HomeMy WebLinkAboutRES 123 Draft 01 2004-2006 ~•.:y ~il4r
COUNTY OF HAWAII •s STATE OF HAWAII
RESOLUTION NO. 123 (?5
RESOLUTION AUTHORIZING THE OFFICE OF THE MAYOR TO ENTER INTO AN
AGREEMENT WITH THE STATE OF H.AWAI`I DEPARTMENT OF HUMAN
SERVICES, PURSUANT TO HRS 46-7, FOR THE TEMPORARY ASSISTANCE FOR
NEEDY FAMILIES (TANF) GRANT
WHEREAS, the State of Hawaii Department of Human Services has informed the County of
Hawaii of the availability of federal Temporary Assistance for Needy Families (TANF) funds to
address various human needs within the Counl:y; and
WHEREAS, the TANF funds must be used to meet any one or more of the four TANF
purposes, which are: to provide assistance to needy families; end dependence of needy parents by
promoting job preparation, work and marriage; prevent and reduce out-of-wedlock pregnancies; and
encourage the formation and maintenance of t~vo-parent families; and
WHEREAS, one of the key missions of the County of Hawaii will be to develop a
comprehensive approach to the effective administration and coordination of programs and plan of
actions designed to meet human needs; and
WHEREAS, Hawaii Revised Statutes, ~~ection 46-7, requires that county departments obtain
the consent of the council to enter into agreements with the federal or state governments respecting
action to be taken pursuant to any of the powers granted by law to furnish, expend, and receive any
funds or other assistance in connection with projects being or to be undertaken pursuant to those
powers.
N011V, THEREFORE, BE IT RESOLVE ~Y THE COUNCIL OF THE COUNTY OF HAUVAI`I,
in accordance with section ~6-7, Hawaii Revi ed Statutes, that the Mayor of the County of Hawaii is
authorized to execute, on behalf of the County, the memorandum of agreement, attached hereto and
incorporated herein by reference as Exhibit "A', to enable the County to procure services and
programs that meet any one of the four TANF urposes.
IT FURTHER RESOLVED that the ounty Clerk of the County of Hawaii shall transmit
copies of this resolution to the Office of the M yor and the Department of Finance.
Dated at Hilo, Hawaii, this 7th ay of July, 2005.
INTRODUCE BY:
~
COUNCIL M MBER, COUNTY OF HAWAII
COUNTY COUNCIL ROLL CALL VOTE
County of Hawaii
Hilo, Hawaii AYES NOES ABS F,X
ARAKAKI X
[ hereby certify that the foregoing RESOLUTION wa~ by the H[c;A X
vote indicated to the right hereof adopted by the COUN [L of I iOPFMANN X
the County of Hawaii cm Jul 7 2005 I101_SCHUEI X
IKEDA X
ATTEST [SBE[.L
.IACOBSON X
PII,AGO X
SAPAR[K X
9 0 0 0
C
Reference C-334/waived. F'C
COUNTY CLERK CHAIRMAN & PRESIDING FFICER RESOLUTION NO.
MEMORANDUM OF AGREEMENT
Behveen
The State of Hawaii, Department of Human Services
And
The County of Hawaii
This Memorandum of Agreement (hereafter referred to as "MOA") is made and entered
into between the State of Hawaii, Department of Human Services (hereafter "DHS"), an
agency of the State of Hawaii which is responsible for, among other things, providing
local welfare services whose business address is Queen Liliuokalani Building, 1390
Miller Street, Honolulu, Hawaii 96813, and the County of Hawaii, whose business
address is 25 Aupuni Street, Room 215, Hilo, Hawaii 96720. The County of Hawaii will
direct all services to be performed under this MOA. Benefit, Employment and Support
Services Division (BESSD) will perform all services for DHS under this MOA.
WIINESSETH:
WHEREAS, the DHS, is the agency responsible for the statewide implementation and
oversight of the federally funded Temporary Assistance to Needy Families (TANF), and
state funded Temporary Assistance to Otlier Needy Families (TAONF).
WHEREAS, the four objectives of TANiF are to provide assistance to needy families;
end dependence of needy parents by promoting job preparation, work and marriage;
prevent and reduce out-of-wedlock pregnancies; and encourage the formation and
maintenance oftwo-parent families.
WHEREAS, one of the key missions of the County of Hawaii is to develop a
comprehensive approach to the effective administration and coordination of programs
and plan of action designed to meet human needs.
NOW, THEREFORE, DHS and the County of Hawaii (hereafter referred to as "Parties")
agree as follows:
PURPOSE OF MEMORANDUM OF AGREEMENT FOR DHS
The purpose of this MOA is as follows. DIES will fund the County of Hawaii to procure
services and/or programs through competitive procurement process and implement these
services and programs that meet any one of the four TANF purposes.
EXHIBIT "A"
Page 1 of 6
A. DUTIES AND RESPONSIBILITIES OF DHS
DHS shall:
1. Not reimburse the County of Hawaii for any services other than those
identified in this MOA and/or procured in accordance with the provisions
of this MOH.
2. Reimburse the Couniy o f Hawaii for services procured and implemented
pursuant to this MOA in an amount not to exceed $3,000,000.00.
3. Approve the request of proposal (RFP) and communicate the same to the
County of Hawaii in a tirnely manner.
4. Approve the scope of services of any potential purchase of service
provider's contract and communicate the same to the County of Hawaii in
a timely manner.
5. Assist the County of Hawaii in the development of an invoicing format to
be utilized in claiming for the services specified in this MOH.
6. Process the claim submitted by the County of Hawaii within fifteen days
of the submittal of the claim and process the payment within 30 days of
the submittal of the claim.
7. Conduct a program and fiscal audit at its discretion to ensure that all
services and payments issued are issued in accordance with the applicable
laws, rules, regulations, arrd procedures.
B. DUTIES AND RESPONSIBILITIES OF THE COUNTY OF HAWAII
The County of Hawaii shall:
1. Procure and implement services and/or programs which meet any one or
more of the four TANF purposes outlined in this MOH.
2. Ensure that any service(s) ;rnd/or program(s) procured and implemented in
accordance with this MOA are not directly delivered by the County
employees.
3. Competitively procure services and/or program described in item 1 above
in accordance with the applicable state procurement laws.
4. Submit the request for proposals to DHS for review and approval prior to
publication in order for DHS to determine that the procurement of such
Page 2 of 6
services would e in compliance with the requirement of the DHS funding
source.
Submit the scope of services of any potential purchase of service (POS)
provider to DHS for review and approval prior to executing a Contract
with the service provider in order for DHS to determine that the
procurement of such services would e in compliance with the requirement
of the DHS funding source.
6. File claims with DHS for those POS providers whose Scope of Services
have been approved by LiHS and have a Contract with the County of
Hawaii.
7. Use its discretion to select POS providers who can best provide services in
accordance with this MOA.
8. Require all POS providers to submit reports containing specific
information on project accomplishments detailing how the services
provided meet the purpose this MOA, and using the following
performance measures:
(a) List of activities by program and target population to be served;
(b) Number of individuals/families participating in the activities; and
(c) Number of individuals families successfully completing the
activities.
9. Manage the activities of POS Providers to ensure their compliance with
the objectives stated in this MOA.
10. Ensure that the POS providers keep records to document information
acquired about the recipients or given or made available by the recipients
served under this Agreement. All such information shall be considered
confidential and shall not be disclosed to any individual or organization
without the written authorization of the individual concerned. The
Provider may release information regarding the recipients of services
under this Agreement subject to Hawaii Revised Statute (HRS) §346-10
and DHS' prior approval.
