Detailed Information on the
Temporary Assistance for Needy Families (TANF) Assessment

Reassessing the program's performance measures and related targets.

Implementing the plan to determine the rate and amount of cash assistance payments that are paid improperly and developing a plan for reducing improper payments.

Reassessing the program's performance measures and related targets. Milestone: Make preliminary reassessment based on the estimated gap between states' current work participation rates and projected target rates states need to achieve for FY 2007.

Implementing the plan to determine the rate and amount of cash assistance payments that are paid improperly and developing a plan for reducing improper payments. Milestone: Department of Health and Human Services (HHS)/Office of Inspector General (OIG) determines the TANF improper payment rates in three pilot states, including assessing the causes for improper payments as well as the review methodology used in the pilot states.

Measure: Increase (from the baseline year) the percentage of adult TANF recipients who become newly employed.

Explanation:This measures job entry. Note that 2003 was established as a new baseline to account for change in data collection source and harder to serve population. Targets were adjusted from FY 2006 and forward because it is too late to make changes to FY 2004 and FY 2005 targets.

Measure: Annual cost per adult recipient.

Explanation: The numerator is the total Federal TANF and state maintenance of effort (MOE) expenditures on work-related activities/expenses, transportation, and a proportional amount on administration and systems. The denominator is the number of adult TANF recipients.

Measure: Maintain the number of children living in married couple households as a percentage of all children living in households.

Explanation:This measures progress made in program's goal of promoting healthy marriages.

Measure: Increase (from the baseline year, FY2000) the percentage of adult TANF recipients/ former recipients employed in one quarter of the year that were still employed in the next two consecutive quarters.

Explanation:This measures job retention. Note that 2003 was established as a new baseline to account for change in data collection source and harder to serve population. Targets were adjusted from FY 2006 and forward because it is too late to make changes to FY 2004 and FY 2005 targets.

Measure: All States meet the TANF all-families work participation rate of 50% (including the caseload reduction credit).

Explanation:This measures the percentage of states that met the all families work rate of 50%, with the caseload reduction credit.

Measure: Increase (from the baseline year) the percentage rate of earnings gained by employed adult TANF recipients/former recipients between a base quarter and the second subsequent quarter.

Explanation:This measures earnings gain. Note that 2003 was established as a new baseline to account for change in data collection source and harder to serve population. Targets were adjusted from FY 2006 and forward because it is too late to make changes to FY 2004 and FY 2005 targets.

Measure: Increase the rate of case closures related to employment, child support collected, and marriage.

Explanation:

Is the program purpose clear?

Explanation: The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA) amended title IV-A of the Social Security Act by terminating the Aid to Families with Dependent Children (AFDC, the prior welfare program), the Job Opportunities and Basic Skills Training (JOBS) and the Emergency Assistance (EA) programs and creating a single block grant program entitled Temporary Assistance for Needy Families (TANF). PRWORA clearly defines four purposes for TANF and specifies that TANF funds may be used in any manner that is reasonably calculated to accomplish one of the following purposes: 1) provide assistance to needy families so that children may be cared for in their own homes or in the homes of relatives; 2) end the dependence of needy parents on government benefits by promoting job preparation, work, and marriage; 3) 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 4) encourage the formation and maintenance of two-parent families.

Evidence: 1) Personal Responsibility and Work Opportunity Reconciliation Act of 1996. P.L. 104-193. <thomas.loc.gov/cgi-bin/query/D?c104:1:./temp/~c1043xgiB6::>; 2) Social Security Act. Title IV-A block Grants to States for Temporary Assistance for Needy Families. Sections 401(a) and 404(a)(1). <www.ssa.gov/OP_Home/ssact/comp-toc.htm>

Does the program address a specific and existing problem, interest, or need?

Explanation: As of June 2004, there were 4,729,291 individuals receiving TANF cash assistance. Research shows that stable and secure parental employment can have many positive effects on family and child well-being. Specifically, it reduces the stress associated with unemployment or underemployment and is associated with higher family income and lower poverty rates; greater access to health care; and improved children's psychological well-being and family functioning. Also, the TANF population continues to be largely single mothers with children born out-of-wedlock. Research shows the ill effects of this combination where young women ages 17 and under with children born out-of-wedlock are more likely to go on public assistance and to spend more years on welfare once enrolled. Children born out-of-wedlock have a substantially higher risk of being born at a low birth weight, having low verbal cognitive attainment, and experiencing child abuse and neglect. These children also have a greater likelihood of becoming teenage parents themselves, and are three times more likely to be on welfare when they grow up. Also, single mothers with children are five times more likely to live in poverty than married, two parent families. In light of these research findings, the TANF program focuses on helping families on the road to economic independence and self-sufficiency by providing temporary cash assistance, a variety of support services such as job training, promoting healthy marriage and preventing out-of-wedlock births.

