and size, parents may be required
to pay a weekly fee for subsidized child care. The maximum weekly
fee was $90 per eligible family. The lowest fee was $1 per week,
and some families were not required to contribute financially.79
From 1990 to 1996 the total number of children receiving child
care subsidies through the ACD grew steadily, increasing 18 percent
from 59,611 in 1990 to 70,336 in 1996. (See Table 11.)
The growth in Head Start and group day care enrollment accounts
for 60 percent of the total increase. The City expanded the number
of Head Start slots by almost 4,300 or 36 percent over the period.
This was the result of increased federal appropriations for Head
Start, which grew from a nationwide total of $1.5 billion in 1990
to $3.5 billion in 1995.80 The second largest source of expansion
was in group day care programs, where enrollment grew 9 percent
from 36,707 in 1990 to 40,033 in 1996.
Although these two types of programs generated most of the growth
in enrollment, three additional developments are noteworthy. In
1991, the ACD established the first Head Start/Day Care collaboration
programs. These programs extend the normal half-day Head Start
services to a full-day program by combining them with group day
care. Despite the program's relatively small size-1,805 children
in 1996-this is a positive development, because it enables parents
to work full-time while providing continuity of care in an enriched
setting.
The ACD also increased the supply of vouchers for child care services.
The number of children provided vouchers almost tripled from 1,314
in 1990 to 3,920 in 1996. Part of the impetus for the expansion
of the voucher program were the parental choice requirements of
federal Child Care Development Block Grant (CCDBG) funds.81 Access
to vouchers allows parents to purchase the type of care they choose
in a neighborhood that is convenient to them. Providing vouchers
also allows the City to redirect financial resources from underutilized
contracts to payments to parents who can then purchase care where
they wish.
Finally, the ACD discontinued the locally-funded Project Giant
Step program in January 1991. Project Giant Step was a locally-funded
half-day program for pre-kindergarten children run by both the
ACD and the Board of Education. The ACD used 2,646 spaces from
this program to accommodate 669 full-time intergovernmentally-funded
group day care spaces and 1,105 full- and part-time federally-funded
Head Start spaces.82
While complete data are not available on the Office of Employment
Services' role in the provision of subsidized child care, those
activities also likely expanded. Data on the number of children
receiving child care subsidies through the OES are available for
only one year (1995) of the seven-year period. In the Spring of
1995, the OES provided subsidies for 19,557 children of parents
who were participating in welfare-to-work activities. The OES
also distributed subsidies to 1,077 children eligible under the
Transitional Child Care (TCC) program, which aids families for
one year after they leave welfare.83
The number of adults who left AFDC and received TCC subsidies
for their children increased from an average of 236 parents per
month in 1992 to 645 in 1996.84 Although the number of parents more
than doubled, a study commissioned by the OES suggests these subsidies
fall short of reaching the entire eligible population. Internal
barriers at the OES contributed to a 20 percent TCC application
rate.85 These problemslack of communication among HRA divisions,
inadequate delivery of applications, and insufficient publicizing
of the availability of these benefitsindicate that the HRA's provision
of access to subsidies was deficient.
The expansion of child care was accompanied by a shift in the type of services provided. While the changes are not dramatic, the general trend has been positive, with increased numbers of children in programs designed to emphasize educational services and providing the option of full-day care.
The number of children in both Head Start and Head Start/Day
Care collaborations grew. (See Figure 6.) The collaborative programs,
as noted earlier, were established in 1991 and reached 1,805 children
in 1996. Head Start enrollment increased from 11,931 to 16,219;
together these two types of programs grew from 21 percent to 26
percent of all ACD enrollments.
The other notable trend in the ACD's mix of services is the increased
emphasis on vouchers. The percentage of children receiving subsidized
care through ACD vouchers increased from 2 percent in 1990 to
almost 6 percent in 1996. The greater use of vouchers is positive
because it allows parents to select caregivers from a wider range
of options and provides them with greater opportunity to find
care in a convenient location. Moreover, information available
for 1993 and 1995 suggests that the overwhelming majority of vouchers
were used for group day care or family day care.86 (See Table 12.)
