“They’re my advocates? No they’re not. To me, they’re against me.”
—Quote from teenage foster child about a foster care agency taking his Social Security survivor benefits1
Alex and Ryan share unfortunate histories in the Maryland foster care system.2 Both boys, now young men, were shuffled between multiple placements and they struggled with the transition to adulthood. Both Alex and Ryan suffered through their parents’ deaths while in state custody, and then had the only remaining connection to their deceased parents—their Social Security survivor benefits—taken by the foster care agency without their knowledge.
As described in the introduction, Alex was twelve when he entered foster care following his mother’s death. During his six years in foster care, Alex was moved several times between temporary placements. Soon after losing his mother, Alex’s father also died. Unknown to Alex, he was then eligible to receive Social Security survivor benefits. The Baltimore County Department of Social Services (BCDSS) was charged with protecting Alex’s interests, but the agency sidestepped that obligation when it saw the potential money it could obtain from the boy. Without telling Alex, the agency applied for the survivor benefits on Alex’s behalf, applied to become his representative payee to gain access to the funds, and then took every payment Alex received.
If the agency applied fiduciary discretion to use Alex’s money in his best interests, the payments could have been used to help him prepare for the difficult transition to independence: saved for college or to pay for vocational training; used to purchase specialized tools or equipment for Alex’s future chosen profession; saved to help pay future rent or to purchase a car—now virtually a necessity for independent living; or simply conserved in a savings account for the many unforeseen expenses that Alex would encounter. However, the agency ignored Alex’s needs and simply took the boy’s money.
Ryan’s experiences were very similar to those of Alex. Ryan did not understand how the Baltimore City foster care agency could take his survivor benefits that were left to him by his deceased father. He expressed frustration, but also determination: “You know, the thing is, they are survivor benefits. I am a survivor.”3 And he explained his feelings in more detail:
When I first wanted to move where I am now, they didn’t want to do it, meaning they were fighting me. They thought I was better where I was in a group home, than be in a foster home where I was in a much better school, and getting the help I needed. For now, they’re supposed to be here for me, but everything that benefits me they’re fighting. My parents have passed away, you know. I loved my parents to death. I just lost my big brother. If my parents pass away, they would want me to have their work benefits, and DSS, they don’t need it . . . You know, the thing is, they are survivor benefits. I am a survivor . . . Everyone’s passed away, besides my Aunt. I wish that I’d be able to get this, so I can move on with my life, and stop having to fight for everything that benefits me. That’s what they (BCDSS) have been doing. They’re my advocates? No they’re not. To me, they’re against me.4
Both Alex and Ryan filed court actions in an effort to stop the agencies from taking their money. The boys’ cases are discussed in more detail in chapter 3, and illustrate the lengths to which a child welfare agency will go to convert a child’s funds into agency revenue. The details provide a stark example of a human service agency turning its power against the interests of its child beneficiaries by ignoring its legal and ethical obligations.
The experiences of Alex and Ryan are unfortunately emblematic of tens of thousands of foster children across the country who are being used in the same revenue strategy. And their experiences are also emblematic of the numerous other methods developed by states and their agencies, with the assistance of private contractors, to convert funds intended to help struggling families and individuals into state revenue and private profit. The boys’ experiences thus provide an excellent backdrop to consider the conflict between the intended benign purpose and fiscal self-interests of agencies created to serve the vulnerable.
By 2009, after the financial crisis hit, circumstances facing vulnerable populations were already looking grim. Cities participating in the 2009 U.S. Conference of Mayors Hunger and Homelessness Survey reported a 26 percent average increase in demand for hunger assistance, the largest increase in almost 20 years—including an increase in hunger assistance requests from middle-class families who used to donate food. More than three out of every four cities reported an increase in family homelessness.5
By 2012, circumstances for low-income families were worsening. More than 70 percent of cities reported increases in family homelessness, and almost two-thirds of cities were turning away homeless families with children from emergency shelters due to lack of resources.6 By 2013, family homelessness again increased, emergency food assistance requests continued to increase, and the percentage of the total food assistance requests coming from families increased to almost 60 percent.7
According to 2012 census data, 9.5 million families in the U.S. were living below the poverty line, up from 7.7 million families in 2005. The families living in poverty included 33.1 million individuals (adults and children) within those families—so an average family size of about 3.5 individuals. Almost one out of 4 children under six years of age were living in families under the poverty threshold.
