However, we have indicated that costs such as equipment, travel, and office space costs, when directly associated with providing program services, would be treated as program costs (whether provided under contract or otherwise). Given the severe revenue shortfalls faced by many states as a result of the recession, many states are re-evaluating their use of TANF and MOE funds. The Cash Assistance program provides temporary cash benefits and supportive services to the neediest of Arizona's . Collection of Information Requirements Based on our initial assessment of Breakthrough Devices applying the characteristics we . Items falling under "assistance" are subject to a number of requirements, including work, time limits, child support assignment, and data reporting. Q34: Can State or Tribal Federal TANF funds be used to purchase tools and building materials in order to support a training program that will prepare needy TANF recipients for jobs in the construction trades such as carpenter, electrician, plumber, etc.? However, a State could enter into a multi-year contract with the agency to provide Federal TANF funds for rental subsidies (paid at a fair market value) on behalf on TANF-eligible families, contingent on the agency purchasing the building with other funds.12 The TANF and SSP-MOE Data Report layouts were also updated to reflect the streamlined instructions. If the answer is yes, the State may not use the same State funds to meet the cost-sharing requirements for both the other program and TANF (i.e., the State MOE). In short, TANF and MOE expenditures that are not "administrative costs" are not subject to the 15-percent cost limitations. Family planning services are not among the enumerated healthy marriage and responsible fatherhood activities. Under section 404(a)(2) of the Act, States may use segregated Federal TANF funds only for the specific activities that had been previously authorized based on the State's approved title IV-A or IV-F plan in effect as of either 9/30/95 or 8/21/96 (per the State option). For example, if the Tribe has or wants to implement an employee morale/cash incentive based on actual employee performance then TANF funds may be used to pay the incentives for TANF employees up to the percentage of effort they work on the TANF program. Due to aggressive automated scraping of FederalRegister.gov and eCFR.gov, programmatic access to these sites is limited to access to our extensive developer APIs. Q28: Could a State use Federal TANF funds to help a non-profit agency purchase a multi-family building that would provide affordable housing to a number of needy families? Under the statute and final TANF rules, prior year funds can only be used for "assistance" -- those benefits designed to meet the ongoing, basic needs of a family, such as food, clothing, shelter, utilities, etc. Expenditures on adoption assistance in such circumstances could constitute an allowable use of Federal or State MOE funds. In order to count state spending as MOE, funds must be spent on benefits and services to families with children that have incomes and resources below certain state-defined limits. A33: Yes. Given the severe revenue shortfalls faced by many states as a result of the recession, many states are re-evaluating their use of TANF and MOE funds. Hence, as explained above, to claim any MOE expenditures for outreach activities, a State must have a sound methodology that enables it to identify and claim only the portion of total qualified expenditures for benefits that have been provided to or on behalf of eligible families. A22: Yes, we mentioned that supplemental unemployment insurance for unemployed workers in needy families is an allowable use of funds in the TANF funding guide (Helping Families Achieve Self-sufficiency). The following discussion is a brief explanation of the steps that a State should take when evaluating a proposal to initiate a program, such as summer jobs for youth. Thus, section 408(a)(6) of the Act, which prohibits use of Federal TANF funds for medical services, would preclude use of Federal TANF funds for the costs of health insurance coverage. The restrictions apply to Temporary Assistance for Needy Families (TANF), which provides assistance to low-income families with children. Such a review would present a great opportunity for looking at ways to develop a more streamlined and coordinated system of quality child care services within the State. Payments to a developer for rent subsidies on behalf of needy families or transitional supportive services for families living in the subsidized apartments would be permissible uses of Federal TANF funds. For example, a program that covers a youth's wages in a subsidized public or private sector job could be associated with purpose one of the TANF statute - - providing assistance so that children in needy families may live at home -- or with purpose two (for teens with children) - - reducing dependency among needy parents through work and job preparation. Q33: Final DRA 2005 Rules: Can a county offer family planning services, funded by TANF, to a childless couple under TANF purpose 4? There are two potential sources under the TANF funding provisions: Federal TANF and State MOE funds. Please note the language in the PI explaining that