The very modest growth in the number of children receiving subsidized
informal care may be due to a number of causes: Parents may prefer
informal care situations; parents may be unable to find center-based
care in a convenient location; and, parents may not be able to
locate a program that would accept the subsidized rate.
It is more difficult to judge changes in the quality of care provided
with OES subsidies due to the absence of consistent data. The
figures for Spring 1995 reveal that 83 percent of the children
receiving OES subsidies were in informal arrangements. This is
a remarkably high percentage compared to the pattern for ACD vouchers.
Since informal care situations are typically less reliable and
have less educational content, it appears that children of parents
who are participating in welfare-to-work activities or who have
recently left welfare for work are receiving inferior care.87 Although
some may argue that this is due to parental preferences, a 1997
survey by the Office of the Public Advocate of parents participating
in welfare-to-work activities reveals that this is not the case.
Only 24 percent of the respondents preferred informal care for
their children; fully 72 percent preferred center-based programs
for their children, and family day care was chosen by 3 percent.88
It appears that the OES is neither assisting parents in securing
high quality child care for their children nor enabling them to
find the type of care they prefer.
Longer Waiting Lists and Increased Demand
Although subsidized child care enrollment increased significantly,
the capacity did not keep pace with demand. Over the 1990 to 1996
period, the number of children on waiting lists for ACD-sponsored
care rose 9 percent to reach 15,346; from 1991, when the unduplicated
counting measure was most comparable to 1996, the increase was
16 percent.89 Despite the expanded enrollment, at both the beginning
and end of this period there was one child denied care and on
a waiting list for every three children enrolled.90
After investing considerable resources in creating an unduplicated
waiting list in 1991, the agency reverted to duplicate counting
in subsequent years due to insufficient resources and an inadequate
computer system, and did not produce another unduplicated count
until 1996. The plan for 1997 is to decentralize waiting lists
to the borough level. This may ease the creation of unduplicated
lists for each borough, but the absence of a centralized citywide
list may lead to duplication among boroughs and may make central
coordination more difficult. In light of the availability of sophisticated
computer technology, the inability of the ACD to create and maintain
a meaningful waiting list illustrates the agency's inadequate
management capacity.
The context in which the City of New York provides social services
is constantly changing. The 1996 federal reforms will oblige the
City to implement some changes, and these federal requirements
may themselves be altered. In addition, at the State level both
Governor George E. Pataki and legislative leaders have made proposals
for changes, including benefit reductions and structural alterations
in the Home Relief program. The continually dynamic local labor
market will also help shape the future of welfare reform. Accordingly,
the future is difficult to discern, but some issues will persist.
Based upon our review of performance over the past seven years,
the Citizens Budget Commission identifies the following eight
high-priority concerns.
Managing an expanded WEP Program productively. The HRA
did an admirable job of expanding the WEP program in recent years.
Enrollment significantly increased to include virtually all eligible
HR recipients and to begin to include AFDC recipients. The combination
of increasing requirements for work-related activity for public
assistance beneficiaries and the limited private sector job prospects
for the less-skilled point to a vastly expanded WEP program in
the future involving tens-of-thousands more single parents formerly
classified as AFDC recipients.
The City should continue to focus great attention on managing
expansion of the WEP program so that it functions productively.
Suitable tasks should be identified for the participants, and
they should be adequately supervised. If well run, WEP can deliver
significant benefits to citizens in the form of valuable services,
as well as to participants in the form of a credible work record
to aid in subsequent job searches.
Striking a better balance between fraud control and inappropriately
denying benefits to the indigent. There is evidence that elements
of the NYC WAY initiative are causing otherwise eligible indigent
New Yorkers to be denied cash benefits. The motivation for the
NYC WAY program-to increase work effort among recipients and to
screen out abusers-is sound, and has yielded many positive achievements.
