Temporary Assistance for Needy Families: Implications of Caseload and Program Changes for Families and Program Monitoring
Published: 2010-09-21T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The Temporary Assistance for Needy Families (TANF) program, created in 1996, is one of the key federal funding streams provided to states to assist women and children in poverty. A critical aspect of TANF has been its focus on employment and self-sufficiency, and the primary means to measure state efforts in this area has been TANF's work participation rate requirements. Legislative changes in 2005 were generally expected to strengthen these work requirements. Given changes in the number of families participating in TANF over time and questions about whether the program is achieving its goals, this testimony draws on previous GAO work to focus on 1) key changes to state welfare programs made in response to TANF and other legislation and their effect on caseload trends; 2) how low-income single-parent families are faring; and 3) how recent developments in state programs and the economy may affect federal monitoring of TANF. To address these issues, in previous work conducted from November 2008 to May 2010, GAO analyzed state data reported to the Department of Health and Human Services; used microsimulation analyses; surveyed state TANF administrators in 50 states and the District of Columbia; interviewed officials in 21 states selected to represent a range of economic conditions and TANF policy decisions; conducted site visits to Florida, Ohio, and Oregon; and reviewed relevant federal laws, regulations, and research.
section_title: What GAO Found
paragraphs: Changes states made to their welfare programs as they implemented TANF contributed to a significant decline in program participation, but caseloads are starting to increase in many states. The strong economy of the 1990s, TANF's focus on work, and other factors contributed to increased family incomes and a decline in the number of families poor enough to be eligible for cash assistance. However, research shows that state policies--including TANF work requirements, time limits, and sanction and diversion policies--also contributed to the caseload decline, as fewer eligible families participated in the program. In recent years, states have varied in their response to changes in economic conditions, with caseloads rising in 37 states and falling in 13 states between December 2007 and September 2009, the latest data available when we did our work. Like TANF recipients, families who left TANF, as well as those who qualified for the program but who did not participate, had low incomes and continued to rely on other government supports. In the years following welfare reform, many of the parents who left cash assistance found employment, and some were better off than they were on welfare, but earnings were typically low and many worked in unstable, low-wage jobs with few benefits. Among eligible families who did not participate, a small subset did not work and had very low incomes. Efforts to measure states' engagement of TANF recipients in work activities and to monitor states' use of all TANF funds have been of limited use in ensuring accountability for meeting federal TANF goals, according to our analysis. Work participation rates--a key performance measure for TANF, as currently measured and reported, do not appear to be achieving the intended purpose of encouraging states to engage specified proportions of TANF recipients in work activities. In addition, states' decisions to shift their spending from cash assistance to other programs and work supports such as childcare have highlighted gaps in the information available at the federal level on how many families received TANF services and how states used funds to meet TANF goals. A central feature of the TANF block grant is the flexibility it provides to states to design and implement welfare programs tailored to address their own circumstances, but this flexibility must be balanced with mechanisms to ensure state programs are held accountable for meeting program goals. The limited usefulness of current measures of work participation and the lack of information on how states use funds to aid families and to meet TANF goals hinders decision makers in considering the success of TANF and what trade offs might be involved in any changes to TANF when it is reauthorized.

section_title: Letter
paragraphs: I am pleased to have the opportunity to participate in today’s discussion of  women in poverty. I will focus on the role of the Temporary Assistance for  Needy Families (TANF) program in providing assistance to this  population. As you know, many families receiving TANF cash assistance  are headed by single parents, and because the vast majority of those  parents are women, the $16.5 billion TANF block grant is one of the key  federal funding streams provided to states to assist women and children in  poverty. The Bureau of the Census just released last week poverty  statistics for 2009 and the poverty rate for children is now at 20.7 percent,  the highest it has been this decade. My remarks today are mainly based on  two of our recent reports entitled TANF: Fewer Eligible Families Have  Received Cash Assistance Since the 1990s, and the Recession’s Impact  on Caseloads Varies by State; and TANF: Implications of Recent  Legislative and Economic Changes for State Programs and Work  Participation Rates.
