Welfare Reform: Better Information Needed to Understand Trends in States' Uses of the TANF Block Grant
Published: 2006-03-03T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Under the Temporary Assistance for Needy Families (TANF) block grant created as part of the 1996 welfare reforms, states have the authority to make key decisions about how to allocate federal and state funds to assist low-income families. States also make key decisions, through their budget processes, about federal and state funds associated with other programs providing assistance for the low-income population. States' increased flexibility under TANF as well as the budgetary stresses they experienced after a recession draw attention to the fiscal partnership between the federal government and states. To update GAO's previous work, this report examines (1) changes in the overall level of welfare-related spending; (2) changes in spending priorities for welfare-related nonhealth services; and (3) the contribution of TANF funds to states' spending for welfare-related services. GAO reviewed spending in nine states for state fiscal years 1995, 2000, and 2004 and focused on spending for working-age adults and children, excluding the elderly, long-term and institutional care.
section_title: What GAO Found
paragraphs: GAO found that spending for low-income people for health and nonhealth services in nine states generally increased in real terms from 1995 to 2000 and from 2000 to 2004. Health spending, excluding spending for the elderly, outpaced nonhealth spending over the decade and now consumes an even greater share of total spending for low-income people, mirroring a nationwide expansion in health care costs. Spending increases were substantially supported by both federal and state funds in the health and nonhealth areas in each time period, reflecting the important federal-state partnership supporting these low-income programs. Overall, spending increases reflected changes in eligible populations and needs, increasing costs, as well as policy changes. While nonhealth spending increased in real terms, spending priorities shifted away from cash assistance to other forms of aid, particularly work supports, in keeping with welfare reform goals. The largest increases for noncash services occurred from 1995 to 2000, with smaller increases from 2000 to 2004, when some state officials cited challenges in maintaining services. By 2004, states used federal and state TANF funds to support a broad range of services, in contrast to 1995 when spending priorities focused more on cash assistance. However, reporting and oversight mechanisms have not kept pace with the evolving role of TANF funds in state budgets, leaving information gaps at the national level related to numbers served and how states use funds to meet welfare reform goals, hampering oversight. Any efforts to address these gaps should strike an appropriate balance between flexibility for state grantees and accountability for federal funds and goals.

section_title: Letter
paragraphs: In 1996, the federal government made sweeping changes to national  welfare policy, significantly altering the federal-state partnership in  assisting low-income families as well as setting new goals for states to help  parents become independent of government assistance.  A decade has  passed since then, during which strong economic growth faded into a short  recession and many states faced a period of significant budgetary stress.   This warrants attention to how the 1996 changes have evolved over time.   These changes, enacted through the Temporary Assistance for Needy  Families (TANF) block grant, gave states authority to make key decisions  about how to allocate federal and state funds to assist low-income families.   Since states implemented welfare reforms, they have spent almost   $200 billion in federal and state TANF funds on their programs.  TANF  spending is but a portion of the billions of federal and state dollars that  flow through state budgets for a variety of programs for low-income  working-age adults and children.   These welfare-related programs and  services include ongoing cash assistance, employment services and  training, work and other supports, aid for the at-risk, and health services.
To provide information on how this welfare-related spending has evolved  over the decade since reform and particularly after the national recession  in 2001, this report responds to your request that we examine (1) changes  in the overall level of welfare-related spending for nonhealth and health  services in the periods before and after the recession and over the decade;  (2) changes in spending priorities for nonhealth services over these same  periods; and (3) the contribution of TANF funds to states’ spending for  welfare-related services.
To address these questions, we collected state spending data and  conducted site visits in nine states examined in our earlier reports that  represent a diverse set of characteristics, including geographic region,  population size, and experiences with welfare initiatives.  These states are  California, Colorado, Louisiana, Maryland, Michigan, New York, Oregon,  Texas, and Wisconsin.  Together, these states represented about 50 percent  of all federal TANF spending nationwide in 2004.  In each of these states,  we collected budget data and program information for three points in time  based on state fiscal years:  for 1995 before the passage of federal welfare  reform legislation; for 2000; and for 2004, the most recent year for which  data were available.  We focused on spending for working-age adults and  children and excluded spending for the elderly, long-term care, and  institutional care.  We classified spending into five key areas: cash  assistance, employment services and training, work and other supports, aid  for the at-risk, and health care.  We also spoke with budget and program  officials in these states and at the Department of Health and Human  Services (HHS), which oversees TANF at the federal level.
Our study includes federal, state, and local spending associated with a  broad array of programs, including Medicaid, TANF, housing assistance,  and child care and welfare programs for which states make key budgetary  decisions. (See fig. 1.)  We also focused specifically on federal TANF funds  and state funds—referred to as maintenance of effort (MOE) funds—that  states must spend at a specified level under law to receive their federal  TANF funds.  We excluded federal program spending about which states do  not make key budget decisions, such as food stamp benefits, the Earned  Income Tax Credit (EIC), and others; as a result, our data do not capture all  federal spending for low-income individuals.  We adjusted spending data  for each of our three study years to 2004 dollars in order to make the  spending more comparable over time. While information on real spending  levels is important, additional data on the extent to which eligible  individuals targeted by these programs are being served—information not  routinely available—would be needed to draw conclusions about how  service needs are being met at these spending levels.
We conducted our work from October 2004 through February 2006 in  accordance with generally accepted government auditing standards.
subsections: section_title: Background
paragraphs: The TANF block grant was created by the Personal Responsibility and  Work Opportunity Reconciliation Act of 1996 (PRWORA), and changed the  federal role in financing welfare programs in states.  PRWORA ended  families’ entitlement to cash assistance by replacing the Aid to Families  with Dependent Children (AFDC) program—essentially a federal-state  matching grant—with the TANF block grant, a $16.5 billion per year fixed  federal funding stream to states.  PRWORA coupled the block grant with an  MOE provision, which requires states to maintain a significant portion of  their own historic financial commitment to their welfare programs as a  condition of receiving their full TANF allotments.  This helped to ensure  that states remained strong fiscal partners.  PRWORA provided states  greater flexibility and responsibility for administering and implementing  their welfare programs.  Importantly, with the fixed federal funding stream,  states must assume the fiscal risks in the event of a recession or increased  program costs.
In addition to increased flexibility and the new fiscal structure, PRWORA  charged HHS with oversight of states’ TANF programs and gave HHS new  responsibilities for tracking state performance.  PRWORA also set federal  requirements that states must impose on many families receiving cash or  other ongoing assistance, including time limits and work requirements for  adults.  At the same time, the law restricts HHS’s authority to regulate  states’ programs and reduced the number of federal employees involved in  the program.
TANF and MOE spending is one component of federal, state, and local  spending on a range of programs aimed at serving low-income and needy  populations, which in this report we will refer to as welfare-related  spending.  In state fiscal year (SFY) 2004, among the nine states in our  study, TANF and MOE spending represented from 12 to 28 percent of all  federal, state, and local spending flowing through the state budgets for  welfare-related services outside of the health spending captured in our  survey.  (See app. II.)  Outside of TANF and MOE, welfare-related spending  provides a wide range of services and comes from a variety of federal,  state, and local sources.  Transportation subsidies, rental assistance, child  care subsidies, heating and energy assistance, and low-income tax  preferences, among others, can all serve low-income and needy  populations and are funded through multiple federal agencies, such as the  Department of Housing and Urban Development, HHS, and the Department  of Transportation, as well as by state and local governments.
