State agency says it lacks adoption subsidy money

August 8, 2014

The Indiana Department of Child Services says it isn't paying subsidies to parents who adopted special-needs children out of foster care because the state Legislature hasn't appropriated enough money.

The agency is facing a class-action lawsuit from a northern Indiana woman seeking the nearly $19-per-child daily payments that were in a contract when she adopted her three children in 2012.

The lawsuit, filed by Indianapolis-based law firm Cohen & Malad LLP, says the agency hasn't made the payments while returning about $240 million to state coffers since 2009.

The agency acknowledges in a response filed in a LaPorte County court last week that it returned that amount to the state's general fund but denied violating the families' contracts, The Indianapolis Star reported.

"DCS can make adoption subsidy payments only if DCS determines in its discretion that sufficient funds are available in the adoption assistance account and that sufficient funds can reasonably be anticipated to be available in the account during the term of the subsidy," the agency's response said. "This is a condition precedent to payment that did not occur."

Lynn Toops, an attorney representing Debra Moss of LaPorte, said DCS has returned $4 million to the state's general fund since Moss' lawsuit was filed and that the returned money could've been used for the adoption payments to some 1,400 families.

"The contracts that DCS had with the adoptive families weren't contingent on an appropriation from the Legislature," she said in a statement. "Since 2009, DCS has returned over $240 million in excess, unused funds to the State, and all of that money was available to DCS to pay to the adoption subsidies."

Agency spokesman Rich Allen said he couldn't comment on why DCS returned the money to the state's general fund rather than using it on subsidies because of the lawsuit.

Republican Gov. Mike Pence ordered spending cuts last year that amounted to $300 million, boosting the state's reserves to more than $2 billion at the end of the state budget year in June. Pence has told state agencies to hold back 4.5 percent of their funding for the current fiscal year, with Pence's spokeswoman saying the cuts are needed to manage potential budget shortfalls and ensure the state maintains adequate reserves

State Rep. Greg Porter, D-Indianapolis, said the Legislature approved the budget with the expectation that the money it appropriated would be spent. He said the desire to return money to the general fund shouldn't trump DCS' need to take care of children and families.

"We believe we did fund it sufficiently," said Porter, the ranking minority member of the House Ways and Means Committee. "If they want to revert those dollars, the ball's back in their court."


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