As you know, the Personal Responsibility and Work Opportunity  Reconciliation Act of 1996 (PRWORA) introduced sweeping changes to  federal welfare policy. PRWORA ended Aid to Families with Dependent  Children (AFDC), which entitled eligible families to monthly cash  payments, and created TANF, a capped block grant that emphasizes  employment and work supports for most families who receive cash  assistance. Under the TANF block grant program, states receive a capped  amount of federal funds to design and operate their own welfare programs  within federal guidelines. The Department of Health and Human Services  (HHS) administers the TANF program, which provides states with up to  about $16.5 billion each year in TANF block grant funds, and each state  must contribute a specified level of its own funds to qualify for the grant.  Within certain limitations, states set their own eligibility limits and benefit  levels for cash recipients, but they must restrict most families to a lifetime  limit of 60 months of federally funded TANF cash assistance. Central to  TANF’s focus on employment and self-sufficiency are TANF’s work  participation rate requirements, which require states to involve a minimum  percentage of their families receiving TANF cash assistance in work  activities for a required number of hours each week.
Recently, several legislative and economic changes have affected TANF.  First, with the reauthorization of the TANF block grant through the Deficit  Reduction Act of 2005 (DRA), the Congress took steps generally expected  to strengthen TANF work requirements by modifying the credit provided  to states for reducing the number of families receiving TANF. Following  DRA, the U.S. economy experienced a severe recession and, in response,  the Congress passed the American Recovery and Reinvestment Act of 2009  (Recovery Act) which included provisions affecting TANF such as the  creation of a $5 billion Emergency Contingency Fund for state TANF  programs. States qualify for this fund based on increases in expenditures  for short –term non-recurrent benefits or subsidized employment or  increases in the number of families receiving cash assistance. This fund  supplemented the TANF contingency fund, which under PRWORA had  made  up to $2 billion available to states.
With the creation of TANF, the number of families who received cash  assistance fell significantly, from 4.8 million families on average each  month in 1995—just prior to the creation of TANF—to 1.7 million in 2008.  More recently, however, caseloads have begun to rise in some states.  Recent changes in state TANF programs made in response to DRA as well  as changes in the economy have raised questions about how the program  has affected low-income families over time and how best to monitor  TANF’s progress in meeting two of its key goals—to provide assistance to  needy families so that children may be cared for in their own homes or in  the homes of relatives and to end the dependence of needy families on  government benefits by promoting job preparation, work, and marriage.
My remarks today—based primarily on our February and May 2010  reports—will focus on the following three issues: (1) key changes made to  state welfare programs in response to TANF and other legislation and the  effect of these changes on caseload trends; (2) how single parent families  with children are faring, including those who receive TANF cash  assistance as well as those who are eligible but do not receive assistance;  and (3) the implications of recent developments on monitoring state TANF  programs.
We used multiple methodologies to develop our findings for these reports.  We reviewed and analyzed state TANF data reported to HHS; reported on  microsimulation analyses conducted for us by the Urban Institute using a  model known as TRIM3; reviewed relevant federal laws, regulations, and  guidance and relevant research on the factors affecting the decline of cash  recipient families; interviewed HHS officials; surveyed state TANF  administrators from the 50 states and Washington, D.C.; interviewed TANF  officials in 21 states, and conducted site visits to meet with state and local  TANF officials in Florida, Ohio, and Oregon. The states we selected for  interviews and site visits had a range of economic conditions, caseloads,  TANF policies, and geographic diversity. We assessed the data we received  for data reliability and concluded that the data were sufficiently reliable  for the purposes of our report.
