oversight

Welfare Reform: Status of Awards and Selected States' Use of Welfare-to-Work Grants

Published by the Government Accountability Office on 1999-02-05.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                 United States General Accounting Office

GAO              Report to Congressional Requesters




February 1999
                 WELFARE REFORM
                 Status of Awards and
                 Selected States’ Use of
                 Welfare-to-Work Grants




GAO/HEHS-99-40
      United States
GAO   General Accounting Office
      Washington, D.C. 20548

      Health, Education, and
      Human Services Division

      B-280256

      February 5, 1999

      The Honorable William F. Goodling
      Chairman, Committee on Education
        and the Workforce
      House of Representatives

      The Honorable Howard P. (Buck) McKeon
      Chairman, Subcommittee on Postsecondary
        Education, Training and Life-Long Learning
      Committee on Education and the
        Workforce
      House of Representatives

      Federal and state welfare reform initiatives focus on moving welfare
      recipients to work and economic self-sufficiency. To foster this goal, the
      Congress authorized welfare-to work grants in the Balanced Budget Act of
      1997 (P.L. 105-33). These grants were intended to help hard-to-employ
      persons receiving aid under the block grant program of Temporary
      Assistance for Needy Families (TANF), to obtain employment. The
      welfare-to-work grants total $3 billion—$1.5 billion to be awarded by the
      Department of Labor each year in fiscal years 1998 and 1999. About
      75 percent of the funds are for formula grants to states, and nearly
      25 percent are for competitive grants to local organizations for innovative
      approaches in moving welfare recipients into permanent work. To receive
      a formula grant, states must pledge one dollar of state matching funds for
      every two dollars of federal welfare-to-work funds. States must also
      submit a plan describing how the formula funds will be used and ensure
      that the plan was developed in consultation with appropriate state and
      local agencies, including those responsible for TANF funds. States, in turn,
      must pass most of the formula funds to substate areas that plan for and
      administer the funds. Governors may retain a small portion, 15 percent, of
      the states’ formula funding for special welfare-to-work projects.

      As requested, we are providing information about (1) welfare-to-work
      formula and competitive grants awarded to, or declined by, states for
      fiscal year 1998; (2) how selected grantees are planning to use these funds;
      and (3) how selected grantees plan to meet welfare-to-work requirements
      to better integrate the states’ workforce development services with other
      human services for welfare recipients. Because the grants were mostly
      awarded in the second half of fiscal year 1998, in discussions with your
      offices we agreed that it is too early to report on how welfare-to-work




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                   funding was actually spent or to collect outcome data about the impact of
                   the funds on finding jobs for hard-to-employ welfare recipients.

                   In performing this work, we met with Labor officials who administer the
                   welfare-to-work grants and obtained information on the formula and
                   competitive grants Labor awarded for welfare-to-work funds available for
                   fiscal year 1998. We also interviewed state and local officials in six
                   states—Arizona, California, Massachusetts, Michigan, New York, and
                   Wisconsin—to obtain information on their plans for the welfare-to-work
                   grant funding. (See app. I for a full discussion of our scope and
                   methodology.)


                   Labor awarded formula grants to 44 states plus the District of Columbia,
Results in Brief   Guam, Puerto Rico, and the Virgin Islands with welfare-to-work funding
                   available for fiscal year 1998, and, as of November 20, 1998, it had awarded
                   competitive grants to 126 organizations with combined welfare-to-work
                   funding available for fiscal years 1998 and 1999. Six states—Idaho,
                   Mississippi, Ohio, South Dakota, Utah, and Wyoming—did not participate
                   in the welfare-to-work formula grant program. These states, which would
                   have received a total of about $71 million, chose not to participate for
                   various reasons, including concerns about their ability to provide state
                   matching funds. Arizona was the only state that applied for formula grant
                   funds but did not pledge sufficient matching funds to receive its maximum
                   federal allocation. The competitive grant funds Labor awarded
                   represented all welfare-to-work funds available for fiscal year 1998 and
                   about a third of the fiscal year 1999 funds. Most states had at least one
                   local service organization that received competitive grant funds.

                   Three of the six states we reviewed—Massachusetts, Michigan, and
                   Wisconsin—outlined very specific uses for formula funds, while plans for
                   the other three states—Arizona, California, and New York—indicated that
                   the use of these funds would be determined by the local service delivery
                   areas. Michigan’s and Wisconsin’s plans emphasized assistance to
                   unemployed noncustodial parents—these parents, mostly fathers, often
                   have child support payments in arrears and dependents who are receiving
                   welfare cash assistance. Massachusetts focused on serving TANF recipients
                   who are reaching their time limits on cash assistance. In contrast,
                   California’s plan did not emphasize a specific welfare-to-work service
                   strategy because state officials believed that no one service strategy could
                   be applied effectively throughout the state. Similarly, Arizona and New
                   York allowed local service delivery areas to decide on strategies for using



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             formula grant funds. One example is an area in New York that plans to hire
             staff to be available 24 hours a day to assist the hardest-to-employ TANF
             participants in finding and keeping jobs. Plans for the competitive grants
             focused more narrowly on a specific population and activity. For example,
             in Milwaukee, a competitive grant will be used to provide legal assistance
             to long-term welfare recipients and noncustodial parents.

             State and local officials in the six states we reviewed noted that a stronger
             partnership was developing between the workforce development agencies
             and other human service agencies assisting welfare recipients, in part
             because of their joint involvement in the welfare-to-work planning
             process. For example, Massachusetts developed a welfare-to-work
             steering committee that had representatives from state and local
             employment and training entities as well as the state’s TANF agency. By
             planning and working together, this group shares information that will
             minimize duplication of effort in service delivery. Additionally, as local
             welfare-to-work plans were developed, local partnerships were formed,
             such as a community task force in Arizona with representation from 64
             state and local agencies in the service delivery area that were involved
             with moving individuals from welfare to work. The welfare-to-work
             competitive grantees also coordinated their plans with state and local
             officials. For example, the competitive grant in Merced, California, has a
             coalition of partners including representatives from the employment and
             training community, the local human services agency, and the housing
             authority.