11. Submit monthly invoices to DHS-BESSD (Attention: Employment and
Child Care Program Office;) on the 15`h of each month for the expenditures
incurred in accordance with the agreed upon Compensation and Payment
Schedule.
12. Submit to DHS-BESSD asemi-annual program report on mutually agreed
upon elements by January l5, 2006.
Page 3 of 6
13. Submit to DHS-BESSD as the final program and expenditure report on
mutually agreed upon elements by August 15, 2006.
C. TIME OF PERFORMANCE
The period of performance of thus Agreement shall be from June 30, 2005 to June
30, 2006, unless this Agreement is extended or sooner terminated as hereinafter
provided.
D. OPTION TO EXTEND AGRE',EMENT
This MOA will terminate on June 30, 2006, unless the Parties agree in writing to
extend this agreement prior to the termination of the MOA. The Party interested
in extending the MOA must notify the other Party of its interest, and should
include in such notification any provision to be renegotiated, including price
adjustments. If the extended MOA is effective beyond the period for which the
DHS has obtained appropriation, the DHS shall notify the County of Hawaii at the
time of renegotiation.
E. RETENTION OF FINANCIAL, RECORDS
The County of Hawaii shall maintain records and financial accounting for funds
in this MOA for a period of three (3) years from the end date of final
reconciliation.
F. COMPENSATION ANA FAYMENT FOR SERVICES
1. In full consideration for the services performed under the direction of the
County of Hawaii under this MOA, DHS agrees, subject to allotments to
be made by the Director of Finance, State of Hawaii, pursuant to Chapter
37, Hawaii Revised Statutes, to pay a total sum of federal funds not to
exceed THREE MILLION AND NO/100 ($3,000,000.00) for the term
of this Agreement (June 30, 2005 -June 30, 2006) which shall be paid in
accordance with and subject to the following:
a. Payments shall be made upon the submission by the County of
Hawaii of invoicesiclaims in triplicate for the services provided in
accordance with terms and conditions agreed upon and set forth by
this MOA.
b. If an amount of reported expenditures is preliminarily determined
by the DHS-BESSD to be inappropriate and unallowable, DHS-
BESSD shall immediately notify the County of Hawaii of its
preliminary determination. The parties shall meet as soon as
practicable to resolve the amount in dispute.
Page A of 6
c. The DHS shall promptly review the invoices and/or services and
notify the County of Hawaii of disputed amounts. The parties shall
meet as soon as practicable to resolve the amount in dispute. If
after payment of the last installment prior to the final payment,
investigation and examination reveal expenditures that are
determined by DHS to be inappropriate and unallowable, DHS
may request an equivalent amount of monies refunded by the
County of Hawaii notwithstanding DHS' preliminary
determination of .amounts being appropriate and allowable;
provided that suclh inappropriate expenditures are attributable to
the' acts or omissions of the County of Hawaii. The County of
Hawaii and DHS will resolve their payment difference amicably.
However, in the event of any disputed payment, the County of
Hawaii and DHS will resolve their payment differences amicable.
Final settlement of this MOA shall include submission and
acceptance of all reports and other materials to be submitted by the
County of Hawaii to DHS, resolution of all discrepancies in the
expenditures or performance of services, and completion of all
other outstanding matters under this Agreement.
G. MODIFICATION OF AGREEMENT
Any modifications, alterations, ot• changes to this MOA shall be made only by
written Supplemental Agreement:> executed by both parties.
H. TERMINATION OF AGREEMENT
This MOA may be terminated earlier than June 30, 2006 by either party through a
written notice sent thirty (30) days prior to the termination date that includes a
brief statement of the reason for the termination.
I. BINDING EFFECT OF THE AGREEMENT
This MOA is a binding Agreement and can be changed at any time. It is not
intended to create any rights, interest or remedies for any third party beneficiaries,
and third parties may not rely upon this Agreement to assert any claim against the
State or any State employee, whether individually or in their official capacity.
IN WITNESSETH WHEREOF, DHS and. the COiINTY OF HAWAII have executed this
Agreement as of the date written above.
Page 5 of 6
DEPARTMENT OF FIUMAN SERV[CES COUNTY OF HAWAII
By G
Lillian B. Koller, Esq Harry
Director Mayo
DATE:
DATE: I IS ~y5
APPROVED AS TO FORM
AND LEGALITY:
_
CORPORATION COUNSEL
COUNTY OF HAWAII
DATE: G~lS~oS
Page 6 of 6
STATE OF HAWAII )
SS.
COUNTY OF HAWAII )
.ti,
On this ~`S day of `r"~-~Q- , 2005, before me
personally appeared HARRY KIM, to me personally known, who, being by me duly
sworn, did say that he is the Mayor of the County of Hawaii, a municipal corporation
of the State of Hawaii; that the seal affixed to the foregoing instrument is the
corporate seal of the said County of Hawaii; that the foregoing instrument was signed
and sealed in behalf of the County of Hawaii by authority given to said Mayor of the
County of Hawaii by Section 5-1.3 (g) of the County Charter, County of Hawaii
(2000), as amended; and said HARRY KIM acknowledged said instrument to be the
free act and deed of said County of Hawaii.
~,F.e.~c.-, ~ ~-2.~.,~v.~
JEA VIERNES
Notary Public, State of Hawaii
My commission expires: 11/1/2005
Helping Families
Achieve Self-Sufficiency
A Guide on
Funding Services for
Children and Families
through the
TANF Program
. .
/Department of Health and Human Services
J ~ administration for Children and Families
Office of Family Assistance
Table of Contents
Executive Summary
Introduction
The purpose of this guide
Accomplishments
Needs
The purposes of the TANFprogram
Availability of Funds
Considerations in Decidine Whether A Use of Funds Is Appropriate
Identify the benefit, service, or activity the State would like to provide
"Assistance" versus other benefits
Eligibility
L'se of Federal or State funds
General limitations
Federal TAIVF Funds
Flexibility to meet program goals
Ability to tailor services
State discretion about eligibility
Continuation of waiver policies
Limited Federal rules
L'se of Federal TANF Funds
For the purposes of TANF
Previously authorized activities
Transfers
State:Maintenance-of-Effort (:~fOE) Funds
"Eligible families
Qualified activities
Funding options
Appropriate Uses of Funds
Additional Considerations
The definition of "assistance
Why it matters
What is included
What is not included
Restrictions on use of fiends
General Guidance and References
Overview Chart of TANF Provisions
Executive Summary
Spurred on by the passage of the landmark welfare reform legislation the Personal
Responsibility and Work Opportunity Reconciliation Act of 1996 States have made
tremendous progress toward the critical goal of moving families from welfare to work. More
families are entering employment, earnings aze up, and caseloads are down.
The Temporary Assistance for Needy Families (TANF) program has given States new
opportunities to develop and implement creative and innovative strategies and approaches to
remove families from a cycle of dependency on public assistance and into work. For example,
many are turning welfare offices into comprehensive service centers focused on work or
changing policies so that work pays.
However, in spite of some dramatic results, there are still individuals not working or in
entry-level jobs, with incomes that are too low or too erratic to raise their families above poverty.
Under TANF, States have the flexibility and resources to develop programs that reach all
families, promote success at work, and convert welfare offices into job centers. The task of
welfare reform is far from finished. We encourage States to take the critical next steps to ensure
that all families get the essential supports they need to get a job, succeed at work, and move out
ofpoverty. Some important areas for States and communities to address include;
• Ensuring that families have sufficient food, medical coverage, quality, affordabie child
care, and reliable transportation that enables them to work;
• Ensuring that custodial parents receive child support from noncustodial parents so they
may pay their bills and adequately provide for their children;
• Focusing on educational and training opportunities that improve wages and working
conditions for low-income families;
• Crafting sen ices for families with special needs or multiple employment barriers that
appropriately and effectively address their needs; and
• Developing collaborative linkages among employers, local leaders and organizations, and
faith-based and nonprofit community groups so as to combine their resources and talents
to create jobs, support work, and make low-income neighborhoods more viable.