We conducted our work from November 2008 to May 2010 in accordance  with all sections of GAO’s Quality Assurance Framework that are relevant  to our objectives. The framework requires that we plan and perform the  engagement to obtain sufficient and appropriate evidence to meet our  stated objectives and to discuss any limitations in our work. We believe  that the information and data obtained, and the analysis conducted,  provide a reasonable basis for any findings and conclusions in this  product.
subsections: section_title: Changes to State TANF Programs Contributed to a Long-Term Decline in Participation but Caseloads are Starting to Increase in Many States
paragraphs: In response to the creation of TANF, states implemented more work- focused welfare programs, and research shows that these changes—in  concert with other policy changes and economic conditions—contributed  to raising the incomes of single parent families so that fewer were eligible  for cash assistance. In designing and implementing their new TANF  programs, states focused more than ever before on helping welfare  recipients and other low-income parents find jobs. Many states  implemented work-focused programs that stressed moving parents quickly  into jobs and structured the benefits to allow more parents to combine  welfare and work. States also imposed financial consequences, or  sanctions, on families that did not comply with TANF work or other  requirements, strengthening the incentives for TANF participants to  comply with work requirements. Other concurrent policy changes  contributed to an increase in the share of single parents in the labor force.  These included an increase in the Earned Income Tax Credit (EITC) in the  1990s and increases in the minimum wage in 1996 and 1997, both of which  contributed to an increase in the returns to work. Additional funds for  federal and state work supports such as child care also made it easier for  single parents to enter the labor force. Finally, the strong economy of the  1990s facilitated the move from welfare to work for many TANF  recipients. A decline in the unemployment rate and strong economic  growth contributed to the widespread availability of job openings for  workers of all skill levels in many parts of the country. During this period,  labor force participation increased among single mothers, the population  most affected by TANF—from 58 percent in 1995—the year prior to the  creation of TANF—to 71 percent in 2007, with most of this increase  occurring immediately following the passage of welfare reform. Because  the incomes of many single-parent families increased as a result of these  policies, in total, 420,000 fewer families had incomes low enough to be  eligible for cash assistance in 2005 compared to 1995, according to HHS  data.
At the same time that some families worked more and had higher incomes,  others had income that left them still eligible for TANF cash assistance;  however, many of these eligible families were not participating in the  program. According to our estimates, the vast majority—87 percent—of  the caseload decline can be explained by the decline in eligible families  participating in the program, in part because of changes to state welfare  programs. (See Fig. 1). These changes include mandatory work  requirements, changes to application procedures, lower benefits, and  policies such as lifetime limits on assistance, diversion policies, and  sanctions for non-compliance, according to a review of the research.
While mandatory work activities assisted some participants in getting jobs,  according to a research synthesis conducted for HHS, these mandates may  have led other families to choose not to apply rather than be expected to  fulfill the requirement to work. Other families may have found it more  difficult to apply for or continue to participate in the program, especially  those with poor mental or physical health or other characteristics that  make employment difficult. A decline in average cash benefits may also  have contributed to the decline in participation. Average cash benefits  under 2005 TANF rules were 17 percent lower than they were under 1995  AFDC rules, according to our TRIM3 estimates, as cash benefit levels in  many states have not been updated or kept pace with inflation. Research  also suggests that in response to lifetime limits on the amount of time a  family can receive cash assistance eligible families may hold off on  applying for cash assistance and “bank” their time, a practice that could  contribute to the decline in families’ use of cash assistance. In addition,  fewer families may have applied or completed applications for TANF cash  assistance because of state policies and practices for diverting applicants  from cash assistance; nearly all states have at least one type of diversion  strategy, such as the use of one-time nonrecurring benefits instead of  monthly cash assistance. Finally, some studies and researchers noted that  full sanctions for families noncompliance—those that cut off all benefits  for a period of time—are associated with declines in the number of  families receiving cash assistance, although more research is needed to  validate this association.
