For Release on Delivery

Expected at 11:00 a.m.

Thursday, March 15, 2001

GAO-01-522T

WELFARE REFORM

Progress in Meeting WorkFocused TANF Goals

Statement of Cynthia M. Fagnoni, Managing Director

Education, Workforce, and Income Security Issues

Testimony

Before the Subcommittee on Human Resources,

Committee on Ways and Means, House of Representatives

United States General Accounting Office

GAO
Page 1 GAO-01-522T

Mr. Chairman and Members of the Subcommittee:

Thank you for inviting me here today to discuss the progress of welfare

reform and our related work. The 1996 Personal Responsibility and Work

Opportunity Reconciliation Act of 1996 (P.L. 104-193) (PRWORA)

significantly changed federal welfare policy for low-income families with

children, building upon and expanding state-level reforms. It ended the

federal entitlement to assistance for eligible needy families with children

under Aid to Families With Dependent Children (AFDC) and created the

Temporary Assistance for Needy Families block grant (TANF), designed to

help needy families reduce their dependence on welfare and move toward

economic independence. Under TANF, states have increased flexibility to

meet four broad goals:

• Providing assistance to needy families so that children may be cared for in

their own homes or in the homes of relatives;

• Ending the dependence of needy parents on government benefits by

promoting job preparation, work, and marriage;

• Preventing and reducing the incidence of out-of-wedlock pregnancies; and

• Encouraging the formation and maintenance of two-parent families.

In addition, PRWORA requires states to impose federal work and other

program requirements on most adults receiving aid and to enforce a

lifetime limit of 5 years, or less at state option, on the receipt of federal

assistance.

As states have implemented TANF, this Subcommittee has asked us to

examine a broad range of welfare reform issues. My testimony today will

focus on the progress of welfare reform related to the goals of providing

assistance and reducing dependency by promoting work. More

specifically, it discusses (1) states’ progress in implementing TANF, (2) the

status of families who have left welfare, (3) the characteristics of adults

currently receiving TANF and state strategies for helping hard-to-employ

recipients find jobs, and (4) emerging issues as welfare reform evolves.

The information on former welfare recipients is from our 1999 review of

state studies and more recent studies. Information on current welfare

recipients and state strategies for serving hard-to-employ recipients is

drawn from our latest review of national data, numerous research studies,

and visits to six states from a new report to this Subcommittee to be

released soon.

Welfare Reform: Progress in Meeting WorkFocused TANF Goals
Welfare Reform: Progress in Meeting WorkFocused TANF Goals

Page 2 GAO-01-522T

In summary, our work shows that states are transforming the nation’s

welfare system into a work-based, temporary assistance program for

needy families, with a focus on moving people into employment rather

than signing them up for cash assistance. States’ implementation of TANF,

undertaken in a time of strong economic growth, has been accompanied

by a 50 percent decline in the number of families receiving cash welfare—

from 4.4 million in August 1996 to 2.2 million as of June 2000. Our review

of state-sponsored studies available in 1999 and several more recent

studies show that most of the adults in families remaining off the welfare

rolls were employed at some time after leaving welfare. Of adults who

continue to receive TANF cash assistance, national data show that a

higher percentage is currently engaged in work than previously—17

percent in fiscal year 1997 compared to 25 percent in fiscal year 1999. A

majority of those on the rolls, however, are not working or engaged in

work activities, in part because many have characteristics that make it

difficult for them to get and keep jobs. All six of the states we visited have

modified their “work first” programs—designed to move recipients quickly

into jobs—to better serve recipients who face difficulties in entering the

workforce. States have found that some of the recipients with such

difficulties do, in fact, find jobs. While states have made significant

progress in meeting work-focused goals, as welfare reform continues to

evolve, attention should be paid to these issues:

• Emphasizing and enhancing work-based strategies, including engaging

hard-to-employ recipients in work and helping families stay off welfare

and increase their earnings; and

• Fostering and facilitating improved management and service delivery

approaches by states.