a state may not treat foregone revenue as an allowable use of TANF or MOE funds, and that only the portion of the tax credit that the state actually refunds to the taxpayer may be claimed. During consideration of a summer jobs program, a State would ask itself if such a program is funded by another Federal program for which there is a cost-sharing or matching requirement. Revisions are intended to improve the clarity of the instructions, streamline reporting, and ensure all instructions are up-to-date. A41: No. A17: The first, threshold question is whether expenditures on the benefits or services would be reasonably calculated to accomplish the third or fourth goal of TANF. However, if an employee is providing program services, then the associated salary and benefits (including any employee morale costs) are excluded from the administrative cost limit. A12: The original Handbook consisted of seven parts (designated I through VII), four supplements (designated A through D), and an undesignated supplement for "Medical Assistance for the Aged." lunch provided during a Family Day at the fair for TANF clients. A3: There are limited circumstances under which a child may be placed in foster care with a non-relative and be eligible for TANF.2. [REVISED] Q15: Under the grandfathering provision at section 404(a)(2) of the Act, may a State use TANF funds for Food Stamp and Medicaid administrative costs? In Brief: The TANF maintenance of effort (MOE) requirement is a requirement that a state must spend at least a specified amount of state funds for benefits and services for members of needy families each year. It also prohibits Stats from using "the grant" for medical services except prepregnancy family planning. A State should identify in its State plan its temporary absence policy as it pertains to assistance funded with Federal TANF and commingled funds, as well as MOE-funded assistance. _________________________________________________2States may not use Federal TANF or State MOE funds to take the place of any foster care maintenance payments provided under the Federal Foster Care Program. To receive TANF funds , states must meet a maintenance of effort (MOE) requirement under which they continue to spend on programs benefiting needy families a specified share of the funds that they spent prior to welfare reform on the programs that TANF replaced. Publicly Released: May 17, 2012. If applicable, State expenditures in this area must follow the cost allocation guidelines governing expenditures involving two or more Federal programs. The four months of TANF benefits would be considered a non-recurrent, short-term benefit, even though they are provided to a recipient who has received the same or similar non-TANF/MOE benefits in order to address the same crisis or episode of need. (1) The expenditure is verifiable and meets all applicable requirements in 45 CFR 75.2 and 75.306; (2) There is an agreement between the State and the other party allowing the State to count the expenditure toward its MOE requirement; and, (3) The State counts a cash donation only when it is actually spent. Reasonable and necessary costs pertaining to TANF-related meetings and conferences, including food service expenses, are allowable. Mothers Day lunch for TANF clients at a local restaurant. Likewise, clearing up other kinds of debt (e.g., credit, car payments, etc.) A37: First and foremost, the purpose of TANF is to help needy families, along with the other goals specified in Section 401(a) of the Social Security Act, and in looking at any potential expenditure, it is important for the State, Tribe or Territory to be satisfied that the expenditure is reasonably calculated to further the program goals. States may use Federal TANF or State MOE funds to provide ongoing assistance and other benefits and services in "kinship care" situations where a child is placed with an adult relative. However, wage subsidies do not constitute assistance under our regulatory definition. However, in order to meet the "eligible families" requirement for MOE and to be consistent with the goals of TANF, there cannot be an expectation that the child will be absent beyond the reasonable period of temporary absence determined by the State for MOE purposes. Within these broad goals, states have significant flexibility to design programs and spend their funds to meet families needs. The Temporary Assistance for Needy Families (TANF) block grants maintenance of effort (MOE) provisions include specified state spending levels and general requirements on the use of funds. A, section C, a cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. In summary, expenses incurred in the context of improving employee morale, including cash incentives to employees, are allowable if they are consistent with all applicable rules and regulations, including the criteria outlined above. The TANF rules changed in 2017. The document known as the ASMB C-10, which is entitled The Cost Principles and Procedures For Establishing Cost Allocation Plans and Indirect Cost Rates For Agreements with the Federal Government, provides guidance on the allocation of costs eligible for reimbursement under more than one program. 