During the recent economic recession, caseloads increased in some states  but decreased in others, as circumstances in individual states as well as  states’ responses to the economic conditions varied. Between December  2007 and September 2009, 37 states had increases in the number of  families receiving TANF cash assistance while 13 states had decreases.  However, the degree of change in families receiving TANF cash assistance  varied significantly by state, as some states experienced caseload  increases or decreases of over 25 percent while others experienced  minimal changes of 0 to 5 percent. Nationwide, the total number of  families receiving TANF cash assistance increased by 6 percent during this  time period although the subset of two-parent families receiving such  assistance increased by 57 percent. Initially few states reported reducing  TANF-related spending on family and/or work supports in response to the  recession, instead using funding sources such as the Emergency  Contingency Fund created by the Recovery Act to respond to rising  caseloads and/or to establish or expand subsidized employment programs.  However, through their comments on our national survey and during our  site visits, state officials discussed how the economic recession has  caused changes to local TANF service delivery in some states. A majority  of state TANF officials nationwide, as well as TANF officials from all eight  localities we visited, reported that they made changes in local offices’  TANF service delivery because of the economic recession. Specifically, of  the 31 states reporting such changes through our survey, 22 had reduced  the number of TANF staff, 11 had reduced work hours at offices, and 7 had  reduced the number of offices. Officials in all three states we visited also  reported that local TANF caseworkers are now managing an increased  number of TANF cash assistance families per person. As a result of these  increased caseloads, along with tightened resources, local officials in all  three of the states we visited expressed their concerns that staff are less  able to provide services to meet TANF cash assistance families’ needs and  move them toward self-sufficiency.
section_title: Most TANF Participants and Eligible Non- Recipients have Low Incomes, and A Small Subgroup Have Very Low Incomes
paragraphs: Research on how families are faring after welfare reform has shown that,  like those who receive TANF cash assistance, families that have left  welfare, either for work or for other reasons, tend to remain low income  and most depend in part on other public benefits. As we noted in a 2005  report, most of the parents who left cash welfare found employment and  some were better off than they were on welfare, but earnings were  typically low and many worked in unstable, low-wage jobs with few  benefits and advancement opportunities. There is evidence that some  former TANF recipients have had better outcomes; for example, a 2009  study found that, in general, former TANF recipients in three cities,  especially those who had left TANF prior to 2001, had higher employment  rates and average income levels than they had while they were on TANF.   However, even among working families, many rely on government  supports such as the EITC, Medicaid, the Supplemental Nutrition  Assistance Program (SNAP), formerly known as the Food Stamp Program,  and other programs to help support their families and lift them out of  poverty, as most parents who recently left welfare are not earning enough  to be self-supporting. In addition, a considerable body of work has  documented families who are often described as “disconnected” from the  workforce. It is not yet known whether or to what extent the recession has  led to an increase in the number of these families.
A recent GAO analysis of the characteristics of low-income families  several years post-welfare reform found that while families who were  receiving TANF cash assistance in 2005 had low incomes, a third worked  full-time and most received other public supports, according to the most  recent data available. The median household income of families receiving  TANF cash assistance was $9,606 per year, not including means-tested  benefits. One third of families who received TANF cash assistance at some  point during the year (33 percent) were engaged in full-time employment,  while 44 percent were headed by an adult without earnings. About a fifth  (18 percent) of these families were headed by an adult who had a work- limiting disability. The vast majority of families receiving TANF cash  assistance—91 percent—also received at least one other public benefit,  with most (88 percent) receiving benefits from the Supplemental  Nutritional Assistance Program (SNAP), formerly known as the Food  Stamp Program, and a smaller proportion receiving subsidized housing (22  percent), child care subsidized by the Child Care and Development Fund  (CCDF) (11 percent), or Supplemental Security Income (SSI), a cash  assistance program for low-income people with disabilities (22 percent).  Only 16 percent of families receiving cash assistance included married  couples, and even fewer—less than 10 percent—had income from an  unmarried partner.
Many TANF eligible families do not participate in the program, possibly  because they left the program or because they did not apply. Our analysis  found that on average, these families had higher incomes than TANF  recipients, but median incomes remained low, a significant proportion did  not work full time, and many received public supports other than TANF.  Compared to TANF cash assistance recipients, eligible non-recipients had  higher median incomes ($15,000 per year) and higher rates of full-time  employment (44 percent). However, a significant proportion of TANF- eligible non-recipient families—41 percent—were headed by an adult  without any earnings, and 11 percent had a work limiting disability. A  somewhat lower percentage of those eligible but not receiving TANF cash  assistance received other public benefits (66 percent received any benefit),  but a majority lived in households that received SNAP (59 percent).  Receipt of other benefits was also somewhat lower than among TANF  recipients, with 13 percent receiving subsidized housing, 8 percent  receiving CCDF-subsidized child care, and 18 percent receiving SSI. More  eligible non-participating families were headed by married couples than  participating families, but no more had income from an unmarried partner.
