GAO

United States General Accounting Office

Report to Congressional Requesters

July 2000 WELFARE REFORM

Work-Site-Based

Activities Can Play an

Important Role in

TANF Programs

GAO/HEHS-00-122

Page 1 GAO/HEHS-00-122 TANF Work Programs

Contents

Letter 3

Appendixes Appendix I: Comments From the Department of Health and Human

Services 38

Appendix II: GAO Contacts and Staff Acknowledgments 40

Bibliography 42

Related GAO Products 46

Tables Table 1: Federal Law Sets Increasing TANF Participation

Requirements for All Families for Fiscal Years 1997-2002 7

Table 2: Key Characteristics of the Work-Site Activities Reviewed 10

Table 3: Selected Data on TANF Caseload for Each Work-Site

Activity, November 1999 14

Table 4: Information on Administration and Funding for Nine

Work-Site Activities 18

Table 5: Outcomes for Five Work-Site Activities 28

Figures Figure 1: TANF Recipients Working or Participating in WorkRelated Activities, Fiscal Year 1998 8

Figure 2: Continuum of Work-Site Activities 15

Figure 3: Characteristics of Work-Site Activities Along the

Continuum 16
Contents

Page 2 GAO/HEHS-00-122 TANF Work Programs

Abbreviations

AFDC Aid to Families With Dependent Children

CWEP Community Work Experience Program

EIC Earned Income Credit

FICA Federal Insurance Contributions Act

HHS Department of Health and Human Services

MDRC Manpower Demonstration Research Corporation

PRWORA Personal Responsibility and Work Opportunity Reconciliation

Act of 1996

TANF Temporary Assistance for Needy Families

WEP Work Experience Program
Page 3 GAO/HEHS-00-122 TANF Work Programs

United States General Accounting Office

Washington, D.C. 20548

Health, Education, and

Human Services Division

B-283158 Letr

July 28, 2000

The Honorable Daniel P. Moynihan

Ranking Minority Member

Committee on Finance

United States Senate

The Honorable Sander M. Levin

House of Representatives

The Personal Responsibility and Work Opportunity Reconciliation Act of

1996 (PRWORA) significantly changed federal welfare policy for lowincome families with children, building upon and expanding state-level

reforms. Under the Temporary Assistance for Needy Families (TANF)

block grant created by PRWORA, states have much greater flexibility than

before to design and implement programs that meet state and local needs.

At the same time, states must enforce a lifetime limit of 5 years (or less, at

state option) on the length of time adults receive federal assistance and

impose federal work requirements on most adults receiving aid. More

specifically, states are to require adults receiving TANF aid to be engaged in

work or work-related activities, as defined by the states, after 2 years of

receiving assistance. In addition, to avoid financial penalties, states must

ensure that increasing proportions of adult TANF recipients are working or

engaged in federally specified activities for increasing numbers of hours

through fiscal year 2002. Recipients’ participation in PRWORA-specified

activities, including unsubsidized employment, can be counted toward this

target participation rate. These activities can be grouped into three broad

categories: those that focus on finding a job, those that take place in a

classroom or other educational setting, and those that take place at a job or

work site. We refer in this report to activities that are based at a work site—

with the exception of unsubsidized employment—as work-site activities:

subsidized employment, community service, on-the-job training, and work

experience. Many policymakers anticipate that as the federal participation

rates increase and as state welfare caseloads become increasingly

composed of those who are most difficult to employ—or if the economy

falters—states will rely more heavily on work-site activities to meet federal

work requirements or states’ own welfare reform goals.
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To better understand work-site activities currently in place and the role

they may play as TANF evolves, you asked us to review (1) the key

characteristics of work-site activities states and localities are using in their

TANF programs, (2) the key challenges to implementing and administering

work-site activities and some of the ways that states and localities have

addressed these challenges, and (3) what is known about the effects worksite activities have had on participants’ ability to successfully make the

transition to unsubsidized employment and on their communities. To

identify characteristics of work-site activities used across the nation, we

analyzed participation data reported by states to the Department of Health

and Human Services (HHS), which administers TANF at the federal level,

and interviewed selected state TANF administrators and experts on TANF

work programs. On the basis of this work, we selected for review nine

work-site activities representing a range of activity types: four at the state

level (two in Massachusetts and one each in Oregon and West Virginia) and

five at the local level (in Chicago; New York City; Onondaga County, New

York; Philadelphia; and San Francisco).1 To describe work-site activities in

more detail and to understand implementation challenges and performance

results, we visited these locations, collecting data and documentation and

conducting interviews with state and local TANF administrators and others

involved in the work-site activities, including contractors and some clients

and client advocacy groups. Although we identified a broad range of worksite activities in this way, they were judgmentally selected, and our results

cannot be generalized to work-site activities across the nation. We

conducted our work from July 1999 to July 2000 in accordance with

generally accepted government auditing standards.

Results in Brief The work-site activities at the locations we visited have in common the

assignment of TANF recipients to public or private sector employers to

perform work in areas such as building maintenance, clerical work,

unskilled health care, and food service. However, these work-site activities

differ in two key ways. First, they play varying roles in their state’s or

locality’s TANF program, with some TANF programs requiring almost all

recipients who have not found a job after a fixed period of time to

participate in work-site activities and others targeting work-site

participation to individuals who face multiple barriers to work, such as

limited work experience or English-language speaking skills. For example,

1

While we have highlighted these types of work-site activities, states and localities may use

variations and combinations of them to serve TANF clients.
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New York City’s TANF program assigns most adults to work-site activities

soon after they begin receiving cash aid. Nationwide, New York City’s

program had the largest number of TANF recipients, almost 21,000,

assigned to work sites in November 1999. In contrast, Chicago’s TANF

program targets participants with multiple barriers for work-site activities,

relying on other activities for recipients with different employment-related

needs. Work-site activities also differ in how closely they resemble welfare

as opposed to employment, particularly in regard to participant payments.

The work-site activities we reviewed range from those in which

participants are expected to work in exchange for a welfare check to those

in which participants (1) receive paychecks subsidized by TANF funds or

other funding sources from which payroll taxes, including Social Security,

are deducted and (2) qualify for the Earned Income Credit (EIC), which can

provide additional income.

States and localities we visited have overcome multiple challenges in

implementing and administering their work-site activities, including the

challenge of recruiting employers and involving participants. In New York

City, for example, the Mayor’s decision to direct city government agencies

to develop work-site assignments for welfare recipients was key to

implementing such a large-scale program. Even in much smaller programs,

administrators needed to develop relationships with employers and

emphasize that they would save recruiting costs and benefit from access to

prescreened, prequalified job candidates. Once work sites are in place,

administrators must attend to participants’ child care and transportation

needs. Most of the sites we visited address these needs by having staff help

participants secure appropriate child care services and transportation

assistance in the form of fare cards or passes for public transportation. In

addition, to deal with motivational problems that can interfere with

attendance, administrators are relying on a combination of “carrots and

sticks.” For example, San Francisco offers financial incentives to

participants ranging in value from $25 to $150 for good attendance or for

staying on the job, and all states have policies requiring reductions in or

elimination of cash aid, called sanctions, if a TANF recipient fails to comply

with work requirements.

While the states and localities we visited generally have outcome data on

key aspects of their TANF programs, such as the number of TANF

recipients who find unsubsidized employment or leave welfare, less is

known about outcomes specifically for work-site activity participants, and

current information is not available on the effectiveness of work-site

activities in promoting employment. In those cases in which outcome data
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on employment and earnings for work-site participants are available, the

data are not comparable among the different work-site activities. In

addition, while outcome data are valuable in helping to understand the

extent to which work-site participants become employed, a rigorous

evaluation using these data would be needed to determine a work-site

activity’s effectiveness. Program administrators, participants, and others

suggest that work-site activities can help participants with no prior work

experience develop a resume and at the same time provide community

services, such as preparing food for delivery to the elderly. However, some

critics say that some work-site activities do not provide the necessary level

of experience or skills to enable participants to make the transition to

unsubsidized employment that leads to economic independence; some

critics also say that work-site participants are brought in to replace regular

salaried employees.