104-193). A28: The proposed expenditures for grants or loans to a developer would not be allowable because of the prohibition against using Federal funds for construction, rehabilitation, and purchases of buildings. Q37: Are employee morale expenditures, including cash incentives to employees, an allowable use of TANF funds? Rental costs under "less-than-arm's-length'' leases are allowable only up to the amount that would be allowed had title to the property been vested in the governmental unit. To be eligible for the block grant, states must meet a Maintenance of Effort (MOE) requirement, meaning they must spend state dollars on TANF-allowable activities. As articulated in the HHS Grants Policy Statement, trailers or modular units that are classified as permanent structures are considered real property and may not be charged. For more information, contact Kay E Brown at (202) 512-7215 or brownke@gao.gov. A20: Yes, States may use their funds in this way as long as such expenditures are consistent with the purposes of the program (e.g., where legal problems are a threat to family stability or undermine the employment of needy parents). For example, if a State proposed to define needy families based on current unemployment and prior low wages, using UI wage data in its determination, we would not reject that proposal. To provide information for its potential extension or reauthorization, this testimony draws primarily on previous GAO work to focus on (1) the key features of the state MOE requirements and (2) how the role of state MOE spending has changed over time. ), (ii) Such child is without resources immediately accessible to meet his needs; and. Control group is a term relevant to continuation of a "waiver" and has the meaning specified at 260.71 . | 1310 L St. NW, Suite 900 | Washington, D.C. 20005 | (202) 906-8000, Copyright 2023 by the Center for Law and Social Policy, Inc. All Rights Reserved, Work-Based Learning and Subsidized Employment, Still at Risk: The Urgent Need to Address Immigration Enforcements Harms to Children, Expanding Access to Child Care Assistance: Opportunities in the Child Care and Development Fund. If this agency fails to obligate all of these transferred funds within CCDF's maximum two-year obligation period (i.e., by end of FY 2000), it may still return the money to TANF as long as it does so no later than September 30, 2000. For example, it may look at income received in the prior month, in the current month, or even in the prior year (e.g., for eligibility for a refundable tax credit) in determining financial need. Under 45 CFR 286.45(e), Tribal TANF funds may not be used for the construction or purchase of facilities or buildings., According to the HHS Grants Policy Statement, Exhibit 4. ", Q25: Does a State have flexibility in establishing the period of time it will look at in determining if a family is needy? Examples of topics related to TANF include housing, child welfare, and other issues impacting vulnerable families. Interest costs related to capital leases are allowable to the extent they meet the criteria at 2 CFR 225, App. Although TANF purposes three and four are not restricted to the needy, MOE is. Also, MOE expenditures must meet all the conditions in section 409(a)(7) of the Act and subpart A of part 263 of the TANF rules in order to count as "qualified expenditures" for MOE purposes. The implementing regulation was 45 CFR 233.120. For this purpose, a less-than-arm's-length lease is one under which one party to the lease agreement is able to control or substantially influence the actions of the other. Therefore, the restriction at 45 CFR 286.45(e) applies. (Posted on: 5/2/2013). The expanded role of MOE in state TANF programs highlights the importance of having reasonable assurance that MOE spending reflects the intended commitment to low-income families and efficient use of federal funds. For example, for fiscal year 2009, the most recent data available, 16 of the 45 states that met the TANF work participation rate would not have done so without the credit they received for excess state MOE spending. The third step for the State would be to establish eligibility criteria, including a definition of "needy" (generally in the form of income and/or resource standards) for the receipt of summer jobs program benefits. _________________________________________________11A one-time payment to a family to assist in the purchase of a home (e.g., to assist with the costs of settlement and/or a downpayment) would not be considered assistance either; it would be excluded as a nonrecurrent, short-term benefit.12Such rental subsidies would constitute assistance for families that benefit from them.Q29: Assume a State program provides a deferred payment loan to a developer to assist with the construction or rehabilitation of multifamily housing for TANF families with substantial barriers to workand that the housing assistance is "bundled" with services, such as on-site child care. It is also important to note that for an employee whose salary and benefits qualify as an administrative cost, any employee morale costs attributable to that employee are also subject to the TANF jurisdictions administrative cost limit. Please note, any TANF or MOE funded benefit that is designed to meet a particular need on an ongoing basis (i.e., more than four consecutive months) would