A small subgroup of families eligible for but not receiving TANF cash  assistance (732,000 families in 2005), did not work and did not receive SSI  benefits and this group has lower incomes than TANF recipients and other  eligible non-recipients. In addition, these families also had lower receipt of  other public benefits compared to TANF recipients. Among families with  no earned income that received neither TANF nor SSI, the median income  from all sources was $7,020, an amount equal to about 45 percent of the  federal poverty threshold for a family consisting of one adult and two  children. Twelve percent of this group of families was headed by a parent  who reported having a work-limiting disability. The extent to which these  families received other public benefits was similar to that of other families  eligible but not participating in TANF, with 66 percent receiving any  benefit. Most (63 percent) received SNAP benefits while 18 percent  received subsidized housing, and 4 percent received CCDF-subsidized  child care. These more disadvantaged non-participants accounted for 11  percent of all families who were eligible for TANF cash assistance in 2005.
section_title: Efforts to Measure States’ Engagement of TANF Recipients in Work Activities and to Monitor States’ Use of All TANF Funds Fall Short
paragraphs: Data on caseload trends, state policies, and how families are faring can  provide important insight into how TANF programs are working. However,  work participation rates—a key accountability feature of TANF, as  currently measured and reported—do not appear to be achieving the  intended purpose of encouraging states to engage specified proportions of  TANF adults in work activities. In addition, as cash assistance caseloads  fell, many states shifted their spending away from cash assistance toward  work supports such as child care, highlighting information gaps at the  federal level in how many families received TANF services and how states  used federal and state MOE funds to meet TANF goals.
subsections: section_title: States Used Flexibilities Allowed in Law to Engage a Smaller Share of Participants in Work Activities than Stated Goal
paragraphs: To promote TANF’s focus on work, HHS measures state performance by  the proportion of TANF participants engaged in allowable work activities.  States are expected to ensure that at least 50 percent of all families  receiving TANF cash assistance participate in one or more of 12 categories  of work activities for an average of 30 hours per week. PRWORA  established penalties for states that did not meet their required work  participation rates and gave HHS the authority to make determinations  regarding these penalties.
However, states can take advantage of program options to make it easier  to meet their required rates. For example, states can annually apply to  HHS for a caseload reduction credit that generally decreased the state’s  required work participation rates by the same percentage that the state’s  caseload decreased since a specified year, established as 1995 in  PRWORA. Because of the significant drop in caseload size, many states  were able to reduce their required work participation rate. In fact, 18  states reported caseload reductions of at least 50 percent in fiscal year  2006, effectively reducing their required work participation rate to zero. In  addition, states can modify the calculation of their work participation  rates by funding certain families with state maintenance-of-effort (MOE)  dollars rather than federal TANF block grant dollars. By using state MOE  dollars rather than federal dollars, states are able to remove these families  from the work participation rate calculation. Between 2001 and 2006, all  but two states met the participation rate requirement, according to HHS  data. However, nationally, between 31 and 34 percent of families  receiving cash assistance met their work requirements during this time.
In 2006, DRA reauthorized the TANF block grant through fiscal year 2010  and made several modifications that were generally expected to  strengthen TANF work requirements intended to help more families attain  self-sufficiency,  and to improve data reliability. For example, DRA  modified the caseload reduction credit by changing the base year from  1995 to 2005, and it mandated that families receiving cash assistance  funded with state maintenance of effort dollars be included in the  calculation of the work participation rates. It also directed HHS to issue  regulations defining the 12 work activities and included new requirements  to better ensure the reliability of work participation rate data.