             The Personal Responsibility and Work Opportunity Reconciliation Act
Background   (P.L. 104-193), enacted in August 1996, overhauled the nation’s welfare
             system. Although some states were already implementing changes to their
             welfare programs before this legislation, the act abolished the federal Aid
             to Families With Dependent Children program and established TANF block
             grants, which imposed stronger work requirements for welfare recipients
             than its predecessor program. TANF provides benefits for a time-limited
             period and focuses on quickly putting individuals to work. The TANF block
             grants available to states totaled about $16.6 billion in fiscal year
             1998—ranging from about $21.8 million in Wyoming to over $3.7 billion in
             California. To receive their TANF grants, states must maintain funding for
             needy families at specified levels tied to their historical expenditures on
             welfare programs.




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The Balanced Budget Act of 1997 authorized $3 billion for welfare-to-work
grants to state (the 50 states, the District of Columbia, Guam, Puerto Rico,
and the Virgin Islands) and local communities to move welfare recipients
into jobs—$1.5 billion is available to be awarded by Labor each year in
fiscal years 1998 and 1999. A small amount of the total grant money was
set aside for special purposes: 1 percent for Native American tribes
($15 million for each year), 0.8 percent for evaluation ($12 million for each
year), and $100 million in fiscal year 1999 for performance bonuses to
states that successfully move welfare recipients into employment.1 After
these set-asides, Labor allocated 75 percent (about $1.1 billion for fiscal
year 1998) of the welfare-to-work funds to states on the basis of a formula
that equally considers the shares of individuals with incomes below the
poverty level and adult recipients of TANF assistance residing in the state.
States must pledge one dollar of nonfederal funding to match every two
dollars of federal funding provided under the formula; up to half of the
match may consist of third-party in-kind contributions. The state
welfare-to-work matching funds are in addition to the state funds that
must be expended as required under TANF block grants.2

Funds not allocated by formula, which are nearly 25 percent of the
welfare-to-work funds (over $368 million for fiscal year 1998), were
available for Labor to award competitively to local organizations. These
organizations—local governments, Private Industry Councils,3 and private
organizations that apply in conjunction with a Private Industry Council or
local government—submit applications to Labor describing how they plan
to use welfare-to-work funds. In addition to giving special consideration to
cities with large concentrations of poverty and to rural areas, Labor



1
 Labor, in consultation with the Department of Health and Human Services, the National Governors’
Association, and the American Public Human Services Association, is responsible for developing a
formula for determining performance bonuses.
2
 Matching funds, like the federal formula funds, must be spent on eligible individuals and allowable
activities under the authorizing legislation. However, while states must pass most of the formula funds
to substate areas that plan for and administer the funds, states have more discretion regarding the
expenditure of state matching funds.
3
 Private Industry Councils were established in 1982 under the Job Training Partnership Act (JTPA).
JTPA, administered by Labor, provides job training and placement services to economically
disadvantaged adults and youth. The membership of Private Industry Councils reflects stakeholder
populations in the local community, including service providers, community-based organizations,
government agencies, organized labor, and private businesses; the majority of the membership must be
in the private sector. The Workforce Investment Act of 1998 replaced JTPA, and effective July 1, 2000,
Private Industry Councils will be replaced by local Workforce Investment Boards. While there is a
transition period between the two programs, states will continue to use the Private Industry Councils
in place; some states have already renamed their Councils as Workforce Investment Boards; other
states, such as Massachusetts, renamed these Councils as Regional Employment Boards.



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    reviews applications and awards competitive grants using the following
    criteria:

•   the relative need for assistance in the area proposed to be served;
•   the extent to which the project proposes innovative strategies for moving
    welfare recipients into lasting work;
•   the quality of the proposed outcomes of the project;
•   the degree to which the project is coordinated with other services; and
•   the demonstrated ability of the grant applicant.

    To receive its allocation of welfare-to-work formula funds, a state was
    required to submit a plan for the use and administration of the grant funds
    to Labor. The Secretary of Labor then determined whether the plan met
    the statutory requirements, including assurances that the plan was
    developed with coordination from appropriate entities in substate areas
    and that welfare-to-work programs and funds would be coordinated with
    programs funded through the TANF block grants.4 Using an allocation
    formula developed by the state, 85 percent of the state’s federal formula
    funds were to be passed to local Private Industry Councils. The Private
    Industry Councils have policy-making responsibility in these service
    delivery areas and administer the welfare-to-work programs at the local
    level unless the Secretary of Labor approves a governor’s request to use an
    alternative administering agency. The remaining 15 percent of the state’s
    formula allotment may be spent on welfare-to-work projects of the state’s
    choice, which is described in this report as the governor’s discretionary
    fund.

    States establish their own formula for allocating formula funds to Private
    Industry Councils for local service delivery areas but must give a minimum
    weight of 50 percent to the number of people in the area in excess of
    7.5 percent of the population whose income is below the poverty level.
    States may also consider the local area’s proportion of the state’s
    long-term welfare population or the state’s unemployed population.
    Additionally, if the amount to be allocated by formula to a local service
    delivery area is less than $100,000, that money may be held by the state
    and added to the 15 percent governor’s discretionary funds.

    Labor was required to obligate the fiscal year 1998 formula grant funds by
    September 30, 1998; however, funds for the competitive grants were
    multiyear, and Labor could obligate those funds into fiscal year 1999. Both

    4
    Welfare-to-work activities must be coordinated with those provided through TANF. Hard-to-employ
    welfare recipients constitute a significant portion of the TANF-eligible population.



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formula and competitive grants must be spent within 3 years of the grant
award. Under the Balanced Budget Act, the welfare-to-work grants were
initially legislated as multiyear allocations that could be awarded any time
in fiscal years 1998 and 1999, but this law was amended to require that
Labor award formula funds available for fiscal year 1998 by September 30,
1998. If at the end of any fiscal year states have not applied for or have
applied for less than the maximum amount available for formula funds, the
funds are to be transferred to the General Fund of the U.S. Treasury.
Competitive grant funds, however, remain multiyear funds, and there is no
requirement to obligate funds for fiscal year 1998 within the fiscal year.

Grantees have flexibility in designing welfare-to-work strategies geared to
the needs of their own local populations and labor markets. Overall,
welfare-to-work program services help individuals get and keep
unsubsidized employment. Allowable activities include job readiness and
placement services financed through vouchers or contracts; community
service or work experience; job creation through public sector or private
sector employment wage subsidies; and on-the-job training,
postemployment services financed through vouchers or contracts, and job
retention and support services.