Evidence: 1) For employment rates of never-married mothers with children under 18, see Figure F at aspe.hhs.gov/hsp/05/unemp-receipt/index.htm For employment rates of AFDC/TANF recipients, see chapter 1 of the TANF Sixth Annual Report to Congress at <www.acf.hhs.gov//programs/ofa/annualreport6/chapter01/chap01.htm.>; 2) For work rates and earnings for single mothers, see the Executive Summary (under "Work and Earnings") of the TANF Sixth Annual Report to Congress, and also Chapter 4 of the report, available online at <www.acf.hhs.gov//programs/ofa/annualreport6/ar6index.htm>; 3) For poverty rates for single mothers with children, see: <pubdb3.census.gov/macro/032004/pov/new07_100_01.htm> - families with related children under 18 and <pubdb3.census.gov/macro/032004/pov/new03_100_01.htm> - people in families with related children under 18; 4) For evidence of the positive effects of marriage, see Waite, L.J., & Gallagher, M. (2000). The Case for Marriage: Why Married People are Happier, Healthier, and Better Off Financially. New York, NY: Broadway Books as cited in TANF Sixth Annual Report to Congress (Chapter 7), at <www.acf.hhs.gov/programs/ofa/ar6index.htm>; 5) Lerman, Robert. (July 2002). ""Effects of Marriage on Family Economic Well-Being," Office of the Assistant Secretary for Planning and Evaluation, HHS. <aspe.hhs.gov/hsp/marriage-well-being03/index.htm>; 6) National Center for Health Statistics News Release, "Birth Rate for Women Aged 40-44 Years Rose in 2003". Available at <www.cdc.gov/nchs/pressroom/04facts/birthrates.htm>; 7) National Center for Health Statistics, "Births: Preliminary Data for 2003", <www.cdc.gov/nchs/data/nvsr/nvsr53/nvsr53_09.pdf>; 8) National Institute of Child Health and Human Development, America's Children: Key National Indicators of Well-Being 2003 (Washington, DC: Federal Interagency Forum on Child and Family Statistics, July 2003) <www.nichd.nih.gov/publications/pubs/childstats/report2003.pdf, accessed July 11, 2005.>; 9) GAO study - Welfare Reform: Former TANF Recipeitns with Impairments Less Likely to Be Employed and More Likely to Receive Federal Supports (GAO-03-210) see page 8 & 9; 10) GAO study- Domestic Violence: Prevalence and Implications for Employment Among Welfare Recipients See page 7

Is the program designed so that it is not redundant or duplicative of any other Federal, state, local or private effort?

Explanation: TANF is the only Federal program that provides cash assistance to meet the basic needs of families with children and is also the only Federal program statutorily charged with encouraging the formation and maintenance of two-parent families. Although there are other means-tested cash assistance programs such as Supplemental Security Income and State General Assistance, most are entitlement programs that serve a population that is unique and different from that of the TANF program and lack the flexibility to offer the wide range of non-cash services that TANF provides. Other means-tested programs such as Food Stamps, the Child Care and Development Fund, and Medicaid do not provide cash assistance and generally have a more narrow purpose. Also, states may choose to spend TANF funds on services, such as child care and employment services, which mirror services provided by the Child Care and Development Fund (CCDF) and the Workforce Investment Act (WIA). However, states are given great flexibility in developing their TANF programs, such that states coordinate their activities with existing state, local and private efforts, including those of faith-based organizations, in order to reduce duplication and effectively meet the needs of low-income families with children. Providing flexible funding under TANF rather than increasing funding to a targeted program allows states to determine the activities that will be most effective in meeting local needs.

Evidence: 1) "TANF Sixth Annual Report to Congress." November 2004. HHS ACF Office of Family Assistance. <www.acf.hhs.gov/programs/ofa/annualreport6/ar6index.htm>; 2) US Code Title 7 Ch. 31: Food Stamp Program. <www.access.gpo.gov/uscode/title7/chapter51_.html>; 3) Social Security Act. Title XX: Supplemental Security Income. Title IV-B: Child Care and Development Fund. Title IX: Medicaid. <www.ssa.gov/OP_Home/ssact/comp-toc.htm>; and 4) Greenberg, Mark & Noyes, Jennifer L. (2005) "Increasing State and Local Capacity for Cross-Systems Innovation: Assessing Flexibility and Opportunities under Current Law." <www.nga.org/cda/files/CLASP.pdf>

Is the program design free of major flaws that would limit the program's effectiveness or efficiency?

Explanation: TANF improved Federal assistance for needy families with children by substantially increasing state flexibility. However, since TANF's enactment in 1996, there are areas of the program design in need of improvement. Most notably, the current law allows for a caseload reduction credit, which enables states to lower their required work participation rate based on caseload declines since FY 1995. With the unpredicted and dramatic caseload decline, the Federal work requirements have weakened and this phenomenon has circumvented the original intent of the law. In reauthorization, the Administration and Congress are working to modify these credits, so that states continue to engage all recipients in activities leading to self-sufficiency. The Administration also proposes to redirect out-of-wedlock birth bonus funds to promote healthy marriages, family formation, and fatherhood.

Evidence: "Working Toward Independence." February 2002. The White House. <www.whitehouse.gov/news/releases/2002/02/welfare-reform-announcement-book.html>

Is the program design effectively targeted so that resources will address the program's purpose directly and will reach intended beneficiaries?

Explanation: PRWORA requires states to spend 75% to 80% of their 1994 welfare spending in what is known as Maintenance of Effort (MOE). The purpose of MOE is to prevent states from using the Federal TANF funds to supplant state funds. In other words, if States are using Federal dollars to provide services that were once funded with state dollars, the TANF program will be vulnerable if caseloads were to increase suddenly in a weak economy. While there is no evidence of states supplanting the MOE funds, there is evidence of supplantation of Federal TANF funds. For example, a ten-state analysis of supplantation by the U.S. General Accountability Office (GAO) indicates that the degree to which states supplanted state spending ranged from 5 percent to 25 percent of the Federal TANF block grant during the 1999-2000 state fiscal year. Further, these states used Federal TANF funds to replace funds previously spent on programs such as low income tax credit or child welfare services. Also, preliminary findings from the Rockefeller Institute study indicate that there is supplantation in the study states in specific program areas such as earned income tax credit. Further, the study declares that "some states outside the study apparently are supplanting state spending with federal money (a number of states have been forthright and public about this)."

