Created by the Social Security Act of 1935, the AFDC program provides cash assistance to families with needy children who have been deprived of parental support if a parent is continuously absent from the home, incapacitated, dead, or unemployed. The program is jointly funded by the federal government and the states, with federal funds providing from 50 to about 80 percent of the AFDC benefit costs (55 percent on average) and 50 percent of administrative costs. States administer or supervise the program and set their own benefit levels. In fiscal year 1993, federal and state spending for AFDC totaled $25.2 billion. Since 1968, various federal programs have aimed to help adult AFDC recipients become employed. However, early welfare-to-work programs were faulted for low participation rates, insufficient attention to less employable recipients, and inadequate results in reducing welfare dependency. In 1988, seeking to rectify these program deficiencies, the Congress passed FSA, creating the JOBS program. FSA was to be the first step in transforming the welfare system from one of permanent entitlement to a program of transitional assistance. Specifically, FSA directed the states to make available to JOBS participants a broad range of services and activities including high school or equivalent education, basic and remedial education, education for those with limited English proficiency, job skills training, job readiness activities, and job development and placement. Further, states were required to offer at least two of the following: group and individual job search, on-the-job training, work supplementation, or community work experience. States could also offer postsecondary education. Finally, FSA provided federal reimbursement for child care, transportation, and other work-related expenses and supportive services when necessary (as determined by the state) for participation in JOBS.(See the glossary for further details on JOBS education and training components.) FSA allowed states much flexibility in the design and implementation of their JOBS programs. Programs may emphasize quick movement into the labor force for those who are job-ready, while others may emphasize education and training to increase participants’ employability. However, whatever their emphasis, JOBS programs are required to offer a full range of services. Under JOBS, once a participant is enrolled, the program must assess individual educational, child care, and other supportive services needs, taking into account skills, prior work experience, employability, and family circumstances. Based on this initial assessment, the program develops an employability plan, which specifies the services to be provided and sets an employment goal for each participant, considering individual preferences, supportive services needs, available program resources, and local employment opportunities. To help clients meet their employment goals, FSA encourages programs to draw on existing community services to meet participants’ needs, especially to the extent that they can be obtained at no cost to JOBS. By emphasizing existing services available at no cost, programs can avoid duplication and ensure judicious use of program funds. When JOBS programs find that such services are not available and must be purchased, they may enter into arrangements and contracts with other service providers to obtain them. Commonly used providers of education and training services include Job Training Partnership Act (JTPA) programs, state and local educational agencies, other public agencies, and private organizations (including community-based organizations). FSA mandates participation in JOBS for AFDC recipients between 16 and 59 years old, but provides exemptions for certain individuals. FSA exempts individuals who: care for children under 3 years old (or 1 year old, at state option); work 30 or more hours per week; attend elementary, secondary, or vocational school full-time; are ill or incapacitated; care for a household member who is ill or incapacitated; are in at least the second trimester of pregnancy; or live in an area that is remote from a JOBS program or activity. However, exempt individuals may voluntarily participate in JOBS. In addition, states must spend at least 55 percent of their JOBS funds on specific target groups, including custodial parents under 24 years old with low levels of education or work experience, long-term adult AFDC recipients, and those whose AFDC eligibility is about to expire due to the age of their youngest dependent child. FSA provided $1 billion in federal funds for JOBS in fiscal years 1991, 1992, and 1993, reaching $1.1 billion in fiscal year 1994, and $1.3 billion for fiscal year 1995. These funds are allocated among the states and tribal organizations according to their percentage of the national AFDC population. To utilize the full amount of the allocation available to them, states must meet certain matching requirements. In recent years, most states have not provided sufficient matching funds to take full advantage of the federal resources available to them. In 1992, overall, states used 68 percent of the federal funding available to them. FSA envisioned gradual expansion of JOBS and mandated steadily increasing participation rates for the program. States must meet these participation rates or accept a reduced federal share of JOBS expenditures. This participation rate threshold was 7 percent of the nonexempt caseload in fiscal year 1991, 11 percent in 1992 and 1993, 15 percent in 1994, and 20 percent in 1995. However, many critics remain dissatisfied with this gradual expansion and believe that these requirements do not ensure that JOBS will reach a large share of AFDC households and, thereby, transform the welfare culture. The JOBS program serves a small percentage of the total AFDC caseload because program rules exempt most adult AFDC recipients from participation and because FSA established minimum