To provide more information on work-site activities, we recommend that

HHS (1) require states to provide more information on the key

characteristics of work-site activities they are using; (2) use its regional

offices, HHS-sponsored conferences, and other means available to collect

and disseminate information on promising work-site approaches; and (3)

support evaluations to increase knowledge about the effectiveness of

various types of work-site activities. HHS generally agreed with our

recommendations and cited actions planned or under way to address them.

Background The welfare reform law transformed federal welfare policy for needy

families with children by replacing the individual entitlement to benefits

under the 61-year-old Aid to Families With Dependent Children (AFDC)

program with TANF block grants to the states. The TANF block grant

makes $16.8 billion available to the states each year through 2002, and in

June 1999, states were providing TANF assistance to about 2.5 million

families. Under TANF, aid recipients face stronger work requirements than

under its predecessor program, and the population that can be required to

work now includes all parents, rather than only those with children 3 years

of age or older. If recipients fail to participate as required, states must at

least reduce the family’s grant and may opt to terminate the grant entirely.

In addition, states must now enforce a 5-year limit (or less, at state option)

on the length of time a family may receive federal TANF assistance.

States must require adults in families receiving TANF assistance to

participate in work or work-related activities, as defined by the states, after

receiving assistance for 24 months (or sooner, at state option). In addition,
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to avoid financial penalties, states must ensure that at least a specified

minimum percentage of adults are participating in work or work-related

activities each year. The required number of hours of participation and the

percentage of a state’s caseload that must participate to meet mandated

rates have steadily increased since 1997, as shown in table 1.

Table 1: Federal Law Sets Increasing TANF Participation Requirements for All

Families for Fiscal Years 1997-2002

Note: PRWORA also sets higher minimum hour and participation rates for two-parent families. The

minimum hour requirement is 35 hours, and the minimum participation rate rises from 75 percent in

1997 to 90 percent in 1999 and beyond.

The welfare reform law also allows each state to reduce its annual

mandated participation rate by an amount equal to the percentage that the

state’s welfare caseload has declined since fiscal year 1995. As a result,

while states were to meet a 30-percent minimum participation rate in fiscal

year 1998, the adjusted required participation rates ranged from 0 percent

in four states—Indiana, Oklahoma, Oregon, and Wisconsin—to 28 percent

in Hawaii. In fiscal year 1998, every state met its adjusted participation rate

for single-parent families. As figure 1 shows, the largest percentage of

TANF recipients meeting federal participation standards were engaged in

unsubsidized employment—that is, they combined welfare and work.

About 17 percent of TANF recipients were engaged in work-site activities—

subsidized employment, community service, on-the-job training, and work

experience.

1997 1998 1999 2000 2001 2002

Minimum weekly hours 20 20 25 30 30 30

Minimum percentage participation 25 30 35 40 45 50
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Figure 1: TANF Recipients Working or Participating in Work-Related Activities,

Fiscal Year 1998

Note: Percentages add up to more than 100 because participants may be counted in more than one

work activity.

Source: HHS, Administration for Children and Families.

As specified in PRWORA, approved activities include, in addition to

unsubsidized employment and work-site activities,2 those focused on

finding a job and those that take place in a classroom or other educational

setting. The activities countable for participation rate purposes under

PRWORA are more work-focused than those under AFDC, which generally

2

For the purposes of meeting federal participation rates, PRWORA specifically defines

approved work activities as unsubsidized employment, subsidized private or public sector

employment, work experience, on-the-job training, job search and job readiness assistance,

community service programs, vocational educational training, job skills training directly

related to employment, education directly related to employment, satisfactory attendance at

a secondary school or a course of study leading to a certificate of general equivalence, or the

provision of child care services to an individual who is participating in a community service

program.

0

10

20

30

40

50

60

70

80

Percentage

70

12 12

Education

and Other

Work-Site Job Search

Activities

Unsubsidized

Employment

17
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allowed more education and training activities. Moreover, although

subsidized employment, on-the-job training, and work experience were

approved activities under AFDC as well, requirements relating to a number

of aspects of each of these activities were specified, including such

features as length of participation allowed and type and amount of

payments to be made to participants and employers.3 PRWORA does not

specify any of the characteristics of these activities, and in the general

explanation of the final TANF rule, HHS stated that it would not further

define the terms in order to provide states with maximum flexibility in

designing their TANF programs. HHS does, however, require states to

provide it with state TANF plans and annual reports that include at least

some information on TANF program activities, although detailed

information describing work-site activities is not required. At the time of

our review, little information describing work-site activities nationwide

was available at the federal level.

TANF Work-Site

Activities Differ in Who

Is Required to

Participate and in How

Much They Mirror

Unsubsidized

Employment

The TANF programs in the states and localities we visited all emphasize the

need for TANF recipients to find unsubsidized employment. To help those

recipients who have difficulty finding unsubsidized employment, states and

localities have implemented work-site activities that differ in two key ways:

the extent to which unemployed TANF recipients are required to

participate in the activity and the degree to which the work-site activity has

characteristics of an unsubsidized job. Some TANF programs require all

unemployed recipients to participate in a work-site activity either

immediately after becoming a cash assistance recipient or after a specified

period of time on assistance. Other TANF programs target their work-site

activities to recipients with specific barriers to employment, such as

limited work experience. Moreover, some states and localities have

implemented work-site activities for which participants receive a

subsidized paycheck and qualify for the EIC; participants in other work-site

activities work in exchange for their cash assistance check.

3

For more information on work-site activities allowed under the AFDC welfare-to-work

program, the Job Opportunities and Basic Skills Training Program, see Welfare to Work:

Most AFDC Training Programs Not Emphasizing Job Placement (GAO/HEHS-95-113, May

19, 1995).
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TANF Programs Differ in

Their Reliance on Work-Site

Activities

Although in all the locations we visited work-site participants generally are

performing the same type of work—such as housekeeping, janitorial,

clerical, unskilled health care, or food service—we identified differences in

the extent to which unemployed TANF recipients are required to

participate in these work-site activities. These differences primarily

concern when unemployed adult recipients are required to participate and

how broadly the work-site activity requirement is applied to the TANF

caseload. Accordingly, we categorized the work-site activities by one of

three characteristics: those that require immediate work-site participation,

those that require work-site participation after a specified delay, and those

that are targeted toward a particular group. Table 2 shows the work-site

activities we reviewed and how we classified them.

Table 2: Key Characteristics of the Work-Site Activities Reviewed

Work-site activity

Who is required to

participatea

Whenparticipation

is required

Number of hours

required at work site

Maximum length of time

allowed to participate

Immediate work-site requirementb

New York City

Work Experience Program

(WEP)

All unemployed

recipients

Once approved for

cash aid

35 hours per weekc As long as receiving cash

assistance, up to the 5-year aid

limit

Onondaga County, N.Y.

WEP

All unemployed

recipients

4 weeks after cash

aid approval

Varies; generally 20

hours per weekc

As long as receiving cash

assistance, up to the 5-year aid

limit

Massachusetts

Community Service

All unemployed

recipientsd

60 days after cash

aid approval

20 hours per week As long as receiving cash

assistance, up to the 2-year aid

limit

Delayed work-site requirement

San Francisco

Community Jobs Initiative

All unemployed

recipients

18-24 months after

signing welfare-towork plane

32 hours per week 9 months

Philadelphia

Paid Work Experience

All unemployed

recipients

After 24 months of

receiving cash aid

20 hours per weekf 6 months

Targeted work-site activity

Chicago

WorkFirst

Recipients with no child

under age 13 or with

multiple barriers to

working

Any time during

receipt of cash aid

Up to 40 hours per

week

As long as receiving cash

assistance, up to the 5-year aid

limit

Massachusetts

Supported Work

Recipients with multiple

barriers to working

At participant’s

option

30-40 hours per week 39 weeksg
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a

All locations we visited exempt some portion of the TANF caseload from the requirement to work or

participate in a work-related activity on the basis of age, disability, or other reasons specific to the

location. This category refers to individuals who have not been exempted from the location’s

requirement.

b

In addition to individuals applying for TANF, those already receiving TANF may be required to

participate.

c

The maximum number of hours required equals the TANF grant plus the food stamp amount divided

by the minimum wage. Most TANF recipients in New York City receive a large enough grant to require

35 hours of work or other concurrent activity per week.

d

This applies only to recipients whose youngest child is over age 5. Massachusetts is still operating

under a waiver granted under prereform rules to exempt parents with younger children.

e

California requires new TANF recipients to meet a community-service requirement 18 months after

signing a welfare-to-work plan, or after 24 months if they were on assistance when the communityservice requirement took effect. Counties have the option to extend the time to 24 months for new

recipients on a case-by-case basis. The welfare-to-work plan documents how the participant will meet

the requirement to participate in a work activity for 32 hours per week during the first 18 to 24 months.

f

Participant engages in 20 hours of paid work experience and 5 hours of other countable activity, such

as budgeting or life skills classes.

g

If a participant has not been hired at the work site after 39 weeks, the placement will be reevaluated. If

the participant may be hired at that site, the participant may receive an extension at the work site.