In 2001, we examined welfare-related spending in 10 selected states before  and after the passage of welfare reform, from SFY 1995 to SFY 2000.  We  reported that after welfare reform, since both the amount of flexible  federal TANF funds and required MOE remain fixed regardless of the  number of people served with these funds, and since cash assistance  caseloads declined dramatically since the mid-1990s, states had additional  budgetary resources available for use toward a variety of welfare-related  purposes and spending. From SFY 1995 to SFY 2000, while total spending  levels for all welfare-related services generally increased, states began  using these additional budgetary resources to enhance spending for  noncash services, such as training, education, and a range of other welfare- related spending—an allowable practice under TANF.  As state TANF  programs and welfare-related spending evolved after welfare reform, the  nation’s welfare system now looks quite different than it did under AFDC.
Our previous findings focused on a period of sustained economic growth  and increasing tax collections in states.  From 1995 to 2000, state  government tax collections grew in inflation-adjusted terms, and  unemployment and poverty rates were generally falling, although there was  some variation among the nine states we studied.  Overall, these  circumstances suggest that states were generally faced with declining  spending demands from low-income populations and increasing fiscal  resources to meet those demands.  In 2001, however, the nation  experienced a recession from March through November, and a contrasting  set of economic and fiscal circumstances developed.  A period of rising  unemployment and declining state tax collections ensued.  In seven of the  nine states, poverty rates that fell from 1995 to 2000 increased from 2000 to  2004, as shown in figure 2.  These shifts suggest that, in general, states were  faced with an increased demand for services aimed at low-income  populations at a time when fewer fiscal resources were available to meet  these demands after the recession.
section_title: Spending on Low- Income Programs Increased over the Decade
paragraphs: According to data provided by the states, total welfare-related spending  rose over the decade in each of the nine states.  Health spending  accelerated as the decade progressed, increasing faster over the decade  than nonhealth spending, which varied somewhat by state and period.   Health and nonhealth spending from both federal and state sources  increased over the decade, a reflection of the strong fiscal partnership  between the federal government and states in supporting low-income  individuals.  However, while the federal share of health care spending  remained fairly consistent over the decade, the federal share of nonhealth  spending varied over time.
subsections: section_title: Total Spending for Welfare- Related Services Increased over the Decade
paragraphs: In the nine states, spending for low-income people for health and nonhealth  services increased over the decade since welfare reform.  These spending  levels, shown in figure 3 for each of the three points in time we examined,  include federal and state funds that flowed through state budgets for  programs targeting low-income and at-risk individuals.  The figure excludes  spending for the elderly, for those in institutions, and for long-term care.
section_title: Health Spending Grew Faster Than Nonhealth Spending
paragraphs: In general, health spending accelerated over the decade.  The median  growth rate increased from 11 percent in the first period (from 1995 to  2000) to 40 percent in the second period (2000 to 2004), as shown in table 1.   Colorado and Oregon were exceptions, with larger increases during the  strong economy of the late 1990s.  States often cited increases in eligible  populations and rising pharmaceutical and service delivery costs as the  primary reasons for the rapid spending growth in this area.
The health spending we examined in this report included state spending  from federal and state sources for any health care program for working age  adults and children, excluding long-term and institutional care.  While this  spending included such services as public health initiatives—outreach,  prevention, diagnosis, care, and children’s vaccines, most funds were spent  on the State Children’s Health Insurance Program (SCHIP) and the  Medicaid program.  Medicaid is a complex program that serves many  different low-income populations.  Nationwide, children and their families  constitute 75 percent of those served but only account for 30 percent of  expenditures, while those with disabilities represent 16 percent of  beneficiaries and 45 percent of expenditures.  Between 1995 and 1997, the  number of able-bodied adults and children on Medicaid fell, which may be  due in part to changes in the relationship between TANF and Medicaid  triggered by the 1996 welfare legislation.  At the same time, states were  starting to enroll low-income children in SCHIP, a new federal-state  partnership created by Congress in 1997.  It extends health insurance to  low-income children whose families earn too much to be eligible for  Medicaid but are unable to obtain insurance another way, either through an  employer or outright purchase of private insurance.  Nationwide,  enrollments in Medicaid and SCHIP generally increased from 2000 to 2004.   Even so, not all low-income individuals are eligible for Medicaid or SCHIP,  and some of those who are eligible are not enrolled for a variety of reasons,  including lack of information about the program or choosing not to enroll.
Because health spending grew faster than nonhealth spending since 1995, it  now consumes a greater share of welfare-related spending in the state  budgets we examined, as shown in table 2.  In eight of our nine states,  health care accounted for at least 45 percent of welfare-related spending  for low-income programs from federal and state sources by 2004.  This  mirrors a nationwide trend of rising health costs, raising concerns about  growing government expenses for health programs.
section_title: Spending for a Broad Range of Nonhealth Services Increased
paragraphs: Nonhealth spending also generally increased after 1995, although at a  slower rate and with more variation among the states and time periods, as  shown in table 3.  Nonhealth spending includes the following categories:  cash assistance, employment services and training, work and other  supports, and aid for the at-risk.  Spending in these combined categories  occurs through a wide variety of federal and state programs that can serve  low-income and needy populations.  While we found that spending  increased overall when looking at all these programs combined, some  differences emerged when compared with health spending.  Since 1995,  median nonhealth spending increased 17 percent, in contrast to the 61  percent median growth rate for health.
Because nonhealth spending includes so many different federal and state  programs and services, it is difficult to clearly identify factors that explain  spending changes overall.  However, our previous work and our  discussions with state officials show that the spending outcomes reflect a  multitude of factors, including changes in the numbers and needs of  eligible populations and in federal and state policy and fiscal situations.  We  provide more information on the factors affecting spending changes in this  area in the next section.
section_title: After Welfare Reform, State Spending for Low-Income Programs Generally Increased from Both Federal and State Sources
paragraphs: Federal and state governments are important fiscal partners when it comes  to providing many types of assistance to low-income and at-risk  individuals.  Our analysis of state expenditures showed that the spending  increases evident since 1995 were substantially supported by both federal  and state funds in the health and nonhealth areas in both time periods.   (For more details on federal and state spending, see app. III.)  The state  contribution is noteworthy particularly during the second time period  when states experienced declining revenues.  States generally are required  to balance their operating budgets, and may need to raise revenues or  reduce spending to do so.   At the same time, many of the key federal  programs for low-income individuals are structured in a way to help ensure  that states maintain their financial commitment to these programs in order  to receive continued federal support.
In the health area, federal and state funds spent on health services grew at  roughly the same rate over the decade, resulting in a fairly stable split in  federal and state shares of spending over time.  As shown in table 4, in  2004, the median federal share of health spending totaled 58 percent, which  would correspond to a state share of 42 percent.  The higher federal shares  in some states, such as Louisiana, may be explained in part by the greater  role the federal government plays in funding Medicaid costs in states with  lower per capita incomes.  At the same time, because the health spending  data include services other than Medicaid, the federal share will not  correspond directly to the share under Medicaid.