Consistent with the thrust of the federal welfare reform law, states are

moving away from a welfare system focused on entitlement to assistance

to one that emphasizes finding employment as quickly as possible, called a

“work first” approach. Our work and other studies show that many states

and localities have transformed their welfare offices into job placement

centers. In some locations, applicants are expected to engage in job search

activities as soon as they apply for assistance and may be provided

support services, such as child care and transportation, to support their

work efforts without adding them to the welfare rolls. Our recently issued

report on child care noted that spending on child care programs for lowincome families under TANF and the Child Care and Development Fund

As States

Implemented Welfare

Reform Amid Strong

Economic Growth,

Welfare Caseloads

Dropped 50 Percent
Welfare Reform: Progress in Meeting WorkFocused TANF Goals

Page 3 GAO-01-522T

increased substantially in recent years, from $4.1 billion in fiscal year 1997

to $6.9 billion in fiscal year 1999 in constant dollars.1

As many welfare offices have increased their emphasis on work activities,

welfare offices and workers are also focusing more on helping clients

address and solve problems that interfere with employment. In addition,

some states are using the flexibility allowed under TANF to continue

providing services to families who left the welfare rolls as a result of

employment, including, in some cases, providing case management

services to help ensure that families can deal with problems that might put

parents’ jobs at risk. Some states are also providing services to low-income

working families not receiving cash assistance.

States’ implementation of more work-based programs, undertaken under

conditions of strong economic growth, has been accompanied by a

dramatic decline in the number of families receiving cash welfare. As

shown in figure 1, the number of families receiving welfare remained

steady during the 1980s and then rose rapidly during the early 1990s.2 The

caseload decline began in 1995 and accelerated after passage of PRWORA,

with a 50 percent decline in the number of families receiving cash

welfare—from 4.4 million families in August 1996 to 2.2 million families in

June 2000. Caseload reductions occurred in all states, ranging from 10

percent in the District of Columbia to 85 percent in Wyoming.3 While

economic growth and state welfare reforms have been cited as key factors

to explain nationwide caseload decline, there is no consensus about the

extent to which each factor has contributed to these declines.4

 

1Child Care: States Increased Spending on Low-Income Families (GAO-01-293, Feb. 2, 2001).

2A Congressional Budget Office (CBO) model attributes more than half of the growth in AFDC

caseloads between 1989 and 1992 to increases in the number of female-headed families (especially

never-married females) and approximately one-fourth of the growth to the recession and to the weak

economy that preceded and followed the recession. CBO Staff Memorandum, Forecasting AFDC

Caseloads, With an Emphasis on Economic Factors (CBO, Washington, D.C.: July 1993).

3Data on caseload reductions for families by state utilize January 1997 to June 2000 data.

4Studies have specifically cited the following reasons for the caseload decline: changes made by

PRWORA; state changes to welfare programs that preceded PRWORA; changes in client and

caseworker behavior; past increases in the minimum wage; and low unemployment rates. See Council

of Economic Advisers, The Effects of Welfare Policy and the Economic Expansion on Welfare

Caseloads: An Update (Washington D.C.: Council of Economic Advisers, Aug. 1999). See also Rebecca

M. Blank, What Causes Public Assistance Caseloads to Grow? (Cambridge, Mass.: National Bureau of

Economic Research, Dec. 1997).
Welfare Reform: Progress in Meeting WorkFocused TANF Goals

Page 4 GAO-01-522T

Figure 1: Number of Families Receiving Welfare From 1982 Through June

2000

Source: Department of Health and Human Services (HHS), Administration for Children

and Families.
Welfare Reform: Progress in Meeting WorkFocused TANF Goals

Page 5 GAO-01-522T

Information on former welfare recipients shows that most adults who left

welfare had at least some attachment to the workforce. Our 1999 review

on the status of former welfare recipients identified studies from seven

states that provided representative data on families leaving welfare.5

Employment rates among adults in the families who left welfare in these

seven states ranged from 61 to 87 percent.6 However, the employment

rates were measured in different ways. Studies measuring employment at

the time of follow-up reported employment rates from 61 to 71 percent.

