Welfare Reform: Improving State Automated Systems Requires Coordinated Federal Effort
Released: 2000-04-27T00:00:00

Letter

Introduction

The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA) significantly changed federal policy for aiding low-income families with children. It ended the 61-year-old Aid to Families With Dependent Children (AFDC) program, under which eligible families were entitled to ongoing monthly cash assistance, and replaced it with the Temporary Assistance for Needy Families (TANF) block grant for states. The TANF block grant, administered by the Department of Health and Human Services (HHS), provides a total of up to $16.5 billion to the states each year through 2002. As specified in PRWORA, the goals of TANF include ending the dependence of needy parents on government benefits by promoting job preparation and work. Under TANF, states have increased flexibility to design their programs and are therefore able to build upon initiatives they had begun experimenting with before federal reform. However, among other provisions, the law also requires that, to avoid financial penalties, states impose work requirements for adults, meet steadily rising requirements for the percentage of adults who participate in work activities, and enforce a 5-year lifetime limit on receiving TANF. To ensure they meet these and other requirements, states must also meet new federal program and fiscal reporting requirements.

The new emphasis on work, job placement, and the temporary nature of aid requires a fundamental shift in how welfare offices do business and has implications beyond the TANF program and its workers. The goal of welfare workers and program managers is to help families become self- supporting. This new work-focused welfare affects other key programs that can help needy families in their transition to employment, most prominently the Food Stamp program, Medicaid, and the employment and training programs that are a part of each state’s workforce development system.Work-focused welfare also has an effect on the multitude of service providers—public, nonprofit, and private—that are involved in helping low-income families move toward economic independence.

Because of the new ways of doing business, the increased number of agencies and service providers involved, and the expanded federal reporting requirements, welfare reform has placed increased demands on state information systems that have traditionally been critical to the successful operation of states’ welfare programs. Under the AFDC program, information systems were primarily used to determine eligibility and to provide some data for oversight, typically aggregate data on caseloads and expenditures, to state and federal program managers.In the new welfare environment, however, information systems must support an expanded set of functions in three key areas: case management, including eligibility determination; service planning; and program oversight, with a new emphasis on outcomes and results. In addition, the increased devolution of responsibility for program operation and performance to states and localities increases the need for systems that can respond to the multiple needs of users at all levels of government. State and local information systems used in operating and overseeing welfare programs will be important to the effective implementation of the new welfare program.

Federal Funding and Oversight Have Played Key Roles in Developing States’ Automated Welfare Systems

Three of the federal government’s major programs for needy families— AFDC/TANF, Medicaid, and the Food Stamp program—have historically relied heavily on state-run automated computer systems to help determine applicants’ eligibility and the amount of assistance each participant should receive. Recognizing the importance of automated systems in efficiently and accurately determining eligibility, over the years the Congress has acted to encourage states to develop automated systems for these programs. Specifically, the Congress authorized HHS’ Administration for Children and Families (ACF), which oversaw the AFDC program, and HHS’ Health Care Financing Administration (HCFA), which oversees Medicaid, to reimburse states for a significant proportion of their total costs to develop and operate automated eligibility determination systems.In 1980 the Congress also authorized the Department of Agriculture’s (USDA) Food and Nutrition Service (FNS), which oversees the Food Stamp program, to reimburse states for 75 percent of their costs for planning, designing, developing, and installing automated eligibility systems and 50 percent of the costs to operate these systems.The goals of these automated eligibility systems were to minimize mistakes and the amount of time needed to determine eligibility, and to lower administrative costs.

To obtain federal funding for a portion of the cost of automated welfare systems development and implementation for AFDC, Medicaid, and food stamps, states have been required to follow the advanced planning document (APD) process. Under this process, states submit APDs to the specific oversight agencies detailing state plans to develop and implement automated systems. The federal agencies then make funding decisions on the basis of these APD submissions. If a system is to be used for more than one program, APDs that meet the separate requirements of each program must be submitted and approved, and development costs are allocated to the various programs. After approving funding to states, the federal agencies monitor development and operation of the state systems to ensure all federal requirements are met. To obtain enhanced funding for AFDC automated systems, states had to meet the requirements for a Family Assistance Management Information System (FAMIS), a general system design developed by HHS to improve state administration of the AFDC program. Because eligibility for Medicaid and food stamps was linked to eligibility for AFDC, most of the AFDC systems also covered Medicaid and food stamps. To the extent that Medicaid and food stamp eligibility systems were integrated with AFDC systems, ACF, HCFA, and FNS used a cost allocation method to determine the portion of the system costs to be borne by each agency. At the time PRWORA was enacted in August 1996, 38 states operated state systems that complied with FAMIS requirements.

The APD process remains in place for Medicaid and food stamps. However, under TANF, states are no longer required to submit APDs, and ACF is no longer required to play a role in establishing system requirements or in monitoring system development. States may use whatever portion of their capped federal TANF block grant funds they wish for developing and operating systems. However, no legislatively mandated ceilings exist to specifically limit federal funds for states’ development and operation of automated systems costs related to Medicaid and food stamps. According to data reported by states to HHS, states had expended a total of about $456 million, or about 2 percent, of federal TANF funds on systems from fiscal year 1997 through the second quarter of fiscal year 1999.

HHS also provides states with a proportion of the costs of automated systems for other federal welfare-related programs, including the child support enforcement program, child care subsidy program, child welfare services, and foster care/adoption assistance. We reported in 1994that 52 of the 54 states and territories were operating multiple systems—ranging from 2 to 12 systems each—to provide welfare program support for AFDC, Medicaid, food stamps, child support enforcement, child care, child welfare services, foster care/adoption assistance, and the now-repealed Job Opportunities and Basic Skills Training (JOBS) program.We also reported that HHS and USDA had contributed over $6.8 billion from 1984 to 1992, and over $1.8 billion prior to 1984, to help fund development and operation of these automated systems.The 1994 report also asserted that the federal government might pay the largest share of an estimated $10.7 billion in additional automated systems costs from fiscal year 1993 through the end of 1999. These cost figures do not include federal funding for other automated systems used by programs involved in helping welfare recipients move toward economic independence, such as systems related to state workforce development systems.