In the nonhealth spending area, we also found spending increases generally  supported by both federal and state funds, although the federal share  showed more variation over the two time periods for nonhealth than for  health spending.  As shown in table 5, the median federal share fell in 2000  (from 50 percent to 44 percent), possibly as states responded to higher  state revenues during the late 1990s.  In 2004, the median federal share rose  to 49 percent, possibly as a reflection of the tighter fiscal conditions states  faced in this time period.  In addition, the federal share of nonhealth  spending grew more consistent among the states over the decade.  The  federal share ranged from 33 to 73 percent in 1995, tightening to range from  43 to 61 percent by 2004.
It is important to highlight the distinction between the health and  nonhealth areas again when discussing the federal and state shares of  spending.  In contrast to the health area where much of federal and state  financial participation is guided by federal Medicaid statute and  regulations, nonhealth spending—comprising numerous federal and state  programs—is guided by an array of different laws and rules about federal  and state financial participation.  Specifically, supports for low-income  people vary in terms of whether they are funded with federal funds, state- local funds, or a combination.  While several key funding sources, such as  the TANF block grant, foster care, food stamp administrative costs, and  others require state matching and MOE provisions, others do not.  In these  cases, funding decisions are left entirely up to states.
section_title: Spending Priorities Shifted Away from Cash Assistance
paragraphs: The overall increases in spending for nonhealth services in the nine states  mask some substantial shifts over the decade in how states spent federal  and state funds for low-income people.  Two trends emerged.  First,  spending shifted away from cash assistance programs toward other types  of aid and services (excluding health).  Second, this expansion in noncash  spending was strongest from 1995 to 2000, and spending increased  further—but more slowly—from 2000 to 2004.  Spending for work and  other supports, particularly child care and development, was a key growth  area in several states, reflecting state efforts to support welfare reforms  that focused on employment.  Spending on the various nonhealth services  varied among the states, reflecting to some extent different state spending  priorities.  In general, states reported that increases in these areas were  driven by policy changes to welfare and other social programs, increased  program costs and demand, and increases in federal grants.
subsections: section_title: Spending Priorities for Low- Income Programs Changed Significantly from 1995 to 2004
paragraphs: By 2004, the nonhealth portion of state spending (from federal and state  sources) for low-income services looked substantially different than it did  in 1995.  In all of the nine states, the total portfolio of nonhealth services  shifted away from cash assistance toward other programs, as  demonstrated in figure 4.  For example, in New York, 33 percent of total  nonhealth spending was devoted to cash assistance in 1995, compared with  13 percent in 2004.  Other shifts among the noncash assistance categories  varied by state and period, reflecting differing spending priorities.  For  example, work and other supports increased from 39 percent to 58 percent  of the welfare-related budget in Wisconsin over the decade, while in  Louisiana, the same category declined from 37 percent to 31 percent.
Figure 4 also shows the relative size of the nonhealth categories.   Employment services and training remained the smallest category in most  of these states over the decade.  Although cash assistance began the  decade as a larger category in many states, by 2004 it was generally the  second smallest category.  Over the decade, work and other supports grew  to become the second largest category in most states, and aid for the at-risk  generally remained or became the largest category.  The aid to the at-risk  category includes spending for child welfare, juvenile justice, mental  health, and other related services.
section_title: Cash Assistance Spending Declined Significantly, Largely from 1995 to 2000
paragraphs: Cash assistance spending declined dramatically from 1995 to 2000 in all  case study states and varied from 2000 to 2004, as shown in table 6.   Although some states increased spending after 2000, all nine states  experienced at least a 50 percent decline in cash assistance spending over  the decade.  In all of the states, a dramatic decrease in cash assistance  caseloads led to the decline in spending in this area, particularly from 1995  to 2000.
In our previous work, we found that several factors have been cited to  explain the large reductions in cash assistance caseloads.  These include  changes in welfare programs; the strong economy of the late 1990s; and  other policy changes, such as expansions of the federal EIC and increased  federal spending for child care subsidies. One state attributed the more  recent caseload increases to the economy.  Many state officials also noted  changes in the characteristics of those who remained on the welfare rolls.   They told us that after the shift to a work-first approach, the caseloads  stabilized as the most employable recipients transitioned into the  workforce.  They said that the remaining cash assistance recipients tend to  have multiple barriers to employment and require a wider and costlier  range of services to enable them to be self-sufficient.
section_title: Other Nonhealth Spending Increased Rapidly until 2000, Then Growth Generally Slowed
paragraphs: In general, spending for other noncash categories combined (employment  services and training, work and other supports, and aid for the at-risk)  increased significantly after welfare reform, but slowed from 2000 to 2004  in most of these states, as shown in table 7.  While most states increased  spending after 2000, some states cited challenges in maintaining their initial  rate of growth as their fiscal situations tightened.  In contrast to cash  assistance spending, which declined sharply during the first period,  noncash expenditures rose dramatically in the first period and generally  continued to rise during the second period, but at a slower rate.
State spending patterns for training and education varied, although one  trend related to welfare reform was evident.  As shown in table 8, six states  expanded employment services and training spending after 1995, in part to  meet the increased employment focus of their TANF programs.  Then five  of these states cut this spending back as state revenues declined after 2000.
For example, as cash assistance caseloads declined in Wisconsin from 1995  to 2000, it more than doubled spending for employment services and  training.  However, as cash assistance caseloads increased after 2000,  spending for employment services and training was reduced 44 percent.   Even so, spending for employment services and training ended more than  30 percent higher at decade end than at its beginning.  In addition, in  California, a large amount of TANF funds were moved into the training and  education area from 1995 to 2000, but some of these funds were removed  after 2000.  In contrast, two states reduced their training and education  spending during the period immediately following welfare reform, but  expanded this spending after 2000.
Over the decade, state spending generally increased by a higher percentage  for work and other supports than for any other nonhealth category.  In  most case study states, this was the second largest nonhealth category in  2004.  In each period, most of these states increased spending in this area,  although the median increase was much smaller after 2000, as shown in  table 9.  These expansions are consistent with our previous work, which  found that many states expanded the availability of supports that promote  employment and economic independence for low-income families.
Louisiana was the only state to experience a substantial spending decline in  this category from 1995 to 2000.  Louisiana increased spending for two  areas in this category, including child care and development, as discussed  below.  However, these increases were more than offset by other spending  areas that decreased, including administrative costs for food stamps,  associated with declining food stamp caseloads in the state.  After 2000,  spending for work and other supports increased as Louisiana invested  TANF funds in additional programs, particularly prekindergarten.  In  contrast, Colorado increased spending on refundable tax credits for  working families during the robust economic growth of the 1995-2000  period, but decreased spending slightly from 2000 to 2004.