Studies measuring whether an adult in a family had ever been employed

since leaving welfare reported employment rates from 63 to 87 percent. A

more recent review of state and local-level studies supported by funds

from HHS’ Office of the Assistant Secretary for Planning and Evaluation

(ASPE) shows similar patterns.7In addition, a recent report by the Urban

Institute, using data from its 1999 National Survey of America’s Families

(NSAF)—a nationally representative sample—finds that 64 percent of

former recipients who did not return to TANF reported that they were

working at the time of follow-up, while another 11 percent reported

working at some point since leaving welfare.8

Not all families who leave welfare remain off the rolls. In the seven studies

we reviewed, the percentages of the families who left welfare and then

returned to the rolls ranged from 19 percent after 3 months in Maryland to

30 percent after 15 months in Wisconsin. In ASPE’s recent review of state

and local-level studies, the proportion of families who returned to welfare

within 12 months after exit ranged from 12 percent in San Mateo County,

 

5See Welfare Reform: Information on Former Recipients’ Status (GAO/HEHS-99-48, Apr. 28, 1999). In

this report we identified 18 studies about former recipients and summarized the findings from eight of

these studies (representing seven states) based on whether the results could be generalized to most

families who left welfare in the state at the time of the study. The states we studied are Indiana,

Maryland, Oklahoma, South Carolina, Tennessee, Washington, and Wisconsin. Because the seven

states’ studies differed in time periods covered—from as early as 1995 to as late as 1998—and

categories of families studied, the results are not completely comparable.

6Employment rates in various studies generally excluded families who returned to welfare. Removing

families who return to welfare from the employment rate calculations results in higher employment

rates, because many former recipients who return to the welfare rolls are not employed.

7ASPE has encouraged the use of comparable measures among research focused on former recipients.

ASPE awarded grants to states and the research community in fiscal years 1998, 1999, and 2000 for

studies in 10 states and three large counties.

8Pamela Loprest, How Are Families Who Left Welfare Doing Over Time? A Comparison of Two

Cohorts of Welfare Leavers (Washington, D.C.: Urban Institute, Dec. 8, 2000). Respondents had been

off TANF from between 3 months to more than 12 months at time of follow-up interview.

Most Adults in

Former Welfare

Families Were

Employed at Some

Time After Leaving

Welfare, Often at LowWage Jobs
Welfare Reform: Progress in Meeting WorkFocused TANF Goals

Page 6 GAO-01-522T

California, to 29 percent in Cuyahoga County, Ohio.9 The study using 1999

NSAF data reported that 22 percent of those who had left the rolls were

again receiving benefits at time of the survey follow-up.

Of those who left welfare, former recipients in the seven states we

reviewed had average quarterly earnings that generally ranged from $2,378

to $3,786 or from $9,512 to $15,144 annually.10 This estimated annual

earned income is greater than the maximum annual amount of cash

assistance and food stamps that a three-person family with no other

income could have received in these states.11 However, if these earnings

were the only source of income for families after they leave welfare, many

of them would remain below the federal poverty level.12

In addition to information on individuals’ earned incomes, former

recipients’ total household income and use of other government supports

are key to understanding the circumstances of these families. For

example, the recently expanded earned income credit (EIC) can increase

the incomes of qualified low-income families by as much as $2,271 for

families with one child and $3,756 for families with two or more children.13

The ASPE review of state and local-level studies reported that there were

limited data on total household income. Reports from the few states that

attempted to gather this information found that 45 to 50 percent of

household income comes from the adult leaving TANF, 20 to 40 percent

from others in the household, and between 3 and 8 percent from other

sources, such as child support and Supplemental Security Income. More is

known about former recipients’ use of other government supports. Some

of the state studies we reviewed reported that between 44 and 83 percent

of the families who left welfare received Medicaid benefits, and between

31 and 60 percent received food stamps. More recent research at the state

 

9

Julia B. Isaacs and Matthew Lyon, A Cross-State Examination of Families Leaving Welfare: Findings

From the ASPE-Funded Leavers Studies, presented at the National Association for Welfare Research

and Statistics 40th Annual Workshop in Scottsdale, Ariz. (Aug. 1, 2000; revised Nov. 6, 2000).