Recognizing the importance of information systems in implementing key aspects of welfare reform, the Congress in PRWORA directed HHS to prepare a report that addressed (1) the status of the automated systems operated by states to help program managers administer their TANF programs and (2) what would be required to establish a system capable of tracking participants in public programs over time and checking case records of the states to determine whether individuals were participating illegally in public programs in two or more states at a time. In collecting information intended for use in this report, HHS worked with several organizations representing states, information technology specialists, and welfare administrators to survey states on the likely effects on information systems of legislatively mandated changes to welfare programs. The 1997 report projected on the basis of state estimates that adapting current information systems to meet the demands of welfare reform would require spending about $1 billion.

Welfare Reform Legislation Established Numerous Requirements for Those Receiving TANF and for States

While PRWORA limited the federal government’s role in approving and overseeing states’ development of TANF automated information systems and provided states much greater flexibility than before to design and implement their own programs, it also emphasized states’ accountability for meeting program requirements and for program performance. This accountability focus is in keeping with the increased emphasis governmentwide on program performance fostered by the Government Performance and Results Act of 1993. Under TANF, to avoid financial penalties, states must ensure that a certain minimum percentage of their caseloads are participating in work or work-related activities each year. These percentages are referred to as “minimum mandated participation rates.” To count toward states’ mandated rates, adult recipients in families must participate a certain minimum number of hours in work or a work- related activity as prescribed in the law, such as job readiness workshops; on-the-job training; and, under certain circumstances, education. The required number of hours of participation and the percentage of a state’s caseload that must participate to meet mandated rates generally increase over time, as shown in table 1.

States must also track the length of time that individuals receive TANF to implement the new time limits. States must enforce the PRWORA prohibition on provision of TANF funds to families with adults who have received TANF for a total of 5 years over their lifetime. Families with no adult receiving assistance (commonly referred to as “child-only” cases) are not subject to this limit, and up to 20 percent of a state’s average monthly caseload may be exempt on the basis of hardship or having been subjected to domestic violence.Also, states may opt to continue to provide assistance beyond the 5-year limit using state funds.

In addition to holding states accountable for tracking and enforcing participation requirements and time limits, PRWORA authorized HHS to award federal dollars to states with exceptional performance in achieving the goals of TANF. PRWORA established the broad parameters of a high- performance bonus system and required that HHS work with organizations representing states and welfare administrators to determine the details of the system. For the first year that the bonus was to be awarded—fiscal year 1999—states were to compete in the areas of TANF recipients’ rates of job entry, earnings gains, and job retention as well as increases in these rates over time.

The new focus on work as well as the new high-performance bonus system resulted in an expanded set of reporting requirements and options for states, as shown in table 2. HHS issued final regulations on data collection and reporting requirements in April 1999 and published information on the first year of the high-performance bonus system in March 1998.

New and Evolving Welfare Environment Is Transforming States’ Automated Systems Needs

Our work and other studies show that states and localities have made progress in implementing key aspects of TANF. States are refocusing their programs on moving people into employment rather than signing them up for monthly cash assistance. To better support this new work focus, many states are changing how their welfare offices and workers do business; converting their offices into job placement centers; and helping clients address and solve problems that interfere with employment, such as lack of child care or transportation as well as more complex mental and physical health problems.

As welfare agencies focus on moving needy families toward economic independence, frontline workers are drawing on other federal and state programs, often administered by separate agencies, to provide a wide array of services. These programs range from those designed to meet families’ basic needs for food and shelter to those that provide employment and training services and support services, such as subsidies for child care. While local welfare agencies typically administer eligibility determination for TANF, food stamps, and Medicaid, other programs that provide key services to TANF clients may be administered by separate entities, such as housing authorities or education agencies. Most notably, because TANF has focused welfare agencies on employment, a focus that has long been the province of state and local workforce development systems, welfare agencies need to work more closely than before with workforce development systems, particularly to administer services funded by the new welfare-to-work grants created by the Congress in 1997 and administered by the Department of Labor.

In addition, some states now rely on state unemployment insurance (UI) systems to obtain data on the employment and earnings of former welfare recipients to help monitor both clients’ progress and the performance of various state programs. Figure 1 shows many of the programs and services that frontline workers may be responsible for arranging and monitoring to help clients move toward economic independence through employment.

The new environment in which state and local agencies provide services to low-income families has profound implications for the information needs of states and the automated systems designed to meet those needs. Typically, the programs to which welfare workers and managers turn to provide services have automated information systems that were designed to meet the particular needs of each program rather than the cross-program needs of the clients they serve. Yet, successful implementation of welfare reform calls for information from a range of programs in three key areas: case management, service planning, and program oversight. As shown in table 3, these key functions are performed at different levels of program administration.

While the information needs of the users differ, these needs also share some key characteristics that distinguish them from the information needs of the previous welfare environment. First, information is now needed that allows workers and managers to monitor people’s activities and progress over time toward employment and economic independence. Second, more than ever before, case and program managers must focus on ensuring the delivery of an integrated package of services for families seeking aid. While the importance of service integration—creating methods to unite or link the services provided by different programs and agencies to serve the same population—has been acknowledged as a critical need of human services programs, including welfare, for at least 2 decades,the need for providing integrated services has heightened with the new emphasis on moving welfare recipients into employment and placing a time limit on the receipt of aid. The goal of service integration has been reinforced by the Workforce Investment Act of 1998 (P.L. 105-220), which requires that all states and localities use one-stop career centers to deliver most employment and training services (except TANF-related services). These centers seek to bring together all workforce development programs—each with its own target population—in a single system that serves all individuals, regardless of their eligibility for any specific program. In developing one-stop systems, Labor has encouraged states to involve human services agencies in the planning and delivery of services.

Objectives, Scope, and Methodology

To better understand and assess the role of information systems in states’ welfare reforms, we collaborated with the Nelson A. Rockefeller Institute of Government to establish the GAO/Rockefeller Institute Working Seminar on Social Program Information Systems. The working seminar has about 30 members, including congressional staff, federal and state managers of information technology, and welfare researchers and has met six times over a period of almost 2 years. (See app. I for a list of members and summary of working seminar activities.) The working seminar has been meeting regularly to determine what changes are needed to facilitate states’ efforts to improve their automated systems to meet the information needs for welfare reform. To provide information for congressional oversight, we undertook a review of states’ efforts to meet the information needs for welfare reform, with a focus on the TANF program.