Both formula and competitive grant funds are to be used for certain TANF
families—recipients on long-term welfare assistance, TANF recipients with
characteristics of long-term welfare dependence, and/or their noncustodial
counterparts. These people are considered hard to employ and may have
low educational attainment or poor work histories. The law requires that
at least 70 percent of the funds be spent on the hardest to serve long-term
welfare recipients with two of three specified barriers to successful
employment. Up to 30 percent of the grant funds may be spent on
individuals with characteristics of long-term welfare recipients; these
characteristics could include dropping out of school, teenage pregnancy,
or poor work history. Under either the 70- or 30-percent category,
noncustodial parents with dependents receiving TANF assistance may
qualify for welfare-to-work activities. (See table 1 for a summary of
eligibility requirements for welfare-to-work services.)




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Table 1: Eligibility Requirements for Welfare-to-Work Services
Requirement                                  Eligible population
At least 70 percent of welfare-to-work funds   Those who have two of the three barriers to employment:
must be spent on the hardest-to-employ         — lack a high school diploma or general equivalency degree and have low reading or
individuals:                                   math skills;
                                               — require substance abuse treatment for employment; and
                                               — have a poor work history (that is, have worked no more than 3 consecutive months in
                                               the past 12 calendar months), and
                                               those who are
                                               — long-term TANF recipients who have received cash assistance for at least 30 months
                                               or are within 12 months of losing TANF eligibility because of federal or state time limits; or
                                               — individuals who would otherwise be long-term TANF recipients but have exceeded
                                               time limits on cash assistance; or
                                               — noncustodial parents of minors whose custodial parent is a long-term TANF recipient
                                               or minors who are long-term TANF recipients under “child only” cases.
No more than 30 percent of welfare-to-work     Those who exhibit characteristics of long-term welfare dependence, such as having
funds may be spent for the benefit of the      dropped out of school, having a teenage pregnancy, or having a poor work history, and
following individuals:                         those who
                                               — are TANF recipients, or
                                               — would otherwise be TANF recipients but have exceeded their time limits on cash
                                               assistance, or
                                               — are noncustodial counterparts of TANF recipients.



                                               Labor awarded about $1 billion in formula grants for fiscal year 1998 to all
Labor Awarded                                  but six states. The six states that chose not to participate in the formula
Welfare-to-Work                                grant program would have received about $71 million. Labor also awarded
Grants to Most States                          a total of almost $500 million in competitive grants using all of the
                                               approximately $368 million in competitive grant funds available for fiscal
and Many Local                                 year 1998 and about a third of the competitive grant funds available for
Organizations                                  fiscal year 1999.

Most States Received                           Most states applied for and received their full allocation of formula grant
Formula Grants, but Six                        funds. (See app. II for the amount of formula funds awarded, by state, for
States Declined to                             fiscal year 1998.) Of the states that applied for formula grant funding,
                                               Arizona was the only state that did not pledge sufficient matching funds to
Participate                                    receive its maximum federal allocation.5 Of the states that declined to
                                               participate in the welfare-to-work program, four states did not submit a
                                               welfare-to-work plan to Labor and the remaining states informed Labor

                                               5
                                                Because of an administrative error, West Virginia did not match $500 of the welfare-to-work grant
                                               funds for which the state was entitled. Guam and the Virgin Islands were waived from the first
                                               $200,000 of the required match and could then request a waiver for the remaining match requirement.
                                               Guam did request a waiver from the full amount of match; however, the Virgin Islands provided its
                                               remaining match, about $77,000. Formula grant funding not awarded by Labor was returned to the U.S.
                                               Treasury. In total, Labor returned almost $80 million, or 7 percent, of the formula funds available for
                                               fiscal year 1998. These funds were the unallocated formula funds for which states had either not
                                               applied or applied for less than the maximum available under the formula.



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that they would not participate in the formula grant program. These six
states chose not to participate for various reasons, including concerns
about their ability to provide state matching funds.

Arizona needed about $9 million in matching funds to obtain its full
allocation of about $17 million in federal welfare-to-work funds; however,
the state legislature was not willing to provide this amount in matching
funds. Instead, the state assured a match of $4.5 million and obtained a
formula grant for $9 million in fiscal year 1998. Initially, Arizona asked the
local service delivery areas to determine whether they could raise the
required matching funds; however, the local areas, while they wanted the
welfare-to-work funding, did not believe they could raise the matching
funds locally.

Of the six states that declined to participate in the welfare-to-work
formula program, four states—Idaho, Mississippi, South Dakota, and
Wyoming—neither informed Labor they would not be participating in
welfare-to-work, nor submitted a welfare-to-work plan to Labor; the
remaining states—Ohio and Utah—informed Labor that they would not
participate. Ohio initially applied for its welfare-to-work allocation, but the
governor later decided the grant was too complex and burdensome,
especially the match requirement. Since Ohio had excess, unobligated TANF
funds, state officials believed the TANF funds should be used to move
welfare recipients to work—especially because there were no matching
requirements and the eligibility requirements were less restrictive. Utah
sent a letter declining its allocation, listing two reasons for its
decision—that the state believed the formula funding was too restrictive
regarding participant eligibility and that it believed the welfare-to-work
grants were too prescriptive and did not allow the state enough flexibility.
A state official in Utah also said that, at the time the letter was sent,
officials believed TANF funds were sufficient to serve the TANF population’s
needs; furthermore, the funds required a state match, which did not seem
feasible at the time.

The states that did not apply for welfare-to-work funds had various
reasons for not participating. For example, an official in Idaho noted that
the state’s TANF caseload had dropped precipitously, consequently the
state had adequate TANF funds to meet the employment and training needs
of the remaining welfare recipients. The official also estimated that no
more than about 350 of the state’s welfare recipients were eligible for
welfare-to-work services—and perhaps as few as 100. A state official in
Mississippi said that a significant amount of TANF funds had been budgeted



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                        for job skills development and job search. Additionally, the state had set
                        aside 30 percent of enrollments in JTPA for welfare recipients and was
                        having difficulty filling these slots. Consequently, in addition to concerns
                        about the state’s ability to provide matching funds, the state decided
                        against applying for welfare-to-work funds. The six states may still apply
                        for fiscal year 1999 funds and have until March 1999 to do so.