The child care and development area was the main driver of spending  changes in this category in many of these states, with high rates of growth  as shown in table 10.  In five states, more than half of all growth in the  category was due to increased spending for child care and development.   Several states reported that child care continued to be in demand, even as  TANF caseloads fell, because many working parents relied on subsidized  child care to help them keep their jobs.  While most spending in this area is  focused on child care subsidy programs, some states also increased  spending for prekindergarten and other child development programs.  As  part of the 1996 welfare reform, the federal government increased funding  to states through the Child Care and Development Fund (CCDF) to  subsidize child care assistance for low-income families who were working  or preparing for work through education and training, with a special  emphasis on families working their way off welfare.  In addition to CCDF,  funds allocated by the nine states for child care or development included  TANF, MOE, and other funds.  Table 10 shows that substantial investments  of these funds for child care and development accompanied welfare  reforms in the first period and continued, in almost all of these states at a  slower rate of increase, in the second period.
Other areas of expansion included some entitlement or federal grant  programs, such as tax credits, housing, or food assistance.  Four states  (Colorado, Maryland, New York, and Wisconsin) began or expanded state  EIC programs to complement the federal EIC program, which offers work  incentives in the form of a tax credit based on income.  Food assistance  spending increased in most states due to increased administrative costs  related to expanding food stamp benefit rolls, although the benefit costs  are not reflected here.  Two states told us they had engaged in publicity  campaigns to encourage eligible recipients to sign up for federally funded  programs such as food stamps or EIC.
subsections: section_title: Aid for the At-Risk Spending Increased Steadily and Remains the Largest Nonhealth Category
paragraphs: Spending on aid for the at-risk, generally the largest nonhealth category,  increased over the decade, although growth slowed considerably in most  states after 2000, as shown in table 11.  This category includes spending for  child welfare, mental health, developmental disabilities, juvenile justice,  substance abuse prevention and treatment, and related spending.  Among  these, the largest areas of spending were child welfare, mental health, and  developmental disabilities.  Officials in several states told us that there  were increases in the costs of providing services for these three areas, as  well as increased demand for child welfare and other services. However,  several states had growth rates under 10 percent after 2000, because of  decreases in spending areas such as juvenile justice, substance abuse, and  developmental disabilities.
Child welfare spending increased considerably in most of the nine states  over the decade, primarily from 1995 to 2000, as shown in table 12.  This  includes spending for key federal/state partnership programs such as foster  care, adoption assistance, and other child welfare services.  Nationwide,  child welfare systems investigate abuse and neglect, provide placements to  children outside their homes, and deliver services to help keep families  together.  TANF and MOE funds played an important role in four states,  which increased TANF-related spending until it accounted for 19 to 32  percent of child welfare spending by 2004.
section_title: TANF and MOE Funds Played an Expanding and Flexible Role across State Budgets, but Accountability Remains a Challenge
paragraphs: The combination of a substantial decline in traditional cash assistance  caseloads, new flexibilities under PRWORA, and states’ implementation of  their welfare reforms resulted in a changing role for TANF and MOE dollars  across state budgets.  The change from the previous welfare program— with its open-ended federal funding that matched state expenditures for  monthly cash assistance—to the federal TANF block grant—with fixed  federal funding and a specified level of state spending—gave states broader  discretion over the types of services and activities to fund toward welfare  reform goals.  This change also gave states broader discretion over the  amount of federal TANF and state MOE funds to spend in a given year,  subject to minimum levels required under the MOE provisions.  Under this  new fiscal framework, the landscape of spending for traditional welfare  funds changed substantially since welfare reform.  TANF and MOE dollars  played an increasing role in state budgets outside of traditional cash  assistance payments, for programs to encourage work, help former welfare  recipients keep their jobs, and provide services to needy families that did  not necessarily ever receive welfare payments.  However, with this shift,  gaps arose in the information gathered at the federal level to ensure state  accountability.  Existing oversight mechanisms focus on cash assistance,  which no longer accounts for the majority of TANF and MOE spending.  As  a result, there is little information on the numbers of people served by  TANF-funded programs, meaning there is no real measure of workload or  of how services supported by TANF and MOE funds meet the goals of  welfare reform.
subsections: section_title: Flexible TANF Funds Serve a Broad Population in Various Ways
paragraphs: Since welfare reform, states have increasingly spent TANF and MOE funds  for aid and services outside of traditional cash assistance payments.   Before welfare reform each of our study states spent some federal and  state AFDC-related funds in spending categories other than cash  assistance.  However, by 2004, most of the states had significantly  increased their use of TANF and MOE funds in these noncash categories  compared with the level of spending in 1995, as shown in figure 5.
The TANF block grant played a critical role in this shift in spending  priorities.  Under the block grant structure, states’ fixed annual TANF  allotments did not change as cash assistance caseloads fell.  In addition,  states still had to meet maintenance of effort requirements by spending at  least 75 percent of the amount they had spent in the past when caseloads  were much higher.  States faced choices about how to use these funds,  including whether to leave some amount of their annual grant in reserve at  the U.S. Treasury to help them meet any future increases in welfare costs.   TANF funds not spent by states accumulate as balances in the U.S.  Treasury.
subsections: section_title: New Welfare Environment Emerges after Federal and State Reforms
paragraphs: Our previous work showed that several trends emerged in this new welfare  environment.  First, many states increased their efforts to engage more  welfare families in work or work-related activities in keeping with key  TANF program requirements.  More specifically, to avoid financial  penalties, states were to meet specified work participation rates by  engaging parents receiving cash assistance in work-related activities.   States generally met these rates, in part because of adjustments made in  the target rates due to the drop in caseloads and other provisions that  allowed states to serve some families without work requirements.  In  strengthening their welfare-to-work programs, states emphasized the  importance of work to TANF recipients and paid more attention to case  management services, child care and transportation assistance, and other  services to help individuals, including those who faced some barriers to  employment, become job ready.
Second, many states took steps to help parents who had left the welfare  rolls for employment, often by continuing to provide child care assistance,  sometimes using TANF funds to supplement other federal funds used for  child care subsidies for low-income parents.  Our work has shown that  many former welfare recipients work in low-wage jobs with limited  benefits and that continued assistance, such as child care subsidies, can  help them maintain their jobs.
Third, states also used TANF and MOE funds to provide a range of services  to families that had not previously received cash welfare payments.  These  services can include onetime payments to families in need, such as for rent  payments that might help keep them off the welfare rolls.  Some states  increased efforts to promote healthy marriages and two-parent families.   All of these uses of TANF and MOE funds are generally considered in  keeping with the broad goals established in the legislation.  As specified by  law, the purpose of TANF is to  provide assistance to needy families so that children may be cared for in  their own homes or in the homes of relatives;  end the dependence of needy families on government benefits by  promoting job preparation, work, and marriage;   prevent and reduce the incidence of out-of-wedlock pregnancies; and  encourage the formation and maintenance of two-parent families.
section_title: Spending Priorities Shift as Policies and Programs Change
paragraphs: This shift to aid and services other than cash assistance is mirrored in our  analysis of states’ spending patterns for TANF and MOE funds.  Figure 6  shows the percentage of TANF and MOE funds (combined) that each state  spent in each spending category in 1995, 2000, and 2004.  (This figure only  includes TANF and MOE spending, in contrast to figure 4, which showed  the percentage of total federal and state low-income spending that each  state spent in each category.)  For example, figure 6 shows that California  spent more than 90 percent of its federal and state AFDC-related funds on  cash assistance in 1995 compared with 68 percent of its federal and state  TANF-related funds in 2004.  As the share of funds devoted to cash  assistance declined in that state, the portion devoted to employment  services and training, in particular, increased.  In seven of the nine states,  by 2004, cash assistance spending accounted for 40 percent or less of total  TANF and MOE.  States varied in how their TANF and MOE funds were  distributed among the noncash categories.