For this study, we (1) assessed the extent to which current automated systems in selected states meet key information needs of programs that help low-income individuals with children obtain employment and become economically independent, (2) identified the approaches states are using to develop or modify their automated systems to better meet these information needs, and (3) identified the major obstacles states have encountered in working to improve their automated systems and the potential role of the federal government in helping overcome these obstacles. With respect to the first objective, we focused on three broad types of information needs: those for case management, service planning, and program oversight. In collaboration with field researchers from the Nelson A. Rockefeller Institute’s State Capacity Project, we conducted case studies at the state and local levels in 6 states and collected supplemental information from a survey of these 6 and 9 additional states and some of their localities, so that some comparable information was available for a total of 15 states.

In-Depth Data Collection in Six States

In selecting the six states for our in-depth fieldwork, we sought to include states (1) in varying stages of revamping their automated systems, (2) with both state- and locally administered TANF programs, and (3) that were geographically diverse. We interviewed officials in state welfare and labor departments, including program and information technology managers. In addition, we interviewed officials at two local sites in each state. Officials interviewed at local sites included welfare and labor program managers, information technology managers, TANF case managers, and supervisors of TANF case managers. At state and local site visits, we observed demonstrations of automated systems and obtained relevant documents, such as systems printouts and manuals. (See table 4.)

The state and local interviews were administered using a semistructured interview guide that we developed through a review of relevant literature and discussions with members of the GAO/Rockefeller Institute Working Seminar on Social Program Information Systems. We conducted the interviews in five of the six states and were accompanied at some interviews by field researchers from the Rockefeller Institute’s State Capacity Project. The interviews in Georgia were conducted entirely by the Rockefeller Institute’s field researcher for Georgia, an associate professor of political science at Emory University.

Data Collection on Selected Topics in 15 States

On the basis of our fieldwork in the six states, we identified several key topics for follow-up work on a larger geographic scale. We developed a questionnaire to obtain information on four topics: (1) the extent to which automated systems for different programs share data; (2) the accessibility of data from different automated systems using the desktop computers of TANF case managers; (3) the overall extent to which information needs for case management, service planning, and monitoring program performance are met by current automated systems; and (4) the most helpful actions that the federal government could take to help resolve the major obstacles encountered by states and localities in developing or modifying automated systems. The questionnaires were administered by our evaluators and field researchers from the Rockefeller Institute’s State Capacity Project. (See table 5.)

We provided a draft of this report to HHS, USDA, Labor, and the six case study states. We conducted our work from April 1999 to March 2000 in accordance with generally accepted government auditing standards.

Current Automated Systems Do Not Always Fully Support State and Local Efforts to Help TANF Recipients Move to Employment

Current automated systems in the states we studied provide support for implementing and overseeing welfare reform in many critical areas. However, a number of these systems have shortcomings that limit their usefulness in helping to move TANF recipients toward employment and economic independence. One shortcoming is that these automated systems sometimes do not share information about TANF recipients that is needed by the different agencies that serve them. This constrains the ability of case managers to coordinate services and monitor recipients’ progress. A second shortcoming is that the systems’ limited capabilities to query and manipulate data sometimes prevent users from readily obtaining aggregate information on caseload characteristics. This shortcoming limits capabilities for service planning and was reported to be especially pervasive at the local level. With regard to program oversight, we identified some system limitations that negatively affected the ability of program managers to monitor TANF recipients’ employment progress and enforce the 5-year time limit on federal TANF assistance.

Insufficient Links Among Automated Systems Constrain Case Managers’ Ability to Coordinate Services and Monitor Recipients’ Progress

Automated systems do not always fully meet the information needs of TANF case managers—the frontline workers with primary responsibility for managing services for TANF clients and monitoring their progress toward employment. Figure 2 presents the assessments of officials from 15 localities of the overall extent to which current automated systems support case management. While 5 of the localities indicated that automated systems provide all or most of the information that TANF case managers need to support their clients’ movement to employment and economic independence, the other 10 localities said that automated systems provide about half or less of the information needed.

A major shortcoming of current automated systems, cited to varying degrees in the six states in which we did in-depth fieldwork, is that some of the systems used by the agencies providing services to TANF recipients do not share data on these recipients. This shortcoming constrains the ability of case managers to arrange needed services; ensure that these services are provided; and respond quickly when problems arise, such as when a recipient does not attend a scheduled work activity. For example, local officials in New Jersey told us that some TANF clients have received sanctions in error because data are not transferred electronically between the automated system used by staff at the labor department, who receive data on recipients’ attendance at work activities, and the system used by staff at the welfare department, who issue sanctions for failure to meet work requirements. Local officials in Ohio and New Jersey said that TANF case managers are unable to determine which of the children receiving TANF are also involved with the child welfare system, a situation that can hinder the ability of case managers to devise appropriate service strategies for such families.Appendix II provides more detailed information from our survey of 15 states on the extent to which the automated systems for different programs share data.

In the absence of links between automated systems, local officials in our study states generally said that paper forms or telephone contacts are used to refer recipients to, or obtain information on their use of, vocational education, secondary education, substance abuse services, and mental health services. The reliance on paper forms was cited as a major burden for case managers because of the substantial amount of time involved in collecting all the needed forms from service providers and keying data from these forms into automated systems. At many local sites, the problem was reported to be compounded by the need for double or even triple data entry for some items: case managers or other frontline workers must separately input the same data, such as a recipient’s entry into employment, into different automated systems because the data are not automatically transferred and updated from one system to the other. Local officials told us that multiple entry of the same data not only reduces the time available to work directly with TANF clients but also increases the risk of introducing errors into the data contained in automated systems.

An important dimension of automated support for case management is the extent to which TANF case managers are able to access data from the automated systems for different programs from their desktop computers. As shown in figure 3, case managers in the localities we surveyed generally have desktop access to data in the automated systems for food stamps, TANF work activities, child support enforcement, Medicaid eligibility determination, and transportation subsidies for TANF recipients. However, case managers in most localities do not have desktop access to data from automated systems for welfare-to-work grants, the Job Training Partnership Act (JTPA), job listings, child welfare programs, vocational rehabilitation, and subsidized housing. Over half the localities said that case managers have desktop access to data from automated systems for child care subsidies and UI. As a result, case managers do not always have ready access to information that could help them coordinate services for TANF recipients and monitor their use of these services. In such cases, the relevant information either is not available to case managers or it takes longer to obtain it (for example, from hard copy reports from a specific program).

