However, SSA views it differently. SSA states the following about Title IV-E funds:]
Originally Posted by NizhoniSeattle
Adoption assistance cash payments made to adoptive parents on behalf of a child under Title IV-E are Federally funded income based on need (IBON) to the adopted child. This income is not subject to the $20 general income exclusion and the Presumed Maximum Value (PMV) cannot be applied. Therefore, the total payment is considered cash income to the adopted child and is counted dollar for dollar.
(Bolding added.) See https://secure.ssa.gov/poms.nsf/lnx/0500830415
So while the checks may be made out to you, they are paid to you on her behalf and, as the part I bolded indicates, they are treated as cash income of the child. The survivor benefits are also benefits for the child, and there are rules for coordination of benefits that prevent a child from cashing in on the full amount of some SSA benefit programs when the person is receiving another SSA benefit. SSI is not affected (as the above from SSA indicates), but other programs are. Arizona DCS specifically states that death (survivor) benefits are among those that are affected:
Will Adoption Subsidy subtract other benefits such as Social Security (SSA) or Supplemental Security Income (SSI)?
Adoption Subsidy subtracts some benefits such as SSA death or disability benefits. SSI is not subtracted but the adoptive parent must report the receipt of adoption subsidy maintenance to Social Security and frequently the child will no longer qualify for SSI after the adoption.
(Bolding in original.) See page 3 of the Arizona DCS publication Adoption Subsidy found at: https://dcs.az.gov/sites/default/files/media/PAP-194english.pdf
So it appears that what DCS has told you is consistent with that publication. Since these are both programs of SSA, you may ask SSA directly how the coordination of these two benefits is supposed to work.