This shift to noncash assistance was curtailed somewhat from 2000 to 2004,  when cash assistance caseloads and related spending increased in several  of the states, associated with a contraction of spending for other forms of  aid and services, as shown in figure 6.  During this period, state officials  generally had to make different choices about what services and programs  they could support with TANF and MOE funds to ensure they had enough  funds to support the core cash assistance program.  Some state officials  told us that they drew down their TANF balances or reserves to help them  maintain service levels.  Regarding these TANF balances, most of the nine  states followed a pattern of initially building up their TANF balances and  then drawing them down in the 2000-2004 time period to help them  maintain services, as shown in figure 7.
Over the decade, we found that 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 EICs  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 and set of state needs.  The  flexibility afforded states under TANF allows them to use these funds  toward their state priorities.  Some examples include the following:    Oregon—home to a large refugee resettlement population—spent TANF  funds on cash benefits and other refugee services.  Oregon also spent  TANF and MOE funds on emergency assistance for survivors of  domestic abuse.
New York and Wisconsin use federal TANF or state MOE funds for  refundable tax credits.  New York has increased the extent to which it  counts state spending for the refundable portion of its EIC and  dependent care tax credit to help it meet its MOE requirement.   Wisconsin has used federal TANF funds to finance the refundable  portion of its state EIC that previously had been financed with state  funds, as we reported in our earlier report on these states’ use of funds.
Michigan uses TANF funds for emergency homeless shelters and  programs for runaways.  TANF funds are also used for individual  development accounts, which provide funds to eligible families to match  their own funds to encourage them to save for educational purposes.
According to state officials, Texas used MOE funds for prekindergarten  for low-income children with low English proficiency.  Texas also used  TANF funds for an employment retention and advancement program for  working people.
California counts state funds used for the California Food Assistance  Program toward its MOE requirement and uses TANF funds for juvenile  probation services and fraud prevention incentive grants to counties.
Maryland spent TANF funds through the state Department of Education  for the Children At Risk program.  According to the Governor’s Budget,  this program provides services for pregnant and parenting teenagers  and provides funds to reduce the number of students who drop out of  school each year, prevent youth suicides, reduce the incidence of child  alcohol and drug abuse, and reduce AIDS among students.
According to state officials, Louisiana, after initially building up a large  TANF balance, took steps from 2002 to 2004 to spend down these funds,  in some cases through short-term initiatives to be supported only until  funding ran out.  Some of these spending initiatives included  prekindergarten, which state officials noted is a priority of the governor;  funds to address teen pregnancy; and support for child welfare  advocates.
section_title: Much Remains Unknown about How States Use TANF Funds to Address Federal Welfare Reform Goals
paragraphs: While current mechanisms in place at the federal level to hold states  accountable for their use of federal TANF and state MOE funds provide  useful information, these reporting mechanisms still leave significant gaps  that hamper oversight.  The new federal welfare program goals and fiscal  structure established in 1996 entailed substantial changes in federal  oversight and reporting mechanisms.  At the federal level, HHS is  responsible for oversight of the TANF block grant, and states provide  several types of information for oversight purposes.  Key oversight and  reporting mechanisms are  expenditure reports on the amount and type of federal and state MOE   plans that each state must file with HHS to outline its TANF programs  and goals, among other things, for reducing out-of-wedlock pregnancies;   annual reports that each state must file with HHS to supplement its state   aggregate caseload and individual reporting on demographic and  economic circumstances and work activities of individuals receiving  TANF cash assistance;  single audit reports conducted as part of governmentwide audits of  federal aid to nonfederal entities;  performance bonuses related to measures of job entry, job retention,  and wage growth for TANF recipients and also for reducing out-of- wedlock births; and    financial penalties in 14 specified areas, including failure to meet the  state MOE requirement and the minimum work participation rates.
In addition, HHS funding supports a range of research activities that  provide additional information on TANF recipients and other low-income  populations.
These reporting mechanisms and information sources generally provide  useful information on states’ use of TANF and MOE funds, although key  information gaps remain.  One such gap exists because the key measure of  the number of people served through the block grant remains focused on  families receiving TANF assistance, defined in TANF regulations as  benefits designed to meet a family’s ongoing basic needs, which most  typically occurs through receipt of monthly cash assistance.  This  measure does not provide a complete picture of the number of people  receiving other forms of aid or services funded with TANF and MOE funds.   In 2002, we estimated that in the 25 states we studied, at least 46 percent  more families than are counted in the TANF caseload are provided aid or  services with TANF and MOE dollars.  In addition, we reported in June  2005 that the lack of information on the numbers of children and families  receiving child care subsidies funded by TANF and the types of care  received leads to an incomplete picture of the federal role in providing  child care subsidies to low-income parents.  We already said in that report  that Congress may wish to require HHS to find cost-effective ways to  address this specific gap to provide additional information of value to  policymakers and program managers in ensuring the efficiency,  effectiveness, and accountability of federal supports for child care.
Additional information on the full range of people served by TANF and  MOE funds is essential for a better understanding of the true workload of  the grant.  Caseload or workload information is important for oversight and  policy-making purposes, particularly those related to the amount of and  needs associated with the block grant.  For example, as the cash assistance  caseload declined by more than half nationwide, it raised questions as to  whether adjustments were needed to the block grant funding levels.  At the  same time, because the amount of the block grant has not been adjusted for  inflation since its creation in 1996, concerns have been raised about its  declining value and the possible impact on meeting needs.  Better  information could inform these discussions.
While having more information on the numbers served is important, it is  also critical to make a distinction between those receiving cash assistance  and other types of assistance, because different program requirements  apply to families in different situations.  More specifically, under TANF,  families receiving ongoing cash assistance are generally subject to work  requirements, time limits, and other requirements, in part to emphasize the  transitional nature of assistance and to help ensure that recipients take  steps to prepare for work.  Those receiving other forms of aid outside of a  state’s TANF program through a separate state program, such as working  parents receiving child care subsidies, are not subject to requirements such  as time limits on aid.
Another information gap relates to what services are funded and how those  services fit into a strategy or approach for meeting TANF goals.  This would  include information about intended target populations and the strategy or  approach for using the funds to further welfare reform goals.  For example,  additional information on the extent to which TANF and MOE funds were  used to support work requirements for cash assistance recipients is  important to understanding the costs of supporting a state’s core TANF  program. It is also important to have additional information to better  understand the costs involved in providing aid to those transitioning off of  welfare and to a more general population, such as for prekindergarten  services or to supplement a state’s refundable EIC program.  Such  information would be useful to congressional policymakers in considering  changes to TANF work requirements and implications for the provisions of  other services, a key issue in TANF reauthorization deliberations.
In creating the TANF block grant, Congress emphasized the importance of  state flexibility, and to that end, the legislation restricted HHS regulatory  authority over the states except to the extent expressly provided in the law.   Regarding collecting additional information about services beyond cash  assistance, while HHS has acknowledged the value of having additional  information, it has said that it will not collect this information without  legislative changes directing it to do so.