Evidence: 1) "Welfare Reform: Challenges in Maintaining a Federal-State Fiscal Partnership." General Accountability Office. Report #1-828. August 2001. <www.gao.gov/new.items/d01828.pdf>; 2) Ellwood, Deborarh and Donald J. Boyd. ""Changes in State Spending on Social Services Since the Implementation of Welfare Reform."" The Nelson A. Rockefeller Institute of Government. February 2000. <www.rockinst.org/publications/fiscal_studies/FiscalEffects.PDF>; 3) "Spending on Social Welfare Programs in Rich and Poor States." Lewin Group and the Nelson A. Rockefeller Institute of Government. June 30, 2004. <aspe.hhs.gov/hsp/social-welfare-spending04/report.pdf>; 4) ACF Policy Announcement #TANF-ACF-PA-97-1. Section 409(a)(7)(B)(i)(II) (Statutory bar on supplantation with MOE funds) <www.acf.dhhs.gov/programs/ofa/guidej31.htm>; 5) "TANF Sixth Annual Report to Congress." November 2004. HHS ACF Office of Family Assistance. <www.acf.hhs.gov/programs/ofa/annualreport6/ar6index.htm>; 6) TANF-ACF-PI-2003-02 Approved Form ACF-196 Financial Reporting Form for the TANF Program Work participation rates. <www.acf.hhs.gov/programs/ofa/particip/indexparticip.htm>

Does the program have a limited number of specific long-term performance measures that focus on outcomes and meaningfully reflect the purpose of the program?

Explanation: TANF has long-term measures, which tie to the program goals of promoting work, strengthening marriage, and preventing out-of-wedlock pregnancies. For example, TANF assesses progress made in moving its recipients into work with performance measures on job entry, job retention, and earnings gain. Also, the program has a developmental measure of increasing the percentage of children living in married, two-parent families, but no measure for preventing and reducing out-of-wedlock pregnancies because of significant data accuracy issues associated with state level pregnancy data. Specifically, the total number of pregnancies is based on three distinct data sources: live births, non-induced fetal deaths, and induced abortions. While the vital statistics data on live births are reliable because they are based on birth certificates, fetal deaths and induced abortion rates are not reliable because of differing data collection methodologies across states.

Evidence: 1) ACF Final FY 2006 Performance Plan and FY 2004 Annual Performance Report: <www.acf.dhhs.gov/programs/olab/budget/2006/cj2006/cj2006.html>; 2) ACF Final FY 2005 Performance Plan and FY 2003 Annual Performance Report: <www.acf.hhs.gov/programs/opre/acf_perfplan/ann_per/index.html>

Does the program have ambitious targets and timeframes for its long-term measures?

Explanation: The program has a baseline for each of the work-related performance measures, and is working to collect FY 2004 baseline data for the developmental marriage measure. Also, there are clear targets for each of the long-term measures. For example, the program aims to achieve a four percentage point improvement for the job entry measure, a five percentage point increase for the job retention measure, a four percentage point improvement for the earnings gain measure, and a three percentage point gain for the marriage measure by FY 2009.

Evidence: 1) ACF Final FY 2006 Performance Plan and FY 2004 Annual Performance Report: <www.acf.dhhs.gov/programs/olab/budget/2006/cj2006/cj2006.html>; 2) ACF Final FY 2005 Performance Plan and FY 2003 Annual Performance Report: <www.acf.hhs.gov/programs/opre/acf_perfplan/ann_per/index.html>

Does the program have a limited number of specific annual performance measures that can demonstrate progress toward achieving the program's long-term goals?

Explanation: All of the program's long-term measures also serve as the annual measures. In addition, the program has an annual measure for work participation rate.

Evidence: 1) ACF Final FY 2006 Performance Plan and FY 2004 Annual Performance Report: <www.acf.dhhs.gov/programs/olab/budget/2006/cj2006/cj2006.html>; 2) ACF Final FY 2005 Performance Plan and FY 2003 Annual Performance Report: <www.acf.hhs.gov/programs/opre/acf_perfplan/ann_per/index.html>

Does the program have baselines and ambitious targets for its annual measures?

Explanation: All of the annual measures have baselines and annual targets. Annual targets reflect a caseload with a harder-to-serve population.

Evidence: 1) ACF Final FY 2006 Performance Plan and FY 2004 Annual Performance Report: <www.acf.dhhs.gov/programs/olab/budget/2006/cj2006/cj2006.html>; 2) ACF Final FY 2005 Performance Plan and FY 2003 Annual Performance Report: <www.acf.hhs.gov/programs/opre/acf_perfplan/ann_per/index.html>

Do all partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) commit to and work toward the annual and/or long-term goals of the program?

Explanation: Program partners, including states, participated in the development of the work-related long term measures, which are a part of the High Performance Bonus (HPB) system. HPB awards are based on states' achievement of TANF goals, and consider such factors as employment and family formation outcomes and child care affordability. While participation in HPB is voluntary, all but one or two states participated in the six years the work bonus has been awarded. States that received these awards achieved work performance rates at, near, or above the performance targets for these work measures. And the remaining states strive for the bonus by working to surpass the targets achieved by the bonus winning states. Also, states continue to work toward the work participation requirement even though their effective targets are considerably less than the statutory requirement, after applying the caseload reduction credit. In addition to the program wide performance measures, TANF is piloting a software project to track performance data at the state level, which will be made available to all states by May of 2006. Currently ten states are participating in the pilot and many already have some form of performance management in place.

Evidence: 1) HPB award data - TANF Annual Report to Congress (Chapter 5 and related Appendix) <http://www.acf.hhs.gov/programs/ofa/indexar.htm>; 2) TANF logic model; 3) ACF-196 TANF Administrative Data Report <http://www.acf.hhs.gov/programs/ofa/pi99-3.htm>; 4) ACF-199 TANF Administrative Data Report <http://www.acf.hhs.gov/programs/ofa/pi99-3.htm>; 5) ACF Final FY 2006 Performance Plan and FY 2004 Annual Performance Report for GPRA in the FY 2006 Congressional Justification: <http://www.acf.dhhs.gov/programs/olab/budget/2006/cj2006/cj2006.html>

Are independent evaluations of sufficient scope and quality conducted on a regular basis or as needed to support program improvements and evaluate effectiveness and relevance to the problem, interest, or need?

