For example, states are required to provide information and report to HHS  on their use of TANF funds in TANF state plans outlining how each state  intends to run its TANF program (generally filed every 2 years), quarterly  reports on demographic and economic circumstances and work activities  of families receiving cash assistance, quarterly financial reports providing  data on federal TANF and state MOE expenditures, and annual reports  on state programs funded with MOE funds, among other things. TANF’s Role in Providing Cash Assistance to Needy Families Has Evolved

		Fewer Eligible Families Receive Cash Assistance

A key TANF purpose stated in law is to provide assistance to needy  families so that children may be cared for in their own homes or homes of  relatives. With the TANF block grant in effect replacing AFDC—a key  federal cash welfare program for needy families—in fiscal year 1997,  much attention has focused since then on the decline in the number of  families receiving TANF cash assistance and the implications for poor  children and families. The law does not explicitly state that poverty  reduction is a TANF purpose, and there are generally no federal  requirements or benchmarks as to eligibility criteria or benefit amounts, or  on the percentage of low-income families who are to be covered by a  state’s TANF program. 1). The relatively modest increase  in TANF caseloads—and decreases in some states—has raised  questions about the responsiveness of TANF to changing economic  conditions. In 2012, HHS officials noted  that they do not have the authority to require states to provide basic  information about the cash assistance programs, including state TANF  eligibility criteria, benefits levels, and other program features. Composition of the Cash Assistance Caseload Has Changed

Much of the federal welfare policy discussion has focused on how to help  low-income parents caring for their children become employed and less  dependent on government assistance. We reported in 2012 that the percentage  of child-only cases increased from about 23 percent from July through  September 1997 to over 40 percent in fiscal year 2010. Approach to Measuring Work Participation Has Limitations

		States Have Generally Met Work Participation Rates by Using Credits Allowed by Law

One of the four TANF purposes is to end dependence of needy parents  on government benefits by promoting job preparation, work, and  marriage; TANF's work participation rate requirement is in keeping with  the purpose of helping parents prepare for and find jobs. numbers of families receiving TANF cash assistance over a specified time  period are accounted for in each state’s caseload reduction credit, which  essentially then lowers the states’ required work participation rate from 50  percent.For example, if a state’s caseload decreases by 20 percent  during the relevant time period, the state receives a caseload reduction  credit equal to 20 percentage points, which results in the state work  participation rate requirement being adjusted from 50 to 30 percent. This is the same conclusion we  reached in our 2005 report that recommended changes to improve this  measure of states’ performance. States May Not Serve Some Families that are Not Work-Ready

Work participation rate requirements can play an important role in  encouraging states to move TANF recipients into work; however, our  work indicates some ways that current policies may be discouraging  states from engaging some TANF recipients with complex needs and  from providing an appropriate mix of activities. Additional information may be needed before adopting any of these  potential options. Information Available to Assess Recent Trends in TANF Spending is Limited

		Performance Information for Non-Cash Services is Incomplete

We reported in 2012 that the TANF block grant has evolved into a flexible  funding stream that states use to support a broad range of allowable  services, but the accountability framework currently in place in federal law   Declining cash  and regulations has not kept pace with this evolution.assistance caseloads freed up federal TANF and state MOE funds for  states, and over time, states shifted spending to other forms of aid, which  we refer to as non-cash services. However, there are no reporting  requirements mandating performance information specifically on families  receiving non-cash services or their outcomes. Still, we concluded that without more information that  encompasses the full breadth of states’ uses of TANF funds, Congress  will not be able to fully assess how funds are being used, including who is  receiving services or what is being achieved. Some Potential Options

Potential options are available to provide additional information on non- cash services and state MOE expenditures that may be useful for making  decisions regarding the TANF block grant and better ensure  accountability for TANF funds (see table 3). Concluding Observations

