Vermont’s ability to draw down certain federal child welfare funds is being constrained by legacy information technology systems that advocates and lawmakers say are too old to meet federal data requirements—and officials say the state cannot even calculate the size of the funding gap.
In an email, Aryka Radke, head of the Family Services Division, said the “total monetary impact remains unknown” because Vermont’s system “lacks the sophistication to determine the exact amount of inaccessible federal funds.” Lawmakers and advocates said those shortcomings have also made it difficult to keep up with changing federal reporting expectations for child welfare programs that depend on detailed tracking of children’s path through care.
State leaders are pressing for upgrades as they prepare for debate over Gov. Phil Scott’s proposed budget for the next fiscal year. Advocates said Vermont’s noncompliance with federal data standards rules out eligibility for certain federal grants, while also pointing to longer-running service failures they attribute to the systems’ fragility and limited capacity.
Vermont’s primary child welfare information system is intended to manage basic information about minors in state custody and their placements, while a related program organizes child abuse reporting and case notes. Both were created before 2000, and the technology is widely described as unable to easily absorb data requirements added more recently, including information that child welfare officials say did not need to be captured when the systems were built.
The state is also facing reliability risks tied to the same platform. Advocates said the infrastructure has been fragile, including a reported three-day catastrophic failure in December after a botched server update.
Officials say the federal funding at stake comes from programs that assist states with foster care systems, adoption and related outreach. Those funds are structured through matching grants and reimbursements that include eligibility rules, and advocates said those requirements often hinge on states closely tracking children’s path through care. They said Vermont has fallen behind in meeting federal standards that have existed for years.
As federal eligibility rules changed in 2021, officials said Vermont’s federal revenue reports for reimbursing group care programs fell, a drop Matthew Bernstein’s office described as largely linked to the state’s technical limitations. Bernstein’s office also estimated that the overall cost of transitioning away from the existing systems could rise as high as $50 million, while Vermont has so far directed just shy of $8 million toward the project, with Radke saying both the cost and timeline are “unknown.”
Bernstein’s office said Vermont declined a 90% federal match offered decades ago for bringing its data systems up to date. The office argued that the state should use money already set aside to make smaller, immediate improvements at the most problematic points, while Vermont Department for Children and Families issued a request for proposals last year to begin contracting out improvements. Advocates said the department has pursued similar contracting steps in the past, including 2018 and 2022, and Radke said she was confident of progress this spring.
Several lawmakers said the proposed budget’s approach would worsen the gap between what federal programs require and what Vermont systems can document. Rep. Laura Sibilia, who serves on the House Energy and Digital Infrastructure Committee and the Joint Information Technology Oversight Committee, said Scott’s proposed 2027 budget does not include appropriations to continue developing the system and called that omission “inexplicable,” adding, “We do not have a good system in place … for replacing IT, software.”
Rep. Anne Donahue, the House Human Services Committee’s ranking member, said she is especially concerned about immediate impacts on children, citing limits on the state’s ability to adequately track the use of restraints and seclusion in some care settings. Donahue also argued that federal programs Vermont cannot access are an important part of comprehensive care and said the system’s effect on families is “horrific at many levels,” warning that the urgency should persist even amid a tight state budget.
Donahue said Scott’s budget book recommends the elimination of more than $1 million in state funds for the Family First Prevention Services Act After Care program, intended to help children exiting residential treatment programs. Advocates said Vermont was not able to “draw down” corresponding federal funds, so the program never got off the ground in the state. Donahue also pointed to cuts to a related program focused on helping keep children with their families and out of state custody where possible, saying state contributions are reduced by half (over $500,000) and that the federal funding requirements are “impossible using the current (Vermont) case management system.”
Despite those proposed changes, Radke said the state plans to use remaining funds to continue work on a new motivational interviewing program, which she said was approved by the federal government in 2022. When asked about potential budget cuts, Radke said the administration prioritized preserving services for children, youth and families “to the extent possible,” adding that those changes were chosen accordingly.
Bernstein said prevention practices can help both families and the state’s fiscal responsibility. In contrast, Bernstein said he was not sure Scott’s budget approach would maintain that balance, replying in an email to the administration’s justification that he saw “multiple cuts in prevention funds,” deep investments in congregate and locked facilities, and a move to increase punitive measures on children and youth.
Other proposed cuts in Scott’s budget also drew criticism from lawmakers, including Rep. Theresa Wood, D-Waterbury, who chairs the House Human Services Committee. Wood called a reduction in funding for parenting workshops organized by Prevent Child Abuse Vermont “ludicrous,” saying, “They have tons of data to support the work that they’ve done.”