10We estimated annual incomes by extrapolating quarterly earnings; states did not provide information

on annual earnings. Using this method may overestimate the annual earnings, as a former recipient

may have worked fewer than four quarters.

11 In these seven states, for a single-parent, three-person family with no income, the maximum annual

amount of cash assistance and food stamps combined ranged from $6,000 in Tennessee to $9,744 in

Washington as of January 1997.

12For 1998, the federal poverty level for a family of three was $13,650.

13 The EIC is a refundable tax credit for qualified working people who have earned incomes below

certain specified levels.
Welfare Reform: Progress in Meeting WorkFocused TANF Goals

Page 7 GAO-01-522T

level and nationally also shows differences in the rate of Medicaid and

food stamps receipt among former welfare recipients.

While many adults have left the welfare rolls for work, those remaining on

the rolls have increased their work efforts. Nationwide, the percentage of

TANF recipients combining welfare and work has risen from 17 percent in

fiscal year 1997 to 25 percent in fiscal year 1999. Most current recipients,

however, are not engaged in work or work activities as defined by

PRWORA. At least in part, this may be because many current recipients

have characteristics that make it difficult for them to work, according to

data from national surveys and several studies, as well as from officials in

the six states that we visited.14 The states we visited had taken steps to

help hard-to-employ recipients move into jobs, such as improving and

expanding case management or providing programs and services targeted

specifically to prepare them for work. While recipients with one or more

work-impeding characteristics may find the transition to work difficult,

the states have found that some do find jobs.

 

14 For Welfare Reform: Moving Hard-to-Employ Recipients Into the Workforce (GAO-01-368,

forthcoming), we visited six states: California, Connecticut, Florida, Maryland, Michigan, and

Washington. In addition, we collected and analyzed caseload data from these states and from Oregon,

New York, and Wisconsin.

States Are Taking

Steps to Help Hard-toEmploy Recipients

Find Jobs
Welfare Reform: Progress in Meeting WorkFocused TANF Goals

Page 8 GAO-01-522T

The proportion of TANF recipients nationwide who were engaged in

unsubsidized employment increased during the past few years. According

to our analysis of HHS data, the percentage of recipients who were

engaged in unsubsidized employment increased from 17 percent in fiscal

year 1997 to 25 percent (or 400,000 recipients) in fiscal year 1999.15 In the

states we reviewed that provided us with data on their caseload

characteristics, the percentage of the caseload that was employed ranged

from 6 percent to just under 40 percent.16 This wide range of rates may be

explained in part by the varying state policies on the amount of earnings a

person may retain while still remaining eligible for welfare.17

Although more TANF recipients are combining welfare and work, in fiscal

year 1999 a majority did not participate in work activities—a monthly

average of nearly 60 percent of all TANF recipients nationwide. Although

this may have been caused by weak implementation of state work

programs, the characteristics of TANF recipients may affect their abilities

to engage in work and work activities. Studies have shown that having

certain characteristics, such as poor health or disability, no high school

diploma, limited work experience, exposure to domestic violence,

substance abuse, and limited English proficiency, makes engaging in work

activities more difficult. Based on data from its 1997 National Survey of

America’s Families (NSAF), the Urban Institute found that the greater the

number of these characteristics a TANF recipient has, the less likely that

recipient is to be engaged in work or work activities.18 The survey showed

that 88 percent of recipients who had none of these characteristics were

working or engaging in work-related activities, compared to 59 percent

with one of these characteristics and 27 percent with three or more (see

 

15Percentages represent the average monthly number of families with at least one adult engaged in

unsubsidized employment divided by the number of families in the overall work rate, as defined by the

Administration for Children and Families. The families included in the overall work rates are all TANF

families except (1) child-only cases and (2) families disregarded for one of the three reasons allowed

under federal law: (a) they have a child under age 1; (b) they are participating in the tribal work

program; or (c) they were sanctioned during the month but not for more than 3 of the past 12 months.