participation rate requirements. In addition, the characteristics of the large population of adult nonparticipants differ from those of participants in certain key ways. JOBS reaches a relatively small percentage of all AFDC households, despite success in meeting the participation rates called for by FSA. As shown in figure 1, in 1992, most adult AFDC recipients (about 59 percent) were exempt from mandatory JOBS participation. Of those 16 years old and older who were exempt from JOBS, 75 percent were exempt because they were providing care for a child under 3 years old. Adult AFDC recipients are also exempt if, for example, the JOBS program is not offered in the recipient’s local area or if the recipient is in at least the second trimester of pregnancy, incapacitated, or caring for another household member who is ill or incapacitated. Furthermore, even for those who are not exempt under program rules, JOBS participation rate requirements do not ensure that large numbers of adult AFDC recipients participate. In 1992, about 13 percent of all single female heads of households on AFDC, about one-fourth of the nonexempt adult recipients, were participating each month. By contrast, however, about three-fourths of nonexempt adult recipients were not participating. Even if the participation rate requirements were raised dramatically for nonexempt adults, well over one-half of the AFDC caseload would still be exempt from program participation. Some experts believe that welfare-to-work programs will not be effective in transforming the culture of welfare unless they reach a much larger percentage of AFDC households. Participants in JOBS differ from nonparticipants in certain key ways that appear related to aspects of program requirements. The most noteworthy differences include the age of the youngest child and the age of the recipient. Nonparticipants were about twice as likely to have children under 3 years old than were JOBS participants. They were also more likely to be 24 years old or younger. This difference is consistent with JOBS’ exemption of parents or other caretakers of a child under 3 years old. Additionally, a comparison of JOBS participants with the overall AFDC caseload showed that a larger percentage of JOBS participants have fewer than 9 years of education and a smaller percentage have attended college. The difference in education levels may also be explained by the JOBS requirement that targets young parents who have not completed high school. Apart from differences resulting from program requirements, our analysis of program data did not reveal any other significant differences between JOBS participants and nonparticipants. In characteristics such as race, number of children, and prior AFDC history, the two populations appear similar. Beyond the differences that are readily observable, however, nonparticipants may differ from participants in ways that are difficult to quantify. According to JOBS administrators who participated in our discussion groups, current nonparticipants may be less motivated and have impediments that make them harder to serve without extra support and services. For example, some may need treatment for more severe drug and alcohol problems before they can fully participate in an education or training program. Others may have mental health problems or learning disabilities that also need to be addressed. As envisioned under FSA, JOBS programs offer a range of services and tap into available community resources to serve their participants. Our survey data results show that JOBS programs offer most of the education and training components and supportive services described in the act and that JOBS participants are enrolled in a range of activities. For each specific education or training component that participants needed, however, the percentage of programs that had difficulties providing that service ranged from 30 to 70 percent. In these cases, the programs lacked the capacity to ensure that all the participants received education and training services when they needed them. JOBS administrators selected multiple reasons for the programs’ inability to serve all participants. JOBS programs offer a range of components and services drawn for the most part from existing programs in their communities. About one-half of JOBS programs offer all the education and training components described in FSA or all but the work supplementation component. As shown in figure 2, nearly all offer high school/General Educational Development certificate (GED) education; adult basic education; job skills training; job readiness training; postsecondary education; job search; community work experience; and supportive services, including child care. About 30 percent of the programs did not offer English as a Second Language and about one-fourth did not offer on-the-job training. In addition, about 78 percent did not offer work supplementation. JOBS programs access a range of community providers to obtain education, training, and supportive services for participants, as FSA envisioned. More than 8 out of 10 JOBS programs use community colleges, JTPA programs, and adult basic education programs to provide services to their participants. About 7 out of 10 use state employment services, local high schools, and community-based organizations, and about one-half use other organizations or programs. While programs draw on services that are free to JOBS, they also purchase at least some of the education and training services that their participants need (see fig. 3). About 78 percent of programs purchased at least some services from one or more providers. As shown in figure 3, the most frequently reimbursed providers are community colleges (55 percent) and adult basic education programs (61 percent). On average, programs purchased services from about 38 percent of the providers they used. JOBS participants are enrolled in a variety of JOBS components and many receive supportive services. As shown