The TA;v"F program provides extraordinary flexibility for funding a wide variety of employment
and training activities, supportive sen ices, and benefits [hat will enable clients to get a job, keep
ajob, and improve their economic circumstances. TA1VF funds are much more flexible than
funds under the prior entitlement programs. So States should start with the assumption that
they may use these funds in innovative ways to achieve the critical goals laid out io the
T,~:YF statute.
As a general rule, States (or local governments and other agencies where decision-making has
devohed from the State agency) must use the available funds for eligible, needy families with a
child and for one of the four purposes of the TANF program:
t. To provide assistance to needy families;
2. To end dependence of needy parents by promoting job preparation, work and
marriage;
3. To prevent and reduce out-of-wedlock pregnancies; and
4. To encourage the formations and maintenance oftwo-parent Families.
States must use objective criteria for determining eligibility and benefits. However, they may
decide the income and resource standards that they will use to determine eligibility, and they may
set different financial eligibility criteria for different benefits or services. (For example, they
could limit eligibility for cash assistance to families living below poverty, but provide supportive
services like child care and transportation to working families with incomes up to 185% of
poverty.) Further, since individuals do not have an entitlement to TANF benefits, States may
elect to target benefits to families with incomes below their established eligibility guidelines.
States fund their TANF programs with a combination of Federal and State funds. 1~`hile both aze
very flexible, the two sources of funds entail somewhat different rules and restrictions.
Federal TA1VF Funds. If States use Federal funds provided through their TANF block grants to
provide "assistance," recipients aze subject to work and participation requirements, afive-year
time limit on Federal assistance, data reporting, and certain prohibitions. But these restrictions do
not generally apply to other services and benefits that are not "assistance." Also, States have
broad discretion to provide a wide range of benefits and services and to set different eligibility
standards for the different types of benefits.
State "maintenance-of-effort" (,'140E) funds. States must spend 80% of their historic level of
spending (FY 1994) or 75% if they meet work participation requirements on "qualified State
expenditures" to meet the basic MOE requirement. All MOE funds must be spent on TAiYF
eligible Families.
This guide suggests some of the many flexible ways States may expend their Federal TA~,'F and
State MOE funds to further the purposes of the TA.v~ program. These examples are by no means
exhaustive. They merely serve to illustrate a few of the possibilities that State and local agencies,
State legislators, communities, community-based organizations, and advocates may consider
when designing an array of benefits, services, and supports that will accomplish one of the four
purposes of the TA.'~'F program. We hope that the principles and illustrations in this guidance
will promote the design of creative and innovative programs that effectively address the needs of
low-income families.
This guide is organized into seven sections:
Introduction provides some background information, explaining what progress has been made
on welfare reform, what the funding situation is, the purposes of TAiVF, and the purpose of this
guide.
Considerations in Deciding Whether A L`se of Funds is Appropriate presents a list of factors
which a State would consider in deciding what benefits and services to fund with Federal or State
dollars.
Federal TAYF Funds addresses the basic criteria that apply to the expenditure of the Federal
block grant funds.
State i`laintenance-of-Etfort (1`IOE) Funds addresses the basic criteria for determining
whether State expenditures would count as part of the minimum State financial contribution to
the TA:dF program.
Appropriate L'ses of Funds provides numerous examples of benefits and services that might be
paid for with Federal TAi~iF or State MOE funds.
Additional Considerations provides more detailed information about the potential implications
of providing "assistance" and other kinds of benefits under the TA.'~iF program. It also provides
more detailed information about what kinds of expenditures are allowable.
General Guidance and References identifies additional sources of information about the
appropriate use of Federal and State funds. It also includes a chart summarizing the specific
program requirements that would apply under different State program designs.
We hope that this guide will facilitate the development and sharing of creative ideas, and we
invite States to send us information about successful strategies and innovative approaches. We
will post them on our Internet page www.acf.dhhs.eov) so that everyone can benefit from
this information. Also, we encourage contact with Regional Office or Central Office staff who
are available to answer any fiscal or policy questions about strategies being considered.
Introduction
The purpose of this guide
The purpose of this guide is to show how States may use Federal TA.'VF and State ~10E funds to
support working families and to address the needs of clients with barriers to self-sufficiency, The
flexibility available under T.41VF presents new opportunities for funding a greater variety of
activities, services, and benefits and for fostering new collaborative partnerships.
Because the funding of TA:v'F is complex., State agencies, advocates, community groups, and
State legislators may be unsure about the array of options available. Therefore, we developed this
guide as a ready reference tool that would promote creative thinking about potential services,
supports, and activities that States might adopt to further the purposes of the TANF program.
This guide presents examples of the many flexible ways States may use TANF and :~1OE funds
to further the purposes of the TA.'VF program. It does not contain new rules or policies. Although
it summarizes the general limitations and prohibitions on the use of funds, we do no[ intend for it
to serve as a definitive policy manual. States and locales should review the recently issued final
rules and consult with Regional Office or Central Office staff if they have 6sca1 or policy
questions about strategies they are considering.
The guide does not attempt to identify all possible appropriate uses of TA,'YF and MOE funds,
but simply provides a list of representative examples. Omission of a particulaz activity or service
from the list does not necessarily mean that associated expenditures are not allowable. Also,
inclusion of a particular example does not mean that such expenditures are categorically
allowable, under all funding streams or for all types of recipients.
Accomplishments
Over the past several years, States have made great progress toward the critical goal of moving
families from welfare to work, spurred on by the passage of the landmark Persona]
Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA). This legislation
created the TANF program.
The TAIv'F program has expanded the opportunities States have to develop and implement
creative and innovative strategies and approaches to remove families from the cycle of
dependency on public assistance and into work. Across the country, we aze seeing welfare offices
transformed into comprehensive service centers focused on work. Case managers are being
energized by their success in helping families find jobs and enter the economic mainstream.
States have dramatically improved policies to help ensure that work pays. For example, they are
allowing families to keep a larger share of their earnings, supplementing the Federal Earned
Income Tax Credit with refundable State credits, allowing ownership of more reliable
automobiles, helping families accumulate assets through Individual Development Accounts, and
investing new resources in child caze services.
The results are dramatic:
• The proportion of people who are working after receiving assistance is much
higher than in the past.
• A variety of "leaver" studies conducted by the States show that 50-65"% of
families leaving the rolls aze working afterwards.
• The latest Census Bureau statistics show that nearly one-third of the families that
were on welfare in 1997 were working in March of 1998 -that's 1.5 million
working parents.
• Eighteen percent of clients receiving assistance now have earnings, more than
double the level in 1993.
• The amount of monthly earnings for these welfaze families who are working is up
from a monthly average of $450 in fiscal year 1996 to $592 in the last quarter of
fiscal year 1997.
• The number of individuals on welfare has been reduced by 46°o since President
Clinton took office.
Needs
Even with these dramatic results, there are still individuals without work or in entry-level jobs.
lb"hile these jobs typically pay more than welfare, they may leave families with incomes that are
too iow or too erratic to escape poverty. Some studies are showing that, within a year of finding
jobs, 30-40°ro of families are back on assistance or still combining welfare with work.
It is clear that poverty is significantly correlated with bad results for families: poor nutrition and
health, unsafe housing, dangerous neighborhoods, and inadequate cognitive development of
children. Recent findings from the New Hope demonstration program in Ivlilwaukee demonstrate
that investments in working families particularly child care and health caze can yield very
impressive results in helping families succeed in jobs and improve the well-being of children.
