Funding for lead agencies.

A contract established between the department and a lead agency must be funded by a grant of general revenue, other applicable state funds, or applicable federal funding sources.

(1) The method of payment for a fixed-price contract with a lead agency must provide for a 2-month advance payment at the beginning of each fiscal year and equal monthly payments thereafter.

(2) Notwithstanding s. 215.425, all documented federal funds earned for the current fiscal year by the department and lead agencies which exceed the amount appropriated by the Legislature shall be distributed to all entities that contributed to the excess earnings based on a schedule and methodology developed by the department and approved by the Executive Office of the Governor.

(a) Distribution shall be pro rata, based on total earnings, and made only to those entities that contributed to excess earnings.

(b) Excess earnings of lead agencies shall be used only in the service district in which they were earned.

(c) Additional state funds appropriated by the Legislature for lead agencies or made available pursuant to the budgetary amendment process described in s. 216.177 shall be transferred to the lead agencies.

(d) The department shall amend a lead agency’s contract to permit expenditure of the funds.

(3) Notwithstanding any other provision of this section, the amount of the annual contract for a lead agency may be increased by excess federal funds earned in accordance with s. 216.181(11).

(4) Each contract with a lead agency shall provide for the payment by the department to the lead agency of a reasonable administrative cost in addition to funding for the provision of services.

(5) A lead agency may carry forward documented unexpended state funds from one fiscal year to the next; however, the cumulative amount carried forward may not exceed 8 percent of the annual amount of the contract. Any unexpended state funds in excess of that percentage must be returned to the department.

(a) The funds carried forward may not be used in any way that would create increased recurring future obligations, and such funds may not be used for any type of program or service that is not currently authorized by the existing contract with the department.

(b) Expenditures of funds carried forward must be separately reported to the department.

(c) Any unexpended funds that remain at the end of the contract period shall be returned to the department.

(d) Funds carried forward may be retained through any contract renewals and any new procurements as long as the same lead agency is retained by the department.

(6) It is the intent of the Legislature to improve services and local participation in community-based care initiatives by fostering community support and providing enhanced prevention and in-home services, thereby reducing the risk otherwise faced by lead agencies. A community partnership matching grant program is established and shall be operated by the department to encourage local participation in community-based care for children in the child welfare system. A children’s services council or another local entity that makes a financial commitment to a community-based care lead agency may be eligible for a matching grant. The total amount of the local contribution may be matched on a one-to-one basis up to a maximum annual amount of $500,000 per lead agency. Awarded matching grant funds may be used for any prevention or in-home services that can be reasonably expected to reduce the number of children entering the child welfare system. Funding available for the matching grant program is subject to legislative appropriation of nonrecurring funds provided for this purpose.

(7) If subcontracted service providers must provide services that are beyond the contract limits due to increased client need or caseload, the lead agencies shall fund the cost of increased care.

(8)(a) The department, in consultation with the Florida Coalition for Children, Inc., shall develop and implement a community-based care risk pool initiative to mitigate the financial risk to eligible lead agencies. This initiative must include:

1. A risk pool application and protocol developed by the department which outlines submission criteria, including, but not limited to, financial and program management, descriptive data requirements, and timeframes for submission of applications. Requests for funding from risk pool applicants must be based on relevant and verifiable service trends and changes that have occurred during the current fiscal year. The application must confirm that expenditure of approved risk pool funds by the lead agency will be completed within the current fiscal year.

2. A risk pool peer review committee, appointed by the secretary and consisting of department staff and representatives from at least three nonapplicant lead agencies, which reviews and assesses all risk pool applications. Upon completion of each application review, the peer review committee shall report its findings and recommendations to the secretary, providing, at a minimum, the following information:

a. Justification for the specific funding amount required by the risk pool applicant based on the current year’s service trend data, including validation that the applicant’s financial need was caused by circumstances beyond the control of the lead agency management;

b. Verification that the proposed use of risk pool funds meets at least one of the purposes specified in paragraph (c); and

c. Evidence of technical assistance provided in an effort to avoid the need to access the risk pool and recommendations for technical assistance to the lead agency to ensure that risk pool funds are expended effectively and that the agency’s need for future risk pool funding is diminished.

(b) Upon approval by the secretary of a risk pool application, the department may request funds from the risk pool in accordance with s. 216.181(6)(a).

(c) The purposes for which the community-based care risk pool shall be used include:

1. Significant changes in the number or composition of clients eligible to receive services.

2. Significant changes in the services that are eligible for reimbursement.

3. Continuity of care in the event of failure, discontinuance of service, or financial misconduct by a lead agency.

4. Significant changes in the mix of available funds.

(d) The department may also request in its annual legislative budget request, and the Governor may recommend, that the funding necessary to effect paragraph (c) be appropriated to the department. In addition, the department may request the allocation of funds from the community-based care risk pool in accordance with s. 216.181(6)(a). Funds from the pool may be used to match available federal dollars.

1. Such funds shall constitute partial security for contract performance by lead agencies and shall be used to offset the need for a performance bond.

2. The department may separately require a bond to mitigate the financial consequences of potential acts of malfeasance or misfeasance or criminal violations by the service provider.

(9) Notwithstanding subsection (5), all funds held by a lead agency carried forward pursuant to subsection (5) as of July 1, 2026, must be returned to the department. By August 1, 2026, the department must report to the chair of the Senate Committee on Appropriations, the chair of the House of Representatives Budget Committee, and the Executive Office of the Governor’s Office of Policy and Budget the amount of funds returned by each lead agency. The funds returned shall be held in reserve, and the Department of Children and Families may submit a budget amendment pursuant to chapter 216 requesting release of funds in amounts necessary to satisfy fourth quarter payment obligations to community-based care lead agencies or address potential revenue shortfalls associated with declining Title IV-E eligibility within the state’s foster care population. This subsection expires July 1, 2027.