Our work in the six case study states also uncovered some specific case management tasks that are not always well supported by automated systems, as shown in table 6.

As a result of separating cash assistance from Medicaid,local officials in five of the six states cited automated system glitches that sometimes occur in enrolling families in Medicaid or ensuring their continued enrollment. For example, local officials said that frontline workers on occasion have to intentionally enter inaccurate data to enable a Medicaid case to be opened correctly. Local officials also told us that automated systems sometimes close Medicaid cases that should not be closed or fail to correctly process cases for transitional Medicaid,which requires frontline workers to do “workarounds” to correct these problems. PRWORA authorized $500 million to aid states in maintaining Medicaid coverage for individuals affected by welfare reform, some of which may be used to pay the costs of modifying Medicaid eligibility systems. However, as of June 1999, states had submitted claims for only 10 percent of the available funds.

Difficulties in Querying Automated Systems to Obtain Needed Information Limit Capabilities for Service Planning

In addition to supporting the activities of TANF case managers, automated systems can provide aggregate information on the characteristics and service needs of TANF recipients to help program managers determine the appropriate services to provide for their TANF caseloads. However, as shown in figure 4, the 15 states we surveyed vary considerably in their assessments of the level of automated support available for service planning, and local officials tended to assess the level of support lower than state officials did. While state officials from 8 of the 15 states indicated that automated systems provide all or most of the information on the TANF caseload that state program managers need for service planning, officials from 6 of the 15 localities responded that systems provide all or most of the information needed by local program managers.

Some gaps in information on caseload characteristics occur because the desired data are not contained in automated systems. Other gaps arise because even though the data are contained in automated systems, these data are difficult or impossible to extract in a way that answers the particular question of concern to the program manager. For example, local officials at one site said that the locality does not have adequate access to data it enters into the state welfare system and that writing the computer program needed to extract data generally takes an entire day. Officials at a locality in another state said that data on the characteristics of TANF recipients contained in the state’s automated systems are often not available in a format that can be easily manipulated, so obtaining data depends on the technical expertise of the user.

As shown in table 7, automated systems in our case study states can provide information on some characteristics of TANF caseloads but not others. The ability to identify long-term welfare recipients can be useful because they may possess characteristics that make them harder to serve. When we asked whether officials could identify their current “hard-to- serve” TANF cases by identifying cases that include adults who either are long-term welfare recipients or have multiple barriers to employment, states and localities generally said that their automated systems provide this capability. For example, state officials in Georgia and Washington told us that their automated systems had been programmed to identify recipients who have received cash assistance for 30 months or more. In comparison with long-term welfare recipients, adults who have repeatedly cycled on and off welfare may differ somewhat in their service needs.Local officials generally said that they are unable to identify such cases in their caseloads. Responses from state officials varied: while some said that they cannot identify such cases, others said that they can do so with some difficulty.

Officials at some localities cited examples of other information gaps they had encountered with respect to characteristics of their TANF caseloads. For example, officials at one site explained that while the state’s automated welfare system contains data on whether individual TANF clients have received high school diplomas, it does not contain data on the highest grade completed.Officials explained that the lack of such information constrains their ability to purchase appropriate education and training services for the local TANF caseload.

Automated Systems Vary in Capabilities to Support Program Oversight

Another way in which automated systems can support welfare reform is by providing information for program oversight and, in particular, information for monitoring measures of program performance and meeting federal TANF reporting requirements. As shown in figure 5, the 15 states and localities we surveyed varied considerably in their assessments of the level of automated support available for monitoring performance measures related to helping TANF recipients find jobs and become economically independent. Local officials tended to assess the level of automated support lower than state officials did. State officials from 10 of the 15 states indicated that automated systems provide all or most of the information needed by state program managers, and officials from 6 of the 15 localities responded that systems provide all or most of the information needed by local program managers.

Capabilities to Monitor Recipients’ Employment Progress Are More Limited at the Local Than the State Level

With regard to monitoring measures of the employment progress of TANF clients, state officials in all six of our case study states said that their states have data on job entries, job retention, and wage progression and have used these data to apply for the TANF high-performance bonus. The states vary in the source(s) they use to obtain these state-level data: state UI data, TANF administrative data, or both.

In contrast, local officials in the six states reported having more limited capabilities to monitor the employment progress of TANF clients. Local officials generally can obtain data from automated systems on the number of TANF clients in a locality who have entered employment in some specified time period. However, local officials vary in their automated capabilities to obtain aggregate information on the job retention of these recipients and generally cannot obtain aggregate information on recipients’ wage progression. Local officials in one state cited the need to have more detailed information on the employment progress of TANF clients than is available from state UI records. For example, they noted that while UI records can provide information on the amount of a person’s total earnings for a quarter, these records cannot provide information on the person’s hourly wage and number of hours worked per week. These officials said that having access to such information could help localities better target the appropriate job retention and advancement services for current or former TANF clients.

Officials at several local sites also reported problems obtaining information on the TANF work participation rates for their caseloads. The problems cited by local officials in this area included not being able to obtain timely data on work participation rates for their area from the state, receiving state-calculated rates that do not match the locality’s own calculated figures, and not being able to interpret the state-provided reports on local participation rates. If local program managers and contracted service providers are held accountable for meeting specified target levels for work participation rates and other performance measures, it becomes critical that automated systems be able to provide data that are timely, accurate, and clearly presented so that program managers and service providers can make needed adjustments in their service strategies.

Automated Systems Provide Information on Diversion of Potential TANF Recipients

Diversion is a central component of many states’ welfare reform programs. The objective of diversion strategies is to meet the needs of potential TANF recipients in ways other than through monthly cash assistance, such as by having them engage in immediate job search to obtain employment quickly; providing one-time cash payments; or providing support services, such as child care and medical assistance. The ability to obtain aggregate information in this area can facilitate program oversight by highlighting the frequency with which potential recipients are diverted for various reasons.

State officials in the case study states generally said that they have automated capabilities to determine the number of families that have received one-time cash diversion payments. Officials in some of these states reported that their automated systems also provide information on other types of diversions. For example, Texas’ system tracks both the number of people who leave welfare offices without applying for TANF and the number who obtain employment through the state’s welfare-to-work program but do not receive cash assistance. While Wisconsin does not have a one-time cash payment diversion program, the state’s automated welfare system tracks the number of people diverted from TANF for a range of reasons and uses separate codes to track people who have been screened for TANF eligibility and those who have not.