Under TANF, States have the flexibility and resources to contribute to these kinds of
investments.
To succeed over the long run, collaboration among a range of community organizations and of
governmental agencies must occur to address how best to serve clients with needs such as
developmental disabilities, teaming problems, substance abuse, mental health problems, rural
isolation, and domestic violence.
The purposes of the TANF program
States decide the services or benefits that are to be provided using their Federal and State funds.
A State must use all of its Federal TA.'VF and State MOE funds to meet one of the four purposes
articulated in the Federal TAIVF statute or, in the case of the Federal TANF funds, to continue
providing services and benefits that it was authorized to provide under its Former title N-A or
IV-F State plans (which covered Aid to Families with Dependent Children (AFDC), Emergency
Assistance (EA), Job Opportunities and Basic Skills Training (JOBS), and Supportive Services).
In brief, the four purposes are to:
1. Provide assistance to needy families;
2. End the dependence of needy parents by promotingjob preparation, work and marriage;
3. Prevent and reduce out-of-wedlock pregnancies; and
4. Encourage the formation and maintenance of hvo-parent families.
VOTE: i. e., financially needy under the objective criteria for need specified in the State's TACT plan.
A State may use its TA.'VF or ~IOE funds for services and benefits that directly lead to (or can be
expected to lead to) the accomplishment of one of these four purposes. For example, it could
fund special initiatives to improve [he motivation, performance, and self-esteem of youth (e.g.,
activities like those included in the HHS Girl Power! Campaign or sponsored by the Boys and
Girls Clubs) because such initiatives would be expected to reduce school- dropout and teen
pregnancy rates.
YOTE:These are restrictions on use of funds for educational activities.
Availability of funds
States have two primary funding sources for their TAIVF programs:
• The annual Federal TAA1F block grant; and
• Their annual State maintenance-of--effort (MOl?) funds.
Both sources of funding provide significartt resources for States to invest in the services that
families need to move from welfare to work, stay in the workforce, and move out of poverty.
States have received tremendous financial benefits from the flexibility available under TANF and
the strong economy. Many States have unobligated TANF funds available, giving them an
unprecedented opportunity to invest in families with significant barriers to employment, provide
additional supports for low-income working families, or design pregnancy prevention and family
formation programs.
in deciding how to best use their TA.'VF and MOE funds, it is critical that State agencies,
including agencies such as child support, transportation, housing, and child care, develop strong
collaborative relationships with businesses, local agencies, and community organizations in
developing strategies and delivering services. While States have been enormously successful in
placing millions of clients into work, efforts must extend to reach a]] needy families, including
those that face multiple barriers to success and who face time limits for receiving public
assistance.
Considerations in Deciding Whether A Use of
Funds Is Appropriate
States should start with the assumption that they may use their funds in innovative ways to
achieve the critical goals laid out in the TA~~IF' statute. The following steps outline a simple
step-by-step process to follow in determining how to best use the available funds.
[dentify the benefit, service or activity the State would like to provide
The first step in the process of deciding how best to use TA.~TF and ~fOE funds is to identify
needs within the State and prioritize them. This step includes identifying needs, weighing
alternative options and strategies that address these needs (e.g., for consistency with TA.~"F
purposes and requirements), selecting the most appropriate services and benefits, and designing
programs or activities that reflect those decisions.
"assistance" versus other benefits
If the proposed program or activity achieves a TAVF purpose, the second step involves
determining the nature of the benefit. A State may choose to spend funds on activities that are
considered "assistance" under the Federal regulations.
VOTE: See pp. 25-26 and X260.31 of TA`.'F Tula; for additional intormation on "assistance." These activities
are subject to a variety of spending limitations and requirements including work, time limits,
child support assignment, and data reporting. A State may also choose to fund activities that are
not considered "assistance." These latter activities would not have the same requirements
associated with them.
Eligibility
The next step is to define individual eligibility criteria (which would generally be in the form of
income and or resource standards) for receipt of benefits. The first and second purposes of TA.YF
concern only "needy families" or "needy parents," respectively, as defined by State criteria.
Thus, a State must establish financial eligibbility criteria for benefits under either of these
purposes. For the third and fourth purposes, a State may use Federal funds to provide services to
both needy and non-needy families that are consistent with those purposes.
Use of Federal or State funds
The State must then decide how to fund the desired program benefits and services. This decision
will determine what specific requirements apply and whether a particulaz use of funds is
appropriate.
All State expenditures claimed under the MQE requirements must be made with respect to "
eligible families." These families need not actually be TANF recipients in order to receive
services or benefits funded with MOE dollars; they need only be financially eligib]e for the
service or benefit (and have a minor child living with an adult relative in the home). The
definition of "eligible famllies" is very similar to that of "needy families' ;eligible families are
families that meet the income and resource standards in the State plan. In addition, they must be
either: (1) eligible for TAIdF; or (2) eligible for TANF, but for the five-year time limit on
federally funded assistance or the restrictions on benefits to immigrants found in title Iti' of the
1996 welfare law (Public Law 104-193).
In addition, the State may count as .b10E only the qualified expenditures that exceed its program
spending in 1995. This limitation is referred to as the "new spending test."
A State may expend Federal funds, but not State ~IOE funds, for activities that were previously
authorized under its IV-A or N-F plans, but which are not otherwise allowable under TA.tiF
(includingjuvenilefustice and or State foster care maintenance payments).
General limitations
The final step in determining how best to use the available TA.'VF funds is to determine what
requirements, limitations, and restrictions apply to the selected activities or services. The last two
sections of this guide outline the statutory requirements, restrictions and cost principles that
apply. For example, they address the requirements associated with "assistance"for certain
clients, the administrative cost caps, the medical services prohibition, and general appropriations
principles. Specific questions on these limitations can be directed to the ACF Regional Offices
For clarification.
Federal TANF Funds
Flexibility to meet program goals
The TANF program gives States broad flexibility to make program and funding decisions that
they believe will best support the goals of the program and their individual circumstances. They
may use Federal funds for a wide array of services and benefits that were previously allowable
only through specific, categorical programs. States should view their Federal TANF grant as a
source of funds that they may use creatively to support work and the efforts oflow-income
working families, promote marriage, and reduce and prevent out-of-wedlock childbearing. In
support of these goats, they may use their funds to fill gaps in the service delivery system,
integrate program services, and supplement or enhance the services available through other
programs.
Key features of the TAlVF program include:
• Ability to tailor services
Under the prior public assistance program, all families in similar circumstances of need were
entitled to a standard package of basic benefits and services. Under TA1VF, States have the ability
to offer services to some, but not all, families and to tailor services and benefits so that they
better address the needs of individual clients. They also have the ability to make adjustments in
the services they offer, depending upon funding availability and other factors. However, under
their TA~~1F State plans, States must set forth the objective criteria for the determination of
eligibility and the delivery of benefits and for the fair and equitable treatment of clients.
• State discretion about eligibility
States may set different financial eligibility criteria for different types of benefits in order to
increase the number of families they help to become self-sufficient. For example, States may set
higher income standards to establish eligibility for transitional benefits (i.e., for those no longer
receiving cash assistance) in order to provide these families child caze, transportation, and other
job retention and advancement services. For instance, States may limit eligibility for TA.'YF cash
assistance to families with income below poverty, while making transitional child care and
transportation services available to families with incomes up to ] 85°% of the poverty line. By
adopting these different standards, States may provide work supports to a broader range of
low-income, working families.
L nder this principle, a State can set different firiancia] eligibility criteria based on any number of
categorical distinctions. For example, as we indicated above, States may apply different standards
for "assistance" than for other types of benefits or services. Also, where appropriate, a State
may deem specific groups financially eligible for particular services if there is a categorical,
factual basis (for example, homelessness) for determining financial need.