have to be classified as assistance if it qualifies as such under the applicable regulatory requirements. To benefit from current prices and discounts for bulk purchases, a State could contract for computers and Internet access and actually liquidate the current year obligation over the next two years. Selected Items of Cost, A trailer or modular unit is considered real property when the unit and its installation are designed or planned to be installed permanently at a given location so as to seem fixed to the land as a permanent structure or appurtenance thereto. A42: Yes. The Preamble to the TANF Final Rule states that It would be reasonable for States to use the time frames given under section 408(a)(10) to define temporary and to develop a corresponding MOE policy (FR Vol. In some cases, they are substituting TANF funds for state funds that had previously been provided to nonprofits. (Posted on: 5/2/2013), An Office of the Administration for Children & Families, U.S. Department of Health & Human Services, Administration for Native Americans (ANA), Administration on Children, Youth, and Families (ACYF), Office of Family Violence and Prevention Services (OFVPS), Office of Human Services Emergency Preparedness and Response (OHSEPR), Office of Legislative Affairs and Budget (OLAB), Office of Planning, Research & Evaluation (OPRE), Public Assistance Reporting Information System (PARIS), About Temporary Assistance for Needy Families, About Health Profession Opportunity Grants. Such costs will be equitably apportioned to all activities of the governmental unit. For example, we believe that Food Stamp informational activities and SCHIP outreach services are reasonably calculated to accomplish the first of the four TANF purposes: to provide assistance to needy families so that children may be cared for in their own homes or in the homes of relatives. Also they would count as MOE expenditures at drawdown only to the extent that they represent expenditures on behalf of needy families.States may also use Federal TANF funds for rent subsidies for needy families, but they may not draw down Federal TANF funds to place them in a reserve account. If the State now puts additional TANF money into its CCDF program, does CCDF become a TANF-funded program, in which case the non-employed receiving CCDF funds are getting child care from a TANF-funded program (and are subject to time limits and other TANF requirements)? Likewise, section 408(a)(4) prohibits the use of Federal funds only on "assistance" to teen parents who are not attending appropriate educational activities. The TANF program also has a required annual cost-sharing requirement, known as maintenance-of-effort (MOE). 9. A21: Yes, States may use TANF and/or MOE funds for these purposes. Given that the summer jobs program achieves a TANF purpose, the State would then determine whether or not the benefits (i.e., the wage subsidies in this case) constitute "assistance" as defined under the Federal regulations at 45 CFR 260.31. In other cases, they are claiming existing expenditures towards the MOE requirement, often for the first time. The same definitions of administrative costs and program costs apply to both Federal TANF and State MOE funds. Two programs are considered assistance by federal definition and three are considered non-assistance programs. Q1: May States help the non-needy with services that are consistent with TANF purpose one or two as long as those services fall outside the definition of assistance? The regulations at 45 CFR 286.45(e) specifically prohibit the purchase of facilities or buildings with Tribal TANF funds; trailers and modular buildings, which are designed to serve as dwellings or places of business, fit this classification. At the end of the 12-month period, a new application must be taken, and eligibility must be determined in order for EA to be authorized during the 30-day period which begins a new 12-month period. By spending prior year dollars on assistance, however, a State could free up current year funds for use on computers and Internet access. Likewise, a State may determine that a family is eligible for an extended period of transitional benefits based on its eligibility for cash assistance in a recent prior period. Section 402 of the Act requires "eligible States" (i.e., States that receive Federal TANF funds) to certify that they will operate a Foster Care and Adoption Assistance Program under Title IV-E of the Act. The final TANF rule narrowed the scope of this pro-family claiming provision to certain pro-family activities within TANF purpose 3 or TANF purpose 4. As we stated in the preamble to the TANF final rule, at 62 FR 17841, "[a]ctivities authorized under this subsection must have been in an approved plan under part A or part F to be an allowable expenditure of Federal TANF funds." Thus, in situations where LEP-related services are needed for TANF, Food Stamp, and Medicaid benefits, States must appropriately allocate the costs of those services among these three programs. To develop the spending-related findings in this body of work, GAO reviewed relevant federal laws, regulations, and guidance, state TANF data reported to the U.S. Department of Health and Human Services (HHS), and related financial data from selected states.