But a better balance is needed between these anti-fraud concerns
and the goal of providing needy residents a reliable source of
cash income. Administrative procedures should be revised to avoid
inappropriate rejection of applications and inappropriate closing
of cases.
Maintaining an adequate benefit package for the needy. The
value of the combination of cash benefits and food stamps given
to indigent New Yorkers did not keep pace with inflation in the
1990s. Moreover, this continued a longer-run trend dating from
the mid-1970s. The standard of living supported by these benefits
is now significantly below the federal poverty level.
There are multiple reasons for this worsening hardship. As State
and local governments faced tighter fiscal constraints, benefits
for the indigent suffered along with allocations for many other
purposes. In addition, the intergovernmental nature of financing
for these benefits provides fiscal incentives for the State to
reduce its benefits; welfare allowances are counted as income
in calculating federal Food Stamp benefits, and therefore part
of any loss of welfare income is made up with federally funded
Food Stamps. Nonetheless, in order to protect the most needy from
further hardship, the Citizens Budget Commission, in its Budget
2000 report, recommended that welfare benefits not be allowed
to deteriorate further: "Competitive fiscal pressures among
states may prevent New York from raising grants to the poverty
threshold, but they should not be used as an excuse for lowering
benefits from current levels."91
Providing shelter for homeless families. The DHS simply did not do an adequate job of providing homeless families with temporary housing. Some were deterred from seeking aid, and many others were forced to wait in the EAUs for days before being placed. The management of the department was so poor that taxpayers paid millions of dollars in fines imposed by the courts because of the City's ineptitude.
Since the end of fiscal year 1996, the DHS has implemented new
measures to address some of these problems.92 The department began
to use assessment centers to house families while they await completion
of a lengthier and more thorough eligibility verification process;
consequently, fewer families stay in the EAU. Additional services
are provided to the families at the EAU by ACS caseworkers and
HRA domestic violence workers. The DHS also established a network
of contracted outreach teams and drop-in centers. Outreach teams
actively seek out homeless on the streets and entreat them to
accept shelter and services. The eight drop-in centers assist
the homeless by providing basic necessities such as food, clothing
and medical attention, and by placing them in temporary shelter
or permanent housing. Also, since December 1996 the DHS has not
used non-compliant hotels. These measures hold the promise of
expanding access to services and reducing delays in placement;
if data for fiscal year 1997, scheduled for release in September
1997, demonstrate improvements, then these efforts should be continued
and expanded.
Discovering and rectifying child abuse and neglect in a timely
way. In the recent past, understaffing and other practices
in the provision of child protective services appeared to have
created incentives for workers to err on the side of avoiding
a finding requiring intervention. As a result, preventive services
and supportive activities were reduced.
The creation of the ACS and increases in its budget may be rectifying
this troublesome situation. The ACS restructured child welfare
services into three divisions: the Division of Child Protection,
the Division of Family Permanency, and the Division of Legal Services.
Child protective service (CPS) caseworkers are no longer responsible
for the management of the foster care cases of children who have
been removed from their homes; caseworkers from the Division of
Family Permanency now monitor these cases, leaving the CPS caseworkers
to concentrate on investigating maltreatment reports. In addition
to this change in the Division for Child Protection, the ACS plans
to: Reduce CPS caseloads by hiring more caseworkers; create instant
response teams that include the police and assistant district
attorneys for cases involving crimes; establish CPS zones consistent
with the Community Districts; introduce a case-conferencing system
for cases involving the removal of children from their homes;
and, establish a new investigative training component for the
ACS's Satterwhite Academy.
The ACS is also making important changes in the Division of Family
Permanency and the Division of Legal Services. One initiative
is to increase the acceptance of ACS referrals to contracted preventive
services. In the area of legal services, the ACS launched a new
policy of having one attorney manage a case from initiation to
completion.