• Continuation of waiver policies
A State that had a welfare reform waiver(s) approved before enactment of PR1~'ORA may
continue to operate its program under some or all of those waivers rather than the TA:v'F rules.
For States that elect this option, the provisions or requirements of TANF that are inconsistent
with the waiver are not effective until the applicable waivers expire.
• Limited Federal rules
Under TANF, the Federal government may not regulate State conduct or enforce any provision
except to the extent expressly provided by law. Consistent with the principle of State flexibility
in program design, the final TANF rules regulate only where Congress specifically directed the
Department of Health and Human Services to do so or where the Department is charged with
enforcing penalties.
L'se of Federal TANF funds
State, local, and Tribal TANF agencies, or private organizations providing services under
contract with the TANF agency, may use Federal TANF funds in one of three fundamental ways:
1. For the purposes of TANF
Under this provision, allowable expenditures for particular activities, benefits, or services consist
of those that are "in any manner reasonably calculated to accomplish" any one of the four
purposes of the TANF program. Activities, benefits, or services that are reasonably calculated to
accomplish a TANF purpose aze those that directly lead to (or cazr be expected to lead to)
achievement of a TANF purpose. This language includes all activities that are obviously related
to a purpose. It also includes activities whose relationship to a purpose may not be obvious, but
for which there is evidence that it achieves a purpose. For example, there is a clear statistical
relationship between staying in school and lower teen pregnancy rates. Thus, we would conclude
that special initiatives to keep teens in school are reasonably related to the third purpose of
TANF - to reduce out-of-wedlock pregnancies.
States may use Federal TANF and State :~10E funds in accordance with this principle for a
variety of eligible activities.
The four purposes are:
a. To provide assistance to needy families so that children may be cared for is
their own homes or in the homes of relatives;
Spending to achieve this purpose covers only needy families so children may live
with their parents or other relatives. It does not cover children living with
non-relatives. A needy family is one that meets the income andr'or resource
standards established by the State in its TANF plan. A State may establish a
variety of income and resource standards for "assistance" and other services and
benefits.
Spending under this purpose is not limited to benefits that are within the
regulatory definition of "assistance." A State may provide other services in
support of this purpose. For example, funding of home repairs or food banks to
provide groceries to needy families would be consistent with the purpose, even if
the benefits provided do not fall within the definition of "assistance."
b. To end the dependence of needy parents on government benefits by
promoting job preparation, work, and marriage;
Under this purpose, a State could help any needy parent, including a
noncustodial parent or a working pazent, by providing employment, job
preparation, or training services. Examples of potential services includejob or
career advancement activities, marriage counseling, refundable earned income tax
credits, child caze services, and employment services designed to increase the
noncustodial pazent's ability to pay child support. Activities that promote any one
of the three objectives -job preparation, work, and marriage would be
consistent with this purpose.
Like a needy family, a needy parent must meet the income and/or resource
standards established by the State in its TANF plan.
The following example illustrates how some of the funding principles would
apply in meeting this TA.'VF purpose.
A State agency determines that there aze insufficient child caze services available
for the pre-school age children of working needy parents. A Head Start facility can
meet this need. The TANF agency could contract with the Head Start grantee to
provide child caze services for a number of TANF fami]ies who aze not enrolled in
Head Start or to provide expanded hours of child care services for TANF families
whose children are enrolled itt the Head Start program.
The State agency may pay for these services with Federal TAIs1F or State MOE
funds. (However, the Head Start grantee must account for the TA.'VF and .tifOE
funding sepazately from its Head Start funding and must also be able to identify
the needy or eligible families served with the TAIVF' or ~IOE funds.)
c. To prevent and reduce the incidence of out-of-wedlock pregnancies and
establish annual numerical goals for preventing and reducing the incidence
of these pregnancies; and
tieither this purpose nor the following purpose (related to family formation) is
limited to needy families or individuals. Thus, a State may use Federal TAti'F
funds, but not ~10E funds, to serve non-needy families or individuals for either of
these two purposes. However, the State must establish objective criteria for the
delivery of services to the non-needy.
Potential activities that would be reasonably calculated to accomplish this purpose
include abstinence programs, visiting nurse services, and programs and services
for youth such as counseling, teen pregnancy prevention campaigns, and
after-school programs that provide supervision when school is not is session A
State may also fund a media campaign for the general population on abstinence or
preventing out-of-wedlock childbearing.
d. To encourage the formation and maintenance oftwo-parent families.
A significant share of TA~~F' families consists of unmarried mothers with low
skills who live with their chhildren apart ham low-skilled, underemployed fathers.
hinny of these fathers aze involved in the lives of their children and provide some
financial support, but would like to do much more. Historically, however, the
fathers have found limited employment opportunities, and welfare rules have
worked to discourage family formation and fuller involvement of these fathers in
the lives of their children.
This fourth TANF purpose offers the opportunity to address these issues. Some
activities that are reasonabl}~ calculated to accomplish this purpose might include
parenting skills training, premarital and marriage counseling, and mediation
services; activities to promote parental access and visitation; job placement and
training services for noncustodial parents; initiatives to promote responsible
fatherhood and increase the rapacity of fathers to provide emotional and financial
support for their children; and crisis or intervention services.
2.Previously authorized activities
This statutory provision allows States to use Federal TANF funds for specific activities that had
been previously authorized based on an approved title IV-A or N-F plan and using the same
eligibility criteria contained in the approved plan. While the purposes of the TANF program are
very broad, some activities that are not now permissible had been included in a State's approved
AFDC plan, JOBS plan, or Supportive Services plan as of September 30, 1995 (or, at State
option, as of August 21, 1996). Examples of such activities are juvenile justice and certain State
child welfare and foster care activities that were included in many States' approved plans. A
State may continue to provide these services or benefits that were previously authorized,
notwithstanding the prohibitions in PRWORA (under section 408 of the Social Security Act). For
example, if a State's approved AFDC plan as of September 30, 1995, allowed it to assist children
in the juvenile justice system, then it may continue to use TAIv"F funds for such activities even
though the child is not living with a pazent or other adult caretaker relative.
In providing previously authorized services, a State must choose one of these two dates (i.e.,
either 9 30 95 or 8:21, 96). It should consider rivo things in deciding which date to choose. First,
if it previously covered juvenilejustice services under its Emergency Assistance program and
wants to continue to do so under TA~'F, it must elect the September 30, 1995, date. Since the
Department notified States that juvenile justice services would no longer be approved in a State
plan on September 3Q, 1995, juvenile justice activities would not be allowable if a State elected
the August 1996 date. Second, if a State significantly amended its State plan after September 30,
1995, to expand coverage of child welfare or State foster care services or to provide other
expanded benefits, it must choose the latter date if it wants to continue those beneftts under
TAIv'F and they are not otherwise allowable.
3.Transfers
.4 State may transfer a total of up to 30°0 of its TA.VF funds for a fiscal year to the Child Care
Development Fund (CCDF) and the Social Services Block Grant program (SSBG). However, it
may transfer no more than 10°'° (4.25% beginning in fiscal year 2001) of the grant amount for a
fiscal year to the SSBG. If a State transferred 10% of its annual TANF grant to SSBG, then it
could transfer up to 20% of the annual gr~mt to CCDF. Once a State transfers funds to either
program, it must use the funds in accordance with the rules of the receiving program.
Child care is critically important to accomplishing the goals of TANF. Since most States are
unable to fulfill the demand and need for child care with their CCDF funds, they should look to
TA1VF as another vehicle for expanding the availability of child care. They could either transfer
the Federal TANF funds to CCDF or spend TANF and'or MOE funds directly on child care.