Explanation: Independent evaluations have been an integral part of TANF and its predecessor program, AFDC, and are conducted on a regular basis. In fact, the National Academies of Science issued a report in 2001 reviewing the status of welfare research and concluded that "(t)he set of welfare reform projects that have been completed or are now under way is impressive in scope, volume and diversity. The volume of research is unprecedented in comparison with any prior era of welfare reform." While TANF supports evaluations studies per sections 1110 and 413(h) of the Social Security Act, there has been a strong interest from other governmental and non-governmental entities alike. For example, the HHS Office of Inspector General and the Government Accountability Office have conducted many evaluations on welfare over the years, as well as universities, think tanks, and research firms. The following three examples are currently on-going studies, which illustrate the quality, scope, and independence of the evaluations. Each is conducted using high quality evaluation design of random assignments, and an independent and experienced evaluator such as MDRC, Lewin Group, and Mathematica. Also, these multi-year studies are evaluated across multiple sites, giving them broad generalizability. 1) The Employment Retention and Advancement project is evaluating strategies to promote employment retention and advancement among welfare recipients and low-wage workers. The project is evaluating fifteen tests of alternative strategies in eight different states. A report of preliminary results in four sites will soon be released; 2) The Enhanced Services for the Hard-to-Employ project is evaluating programs designed to enhance employment outcomes for current or former TANF recipients and other low-income parents who have demonstrated difficulty entering and sustaining employment. The project is evaluating four different demonstrations each with a different focus, including low-income parents with diagnosed depression; a transitional work program; ex-offenders; and Early Head Start participants; 3) The Rural Welfare-To-Work Strategies project is designed to learn how best to help TANF and other low-income rural families move from welfare to work. The project is evaluating two demonstrations: an intensive, employment-focused case management approach, and a pre-employment education program to improve the basic life skills of hard-to-employ people so they can engage in job search and training activities and address personal and family barriers to self-sufficiency.

Evidence: 1) 1. National Research Council. Evaluating Welfare Reform in an Era of Transition. Panel on Data and Methods for Measuring the Effects of Changes in Social Welfare Programs. Robert A. Moffitt and Michele Ver Ploeg, Editors. Committee on National Statistics, Division of Behavioral and Social Sciences and Education. Washington DC: National Academy Press, 2001.; 2) MDRC Employment Retion and Advancement Project. ; 3) MDRC Enhanced Services for Hard-to-Employ. ; 4) MDRC Rural Welfare-to-Work Strategies. ; 5) 2. Bloom, Dan, et. al; The Employment Retention and Advancement Project: Early Results from Four States; MDRC ; 6) 3. Burwick, Andrew, Vinita Jethwani, and Alicia Meckstroth , Implementing Welfare-to-Work Programs in Rural, Places; Mathematica Policy Research Institute; ; 7) Final Synthesis Report of Findings from ASPE "Leavers" Grants. December 2001. By Gregory Acs, Pamela Loprest with Tracy Roberts, The Urban Institute. ; 8) Jeffrey Grogger, Lynn A. Karoly, and Jacob Alex Klerman, Consequences of Welfare Reform: A Research Synthesis (Santa Monica, CA: RAND, prepared for the Administration for Children and Families, U.S. Department of Health and Human Services, July 2002); ; 9) 3.6. Robert M. Schoeni and Rebecca M. Blank, "What Has Welfare Reform Accomplished? Impacts on Welfare Participation, Employment, Income, Poverty, and Family Structure," (Cambridge, MA: National Bureau of Economic Research, March 2000); ; 10) Stephen H. Bell, "Why Are Welfare Caseloads Falling?" (Washington, DC: Urban Institute, Working Paper #1-02, March 2001); ; 11) Gayle Hamilton, Moving People from Welfare to Work: Lessons from the National Evaluation of Welfare-to-Work Strategies (New York, NY: Manpower Demonstration Research Corporation, July 2002). ; 12) Rebecca M. Blank and Robert F. Schoeni, Changes in the Distribution of Children's Family Income Over the 1990s. American Economic Review, 2003. ; 13) Potential Employment Liabilities Among TANF Recipients: A Synthesis of Data from Six State TANF Caseload Studies, October 2004. by Susan Hauan and Sarah Douglas, ASPE. ; 14) The Long-Term Effects of the Minnesota Family Investment Program on Marriage and Divorce Among Two-Parent Families, June 2003. by Lisa Gennetian, MDRC.

Are Budget requests explicitly tied to accomplishment of the annual and long-term performance goals, and are the resource needs presented in a complete and transparent manner in the program's budget?

Explanation: TANF is a pre-appropriated block grant program designed to ensure that states receive a consistent uninterrupted funding stream. In effect, this allows states the maximum flexibility to design the most effective programs to best achieve the goals of TANF with limited Federal government's involvement. For example, the program's consistent funding stream has allowed states to target the savings associated with the declining caseloads to essential non-cash services to support low-income working families. The program also makes a linkage between program performance and resource requests as evidenced by the new policy proposal to redirect the poorly functioning out-of-wedlock bonus to the healthy marriage initiative. Finally, the current FY 2006 Congressional Justification displays full cost by performance areas, including direct and indirect costs.

Evidence: ACF FY 2006 Congressional Justification. <www.acf.dhhs.gov/programs/olab/budget/2006/cj2006/cj2006.html>

Has the program taken meaningful steps to correct its strategic planning deficiencies?

Explanation: The program mainly uses the annual GPRA process to review its measures and to correct any strategic planning deficiencies. For example, all of the job-related measures were first developed in FY 1999. The original job retention measure assessed the percentage of adult TANF recipients employed in one quarter who remained employed at the end of the next quarter. The program recognized that continued employment for one quarter was not a sufficient period of time to measure job retention and was not true to the program's self-sufficiency goal. As a result, it was changed in FY 2000 to measure continued employed for two consecutive quarters. Also, the PART review has enabled the program to adjust the baseline and targets for the work measures. More specifically, the baseline was changed to FY 2003 and the targets were adjusted from FY 2006 to FY 2009 to account for the cumulative effects of the following factors: 1) change in data source for the work measures; and 2) effect of the??large caseload declines on work participation requirement (caseload reduction credit) and the resulting harder to serve population. In addition to the work measures, the program has a developmental marriage measure which aims to assess the program's progress on promoting healthy marriage and family formation, and is more ambitious than the former output-oriented measure of counting the number of states implementing healthy marriage initiatives. Finally, the proposed welfare reauthorization legislation provides for an employment achievement bonus, which will effectively replace the High Performance Bonus. While the new legislation will require regulations to implement, the program has conducted preliminary program and data analysis of existing work performance data in anticipation of re-designed work performance measures.