Capabilities to Track Recipients’ Use of Other Programs After Leaving TANF Are Limited in Some Cases

Information on the use of social service programs by families after they exit TANF can help program managers determine whether families are receiving services such as Medicaid and food stamps, which can facilitate families’ efforts to retain employment and increase their wages. The recent declines in the size of the national Medicaid and food stamp caseloads have generated concerns that some families who leave TANF are not receiving the Medicaid and food stamps for which they are eligible and that this, in turn, may jeopardize their employment progress.Conversely, information on the use of social service programs by families after they exit TANF can also help program managers determine whether families are reducing their dependence on government-provided benefits over time.

State officials in the case study states generally said that they have automated capabilities to determine what percentage of families that have left TANF within some time period are receiving Medicaid or food stamps some specified number of months after leaving TANF. Capabilities vary at the local level: some officials said that their automated systems can perform this task, whereas others said that their systems lack this capability. In contrast, both state and local officials generally said that they do not have the capability to determine how many children are placed in foster care within some specified time period after their families leave TANF. This information gap limits the ability of program managers to monitor the extent to which TANF case closures are associated with subsequent financial hardship that leads to child abuse and neglect.

Information Gaps on Status of TANF Recipients’ Time Limits Affect Ability to Meet Federal TANF Reporting Requirements

At the time of our interviews, our case study states were in the process of modifying their automated systems to generate data for some of the required elements in the quarterly TANF Data Report. Data on recipients’ education levels, reasons for case closure, and noncustodial parents were among the elements cited by states as especially challenging to obtain. Some state officials commented that a major source of the problem in meeting the reporting requirements is that considerably more information on individuals is now needed than was collected under AFDC.

One of the required data elements in the quarterly TANF Data Report, the number of months countable toward a TANF adult’s federal 5-year time limit, is a primary source of data for enforcing PRWORA’s limit on federal TANF assistance for individuals. We identified some limitations of automated systems that affect the states’ ability to enforce the federal time limit. State officials in five of the six case study states said that their automated systems provide data on the number of months countable toward a TANF recipient’s time limit in the state.However, when we asked about the mechanisms states are using to obtain data on prior receipt of TANF in other states by their TANF recipients, we learned that our states generally either do not collect such data or rely on TANF clients to disclose this information. Data that rely on client self-reporting are not likely to be as reliable as those derived from a database of TANF recipients and could result in payments to ineligible individuals.

As discussed earlier, PRWORA directed HHS to prepare a report that would identify requirements for a system capable of tracking participants in public assistance programs over time and checking case records of the states to determine whether individuals are participating in the public assistance programs of more than one state. In its December 1997 report to the Congress, HHS noted that the tracking provisions present interstate issues and would require extensive coordination and interstate agreements. HHS identified five alternative system architectures for meeting the participant tracking requirements of the law. HHS analyzed these alternatives and concluded that while some clear distinctions existed in the functional capabilities of these system architectures, no system was clearly the best because of uncertainty regarding how some provisions of the law would be implemented.HHS included three options for congressional consideration in its report.

USDA has recently completed a study of the feasibility of a national system for tracking participation in public assistance programs. In August 1998, we issued a report in which we recommended the development of a national client database to reduce improper food stamp payments resulting from including individuals as members of recipient households in more than one state during the same period.In a federally mandated report issued in November 1999,USDA concluded that two of the five alternatives identified by HHS in its 1997 report would provide feasible models for a database of public assistance recipients that could be used for the Food Stamp program and to track TANF time limits. Nonetheless, the issue of how best to establish such a database remains unresolved.

State Automated Systems Projects Seek to Expand the Ability to Obtain and Analyze Data From Multiple Sources

The states we visited are planning or implementing a variety of automated systems projects to better provide the information needed by frontline workers and program managers in the new welfare environment. Because links among a range of program data systems are key to meeting these information needs, some projects focus on increasing frontline workers’ access on their desktop computers to data on individual recipients across programs. Other projects, geared more to improving the capabilities of program managers to obtain and analyze data from different programs, involve developing new databases and query tools. Modifying and developing automated systems that better support welfare reform is a long- term and evolving process.

States Seek to Improve Capabilities for Coordinated Service Delivery by Expanding Automated System Links

States are using various approaches to make data on individual recipients stored in multiple systems more readily available to frontline workers to help them coordinate service delivery. These approaches include developing links among separate systems, replacing existing systems with new integrated systems, and constructing electronic networks to link agencies and service providers. In some states we reviewed, such projects represent the first time that data previously stored in separate automated systems operated by different agencies, such as human services and employment services, are being shared by the agencies and their affiliated service providers. Table 8 provides an overview of the objectives, scope, and implementation status of the case study states’ projects.

These projects are intended to enhance the capabilities of frontline workers in such ways as the following.

Ohio’s Integrated Client Management System is expected to enable frontline workers in the state to use their desktop computers to obtain a holistic view of TANF recipients’ and their families’ use of social services, their service needs, and their strengths. The project is also expected to enable frontline workers to input data only once in a system and then have them automatically transferred to other appropriate systems, thereby helping reduce errors that arise from duplicate data entry.

Wisconsin’s Partnership for Full Employment Case Management System is intended to provide frontline workers with read-only access to data in various state systems to enable them to determine a TANF recipient’s involvement with different programs. For example, if a recipient has a record on the state’s database of new hires, the system should display the hiring date and the address of the employer.

Georgia is using its System for the Uniform Calculation and Consolidation of Economic Support Services to facilitate having a single frontline worker handle an applicant’s involvement with TANF, food stamps, and Medicaid, whereas in the past the applicant would have been referred to three different eligibility workers.

The New Jersey Departments of Health and Senior Services, Human Services, and Labor are providing leadership to counties that want to develop an on-line local electronic communication network. A frontline worker in one county piloting the One Ease-E Link network told a state official that she is now referring recipients to services “that she never even knew existed before,” such as assistance in paying for needed medicines.