Otherwise, another work-site position for the participant will be pursued.

h

Participants must meet the federal standard of 30 hours per week, but the number of hours may be

less if the TANF grant plus the food stamp amount divided by the minimum wage equals less than 30

hours per week.

Source: States and localities visited.

Oregon

JOBS Plus

Recipients who need

work to develop specific

job skills or work habits

At participant’s

option

No minimum; generally

30-40 hours per week

No overall limit specified, but

recipients may be at one

particular site for maximum of 6

months

West Virginia

Community Work

Experience Program

(CWEP)

Recipients with little or

no work experience

Any time during

receipt of cash aid

Up to 30 hours per

weekh

As long as receiving cash

assistance, up to the 5-year aid

limit

(Continued From Previous Page)

Work-site activity

Who is required to

participatea

Whenparticipation

is required

Number of hours

required at work site

Maximum length of time

allowed to participate
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Three of the TANF programs whose work-site activities we reviewed have

an immediate work-site requirement for almost all unemployed recipients.

In these programs, TANF recipients who have not found jobs after an initial

search for work are required to participate in a specific work-site activity,

for a fixed amount of time per week, almost immediately or soon after they

have been approved for cash assistance. Not only do these TANF programs

provide a way for recipients to meet their participation requirements, but

they also discourage those who are already working, or who are able to

find a job, from applying for welfare.4

• In New York City, the TANF program assigns almost all unemployed

recipients to its WEP immediately after cash aid approval. Recipients

who have been identified as having medical limitations or limited

English-language skills may be referred to other activities, such as the

recently implemented Personal Roads for Individual Development and

Employment project or the ongoing Begin Employment Gain

Independence Now, both of which combine a work-site assignment with

specialized activities or education and training as needed to meet

participants’ needs. According to New York City officials, they are

planning to combine work-site activities with other activities such as job

search and courses for the General Education Diploma even if

recipients do not have specific barriers.

• In Onondaga County, which includes the city of Syracuse in New York

State, the TANF program requires unemployed recipients to participate

in a 4-week class after being approved for cash aid that is designed to

help them find a job and determine their interests and skills. Recipients

who are not employed at the end of the class are assigned to a work site.

• In Massachusetts’ TANF program, adult recipients whose youngest child

is over the age of 5 have 60 days from application approval to find a job.

If a recipient is not employed or participating in another work activity at

that point, he or she must participate in the Community Service worksite activity for 20 hours a week.

Two of the other TANF programs whose work-site activities we reviewed

also require unemployed recipients to participate in a work-site activity, but

the requirement is delayed. In San Francisco and Philadelphia, recipients

4

See Moffitt, Robert A., “The Effect of Employment and Training Programs on Entry and

Exit from the Welfare Caseload,” Journal of Policy Analysis and Management, Vol. 15, No. 1,

pp. 32-50 (1996) for a discussion of the effects various work-related activities can have on an

individual’s decision to apply for and enter the rolls or to leave the rolls.
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are allowed up to 24 months to find unsubsidized employment, after which

they are assigned to a work-site activity. At the time of our visit, San

Francisco was operating its work-site activity, called Community Jobs

Initiative, on a pilot basis for recipients who had been receiving aid for at

least 12 months, had little or no work experience, and had been unable to

find a job. In anticipation of recipients reaching the 18- to 24-month mark in

the summer of 2000 and thus needing to meet the state community service

requirement, San Francisco officials are expanding the pilot to the entire

caseload. Pennsylvania requires participation in its Paid Work Experience

activity after 2 years.

In contrast to work-site activities designed for all unemployed recipients,

some of the TANF programs we visited target work-site activities to

recipients with specific characteristics. TANF programs in Chicago,

Oregon, and West Virginia and Massachusetts’ Supported Work offer worksite activities designed to address barriers that recipients face in finding

unsubsidized employment, such as lack of specific job skills, poor work

habits, or inability to exhibit appropriate workplace behaviors; limited

reading proficiency; limited English-language speaking skills; and little or

no work experience.5

The work-site activities we reviewed varied in both the absolute number of

participants and the proportion of unemployed recipients participating in

the work-site activity, ranging from 83 participants in San Francisco’s

Community Jobs Initiative to approximately 21,000 participants in New

York City’s WEP. Several factors influenced the scale of the work-site

activity, including the role of the work-site activity within the TANF

program, the total adult TANF caseload size, the number of employed

TANF recipients, and the number of adult recipients participating in other

activities. To better understand the role of particular work-site activities in

our sites, we calculated the percentage of unemployed TANF recipients

meeting their participation requirement through participation in the worksite activity under review. Table 3 shows that two of the broad-coverage

TANF work-site activities had higher proportions of participants than

TANF programs that use a targeted approach. However, as in the case of

Chicago, a work-site activity with a targeted approach can involve a

significant percentage of active TANF participants if its target population is

5

Chicago’s WorkFirst originally targeted TANF recipients who had no children under age 13,

but as of January 2000, it also targets recipients who face multiple barriers to employment.
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sizable. With the exception of New York City, the scale of the work-site

activities in absolute numbers is relatively small.

Table 3: Selected Data on TANF Caseload for Each Work-Site Activity, November 1999

Note: Recipients in the process of being sanctioned are not included in this chart. Recipients may be

counted in more than one work activity.

a

Other activities are those defined by the states and those that are listed in the federal law.

b

These figures include both one- and two-parent families.

Source: GAO analysis of state administrative data.

Some Work-Site Activities

Are Designed to Be More

Job-Like Than Welfare-Like

Another key factor distinguishing one type of work-site activity from

another is how much these activities mirror a “real job.” All work-site

activity participants were generally performing similar types of work , such

Work-site activity

Total adult

TANF caseload

Adult TANF

recipients in

unsubsidized

employment

Unemployed adult

TANF recipients

participating in

any activitya

Unemployed

adult TANF

recipients

participating in

this work-site

activity

Percentage of all

participants that

participate in this

work-site activity

Immediate work-site requirement

New York City

WEP 156,357 29,374 38,652 20,951 54

Onondaga County, N.Y.

WEP 3,015 987 364 209 57

Massachusetts

Community Service 29,769 4,716 8,036 696 9

Delayed work-site requirement

San Francisco

Community Jobs Initiative 5,622 1,891 2,864 83 3

Philadelphia

Paid Work Experience 37,852 7,158 5,142 1,528 30

Targeted work-site activity

Chicago

WorkFirst 59,252 24,282 7,918 2,119 27

Massachusetts

Supported Work 29,769 4,716 8,036 564 7

Oregonb

JOBS Plus 11,541 2,775 10,287 403 4

West Virginia

CWEP 13,838 1,816 5,768 1,060 18
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as housekeeping, janitorial service, clerical work, unskilled health care, or

food service. However, what differs among work-site activities is the extent

to which participants’ financial benefits and responsibilities are more

similar to those of traditional welfare programs than to those of

unsubsidized employment. As shown in figure 2, the work-site activities we

reviewed can be arrayed along a continuum, ranging from activities that are

more welfare-like to those that are more job-like.