16 Data were reported by states and may not be consistent with each other.

17Some experts have speculated that this wide range may also be because states that have enforced

“work first” are likely to have experienced the greatest caseload decline and thus lower work levels for

those remaining on the rolls.

18 NSAF is an ongoing, nationally representative survey, of the noninstitutionalized, civilian population

of persons under age 65 in the nation as a whole. Sheila Zedlewski, Work-Related Activities and

Limitations of Current Welfare Recipients (Washington D.C.: The Urban Institute, July 1999).

A Majority of TANF

Recipients Are Not

Engaged in Work

Activities, in Part Because

Many Have Characteristics

That Make it Difficult for

Them to Get and Keep

Jobs
Welfare Reform: Progress in Meeting WorkFocused TANF Goals

Page 9 GAO-01-522T

fig. 2).19 Officials in all six of the states we visited agreed that recipients

with one or more work-impeding characteristics find it hardest to

successfully enter the workforce, and are often referred to as hard-toemploy recipients. However, states have found that while having these

characteristics makes employment difficult, some recipients do, in fact,

find jobs.

Figure 2: TANF Recipients Engaged in Work or Work Activities, by Number

of Obstacles to Employment, 1997

88%

59%

43%

27%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0 1 2 3+

Number of Obstacles

Source: 1997 NSAF, The Urban Institute.

Our analysis of existing studies showed that a considerable percentage of

TANF recipients have characteristics that make it difficult for them to

work. Table 1 identifies the range of estimates a number of studies provide

on the prevalence of some of these characteristics in the welfare

population. For example, estimates of the proportion of the welfare

caseload with health problems or disability range from 20 to 40 percent,

and the proportion of the caseload with no high school diploma from 30 to

45 percent.

 

19 The Urban Institute analysis counted only those characteristics shown to significantly depress work

activity as obstacles to employment: less than a high school education, last employment 3 or more

years ago, child under age 1, either very poor mental health or health condition that limits work, caring

for a disabled child, and limited English. NSAF did not collect data on domestic violence or substance

abuse.
Welfare Reform: Progress in Meeting WorkFocused TANF Goals

Page 10 GAO-01-522T

Table 1: Prevalence of Selected Characteristics Among TANF Recipients

Based on Selected Studies

Characteristic

Estimated range

of TANF recipients

with characteristic

(percent)

Number of

selected studies

measuring this

characteristic

Health problems or disabilities 20-40 12

Lack of high school diploma 30-45 8

Current domestic violence 10-30 7

Lack of job skills 20-30 3

Substance abuse 3-12 8

English as a second language 7-13 4

Multiple barriers 44-64 5

Note: Studies were conducted between 1997 and 1999. The estimates provided by each

study are not directly comparable to those from other studies because each defines

characteristics slightly differently and examines a different specific population. For

example, when measuring the incidence of substance abuse, one study counted only

recipients who self-reported seeking substance abuse treatment while another counted

recipients believed by case managers to need to address substance abuse problems.

Likewise, the scope of the studies varies; most cover only a single state or community

while one is national in scope. Because of difficulties identifying and measuring these

characteristics, these studies may understate the prevalence of these characteristics

among TANF recipients. Nonetheless, together these studies give a rough indication of

the prevalence of these characteristics among TANF recipients.

Information from the states we visited is consistent with the studies’ data.

Officials in these states indicated that many recipients have poor mental or

physical health, have substance abuse problems, or were victims of

domestic violence. Some officials noted that the actual extent of these

characteristics can be hard to determine because most states and localities

rely on recipients to disclose this information about themselves to their

case managers, which they are often reluctant to do.