It is too early to determine if the ACS's plans are having a
positive impact. The most obvious change is that more money is
being spent by the agency. Expenditures for child welfare totaled
$1,211 million in 1996 under the CWA and the ACS; in 1997 the
ACS spent an estimated $1,414 million, and is projected to spend
$1,833 million in 1998.93 Significantly, the Department is reporting
that CPS caseloads have been reduced to 18.94 Despite the significant
progress made since the creation of this new child welfare agency,
continued attention and fiscal resources are needed to ensure
that reasonable actions are taken to investigate and follow-up
on reports of child abuse and neglect.
Limit foster care to the time necessary and appropriate.
Recent years saw a sharp increase in the average time a child
spends in foster care. This is a cause for concern because long
stays may not be necessary; instead they may result from fiscal
incentives related to per diem payments for care and poor supervision
of foster care caseloads. Previous experiments with alternative
payment arrangements for care, which provide incentives for foster
care agencies to shorten lengths of stay in a prudent manner,
were encouraging. The Citizens Budget Commission estimated in
1996 that about $170 million annually could be saved statewide
if managed care concepts were applied to foster care.95 New expanded
initiatives should be tried.
Expanding child care capacity to keep pace with workfare initiatives.
With federal financial assistance, the City significantly
expanded opportunities for child care subsidies during the 1990s.
However, federal welfare reform requirements will place new demands
on the OES and the ACS. One recent independent estimate is that
by 1999 over 100,000 children will need some type of child care
because their parents are participating in workfare as a result
of new federal legislation.96
To meet these new demands the City will have to make difficult
resource allocation decisions. Relying on allowances for informal
care could provide cheaper care for larger numbers than would
expansion of subsidies for center-based and other regulated care.
But the former type of care is generally less reliable, has far
fewer educational benefits, and is virtually unregulated. In the
face of significant new demand, careful consideration should be
given to the choices of how to expand child care subsidies and
to ensure adequate quality of informal as well as formal care.
Comprehensive management is also necessary to coordinate the efforts
of the multiple agencies providing child care servicesthe ACD,
the OES, the OIS, and the Board of Education.
Expanding use of computer technology and capacity for program
analysis. The CBC's most recent analysis of the HRA identified
"three broad principles to guide the HRA's management into
the next century. First, the HRA's operations should be designed
to promote the fundamental goal of helping its clients achieve
self-sufficiency. Second, this goal can be achieved efficiently
only if the HRA has a well-developed capacity for program evaluation
and an information system to support such analyses. Third, the
maintenance of a comprehensive information system that serves
as a management tool for the entire agency requires the application
of sophisticated technology."97
To date, little has changed in this regard. This lack of progress is particularly worrisome because dramatic changes in the way social services are provided are occurring with insufficient ability to assess their efficacy and efficiency. Furthermore, while other jurisdictions are successfully exploring new uses of technology, like advanced information management systems and interactive kiosks, the City continues to administer its social services in the same fashion. More sophisticated record-keeping, combined with the capacity for skillful analysis, would produce meaningful information to direct the formation and implementation of less expensive, higher quality programs.
NOTES
1. This report does not examine the purchase of medical care for the indigent under the Medicaid program. Although the City's portion of the Medicaid program is a large item in the New York City Department of Social Services' budget, the City has little control over the administration of the Medicaid program. It is administered primarily by the State Department of Social Services. Furthermore, the City's Medicaid contribution is better analyzed in the broader context of State and local policies relating to medical care for the indigent, including the activities of the New York City Health and Hospitals Corporation.
2. National employment data from City of New York, Office of Management and Budget, "Monthly Report on Economic Conditions" (NY: OMB, April 7, 1997).
3. Ibid.
4. U.S. Department of Justice, Office of National Drug Control Policy, "Fact Sheet: Drug Use Trends" (Rockville, MD: National Criminal Justice Reference Service, July 1996), p. 4.