Figure 2: Continuum of Work-Site Activities

Work-site activities that are more welfare-like generally emphasize a TANF

recipient’s obligation to work in exchange for cash assistance. As shown in

figure 3, participants in these work-site activities receive a TANF check,

and the maximum number of hours they are required to work is calculated

by dividing the TANF grant amount plus food stamp benefits by the

minimum wage. A slight difference exists in Onondaga County, where

work-site positions are supplemented with job search assistance while the

participants are in the work-site activity, thus emphasizing the need for

participants to find unsubsidized employment.
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Figure 3: Characteristics of Work-Site Activities Along the Continuum

a

Intermediary organizations issue TANF benefits in the form of a paycheck, but the benefits are not

considered earned income.

b

Because of policies that disregard some earnings in calculating recipients’ eligibility for and amount of

aid (called earnings disregards), some work-site activity participants may receive a reduced TANF

benefit check in addition to the paycheck. For instance, Philadelphia disregards 50 percent of Paid

Work Experience participants’ earnings; thus, participants may be eligible to receive a small

supplemental TANF check.

c

Federal Insurance Contributions Act.
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In the middle of the continuum, Philadelphia’s Paid Work Experience and

San Francisco’s Community Jobs Initiative are more job-like than those

discussed above. Participants in both activities receive paychecks, qualify

for the EIC, have payroll taxes deducted, and are able to earn more than

their grant amount.6 Nonetheless, participants’ paychecks are subsidized

by TANF funds and are issued from an intermediary organization, such as a

nonprofit organization, rather than the work-site employer, and

participants are not considered employees of the work site.7

Finally, work-site activities on the right side of the continuum have

additional characteristics not found in Philadelphia’s and San Francisco’s

work-site activities. Participants in Oregon’s JOBS Plus are considered

employees of the work site. They are paid by the work-site employer and

make at least the state minimum wage. The welfare agency reimburses the

employer for 100 percent of the minimum wage for up to 40 hours a week,

for workers’ compensation, and for other payroll taxes.8 In addition, while

there is no contractual obligation on the part of work-site employers to hire

JOBS Plus participants, there is a mutual expectation that work-site

employers will hire participants for an unsubsidized job if they perform

well. Placements of participants at subsidized work sites in Massachusetts’

Supported Work are also expected to lead to unsubsidized employment

with that work-site employer. The key difference is that Supported Work

participants are considered employees of an intermediary organization

rather than of the work site.

Work-Site Activities Differ

in Administration and

Funding

Along with differences in participants’ financial benefits and

responsibilities are differences in how the work-site activities are

administered and funded, as shown in table 4. Generally, the work-site

activities that are more welfare-like are administered by the state or local

6

Under TANF regulations, when TANF funds are used to subsidize wages, the resulting wage

payments to recipient-employees do not constitute assistance and do not count against the

60-month federal time limit. This does not prevent states from counting months in

subsidized jobs against their own state time limits, and most states in our review did so.

7

California allows counties to adopt one of two approaches to community service: either a

work-for-cash-assistance approach or an approach in which recipients work and receive a

paycheck subsidized by their cash assistance grant. San Francisco elected to adopt the

second approach.

8

This approach, in which a welfare recipient’s grant is “diverted” to an employer who agrees

to employ the person, has been known as grant diversion under past welfare programs.
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TANF agency, which places recipients at work sites and monitors them to

ensure that they are meeting their work-site obligation. However, the New

York City TANF agency uses a hybrid approach, assigning recipients to

either a city agency or a community-based organization that supervises

participants at a work site and monitors their attendance. In October 1999,

almost 70 percent of New York City WEP participants were assigned in

large groups to public sector agencies, where participants performed such

tasks as cleaning city court buildings and providing administrative support,

among others. New York City WEP participants referred to a communitybased agency performed the same types of work, such as maintenance or

clerical tasks, but for nonprofit organizations.

Table 4: Information on Administration and Funding for Nine Work-Site Activities

a

A nonprofit contractor we visited in Philadelphia, the Transitional Work Corporation, which is headed

by a board that includes the city’s mayor, state-level TANF officials, and others, had received a grant

from a private foundation to serve Paid Work Experience participants.

Locations with more job-like work-site activities typically contract with

external organizations to administer the work-site activity. For example, in

Work-site activity

Work-site

administrator Funding source

Massachusetts

Community Service

TANF agency TANF

New York City

WEP

TANF agency, city

agencies, nonprofit

and for-profit

contractors

TANF; federal welfare-to-work grant

West Virginia

CWEP

TANF agency TANF

Onondaga County, N.Y.

WEP

Nonprofit contractor TANF

Chicago

WorkFirst

Nonprofit and for- profit

contractors

TANF

Philadelphia

Paid Work Experience

Nonprofit and for profit

contractors

TANF; federal welfare-to-work grant;

private foundationsa

San Francisco

Community Jobs Initiative

Nonprofit contractors TANF; federal welfare-to-work grant;

city general fund revenues;

private foundations

Massachusetts

Supported Work

Nonprofit contractors TANF; state general fund revenues

Oregon

JOBS Plus

Nonprofit contractors TANF; food stamps (under waiver)
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Philadelphia and San Francisco, contractors are responsible for identifying

work sites; assessing and placing participants at work sites; issuing

participants’ paychecks; monitoring the quality of the work site to ensure

that the position is meeting the participant’s needs; and providing support

to help participants handle any problems that may interfere with their

attendance, such as a breakdown in child care arrangements. TANF

agencies pay contractors for enrolling participants in the activity and

placing participants at a work site. Contractors can receive additional

payments for placing participants in unsubsidized jobs and if the individual

retains that job for a period of time.

Work-site activities in Philadelphia, San Francisco, Oregon, and

Massachusetts’ Supported Work incur additional costs, such as payroll

taxes and workers’ compensation premiums, not associated with work-site

activities in which participants work in exchange for a cash assistance

check. To cover these costs, contractors and TANF agencies in these

locations have tapped into non-TANF resources, including, in some cases,

the federal welfare-to-work grant administered by the Department of

Labor.9 These locations use contractors to administer these work-site

activities and often rely on performance-based contracts to encourage the

contractors through financial incentives to develop work-site positions that

match the skills and abilities of TANF recipients.

States Face Multiple

Challenges in

Implementing and

Administering WorkSite Activities

States and localities must overcome a number of challenges during the

initial implementation and ongoing operation of work-site activities. Some

of these challenges include designing and implementing, within state and

federal laws, a program that reflects the vision of the local elected

leadership. Program administrators also must garner community support

and identify and involve employers. Once the work-site activity has been

established, program administrators face the additional challenge of

getting TANF recipients to report to work sites and motivating them to take

advantage of opportunities to improve their work habits and skills through

participation in these activities.

9

The Balanced Budget Act of 1997, amended by the Consolidated Appropriations Act of

2000, appropriated nearly $3 billion in welfare-to-work grants to be awarded by the U.S.

Department of Labor to states and local communities to move welfare recipients into jobs.

For a review of the early implementation of programs funded with welfare-to-work grants,

see Demetra Smith Nightingale and others, Early Implementation of the Welfare to Work

Grants Program: Findings From Exploratory Site Visits and Review of Program Plans

(Washington, D.C.: The Urban Institute, Feb. 2000).
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Initial Implementation Is

Affected by Local Policy and

Legal and Economic Factors

Agency officials at each of the locations we visited said that they are

challenged to implement work-site activities that reflect the preferences of

local elected leaders, are in accordance with applicable laws, and take local

economic conditions into account. In particular, elected leaders influence

the choices that agencies make regarding work-site activities for TANF

recipients and can facilitate or hinder the implementation of particular

activities. For example, in New York City, the Mayor chose to expand a

work-site activity that existed prior to welfare reform when implementing

work requirements for all families receiving cash assistance. The existing

work-site activity, New York City’s WEP, initially required only childless

adults receiving state-funded cash assistance to work in city agencies. In

1996, the Mayor extended the work requirement to certain families

receiving AFDC, both to ensure that all able-bodied recipients in the city

were engaged in work and to discourage their dependency on cash

assistance. The Mayor directed the heads of municipal agencies to bring

more WEP workers into their agencies, and, in response, city

commissioners had to create the large number of assignments needed to

accommodate the increase in mandatory participants. In San Francisco, to

meet state community service requirements established after federal

welfare reform, the Mayor and Board of Supervisors, after considering

unpaid work programs such as the one in New York City, chose to

implement a more job-like program in which participants receive wages,

subsidized by TANF funds, in exchange for their participation. City leaders

in San Francisco believed that this would be more effective in moving

TANF recipients to unsubsidized employment and would have the

additional benefit of making participants eligible for the EIC.10 As a result,

San Francisco’s TANF agency has been charged with creating a highly

individualized program with an intensive case management component.