Also, by transferring funds or expending 7'ANF funds on child care services, States could make
additional funds available to expand child care quality activities under CCDF. These quality
activities could include funding professional development activities, increasing payment rates to
allow for better compensation of child care workers, and establishing or enhancing incentives for
providers who attain accreditation.
State Maintenance-of-Effort (MOE) Funds
• "Eligible families"
The law requires that for each fiscal yeaz, a State must spend State funds in an amount equal to at
•least 80% of the amount it spent in FY 1994. But, if the State meets the minimum work
participation rate requirements for all families and two-parent families, then it need expend only
75% of the amount it spent in FY 1994. Under the TANF MOE provisions, a State may expend
these State MOE funds on a wide variety of services, benefits, and supports that help families
become self-sufficient.
A State must use all of its ~IOE funds to help "eligible families." Eligible families must meet
two criteria: (1) include a child living with his or her custodial parent or other adult caretaker
relative (or a pregnant woman); and (2) be financially eligible according to the appropriate
income,'resource standazds established by the State in its TA.~~' plan. "Eligible families"
includes those eligible for TA.ti'F assistance, as well as those who would be eligible, but for the
time limit on the receipt of federally funded assistance or PR1b'ORA's restrictions on benefits to
immigrants. Thus, "eligible families" may include certain non-citizens.
• Qualified activities
Qualified activities to help eligible families include:
• cash assistance, including any part of [he State's share of the child support collection on
behalf of the family that is sent to the family and disregarded in determining the family's
eligibility for and the amount of assistance;
• child care assistance;
• educational activities to increase self-sufficiency, job training and work (except for
activities or services that the State makes generally available to its residents without cost
and without regard to their income);
• administrative costs in connection with any of these activities, subject to a 15°%
limitation;
• any other services or benefits that .are reasonably calculated to accomplish a purpose of
the TA:VF program.
Thus, a State must expend all of its MOE funds to help eligible families in a manner that is
reasonably calculated to accomplish one or more of the four purposes of [he TANF program.
State spending on families that are not eligible for TANF does not count toward the State's MOE
requirement.
• Funding options
As the following figure indicates, States may spend their ~ti10E funds in three different ways:
• Commingled with Federal funds and expended in the TANF program. These
expenditures are the least flexible because they are subject to Federal funding restrictions,
TANF requirements, and MOE limitations.
• Segregated from Federal funds, but spent in the TANF program. These expenditures are
subject to many TANF requirements, including the work participation requirements, child
support assigrunent and reporting. However, time limits and Federal funding restrictions
(such as teen parent restrictions) do not apply.
• In separate State programs, operated outside of the TANF program. These expenditures
are very flexible and not subject to the general TANF requirements. However, they must
be consistent with the goals of the TANF statute and other MOE requirements. Also, they
aze included within the 15% administrative cap for MOE expenditures, and they are
covered bycase-record reporting requirements under some circumstances.
Given these possibilities, States have the opportunity to tailor their programs and services in
ways that aze appropriate for them and best suited to address the needs of eligible families in
their State.
Potential Funding Options
Federal TANF Funds State MOE Funds
r
N.'
Com
~ TANF Grant S
+ Fe
s T
TANF PROGRAM
Transfer to:
CCDF & SSBG
Appropriate Uses of Funds
The TANF program provides tremendous flexibility for funding a wide variety of activities,
supportive services, and benefits to accomplish the purposes of the program. The following lists
identify some possible uses of Federal TANF or State ~IOE funds.
Support for Work Activities
• Provide job search, job placement, transportation, and child care services to TA.~1F
applicants from the beginning of the TA.~IF application period
• Provide work experience and case management to individuals with employment bamers,
such as little or no work history
• Subsidize wages directly or through an employer. Provide subsidies to help pay for the
creation of community jobs for needy pazents in private, non-profit or community
agencies
• Help unemployed needy noncustodial parent by providingjob skills training, re-training,
job search, emplo}7rtent placement services, or other work-related services
• Provide job retention services orpost-employment follow-up services, such as
counseling, employee assistance, or other supportive services
• Pay refugee services providers to provide linguistically and culturally appropriate services
that help refugee TA:VF recipients obtain employment or participate in work activities
• Provide specialized training for supervisors orjob coaches in private industry on how to
work with newly hired TA:~`F individuals who have serious bamers to employment--or
reimburse employers for the time supervisors spend in such training
• Subcontract with business organizations or associations to expand participation of
employers in welfare-to-work initiatives and encourage the hiring of TANF recipients
• Conduct a State public awareness campaign designed to inform employers about the
benefits of hiring TA:v'F recipients and encourage employers to alert the TANF office
when they have job openings
Child Care
• Transfer Federal TANF funds into the Child Care and Development Fund to support
"quality activities," e.g., to help child care providers attain accreditation and increase
monitoring and unannounced inspecaions of child care settings
• Counsel needy parents about health, safety, educational, social, and emotional
development issues to consider in selecting child care
• Provide full-day. full-year high quality child caze services for young children in needy
families by expanding or extending the hours of programs with high educational and
developmental standards, such as Head Star[ and accredited pre-kindergarten
• Increase child care subsidy levels, especially for infant and toddler care, to expand the
availability of care for needy families
• Increase child care payment rates for chid care offered during non-traditional hours in
order tb expand the availabilityofsuch care
• Expand child care staff recruitment activities to increase the availability of care For needy
families, especially in areas of short supply such as care for children with special needs,
sick-child care, caze in rural azeas, and care during non-traditional work hours
• Fund after-school and summer recreation activities that provide supervision and
developmental services for children and youth while their needy parents work
Transportation
• Provide transportation allowances to cover incidental expenses and participation-related
expenses for unemployed families
• Provide transit passes or tokens
• Arrange with another agency to use its buses or vans or share in the costs of purchasing
transportation services
• Incest in reverse commute projects and other local initiatives to improve the existing
transportation network so that needy parents can access jobs
• Reimburse clients for mileage, auto repairs, or auto insurance to facilitate finding
employment andjob retention
• Contract with a private organization or service to refurbish previously owned cars and
provide the cars to TAIVF recipients or provide financing support that enables recipients
to purchase a car
• Subsidize costs of transporting needy children to child caze
Education and Training
• Train employed recipients, fomterrecipients, and noncustodial parents injob-related
vocational and literacy skills needed for regular, full-time employment
• Fund education or job training acUivities at colleges and secondary and technical schools
that promote advancement to higher paying jobs and self-sufficiency
• Share with employers the costs of on-site education, such as ESL or literacy classes
• Provide classes for new, unskilled, and semi-skilled workers to teach new skills or
enhance existing skills in order to improve their chances ofjob retention and
advancement
Mental Health/Substance Abuse
• Use Federal TANF funds to provide appropriate counseling services (e.g. mental health
services, anger management counseling, non-medical substance abuse counseling
services) to family members with b~uriers to employment and self-sufficiency
• L'se Federal TANF or State MOE fiords to provide non-medical substance or alcohol
abuse services, including room and board costs at residential treatment programs
• Cse State MOE funds (that have not been comm%ngled with Federal TANF funds) to pay
for medical services (e.g., for treatment of substance or alcohol abuse not paid by
Medicaid) or to provide medical coverage for families that lack medical benefits (e.g., for
families ineligible for transitional Medicaid or for adults whose children are served by
Medicaid or CHIP)
Domestic Violence
• Use TANF or MOE funds to help victims of domestic violence relocate somewhere else
in the State or outside the State where employment or safe housing has been secured
• Collaborate with domestic violence service providers to screen and identify victims;
develop safety and services plans; provide appropriate counseling, referrals and other
related services; determine the need for waivers of TANF program requirements;
establish procedures that will maintain confidentiality ofcase-record information and
ensure safety; and develop appropriate stafTtraining
Developmental and Learning Disabilities
• .arrange for the State's vocational rehabilitation agency or similar provider to provide
assessment, evaluation, assistive technology and equipment, and vocational rehabilitation
services to needy individuals who have physical or mental disabilities, but would not
otherwise receive services (Such services may also be important to parents or caretakers
who receive SSI, while their children receive TA.vF'.)