And the numbers are likely underestimated because the official poverty line is recognized as being too low for what families actually need. The poverty line is based on how much money families spent on food in the 1950s. Mollie Orshansky was working for the Social Security Administration and she was assigned to report on child poverty. There was no measure at the time, so she created her own by using a Department of Agriculture report from 1955 that found families spent about a third of their income on food. Her approach was to determine the amount a poor household spent on food, and multiply it by three. To determine the amount, she used the cheapest estimated food plan developed by the Department of Agriculture only for “temporary or emergency use”:
Orshansky based her poverty thresholds on the economy food plan—the cheapest of four food plans developed by the Department of Agriculture. The actual combinations of foods in the food plans, devised by Agriculture Department dietitians using complex procedures, constituted nutritionally adequate diets; the Agriculture Department described the economy food plan as being “designed for temporary or emergency use when funds are low.”8
Thus, because the official poverty line is too low, families and children who are a little above the poverty line still face incredible difficulties. Families up to 150 percent of the poverty line, if not higher, are often classified as low-income. In 2012, 35 percent of children in the United States lived below 150 percent of the poverty line.
Studies show a strong link between poverty and foster care. For example, the Third National Incidence Study of Child Abuse and Neglect found that children in families with annual incomes below $15,000 were much more likely to experience maltreatment than those in families making $30,000 or more—not just twice as much, but 22 times more likely to experience maltreatment. The most common form of maltreatment is neglect, with almost four-fifths (78.3 percent) of maltreated children experiencing neglect rather than some form of physical or mental abuse according to a 2012 federal report. Children in poor families are forty-four times as likely to experience some form of neglect.
Further, the parents of abused and neglected children often face numerous difficulties in addition to poverty, including homelessness, domestic violence, poor education, substance abuse, mental illness, and lack of healthcare. State practices often treat such circumstances of poverty as grounds for child removal.
As the parents of foster children struggle, the children face even more difficulties both in foster care and as they try to transition to independence when aging out of the system. Children in the child welfare system can encounter insufficient services, underfunded agencies, overworked caseworkers, chaotic juvenile courts, poorly run group homes, and inadequately monitored placements. And children removed from their families due to abuse or neglect unfortunately sometimes encounter abuse or neglect again after entering the foster care system.
Then, as the children age out of care, the difficulties continue. The statistics facing former foster children are daunting. More than half of the children experience unemployment, almost three-fifths make less than $10,000 in annual income, 43 percent lack health insurance, 25 percent experience homelessness, 25 percent don’t graduate from high school, just 2 percent obtain a bachelor’s degree, and almost 70 percent of young women receive food stamps.9 And former foster boys in particular encounter barriers to employment and difficulties tied to involvement with the criminal justice system. A 2010 study found that by age 24, nearly 60 percent of former foster males had been convicted of a crime, and by age 26 almost 75 percent of the young men had been incarcerated and 82 percent had been arrested.10
About 28 percent of disabled individuals are living below the poverty line according to 2010 census data. Further, while people’s circumstances can change and they can fluctuate in and out of poverty, disabled individuals who are poor are more likely to stay persistently poor.
Of those who are disabled, the mentally ill face a particularly difficult connection with poverty. If you suffer from mental illness, you are more likely to be poor. And if you are poor, you are more likely to suffer from mental illness. The causal connection travels both ways and can form a vicious cycle. For example, cities in the 2012 U.S. Conference of Mayors Hunger and Homelessness Survey reported that an average of 30 percent of the homeless were severely mentally ill, and almost 20 percent of the homeless were physically disabled. Also, a strong connection exists between mental illness and substance abuse. According to the Journal of the American Medical Association, about half of people with mental illness also struggle with addiction to alcohol or drugs. According to the Bureau of Justice Statistics, more than half of all prison and jail inmates struggle with mental health issues.11 And it’s worse for women, with almost three-quarters of women in state prisons suffering from mental health problems.