The six states we visited implemented a TANF program that can be

characterized as “work first” and, as a result, their TANF programs share a

few common elements. All of the programs seek to move people from

welfare into unsubsidized jobs as quickly as possible. Officials expressed

the belief that the best way to succeed in the labor market is to join it, and

the best setting in which to develop successful work habits and skills is on

All Six of the States We

Visited Have Modified

Their “Work First”

Programs to Better Serve

Hard-to-Employ Recipients
Welfare Reform: Progress in Meeting WorkFocused TANF Goals

Page 11 GAO-01-522T

the job.20 However, to varying degrees, these six states have modified or

enhanced their approach to better serve recipients for whom the “work

first” approach is not successful because they have characteristics that

may impede employment. The states we visited differ markedly in their

approach to identifying recipients who have these characteristics so that

they can either be exempted from work requirements or provided with

targeted programs and services that would help them obtain employment.

Some states and localities require TANF recipients to look for a job and

offer enhanced services only to those who are unsuccessful, while others

begin by screening and assessing new applicants to identify those with

characteristics that might impede their ability to get a job. The strategies

states use to assist those recipients identified as hard-to-employ also vary.

Some of the states we visited have focused their efforts on improving and

expanding case management, while others have targeted programs and

services specifically to prepare hard-to-employ recipients for work. All six

of the states we visited also refer recipients to programs run by non-TANF

agencies and organizations that help recipients deal with specific

problems such as substance abuse and mental illness that may affect their

ability to get and keep a job.

During our site visits, state and local officials reported program success at

the local level. For example, in Grand Rapids, Michigan, the local TANF

agency has stationed two case managers at a large company that employs

TANF recipients to help hard-to-employ recipients retain their jobs. These

on-site case managers serve as a resource both for employees and for the

employer, helping employees cope with crises that might otherwise cause

them to lose their jobs, and intervening on behalf of the employer at the

first sign of trouble. The company’s retention rate for current and former

TANF recipients was 81 percent, as compared to only 33 percent for their

non-TANF employees. Company officials directly attributed the higher

retention rates to on-site case management and cooperation from the local

TANF agency.

 

20A recent study by the Manpower Demonstration Research Corporation (MDRC) reviews 20 welfareto-work programs and assesses the effectiveness of these programs at increasing the employment and

earnings of single-parent welfare recipients. The study found that employment-focused welfare

programs resulted in higher earnings for the most disadvantaged recipients than education-focused

programs, but that programs with a mix of activities tended to help the broadest range of people. See

Charles Michalopoulos, Christine Schwartz, and Diana Adams-Ciardullo, What Works Best for Whom:

Impacts of 20 Welfare-to-Work Programs by Subgroup (New York, N.Y.: MDRC, Aug. 2000).
Welfare Reform: Progress in Meeting WorkFocused TANF Goals

Page 12 GAO-01-522T

As states have taken steps to implement a work-based, temporary

assistance program for needy families, key issues have emerged, including

continuing support for work—for those on the welfare rolls and those

already employed—and building state and local management and service

delivery capacity.

As many TANF recipients have moved into employment, emerging issues

are related to helping those remaining on the rolls move into the

workforce, enforcing work requirements in future years, and helping

former welfare recipients maintain their employment. The states we

visited in 2000 said that while some TANF recipients with work-impeding

characteristics are able to successfully enter the workforce, many need

considerable time and support in order to become work-ready, including

services and work-preparation activities that address their specific needs.

To be successful in moving hard-to-employ TANF recipients into the

workforce within their 5-year time limit for federal benefits, states will

need to provide work-preparation activities tailored to the needs of their

hard-to-employ recipients. To help states with this challenge, we have

recommended that HHS do more to promote research and provide

guidance that would encourage and enable states to estimate the number

and characteristics of hard-to-employ recipients. In addition, we have

recommended that HHS expand the scope of its guidance to states to help

them use the flexibility they have under PWRORA to provide appropriate

work-preparation activities for hard-to-employ recipients within the

current TANF rules. During our site visits we discovered that some states

and localities did not understand the full range of flexibility they have

under the law.

