Over 30,000 Mississippians get stories like this delivered to their inboxes for free.
Sign up for The Today, our daily newsletter, and continue to read this story.
Mississippi’s Child Protection Services is short nearly $40 million, an unprecedented amount that could have severe repercussions for how the state manages the fledgling agency.
Jess Dickinson, the newly appointed head of the agency, announced the shortfall Tuesday before a Senate Appropriations subcommittee. The reason, he said, is that Child Protection Services, which the state formed as a separate agency in 2016, is no longer eligible for the same federal matching dollars as it was when it was part of the Department of Human Services.
The shortfall, which represents one-fifth of the agency’s $207 million budget, shocked legislators, many of whom said they never had seen a miscalculation like this.
“It’s just kind of blown us away,” said Senate Appropriations Chair Buck Clarke, R-Hollandale, who learned about the shortfall last week. “I’ve never seen something like that happen.”
But the problem likely has been brewing for the two-year lifetime of the agency. Dickinson, who took over following the retirement of the agency’s first executive director, David Chandler, said he became aware of the discrepancy within weeks of joining the agency in September.
Dickinson told lawmakers that during a phone call that month with John Davis, director of the Department of Human Services, Dickinson was shocked to hear that the department would receive nearly $130 million less in federal funds than estimated.
This was a drastic departure from the previous estimate. When Child Protection Services filed its budget request for fiscal year 2018 back in September 2016, the agency projected it would spend $317 million and that it would receive $198.6 million in federal funds. When Dickinson took over the next fall, he determined the actual budget for the agency was $207 million, about $110 million less than Child Protection Services had originally estimated. He also realized that the agency would receive only $70 million in federal funds, a difference of nearly $130 million from the original estimate.
“I repeat: I have no idea where those numbers came from,” Dickinson told the committee Tuesday. “I have no idea how somebody suggested or predicted this. I have asked everybody where those numbers came from and nobody has any idea where the numbers came from. As far as I can tell, they’re made up.”
While it remains unclear where the discrepancy originated, agency staff said the problems with funding likely were apparent under the agency’s previous administration.
“I can’t believe they didn’t know,” said Taylor Cheeseman, chief of staff for the commissioner.
Chandler did not immediately respond to a voicemail message.
Although Child Protection Services receives a significant state appropriation — nearly $100 million in 2018 — the agency also relies heavily on federal matching funds, similar to the Division of Medicaid and Department of Human Services. Unlike those two agencies, whose budgets qualify almost entirely for matching funds, many Child Protection Services programs are ineligible for the federal match.
This was not a problem for the agency’s operations when the agency was a branch within the Department of Human Services. But in 2015, the Legislature voted to carve out Child Protection Services, turning it into a standalone agency, complete with its own line in the state budget.
This move marked a dramatic step forward for the state’s child services, which has wrestled for more than a decade with the Olivia Y lawsuit, in which a federal court found that the state had failed to adequately protect children in its custody.
But legislators’ rush to comply with the settlement may have caused them to overlook an important detail, how exactly this new agency would be funded.
“We thought we could do it on our own, and we went out and did it wrong,” Sen. Terry Burton, R-Newton, said in the committee meeting Tuesday. “I’m just telling it like it is.”
Regardless of why the problem exists, Clarke said, the agency had a responsibility to not only get the numbers right but also notify legislators if their projections were incorrect.
“These agencies, we depend on them and their experts to tell us what goes in that federal line,” Clarke said.
Although legislators on both sides of the aisle agree that turning Child Protection Services into its own agency has been a success from an operations standpoint, fixing the agency’s budget problem may mean once again rejoining the two agencies.
At the time Dickinson took over, the shortfall was even more severe, $52 million. Dickinson said the agency already was able to recoup $13.9 million of its deficit by moving certain positions back to the human-services department.
“So we have worked out a memorandum of agreement with DHS and … that leaves us $38 million in the red for the current fiscal year,” Dickinson said. “I do not know how we can address that. I don’t have any options. This money is primarily salaries for caseworkers in the field and their supervisors.”
A budget hole in Child Protection Services is particularly critical because, unlike other agencies, CPS is legally barred from reducing its workforce. The number of employees the agency can have is dictated by Olivia Y litigation, meaning the agency needs at least 1,000 caseworkers in the field and another 200 supervisors.
To meet those requirements, the agency still needs to hire another 200 caseworkers and 60 supervisors, Dickinson said Tuesday.
“So we actually need to continue to add staff if we’re going to comply with Olivia Y,” Cheeseman said.
As a result, legislators admit they’re somewhat at a loss when it comes to finding a way to make up the gaping hole in the budget. When asked where the state might find the nearly $40 million — just under one percent of the entire state budget — Clarke, the appropriations chair, raised his hands and shook his head.
“I just don’t know,” he said.