Minimum wage requirements can also influence the extent to which states

may use particular work-site activities. In particular, the Department of

Labor has determined that under the Fair Labor Standards Act of 1938, as

amended, TANF recipients who are required to participate in work-site

activities must receive assistance that is at least equal in value to the

minimum wage multiplied by the number of hours worked.11 This

10San Francisco officials said recipients may qualify for an EIC benefit that averages $115

per month.

11U.S. Department of Labor, How Workplace Laws Apply to Welfare Recipients (Washington,

D.C.: Department of Labor, May 1997).
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requirement affects the number of hours that states may require

participants to engage in work-site activities, particularly in states that

provide relatively low levels of TANF cash assistance.12 For example, while

the maximum monthly amount of TANF cash assistance for a family of

three in San Francisco is $626, in West Virginia, the maximum monthly

grant amount is $353. To increase the number of hours participants may

work, states may include the value of their federal food stamps when

calculating assistance to TANF recipients, and most of the states we visited

did so. This addition brings the number of hours close to the 30-hour-perweek federal target in most of the states that we visited. In cases in which it

does not, such as for some two-parent families in West Virginia, states may

require TANF recipients to supplement work-site activities with other

countable work activities, such as community volunteering.

Local economic conditions, especially the availability of jobs for less

skilled workers, can also influence the types of work-site activities that

agencies develop for TANF recipients. In West Virginia, officials told us that

work-site assignments in state agencies are one of the few options available

for participants with limited skills who have been unable to secure

unsubsidized employment, particularly in areas where the coal industry has

been in decline. West Virginia has used such assignments extensively since

the 1980s as a means of promoting work among those receiving cash

assistance.13 A recent study on the history of mandatory work programs for

welfare recipients suggests that when the economy is weak, the option of

expanding public employment opportunities can become attractive and

cites West Virginia’s long-standing CWEP as an example that maintains a

safety net for families while ensuring that cash assistance recipients meet

their social obligation to work in exchange for this assistance.14

West Virginia has also gone beyond its more traditional program and

created public sector jobs reserved for TANF recipients in the state’s

Courtesy Patrol, which provides aid to motorists. The program is funded

primarily by the state’s Department of Highways but uses supplemental

12Welfare Reform: Few States Are Likely to Use the Simplified Food Stamp Program

(GAO/RCED-99-43, Jan. 29, 1999).

13GAO/HEHS-95-113, May 19, 1995.

14David T. Ellwood and Elisabeth D. Welty, Public Service Employment and Mandatory

Work: A Policy Whose Time Has Come and Gone and Come Again? (Cambridge, Mass.: The

Kennedy School of Government, Harvard University, Mar. 6, 1999), pp. 4-5.
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funding from private foundation grants and from federal government

sources, including welfare-to-work grant funds and, for support services,

some TANF funds. Since 1998, the Courtesy Patrol has provided temporary

jobs for 133 former TANF recipients while also providing a valuable service

to motorists in West Virginia.

Recruiting Employers and

Participants Presents

Further Challenges

Contractors and agencies that administer work-site activities face the

ongoing challenge of recruiting employers who can accommodate the

developmental needs of TANF recipients. At the same time, they must

ensure that they have adequate numbers of TANF participants to fill work

sites. For contractors, this is a particular challenge, because they must rely

on case managers from other agencies to make referrals or recruit TANF

recipients themselves.

At some of the sites that we visited, program officials have been able to

develop work-site positions that meet their program needs, primarily

through the efforts of specialized program staff or employers who have had

positive experiences with their programs. Nonetheless, program officials

reported that they face employers’ negative stereotypes about welfare

recipients, or employers’ unrealistically high expectations of participants.

Job developers in Massachusetts’ Supported Work program address

negative stereotypes by avoiding use of the word “welfare” in discussions

with potential employers, and in Oregon, potential JOBS Plus employers

are carefully screened to ensure that placements are appropriate and

mutually beneficial to employers and participants. Also, in previous work

we found that employers may be reluctant to provide work-site positions

when a subsidy is not considered adequate to compensate them for the

additional costs that are involved in providing these positions.15 To

overcome employer reluctance, one vendor tells employers it will save the

employers recruiting costs by referring people who are prescreened and

prequalified for a position.

Work-site activity administrators in San Francisco and Philadelphia cited

internal, administrative difficulties in getting state or local agencies to refer

recipients to work-site activities during the start-up of their programs.

Administrators in San Francisco have focused on improving

communications with case managers who perform individual assessments

of TANF recipients and who provide referrals for work-site activities in an

15GAO/HEHS-95-113, May 19, 1995.
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effort to obtain more referrals. Contractors offering Paid Work Experience

in Philadelphia present information about the services that they offer

directly to TANF recipients to encourage participation. At the time we

visited, several of the sites had more work-site positions than participants.

Facilitating Participation

and Motivating Participants

in Work-Site Activities Are

Difficult

When recipients are referred, many fail to report to the work site. This

creates additional paperwork burdens for agencies and contractors, who

must follow up with these nonparticipating TANF recipients, either to

provide needed support services or to ensure that any penalties for

nonattendance are assessed.

Program administrators at most of the sites we visited reported that once

people are assigned to work sites, additional challenges related to

facilitating and motivating recipients’ continued participation arise.

Officials in New York City, Chicago, San Francisco, and West Virginia noted

that securing child care is a key challenge for participants in work-site

activities, as is typically the case when single parents work or participate in

work-related activities. To address this issue, each of the sites that we

visited provides child care assistance to families participating in work-site

activities. At three of the sites that we visited, child care liaisons or

specialists are available to help work-site participants secure appropriate

child care services. In San Francisco, counselors work with TANF

recipients before placing them at work sites to ensure that, if their children

get sick, they have alternative child care arrangements. Massachusetts has

avoided many child care problems because it exempted parents of nonschool-age children from the work requirement under its prereform waiver

program. Also, TANF recipients who perform Community Service in

Massachusetts are required to spend only 20 hours per week in that activity

and may schedule these hours around their children’s schedules.

Most of the sites that we visited also provide transportation assistance to

participants in work-site activities in the form of fare cards, passes, or

reimbursement for public transportation. West Virginia, much of which is

inaccessible by public transportation, is piloting a car leasing program that

will enable TANF recipients to lease vehicles at reduced cost. Onondaga

County has also established a car buying program, in which donated cars

are repaired and sold at cost to those who need them.

In Chicago, Massachusetts, New York City, Philadelphia, and San

Francisco, language barriers were cited as a particular challenge. At each

of these locations, agencies have established contracts with local
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community-based organizations that specialize in serving non-Englishspeaking populations. In Chicago and Massachusetts, contractors serving

those with limited English skills actively recruit employers who do not

require English proficiency, or who share a TANF recipient’s first language.

The Massachusetts Supported Work program also offers an “English for

Employment” training component in its basic skills training curriculum,

and San Francisco is considering exempting Community Jobs Initiative

participants with limited English proficiency from work requirements until

after they have received services to improve their language skills.

After agencies have taken steps to ensure that TANF recipients are able to

participate in work-site activities, they may face additional challenges with

recipients who are reluctant or resistant to engaging in these activities.

Officials at six of the locations that we visited reported some difficulty with

motivating continued participation in work-site activities. Other research

confirms that work-site administrators can expect levels of

nonparticipation as high as 50 percent.16 A 1998 survey conducted by the

Massachusetts TANF agency of community organizations that provided

work-site assignments for TANF recipients cited motivational and

attitudinal problems, such as unwillingness to work and poor attitude, as

obstacles that these organizations had encountered with work-site activity

participants.