However, despite the enormous need, state funding for the mentally ill has been slashed. After the financial crisis of 2008, when economic struggles for individuals and families intensified, mental health services declined. A report by the National Alliance on Mental Illness found that states cut in excess of $1.6 billion in funds for mental health services from FY2009 to FY2012.12
Under a new poverty measure developed by the Census Bureau that takes into account out-of-pocket medical care costs, more than 15 percent of the 41 million elderly in the United States are living in poverty. Almost half of the elderly are struggling to live on less than 200 percent of the poverty level.13 Deep or extreme poverty—defined as income of less than $5,700 per year—has also increased among the elderly. According to a report by the National Women’s Law Center, deep poverty increased by 23 percent among elderly men and 18 percent for elderly women from 2011 to 2012.14
Further, the conditions of housing and care for low-income aging adults can often be described as dismal. Poor quality care and low staffing levels often plague nursing facilities for older Americans. Nursing homes use psychotropic drugs for off-label uses at alarming rates, often to sedate the elderly as a way to reduce staffing needs and increase profits. And needed care is often lacking. For example, according to the New York Times, a Wisconsin study found that dental care for nursing home residents was so bad that almost a third of the residents had teeth that were broken to the gums, with the roots visible.15 Similarly, a study in upstate New York found that only 16 percent of nursing home residents received any oral care whatsoever.16 A 2013 audit by the U.S. Department of Health and Human Services Office of Inspector General (OIG) found that in 37 percent of stays in skilled nursing facilities, the facilities did not provide needed services or failed to develop required care plans. The OIG audit also “found a number of egregious examples of poor quality care that were related to wound care, medication management, and therapy.” For example:
Another beneficiary was given an antipsychotic drug when she did not have a diagnosis for psychosis and her care plan did not indicate that she had a mood disorder. The physician noted that the beneficiary was confused while on the drug, but he still increased the dosage. A month later, the beneficiary’s family complained that the physician and SNF staff were trying to sedate the beneficiary with the drug.17
A 2014 OIG audit examined “adverse events,” which harm a patient or resident as a result of medical errors, poor conditions/treatment, and failure to provide needed care—among other reasons. The audit found that among Medicare beneficiaries staying at skilled nursing facilities for only short stays (35 days or less), 22 percent of the residents suffered from at least one adverse event while in care.18
The difficulties these populations face cause greater interdependence, including greater need for government services. The vulnerability also causes the already struggling children, families, and adults to be even more susceptible to harm—and unfortunately more susceptible to being used rather than helped. These are the populations who have been used by the poverty industry, in which the purpose of human service agencies is subverted to the search for money.
The purpose of human service agencies is not difficult to understand: to help those in need. However, the use of such government power has not always adhered to that humanitarian aim.19 The purpose and power of state human service agencies derives from the old English doctrine of parens patriae, translated as the inherent role of the state as parent of the country. Through this parental role, the state takes on an obligation to protect those who are unable to protect themselves.
Although the doctrine is frequently considered in this chapter in the context of children, often the most vulnerable among us, the discussion is also applicable to understanding the conflict between the purpose and self-interests of state agencies serving any vulnerable population—including children, families, the elderly, and impoverished and disabled adults. Further, the doctrine should also be considered within the broader purpose of government, often described in terms of protecting and maximizing the general welfare of a government’s citizenry.
The parens patriae doctrine dates back to feudal England, during the medieval time of lords, knights, and kings, and has an unfortunate conflicted beginning. Early use of the doctrine included the pure aim of aiding those in need, but which was pitted against the self-interested fiscal motive of obtaining riches to sustain the crown.