States Are Developing Databases and Query Tools to Improve Managers’ Capabilities to Analyze Data Across Programs

In the wake of welfare reform, program managers have a greater need to obtain and analyze data from multiple programs to support their responsibilities for service planning and program oversight. To meet this need, states are developing data query tools and databases of current and historical data from multiple programs. States are working to expand their capabilities for analysis beyond the information contained in preprogrammed monthly reports by developing query tools that enable users to perform on-line queries and generate customized reports that meet their particular information needs. In addition, states are extracting and consolidating data from multiple systems in data warehouses, data marts, and other specialized databases to which more sophisticated query tools can be applied. Table 9 provides an overview of projects in the states we reviewed.

The following examples illustrate how states expect their projects to help managers.

Texas’ data warehouse is expected to help managers assess program results and the performance of service providers by providing the capability to answer various questions, such as how many participants in different training programs entered employment within 2 months and what their average wage levels were.

The Wisconsin Policy and Administrative Data project seeks to help track former TANF recipients’ progress toward economic independence by providing information such as their post-TANF earnings as compared with the earnings of other low-wage workers, their job entry and retention rates, and their use of other support programs.

The extent to which the large databases under development will effectively and efficiently meet information needs for welfare reform remains to be determined. According to a May 1998 report of the National Association of State Information Resource Executives, “Practically every state has developed, is designing or is planning to build a data warehouse to implement welfare reform.”However, establishing a data warehouse is a complex and potentially costly undertaking. Data must be reformatted to use standard definitions and conventions across programs and checked for missing or erroneous entries.Nonetheless, these automated systems projects hold promise for expanding the amount of information available to program managers.

Federal Action Could Help Overcome Obstacles States Face in Improving Automated Systems

States face a number of obstacles to improving their automated systems, such as the magnitude of changes due to welfare reform, the inherent difficulties involved in successfully managing information technology projects, competition with the private sector to recruit and retain information technology staff, and the complexity of obtaining federal approval and funding for systems projects that involve multiple agencies. The federal government could take actions to facilitate states’ automation efforts by providing more information to states on best practices for managing information technology, reviewing and modifying as needed the federal approval and funding process for automated systems, facilitating links among state automated systems, and addressing the need for information to track TANF time limits across state lines. Currently, no group or organization that brings together key federal agencies involved in welfare reform has been formally charged with developing solutions to the range of obstacles states face in improving their automated systems. To encourage such federal efforts, we recommend that HHS establish an interagency group that would meet such a challenge.

States Face a Range of Obstacles to Improving Their Automated Systems

Experience shows that developing new automated systems or modifying existing systems to meet current needs can be a complex and difficult undertaking. This is certainly true in the current environment, in which states face significant obstacles to effectively and efficiently managing complex information systems projects.

Changes Due to Welfare Reform Have Complicated Systems Development and Modification

The large-scale changes in the mission and operations of welfare agencies have complicated states’ efforts to define the functional and data requirements for automated systems projects.As the roles of frontline workers and program managers have expanded beyond eligibility determination to include a focus on employment, welfare agencies have taken and continue to take steps to change the way they do business. Washington state officials cited the large-scale changes in welfare reform as a major obstacle to systems development. One state official commented that planning systems modifications under these conditions is like “building the plane while you are flying”—trying to be responsive to customer needs before the customer’s needs are fully understood.

Many state and local agencies have established new collaborative efforts with other agencies and community organizations to provide services to TANF clients, which creates new needs for information sharing among these partners. The added complexity of working with many partners can exacerbate systems development efforts, as has occurred in Georgia and Washington. Georgia’s welfare reform program involves three primary partners at the state level: the labor, welfare, and adult education agencies. The ability of these agencies to develop automated systems to meet their overlapping information needs for welfare reform has been hampered by significant differences in agencies’ program priorities, systems architectures, and technological capabilities. For example, the labor agency has its own mainframe system, whereas the welfare agency uses a mainframe system maintained by the Department of Administrative Services and is therefore dependent on the cooperation of this department to make any needed systems changes.

Officials in Washington also reported obstacles in this area, noting that the complexity of automated systems projects typically increases substantially as more agencies are involved, and the project scope tends to expand to satisfy the needs of all the agencies. Some states have made organizational realignments that helped to ease such systems development issues. For example, the governor of Wisconsin merged the state labor and welfare agencies into a single department in 1998, and Wisconsin state officials told us that the merger had facilitated their systems development efforts.

Furthermore, some states have devolved substantial authority to their localities for designing TANF programs, which means that state automated systems will be called upon to support a potentially more diverse range of local program goals and operations. For example, Ohio cited the devolution of its TANF program as a major obstacle in designing its Integrated Client Management System. Ohio state officials told us that while the state’s focus in developing this system is to support local needs, it has been very challenging to actually do so because of the substantial diversity of operations among the state’s 88 counties.

In addition to the large-scale changes in the mission and operation of welfare agencies, the expanded federal reporting requirements have complicated for states the task of defining their own systems needs. Several states we visited or surveyed noted that the substantial investment in resources required to modify systems to meet the expanded federal requirements constrained their own efforts to use or improve their systems to better implement and oversee their welfare reform programs. In our earlier work on states’ automated systems for JOBS, the previous welfare- to-work program for AFDC recipients, we found that states focused system design solely on meeting federal data collection and reporting requirements rather than on other program objectives, such as providing information for the use of frontline workers in helping welfare recipients find employment.

In addition, welfare reform has created a need for states to have access to cross-state information on individuals’ TANF receipt to enable enforcement of the 5-year TANF limit. As previously discussed, the states we reviewed generally do not have access to such information.

Finally, a long-standing obstacle to developing automated systems that support service delivery to low-income families is the multitude of programs operated by several different federal agencies that provide services to this population. We reported in 1995 that the complexity of the system of aid for low-income families, including diverse and sometimes contradictory program requirements and separate funding provisions, has made it difficult for states to develop integrated, streamlined automated information systems, often leading states to develop essentially separate automated systems for each program.States continue to cite these conflicting program requirements as obstacles to developing systems that meet information needs that cross program and agency boundaries, which has become more critical than ever as a result of the broad objectives of welfare reform. For example, Texas officials said that the variety and complexity of eligibility requirements for different federal programs have presented a major challenge for the state’s plan to design an integrated system intended to improve the efficient completion of eligibility processes.In addition, Wisconsin officials commented that federal TANF and welfare-to-work grant reporting requirements use different definitions for some key terms, such as “closed case,” which complicates systems development.