in figure 4, nationally, we estimate that 17 percent of JOBS participants are enrolled in postsecondary education and 16 percent are involved in high school or GED preparation. Between 7 and 13 percent are involved in other activities, such as job skills training, job search, job readiness training, and community work experience. The smallest percentages (about 2 percent or less) are involved in English as a Second Language, work supplementation, and on-the-job training. About one-half of JOBS participants receive transportation assistance and about one-third receive child care assistance through JOBS. Smaller percentages also receive assistance with other work-related expenses or supportive services, such as mental health counseling or drug or alcohol abuse treatment. In about one-half of all JOBS programs, all or almost all the participants who needed education and training services were receiving them. However, as illustrated in figure 5, from about one-third to over two-thirds of JOBS programs had some participants needing a specific education or training service who were not receiving it. Such capacity problems were most common in the work supplementation and on-the-job training components (71 percent) and lowest in English as a Second Language (29 percent). Among supportive services, capacity problems were most common in providing other supportive services (43 percent) and least common in child care (12 percent), which is a guaranteed supportive service to JOBS participants. About two-thirds or more of program administrators selected transportation problems as a reason why JOBS programs could not provide participants with the specific education or training component they needed, even though transportation was the supportive service most participants received (selected reasons appear in table 1). Among other reasons selected by a substantial portion of administrators was a need for additional program staff (for example, for counseling, monitoring participants, developing job contacts with employers for work-related components, and conducting case management), and a lack of available services in the community. Additionally, for the work-related components—on-the-job training, work supplementation, and community work experience—the lack of employer interest was a commonly selected reason (see table 2). In addition, some program administrators also volunteered other reasons why participants did not receive the services they needed, such as client choice (when participants drop out, choose not to participate, or fail to cooperate with the program). By contrast, when asked whether lack of child care funding was a reason why participants were not receiving a specific education or training component they needed, the percentage of program administrators who selected this reason ranged from about 10 to 30 percent. That a relatively low percentage of program administrators chose this reason can be partially explained by the fact that JOBS participants may have less need for child care than nonparticipants because they tend to have older children who may be in school and do not need child care. Also, as shown in figure 5, only about 12 percent of JOBS programs had difficulties in providing child care to participants who needed it. FSA requires states to offer JOBS participants a full range of education and training services, including at least two of four work-related activities. It also gives the states the flexibility to design their own programs to emphasize either quick movement into the labor force or work preparation activities to increase participants’ employability. Results from a survey of state JOBS administrators, included in a GAO report on JOBS outcomes, suggest that many states chose to emphasize work preparation over quick movement into the labor force. The Personal Responsibility Act of 1995 (H.R. 4), recently passed by the House, repeals the requirement for states to offer a range of services and instead requires states to place an increasing percentage of participants in a work-related activity. H.R. 4 would also prohibit states from providing benefits for more than 60 months (whether or not consecutive). If adopted, the proposal’s cap on funding, its elimination of the requirement to offer a range of services, and its increased focus on work activities are likely to change the mix of services offered to participants. However, the implications of time limits and other welfare reform measures are likely to remain unclear until a final bill is passed. We provided a draft of this report to HHS’ Assistant Secretary, Administration for Children and Families (ACF), and met with responsible ACF officials to obtain their oral comments. They generally agreed with the content of the report. They also provided technical comments that we have addressed in the text of the report as appropriate. We conducted our work between April 1994 and February 1995 in accordance with generally accepted government auditing standards. We are sending copies of this report to the Chairman, Senate Committee on Finance; the Secretary of Health and Human Services; and other interested parties. Copies also will be available to others on request. If you have any questions concerning this report or need additional information, please call me on (202) 512-7215. Other contacts and contributors to this report are listed in appendix II. To assist the 104th Congress in its deliberations on welfare reform, you asked us to examine (1) who is and is not being served under the JOBS program, (2) the range of services JOBS participants are receiving and the extent to which participants’ needs are being met, and (3) the implications of serving participants in a system of time-limited benefits. To find out who is and is not being served under JOBS, we analyzed HHS’ 1992 national data on JOBS participants, its National Integrated Quality Control System data for 1992, and the Bureau of the Census’ 1992 Current Population