Historical use of the power was partly benevolent, in which the king provided assistance to some citizens who could not care for themselves. For the mentally impaired, then termed “idiots and lunatics,” the king provided assistance without self-interested fiscal motives: “[I]in the seventeenth century the king’s relation to idiots and lunatics was that of guardian to ward, that the guardianship was a duty of care rather than a source of profit.”20 However, regarding children, the king applied the parens patriae doctrine with selfish intent. He did not use the protective power for all children, but focused on children of landed gentry with estates that could be taken. The resulting wardships were not aimed at protecting the children, but rather using them. For example, the wardships were used in the feudal tenurial system in which the guardians—usually a lord, or the king directly—had rights with regard to the male and female wards. And such rights were abused for financial gain: “In the case of wards of the crown, it was the practice of the Court of Wards and Liveries to sell both the wardship and marriage rights, and that these wardships went as often to strangers as to mothers or families of minor heirs indicates that this type of wardship was administered with a financial rather than a humanitarian motive.”21
Thus, the government power to help vulnerable populations was conflicted from its feudal beginnings. Fortunately, public enlightenment and revulsion to such sale of wardship and marriage rights eventually led to the end of the practice in England. But the conflict between government purpose and self-interest continued in America.
America also adopted the parens patriae doctrine, and exercise of the power has been conflicted here as well. The doctrine was established by early American courts as the foundational authority and duty of states to protect the interests of vulnerable children and adults. The parens patriae doctrine and fiduciary purpose of human service agencies is often embedded in statutory and regulatory language and policy statements. For example, the Maryland Department of Human Resources explains why the agency exists:
The Maryland Department of Human Resources (DHR) is the state’s primary social service provider, serving over one million people annually. The Department, through its 24 local departments of social services, aggressively pursues opportunities to assist people in economic need, provide preventive services, and protect vulnerable children and adults.22
The core purpose of human service agencies in America is therefore clear, whether found in the parens patriae doctrine or in state policy: to protect and serve the vulnerable. And in carrying out that duty, the agencies’ fiduciary obligation is also clear: to never place their own self-interests over the interests of the populations that the agencies exist to serve.
However, despite the clarity of the agency service mandate, the conflict between agency purpose and agency self-interest found fertile ground to grow in America. Under confidential and bureaucratic agency practices, and a lack of due process protections, human service agencies have often prioritized their own fiscal interests over the interests of their beneficiaries. The agencies and their parent states have sometimes lost sight of Thomas Jefferson’s simple but crucial principle regarding the purpose of government: that “government exists for the interests of the governed, not for the governors.”
Human service agencies created to look outward toward helping those in need are simultaneously turning inward toward their own self-preservation and agency finances. As a result, agencies often flip the Jeffersonian principle regarding the purpose of government. Rather than only determining the best strategies to serve the interests of their beneficiaries, the agencies often develop strategies to use the vulnerable as a means of serving themselves.
For example, despite the growing recognition of children’s rights, human service agencies created to protect those rights often look back toward feudal England when children were considered property and a source of funds. The agencies seek to hide their actions from public view, often fight to diminish the rights of those they serve, and maneuver to place their own fiscal self-interests over the interests of their beneficiaries.
Agency confidentiality has permitted short-changed due process rights for children and other vulnerable individuals, and has kept the public largely in the dark regarding agency actions. Further, the agencies fight to subvert the legal struggles of vulnerable populations to claim their rights as their own—creating a cloak of power that has allowed human service agencies to use children and the poor in revenue maximization strategies.
The unfortunate flip in agency priority occurs, in part, because we allow it to occur. And we allow it to occur because we don’t know. Owing to the hidden nature in which human service agencies and courts have often operated, the public is often simply unaware of agency practices. Further, as discussed in sections to follow, the diverted focus toward revenue maximization has been heightened by the control of agencies by their parent states—that are also in search of funds—and by the private sector capitalizing on the conflicts.
