The Government Accountability Office (GAO) submitted testimony to the House Subcommittee on Human Resources, Committee on Ways and Means yesterday that explores state Maintenance of Effort (MOE) requirements for the Temporary Assistance for Needy Families (TANF) program. The testimony describes the federal and state partnership under the TANF block grant, including details on required state funding levels and program measures to ensure full federal financial contribution. Furthermore, it asserts that appropriate design, implementation, and monitoring are necessary to ensure a successful balance between state flexibility and the fulfillment of national objectives. In all, the testimony provides a description of the TANF MOE provisions, as opposed to guidance or recommendations in this regard.
TANF is the main federal program assisting low-income families. It was created from 1996 welfare reform when the Aid to Dependent Children and Families (AFDC) entitlement was converted to a block grant. Its four-part stated purpose is to (1) help needy families care for children in their home or kinship homes, (2) promote financial independence for parents, (3) prevent pregnancy outside of marriage, and (4) encourage two-parent families. TANF provides ongoing cash assistance to about 1.9 million families, including 800,000 kinship families, in addition to assisting others with a range of services like child welfare, emergency assistance, child care, and other work supports for families in need.
The MOE is a required level of state spending on particular activities that further TANF’s federal purpose. The required amount is generally based on what the state spent in 1994 on AFDC, the Job Opportunities and Basic Skills Training Program (JOBS), Emergency Assistance (EA), and AFDC-related child care. TANF program requirements relate to recipient eligibility and services provision set by the state, but that fulfills its four-part federal purpose. In addition to a 60-month family assistance time-limit, the main federal measure to track adherence to that purpose is the work participation rate. The expectation is that at least 50% of families receiving cash assistance participate in at least one allowable work activity for a sufficient amount of time.
The testimony looks back to previous GAO studies on TANF to present key features and trends of TANF MOE expenditures, in addition to reviewing federal statute; regulations; guidance; and state data and financial reports, and interviewing U.S. Department of Health and Human Services (HHS) and selected state officials. Analysis of these sources indicate that MOE spending has increased due to states accessing contingency funds, accessing emergency funds created by the American Recovery and Reinvestment Act (ARRA) stimulus legislation, temporarily broadening services under the Deficit Reduction Act of 2005, and offsetting low work participation rates. To the last point, reviewed in detail in the testimony, states can earn credits that allow a workforce participation rate below 50% if they reduce overall caseloads or contribute more to the MOE. The testimony concluded that the resulting growth in MOE spending has created new complexities that call for ensuring MOE effectiveness.