Cal. Welf. & Inst. Code § 18260

(a) The department may conduct a demonstration project in up to 20 counties, to allow flexible use of federal and state foster care funds by utilizing a federal capped allocation model over a five-year period, based on the terms and conditions of the federal Title IV-E waiver. Participation shall be at the option of each county, subject to state approval, provided that each county has entered into a memorandum of understanding (MOU) with the department, as described in subdivision (c). The department shall not be required to conduct any demonstration projects under this section if no county elects to participate. It is the intent of the Legislature that this project will improve outcomes or safety for children, and that the state shall provide immediate assistance, as needed, if the department finds that children’s health, safety, or well-being has declined, or is at risk of declining, as a result of a county’s participation in the project.
(b) The department is authorized to conduct the demonstration project in order to provide participating counties with flexibility in their use of state and federal foster care maintenance and administrative funds that were previously restricted to payment for the care and supervision of children in out-of-home placements and administrative expenditures. Any county, state, or federal savings in the foster care program that occur as a result of the demonstration project shall be reinvested by the counties in child welfare services program improvements. These foster care savings will support the counties in developing a broader and more responsive array of services that will contribute to improved outcomes for children and families. Any unexpended state and federal funds may be retained by each county for expenditure in subsequent fiscal years for purposes consistent with this section.
(c) The department shall work with county welfare directors and other stakeholders to develop the terms and conditions of the MOU. The MOU shall incorporate the terms and conditions of the federal approval of the use of federal funds for the demonstration project, additional conditions as described in this section, and provisions deemed by the department and counties as reasonably necessary to fulfill the purpose of the demonstration project and to ensure compliance with its conditions and with this section. Provisions of the MOU shall include, but shall not be limited to, all of the following:
1. (1) The MOU shall specify the time periods for the county’s participation in the demonstration project, and shall set forth procedures for the county to opt out of participation in the demonstration project. A county electing to opt out of the demonstration project shall provide written notice to the department of its intent to do so in accordance with the MOU.
2. (2) The county is responsible for ensuring that adequate funds are available to protect children at risk of abuse and neglect, by out-of-home placement or otherwise, until funds are appropriated to the county through the Budget Act, including provisional language in the Budget Act that authorizes midyear funding adjustments, for this purpose.
3. (3) The MOU shall specify the allocation methodology for the capped amount of federal funds that will be allocated to the county for the demonstration project, as well as the county’s share of cost.
4. (4) The MOU shall specify the methodology for the provision of state General Fund resources that a county shall receive under the waiver and the liability for the county and the state for costs in excess of the capped federal amount.
(d) The county and state share of costs for the demonstration project shall be determined notwithstanding Sections 15200 and 10100.