Survey. We used the AFDC quality control data to compare the characteristics of JOBS participants with those of nonparticipants for all characteristics except education. In the quality control file, education data are missing for a large number of cases. We based our analysis on 1992 data because they were the most current available when we did our analysis. We limited our analysis to single female heads of households between 13 and 60 years old who receive AFDC. In 1992, these cases accounted for about 76 percent of all AFDC cases. To determine the availability of services offered by JOBS programs and their capacity to provide participants the services they need, we conducted a nationally representative computer-assisted telephone survey of over 400 local JOBS program officials between June and August 1994. We also solicited information on how local programs serve AFDC single-parent recipients. Because most JOBS services are delivered and received at the county level, we selected a random sample of counties for our survey. We derived a nationwide listing of counties from 1990 Census data and selected an overall sample of about 450 counties. Before selecting this sample, we stratified the counties into the following four groups: 1. Large Urban: Counties comprising the 10 cities with the largest populations of children in welfare households.2. Metropolitan With Central City: Counties containing the central city for a metropolitan statistical area. 3. Metropolitan—No Central City: Counties in metropolitan statistical areas that do not contain a central city. 4. Nonmetropolitan (Rural): Counties that are not part of a metropolitan statistical area. We selected all the counties from the large urban category and random samples of counties from each of the other three groups. Table I.1 shows the total number of counties and the number sampled in each stratum. After selecting the sample, we used the Public Welfare Directory to determine the name, address, and telephone number of the JOBS program administrators responsible for programs in the sampled counties. While preparing and conducting our interviews, we found that 36 rural counties and one nonrural county in our sample did not offer JOBS programs.Therefore, we adjusted our initial sample to exclude these counties. We obtained responses from nearly all of the program administrators for the counties in our adjusted sample (411 of 416). We used these responses to produce national estimates for the JOBS program. Response rate (percent) Because the estimates from this survey are based on a sample, each is subject to sampling error. Table I.2 shows the sampling errors for estimates presented in figures 2 through 5 and tables 1 and 2 of this report. In these figures and tables, each education and training component and each supportive service has an individual sampling error associated with it. Table I.2 shows the largest sampling errors for each figure and table. We computed the sampling errors at the 95-percent confidence level. Therefore, the chances are 95 out of 100 that the actual percentage being estimated falls within the range defined by the estimate, plus or minus the sampling error. Maximum sampling error (percentage points) To identify issues related to the efforts of JOBS programs to meet participants’ needs and to solicit program administrators’ views regarding the implications of serving participants in a time-limited system, we held a series of four discussion groups with local program officials. The groups included officials from areas with large populations of children in welfare households, both urban and rural areas, and different geographical regions. While the information and views obtained reflect certain aspects of the participating administrators’ JOBS programs, they cannot be considered representative of JOBS programs nationwide. In addition to those named above, the following individuals made important contributions to this report: Sharon Dooley planned and coordinated the assignment; Robert DeRoy and Steve Machlin conducted the computer programming and provided statistical advice on the survey analysis; Chris Morehouse conducted survey interviews and provided support for survey analysis, discussion group facilitation and analysis, and the writing of the report. Activities directed toward providing an individual with a basic literacy level, defined as a level equivalent to at least eighth grade, ninth month. Exposure to work: Its purpose is to help participants move into regular public or private employment by allowing them (as individuals not otherwise able to obtain employment) to gain work experience and training and improve their employability. Limited to positions that serve a useful public purpose in fields such as health, social service, environmental protection, education, urban and rural development, welfare, recreation, public facilities, public safety, and day care. Education in English proficiency for an individual who is not sufficiently competent to understand, speak, read, or write the English language to allow employment commensurate with his or her employment goal. Activities designed to prepare an individual to qualify for a high school equivalency certificate. Activities that help prepare participants for work by assuring that they are familiar with general workplace expectations and exhibit work behavior and attitudes necessary to compete successfully in the labor market. Activities such as counseling, job-seeking skills training, information dissemination, and support, possibly including telephone banks for participants to use to contact potential employers. May be offered as a participant’s first activity upon enrollment and periodically thereafter, generally in combination with other education, training, or employment activities designed to increase an individual’s prospects for employment. Vocational training for a participant in technical job skills and equivalent knowledge and abilities