5. U.S. Department of Justice, Office of Justice Programs, National Institute of Justice, 1995 Drug Use Forecasting: Annual Report on Adult and Juvenile Arrestees (Rockville, MD: National Criminal Justice Reference Service, June 1996), p. 29.
6.The U.S. Department of Health and Human Services' Substance Abuse and Mental Health Services Administration (SAMHSA) sponsors the Drug Abuse Warning Network (DAWN), an ongoing national survey of hospital emergency departments. To be included in the DAWN statistics, persons must be six years or older and meet all four of the following criteria: The patient was treated in the hospital's emergency department; the patient's problem(s) was induced by or related to drug use, regardless of when drug ingestion occurred; the case involved the non-medical use of a legal drug or any use of an illegal drug; and, the patient's reason for taking the substance(s) included dependency, suicide attempt or gesture, or psychic effects. See Preliminary Estimates from the Drug Abuse Warning Network, Advance Report Number 17 (Washington, DC: SAMHSA, August 1996).
7. This trend should be interpreted cautiously because of possible delays in reporting.
8. This report follows the convention of defining persons in poverty as those with incomes below the federal poverty threshold as defined by the U.S. Bureau of the Census. The poverty threshold for a family of three increased from $10,419 annually in 1990 to $11,821 in 1994. See Jiali Li and Emily Zimmerman, Low Income Populations in New York City: Economic Trends and Social Welfare Programs 1996 (NY: United Way of New York City and the New York City Human Resources Administration, April 1997).
9. This trend should be interpreted cautiously because of possible delays in reporting.
10. National data from Kathryn Porter, Improvements in Poverty and Income in 1995 Tempered by Troubling Long-Term Trends (Washington, DC: Center on Budget and Policy Priorities, March 11, 1997).
11. Several smaller agencies also were involved in social services during fiscal years 1990-1996. Most prominent among these were the Department of Youth Services, the Department of Employment and the Department for the Aging. These agencies are not included in the analysis because they are primarily conduits, directing intergovernmental aid to nonprofit service providers, rather than direct service deliverers themselves, and because they are small relative to the HRA.
12. From this point forward, except where noted, all years are City fiscal years, which run from July 1 through June 30 and correspond to the year in which they conclude. For example, fiscal year 1996 began on July 1, 1995, and ended on June 30, 1996.
13. City of New York, Office of Management and Budget,
Adopted Budget: Expense, Revenue, Contract, Fiscal Year 1998,
(NY: OMB, June 1997).
14. Employment data supplied by the New York City Office of Management and Budget.
15. The welfare reform law enacted by the federal government on August 22, 1996, replaced AFDC with the Temporary Assistance for Needy Families program (TANF). However, the law did not take effect until July 1, 1997. Therefore, AFDC was the operative assistance program for the fiscal years 1990-1996 period.
16. Actual participation rates will be lower because the law allows states to lower the requirements based on actual reductions in caseload.
17. City of New York, Mayorís Office of Operations, The Mayorís Management Report (NY: MOO, September 17, 1990), p. 401.
18. Li and Zimmerman, op. cit., p. 101.
19. City of New York, Mayorís Office of Operations, The Mayorís Management Report, Volume I: Agency Narratives (NY: MOO, September 14, 1995), p. 166.
20. Effective October 1, 1996, the maximum Food Stamp benefit for a family of three receiving the maximum public assistance benefit was cut to $256.
21. City of New York, Human Resources Administration, "HRA Facts: May 1997" (NY: HRA, June 1997).
22. These figures count "entries" into employment programs, not persons participating in programs; because clients can enter multiple programs during the year, the number of entries exceeds the number of participating clients.
23. It should be noted that some clients may be placed in jobs more than once during the year, and thus would be double-counted in these figures. Further, some persons continue to receive benefits because the compensation from their job placement is low enough that they remain eligible. In 1996 there were 3,682 persons in the latter group, or less than 1 percent of all adult recipients. Finally, the preliminary 1997 edition of The Mayor's Management Report states that for Home Relief in 1996 the job placement "indicator now includes public assistance grant reductions and application withdrawals as well as rejected applications." Including these under job placement is inappropriate.