We found that the proportion of families receiving TANF cash assistance  that met work participation requirements has changed little since DRA  was enacted and is still below the 50 percent generally specified as the  required rate. In fiscal years 2007 and 2008—the two years following DRA  for which national data are available—between 29 and 30 percent of  families receiving TANF cash assistance met their work requirements. In  numbers of families, 243,000 of 816,000 families met their work  requirements in fiscal year 2008. The small decrease in the proportion of  families that met their requirements after DRA may be related, in part, to  the federal work activity definitions and tightened work hour reporting  and verification procedures states had to comply with after the act, as well  as states’ ability to make the required changes.
The types of work activities in which families receiving TANF cash  assistance most frequently participated were similar before and after DRA.  For example, among families that met their work requirements, the  majority participated in unsubsidized employment in the years both before  and after DRA. In all of the years analyzed, the next most frequent work  activities were job search and job readiness assistance, vocational  educational training, and work experience.
Although the national rate did not change significantly, fewer states met  the required work participation rates after DRA, according to HHS data.  As before DRA, states used a variety of options and strategies to meet their  required work participation rate. For example:    States continued to request caseload reduction credits to help lower their  required work participation rates; however, the credits were significantly  smaller after DRA, since caseloads went down less after 2005.
Some states lowered their required rates by spending state MOE dollars in  excess of what is required under federal law on TANF-related programs –  a practice we found enabled 22 states to meet their rates in 2007 and 14  states in 2008. Total state MOE expenditures increased by almost $2  billion between fiscal years 2006 and 2008, which appears to be related to  state spending on programs and services such as preventing and reducing  out-of-wedlock pregnancies.
Some states used policies to ensure that families complying with their  individual work requirements were included in the work participation rate  calculation by, for example providing monthly cash assistance to working  families previously on TANF or about to lose TANF eligibility because  their working incomes placed them just above eligibility thresholds. 18  states have implemented such programs since DRA.
In contrast, after DRA required that state maintenance of effort dollars be  included in the calculation of the work participation rates, some states  removed certain nonworking families from the calculation of their rates by  funding cash assistance for these families with state dollars unconnected  to the TANF program – a practice we found in 29 states. We learned that  states often use these state-funded programs to provide cash assistance to  families that typically have the most difficulty meeting the TANF work  requirements, such as families with a disabled member or recent  immigrants and refugees.
In short, because of the various factors that affect the calculation of states’  work participation rates, the rate’s usefulness as an indicator of a state’s  effort to help participants achieve self-sufficiency is limited. Moreover, the  rate does not allow for clear comparisons across state TANF programs or  comparisons of individual state programs over time. This is the same  conclusion we reached in our 2005 report that triggered some of the DRA  changes to improve this measure of states’ performance. Further, our 2005  review before DRA changes as well as the one we just completed in May of  this year indicate that the TANF work rate requirements as enacted, in  combination with the flexibility provided, may not serve as an incentive  for states to engage more families or to work with families with complex  needs. Many states have cited challenges in meeting work performance  standards under DRA, such as new requirements to verify participants’  actual activity hours and certain limitations on the types and timing of  activities that count toward meeting the requirements. The TANF work  rate requirements—as established in the original legislation and revised in  the Deficit Reduction Act—may not yet have achieved the appropriate  balance between flexibility for states and accountability for federal TANF  goals.
subsections: section_title: Reduced Cash Assistance Caseloads Freed Up TANF Funds for Purposes Beyond Welfare-to-Work Programs But Limited Information Exists on Use of These Funds
paragraphs: The substantial decline in traditional cash assistance caseloads combined  with state spending flexibilities under the TANF block grant allowed states  to broaden their use of TANF funds. As a result, TANF and MOE dollars  played an increasing role in state budgets outside of traditional cash  assistance payments. In our 2006 report that reviewed state budgets in  nine states, we found that in the decade since Congress created TANF,  the states used their federal and state TANF-related funds throughout their  budgets for low-income individuals, supporting a wide range of state  priorities, such as refundable state earned income credits for the working  poor, prekindergarten, child welfare services, mental health, and  substance abuse services, among others. While some of this spending,  such as that for child care assistance, relates directly to helping cash  assistance recipients leave and stay off the welfare rolls, other spending is  directed to a broader population that did not necessarily ever receive  welfare payments.. This is in keeping with the broad purposes of TANF  specified in the law:  1.  providing assistance so that children could be cared for in their own  homes or in the homes of relatives;  2.  ending families’ dependence on government benefits by promoting job  preparation, work, and marriage;  3.  preventing and reducing the incidence of out-of-wedlock pregnancies;  4.  encouraging the formation and maintenance of two-parent families.
