About $46 million in federal funding for child welfare services is ensnared in a disagreement between legislators and the state Department of Human Services.

The department is asking the Legislature for authority to spend that money for preventive social services from Temporary Assistance for Needy Families federal funds.

The proposed House budget would prevent the department from spending it, while the Senate version would allow it. The difference must be worked out in a conference committee.

The amount initially totaled $70 million, including $49 million in federal stimulus funds, but the Human Services Department already has received $24 million of the extra money.

One of the problems seems to be a misunderstanding over a spending plan for the federal money on the department's Web site.

House Finance Chairman Marcus Oshiro (D, Wahiawa-Whitmore Village-Poamoho) said legislators and others were “;just flabbergasted”; to see “;zeroes”; for child welfare funding when the assistance plan was reviewed at a hearing as “;the DHS official expenditure plan for the next four years.”;

But Human Services Director Lillian Koller stressed that the plan posted online is not recommended by the department, which supports the governor's supplementary budget request for use of the assistance funds.

She said the 2006 Legislature mandated that the department present four-year plans to show where cuts could be made to achieve a $40 million reserve from the Temporary Assistance for Needy Families block grant if needed for increased welfare cases.

The conflict, she said, is that legislators want to “;hoard”; the money and the DHS wants to spend it for social services.

The state receives $98.9 million a year through the program, most of which was spent on welfare checks by her predecessors, she said.

But the program puts a five-year limit on welfare assistance to encourage employment, she said, explaining the funds can be used for such purposes as strengthening families, preventing child abuse and neglect, job training, youth development and programs to fight poverty.

If the money is not used in the year it is received, it can be used only for cash assistance, and Hawaii's welfare caseload has dropped 12.28 percent, from 1,710 cases in July 2007 to 1,500 in January this year, she said.

Legislators and the department have differed since 2008 over spending of the federal block grant.

“;They let me spend some of the money but never felt comfortable with it,”; Koller said. “;All other states spend all of it.”;

Oshiro said his committee was “;looking at some adjustments only because if we proceed with their plan, which relies heavily on continuation of federal funds, beyond 2011 you're going to be facing a severe cliff.

“;Instead of going up into the cliff and falling off, or having to pull way back on contracts for services or provider networks, we thought we'd take a more conservative approach and pull back a little bit so we don't go in the red in 2011.”;

He said he told human services staff members “;we're willing and open to work with them”; to reach an agreement.

The proposed House budget would undermine progress made by the state and community providers in social services, Koller said, pointing out Hawaii was one of only two states with a decrease in family poverty in 2008, according to a federal announcement.

The reforms also reduced the number of foster care children from 3,000 in 2005 to fewer than 1,400 today, eliminated disproportionate representation of native Hawaiian children in foster care, achieved one of the lowest child re-abuse rates in the nation and received a top national ranking for timely adoptions of foster children, she said.

The department was congratulated recently by the federal Children's Bureau for “;a significant achievement”; in meeting or exceeding all six federal standards required by the nationwide Child and Family Services Review to help protect children from abuse and neglect. The state met only two standards in 2003.

Oshiro congratulated the department and all service providers. “;There should be high fives going around. ... We don't want to take away from that.”;