• Provide cash assistance during the waiting period for SSI benefits for a disabled parent or
disabled child in the family
Enhancing or Supplementing the Family Income or Assets
• yfake loans to needy families to provide stable housing, secure a car, or for other reasons
that are reasonably calculated to meet a purpose of the program
• Create a State refundable Eamed Income Tax Credit Program, using State I~fOE funds to
pay for the refundable portion of the credit
• Fund a supplemental unemploytrtent insurance program for unemployed workers in needy
families who are not eligible for benefits under the State's regular unemployment
insurance program
• Provide stipends to needy parents who combine educationitraining and work
• Increase earnings disregazds for employed parents and adult caretaker relatives
• Match the contributions of TANF eligible individuals in Individual Development
Accounts (IDAs) developed either under the TANF provisions or the Assets for
Independence Act of 1998
VOTE: IDA benefits are not "assistance." Also, IDA benefits and assets may be disregarded in determining TAYF
eligibility and benefits.
• Pass through to the family (and disregard) some or all of the State's shaze of the assigned
child support collection or pass through the full amount of the child support collection by
using the State's share of the assigned child support collection for part of it and using
additional State MOE funds to pay the remainder
• Provide weatherization assistance or pay for home repairs
• Provide rental assistance, including security deposits, application fees, and payments of
back rent to prevent evictions
• Provide a moving allowance (e.g., when a needy adult family member secures a job that
is not close to the family's home)
• Inform families about the availability of the Eamed Income Tax Credit and other ongoing
supports for working families including food stamps, Medicaid, and child care
Child Welfare
• Collaborate with the child welfare agency to identify and serve children in needy families
who are at risk of abuse or neglect (e.g., family counseling, vocational and educational
counseling, and counseling directed at specific problems such as developmentally
disabled needs)
• Provide cash assistance to needy caretaker relatives or provide appropriate supportive
services (e.g., referral services, child rare, transportation, and respite care) to caregiver
relatives who can provide a safe place for a needy child to live and avoid his or her
placement in foster care
• Screen families who have been sanctioned under TA\T' for risk of child abuse or neglect
and provide case management services designed to eliminate bamers to compliance
Family Formation and Pregnancy Prevention
• Fund responsible fatherhood initiatives that will improve the capacity of needy Fathers to
provide financial and emotional support for their children
• Provide parenting classes, premarital and mamage counseling, and mediation sen ices
• Pror•ide counseling services or classes that focus on teen pregnancy prevention
• Fund State or local media campaigns to encourage young people to delay parenting or to
encourage fathers to play a responsible role in their children's lives
• Change TANF eligibility rules to provide incentives for single parents to marry or for
two-parent families to stay together
Community Development
• Issue grants to local welfare planning councils for their use in addressing TANF recipient
needs within a specific locale
• Provide loans to small businesses if they agree to hire and train TANF recipients
• Fund amicro-enterprise development initiative
• Fund Community Development Corporation (CDC) projects or community-based
organizations that employ TANF clients, e.g., by covering the appropriate share of
planning, development, and implementation costs
General
• Use Federal TANF funds for activities for which the State had been specifically
authorized per the State's approved AFDC plan, JOBS plan, or Supportive Services plan
as of September 30, 1995, or, at State option August 21, 1996 e.g., foster care or
juvenile justice activities
• Use Cunds to purchase food stamps from the U.S. Department of Agriculture for legal
aliens who are not eligible for benefits under the Federal food stamp program
• Provide outreach activities that will irnprove access of needy families to medical benefits
provided under the Medicaid or CHIP' programs
• Contribute State MOE funds to Tribal TANF programs
• Provide training to counselors in employee and family assistance programs about the
needs of the population leaving welfaze
Additional Considerations
• The definition of "assistance"
• R'hv it matters
The word "assistance" and the phrase "families receiving assistance" aze important because
most of the prohibitions, restrictions, and requirements in the Act apply only when clients are
receiving "assistance." For example, all families receiving TA.~IF' "assistance" (whether funded
with Federal Tr~'~F or State MOE funds) must meet work participation and child support
cooperation requirements. Few of the TAIv"F program rules pertain to needy families served
outside of the State's TA.'v~ progam, in a separate State or local progam. Also, few progam
rules pertain to families receiving benefits or services that do not constitute "assistance."
• V1'hat is included
"Assistance" includes benefits directed a.t basic needs (e. g., food, clothing, shelter, utilities,
household goods, personal care items, and general incidental expenses) even when conditioned
on participation in a work experience or community service activity. It also includes child care,
transportation, and supports for families that are not employed. ("Assistance" is defined in
§260.31 of the TAA1F final rule.)
• What is not included
"Assistance" excludes:
• child care, transportation, and other supportive services provided to families that are
employed;
• nonrecurtent, short-term benefits, which: (1) are designed to deal with a specific crisis
situation or episode of need; (2) are not intended to meet recurrent or ongoing needs; and
(3) will not extend beyond four months;
• work subsidies;
• refundable earned income tax credits;
• contributions to, and distributions from, Individual Development Accounts;
• education or training, including tuition assistance (although stipends or allowances to
cover living expenses would constitute "assistance");
• other services such as counseling, case management, peer support, child care information
and referral, transitional services, job retention, job advancement, and other
employment-related services that do not provide basic income support; and
• transportation benefits provided under a Job Access or Reverse Commute project to an
individual who is not otherwise receiving "assistance."
Restrictions on the use of funds
• General prohibitions
When planning for the provision of new or expanded services, supports, and activities, States
should be awaze of certain statutory requirements, restrictions, and cost principles that apply to
the use of Federal TAIYF funds. The general prohibitions and restrictions include restrictions on
providing "assistance" to certain teen parents, convicted felons, and individuals convicted of
fraud; a prohibition on expending Federal TAI~1F funds on medical services (except
pre-pregnancy family planning); and a 15% cap on administrative expenditures. The chart
attached to this paper summarizes the major restrictions and requirements that apply to Federal
and State expenditures.
• Application of general Federal grant rules
• Any use of Federal TA1VF funds must be consistent with TA:~'F purposes and applicable
TAti"F rules.
• A State may not use Federal TA.~7F funds to satisfy acost-sharing or matching
requirement of another Federal program unless specifically authorized by Federal law.
However, to foster expenditures on transportation services that could help low-income
families access employment, section 3037 of the Transportation Equity Act for the 21'~
Century (Pub. L. 105-178) specifically allows States to use Federal TA:'v'F funds (up to a
statutory limit) to help meet cost-;sharing requirements under the Job Access program.
• A similar general restriction applies to State ~10E funds; i.e., funds used to meet Federal
cost-sharing requirements in other programs are generally not allowable as MOE.
However, the Social Security Act specifically permits a limited amount of State funds
expended to meet the State's CCDF ~tifatching Fund requirement to count toward the
State's b10E. The amount that maybe double-counted is limited to the State's CCDF
MOE level.
• L`nder the statute, States have specific authority to transfer a limited percentage of their
Federal TA.'VF funds to CCDF or SSBG. States may not transfer TAI~IF funds to another
federally funded program without specific statutory authority. (Transfer of funds means
fuming over the funds authorized under one program for use by administrators of another
program. It also means that transferced funds are blended with other Federal funds
directly awarded to the receiving program and become subject to the rules of the
receiving program.)