Actions taken by agencies and courts are often clouded within confidential systems and by an absence of due process. Regarding maltreated children, the parens patriae doctrine developed in America alongside early failings of the child welfare system and juvenile courts, systems in which the benign doctrine was often turned on its head to rationalize the denial of rights to children. Further, a denial of rights to mentally ill adults was similarly rationalized under the duty to protect.
Historically, courts and agencies viewed children as needing protection but undeserving of rights of their own. The juvenile courts and agencies reasoned that because they were the protectors of children’s interests, they should be left alone to do their jobs without interference—and certainly without legal rights provided to children that might disrupt or complicate decisions regarding the children’s needs.
Then, in the 1967 landmark In re Gault decision, the U.S. Supreme Court recognized that children do in fact have constitutional rights of their own. Supreme Court Justice Fortas noted how the parens patriae doctrine had been inappropriately used to deny children their rights rather than to protect them: “The Latin phrase proved to be a great help to those who sought to rationalize the exclusion of juveniles from the constitutional scheme. ”23
After the In re Gault case, courts began recognizing other children’s rights and also solidified the duty of states to protect the welfare of children. However, children’s rights are still often short-changed because the child welfare system continues to operate in the dark. Most foster care tribunals enforce confidentiality over proceedings, and state agency actions and procedures are also hidden from public view. In addition, such confidential systems and the lack of procedural safeguards apply to other vulnerable populations as well, whether in overwhelmed courts, agency tribunals with authority over services and programs for the poor, or in treatment facilities for the mentally ill.
Because juvenile court proceedings are also usually confidential, only a small handful of the hundreds of thousands of cases make it out to see the light of day through published appeals. The cases are often heard in overcrowded court dockets where jaded apathy can flourish:
Set in Chicago’s Near West Side, the juvenile courts and detention center (known colloquially as the Audy Home) were filthy, overcrowded, secretive, a haven for burnt-out judges, unaccountable, without published data, and a magnet for impoverished families and youngsters of color, primarily African-American children. Crowds of anxious parents and children were made to throng in the hallways, doors and toilet paper were missing in the bathrooms, public officials—judges, defenders and prosecutors, probation officers and court clerks—seemed not to look up as multitudes of accused were called forth and adjudged.24
This picture of juvenile courts is not uncommon, and is repeated in other tribunals and programs for the poor and disabled.
Further, in addition to the confidential nature of overcrowded courts, the actions and policies of human service agencies serving the vulnerable are also hidden. Agency records are often confidential or buried within a bureaucratic fog. Despite state laws that require public formal agency rule-making procedures, agency policies and practices are often established through informal and internal agency directives.
Agencies frequently fight against public disclosure of their records and practices, contending that confidentiality must be provided to protect the populations they serve. Then, within the confidential structure, the agencies often seek unfettered discretion—asserting that unquestioned and unexposed circumstances allow the agencies to do their best work on the behalf of their beneficiaries, and that judicial interference would violate the doctrines of sovereign immunity and separation of powers. For example, the level to which some agencies are averse to judicial review of their discretion is evident in a legal brief filed by the Georgia Department of Human Resources. Rather than focusing on the interests of children served by the agency, the Georgia agency asserts that its own rights to possess and make decisions regarding children are primary:
When a deprived child is placed in the Department’s temporary legal custody by a juvenile court, the Department “has the right to physical custody of the child, the right to determine the nature of the care and treatment of the child, including ordinary medical care, and the right and duty to provide for the care, protection, training, and education and the physical, mental, and moral welfare of the child.”25
And then, the Georgia agency describes its disdain for the juvenile court’s authority to review the agency decisions:
Yet, the Court of Appeals’ decision in the instant case ignores the express authority referenced above and now permits juvenile courts to render decisions regarding placement of children in the Department’s custody, decisions which heretofore were deemed to be solely within the province of the Department . . . The net effect of this portion of the Court of Appeals’ decision in this case permits any party which might disagree with placement decisions made by the Department to have those decisions re-evaluated by the courts, thereby allowing the courts to assume the role of a “super placement agency” and thus abrogate the State’s sovereign immunity. Such a role is not only improper for the courts, but also is violative of both the doctrines of sovereign immunity and separation of powers inherent in Georgia’s Constitution.26
Most of us assume that human service agencies are generally pure in their pursuit of the best interests of their beneficiaries. We want to believe that an agency serving an abused and neglected child or vulnerable adult will strictly serve the welfare of that child or individual and put any conflicting interests aside. But in confidential systems with unfettered discretion as sought by the agencies like in Georgia, the rights of the vulnerable often give way to the self-interests of the agencies. Usually, the front-line caseworkers—although overburdened by high caseloads—are genuine in their desire to serve the best interests of children. However, the agency leaders are too often focused more on the financial bottom line.