Labor Awarded 126       As of November 20, 1998, Labor had awarded a total of 126 competitive
Competitive Grants to   grants. On May 27, 1998, Labor announced the first round of competitive
Local Organizations     grants, which resulted in awards of about $200 million—approximately
                        half of the fiscal year 1998 welfare-to-work competitive grant funds—to 51
                        local organizations.6 On November 20, 1998, Labor awarded the second
                        round of competitive grants to 75 local organizations; these grants totaled
                        about $273 million and represented combined competitive grant funds
                        from the remainder of fiscal year 1998 funds and a portion of the fiscal
                        year 1999 funds. (See apps. III and IV for a list of the first and second
                        rounds of competitive grants awarded, by state.) Most states had at least
                        one local service organization that received competitive grant funds. (See
                        table 2 for the distribution of welfare-to-work competitive grants awarded
                        by Labor.)




                        6
                         Following Labor’s initial announcement of competitive awards to 49 entities, the award to the
                        Oakland Private Industry Council was restructured into separate grants to the Oakland Private
                        Industry Council and the City of Oakland, and an award to Goodwill Industries was restructured into
                        separate awards to Goodwill Industries of Middle Georgia and Goodwill Industries of San Antonio,
                        resulting in awards to 51 entities. A Labor official noted that similar changes may occur for the awards
                        made during the second round of competitive awards and explained that Labor was negotiating the
                        final figures for these competitive grants with the grant recipients; consequently, she referred to the
                        second round of competitive grant awards as “proposed” awards.



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Table 2: Number of Competitive Grants
Awarded, by State, as of November 20,                               Number of grant                                   Number of grant
1998                                                                   awards                                            awards
                                        State or territory         Round I      Round II State or territory           Round I      Round II
                                        Alabama                            1             1 Montana                                       1
                                        Alaska                                           1 Nebraska
                                        Arizona                            1             1 Nevada
                                        Arkansas                           1                New Hampshire                                1
                                        California                        11             8 New Jersey                         2          2
                                        Colorado                           1             2 New Mexico                         1          1
                                        Connecticut                        1             2 New York                           2          4
                                        Delaware                                            North Carolina                    1          2
                                        District of Columbia               1             1 North Dakota
                                        Florida                            2             3 Ohio                               1          2
                                        Georgia                            2             2 Oklahoma                                      1
                                        Guam                                                Oregon
                                        Hawaii                                           1 Pennsylvania                       2          1
                                        Idaho                                               Puerto Rico                                  1
                                        Illinois                           3             2 Rhode Island                                  1
                                        Indiana                            2             1 South Carolina
                                        Iowa                                             1 South Dakota                                  1
                                        Kansas                                           1 Tennessee                                     2
                                        Kentucky                           1             1 Texas                              2          3
                                        Louisiana                                        1 Utah                                          1
                                        Maine                                            1 Vermont                            1          1
                                        Maryland                                         2 Virginia                           2          2
                                        Massachusetts                      1             2 Virgin Islands
                                        Michigan                           2                Washington                                   2
                                        Minnesota                                        2 West Virginia                                 1
                                        Mississippi                                      1 Wisconsin                          1
                                        Missouri                                         2 Wyoming
                                        Note: Additional competitive grants were awarded to grant recipients serving sites in multiple
                                        states (see apps. III and IV).

                                        Source: GAO analysis of Department of Labor data.




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                            Three states that we reviewed targeted a specific population for formula
Some States and Many        grant funds, while the other three states defined their welfare-to-work
Local Communities           focus more broadly and did not emphasize a specific service strategy or
Proposed Specific           targeted population. In the six states, local communities targeted
                            populations and designed their welfare-to-work activities consistent with
Initiatives for Their       their state’s plan. Competitive grants focused more narrowly on a specific
Welfare-to-Work Grant       population and activity.
Funds
Three States Set Specific   Three of the six states we reviewed—Massachusetts, Michigan, and
Focus for Formula Grants,   Wisconsin—specified populations to be served with formula grant funds,
While Others Allowed        such as assistance to unemployed noncustodial parents or TANF recipients
                            who are reaching their time limits on cash assistance. Plans for the other
Wider Local Discretion      three states—Arizona, California, and New York—stated that the use of
                            welfare-to-work funds would be determined by the local service delivery
                            areas. (See apps. V through X for a brief description of the formula grant
                            plans in each of the six states.) In the six states, the local plans we
                            reviewed proposed a range of welfare-to-work activities for eligible
                            participants.

                            Three states planned a specific statewide focus for formula grant funds.
                            For example, Michigan’s plan emphasized serving unemployed
                            noncustodial parents who have child support payments in arrears and
                            whose dependents are receiving TANF assistance. The goal was to increase
                            payments by these noncustodial parents for child support. Not
                            participating in the welfare-to-work program has serious
                            consequences—incarceration—unless there is good cause for
                            nonparticipation. Michigan required local service delivery areas to devote
                            50 percent of their welfare-to-work grant funds to assist noncustodial
                            parents. Wisconsin’s plan also emphasized serving noncustodial parents,
                            and because its TANF caseload is low, the state also proposed to assist
                            individuals receiving only TANF child care subsidies. Massachusetts
                            planned on serving TANF recipients who are reaching their 24-month limit
                            for receiving cash assistance—about 7,000 were expected to lose cash
                            assistance benefits on December 1, 1998.

                            In contrast, three states defined their formula grant focus more broadly
                            and did not emphasize a specific service strategy. California’s state plan
                            noted that—given the diversity of the state’s local service delivery
                            areas—no one service strategy could be effectively applied statewide.
                            Arizona’s plan outlined the state’s support to local service delivery areas in




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their efforts to target welfare-to-work services to hard-to-serve TANF
recipients, noncustodial parents, and other eligible individuals. New York’s
plan provided a general welfare-to-work focus on improving the
connection to work, although the state plan placed some emphasis on
serving individuals with disabilities; many of these individuals have
experienced long-term welfare dependency and had been exempt from
work requirements under Aid to Families With Dependent Children but are
no longer exempt under the state’s TANF program.