Evidence: 1) ACF Final FY 2006 Performance Plan and FY 2004 Annual Performance Report (see 2.1): <http://www.acf.dhhs.gov/programs/olab/budget/2006/cj2006/cj2006.html>; 2) Changes in HPB - TANF Sixth Annual Report to Congress (Chapter 5) <http://www.acf.hhs.gov/programs/ofa/indexar.htm>; 3) ACF Final FY 2006 Performance Plan and FY 2004 Annual Performance Report for GPRA in the FY 2006 Congressional Justification (see 2.7): <http://www.acf.dhhs.gov/programs/olab/budget/2006/cj2006/cj2006.html>; 4) ACF Final FY 2005 Performance Plan and FY 2003 Annual Performance Report (see 2.1): <http://www.acf.hhs.gov/programs/opre/acf_perfplan/ann_per/index.html>

Does the agency regularly collect timely and credible performance information, including information from key program partners, and use it to manage the program and improve performance?

Explanation: The program uses state TANF performance data, in conjunction with the employment and earnings data from the National Directory of New Hires, to determine the High Performance Bonus and thus, collects performance data for the work related measures. The program also regularly collects and reviews TANF performance data to monitor state compliance with work participation and non-work requirements, such as timely data reporting, work sanctions, time limits, misuse of funds, and income eligibility verification. This review has resulted in citing penalties to states, including a penalty to a state for misuse of $133 million for unallowable activities. In turn, the state that was cited with funding misuse submitted a State Corrective Compliance Plan and corrected the violation within two months by restoring the $133 million in the state's Federal TANF account using state-only, non-MOE funds. Analysis of performance data also informs program improvements. For example, program data revealed weakened work requirements resulting from unintended effects of decreased work participation standards with the caseload reduction credit, as evidenced by nearly 60% of TANF recipients not participating in any work activities during the year. It also showed that limiting the use of prior year TANF funds to basic assistance decreased state's flexibility, and the out-of-wedlock birth bonus was ineffective with states receiving the bonus without even implementing a program targeting this problem. These findings informed the following changes in the President's welfare reform proposal: 1) limiting allowable work activities under TANF, 2) increasing the required hours of participation, 3) providing States with more flexibility in the use of prior year TANF funds, and 4) redirecting out-of-wedlock birth bonus funds to promote healthy marriages, family formation, and fatherhood.

Evidence: 1) Social Security Act. Sections 403 and 409. <www.ssa.gov/OP_Home/ssact/comp-toc.htm>; 2) "TANF Sixth Annual Report to Congress." November 2004. HHS ACF Office of Family Assistance. <www.acf.hhs.gov/programs/ofa/annualreport6/ar6index.htm>; 3) Correspondence between Regional Administrator and the state cited with misuse of funds and corrective action; 4) "Working Toward Independence." February 2002. The White House. <www.whitehouse.gov/news/releases/2002/02/welfare-reform-announcement-book.html>

Are Federal managers and program partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) held accountable for cost, schedule and performance results?

Explanation: Accountability exists at the Federal level with Federal managers held accountable by clear and measurable performance goals in the individual performance plans. Further, state partners are held accountable for performance, as evidenced by the program citing 67 work participation rate penalties since 1997 mostly for failure to achieve the two-parent work participation rate, and 50 penalties for failures on non-work requirements (i.e. timely data reporting, work sanctions, time limits, misuse of funds, and income eligibility verification). However, accountability is weakened at the sub-recipient (local and contractor) level. For example, a GAO review of state single audit reports found internal control weaknesses for over a quarter of states nationwide that potentially affected the states' ability to effectively oversee non-governmental TANF contractors. The following weaknesses were cited in the report: 1) inadequate state reviews of the single audits of sub-recipients, 2) failure of states to inform sub-recipients of the sources of Federal funds they received, and 3) inadequate state fiscal and program monitoring of local workforce boards that contract for services. Since GAO conducted this study in June 2002, state single audit reports continue to cite deficiencies with states' monitoring of sub-recipients of TANF funds. In fact, the number of states citied for this deficiency has increased over the years, with 9 states cited in 1999 and 17 states cited in 2003.

Evidence: 1) Assistant Secretary, OFA Managers, and OFA Director, Performance Plans; 2) HHS ACF Office of Family Assistance. "TANF Fact Sheet: Summary of Penalties." <www.acf.hhs.gov/opa/fact_sheets/tanf_factsheet.html >; 3) ACF Form #196 Financial Reporting Form for the TANF Program. State Work Participation Rates. <www.acf.hhs.gov/programs/ofa/particip/indexparticip.htm>; 4) "TANF Sixth Annual Report to Congress." November 2004. HHS ACF Office of Family Assistance<www.acf.hhs.gov//programs/ofa/annualreport6/ar6index.htm>; 5) General Accountability Office. Final Report #02-661. ""Welfare Reform: Federal Oversight of State and Local Contracting Can Be Strengthened."" June 2002; 6) Federal Audit Clearinghouse Home Page. Single Audit Database Query of TANF, CFDA #93.558. <harvester.census.gov/sac/dissem/asp/advancedsearch2.asp>

Are funds (Federal and partners') obligated in a timely manner and spent for the intended purpose?

Explanation: Funds are made available to states each quarter, based on historical and projected resource needs. Audits are conducted to ensure that both Federal and state TANF funds are spent on allowable activities. States also submit quarterly financial reports (ACF-196) to document how funds are spent, and states not meeting specific requirements are subject to penalties.