Within the confidential systems, constitutional due process protections are often weak. The Supreme Court’s decision in Gault provided a notable step toward stopping the misuse of the parens patriae doctrine that long deprived children of rights, and the decision recognized children’s rightful place under the constitution. But, similar to the lack of adequate due process rights for other vulnerable populations, the practical application of children’s due process rights has fallen short.
The long history of the child welfare system’s view and actions against children’s rights has not been overcome quickly. For example, although Gault provided children with the right to counsel in juvenile delinquency proceedings, the right to counsel has not yet been fully afforded to all children in child protection (foster care) proceedings. Also, although an individual’s right to provide his own lawyer is recognized in other tribunals and issues impacting vulnerable children and adults, a lawyer or other advocate is often not provided for free. Thus, the vast majority of the poor try to navigate the systems without an advocate.
Even when rights for vulnerable children and adults have been recognized, the application of those rights is often truncated. As Professor Barbara Bennett Woodhouse explains, “[l]awyers and judges often dismiss or overlook children’s due process concerns in civil cases, because the law has for so long been accustomed to treating children as parental property, lacking not only ‘capacity’ but personhood.”27 Some judges who are overwhelmed with large caseloads and jaded by years of exposure to the chaos of the child welfare system often only go through the motions of civil procedure and due process, and sometimes barely so. Much of the legwork might be shuffled down to judicial masters, with dockets even larger than the judges, who then often retreat to forcing settlements rather than seeking to uncover the necessary details to protect the best interests of the children. When a child does have a lawyer, they may meet for the first time in court because of the lawyer’s crushing caseload. And the same practical barriers and limitations to the actual application of rights can impact other vulnerable populations as well.
Seeking to protect their unfettered discretion, human service agencies unfortunately often fight against the rights of their own beneficiaries. The agencies exist as guardians, with their agency interests and actions intended to align with the best interests of the individuals they serve. It is thus a bitter irony when these guardians turn against those whose rights they are supposed to champion.
In case after case, as children and vulnerable adults struggle to expand their rights, their agency guardians are frequently engaged in the legal struggle as well. But, rather than aiding their beneficiaries, the agencies have often lined up against them. For example, fighting against foster children’s asserted rights to a minimum quality of care, the Maryland child welfare agency argued: “the Due Process Clause does not itself impose on the State a generalized duty of optimal care, protection, and treatment to foster children, nor does due process demand that a state’s administration of a system of foster care meet statutorily-defined professional standards.”28 Similarly, when a mentally ill patient at an Indiana state-run psychiatric hospital alleged he had been beaten and assaulted by hospital staff, he simply asked for his records so that his patient advocate could investigate his care. The Indiana agencies created to serve the disabled individual’s interests fought against his rights by arguing against his request for access to his own records.29
At times, human service agencies seem to long for the past, when they were free to act without interference from constitutional rights. Strikingly, the juvenile court judges of Ohio—the intended arbiters and ultimate protectors of juveniles—similarly pointed to the past in their impassioned argument against children’s rights as amicus curiae in Gault. The judges looked to an 1882 decision to warn against placing constitutional limitations upon agency actions:
It is the unquestioned right and imperative duty of every enlightened government, in its character of parens patriae, to protect and provide for the comfort and well-being of such of its citizens as, by reason of infancy * * * are unable to take care of themselves. The performance of this duty is justly regarded as one of the most important of governmental functions, and all constitutional limitations must be so understood and construed as not to interfere with its proper and legitimate exercise.30
In the practices of our nations’ human service agencies, much has not changed. And as the agencies sometimes turn against their beneficiaries’ attempts to establish and enforce their own rights, the agencies have also turned inward. The often-confidential nature of human service agencies and tribunals has allowed the agencies to focus on their own fiscal bottom line rather than solely protecting the best interests of the individuals they serve.