In any effort to get more information or to increase or revise program and  fiscal reporting requirements, important considerations should be taken  into account.  In our report on the current undercounting of those served  by TANF, some state officials raised concerns about the possibility of  additional TANF reporting requirements being imposed on states to collect  information on families not included in the TANF caseload. These concerns  included that (1) states lack the information systems needed to fulfill  additional requirements, (2) fulfilling additional requirements will increase  administrative costs, (3) additional data collection requirements could  deter states and service providers from offering services because they  would not want the administrative burden associated with them, and   (4) requiring all service recipients to provide personal identifying  information for every service may deter some people from accessing  services because of the stigma associated with welfare.  While many of  these concerns are legitimate, they do not necessarily outweigh the  importance of getting needed information for oversight and policy making  and can be considered in addressing any changes.  In addition, there may  be a variety of ways to get needed information, some more cost-effective  than others, including relying on existing data sources or special studies.   Moreover, opportunities may exist to streamline or eliminate some  reporting requirements to make way for more relevant ones, as determined  by Congress, HHS, and the states.  In the past, Congress has included in  legislation a requirement that HHS cooperate with states—key  stakeholders in welfare reform—in considering aspects of monitoring state  programs and performance.  HHS has worked with state and human  services professional organizations to discuss and receive input on  information requirements and performance standards in the past.
National-level data show that the trend away from cash assistance  spending has occurred nationwide.  States are using substantial portions of  their block grants and MOE funds as large, flexible funding streams to meet  their priorities in many areas of their budgets for low-income families, yet  much remains unknown at the national level about how these federal TANF  and state MOE funds are used to meet the overall goals of welfare reform.
section_title: Conclusion
paragraphs: Ten years after Congress passed sweeping welfare reforms, much has  changed in how federal and state dollars support programs for low-income  and at-risk individuals.  Some trends raise issues for the future.  Overall,  spending is up, but state budgets for low-income individuals are  increasingly dominated by health care spending.  To the extent that this  trend continues or becomes more pronounced, it warrants attention as to  its effect on state spending to meet other needs of low-income individuals.   Another key trend was the shift in nonhealth spending priorities away from  cash assistance to greater emphasis on supporting low-income individuals’  work efforts.  However, the greatest increases came right after welfare  reform during the strong economy, while some contraction in spending was  apparent in the latter period.  This raises questions about the sustainability  of this shift.
In addition, in the new welfare environment, too much remains unknown  about how TANF block grant funds are spent to meet welfare goals.  A  natural tension exists with block grants that is not easily addressed.  A key  challenge is to strike an appropriate balance between flexibility for states  and accountability for federal goals.  This is particularly important given  the large dollar amount of the TANF block grant—over $16 billion in  federal funds annually.  With the current accountability and reporting  structure for TANF, the information gaps hamper decision makers in  making informed choices about how best to spend federal funds to assist  vulnerable populations cost effectively.   At the same time, consideration  needs to be given to collecting needed information in a way that minimizes  reporting burden and acknowledges the importance of flexibility in  addressing state and local needs.
section_title: Matter for Congressional Consideration
paragraphs: To better inform its oversight and decision-making process, Congress  should consider ways to address two key information gaps for the TANF  block grant: (1) insufficient information on the numbers served by TANF  funds and (2) limited information on how funds are used—for example, on  which target populations and as part of what strategies and approaches— to meet TANF goals.
Efforts to obtain more information must take into account how to do so in  the most cost-effective and least burdensome way.  Some options include  Congress directing the Secretary of HHS to require states to include more  information in state TANF plans filed with HHS on their strategies and  approaches for using funds; require states to include more information on  all aspects of TANF spending in the annual reports they must file with HHS;  and revise other reporting requirements regarding the uses and recipients  of TANF-related funds.  Congress may wish to require the Secretary to  consult with key welfare reform stakeholders in assessing and revising  reporting requirements or information-gathering strategies.
section_title: Agency Comments
paragraphs: We provided a draft of this report to HHS for review.  In its written  comments, which appear in appendix VI, HHS agreed that additional  information on states’ use of TANF funds would be valuable and that  expanded data collection requirements should be done in a cost-effective  manner and in consultation with stakeholders.  HHS also provided  technical comments that we incorporated where appropriate.
As agreed with your office, unless you publicly announce its contents  earlier, we plan no further distribution of this report until 30 days after its  issue date.  At that time, we will send copies of this report to the Secretary  of Health and Human Services, appropriate congressional committees, and  other interested parties.  We will also make copies available to others upon  request.  In addition, the report is available at no charge on GAO’s Web site  at http://www.gao.gov.
If you or your staff have any questions about this report, please contact  David D. Bellis at (415) 904-2272 or Stanley J. Czerwinski at (202) 512-6520.   Contact points for our Offices of Congressional Relations and Public  Affairs may be found on the last page of this report.  GAO staff who made  major contributions to this report are listed in appendix VII.
section_title: Objectives, Scope, and Methodology
paragraphs: In order to provide information on welfare-related spending over the  decade since welfare reform, we designed our study to (1) examine  changes in the overall level of welfare-related spending for nonhealth and  health services in the periods before and after the recession in 2001 and  over the decade since 1995, (2) examine changes in spending priorities for  nonhealth welfare-related services during the same time periods, and   (3) review the contribution of Temporary Assistance to Needy Families  (TANF) funds to states’ spending for welfare-related services.  To address  these objectives, we used a survey instrument to collect state spending  data from state budget and program officials in nine states examined in our  prior reports; conducted site visits in these nine states; and reviewed  information available from prior GAO work, relevant federal agencies, and  other organizations.  The nine states in our study—California, Colorado,  Louisiana, Maryland, Michigan, New York, Oregon, Texas, and  Wisconsin—represent a diverse set of socioeconomic characteristics,  geographic regions, population sizes, and experiences with state welfare  initiatives.  For the purposes of this report, we focused on spending for  working-age adults and children and excluded spending for the elderly,  long-term care, and institutional care.  The term welfare-related refers to  spending for low-income and at-risk individuals, including TANF-eligible  and non-TANF eligible individuals.  Because our focus was on states’  budgetary decisions, we excluded federal program spending about which  states do not make key budget decisions, such as food stamp benefits, the  Earned Income Tax Credit, Supplemental Security Income, and other  programs; as a result, our data do not capture all federal spending for low- income individuals.
subsections: section_title: Welfare-Related Spending Survey
paragraphs: To obtain data on welfare-related spending over the decade since welfare  reform, we asked state budget and program officials from each state’s  central budget office and relevant state agencies to identify welfare-related  spending data using the same survey instrument and criteria used in our  prior report.  (See app. V.)  We worked closely with state officials to  complete the survey during our site visits and through numerous telephone  and e-mail contacts.  Because parts of the survey were completed by  different state officials, we also provided the states with the data we  compiled for their review as well as data summaries of our analysis.  We  collected budget data and program information for three points in time  based on state fiscal years:  for 1995 before the passage of federal welfare  reform legislation; for 2000; and for 2004, the most recent year for which  data were available.  Consistent with our prior methodology, we used the  survey to take a comprehensive look at state social service program  budgets by encouraging states to provide spending data on a broad array of  programs, rather than just those programs that received federal TANF  funding.  Our study includes federal, state, and local spending associated  with Medicaid, TANF, housing assistance, child care and welfare, and a  myriad of other programs aimed at needy populations and for which states  make key budgetary decisions.