More recent data indicated that this trend has continued, even under  recessionary conditions. In fiscal year 2009, federal TANF and state MOE  expenditures for purposes other than cash assistance totaled 70 percent  of all expenditures compared with 27 percent in fiscal year 1997, when  states first implemented TANF, as shown in figure 2.  In addition, of the 21  states we surveyed for our February 2010 report, few reported that they  had reduced federal TANF and MOE spending for other purposes, such as  child care and subsidized employment programs, to offset increased  expenditures for growth in their cash assistance caseloads. States that  increased spending on cash assistance while maintaining or increasing  spending for other purposes did so by spending reserve funds, accessing  the TANF Contingency Fund, accessing the TANF Emergency Contingency  Fund created by the Recovery Act, or a combination of the three.
This shift in spending left gaps in the information gathered at the federal  level to ensure state accountability. Because existing oversight  mechanisms focus on cash assistance, which no longer accounts for the  majority of TANF and MOE spending, we may be missing important  information on the total numbers served and how states use TANF funds  to help families to achieve program goals in ways beyond their welfare-to- work programs. For example, states have used significant portions of their  TANF funds to augment their child care subsidy programs, which often  serve non-TANF families, yet we do not know how many children are  served or what role these subsidies play in helping low-income families  avoid welfare dependency, a key TANF goal. Further, many states use  TANF funds to fund a significant portion of their child welfare programs.   In effect, there is little information on the numbers of people served by  TANF-funded programs other than cash assistance, and there is no real  measure of workload or of how services supported by TANF and MOE  funds meet the goals of welfare reform.
Another implication of changing caseloads relates to their changing  composition, with about half of the families receiving cash assistance  composed of cases with no adult receiving assistance in fiscal year 2008  compared with less than one-quarter in fiscal year 1998 (see fig. 3). There  are four main categories of “child-only” cases: (1) the parent is disabled  and receiving SSI; (2) the parent is a noncitizen and therefore ineligible;  (3) the child is living with a nonparent relative; and (4) the parent has been  sanctioned and removed from cash assistance for failing to comply with  program requirements, and the family’s benefit has been correspondingly  reduced.  These families, with parents or guardians not receiving TANF  cash assistance and generally not subject to work requirements, have not  been the focus of efforts to help families achieve self-sufficiency.
section_title: Concluding Observations
paragraphs: Nearly 15 years after the creation of TANF, the expected upcoming  reauthorization of the program has brought renewed interest to efforts to  assess how well the program is meeting the needs of low income families  with children—most headed by women—and putting them on a path to  self-sufficiency. While the dramatic decline in the TANF caseload  following welfare reform and the increase in employment among single  mothers has been cited as evidence for the program’s success, questions  have been raised about its effect on families. Many who left the rolls  transitioned to low wage, unstable jobs, and research has shown that a  small subset of families who neither receive TANF nor earn income may  have been left behind. Following the recent economic recession, poverty  among children has climbed to its highest level in years.