The local plans we reviewed proposed a range of activities for their
formula grant allocations. Because welfare-to-work programs are
administered locally,7 state officials in the six states we reviewed said
local entities have the ability to design welfare-to-work activities and
target populations within the parameters of the state plan. For example,
the New York state plan did not define, beyond the federal
welfare-to-work eligibility requirements, the population to be served with
formula funds, and state officials said that different local plans
emphasized different activities, such as mentoring, case management,
training to upgrade employment, literacy, and career ladder development.
The officials also noted that local service delivery areas considered the
services funded by TANF and proposed to focus formula grant funds on
areas where services were lacking.

In states with a focus on serving a targeted population with formula grant
funds, local service delivery areas focused on these objectives in their
welfare-to-work plans. For example, in Massachusetts, local service
delivery areas, following the state’s direction, will provide services to TANF
recipients facing time limits on cash assistance. Likewise, a service
delivery area in Michigan will identify its welfare-to-work participants
through the Family Independence Agency, which is the TANF agency, and
the Friend of the Court, which refers noncustodial parents. However,
focusing on the needs of its own local population, this service delivery
area also plans to serve several other populations whose characteristics
are associated with or predictive of long-term welfare dependency, such as
rural isolation, substance abuse, homelessness, being a single parent, or
being an offender.

For states leaving more discretion to local service delivery areas in
planning their strategies for the use of formula grant funds, some local

7
 Welfare-to-work programs are administered by the Private Industry Councils, unless the governor
requests a waiver that is approved by the Secretary of Labor. In the six states we reviewed, New York
had requested a waiver that covered just 2 of its 33 local service delivery areas; for these 2 areas, the
welfare-to-work program was administered by the human services agencies.



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areas designed their welfare-to-work activities to complement existing
employment delivery systems. For example, in the San Diego, California,
service delivery area, about 3,000 long-term welfare recipients will receive
a package of services, for about 18 to 24 months, designed to meet their
needs, which will include at least 16 hours a week of work activities and
up to 16 hours a week of support services. These services are provided by
competitively procured contractors, and each contract includes an
incentive program to move participants into work expeditiously. Some
local plans emphasized new approaches for moving welfare recipients to
work. For example, local officials in Phoenix, Arizona, plan to use formula
grant funds to develop new relationships with large businesses that will
receive consulting services in exchange for hiring welfare recipients; the
welfare-to-work participants will receive job readiness training as well as
mentoring and job coaching after they are hired to improve their chances
of job retention.

Local officials we interviewed said service delivery areas planned to use
formula grant funds particularly to provide postemployment services. For
example, in New York’s Oneida-Herkimer-Madison service delivery area,
the welfare-to-work program is based on using employment retention
specialists who will provide 24-hour support service to participants. A
third of the area’s formula funds will be spent on the 6-person employment
retention staff; smaller amounts of the formula funds were allocated for
services such as transportation and child care because the program hopes
to use existing programs and resources for these services. Even with its
focus on job retention services, the local service delivery area will
maintain a menu of services so that it can provide all services to clients as
needed.

The welfare-to-work program for a local area in Massachusetts represents
another example of providing postemployment services with formula
grant funds. This welfare-to-work program planned to provide support
after job placement for up to 6 months rather than the 30 to 60 days that
other employment and training programs generally provide participants.
At the time of our review, this program had placed about 10 of the 70
current participants in jobs, and these employed participants were
receiving services such as mentoring and case management. A program
official noted that, until a participant finds a job, the local career center
provides most services; however, once the participant finds a job, the
career center’s role diminishes, and participants primarily are served
through the welfare-to-work program since it can provide postemployment
services. The local area is still developing community resource teams to



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help TANF recipients manage their lives. The official explained that, once
placed in jobs, welfare-to-work participants might fail to report to work if
they are sick or if they cannot obtain child care. Ideally, the community
resource teams would help individuals find resources to assist them with
these situations without losing their jobs.

The proposed use of the governor’s discretionary portion of state formula
funds (up to 15 percent of the formula funds) generally followed the states’
welfare-to-work initiatives. States that targeted populations for
welfare-to-work activities used discretionary funds for those individuals.
For example, Michigan distributed its discretionary funds (about
$6 million) to the local areas in order to provide more funding to serve
noncustodial parents. In Wisconsin, the discretionary funds (about
$2 million) will be used for a variety of purposes; however, the largest
portion of the discretionary funds (about $1.1 million) will be allocated to
the state’s Department of Corrections to provide employment assistance
to noncustodial parents in correctional institutions, on parole, or on
probation. In Massachusetts, which emphasized assistance to TANF
recipients facing time limits on cash assistance, the state planned to
allocate over half of its about $3 million in discretionary funding to the
Department of Transitional Assistance to supplement its program of
assessment and structured employment assistance. Massachusetts also
planned to subsidize five local areas that were allocated the lowest
amount of formula funds. The state used these funds to provide a
minimum of $400,000 to each area because state officials believed that
local areas needed this level of funding to have an effective
welfare-to-work program.

For states that had a broader focus for their formula funds, plans for the
governor’s discretionary funds were analogous with those for local areas
given wider discretion for the use of these funds. In California, the state
distributed the governor’s discretionary funds (about $29 million)
primarily through a competitive process—special consideration was given
to a broad array of programs that addressed needs in rural areas;
leveraged other resources; and demonstrated an innovative, coordinated
approach to services. Of New York’s discretionary funds (over
$14 million), the state planned to use about 70 percent to support varied
services—also on a competitive basis—to move individuals into
employment and provide postemployment services to help working
participants continue to work and increase earnings. Finally, Arizona
combined its discretionary funds (about $1.4 million) with allocations




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                             B-280256




                             made to the local service delivery areas but did not emphasize service to a
                             specific population as did Michigan.


Welfare-to-Work              The plans for competitive grants we reviewed in the six states focused on
Competitive Grants           specific populations and activities. The competitive grantees proposed a
Focused on Specific          variety of different activities and targeted different populations under this
                             program for innovative approaches. Some of the welfare-to-work
Populations and Activities   competitive grants will be used to complement programs funded by local
                             formula allocations, and others will function separately from the local
                             formula grant but rely on the same systems as the formula grantees to
                             verify welfare-to-work eligibility.