Some work sites have addressed the issue of motivation by contracting

with community-based organizations for liaisons to provide personal

outreach to TANF recipients. These liaisons help TANF recipients to access

services that may enable them to fulfill their obligation to perform worksite activities or to resolve work-site issues that may limit recipients’

willingness to report for their assignments. Involving the recipients in the

up-front assessment and giving them the flexibility to set their schedules

for training and work-site activities is also seen as a key to breaking down

motivational barriers. Oregon also colocates its employment and TANF

programs to streamline the referral process and to improve access to

needed employment services.

Agencies or contractors may also offer incentives to motivate TANF

recipients’ participation in work-site activities. Program administrators

16LaDonna Pavetti and others, The Role of Intermediaries in Linking TANF Recipients with

Jobs, report by Mathematica Policy Research, Inc., for the Office of the Assistant Secretary

for Planning and Evaluation, HHS (Washington, D.C.: HHS, 2000), p. xv.
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from San Francisco’s Community Jobs Initiative program noted that 31

percent of the 221 clients enrolled in the program between February 1999

and February 2000 did not complete it. The Community Jobs Initiative

program has always offered participants food or clothing gift certificates

ranging in value from $25 to $150 to reward them for good attendance or

retaining an unsubsidized job for more than 1 month.

States also use financial penalties, or sanctions, to motivate TANF family

members to meet their work obligations.17 For example, if an adult member

of a family receiving TANF in New York City refuses to participate in a

work-site activity, the city’s Human Resources Administration may reduce

the family’s grant. On November 15, 1999, 34,000 cases were under

consideration for financial penalties for failure to comply with work

requirements, and the cash grants for another 19,000 cases had been

reduced because of participants’ failure to comply with program

requirements.

Little Is Known About

Work-Site Activities’

Effects on Participants

and Communities

In the states we visited, TANF program administrators, recipients,

employers, and others said that participation in work-site activities helps

TANF recipients make the transition into unsubsidized employment and

contributes to the community. While states generally have data on key

employment outcomes for TANF recipients, this information is not

uniformly collected specifically for those engaged in work-site activities.

Moreover, additional information would be needed to assess program

effects. One of the sites we visited plans to evaluate its work-site activity. In

addition to positive comments about work-site activities, we also heard

some concerns that (1) work-site activities do not provide the necessary

level of experience or skills to enable participants to make the transition to

unsubsidized employment that leads to economic independence and (2)

work-site participants replace regular salaried employees.

Little Information Is

Available on the

Effectiveness of TANF

Work-Site Activities

Proponents of work-site activities believe that they contribute to the

employability of welfare recipients, deter individuals from going on or

staying on welfare, provide useful community services, and meet the

public’s preference for providing cash assistance to only those individuals

17For a discussion of the sanction policies of all states, see Welfare Reform: State Sanction

Policies and Number of Families Affected (GAO/HEHS-00-44, Mar. 31, 2000).
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who are working or taking steps to become employed. To determine

whether participation in work-site activities increases employment and

earnings, it is necessary to have information on key outcomes, such as

whether participants become employed and how much they earn, as well

as a way to determine if these outcomes differ from what would have

happened if participants had not taken part in the work-site activity. To

determine whether these activities deter people from welfare is even more

difficult because it requires having information about individuals who do

not enter the system at all or who leave earlier than they would have if

there had been no requirement to participate in these activities.

The states and localities that we visited have collected some data on

outcomes for TANF recipients, both for federal reporting purposes and to

meet their own management information needs.18 At the federal level,

states generally report, among other things, the employment status of

TANF recipients, the number who leave welfare because of employment,

their earnings, and how long they retain their jobs. However, states do not

report these outcomes by type of activity in which TANF recipients are

engaged. At the state and local levels, program administrators collect the

data they need to manage their programs, which may include outcomes for

specific work-site activities. The states and localities we visited that have

contracted out administration of work-site activities generally collect

employment outcome data to help them monitor contractor performance;

however, these data may not be reported or summarized for all the

contractors conducting the activity in an entire locality or state. An Oregon

official told us that although program administrators could report

employment by work-site activity in their state, they generally did not do so

because their interest is in the performance of the entire TANF program

and not an individual component activity. The Pennsylvania Department of

Public Welfare, which monitors the Philadelphia work-site activity

contracts, also does not summarize employment outcomes by work-site

activity. In contrast, the Illinois Department of Human Services reports

employment and earnings outcomes for each Chicago WorkFirst contractor

as well as totals for all contractors. WorkFirst contractors report monthly

billing and participant information, including the number of participants

who become employed and their wage at placement, which the Department

summarizes and uses in its quarterly meetings with the contractors. The

18For a discussion of the information needs of states under welfare reform, see Welfare

Reform: Improving State Automated Systems Requires Coordinated Federal Attention

(GAO/HEHS-00-48, Apr. 27, 2000).
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Department also summarizes the information for all contractors

semiannually to assess the performance of the overall Chicago WorkFirst

activity. Illinois used these data to help redesign the WorkFirst program to

more effectively serve participants who need additional support to make

the transition to unsubsidized employment.

Some of the work-site administrators we spoke with believed that their

programs showed promise in increasing employment outcomes for TANF

recipients. As shown in table 5, Philadelphia’s Transitional Work

Corporation, one of several work-site activity contractors in Philadelphia,

reported that 244, or 24 percent, of the TANF recipients enrolled in its

program from May 1999 to March 2000 made the transition to unsubsidized

employment, with average wages of $7.27 per hour. Program

administrators from San Francisco’s pilot program were encouraged that

38 of the 245 recipients enrolled since the program began had moved into

full-time unsubsidized jobs with benefits and an average wage of $9.53,

even though most enrollees had not yet been at their work sites for the

expected 9-month period.19 Massachusetts reported that more than half of

the 1,586 participants in its Supported Work program were placed in

unsubsidized employment during July 1998 to June 1999. While placement

rates play an important role in assessing program performance, additional

information and analysis would be needed to determine the relative

effectiveness of each work-site activity and to assess the contribution of

other factors, such as the economy or participant characteristics.

19San Francisco officials stated that 92 percent of recipients who had completed their worksite assignments had been placed in an unsubsidized job.
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Table 5: Outcomes for Five Work-Site Activities

a

Based on the 301 placements for which there were wage data.

b

These data were reported by the Transitional Work Corporation, which is one of several work-site

activity contractors in Philadelphia.

Source: Data from state and local administrators.

In a TANF program in which a work-site activity is the primary activity for a

substantial portion of TANF recipients, such as New York City’s program,

data on outcomes for the entire TANF caseload could be considered to

reflect to some extent the outcomes for the work-site activity. A New York

City administrator told us that the city’s WEP and the emphasis on the

importance of work have been key factors in reducing the total number of

AFDC/TANF recipients from about 860,000 in March 1995 to about 530,000

in November 1999. However, without a rigorous evaluation, it is not

possible to determine how much of this caseload reduction is the result of

required participation in the work-site activity and how much is due to

other factors, such as the economy.

Past Evaluations Provide

Some Support for Value of

Work-Site Activities

While research on work-site activities in the new welfare environment is

lacking, evaluations of similar activities implemented during the 1980s, in

which welfare recipients were expected to work in exchange for their

benefits, did not find that participation in these work-site activities

increased employment or earnings.20 However, both participants and their

Work-site activity Data collection period Number enrolled

Number placed in

unsubsidized jobs

Average wage at

placement

Chicago

WorkFirst

April 1996 to July 1999 10,750 1,015 (9 percent) $6.89a

Philadelphia

Paid Work Experienceb

May 1999 to March 2000 1,029 244 (24 percent) 7.27

San Francisco

Community Jobs Initiative

February 1999 to May 2000 245 38 (16 percent) 9.53

Massachusetts

Community Service

July 1998 to June 1999 1,419 (monthly

average)

470 (percentage

not applicable)

6.51

Massachusetts

Supported Work

July 1998 to June 1999 1,586 829 (52 percent) 7.08

20See Thomas Brock, David Butler, and David Long, Unpaid Work Experience for Welfare

Recipients: Findings and Lessons from MDRC Research (New York, N.Y.: MDRC, Sept.

