States are allowed to transfer up to 30 percent of their TANF funds to the Child Care and Development Fund (CCDF) and the Social Services Block Grant (SSBG). Although most adults in former welfare families were employed at some time after leaving welfare, many worked at low-wage jobs. The Focus of Welfare Spending Has Shifted from Monthly Cash Payments to Services

Prior to welfare reform, states focused their welfare spending on providing monthly cash payments. States Are Providing More Work Support Services for Welfare Families

Unlike AFDC, which focused on income maintenance for welfare families, federal and state welfare policies under TANF have focused on helping welfare families secure and maintain employment. As a result, states are providing more services to low-income families who are not on welfare, including those who have recently left welfare. Many Low-Income Families Receiving TANF/MOE-Funded Services Are Not Reflected in TANF Caseload Data

While states are using TANF/MOE dollars to provide services to many families who do not receive monthly cash assistance payments, these families are not included in the reported TANF caseload, and the actual number of these families is unknown. Concluding Observations

Since the Congress passed welfare reform legislation in 1996, states have taken steps to implement a work-based, temporary assistance program for needy families. Although this measure provides important information for administrators and policymakers, it does not provide a complete picture of the number of people receiving benefits or services funded at least in part with TANF/MOE funds. Appendix I: Basis for Estimate Shown in Figure 2

	Basis for Estimate of Minimum Number of Low-Income Families Receiving TANF/MOE-Funded Services Who Are Not in the TANF Caseload

To be included in our estimate of the number of low-income families receiving TANF/MOE-funded services who were not in the TANF caseload, a service or the data on the service had to meet each of the following criteria: Service had to be funded with at least 30 percent TANF/MOE dollars—If a service was funded with at least 30 percent TANF/MOE dollars (and the other criteria were met for our estimate), we included all service recipients not receiving monthly cash payments. States were able to provide these data for families receiving subsidized child care.
Why GAO Did This Study

The Temporary Assistance for Needy Families (TANF) block grant makes $16.5 billion available to states each year, regardless of changes in the number of people receiving benefits. To qualify for their full TANF allotments, states must spend a certain amount of state money, referred to as maintenance-of-effort funds. As states implemented work-focused reforms during the strong economy of the 1990s, welfare caseloads dropped by more than 50 percent.

What GAO Found

GAO found that most former welfare recipients were employed at some point after leaving welfare, typically with earnings that did not raise them above the poverty level. Under welfare reform, spending shifted from monthly cash payments to services, such as child care and transportation. This shift reflects two key features of reform. First, many states have increased spending to engage more welfare families in work-related activities and to provide more intensive services. Second, many states have increased their efforts to provide services to low-income families not receiving welfare. Services for these families include child care, case management, and job retention and advancement services for families who have recently left welfare for employment as well as other low-income working families. Although states have the flexibility under TANF to use their federal and state welfare-related funds to provide services to families not receiving monthly cash assistance, these families are not reflected in caseload data reported to the Department of Health and Human Services. As a result, caseload data do not provide a complete picture of the number of families receiving benefits and services through TANF.