• To carry out one of the statutory purposes of the TANF program, States may contract for
expansions of services in other federally funded programs, unless it would violate
Congressional intent. (Examples of possible expansions would be to contract with: (1)
Head Start centers for more full-day, full-yeaz sen•ices or infant and toddler care; or (2)
adult education programs for additional ESL classes. However, States could not contract
to use Federal TANF funds for inoculations; there is a specific statutory prohibition on
using Federal TANF funds to provide medical services.)
• l~'hile a State may contract for services or benefits, it may not directly transfer TANF
funds into the other program.
• A State may not use Federal TANF car State MOE funds to supplant or satisfy required
State matching requirements in other programs. However, a State may generally spend
TANF funds and MOE funds to supplement the services provided by other programs.
• Although States have considerable flexibility to expend TANF funds consistent with the
purposes of TANF, the statutory language indicates that Congress intended for States to
continue to operate their child support enforcement, foster care, and adoption assistance
programs under titles N-D and N-E of the Social Security Act. Thus, use of TANF or
;ti10E funds to supplant State spending in these programs is not allowable.
• Any costs charged to the TA.'VF progrun must be necessary, reasonable, and allocable to
the program.
• Office of Management and Budget (O.'~SB) cost principles (in Circular A-87) also address
the requirements and bases for allocating costs that maybe associated with more than one
Federal program or anon-Federal program. Basically, total allowable costs can consist of
direct and indirect costs. A cost is either direct or indirect; it cannot be both. A State first
needs to determine the allowable direct costs and to assign a fair share of these costs to
each program. It must then allocate the allowable indirect costs using a methodology that
accurately assigns the costs in accordance with the relative benefits attributable to each
program. The allocation of costs must allso be consistent with section 502(a)(5) of the
Agriculture, Research, Extension, and Education Act of 1998, which is designed to
prevent shifting of Food Stamp administrative costs to TANF.
• A State may not use TANF funds to construct or purchase buildings or facilities or to
purchase real estate. This restriction is based on the general rule, in a long line of
Comptroller General decisions, that in the absence of specific legislative authority,
appropriated funds may not be used for the permanent improvement ofproperty,
including construction and purchase. For example, see the decision at 42 Comp. Gen. 480
(1960).
• A State may not use TANF funds for general expenses required to carry out other
responsibilities of the State or its subrecipients (e.g., building roads).
• Use of reserved funds
States may reserve Federal TANF funds that they receive for any fiscal yeaz for the purpose of
"providing assistance" under the TA.'VF' program, without fiscal year limitation. A State may
only expend reserved money: (1) within the TANF program; and (2) to provide benefits that meet
the definition of "assistance" or on related administrative costs. This limitation precludes a State
from transferring reserved funds to either the CCDF or SSBG.
General Guidance and References
For additional information on appropriate use of funds, consult the following documents:
• The final TA.'VF Rule published in the Federal Reeis[er of April 12, 1999 (64 FR 17720).
Also available online at: ,'programs/Ofa)
• Policy announcement issued by the Office of Family Assistance (refer to
TANF-ACF-PA-97-1, dated January 31, 1997) containing guidance about
State spending requirements, known as maintenance of effort (MOE)
(available at lnewsiwelfarel)
• Joint guidance issued December 23, 1998, regarding the ways in which
TANF, Welfare-to-Work, and Job Access funds can be used to help States
and communities provide transportation services to eligible individuals
available at;programs/ofa/pa-98-S.htm)
• Office of Management and Budget (OMB) Circular A-87 describes the
principles that apply for determining allowable costs. Generally, OMB-A-87
provides that costs must be both "reasonable and necessary." The cost
principles of OMB Circular A-87 are designed to ensure the fair and
equitable expenditure of both Federal and state funds. (Available at:
http:'."www.whitehouse.g_ov, WH.'EOP.'OMB,html,'circular.htm])
• HHS guide on cost principles entitled Cost Principles and Procedures for
Developing Cost Allocation Plans and Indirect Cost Rates for Agreements
with the Federal Government (ASMB C-(0), which is an implementation
guide for Office of Management and Budget (014iB) Circulaz A-87. (For a
copy of the HHS guide go to
http:,;'www.hhs.gov progor~'~rantsnet;'index2.htm)
• TANF Program Compliance Supplement to OMB Circular A-133 (available
in Part 4 of the compliance supplement for Dept. of Health and Human
Services Programs at:
http:;, www.whitehouse.gov, WH/EOP~OI~IB;'Grants/A133 Compliance, 98to
c. html )
• Information on Fatherhood Initiatives is available at
http:~; www.calib.compeerta,`tareportsi tele3.htm
• Information on "Supporting Families in Transition: A Guide to Expanding
Health Coverage in the Post-Welfare Reform World" is available at
'news/welfare.`welfare.htm and
httQ//www.hcfa.~ovimedicaicL'wrd13229.htm
Overview of TANF Provisions under Different Funding Configurations
Provision Federally Funded TANF' TANF Programs Funded With Separate State
Programs Segregated State Funds Programs
Covered by State plan Yes Yes No
Needy per income Yes Ves Yes
stds in State TANF
plan
Restricted disclosure AppAceble Not applicable Not applicable
Allowable For purposes and as aufhonzed Count toward both TANF and Contlngency Count only toward TANF MOE
expenditures under IV-A or IV-F as of either Fund MOES. Must be far purposes of proprom (not Contlngenq Fund MOE).
9/30/95 or 8/21lld6 and for cash asst, child nro, certain See prior column for allowable
aducatlon, admin costs, or other actiNtles purposes.
related to purposes
15% admin cost cap Yes, with ADP exception Yes, with ADP exceptlon Ves, with ADP excepton
Medical services Only pre-pregnancy (amity No specific restdctlon No specific restriction
planning
24•montA work regt Yes Yea No
2-month work req t' Yes Yas No
Sec. 407 work regts' Yes Ysa No
work sanctions` Yes Ves No
non-displacement Yes No No
child living wiN Yes; 'minor child" not absent Yes ~ Yes
relative regt beyond specified period
child support' Assignment E cooperation Assignment 8 cooperation req'd. Share of Assignment 8 cooperation may
req'd. Share of collections to collections to Fed govt. not be req'd. No share of
Fed govt. collections for Fed. Govt.
hme limit on Ves Na Na
assistance
teen schod Required No requirement No regwremen!
attendance'
teen parent living Must be adult-supervised No requirement No requirement
arrangements'
Federal 4 statutes referenced in sec. No specific provision, but TANF beneficiaries No specific provision; other
non-discrimination 408 and other Federal are protected by other Federal employment Federal employment and
statutes employment and and non-discrimination laws non-discrimination laws may
non-discrimination laws apply apply
fraud cases' 10-yr exclusion No exclusion No exclusion
drug felons' Receive reduced benefits Receive reduced benefits No provision
data reporting' Required Required Required i/States want high
- performance bonus or caseload
reductlon credit
fugitive felons' Barred from assistance No bar No bar
This column also applies to programs and activities where S[a[e ~SOEW funds are comrrtingled with Federal TANF
funds.
l.'nder this scenario, Federal and State funds are not commingled. Thus, some, butr not all, of the Federal TANF
toles apply.
These programs count towards State iVIOE. They are no[ subject to TANF requirements, but are subject to the :~[OE
restricitons at section •109(a)(7); e.g., they must be spent on "eligible families."
Per definition of "eligible families."
'These requirements apply only when families are receiving benefits that meet the definition of "assistance."
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