1993).
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supervisors reported that the work was meaningful. These evaluations

were of small programs, which in many ways were different from the

programs we reviewed. The Manpower Demonstration Research

Corporation (MDRC) evaluated nine welfare-to-work programs that

included work experience as a major or ancillary activity. Generally, in

these early programs, welfare recipients were assigned to work sites for 13

weeks and received only a benefit check. In West Virginia, however, a

CWEP placement lasted for as long as a recipient received a welfare check,

and weekly hours of participation were limited to the amount of a

recipient’s cash benefit divided by the minimum wage. The evaluators

concluded that the value of the work performed by participants generally

outweighed the costs of running the programs. Given the small scale of

these programs, however, it remains unclear whether these findings would

hold up for much larger programs or for programs in which the work-site

activity lasts longer than 13 weeks.

The West Virginia CWEP program evaluated by MDRC was a statewide

initiative that continues today as a major work-site activity for West

Virginia’s TANF recipients. The MDRC evaluation concluded that the state

had succeeded in providing a substantial number of welfare recipients with

productive, long-term work experience in a labor market suffering one of

the highest unemployment rates in the nation. However, the program had

little effect on moving recipients into unsubsidized employment. Although

today’s economy in West Virginia is substantially improved, there remain

pockets of very high unemployment where few jobs exist for welfare

recipients. CWEP may be the only opportunity for welfare recipients in

these areas who cannot relocate to meet their work participation

obligation.

MDRC also evaluated a work-site activity known as supported work in the

1970s. Supported work was a highly structured, paid work experience

program specifically designed for a disadvantaged subset of the welfare

population. Participants volunteered to be placed at work sites in closely

supervised groups and were gradually subjected to higher expectations on

the job. They could remain in the program for 12 to 18 months, earning

wages that were partially subsidized with welfare benefits, and were then

assisted in locating unsubsidized jobs. After 3 years in the program,

supported work participants were 10 percent less likely than a control

group to be receiving welfare assistance and had average earnings 23

percent higher than the control group. Although elements of the supported

work model are being incorporated into programs targeting TANF

recipients who are the most difficult to employ, because of the ways in
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which the new welfare environment is different from the old one, we

cannot conclude that these programs will achieve the same effect as the

supported work demonstrations.

HHS has recently taken some initial steps to identify current supported

work programs with the goal of supporting research in this area. HHS’

Administration for Children and Families and the Office of the Assistant

Secretary for Planning and Evaluation have authority to spend funds to

support such research, demonstration, and evaluation efforts. In May 2000,

HHS contracted with Mathematica Policy Research, Inc., to identify

supported work programs serving TANF or non-TANF individuals,

including those in the area of vocational rehabilitation, that hold promise

for meeting the needs of TANF recipients and are potentially large enough

to serve a significant number of participants.

Available Evidence Suggests

Both Positive and Negative

Effects on Participants and

Communities

Program administrators, participants, and others reported that work-site

activities do have a positive effect on participants and communities.

Individuals with no prior work experience can develop employment skills

and a resume. Massachusetts officials reported that community work

experience is beneficial to some clients because it requires them to leave

the house on a daily basis and become involved in a work environment.

They also believe that community service instills a work ethic that some

clients did not have before. Oregon’s JOBS Plus participants reported a

positive change in attitude, self-esteem, and pride.

Evidence from the sites that we visited suggests that the work performed at

these work sites also has had a positive effect on employers and their

communities. Work-site activities provide additional staff to public and

private nonprofit agencies lacking resources, which allows them to better

meet community needs. For example, in Chicago TANF recipients help

prepare food to be delivered to elderly citizens and perform janitorial work

at a low-income housing development. Further, participation in Oregon’s

JOBS Plus gives private sector employers an opportunity to help the

community in which they operate by employing and training welfare

recipients. JOBS Plus employers reported a significant shift in their

perception of welfare recipients and of the challenges they face after

working with them. In Massachusetts, community service participants

work in schools, churches, hospitals, and municipal government.

Participants do clerical, custodial, housekeeping, and food preparation

work as well as assist in classrooms. Finally, in New York City, the Mayor’s

Management Report released in February 2000 states that the citywide
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street cleanliness ratings have improved since WEP participation in street

cleaning was expanded.

While we identified many positive aspects of work-site activities for both

participants and communities, we also identified some negative aspects.

Program administrators reported that for some clients participation can be

stressful, particularly as they adjust to juggling child-care arrangements

and the demands of a job, sometimes for the first time. In New York City,

we spoke with representatives of a legal and advocacy group for lowincome families that works with the city’s WEP participants. These

representatives expressed concern that the program did not do enough to

assess TANF recipients’ needs and skills and to match them with work sites

that would provide them the job search assistance and training needed to

find employment at wages that would move them toward economic

independence. They were also concerned that many people in need of

assistance may have left the TANF rolls or received reduced grants because

they did not want to, or could not, perform the assigned work and that

some of these families may move more deeply into poverty without the aid

they need. WEP officials we spoke with noted that a new assessment

component is planned for the program and that new components, such as

the Personal Roads for Individual Development and Employment project

for individuals with medical limitations, have been added to the program to

better meet the needs of the TANF caseload. In addition, the New York City

Council has recently voted to create a pilot transitional jobs program for

welfare recipients. Modeled after work-site activities such as the Paid Work

Experience in Philadelphia, upon implementation, the New York pilot will

provide recipients with transitional jobs and some job training.

A long-standing concern about public work programs that put welfare

recipients into work-site positions is that these individuals may take jobs

away from regular employees or others seeking work. Consequently,

PRWORA, state TANF plans, and work-site contracts contain language

designed to protect against displacement. The locations we visited took

different approaches to addressing the concern that welfare recipients

might displace other employees. For example, in Philadelphia the Mayor’s

office negotiated with the unions when the public sector transitional jobs

were first created. The agreements with the unions stipulate that the worksite positions are to be short-term and cannot replace other jobs. In

Chicago, an accounting of what welfare recipients are doing at the work

sites is sent regularly to the unions to allay any concerns they may have

about displacement.
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The only site where displacement appears to be an unresolved issue is New

York City. A confederation of 56 New York City public employee unions has

filed several lawsuits against the mayor and New York City agencies,

including the Human Resources Administration; the Administration for

Children’s Services; and the Departments of Sanitation, Transportation, and

Parks and Recreation. The basis for the lawsuits is the unions’ claim that

paid city employees are being replaced with WEP participants or are being

denied promotional opportunities. There is also concern that the increasing

use of work-site participants to perform work equivalent to that typically

performed by entry-level personnel in city agencies prevents individuals

from obtaining city agency employment. A union representative we spoke

with said that entry-level jobs in the city’s public agencies have historically

served an important role in helping low-income individuals find stable

employment and move up over time into the middle class. There is no

expectation under WEP, however, that city agencies will hire program

participants. The union believes that the disappearance of permanent

entry-level jobs in city agencies and the lack of entry-level jobs in the

private sector will inhibit individuals with lower skills and abilities from

becoming employed. The issue of whether displacement of regular workers

is occurring is currently being litigated in the courts.

Conclusions Passage of the welfare reform law changed the federal role in providing

assistance to needy families with children. States and localities have been

given broader flexibility to design and implement their welfare programs,

and coupled with this flexibility is a stronger emphasis on work, with work

requirements for most adults receiving cash assistance, limits on the length

of stay on federal cash assistance, and financial penalties for states that do

not have an increasing percentage of their adult caseload working or in

work-related activities over time. As a result, states and localities are

requiring more clients to find jobs or participate in work-related activities

to prepare for jobs. For the type of work-related activities we focused on—

work-site activities, rather than job search or classroom activities—the

characteristics of activity design and structure were strongly influenced by

elected officials, economic environments, and the support the work-site

activities received from their communities. Because work-site activities

must necessarily involve employers or community organizations—public,

nonprofit, or private—these activities cannot succeed without the support

of these entities.