Managing Complex Information Technology Projects Poses Difficulties

Successfully managing information technology projects is difficult, and many projects fail. Our fieldwork produced examples of difficulties states encountered in effectively managing information technology projects. New Jersey officials said that in planning for the development of systems to support their welfare reforms, they had to decide whether to maintain and modify existing systems or replace them using new technologies, which would require identifying the most appropriate technological alternatives. As a result of such challenges, it took about 4 years for the state to develop its plans for automated systems initiatives. State officials in Ohio decided to delay the rollout of its new system in order to shift from a client server technology, as originally planned, to an Internet-based technology, in large part to take advantage of the greater opportunities for information access provided by the latter.

The HHS study of state automated systems mandated by PRWORA found that the automated systems that were being used for TANF in 66 percent of the states in 1997 first became operational in the 1970s or 1980s.New types of systems hardware have been developed since the initial state welfare automated systems were developed using mainframe architectures in the 1970s. Client server architectures were developed to provide end users with greater capabilities to manipulate data in a system. Additionally, in the last several years, Internet-based architectures have been developed that allow frontline workers and managers to access data from several separate systems at one time. Through this new Internet capability, states can build systems that better promote integrated service delivery while still drawing on the capacities of existing systems. The need to update both hardware and software is especially pronounced in the welfare arena because many states are using older automated systems to manage their welfare programs.

Obtaining Staffing for Projects Has Presented Obstacles Related to Y2K Preparations and Competition With the Private Sector for Staff

Obtaining sufficient staff resources for automated systems projects is another area in which states have encountered obstacles. Two principal obstacles cited by states were the substantial staff resources diverted to address the Y2K issue and difficulties recruiting and retaining qualified information technology staff. The Y2K issue had a sharply defined deadline and the potential for major service disruptions, which helps account for the high priority states placed on modifying systems to address this issue. States told us that this priority constrained their abilities to obtain information technology staff to undertake new automated systems projects for welfare reform.

In addition, states have encountered long-standing problems in recruiting and retaining information technology staff. States reported that these problems are due to factors such as the relatively lower pay and benefits of information technology jobs in the public versus the private sector and fewer opportunities in the public sector to work with the newest hardware and software. Several states noted that the loss of some information technology staff to the private sector had significantly diminished their organizational expertise in the area of information technology. Child support enforcement officials in Texas told us that about 80 percent of information technology personnel, such as systems analysts and programmers, left state government jobs to join various firms that contract with the child support enforcement program and other program areas.According to state officials, the loss of these personnel has resulted in poor or reduced service to the public, because without timely upgrades to automated systems, program personnel cannot easily access case information, update files, or respond to customer inquiries.

Obtaining Federal Funding Approval for Systems Projects Presents Obstacles

States reported that the federal procedure that they must follow for systems procurement is a major obstacle in obtaining federal funding for their automated systems projects. As discussed earlier, to promote accountability for the use of federal funds, the federal government requires that states develop an APD to obtain federal funding for automated systems projects related to food stamps, Medicaid, or child support enforcement.While these acquisition procedures applied to AFDC, they do not apply to systems supported with TANF funds only. This reduced federal role in TANF-funded systems is in keeping with the general devolution of responsibility for TANF programs and operations to states. PRWORA stated that HHS may not regulate state-managed TANF programs except in those areas specifically authorized by PRWORA. PRWORA also specified reduced HHS staffing levels for the administration of TANF. Policy devolution and reduced staffing have altered HHS’ oversight roles and responsibilities, particularly in the area of automated systems.

States criticized the APD process as being too cumbersome with respect to designing systems that require approvals from multiple federal agencies. For example, Ohio state officials told us that they decided to develop their new case management system using TANF funds only—even though they would have preferred to use additional sources of federal funds—because of a desire to avoid the APD process for such reasons. New Jersey state officials commented that even though federal agencies encourage the development of integrated systems, the narrow programmatic focus of federal agencies in the APD cost allocation process makes this difficult. The American Public Human Services Association (APHSA) has echoed such concerns, maintaining that federal procurement procedures, including the APD approval process, are not structurally capable of quickly and effectively responding to the rapidly changing business and technological environments confronting welfare reform.

Previous collaborative efforts of federal and state officials have had some success in improving the APD process. In response to our 1992 recommendation that ACF, HCFA, and USDA collaborate when approving states’ system proposals, an Information Technology Partnership Project was established that year to address identified problems with the approval process.The project involved a series of meetings of representatives from HHS, USDA, the American Public Welfare Association,and the National Association of State Information Resource Executives. In 1994, the project developed a list of action items for improving the APD process. USDA officials told us that the collaborative efforts of USDA and HHS contributed to improvements in the APD approval process after the project ended. For example, they noted that regulations issued jointly by USDA and HHS in 1996 provided regulatory relief by raising the thresholds that trigger APD reviews. USDA officials also pointed out that all federal partner agencies agreed upon an expedited approval process for state systems approvals related to Y2K. While all of the short-term action items identified by the Information Technology Partnership Project have been implemented, several items that were designated for long-term action have not been implemented and remain open issues, according to HHS officials.

Federal Actions Could Help States Improve Automated Systems

The federal government’s primary role in the area of state development of automated systems for social programs has historically been that of a regulator, focusing on ensuring compliance with applicable federal statutes and regulations. While PRWORA reduced the role of HHS in overseeing systems funded solely with TANF funds, HHS still plays a key role, along with USDA and Labor, in funding and overseeing states’ information systems for social programs. Because of this key role, the federal government could further enhance the progress of welfare reform by also functioning as a facilitator of states’ automated system initiatives. On the basis of our visits to six states, surveys of an additional nine states, a review of numerous reports on these issues, and consultation with experts participating in the GAO/Rockefeller Institute Working Seminar on Social Program Information Systems, we identified four key areas in which federal actions could facilitate states’ efforts.

Disseminate information on best practices for managing information technology, particularly in the area of welfare reform. Without assuming greater responsibility for managing states’ information technology projects, the federal government could do more to provide information on and increase states’ access to expertise in that area.For example, the government could serve as a clearinghouse for information on best practices in public and private organizations and sponsor conferences that disseminate information on successfully managing information technology projects. In addition, it could identify and disseminate information on state best practices in developing or modifying automated systems to support the new welfare reforms.

