Some Intercountry Adoption Agencies Face Massive Hikes in Regulatory Costs

Intercountry adoption advocates fear that the fee structure planned by a new State Department accreditation contractor could threaten the operation of the largest American placing agencies.

The fees required by the Intercountry Adoption Accreditation and Maintenance Entity (IAAME), a recently formed nonprofit that now serves as the sole accreditor for international adoption agencies, are pegged to the number of children placed instead of a fixed structure. That is expected to cost significantly more for the largest placing agencies.

“The Department of State keeps saying, ‘Just pass the fees on to families’ as though intercountry adoption isn’t expensive enough,” said Ryan Hanlon, vice president of education, research and constituent services for the National Council for Adoption (NCFA). “They’re even charging per child for sibling groups.”

IAAME was created amidst disagreements between the State Department and its previous partner, the Council on Accreditation (COA). Last fall, COA announced it would walk away from the process over concerns about what it perceived to be new State Department regulations and standards for foreign service providers, the people on the ground in other countries working to finalize adoptions for American families.

IAAME is a newly-established entity that will handle accreditation of adoption agencies for the State Department.

COA is set to end oversight of accreditation of intercountry adoption agencies at the end of this year. The State Department disputed COA’s characterization.

“It’s our opinion these are not new requirements,” said Suzanne Lawrence, the special advisor for the State Department’s Office of Children’s Issues, in a statement to The Imprint from November. “IAAME is coming in knowing what our expectations are.”

IAAME is operated by the Partnership for Strong Families, a child welfare services provider for two regions in Florida that is based in Gainesville. The organization is led by Stephen Pennypacker, who is also CEO of the parent organization; chief financial officer Michael Reneke, also the CFO of the parent; and Executive Director Kim Loughe.

According to figures provided by NCFA, the Council on Accreditation charged agencies $750 to apply for accreditation, and $9,500 for periodic reaccreditation. IAAME’s rates are: $800 per application and a tiered structure for accreditation based on the size of the organization.

Pennypacker said about 100 of the 160 existing intercountry adoption agencies do less than 10 adoptions each year, and that IAAME expects the reaccreditation cost to be lower than COA’s for those 100 agencies.

The real difference comes in the yearly monitoring and oversight (M&O) of the agency in between accreditation reviews. COA imposed a flat fee of $875, per year, per agency. IAAME intends to collect $500 per child, which projects to far higher costs for larger placing agencies.

The State Department, in an online statement addressing concerns about increased rates, said that IAAME’s rates “reflects the need for increased focus in the area of M&O.”

In 2016, one adoption agency, European Adoption Consultants, was suspended shortly after its accreditation was renewed. In a January statement about strengthening the M&O process, State said that while most adoption providers operate ethically, the incident “made clear that changes in the accrediting entities’ (AE) execution of their responsibilities is an urgent matter.”

Pennypacker said the reason for the increased cost of monitoring and oversight is the need to replace COA’s practice of using voluntary peer review for this aspect of the work. Staff from a different agency would do a review of files, and send a score and report to COA’s full-time staff. The peer review team’s travel and accommodations were covered, but they were not paid a salary.

“We know we need to beef that up,” Pennypacker said. “The model will be not to use volunteers, and have more paid bodies.”

He said the plan is to start with 20 full-time employees working on monitoring and oversight.

But Hanlon said the State Department has been “tone deaf” to agencies’ concerns about the increasing costs.

“I don’t think they realize how upset agencies are,” he said. “Even those ones that usually play nice … are speaking up and saying how frustrated they are.”

NCFA collected four-year estimates from several agencies, all of whom would have paid $3,500 over four years for monitoring and oversight. Based on IAAME’s structure, projections ranged from $60,000 up to $370,446.

Hanlon said that increased administrative costs and new hires to work on compliance might present even more increased costs to agencies.

Some agencies are budgeting for additional staff to work with “an accrediting entity that has a mandate to do more oversight work,” Hanlon said.

Pennypacker said IAAME has hosted two national conference calls to answer questions from agencies, but said, “I don’t think that went as far as we would have hoped.”

All of this is happening against a backdrop of continuous decline in the number of foreign children adopted in the United States. The number of international adoptions declined from 22,989 in 2004 to just 4,714 in 2017. On March 1, Ethiopia, one of the top sending countries for the last several years, passed legislation banning intercountry adoption.

Since 2008, three of the top five sending countries – Guatemala, Ethiopia, Russia – have closed down entirely and both China and Korea have reduced the number of children who can be adopted internationally.

Hanlon said the number of intercountry adoption agencies has fallen to 160 from a peak of about 200. “In four years, I can’t imagine there will be 100.”

Joint Council for International Children’s Services, a nonprofit that represented adoption agencies for 40 years, closed in June 2015. At one point the agency boasted 140 partner organizations, but as agencies began to close as intercountry adoptions declined, so did the organization’s membership.

Hanlon said if agencies start passing more cost onto adoptive parents, there could be a “slow burn where intercountry adoption is harder, more expensive. You get to that tipping point, and then it could spiral quickly.”

COA will complete accreditation for agencies due in 2018. IAAME will begin to assume the monitoring and oversight duties for all other agencies in April.

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