The turn inward has also encompassed a look back, with human service agencies acting similar to their ancestral roots in feudal England when the parens patriae doctrine was used to bring riches to the crown. But where the historical financial interests were aimed at children of wealthy landed gentry as a source of funds, today’s agency self-interests are directed toward children and adults living in poverty.
Little is known about the details of agency actions in confidential bureaucracies, and often even less is known or understood about agency budget and revenue practices. As human service agencies have continued to face stagnant or shrinking budgets, they have increasingly turned to revenue maximization strategies. Agency self-preservation in such a cash-deprived environment has often overcome the interests of those served. The agencies rationalize their efforts as a means of growing capacity to serve children and adults in their care, but the fiscal strategies often result in taking resources directly from the intended beneficiaries without any corresponding increase or improvement in agency services.
This conflict between human service agencies’ service mission and their own fiscal interests is further complicated on multiple interrelationship levels. These layers to the conflict are briefly introduced here, and explored in more detail in the chapters that follow.
First, the conflict exists within the fiscal federalism arrangement that provides the funding structure for many of the largest aid programs. Fiscal federalism aims to create a partnership between the relative strengths of the federal and state governments. The federal government’s centralized power to raise revenue and withstand economic downturns is paired with the view that states are better able to understand and serve the more localized needs of their citizens. But the asserted strengths of state agencies in addressing regional and individualized needs often give way to self-interested revenue strategies. Fiscal federalism structure can add to this conflict. The complexities of the eligibility and claiming process of federal aid programs and the billions in funds potentially available encourage the state agencies to increase their gamesmanship and focus on the fiscal pursuit.
Second, the conflict between agency purpose and self-interest is further heightened by a growing private sector seeking to profit from the aid funds. Many companies have grown from the flow of money in federal aid programs and the desire of state agencies to maximize the federal funds. A web of contracts exists between private industry and state and federal governments to provide services in all aspects of government aid. And while taking on more and more operational services of poverty programs, private contractors are also aiming directly at the source of federal funds. As state agencies seek every dollar they can find, consultants have capitalized on the search by developing strategies to claim additional federal funds. Moreover, as poverty industry companies encourage state agencies to claim more federal aid dollars, the companies are also contracting with the federal government to monitor and reduce the pay out of those same federal funds.
Third, an additional conflict exists between the agencies’ interests and the interests of their parent states. Human service agencies are subject to state control. As the agencies are searching for additional funds, so are the states. As a result, the additional federal funds from revenue maximization contracts often do not result in additional fiscal capacity for the human service agencies, but rather states often divert the funds into general revenue. Thus, the parens patriae power that is housed within state human service agencies—already diverted toward agency self-interest—is often further manipulated by the broader state powers. The states aim to control their agency-parts in order to serve themselves, and the intended welfare maximization goals of government are overcome by revenue maximization strategies.
Thus, the agencies often use children and the poor as a source of funds, states in turn often use their agencies as a source of funds—and the best interests- of the agency beneficiaries are often lost in the competing fiscal shuffle. The result is a conflict between agency purpose and self-interest, between the agencies and their parent states, and between the states and their agencies with the federal government. Rather than promoting collaboration between the federal and state governments, the self-interested practice—spurred on by the revenue maximization consultants—pits the levels of government against each other. As explained in more detail in the next chapter, the ideals of fiscal federalism are undermined as a result, and the interests of children and other vulnerable populations are harmed.