                             Several competitive grants will complement formula grant programs. For
                             example, Phoenix planned to use its formula funds to assist participants in
                             gaining employment with large businesses, while its competitive grant will
                             be used to link participants with small businesses. The same approach will
                             be used for both programs. Using both formula and competitive grant
                             funds, EARN, an acronym for Employment and Respect Now, will assess
                             and screen participants for drug use, then enroll them in a 5-week job
                             readiness program that includes some computer-based training. For the
                             competitive grant, these participants will be placed in employment among
                             900 small businesses that receive tax credits for employing them.
                             Throughout the participant’s work experience, EARN staff and volunteers
                             will provide mentoring, job coaching, and other services for job retention.
                             Similarly, Detroit’s competitive grant will be used to complement its basic
                             program of assisting all individuals in obtaining employment by providing
                             more intense services for the hardest-to-employ population.
                             Transportation to work sites is often a critical problem for
                             welfare-to-work participants, and a portion of the competitive grant will be
                             used to fund a demonstration project called Easy Ride that will purchase
                             several alternative fuel vehicles and employ a person to coordinate
                             transportation schedules for welfare-to-work participants. Additionally,
                             the competitive grant in Detroit will provide more intense job readiness
                             training such as substance abuse counseling and classes for
                             English-as-a-Second-Language.

                             The Metropolitan Area Planning Commission in Boston also planned to
                             use its competitive grant funds to complement the area’s formula grant
                             programs by developing a transportation program to help individuals get
                             to work. An “Access to Jobs” study found specific gaps in transportation
                             services that hampered individuals from obtaining employment. The study



                             Page 15                                    GAO/HEHS-99-40 Welfare-to-Work Grants
B-280256




found that people either had no available public transportation, had to
make multiple trips to get from their residence to their work site, or simply
did not know how to make the trip. The Commission will work to connect
city residents to suburban jobs, and suburban residents to jobs in other
suburbs or the city. The program will assist people served by the formula
grant programs and will provide (1) information about transportation
modes, schedules, and day care sites near transportation; (2) direct
assistance, such as subsidies for public transportation; and (3) an
emergency fund for unanticipated transportation needs, allocated on a
case-by-case basis. For example, if someone is not served by public
transportation but has a car in need of repairs, the fund could be used to
keep this individual’s car in running order.

Other competitive grants will function separately from the local formula
grant but rely on the same systems to verify welfare-to-work eligibility as
the formula grantees—the welfare offices or the court system. For
example, Oakland, California, will use its competitive grant to expand its
pilot program to train and place Head Start parents in jobs. The program
staff hope to identify participants who are noncustodial parents or who
have substance abuse problems, but, similar to the welfare-to-work
eligibility determination for the local formula grant, the staff will also
submit a list of interested Head Start parents to the county welfare agency
to verify TANF status. The Private Industry Council of Milwaukee County
will provide legal assistance to long-term welfare clients and noncustodial
parents whose legal problems—combined with poor academic and work
skills—are barriers to employment. For its competitive grant, the Private
Industry Council plans to serve 200 long-term TANF recipients (primarily
women) and 450 noncustodial parents (primarily men) identified by the
welfare agency or the court system—this is the same way that the Private
Industry Council will determine welfare-to-work eligibility for participants
served by the local formula grant. The competitive grant will be used to
provide legal advocacy and case management to participants, track
individuals who drop out of the program and try to reintegrate them, and
develop a process that will place a randomly selected group of
noncustodial parents in unsubsidized or subsidized employment. This
process will require that placement firms pay for the subsidized
employment, thus providing the firms with incentives for finding jobs for
their clients.

In New York City, the Consortium for Worker Education will use its
competitive grant to train and assist women to provide child care from
their homes as satellites for private sector child care centers. The



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                        B-280256




                        Consortium planned to build on its concept of both putting welfare
                        recipients to work by providing child care in their homes and creating
                        needed child care slots for workers in New York City. Recruitment for the
                        program will be managed by two vendors who will advertise, hold
                        presentations at community centers, and obtain referrals from the city
                        welfare department. Once recruited, participants will be assessed and
                        interviewed. For those selected for the program, their welfare-to-work
                        eligibility will be determined by the city’s TANF agency, which is also the
                        administrative entity for the city’s local formula grant. Those deemed
                        eligible must then have their homes inspected for compliance with city
                        building and health codes. Once accepted, the Consortium will enroll
                        participants in a 2-week job readiness program followed by a 16-week
                        Work Experience Program. Participants will spend 60 percent of their
                        work experience working in a day care center and 40 percent in classroom
                        training. When individuals have successfully completed their work
                        experience, they will be hired by the parent company, Satellite Child Care,
                        Inc. The provider’s home will then be opened as a satellite child care
                        center, and the provider will receive a $4,000 kit containing various
                        equipment, including a computer package that has software for children
                        and distance learning capabilities so the provider can receive continued
                        instruction. The providers will receive on-going supervision and home
                        visits from the parent company.


                        State and local officials in the six states we reviewed noted that a stronger
Stronger Partnerships   partnership was developing between the workforce development agencies
Are Developing          and other human service agencies assisting welfare recipients. They
Between the             attributed this stronger relationship, at least in part, to their joint
                        involvement in the welfare-to-work planning process. At the state level,
Workforce               each of the six states we reviewed had developed a partnership steering
Development and         committee, task force, or work group to develop the states’ plans for
                        formula grant funds and had identified ways to promote integration
Human Service           between the workforce development and human service agencies for
Agencies                welfare recipients at the local level. Furthermore, recipients of
                        competitive grant funds also coordinated their plans with state and local
                        officials.

                        The six states we reviewed had developed mechanisms to coordinate
                        welfare-to-work activities with services to the hard-to-employ population.
                        For example, in Massachusetts, an intergovernmental state steering
                        committee prepared the state plan for formula grant funds and continues
                        to respond to technical questions raised by local service delivery areas



                        Page 17                                   GAO/HEHS-99-40 Welfare-to-Work Grants
B-280256




regarding implementation of welfare-to-work programs. The
welfare-to-work stakeholders included representatives from the
Department of Labor and Workforce Development; the Corporation for
Business, Work and Learning; the Executive Office of Health and Human
Services; the Department of Transitional Assistance, which is the state
TANF agency; the Regional Employment Board Association; the Service
Delivery Area Association; the Career Center Office; and the Division of
Employment and Training. By planning and working together, this group
shares information in order to minimize duplication of effort between state
agencies and with the local service delivery areas.