Evidence: 1) 45 CFR 201.5. Timing of Grants to States. <a257.g.akamaitech.net/7/257/2422/01dec20031500/edocket.access.gpo.gov/cfr_2003/octqtr/pdf/45cfr201.5.pdf>; 2) 45 CFR 201.12. Public Assistance Audits. <a257.g.akamaitech.net/7/257/2422/01dec20031500/edocket.access.gpo.gov/cfr_2003/octqtr/pdf/45cfr201.12.pdf>; 3) Instructions for Completing Form ACF-196: Financial Reporting Form for the TANF Program. <www.acf.hhs.gov/programs/ofa/instr196.htm>; 4) "TANF Sixth Annual Report to Congress." November 2004. HHS ACF Office of Family Assistance. <www.acf.hhs.gov/programs/ofa/annualreport6/ar6index.htm>; 5) TANF-ACF-PI-2002-02: Clarification of Procedures and Methods of Obligating Federal Funds under the TANF Program. <www.acf.hhs.gov/programs/ofa/pi2002-2.htm>

Does the program have procedures (e.g. competitive sourcing/cost comparisons, IT improvements, appropriate incentives) to measure and achieve efficiencies and cost effectiveness in program execution?

Explanation: Because TANF is a capped block grant program, it focuses on achieving efficiencies to provide the same quality benefits and services at a constant funding level. For example, states are better able to manage their caseloads with recent access to a national employment and wage information database, the National Directory of New Hires (NDNH). With this new resource, states can identify ineligible recipients and better aid eligible recipients with work participation and employability planning. State TANF agency access to NDNH was first piloted with the District of Columbia (DC). To date, DC has achieved annualized cost savings of close to $10 million with appropriate benefit adjustments. The program also has a developmental efficiency measure of annual cost per adult TANF recipient, which has a baseline and target.

Evidence: The methodology for calculating the developmental efficiency measure is as follows: The numerator is the total Federal TANF and state maintenance of effort (MOE) expenditure on work-related activities/ expenses, transportation, and a proporational amount ona dministration and systems. The denominator is the number of adult TANF recipients. Evidence also includes the following documents: Final FY 2005 Annual Performance Plan, Final Revised FY 2004 Performance Plan, and FY 2003 Annual Performance Report for the Government Performance and Results Act of 1993, February 2004. <www.acf.hhs.gov/programs/opre/acf_perfplan/ann_per/apr2005/apr_sg1_11.html>

Does the program collaborate and coordinate effectively with related programs?

Explanation: TANF partners with internal HHS programs and other government programs outside of HHS on employment and training, child care, domestic violence, substance abuse, mental health, disability, Medicaid, Food Stamps, SCHIP, transportation, education and a host of other support programs. For example, TANF collaborated with IRS to start and sustain statewide coalitions to promote the Earned Income Tax Credit (EITC) upon receiving a request from Louisiana and West Virginia for technical assistance on this area. Roundtable events were held to impart knowledge about EITC, foster peer learning, and highlight best practices on EITC outreach and free tax preparation, and tools for launching EITC campaign. The events were attended by a variety of Federal, state, and local agencies; community and faith-based organizations; foundations; and local businesses. As a result of the roundtable, EITC volunteer programs helped generate $8,710,174 in EITC filings in Louisiana and $3,103,999 in West Virginia. The collaboration is further evidenced by a Rockefeller Institute of Government study, which researched local efforts to integrate income support programs, such as TANF, Medicaid and Food Stamps, with services in other human service domains, such as employment and training programs, child care programs, and child welfare programs.?? The study concluded local program managers were able to increase services, connect programs, and simplify access to services, because of devolution to states, second-order devolution to local governments, and TANF's flexibility to provide a wide range of services.

Evidence: 1) Jointly-funded Earned Income Tax Credit (EITC) Initiative with ACF/OCS. <peerta.acf.hhs.gov/whatsnew/index.htm#TA>; 2) Planning documents on TANF and Treasury/Internal Revenue Service (IRS) collaboration on Earned Income Tax Credit Outreach.; 3) Ragan, Mark. "Building Better Human Service Systems: Integrating Services for Income Support and Related Programs." Rockefeller Institute of Government. (2003.) <www.rockinst.org/publications/federalism/Ragan_Casey_Report_0603.pdf;>

Does the program use strong financial management practices?

Explanation: TANF participates in the Presidential Management Agenda's Improper Payment Initiative and is working to learn state improper payment policies and procedures and to develop component improper payment rates. Currently, the program does not have procedures in place to measure and minimize a national erroneous payment rate.

Evidence: HHS 2004 Performance And Accountability Report. <www.hhs.gov/of/reports/account/acct04/>

Has the program taken meaningful steps to address its management deficiencies?

Explanation: The program will transition from its manual accounting process to HHS' Unified Financial Management System, and thereby automate its financial accounting process by October 2007. The program also has taken steps to eliminate improper payments by focusing on the following three strategies: 1) Conduct an Improper Payments Activities Survey: The survey will solicit voluntary information from states on policies and procedures to identify, prevent, and recover improper payments. The survey results and analysis will be posted on a website to facilitate information sharing among states. Information collected from this survey will also enable the program to better understand improper payment activities across states and better group states for technical assistance; 2) Expand the A-133 State Single Audit Pilot: Alabama recently participated in an expanded A-133 audit, in which auditors identified improper payments and a component error rate for the state. The pilot will be expanded to a tentative list of states with small to moderate shares of TANF funds, including Minnesota, Montana, Nebraska, Maine, and Alabama. The program also has plans to pilot larger states with comparatively large shares of TANF funds. Results of the Alabama audit will be reported in the FY 2005 Performance and Accountability Report (PAR), to be released in November of 2005, while the results of the "small" and "medium" state audits will be released in the FY 2006 PAR and the "large" state audit in the FY 2007 PAR; 3) Enhance/Strengthen PARIS (Public Assistance Reporting Information System): PARIS is an information exchange system designed to provide State Public Assistance Agencies (SPAAs) with appropriate data, which enables SPAAs to validate client reported circumstances and identify potential erroneous payments. By using PARIS, TANF can not only identify potential improper payments among participating states, but also prevent and reduce improper payments.