State budget structures differ across states.  Some states in our analysis  used biennial budgets, others used annual budgets.  States can place  employment and training programs primarily in their social services  departments; other states can place these programs in their economic  development departments.  Some states place responsibility for welfare  programs with county governments.  These differences make comparisons  of state budgets and spending difficult.  In asking states to report spending  on individual programs, regardless of which state agency oversaw these  programs, and then aggregating the spending into the same categories for  each state, we were able to compare state spending trends across all of the  states.  As figure 8 shows, we classified spending data in several key ways,  including nonhealth spending—cash assistance (Category 1), employment  services and training (Category 2), work and other supports (Category 3),  and aid for the at-risk (Category 4)—and health spending (Category 5),  which we generally separated from nonhealth spending in our analysis.
Our first spending category includes state spending for ongoing cash  assistance payments with federal or state moneys under the Aid for  Families with Dependent Children (AFDC), TANF, or other state programs.   This category corresponds most closely with traditional monthly cash  assistance payments under the AFDC program.  Our second spending  category includes spending for job and training programs that seek to  prepare people for employment.  Our third spending category includes  programs that seek to support low-income people with other forms of aid  or services, including helping families move from welfare to work or avoid  welfare altogether.  For example, child care subsidies and rental assistance  payments can help parents remain employed even if they are working in  low-wage jobs.  Our fourth spending category recognizes the range of  programs that states can use to develop strategies to achieve TANF’s goals.   These spending areas include child welfare programs, substance abuse  programs, mental health programs, and programs that help the  developmentally disabled attain a level of self-sufficiency, and exclude  spending for any individuals in institutions.  While many of these state  spending areas may not have income standards to determine eligibility, a  state can claim TANF funds for expenditures in these areas if the state is  able to certify that participants in these programs meet the eligibility  requirements set forth in the state’s TANF plan.  Our fifth spending  category includes spending for health services aimed at low-income people  but excludes spending for the elderly, long-term care, and institutional care.   Analyzing health care spending helps recognize a state’s true and  substantial investment in spending to support these low-income and needy  populations.  In general, our spending categories were designed to cover all  areas of a state’s budget associated with the TANF-eligible population and  allowable expenses under TANF as well as for other low-income children  and individuals of working age.
We analyzed state spending of both federal and state funds on a wide array  of programs aimed at providing services to the needy and that flowed  through the state budget.  In this analysis, federal spending is not defined  by the level of a federal grant allocated to a state, but rather by how much  of the grant the state chooses—or in some cases is required—to spend on a  particular activity.  For this reason we did not consider a number of 100  percent federally funded programs that do not flow through the state  budget.  For example, the food stamp program is administrated by the state  and the shared administrative costs are included in the survey, but the  value of the food stamp coupons disbursed in the fiscal year, borne 100  percent by the federal government, is not.  Likewise, if a state budget action  prompted local spending in these areas, through incentives like a state- local match, then local spending was included in our analysis.
We converted state spending data to real 2004 dollars in order to make our  spending more comparable over time.
section_title: State Site Visits
paragraphs: To obtain program description and recipient eligibility information on the  spending data we collected, we also spoke with budget and program  officials in these nine states knowledgeable about state TANF programs,  Medicaid programs, and other state programs supporting the spending we  captured in our survey.  We also gathered information about the fiscal and  economic environment in each state since state fiscal year (SFY) 2000, the  last data year in our prior report, and a period that included a national  recession in 2001.  We worked closely with state officials to complete the  survey.  Once the state program and budget officials identified the program  spending to include in the survey, we verified through program  documentation and discussions with these state officials that the program  descriptions, targeted beneficiaries, and program goals met the survey  criteria.
section_title: Review of Related Reports and Data
paragraphs: To obtain information about policy and program developments for welfare  and other related program spending data collected in our survey, we  reviewed reports and information readily available from our prior work,  relevant federal agencies, state governments, and local advocacy groups.
section_title: Reliability of Data Obtained from States and HHS
paragraphs: We took several steps to determine the completeness and accuracy of data  obtained from states.  We reviewed related documentation and examined  the data for obvious omissions and errors and to have reasonable  assurance that the spending data were comparable over the three years in  our analysis.  We also collected information and audit reports on the  systems state officials used to provide state spending data.  We did not test  the data systems ourselves.  In some cases, state auditors found  weaknesses with relevant agency data systems or internal controls.   However, for the purposes of examining aggregate welfare-related  spending across state budgets, and identifying the purposes of spending  within these aggregates, we found the survey data we collected to be  sufficiently reliable for use in this report.
We determined the completeness and accuracy of data obtained from the  Department of Health and Human Services (HHS) based on interviews and  related documentation and determined that the data were sufficiently  reliable for use in this report.
section_title: Federal and State AFDC, TANF, and MOE Spending as a Share of Total Welfare-Related Nonhealth Spending
section_title: Survey Instrument
subsections: section_title: When completing the survey, please keep the following in mind:
paragraphs: 1. Provide expenditures for two state fiscal years (not the federal fiscal year): 1999-2000 and  2003-2004.  For most states these would be the fiscal years that ended June 30, 2000 and  June 30, 2004; for Texas they ended August 31, 2000 and August 31, 2004; for New York  March 31, 2000 and March 31, 2004.  Please note that there are four tabs at the bottom of  the spreadsheet that identify four separate worksheets to be filled out.  There are  instructions for the childcare and healthcare surveys on their spreadsheets.  Instructions  for the social services survey are attached.  Identify all state programs serving social service needs that are targeted towards reducing  dependence on public assistance.  Except where noted, include programs that serve both  TANF-eligible and non-TANF-eligible clients.  3. Distribute a copy of the survey to all agencies that oversee these programs. Please explain  to these agencies what MOE means and what funds should be shown in the MOE column.   You may wish to refer them to the spending guide at  http://www.acf.dhhs.gov/programs/ofa/funds2.htm. Include all federal, state and local expenditures that are incorporated in the state budget. For local expenditures, include local spending of locally raised revenue that is  incorporated in the state budget, such as a local match. Include expenditures or estimated  expenditures only (not amounts budgeted or authorized).  Include all expenditures for each program serving social service needs, including but not  limited to TANF and MOE expenditures.  Include all TANF spending; if some TANF  expenditures do not fit into one of the specific program categories, include them in one of  the lines labeled “other.”  If TANF funds are transferred to SSBG or the CCDF, please place  them in those columns (if possible, label them separately from other SSBG or CCDF funds  by inserting a row or a note). 6. Please be careful to count expenditures only once!  7. Do not include capital expenditures.   8. Do not include indirect administrative costs or management information systems (MIS)  expenditures, but do include direct administrative costs such as case management  expenditures in relevant program line items.  If it is impossible to break out these direct  costs by program, include them in the other lines under the most relevant sub-category.  If  necessary, estimate the percentage of direct costs that apply to the programs eligible for  our survey.  Include the costs of fringe benefits for state personnel.  (A rough estimate of  fringe benefit costs is all that is necessary.) Identify funding streams included in the columns labeled “Other” on a separate worksheet.  9. 10. For columns labeled “SSBG” (Social Services Block Grant): If state officials cannot isolate  spending on individual programs, obtain either (1) estimates for these amounts, or (2)  totals with an explanation of the general areas in which SSBG funds are spent.  For TANF  funds transferred from TANF to SSBG, document them as SSBG expenditures with a note  on the level attributable to the transfer. 11. Compile and provide copies of all supporting documentation for the data entered in the  survey, e.g. expenditure reports, annual financial statements.  12. When possible, identify the caseload and eligibility criteria for each program and provide  supporting documentation.