In addition to working with hard-to-employ recipients, states must enforce

federal work requirements for most TANF recipients. The robust economy

has generally helped states meet federal work participation rates. In fiscal

year 1999, the highest percentage of TANF adult recipients meeting federal

work participation rates—66 percent—was in unsubsidized employment.

Moreover, states were also aided in meeting federal participation rates by

receiving credits for the recent caseload reductions as allowed under

PRWORA. In the event of an economic downturn when jobs may be less

readily available, more states may turn to alternative activities for meeting

their work requirements. These activities could include subsidized

employment, work experience, community service, and on-the-job

training, which we call work-site activities. However, states have more

limited experience with work-site activities; nationwide only about 14

percent of TANF recipients meeting federal work participation rates were

in such activities in fiscal year 1999. As a result, implementing large-scale

Emerging Issues as

Welfare Reform

Evolves

Emphasizing and

Enhancing Work-Based

Strategies
Welfare Reform: Progress in Meeting WorkFocused TANF Goals

Page 13 GAO-01-522T

work programs may prove challenging.21 To provide valuable information

for administrators and policymakers on what could in the future become

an increasingly important part of TANF programs nationwide, we

recommended that HHS take steps to collect more information on worksite activities, including supporting evaluations of them, and disseminate

such information to the states. HHS has taken steps to support some

evaluations in this area.

While promoting work among those receiving welfare is essential, some

states have turned their attention to supporting the work efforts of those

who have left the rolls. Many former welfare recipients are employed in

low-wage jobs and at risk of returning to welfare. TANF provides states

the flexibility to devise and implement strategies that help such families

maintain and advance in their jobs. Some states and localities have

undertaken efforts to help low-wage workers upgrade their job skills to

improve their job prospects. For example, when we visited states in 1998,

we found that Michigan had set aside $12 million for postemployment

training for TANF clients who were already meeting their work

requirements. Similarly, Wisconsin had a $1 million Employment Skills

Advancement Program under which poor working parents—including

TANF clients—received grants for attending training programs through the

workforce development system.22 HHS is evaluating some projects

designed to help former welfare recipients retain their jobs and advance in

the workplace.

As welfare agencies focus on moving needy families toward economic

independence by providing a wide array of services, such as child care,

food stamps, and employment and training services, they are drawing on

numerous federal and state programs—often administered by separate

agencies.23 These are sweeping changes that have profound implications

for the information needs of states and the automated systems designed to

meet those needs. Although automated systems in the 15 states we

examined in 1999 supported welfare reform in many ways, a number of

 

21Welfare Reform: Work-Site Activities Can Play an Important Role in TANF Programs (HEHS-00-122,

July 28, 2000).

22 Welfare Reform: States’ Implementation and Effects on the Workforce Development System

(GAO/T-HEHS-99-190, Sep. 9, 1999).

23HHS oversees programs such as TANF, Medicaid, child care, and child support enforcement; the

Department of Agriculture oversees food stamps; and the Department of Labor oversees employment

and training programs.

Fostering and Facilitating

Improved Management and

Service Delivery

Approaches
Welfare Reform: Progress in Meeting WorkFocused TANF Goals

Page 14 GAO-01-522T

these systems have major limitations in one or more of three key areas—

case management, service planning, and program oversight.24 We found,

for example, that some state and local agencies had difficulties in

accessing data on the characteristics of TANF recipients that the agencies

could use to identify and meet the service needs of their caseloads. We

also identified a gap in the ability of automated systems to support

enforcement of the 5-year TANF time limit across states. While states are

making efforts to improve their systems, they face obstacles—including

some at the federal level, such as the complexity of obtaining federal

funding for systems projects that involve multiple agencies. To facilitate

states’ efforts, we recommended that HHS establish an interagency group

to help overcome this and other difficulties. HHS, Labor, and Agriculture

have begun meeting regularly to address these issues. Sustained high-level

attention will be needed to move forward in this important area.