in a specific occupational area, whether offered by postsecondary institutions, secondary schools, public and private agencies, or other organizations. Training that provides participants the opportunity to engage in productive work: upon being hired by a public or private employer, a participant receives training while working, acquires the knowledge or skills essential to the full and adequate performance of that job, and receives compensation comparable to that of other employees performing the same or similar jobs. The employer is reimbursed for the training and supervision provided and retains the participant as a regular employee upon completion of the training period. Instruction in institutions of higher education and other institutions, in appropriate cases, subject to state approval and limited to education that is directly related to the attainment of an individual’s employment goal. Subsidized employment whereby the welfare agency may pay or divert all or part of an individual’s AFDC grant to an employer to cover part of the costs of the wages paid to that individual. Subject to nondisplacement requirements, any job may be supplemented in this way. Guaranteed to participants if necessary to permit them to accept employment, remain employed, or participate in an approved education or training activity. May be provided directly by the program, through other providers, in the form of cash assistance or vouchers to participants or reimbursement of caretaker relatives, or through other arrangements. In addition, transitional child care is available to participants for a 1-year period after they leave AFDC for employment. Other services determined to be necessary by a state to enable participation in approved JOBS activities, whether provided directly, paid for, or reimbursed by the program. One-time expenses that must be provided directly, paid for, or reimbursed by the program if necessary to enable participation in approved JOBS activities or accepting or maintaining employment. Must be provided directly, paid for, or reimbursed by the program if necessary to enable participation in approved JOBS activities. Welfare to Work: Measuring Outcomes for JOBS Participation (GAO/HEHS-95-86, Apr. 17, 1995). Child Care: Child Care Subsidies Increase Likelihood That Low-Income Mothers Will Work (GAO/HEHS-95-20, Dec. 30, 1994). Welfare to Work: Current AFDC Program Not Sufficiently Focused on Employment (GAO/HEHS-95-28, Dec. 19, 1994). Child Care: Promoting Quality in Family Child Care (GAO/HEHS-95-36, Dec. 7, 1994). Child Care: Current System Could Undermine Goals of Welfare Reform (GAO/T-HEHS-94-238, Sept. 20, 1994). JOBS and JTPA: Tracking Spending, Outcomes, and Program Performance (GAO/HEHS-94-177, July 15, 1994). Welfare to Work: JOBS Automated Systems Do Not Focus on Program’s Employment Objective (GAO/AIMD-94-44, June 8, 1994). Families on Welfare: Teenage Mothers Least Likely to Become Self-Sufficient (GAO/HEHS-94-115, May 31, 1994). Families on Welfare: Focus on Teenage Mothers Could Enhance Welfare Reform Efforts (GAO/HEHS-94-112, May 31, 1994). Child Care: Working Poor and Welfare Recipients Face Service Gaps (GAO/HEHS-94-87, May 13, 1994). Multiple Employment and Training Programs: Major Overhaul Is Needed (GAO/T-HEHS-94-109, Mar. 3, 1994). Welfare to Work: States Move Unevenly to Serve Teen Parents in JOBS (GAO/HRD-93-74, July 7, 1993). Welfare to Work: States Serve Least Job-Ready While Meeting JOBS Participation Rates (GAO/HRD-93-2, Nov. 12, 1992). Welfare to Work: States Begin JOBS, but Fiscal and Other Problems May Impede Their Progress (GAO/HRD-91-106, Sept. 27, 1991). The first copy of each GAO report and testimony is free. Additional copies are $2 each. Orders should be sent to the following address, accompanied by a check or money order made out to the Superintendent of Documents, when necessary. Orders for 100 or more copies to be mailed to a single address are discounted 25 percent. U.S. General Accounting Office P.O. Box 6015 Gaithersburg, MD 20884-6015 Room 1100 700 4th St. NW (corner of 4th and G Sts. NW) U.S. General Accounting Office Washington, DC Orders may also be placed by calling (202) 512-6000 or by using fax number (301) 258-4066, or TDD (301) 413-0006. Each day, GAO issues a list of newly available reports and testimony. To receive facsimile copies of the daily list or any list from the past 30 days, please call (301) 258-4097 using a touchtone phone. A recorded menu will provide information on how to obtain these lists.

Summary: Pursuant to a congressional request, GAO examined the Job Opportunities and Basic Skills Program (JOBS), focusing on: (1) who is being served by JOBS; (2) the services JOBS participants receive and the extent to which their needs are being met; and (3) the implications of serving participants in a time-limited benefit system. GAO found that: (1) most adult Aid to Families with Dependent Children (AFDC) recipients do not participate in JOBS due to the Family Support Act's allowable exemptions and minimum participation standards; (2) JOBS only served about 13 percent of single female-headed households receiving AFDC in 1992; (3) even if states meet the minimum participation standard, JOBS will still be serving only a small percentage of AFDC households, which raises questions about whether JOBS can transform the culture of welfare; (4) JOBS services are drawn from existing community programs to avoid duplicative services; (5) JOBS programs obtain many services at no cost, although most programs also purchase some needed education and training services; (6) despite low participation, many JOBS programs are unable to provide participants with the services they need due to a variety of reasons, such as transportation problems; and (7) proposed legislation could require states to place increasing numbers of JOBS participants in a variety of work-related activities over time and impose a 5-year limit on the receipt of benefits.