Evidence: 1) HHS/OMB 2005 Management Plan Agreement.; 2) Public Assistance Reporting Information System (PARIS) website. <www.acf.hhs.gov/nhsitrc/paris/index.html>

Does the program have oversight practices that provide sufficient knowledge of grantee activities?

Explanation: Annual state TANF plans provide detailed information on program activities and financial data. States also submit quarterly financial data, including expenditures, by completing ACF Form 196. The single state A-133 audit ensures that funds are used in eligible activity categories and for designated purpose. Also, ACF Regional Offices conduct site visits to states to review TANF financial and program data.

Evidence: 1) A-133 Audit Specifications www.whitehouse.gov/omb/circulars/a133/a133.html; 2) TANF Financial Reports from the ACF-196 <www.acf.hhs.gov/programs/ofs/data/tableA1_exp_detail_2003.html>; <www.acf.hhs.gov/programs/ofs/data/tableA3_expend_2003.html>; <www.acf.hhs.gov/programs/ofs/data/tableA3_summary_2003.html>; <www.acf.hhs.gov/programs/ofs/data/tableA3_spending_2003.html>

Does the program collect grantee performance data on an annual basis and make it available to the public in a transparent and meaningful manner?

Explanation: OFA collects quarterly program performance and quarterly financial information from state grantees.?? This information includes both detailed individual level data as well as aggregate information.?? Also, certain program and financial data are made available through press releases and on the web throughout the year.?? Extensive yearly compilations are published in the TANF Annual Report to Congress, which is made available on the OFA web site and mailed to State Human Services Administrators, local TANF administrators, and interested parties.

Evidence: 1) TANF Annual Report to Congress. HHS ACF Office of Family Assistance. <www.acf.hhs.gov/programs/ofa/annualreport6/ar6index.htm>; 2) ACF FY 2006 Congressional Justification. <www.acf.dhhs.gov/programs/olab/budget/2006/cj2006/cj2006.html>; 3) ACF Final FY 2006 Performance Plan and FY 2004 Annual Performance Report for GPRA. <www.acf.hhs.gov/programs/olab/budget/index.html>

Has the program demonstrated adequate progress in achieving its long-term performance goals?

Explanation: The program can demonstrate adequate progress towards the following long-term measures: 1) 38% of adult TANF recipients who become newly employed by FY 2009. (Actual Progress: 34% in FY 2003.); 2) 64% of adult TANF recipients/ former recipients employed in one quarter of the year will continue to be employed in the next two consecutive quarters. (Actual Progress: 59% in FY 2003); and 3) 37% of employed adult TANF recipients/ former recipients will experience an earnings gain between a base quarter and the second subsequent quarter by FY 2009. (Actual Progress: 33% in FY 2003).

Evidence: 1) ACF Final FY 2006 Performance Plan and FY 2004 Annual Performance Report: <www.acf.dhhs.gov/programs/olab/budget/2006/cj2006/cj2006.html>; 2) ACF Final FY 2005 Performance Plan and FY 2003 Annual Performance Report: <www.acf.hhs.gov/programs/opre/acf_perfplan/ann_per/index.html>

Does the program (including program partners) achieve its annual performance goals?

Explanation: While the program met the annual targets for work participation rate and earnings gain, it missed the job entry and job retention targets. As discussed earlier, in setting the original program targets, the program did not anticipate the change in data source for the work measures and a significant caseload decline, which left a harder-to-serve population.

Evidence: 1) ACF Final FY 2006 Performance Plan and FY 2004 Annual Performance Report: <www.acf.dhhs.gov/programs/olab/budget/2006/cj2006/cj2006.html>; 2) ACF Final FY 2005 Performance Plan and FY 2003 Annual Performance Report: <www.acf.hhs.gov/programs/opre/acf_perfplan/ann_per/index.html>

Does the program demonstrate improved efficiencies or cost effectiveness in achieving program goals each year?

Explanation: The program's efficiency measure, annual cost per adult TANF recipient, decreased from FY 2002 to FY 2004. Specifically, the program experienced a 7% decrease in costs from FY 2003 to FY 2004. As stated earlier, TANF is a capped block grant program and thus, focuses on achieving efficiencies to provide the same quality benefits and services at a constant funding level. Also, facilitating the states' access to the National Directory of New Hires (NDNH) will result in increased efficiencies by enabling states to make appropriate benefit adjustments with the NDNH employment data. In other words, the program will achieve savings from removing ineligible recipients and target the savings to assist other eligible recipients obtain jobs and become self-sufficient. Finally, while the program does not currently benchmark itself against other similar programs, it is a part of the Common Performance Measures initiative with other job programs in the Department of Labor and Education. The efficiency measure is somewhat developmental for other programs in Labor and Education. As baseline, target, and trend data are made available, TANF will benchmark itself against these programs while exercising caution by considering program differences and likely changes from program reauthorizations.

Evidence: The methodology for calculating the developmental efficiency measure is as follows: The numerator is the total Federal TANF and state maintenance of effort (MOE) expenditures on work-related activities/ expenses, transportation, and a proportional amount on a dministration and systems. Evidence also includes the following: Final FY 2005 Annual Performance Plan, Final Revised FY 2004 Performance Plan, and FY 2003 Annual Performance Report for the Government Performance and Results Act of 1993, February 2004. <www.acf.hhs.gov/programs/opre/acf_perfplan/ann_per/apr2005/apr_sg1_11.html>

Does the performance of this program compare favorably to other programs, including government, private, etc., with similar purpose and goals?