Welfare agencies’ increased focus on helping needy adults with children

find and maintain employment brings them directly into the province of

the workforce development system.25 When we reviewed the role of the

workforce development system in providing services to welfare recipients

in the states in 1998, we observed that workforce development and welfare

systems were still largely independent. When the Congress created the

Welfare-to-Work grant program in 1997, under which it authorized $3

billion in grants to be administered through the Department of Labor to

help hard-to-employ individuals, it provided an opportunity for the two

systems, in participating states, to collaborate. In addition, the passage of

the Workforce Investment Act (WIA) of 1998, designed to integrate and

streamline federal employment and training services, requires most

employment and training services to be provided through a single system,

called the One-Stop Center System. These recent changes in the workforce

development system, along with welfare reform, give states and localities

an opportunity to reassess how employment-related services are

coordinated and delivered. While providing TANF services through onestop centers is a state and local option, we noted in our 2000 report that at

the local level, 24 states reported providing at least some TANF services

on-site at a majority of their one-stop centers.26 Seven states provided

 

24Welfare Reform: Improving State Automated Systems Requires Coordinated Federal Effort

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

25We define the workforce development system as the state or local entity responsible for

administering programs that originate through the Department of Labor, such as the state Employment

Service or Workforce Investment Act programs.

26Workforce Investment Act: Implementation Status and the Integration of TANF Services (GAO/THEHS-00-145, June 29, 2000).
Welfare Reform: Progress in Meeting WorkFocused TANF Goals

Page 15 GAO-01-522T

TANF employment and eligibility services, Medicaid, and food stamp

services at a majority of their one-stop centers. While it is too early to

know what service delivery approaches may prove most effective and

efficient, as welfare reform and WIA implementation evolve, research will

be warranted to determine best practices.

Mr. Chairman, this concludes my prepared statement. I will be happy to

respond to any questions you or other Members of the Subcommittee may

have.

For future contacts regarding this testimony, please call Cynthia M.

Fagnoni at (202) 512-7215 or Sigurd Nilsen at (202) 512-7003. Individuals

making key contributions to this testimony included Sonya Harmeyer,

Gale Harris, Katrina Ryan, Kim Scotten, and Andrea Romich Sykes.

GAO Contacts and

Acknowledgments
Page 16 GAO-01-522T

Child Care: States Increased Spending on Low-Income Families (GAO-01-

293, Feb. 2, 2001).

Welfare Reform: Work-Site-Based Activities Can Play an Important Role in

TANF Programs (GAO/HEHS-00-122, July 28, 2000).

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).

Welfare Reform: Assessing the Effectiveness of Various Welfare-to-Work

Approaches (GAO/HEHS-99-179, Sep. 7, 1999).

Welfare Reform: Information on Former Recipients’ Status (GAO/HEHS99-48, Apr. 28, 1999).

Welfare Reform: States’ Experiences in Providing Employment Assistance

to TANF Clients (GAO/HEHS-99-22, Feb. 26, 1999).

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

Welfare Reform: Early Fiscal Effects of the TANF Block Grant

(GAO/AIMD-98-137, Aug. 18, 1998).

Welfare Reform: Child Support an Uncertain Income Supplement for

Families Leaving Welfare (GAO/HEHS-98-168, Aug. 3, 1998).

Welfare Reform: States Are Restructuring Programs to Reduce Welfare

Dependence (GAO/HEHS-98-109, June 18, 1998).

Welfare Reform: HHS’ Progress in Implementing Its Responsibilities

(HEHS-98-44, Feb. 2, 1998).

Welfare Reform: Three States’ Approaches Show Promise of Increasing

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

(130034)

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