In California, planning for formula grant funds and coordination between
the California Employment Development Department and the state’s
Department of Social Services began as soon as the welfare-to-work
program was introduced by Labor. Both departments are within
California’s Health and Welfare Agency, and, even before welfare-to-work
legislation, these departments had formed a coordination
committee—CalWORKS—to discuss issues regarding the state’s effort to
move welfare recipients into employment. At the state level, California has
an interdepartmental work group that includes representatives of agencies
responsible for education, transportation, housing, community services,
mental health, and job services. In all, the work group includes 15 state
departments responsible for 20 different programs. The state had also
implemented one-stop career centers and had adopted a policy that would
make the county welfare departments part of the one-stop system. The
state further emphasized collaboration by holding five public hearings on
the draft state plan to elicit comments from local service delivery areas
and by posting its plan on the Internet to obtain public comment.

The formula grant plans for the six states we reviewed required
coordination between the workforce development and welfare agencies at
the local level. For example, California required that local plans for
formula funds also be approved by the county welfare department. In New
York, state officials developed guidelines for local formula grant proposals
that required the Private Industry Councils and area social services
districts to develop a written welfare-to-work operational agreement to
detail respective roles, responsibilities, and procedures within the service
delivery area.

At the local level, partnerships were formed to coordinate welfare-to-work
activities provided by the local workforce development agencies with
other human services for welfare recipients. For example, a community



Page 18                                   GAO/HEHS-99-40 Welfare-to-Work Grants
B-280256




task force in Flagstaff, Arizona, was formed with representation from 64
state and local agencies in the service delivery area that were involved
with moving individuals from welfare to work. Together, these
stakeholders developed a matrix, listing each organization and the
services offered to welfare recipients, to leverage resources and minimize
duplication of effort. In Michigan, an official representing a local service
delivery area noted that because the TANF population is the hardest to
employ, she relies heavily on the expertise of the Michigan Rehabilitation
Services for assistance regarding participants with more serious
impediments to employment, such as substance abuse or mental illness.
Additionally, because local service providers in Michigan focus on
noncustodial parents, collaborative efforts with the court system are vital
for identifying this population; the Family Independence Agency, which is
the TANF agency, is also an important welfare-to-work partner in
identifying TANF-eligible recipients. According to officials in Wisconsin,
implementation of formula grant programs at the local level is a joint
project between the local workforce development agency and the local
TANF offices. This coordination allows the welfare-to-work funds to be
used to expand on services provided by TANF funds, thus avoiding
duplication of effort in service delivery.

For the welfare-to-work competitive grants we reviewed, competitive
grantees also coordinated their plans with state and local officials. For
example, the competitive grant awarded in Merced, California, is planned
for use in assisting welfare-to-work participants in becoming
self-employed, and a strong aspect of this program is its collaboration with
various partners. The program, which primarily targets noncustodial
parents and public housing residents, has a coalition of partners including
the Merced County Community Action Agency, Employment Development
Department of Merced County, Merced County Private Industry
Council/Private Industry Training Department, Merced County Human
Services Agency, Housing Authority of the County of Merced, and
chambers of commerce throughout the county. In several states we
reviewed, the competitive grants were awarded to the same or similar
entities that received a formula grant; consequently, the competitive grant
linked significantly with the welfare-to-work program established under
the formula grant. In these cases, the competitive grant funds were
generally used to provide the more intensive services needed to help
welfare recipients get and keep jobs.




Page 19                                   GAO/HEHS-99-40 Welfare-to-Work Grants
                  B-280256




                  We provided a draft of this report to the Department of Labor for
Agency Comments   comment. Labor provided technical comments, which we incorporated in
                  the report where appropriate.


                  We are sending copies of this report to the Secretary of Labor and other
                  interested parties. Copies also will be made available to others upon
                  request.

                  If you have any questions about this report, please contact me at
                  (202) 512-7014. Major contributors to this report include Sigurd R. Nilsen,
                  Betty S. Clark, and Carolyn D. Hall.




                  Carlotta C. Joyner
                  Director, Education and
                    Employment Issues




                  Page 20                                   GAO/HEHS-99-40 Welfare-to-Work Grants
Page 21   GAO/HEHS-99-40 Welfare-to-Work Grants
Contents



Letter                                                              1


Appendix I                                                         26
Scope and
Methodology
Appendix II                                                        27
Welfare-to-Work
Formula Grants
Awarded for Fiscal
Year 1998
Appendix III                                                       30
Welfare-to-Work
Competitive Grants
Awarded May 27, 1998
Appendix IV                                                        33
Welfare-to-Work
Competitive Grants
Awarded November
20, 1998
Appendix V                                                         37
Arizona’s
Welfare-to-Work
Formula Grant
Program for Fiscal
Year 1998




                       Page 22   GAO/HEHS-99-40 Welfare-to-Work Grants
                     Contents




Appendix VI                                                       40
California’s
Welfare-to-Work
Formula Grant
Program for Fiscal
Year 1998
Appendix VII                                                      46
Massachusetts’
Welfare-to-Work
Formula Grant
Program for Fiscal
Year 1998
Appendix VIII                                                     50
Michigan’s
Welfare-to-Work
Formula Grant
Program for Fiscal
Year 1998
Appendix IX                                                       54
New York’s
Welfare-to-Work
Formula Grant
Program for Fiscal
Year 1998




                     Page 23    GAO/HEHS-99-40 Welfare-to-Work Grants
                       Contents




Appendix X                                                                                      58
Wisconsin’s
Welfare-to-Work
Formula Grant
Program for Fiscal
Year 1998
Related GAO Products                                                                            64