Explanation: Aid to Families with Dependent Children (AFDC), the predecessor welfare program, also provided cash assistance and required participation in various work-related activities. Many random assignment experiments across the nation have compared recipients in a treatment group subject to state TANF policies to those in a control group subject to the old AFDC policies. Because the treatment and control groups are exposed to the same socioeconomic conditions, outcomes can be attributed to differences in policy. In general, those subject to TANF policies show higher employment rates, earning levels, and total incomes, with lower levels of welfare receipt and poverty. In addition to these random assignment experiments, program data show higher employment rates for those receiving assistance (e.g. 11 percent in FY 1996 compared to 23 percent in FY 2003) and lower caseloads (e.g. 4.4 million families in FY 1996 vs. 2 million families in FY 2004).

Evidence: 1) Jeffrey Grogger, Lynn A. Karoly, and Jacob Alex Klerman, Consequences of Welfare Reform: A Research Synthesis (Santa Monica, CA: RAND, prepared for the Administration for Children and Families, U.S. Department of Health and Human Services, July 2002); 2) Demetra Smith Nightingale, Nancy Pindus, Frederica Kramer, John Trutko, Kelly Mikelson, and Michael Egner, Work and Welfare Reform in New York City During the Giuliani Administration: A Study of Program Implementation (Washington, D.C.: Urban Institute Labor and Social Policy Center, July 2002), available from: www.urban.org/UploadedPDF/NYC_welfare.pdf, accessed June 30, 2005.

Do independent evaluations of sufficient scope and quality indicate that the program is effective and achieving results?

Explanation: The Consequences of Welfare Reform: A Research Synthesis" summarizes the findings from over 100 randomized experiments and rigorous econometric studies of TANF on a wide range of outcomes. These studies were conducted by independent researchers, applied rigorous research methods, and were subject to peer review. Most include both interim and final findings, generally covering a period about five years after TANF implementation. Because states have great flexibility to design and run their programs, state approaches varied considerably. Most of the studies included in the synthesis report examine program impact at the State and local level. The report also summarizes research using national data and, thus, assesses the impact of TANF on the nation as a whole. The synthesis generally finds that state TANF programs have produced modest, but statistically significant increases in family income and reductions in poverty. These effects varied, depending on the focus of the program intervention and the target population. TANF programs have also reduced welfare dependency, as reflected in national caseload statistics, although the magnitude of the decline in dependency attributable to welfare reform varies according to the econometric model, the time period studied, and other factors. These effects are confirmed in numerous randomized experiments of TANF programs, but were especially pronounced in programs that focused on mandatory work requirements. In addition to reducing welfare dependency, one of TANF's goals is to increase work. Both experimental and econometric studies find that TANF has produced positive effects on employment and earnings. For example, the National Evaluation of Welfare-to-Work Strategies (NEWWS) examined the long-term effects on welfare recipients of 11 mandatory welfare-to-work programs that took different approaches to helping welfare recipients improve their employment outcomes. All 11 NEWWS programs increased single parents' employment and earnings relative to the levels estimated in the programs' absence. Employment-focused programs generally had larger effects on employment and earnings than did education-focused programs. These findings have broad generalizability because of the consistency in findings across sites and studies. The research regarding the impact of TANF programs on promoting marriage and family formation, and reducing the incidence of out-of-wedlock pregnancies is inconclusive. However, there is some suggestive evidence that isolated programs, such as Minnesota's MFIP program, have increased marriage rates and helped keep marriages intact. Finally, research on the impact of TANF programs on various child and family well-being measures is mixed, with mostly positive and some negative impacts.

Evidence: 1) Jeffrey Grogger, Lynn A. Karoly, and Jacob Alex Klerman, Consequences of Welfare Reform: A Research Synthesis (Santa Monica, CA: RAND, prepared for the Administration for Children and Families, U.S. Department of Health and Human Services, July 2002); <www.acf.hhs.gov/programs/opre/welfare_employ/res_systhesis/reports/consequences_of_wr/rand_report.pdf>; 2) Robert M. Schoeni and Rebecca M. Blank, "What Has Welfare Reform Accomplished? Impacts on Welfare Participation, Employment, Income, Poverty, and Family Structure," (Cambridge, MA: National Bureau of Economic Research, March 2000);papers.nber.org/papers/w7627.pdf 3) Stephen H. Bell, "Why Are Welfare Caseloads Falling?" (Washington, DC: Urban Institute, Working Paper #1-02, March 2001), <www.urban.org/UploadedPDF/discussion01-02.pdf>; 4) Gayle Hamilton, Moving People from Welfare to Work: Lessons from the National Evaluation of Welfare-to-Work Strategies (New York, NY: Manpower Demonstration Research Corporation, July 2002). 5) Berlin, Gordon; The Effects of Marriage and Divorce on Families and Children; MDRC; May, 2004; <www.mdrc.org/publications/386/testimony.html>'; 6) Rebecca M. Blank and Robert F. Schoeni, Changes in the Distribution of Children's Family Income Over the 1990s. American Economic Review, 2003. <www-personal.umich.edu/~bschoeni/blankschoeni%20pp.pdf>; 7) Final Synthesis Report of Findings from ASPE "Leavers" Grants. December 2001. By Gregory Acs, Pamela Loprest with Tracy Roberts, The Urban Institute. <aspe.hhs.gov/hsp/leavers99/synthesis02/index.htm>; 8) Potential Employment Liabilities Among TANF Recipients: A Synthesis of Data from Six State TANF Caseload Studies, October 2004. by Susan Hauan and Sarah Douglas, ASPE. <aspe.hhs.gov/hsp/leavers99/emp-liab04/index.htm>; 9) Welfare Time Limits: State Policies, Implementation, and Effects on Families. 2002. Dan Bloom, Mary Farrell, and Barbara Fink with Diana Adams-Ciardullo, MDRC. <www.acf.hhs.gov/programs/opre/welfare_employ/approach_tlimits/reports/welfare_timelimits/welfare_tl_toc.html>; 10) The Long-Term Effects of the Minnesota Family Investment Program on Marriage and Divorce Among Two-Parent Families, June 2003. by Lisa Gennetian, MDRC. <aspe.hhs.gov/hsp/MFIP-2-parent03/index.htm>