Suggested format for data submission:  For example, Line 2b, Work Preparation, could include expenditures from several programs  across two or more agencies.  Each of these agencies would complete the survey as well as  provide the supporting documentation.
The various agencies’ contributions could be compiled and summarized.
section_title: Line 1: Poverty Relief Include expenditures in this category on lines 1a-1g below.
paragraphs: Line 1b: child support payments.  Include all child support collections from non-custodial parents that are passed on to custodial  parents who are receiving cash assistance through TANF, in excess of $50 per monthly  payment.
Line 1c: emergency assistance.  Include all expenditures for emergency assistance, including prevention of eviction, utility cut- off, etc.   Document, to the extent possible, how emergency assistance funds are allocated.
Line 1d: food assistance.  Include expenditures on programs designed to provide food or nutritional assistance to low- income people.  Do not include any 100% federally funded program such as free or reduced- school breakfast or lunch programs.  Include, however, the state and federal expenditures on  administrative expenses for those programs and any state supplemental programs.
Line 1e: housing assistance.  Include expenditures on programs designed to provide housing assistance to low-income  people, such as vouchers, state low-income housing tax credits, or any other state support for  low-income housing efforts.
Line 1f: SSI supplements.  Include expenditures on state supplementation of the federal Supplemental Security Income  program.  Do not include federal expenditures.
Line 1g: other.  Include expenditures on any other programs related to poverty relief that are not included  above.  Describe such programs on an attached sheet.
Line 2: Work Preparation and Education  Include expenditures in this category on lines 2a-2c below.
Line 2a: education and training.  In this instance, limit spending to TANF-eligible people.
Line 2b: work preparation.  Include expenditures on programs to prepare low-income people who are not yet working  with skills to make them employable.  Examples include skills development programs,  community service placements, and Workforce Investment Act programs.  Do not include  expenditures on people who are in the paid workforce.
Line 2c: other.  Include expenditures on any other programs related to work preparation and support that are  not included above.  Describe such programs on an attached sheet.
Line 3: Employment Support  Include expenditures in this category on lines 3a-3f below.
Line 3a: post-employment services.  Include expenditures on programs designed to keep people employed after they have found  employment.  Examples include coaching to ensure that individuals arrive at work on time,  counseling to address problems that may arise in the workplace, and any other case  management services for this working population.  If known, include spending for on-the-job  training.
Line 3b and 3c: state EITC.  Include expenditures on state earned income tax credits paid to families.  Include state and  local tax credits that are designed to defray the costs of employment for low-income families.   On line 3c, do not include foregone state revenues as an expenditure.
Line 3f: other.  Include expenditures on any other programs related to employment support that are not  included above.  Describe such programs on an attached sheet.
Line 4: Poverty Prevention  Include expenditures in this category on lines 4a-4c below.
Line 4c: other.  Include expenditures on any other programs related to poverty prevention that are not  included above.   Describe such programs on an attached sheet.
Line 5: Child Protection/Juvenile Justice Include expenditures in this category on lines 5a-5c below.
Line 5b: juvenile justice programs.
Include expenditures on social services programs for youth who have violated the state  juvenile code.  Do not include institutional spending.
Line 5c: other.  Include expenditures on any other programs related to child protection/juvenile justice that  are not included above.  Describe such programs on an attached sheet.
Line 6: Other  Include expenditures in this category on lines 6a-6d below.
Line 6a: substance abuse prevention and treatment.  Include expenditures on programs aimed to prevent alcohol, drug and tobacco abuse and to  provide intervention services to individuals with alcohol, drug and/or tobacco dependency in  their families.  Examples of prevention programs are media campaigns, educational programs  and community-based planning programs.  Examples of expenditures on treatment include  counseling, short-term inpatient treatment facilities, and outpatient medical care.
Line 6b: developmental disabilities.  Include expenditures on programs that provide services to individuals with developmental  disabilities and their families, including outpatient care and public education, but excluding institutional facilities.
Line 6c: mental health services.  Include expenditures on programs that provide prevention and/or intervention services to the  mentally ill and their families, including community-based treatment facilities, outpatient care  and public education.  Exclude all expenditures provided at/through mental health  institutions.
Line 6d: other  Include expenditures on any other programs that are not included above.  Describe such  programs on an attached sheet.
TANF: Temporary Assistance for Needy Families SSBG: Social Services Block Grant, Title XX of the Social Security Act TANF-MOE: TANF Maintenance of Effort.  See your state TANF director or http://www.acf.dhhs.gov/programs/ofa/funds2.htm Instructions for Healthcare Coverage Spending Survey: Include expenditures on any healthcare program, in-home or out-of-home, aimed at low-income working or non-working people and their children,  excluding long-term care.  Include programs for both the TANF-eligible and non-TANF-eligible population, but exclude all programs for seniors.  Identify  each program in the spaces below and their funding streams.  Identify eligibility criteria for these programs, as well as caseloads  on an attached sheet.
For Medicaid-funded programs, identify target populations (e.g. "transitional assistance," "expansion population") where possible.  State expenditures  should capture local spending if it flows through the state budget (e.g. a local match).
Instructions for Child Care/Child Development: Include expenditures on any child care or child development program, either custodial or educational, in-home or out-of-home, aimed at low-income working or non-working people, including pre-K programs, after-school programs, vouchers for child care, state  expenditures on Head Start, and subsidies to child care centers, and child care tax credits (if available).  Include programs for both  TANF-eligible and non-TANF-eligible people.  Please identify each child care/child development program in the spaces below and  identify their funding streams.  Please identify eligibility criteria for these programs, as well as  caseloads (numbers of children, not  families, if possible), on an attached sheet.
section_title: Comments from the Department of Health and Human Services
section_title: GAO Contacts and Staff Acknowledgments
subsections: section_title: GAO Contacts
section_title: Acknowledgments
paragraphs: In addition to the contacts named above, Paul Posner, Gale Harris, Tom  James, Sandra Beattie, Rebecca Hargreaves, Cheri Harrington, Dorian  Herring, Brittni Milam, and Keith Slade made key contributions to this  report.  In addition, Gregory Dybalski and Jerry Fastrup provided key  analytical and technical support; Wesley Dunn provided legal support; and  Katherine Bittinger, Allen Chan, Reid Jones, Tahra Nichols, Rudy Payan,  John Rose, and Suzanne Sterling-Olivieri assisted with fieldwork in states.