We have identified a number of potential options that could improve  TANF performance and oversight as the program is currently designed,  based on our prior work. These options are not intended to be exhaustive,  and it is not the purpose of this report to recommend or endorse any  particular policy option. In addition, there may be a number of other  options that would warrant further analysis. HHS  provided technical comments which we incorporated as appropriate. We are sending copies of this report to the appropriate congressional  committees, the Secretary of Health and Human Services, and other  interested parties. Temporary Assistance for Needy Families: State Maintenance of Effort  Requirements and Trends. Welfare Reform: Better Information Needed to Understand Trends in  States’ Uses of the TANF Block Grant.
Why GAO Did This Study

In 1996, Congress made sweeping changes to federal welfare policy by replacing the previous cash assistance program with the TANF block grant. Since then through fiscal year 2011, the federal government and states have spent a total of nearly $434 billion for TANF. The block grant was reauthorized under the Deficit Reduction Act of 2005, and is currently authorized through September 30, 2013. To inform a potential reauthorization of TANF, GAO was asked to discuss its key findings on TANF performance and oversight from its previous work and identify potential options that would address these findings. This report discusses issues and options in three selected areas: (1) TANF's role in providing cash assistance to low-income families, (2) measurement of TANF work participation, and (3) information on states' use of TANF funds. In addition to summarizing its previous work on these issues, GAO reviewed relevant federal laws, regulations, and agency documents as well as transcripts from relevant congressional hearings from 2009 through 2012 to identify potential options. GAO also spoke with HHS officials and selected three TANF experts with a range of views to share their perspectives on these issues.

What GAO Found

Temporary Assistance for Needy Families' (TANF) role in providing cash assistance has evolved; fewer eligible families receive cash assistance and the composition of the caseload has changed. GAO noted in 2010 that 87 percent of the dramatic decline from 1995 through 2005 in the number of families receiving cash assistance was due a decline in eligible families participating in TANF, rather than increased incomes. Changes to state TANF programs, such as mandatory work requirements and lower benefits, account in part for this decline. Relatively modest caseload increases in recent years nationwide, as well as decreases in some states, have raised questions about TANF's responsiveness to changing economic conditions. GAO also reported in 2011 that the composition of the TANF caseload has changed, with about 40 percent of cases now comprised of children only, with the adult not receiving benefits, and little known nationwide about state policies for aiding these children. Potential options to better understand TANF's role as a cash assistance program may include: improving information on the extent to which states provide cash assistance to eligible low-income families, and requiring states to include more information--for example in TANF state plans submitted to the Department of Health and Human Services (HHS)--on features such as benefit amounts and services provided.
The current approach used to measure the extent to which states engage TANF recipients in work activities as defined by federal law has limitations. GAO reported in 2010 and 2011 that most states relied on several factors allowed in law, including credits for caseload reductions, to reduce the percentage of families they needed to engage in work to meet their work participation rate requirements. GAO also reported that current policies may be discouraging states from serving some families who are not "work-ready" through TANF, such as those with significant barriers to employment or complex needs. Potential options to address these issues may include: eliminating, limiting, or modifying some of the credits states may use to reduce their work participation rate requirements; adjusting requirements to better ensure states engage those not work-ready; and developing an additional or alternate set of measures that focus on employment outcomes. However, more information may be needed to assess the potential impacts of any changes to work participation requirements.
Limitations exist in the information available to assess states' use of federal TANF funds and state expenditures related to minimum state spending requirements under TANF, known as maintenance of effort (MOE) requirements. GAO reported in 2012 that the TANF block grant has evolved into a flexible funding stream that states use to support a broad range of non-cash services, but information requirements for assessing TANF performance have not kept pace with this evolution. For example, there are no reporting requirements mandating performance information specifically on families receiving non-cash services or their outcomes. GAO also reported in 2012 that states have reported increased levels of MOE spending for a variety of reasons, including helping them reduce their work participation rate requirements as allowed by law. Potential options to better understand federal and state TANF spending may include: improving reporting and performance information to encompass the full breadth of states' use of TANF funds, and requiring a review of MOE expenditures used to meet TANF requirements.

What GAO Recommends

GAO is not making recommendations, but rather identifying some potential options that might improve TANF performance, depending on Congress' goals for the program. These options are not intended to be exhaustive, and there may be a number of other options that warrant further analysis. HHS provided technical comments on a draft of this report.