24. See Charles Brecher, Richard Delaney, James Lo, Dean Michael Mead and Sheila Spiezio, An Agenda for Change at the Human Resources Administration (NY: CBC, January 1994).
25. See Elizabeth Durbin, "Public Assistance," in Charles Brecher and Raymond D. Horton, eds., Setting Municipal Priorities 1990 (NY: New York University Press, 1989), pp. 223-263.
26. Lilliam Barrios-Paoli, Administrator/Commissioner, Human Resources Administration, letter to Raymond D. Horton, President, Citizens Budget Commission, August 6, 1997, p. 3.
27. An important additional indicator is the percentage of fair hearings the HRA wins. If public assistance recipients were unfairly dropped from the rolls, then the percentage would likely decline as the recipients were reinstated. Unfortunately, the City has been unable to provide data on the number of individual issue decisions in fair hearings and the number decided in the HRA's favor. However, the City did provide similar data to the New York Observer in 1996. Those data showed that 80 percent of the clients who appealed EVR-related decisions to close cases were victorious; that figure increased to 98 percent when the client was represented at the fair hearing by an advocate or attorney. See Jesse Drucker and Michael Powell, "Rudy's Crackdown on Welfare Fraud Runs Into Trouble," New York Observer, April 15, 1996.
28. The initial declines in fair hearings, both in number and percentage, likely derived from reductions in payment error rates and from 1990 figures which were unusually high due to the introduction of work requirements for HR recipients.
29. Barrios-Paoli, op. cit., p. 3.
30. City of New York, Mayorís Office of Operations, op. cit., February 15, 1996, p. 110.
31. Barrios-Paoli, op. cit., p. 3.
32. Hotels are deemed noncompliant for one of two reasons: They are for-profit, privately-owned and operated hotels with more than 100 units, or they have 100 or fewer units but do not have a bathroom, refrigerator, cooking facilities and an adequate sleeping area in all units used to house homeless families, and do not provide stable living accommodations or on-site social services. See Local Law 51 of 1993, New York City Charter and Administrative Code 1993 Amendments (Guilderland, NY: New York Legal Publishing Corporation, 1991).
33. The DHS eventually ceased using the non-compliant hotels on December 1, 1996.
34. Citizens' Committee for Children of New York, Inc., Getting Shelter: The Homeless Family Odyssey (NY: CCC, June 1996), p. 5.
35. Ibid., p. 8. The HRA closed five IS centers after November 1, 1996. See From Welfare to Work: Getting Lost Along the Way (NY: Office of the Public Advocate, July 1997).
36. Citizens' Committee for Children of New York, op cit., p. 8.
37. Ibid., p. 10.
38. According to the DHS, recent efforts to address this situation have resulted in improvements: "[L]ast year at this time, we regularly had between 140 and 160 families waiting at the EAU each night, about two-thirds of whom had been at the EAU for more than two nightsin some cases as many as eight or nine. This year, we have between 30 and 60 families a night, almost none of whom have been there for more than two nights." Gordon Campbell, Commissioner, Department of Homeless Services, letter to Raymond D. Horton, President, Citizens Budget Commission, August 6, 1997, p. 2.
39. Peter Hellman, "Justice Freedman v. New York," City Journal, Spring 1997, p. 64.
40. Gordon Campbell, Commissioner, New York City Department of Homeless Services, testimony before the General Welfare Committee of the New York City Council, July 30, 1996.
41. The DHS reports that in fiscal year 1997 the average number of families in temporary housing and the average number in hotels were reduced to near or below 1992 levels. See Campbell, op. cit., p. 2.
42. All information in this paragraph regarding the number of shelters is from City of New York, Human Resources Administration, Crisis Intervention Services, Emergency Housing Services for Homeless Families Monthly Report, August 1989 through June 1