The work-site activities we reviewed are, like welfare reform, a work in

progress. Given the flexibility of TANF, states and localities are providing
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enhanced support services and are changing and tailoring their programs to

meet clients’ needs. New York City’s new work-site activity designed for

TANF adults with medical limitations who had typically been exempted

from work requirements in previous programs and San Francisco’s pilot

Community Jobs Initiative, which creates temporary jobs for TANF

recipients who have not yet found unsubsidized employment, both

represent local responses to welfare reform’s emphasis on the importance

of work for all of those receiving aid. It is likely that changes such as these

will continue as states and localities strive to be successful in implementing

welfare reform.

To date, states and localities have implemented their welfare reform

programs in a strong national economy, which has no doubt facilitated their

reform efforts, as reflected in the fact that in fiscal year 1998, the highest

percentage of participating TANF recipients were engaged in unsubsidized

employment. States have also been aided in meeting federal participation

rates by receiving credits for the recent caseload reductions. In the event of

an economic downturn when jobs may be less readily available, more

states and localities may turn to work-site activities as an alternative for

meeting their work requirements. Yet, nationwide, most of the work-site

activities are currently being operated on a relatively small scale. If states

and localities need to expand work-site activities to serve increasing

numbers of participants, they will need to find increasing numbers of

employers and organizations willing to participate. In addition, states and

localities will need to ensure that participants and work-site activities are

monitored to determine if they meet the desired program outcomes.

Moreover, the greater the scale of work-site activities, the greater the

challenge to ensure that participants in work-site activities do not displace

regular employees from their jobs.

The work-site activities currently in operation can provide valuable

information for administrators and policymakers on what could in the

future become an increasingly important part of TANF programs

nationwide, and HHS could play a role in making such information

available. While HHS requires states to report the number of participants in

work-site activities, it does not require states to describe key

characteristics of these activities. By providing some additional guidance

to states on how to describe their work-site activities in their state TANF

plans, HHS has the opportunity to gather useful information without

compromising state flexibility. In addition, HHS could take steps, through

its regional offices and at HHS-sponsored conferences, for example, to

identify and disseminate information on promising approaches to
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Page 34 GAO/HEHS-00-122 TANF Work Programs

implementing and operating work-site activities in TANF programs. Finally,

as our work has shown, little is known about how effective these

approaches are in the current welfare environment in moving TANF

recipients toward employment and economic independence. With the

broad flexibility granted to them under TANF, states and localities are

implementing alternative approaches, including work-site activities, to

achieve the goals of welfare reform, which provides an opportunity to

compare the effectiveness of various approaches. HHS’ new project

designed to collect information on supported work programs that could

potentially provide models for serving TANF recipients is a positive move

toward understanding how to use work-site activities to serve TANF

recipients effectively. HHS could continue in this and other efforts to

encourage states and localities to evaluate rigorously some of the work-site

approaches used in TANF by providing financial support for such

evaluations. If information on these work-site approaches is not collected

and rigorous evaluations are not conducted, the opportunity to learn

implementation lessons and to measure the value of work-site activities in

moving clients to unsubsidized employment for the future will be lost.

Recommendations to

the Secretary of Health

and Human Services

To make available more information on the effectiveness of work-site

activities, which could play an increasingly important role as welfare

reform evolves, we recommend that the Secretary of Health and Human

Services do the following:

• Require states to provide more information in the state TANF plans or

annual reports that they must file with HHS on the key characteristics of

work-site activities they are using. For example, states could include in

their plans such information as whether a work-site activity participant

receives a welfare check or paycheck, qualifies for the EIC, can earn

more than his or her grant amount, and is considered to be receiving

TANF assistance that counts toward the federal time limit.

• Use HHS’ regional offices’ technical assistance activities, HHSsponsored conferences, and other means available to identify promising

work-site approaches used by the states and localities in their TANF

programs, and collect and disseminate information on them.

• Encourage states and localities to rigorously evaluate their work-site

activities, particularly by providing financial support for evaluations to

increase knowledge of the effectiveness of various types of work-site

activities.
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Page 35 GAO/HEHS-00-122 TANF Work Programs

Agency Comments and

Our Evaluation

We provided HHS and the states and localities we reviewed with an

opportunity to comment on the report. HHS generally agreed with our

findings and recommendations. The states and localities also generally

agreed with the report.

With respect to the recommendation that HHS should require states to

provide more information on the key characteristics of the work-site

activities they are using, HHS said that it is statutorily limited in what

information it may require. HHS pointed out that starting with fiscal year

2000, each state must file an annual report, which will include information

on how a state defines its various work activities. HHS expects that this

report will help provide information about the different work activities

carried out in a state. As discussed in the report, we believe that by

providing some additional guidance to states on how to describe key

characteristics of their work-site activities, HHS could gather useful

information without compromising state flexibility.

Regarding our recommendation on information dissemination, HHS noted

that it will use several methods, such as periodic conferences on critical

welfare issues and interactive work groups, to collect and disseminate

promising approaches. While agreeing with our third recommendation

supporting evaluations, HHS cautioned that there is limited potential for

conducting rigorous evaluations to determine the effects of work-site

interventions on moving TANF recipients to unsubsidized employment. It

noted that differences in the characteristics of populations served by

existing work-site activities would make it difficult to compare the relative

effectiveness of different approaches. Moreover, it noted that the small

scale of these types of programs would make it difficult to generate

adequate-sized research samples for random assignment to experimental

and control groups. However, as we note in our report, HHS has already

taken initial steps to identify current employment-focused programs using

the supported work model with the goal of supporting research in this area.

We encourage HHS to identify opportunities in which rigorous evaluations

may be feasible, and, as discussed in the report, we believe that studies of

program implementation and outcomes can also be useful to program

administrators and policymakers.

HHS’ comments appear in appendix I. HHS and the states and localities we

visited also provided technical comments, which we have incorporated

where appropriate.
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Page 36 GAO/HEHS-00-122 TANF Work Programs

We are sending copies of this report to the Honorable William V. Roth, Jr.,

Chairman, Senate Committee on Finance; the Honorable Don Nickles,

Chairman, Subcommittee on Social Security and Family Policy, Senate

Committee on Finance; the Honorable Nancy L. Johnson, Chairman, and

the Honorable Benjamin L. Cardin, Ranking Minority Member,

Subcommittee on Human Resources, House Committee on Ways and

Means; the Honorable Donna E. Shalala, Secretary of Health and Human

Services; the Honorable Alexis M. Herman, Secretary of Labor; appropriate

congressional committees; and other interested parties. We will also make

copies available upon request.

If you have any questions about this report, please contact me on (202) 512-

7215. Other GAO contacts and staff acknowledgments are listed in

appendix II.

Cynthia M. Fagnoni

Director, Education, Workforce,

and Income Security Issues
Page 37 GAO/HEHS-00-122 TANF Work Programs
Page 38 GAO/HEHS-00-122 TANF Work Programs

Appendix I

Comments From the Department of Health Apendxies

and Human Services ApendxiI
Appendix I

Comments From the Department of Health

and Human Services

Page 39 GAO/HEHS-00-122 TANF Work Programs
Page 40 GAO/HEHS-00-122 TANF Work Programs

Appendix II

GAO Contacts and Staff Acknowledgments ApendxiI

GAO Contacts Gale C. Harris, (202) 512-7235

Kevin M. Kumanga, (202) 512-4962

Staff

Acknowledgments

In addition to those named above, Margaret Boeckmann, Regina Santucci,

and Andrea Romich Sykes made key contributions to this report.
Page 41 GAO/HEHS-00-122 TANF Work Programs
Page 42 GAO/HEHS-00-122 TANF Work Programs

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Related GAO Products

Welfare Reform: Improving State Automated Systems Requires

Coordinated Federal Effort (GAO/HEHS-00-48, Apr. 27, 2000).

Welfare Reform: State Sanction Policies and Number of Families Affected

(GAO/HEHS-00-44, Mar. 31, 2000).

Medicaid Enrollment: Amid Declines, State Efforts to Ensure Coverage

After Welfare Reform Vary (GAO/HEHS-99-163, Sept.10, 1999).

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Welfare Reform: Status of Awards and Selected States’ Use of Welfare-toWork Grants (GAO/HEHS-99-40, Feb. 5, 1999).

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Work Participation (GAO/HEHS-97-80, May 30, 1997).

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