A central feature of the TANF block grant is the flexibility it provides to  states to design and implement welfare programs tailored to address their  own circumstances, but this flexibility must be balanced with mechanisms  to ensure state programs are held accountable for meeting program goals.  Over time we have learned that states’ success in engaging TANF cash  assistance recipients in the type, hours, and levels of work activities  specified in the law has, in many cases, been limited, though they have met  the required targets using the flexibility allowed. Although the DRA  changes to TANF work requirements were expected to strengthen the  work participation rate as a performance measure and move more families  toward self-sufficiency, the proportion of TANF recipients engaged in  work activities remains unchanged. States’ use of the modifications  allowed in federal law and regulations, as well as states’ policy choices,  have diminished the rates’ usefulness as the national performance  measure for TANF, and shown it to be limited as an incentive for states to  engage more families or work with families with complex needs.  Furthermore, while states have devoted significant amounts of the block  grant funds as well as state funds to other activities, little is known about  use of these funds. Lack of information on how states use these funds to  aid families and to meet TANF goals hinders decision makers in  considering the success of TANF and what trade offs might be involved in  any changes to TANF when it is reauthorized.
We provided a draft of the reports we drew on for this testimony to HHS  for its review, and copies of the agency’s written responses can be found  in the appendices of the relevant reports. In its comments, HHS generally  said that the reports were informative and did not disagree with our  findings.
Mr. Chairman, this concludes my statement. I would be pleased to respond  to any questions you or other Members of the Committee may have.
section_title: GAO Contacts and Acknowledgments
paragraphs: For questions about this statement, please contact me at (202) 512-7215 or  brownke@gao.gov. Contact points for our Offices of Congressional  Relations and Public Affairs may be found on the last page of this  statement. Individuals who made key contributions to this testimony  include Hedieh Rahmanou Fusfield, Rachel Frisk, Alexander G. Galuten,  Gale C. Harris, Kathryn A. Larin, and Deborah A. Signer.
section_title: Related GAO Products
paragraphs: Temporary Assistance for Needy Families: Implications of Recent  Legislative and Economic Changes for State Programs and Work  Participation Rates, GAO-10-525. Washington, D.C.: May 28, 2010.
Temporary Assistance for Needy Families: Implications of Changes in  Participation Rates, GAO-10-495T. Washington, D.C.: March 11, 2010.
Temporary Assistance for Needy Families: Fewer Eligible Families Have  Received Cash Assistance Since the 1990s, and the Recession’s Impact  on Caseloads Varies by State, GAO-10-164. Washington, D.C.: February 23,  2010.
Poverty in America: Consequences for Individuals and the Economy.  GAO-07-343T. Washington, D.C.: January 24, 2007.
Welfare Reform: Better Information Needed to Understand Trends in  States’ Uses of the TANF Block Grant. GAO-06-414. Washington, D.C.:  March 3, 2006.
Welfare Reform: More Information Needed to Assess Promising  Strategies to Increase Parents’ Incomes. GAO-06-108. Washington, D.C.:  December 2, 2005.
Welfare Reform: HHS Should Exercise Oversight to Help Ensure TANF  Work Participation Is Measured Consistently across States. GAO-05-821.  Washington, D.C.: August 19, 2005.
TANF AND SSI: Opportunities Exist to Help People with Impairments  Become More Self-Sufficient. GAO-04-878. Washington, D.C.: September  15, 2004.
Welfare Reform: Information on Changing Labor Market and State  Fiscal Conditions. GAO-03-977. Washington, D.C.: July 15, 2003.
Welfare Reform: Former TANF Recipients with Impairments Less Likely  to Be Employed and More Likely to Receive Federal Supports.  GAO-03-210. Washington, D.C.: December 6, 2002.
Welfare Reform: With TANF Flexibility, States Vary in How They  Implement Work Requirements and Time Limits. GAO-02-770.  Washington, D.C.: July 5, 2002.
Welfare Reform: States Provide TANF-Funded Work Support Services to  Many Low-Income Families Who Do Not Receive Cash Assistance.  GAO-02-615T. Washington, D.C.: April 10, 2002.
Welfare Reform: States Are Using TANF Flexibility to Adapt Work  Requirements and Time Limits to Meet State and Local Needs.  GAO-02-501T. Washington, D.C.: March 7, 2002.
Welfare Reform: Progress in Meeting Work-Focused TANF Goals.  GAO-01-522T. Washington, D.C.: March 15, 2001.
Welfare Reform: Moving Hard-to-Employ Recipients into the Workforce.  GAO-01-368. Washington, D.C.: March 15, 2001.
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