Review, and modify as needed, the APD process to ensure that it meets federal needs for state accountability without unnecessarily hindering state development efforts. Although the APD is no longer required for systems developed solely with TANF funds, the process is still key to states’ efforts to integrate or connect TANF, food stamps, and Medicaid systems. The federal process for APD could be reviewed to ensure that it supports what is currently known about best practices in systems development. In addition, the key departments and agencies involved— USDA and HHS’ ACF and HCFA—could work more closely in the APD review and approval process, as is warranted by the need to approve plans for systems projects that involve multiple programs, and in keeping with our recommendation about this in our 1992 report.

Play a stronger role in facilitating links among the automated systems used by different state and local agencies through such means as the following.

Serve as a clearinghouse for information on strategies being used to develop connections among automated systems for different programs, particularly in new areas such as vocational education and criminal justice.

Support demonstrations designed specifically to promote better partnerships between state and local agencies, which lead to more effective and efficient performance of automated systems.

Coordinate existing and new data collection and reporting requirements developed by federal agencies for different programs to encourage common definitions and standards where feasible.

Identify conflicting eligibility requirements for federal programs that serve similar populations. Federal agencies could work together to identify and revise those eligibility requirements determined at the agency level rather than in legislation. In addition, agencies could present to the Congress proposals for changing selected conflicting eligibility requirements in order to better facilitate integrated service delivery while still meeting congressional objectives.

Address the need for states to have access to cross-state information on individuals’ TANF receipt so the states can enforce the federal 5-year TANF time limit. In its December 1997 report to the Congress, HHS presented some options for a national tracking system for congressional consideration and also noted that more information about how states implemented welfare reforms would be needed before considering the most appropriate options for tracking the time limit nationwide. A November 1999 report by USDA studied options for a national system to detect certain types of food stamp fraud and time limits that had been exceeded as well as to track recipients’ time on TANF. TANF recipients could begin to reach the 5-year time limit established by PRWORA as early as 2001. In addition to establishing this time limit, PRWORA required HHS to impose a financial penalty on states that provide federal TANF aid to families no longer eligible because of the time limit, and HHS will need accurate information to enforce this penalty.HHS could take the lead in addressing the need for a national system and work with the Congress to the extent that legislation and resources are needed to accomplish that goal. HHS could also work with USDA as that agency considers a national system to help it identify individuals who are illegally receiving food stamps.

Conclusions

The current environment provides a window of opportunity for more coordinated federal attention to automated systems for social programs. Because states have reported that their automated systems have successfully made the transition to the new century, many state and local staff resources will no longer be diverted to Y2K-related work. Increased attention to the ongoing and evolving process of improving states’ automated systems for social programs could ultimately help bring about more effective and efficient service delivery for low-income families. More specifically, improved systems would help ensure that the intended goals and requirements of TANF, such as promoting work and enforcing the 5- year time limit on aid, are met.

Many of the obstacles states face may be best addressed at the state level, such as the need for collaboration across state and local agencies. However, coordinated action at the federal level would help address several of the obstacles encountered by states as they take steps to improve their automated systems for social programs. Because the issues that need to be addressed involve several federal programs and agencies, any actions undertaken must involve key federal agencies. However, currently, no group or organization formally brings together the array of federal agencies involved in welfare reform to help devise solutions to the issues facing states in improving their welfare and welfare-related automated systems. HHS could play a pivotal role in orchestrating such a broad-based collaborative approach by bringing representatives of key federal agencies and other organizations together to work on these issues.

Recommendation to the Secretary of Health and Human Services

We recommend that the Secretary of HHS establish an interagency group to identify, and develop implementation plans for, federal actions that would facilitate states’ efforts to improve their automated systems for federal programs that serve low-income families. The group should include high- level federal officials from HHS, USDA, Labor, and other federal agencies as appropriate. The interagency group should obtain input from state and local social program and information technology managers; the group could also seek input from others, such as state organizations, professional organizations of social program officials, and welfare researchers. In addition to any actions that the interagency group identifies on its own, it should consider actions in the following areas.

Disseminating information on best practices for managing information technology generally and best practices specific to automated systems that support welfare reform.

Reviewing, and modifying as needed, the federal process for systems procurement to ensure that it meets federal needs for state accountability without unnecessarily hindering state development efforts.

Facilitating links among the automated systems used by different state and local agencies through such means as supporting demonstrations designed to promote better partnerships between state and local agencies and coordinating data reporting requirements for different federal programs.

Addressing the need for states to have access to cross-state information on individuals’ TANF receipt to enforce the 5-year TANF time limit.

Agency Comments and Our Response

We obtained comments on a draft of this report from HHS, USDA, and Labor. USDA and Labor agreed with our recommendation. HHS said that it would, along with other involved federal agencies, undertake a review of, and modify as needed, the federal process for systems procurement. HHS said that the objective of the review would be to ensure that federal needs for state accountability are met without unnecessarily hindering state development efforts. HHS did not specifically say that it would take responsibility for establishing an interagency group to accomplish this review, as we recommended. We continue to believe that HHS, as the agency responsible for many of the programs, should take the initiative in establishing an interagency group. In agreeing with the report recommendation, Labor suggested that it might make sense to place the recommended interagency group under the direction of the Domestic Policy Council because of the cross-cutting nature of providing services to low-income families. This is another way that our recommendation could be implemented.

In its comments, HHS emphasized the initiatives it has taken or has under way to help states achieve effective information systems that support the transition of families from welfare to work. HHS also emphasized the information systems procurement process when discussing what it would review with other agencies. We believe that the interagency group should, as outlined in the recommendation, address multiple issues, not just the computer systems procurement process.

USDA commented that the report did not sufficiently recognize accomplishments since 1992 with respect to federal streamlining of the APD approval process. We added information on these accomplishments to the report. USDA also commented that effective implementation of the report’s recommendation would require additional funding and staff resources and that USDA’s Food and Nutrition Service has not been successful in its efforts to obtain additional resources, including federal employees and contractor support, to bolster the existing APD process. If USDA believes that additional resources would be needed to implement components of our recommendation, it should request and justify additional resources in its budget proposal.

Comments from HHS, USDA, and Labor appear in appendixes III, IV, and V, respectively. We also obtained technical comments from USDA and the six case study states and incorporated them in the report as appropriate.