2. This  number declined by over half within the first 5 years of TANF, and  averaged about 1.9 million families in fiscal year 2011. States Use Flexible Federal TANF Funds to Emphasize Job Preparation and Work Supports for Low- Income Families and Services for At-Risk Children

In fiscal year 2011, nationwide, the top areas of state spending of federal  TANF funds for non-cash services were child welfare, emergency aid,  and other services; job preparation and work activities; and work supports  including child care.populations for services and delivery methods differed within and across  these three spending areas. State decisions on how to allocate funding  for non-cash services were influenced by state priorities and TANF’s  funding structure, according to officials we interviewed. Among our selected states, federal TANF funds were used to support  child welfare services, such as child abuse hotlines, investigative and  legal services, child protection, and preventive services as well as  emergency aid, such as clothing and shelter. Among our selected states, job preparation and work activities included  job readiness training related to resume-writing and interview preparation,  help with the job search process, skills training, and subsidized  employment. Officials  in one selected state noted that they also provided activities such as  English as a Second Language courses that do not count toward meeting  work participation requirements. Other states we reviewed said  they provide certain non-cash services to low-income families regardless  of whether they receive cash assistance. Meanwhile, Florida and Utah coordinate work-related services with those  provided through the Workforce Investment Act one-stop center system,  through which job seekers can access most federally-funded employment  and training programs and services. Officials in three of our selected states cited tensions between the need to  provide cash assistance and the need to provide other state services. TANF’S Accountability Framework Provides Incomplete Information on States’ Use of TANF Funds

		Current Reporting Provides Limited Information on State’s Use of Funds for Non-Cash Services

Although the TANF block grant has evolved into a flexible funding stream  that states use to support a broad range of allowable services while also  serving as the nation’s major cash assistance program for low-income  families with children, the accountability framework currently in place in  federal law and regulations has not kept pace with this evolution. There are no reporting requirements mandating  performance information specifically on families receiving non-cash  services or their outcomes, or information related to TANF’s role in filling  needs in other areas like child welfare, even though this has become a  more prominent spending area for TANF funds in many states.reporting gaps limit the information available for oversight of TANF block  grant funds by HHS and Congress. For  example, the law states that plans are to outline how a state will “conduct  a program…that provides assistance to needy families with (or expecting)  children and provides parents with job preparation, work, and support  services to enable them to leave the program and become self-sufficient.”  Federal law does not require states to include descriptions in their state  plans of how they intend to use TANF funds beyond the cash assistance  population for non-cash services, and states have used their discretion in   For example, a state  determining how much detail to put in their plans. Improving Performance Information to Include TANF Non-Cash Services Is Challenging

Several features of TANF pose challenges to designing performance  measures, as indicated by our previous work. Although in many situations HHS can revise its  reporting form to make adjustments to the reporting categories, generally  HHS has limited authority to impose new TANF reporting requirements on  states unless directed by Congress, so many changes to the types of  performance information that states are required to report would require  congressional action. Matter for Congressional Consideration

To provide better information for making decisions regarding the TANF  block grant and better ensure accountability for TANF funds, Congress  should consider ways to improve reporting and performance information  so that it encompasses the full breadth of states’ uses of TANF funds. Recommendation for Executive Action

As HHS takes steps to revise expenditure reporting for TANF to better  understand how states use TANF funds, it should develop a detailed plan  with specific timelines to assist in monitoring its progress for revising its  financial reporting categories for expenditures of federal TANF and state  MOE funds. These 10  states accounted for nearly half of all federal and state spending for TANF  non-cash services in fiscal year 2010. GAO-10-525. GAO-10-164. Welfare Reform: States Provide TANF-Funded Work Support Services to  Many Low-Income Families Who Do Not Receive Cash Assistance.
Why GAO Did This Study

The TANF block grant, created as part of the 1996 welfare reforms, gives states flexibility to make key decisions about how to allocate funds to provide services to low-income families. The number of families receiving cash assistance declined by over half within the first 5 years of TANF, and states shifted their TANF priorities to other forms of aid, or non-cash services. In fiscal year 2011, states spent about 64 percent of nearly $31 billion in federal and state funds for such services, with federal funds accounting for nearly $9 billion. GAO examined (1) how states have used TANF funds for non-cash services and (2) what information is available to assess TANF performance for non-cash services and what challenges are involved in doing so. GAO reviewed past reports and relevant federal laws and regulations; analyzed state TANF expenditure information; and interviewed HHS officials, TANF experts, and officials in 10 selected states through site visits and phone conferences. These 10 states accounted for nearly half of all TANF spending for non-cash services in fiscal year 2010.

What GAO Found

Nationwide, states have used Temporary Assistance for Needy Families (TANF) block grant funds not only to provide cash assistance, but also to provide noncash services, such as job preparation and work supports for low-income families and aid for at-risk children. Among our 10 selected states, job preparation and work activities included help with the job search process, skills training, and subsidized employment. California generally provides such services to families receiving cash assistance while the other nine states extend some of them to other low-income families. Florida and Utah provide such services in coordination with the Workforce Investment Act one-stop center system. Work supports among these states mainly include child care subsidies for low-income working families. Services for at-risk children include child welfare activities, such as child abuse hotlines, investigative and legal services, child protection, and preventive services. TANF has allowed states to make funding decisions based on state priorities, particularly as cash assistance caseload declines freed up funds for non-cash services. However, according to officials in three states GAO reviewed, state decisions to fund a broad array of services can create tensions and tradeoffs between meeting cash assistance and other service needs.
TANF's accountability framework provides incomplete information on how states' non-cash services are contributing to TANF purposes. Plans that states submit to the Department of Health and Human Services (HHS) outlining how they intend to run their TANF programs provide limited information on goals and strategies for non-cash services. In addition, past HHS reports and selected states identified some weaknesses in TANF expenditure reporting. For example, officials in one selected state noted that the use of TANF funds for child welfare services is not clearly identifiable in HHS's reporting categories for TANF expenditures. HHS is working to revise reporting categories, with a goal of implementing them for fiscal year 2014. No reporting requirements currently mandate performance information specifically on families receiving non-cash services or TANF's role in filling needs in prominent spending areas for TANF funds, like child welfare. These reporting gaps limit the information available for oversight of TANF block grant funds by HHS and Congress. Generally, HHS has limited authority to impose new TANF reporting requirements on states unless directed by Congress. While GAO's previous work on grant design highlights several features of grants, such as broad and varied purposes, that pose challenges to the development of performance information and measures, it also lays out accountability principles that can help address these issues for TANF.

What GAO Recommends

Congress may wish to consider ways to improve reporting and performance information so that it encompasses the full breadth of states' uses of TANF funds. GAO recommends that HHS develop a detailed plan with timelines to revise reporting categories for TANF expenditures. In its response, HHS provided some timeframes that we added to the report, although we maintain a more detailed plan will help HHS monitor its progress in completing this effort.