Tables                 Table 1: Eligibility Requirements for Welfare-to-Work Services            7
                       Table 2: Number of Competitive Grants Awarded, by State, as of           10
                         November 20, 1998
                       Table V.1: Arizona’s Substate Welfare-to-Work Formula Grant              39
                         Allocations
                       Table VI.1: California’s Substate Welfare-to-Work Formula Grant          42
                         Allocations
                       Table VI.2: Projects Awarded Governor’s Welfare-to-Work                  44
                         Discretionary Funds Through Competition in California
                       Table VII.1: Massachusetts’ Substate Welfare-to-Work Formula             48
                         Grant Allocations
                       Table VIII.1: Michigan’s Substate Welfare-to-Work Formula Grant          52
                         Allocations
                       Table IX.1: New York’s Substate Welfare-to-Work Formula Grant            55
                         Allocations
                       Table X.1: Wisconsin’s Substate Welfare-to-Work Formula Grant            60
                         Allocations




                       Abbreviations

                       EARN       Employment and Respect Now
                       JTPA       Job Training Partnership Act
                       TANF       Temporary Assistance for Needy Families


                       Page 24                                GAO/HEHS-99-40 Welfare-to-Work Grants
Page 25   GAO/HEHS-99-40 Welfare-to-Work Grants
Appendix I

Scope and Methodology


             To address the request, we reviewed the legislation authorizing
             welfare-to-work grants and the implementing regulations. We met with
             Labor officials who administer the grants and obtained information on the
             formula grants Labor awarded for welfare-to-work funds available for
             fiscal year 1998. We also obtained information about the competitive
             grants Labor awarded on May 27, 1998, and November 20, 1998, with
             welfare-to-work funds available for fiscal years 1998 and 1999.

             We interviewed state and local officials in six states—Arizona, California,
             Massachusetts, Michigan, New York, and Wisconsin—to obtain
             information on their plans for the welfare-to-work grant funding. We
             selected four of these states to take advantage of site visits made and
             information collected for a concurrent GAO study on states’ experiences in
             providing employment and training assistance to TANF clients.8 For this
             report, we conducted field visits in states that were early implementers of
             welfare reform and of workforce development program consolidation.
             Additionally, we included two other states—California and New York—in
             our study because they have the largest welfare caseloads. For each of the
             six states, we reviewed the state welfare-to-work plan, interviewed
             program officials for at least two selected local service delivery areas
             receiving allocations of the states’ formula grant funds, and interviewed
             one grantee that was awarded competitive grant funds. We also
             telephoned officials in the states that declined or did not apply for
             welfare-to-work grants to obtain information on the reasons for these
             decisions.

             We performed our work from May 1998 to December 1998 in accordance
             with generally accepted government auditing standards.




             8
              Welfare Reform: States’ Experiences in Providing Employment Assistance to TANF Clients
             (GAO/HEHS-99-22, forthcoming).



             Page 26                                              GAO/HEHS-99-40 Welfare-to-Work Grants
Appendix II

Welfare-to-Work Formula Grants Awarded
for Fiscal Year 1998


Dollars in thousands
                                                 Percentage of total 1998                                1998 federal
                       Federal welfare-to-work    federal welfare-to-work                      welfare-to-work funds
State or territory             funds awarded              funds awardeda    State matchb                    declined
Alabama                               $13,978                       1.36         $6,989                          N/A
Alaska                                  2,927                       0.29           1,463                         N/A
Arizona                                 9,000c                      0.88           4,500                      $8,418
Arkansas                                8,490                       0.83           4,245                         N/A
California                            190,417                      18.56         95,209                          N/A
Colorado                                9,879                       0.96           4,939                         N/A
Connecticut                            12,006                       1.17           6,003                         N/A
Delaware                                2,762                       0.27           1,381                         N/A
District of Columbia                    4,646                       0.45           2,323                         N/A
Florida                                50,757                       4.95         25,378                          N/A
Georgia                                28,409                       2.77         14,205                          N/A
                                                                                           d
Guam                                      585                       0.06              0                          N/A
Hawaii                                  5,086                       0.50           2,543                         N/A
Idaho                                     N/A                        N/A            N/A                        2,794
Illinois                               48,663                       4.74         24,331                          N/A
Indiana                                14,552                       1.42           7,276                         N/A
Iowa                                    8,332                       0.81           4,166                         N/A
Kansas                                  6,668                       0.65           3,334                         N/A
Kentucky                               17,723                       1.73           8,861                         N/A
Louisiana                              23,707                       2.31         11,854                          N/A
Maine                                   5,156                         0.5          2,578                         N/A
Maryland                               14,941                       1.46           7,470                         N/A
Massachusetts                          20,692                       2.02         10,346                          N/A
Michigan                               42,226                       4.12         21,113                          N/A
Minnesota                              14,503                       1.41           7,252                         N/A
Mississippi                               N/A                        N/A            N/A                       12,991
Missouri                               19,767                       1.93           9,884                         N/A
Montana                                 3,194                       0.31           1,597                         N/A
Nebraska                                4,022                       0.39           2,011                         N/A
Nevada                                  3,384                       0.33           1,692                         N/A
New Hampshire                           2,762                       0.27           1,381                         N/A
New Jersey                             23,257                       2.27         11,629                          N/A
New Mexico                              9,716                       0.95           4,858                         N/A
New York                               96,886                       9.45         48,443                          N/A
North Carolina                         25,332                       2.47         12,666                          N/A
                                                                                                          (continued)



                                     Page 27                                  GAO/HEHS-99-40 Welfare-to-Work Grants
                                      Appendix II
                                      Welfare-to-Work Formula Grants Awarded
                                      for Fiscal Year 1998




Dollars in thousands
                                                    Percentage of total 1998                                1998 federal
                        Federal welfare-to-work      federal welfare-to-work                      welfare-to-work funds
State or territory              funds awarded                funds awardeda    State matchb                    declined
North Dakota                             2,762                         0.27           1,381                            N/A
Ohio                                       N/A                          N/A            N/A                          44,608
Oklahoma                                11,742                         1.14           5,871                            N/A
Oregon                                   8,637                         0.84           4,318                            N/A
Pennsylvania                            44,296                         4.32         22,148                             N/A
Puerto Rico                             34,566                         3.37         17,283                             N/A
Rhode Island                             4,420                         0.43           2,210                            N/A
South Carolina                          12,006                         1.17           6,003                            N/A
South Dakota                               N/A                          N/A            N/A                           2,762
Tennessee                               21,644                         2.11         10,822                             N/A
Texas                                   76,059                         7.41         38,029                             N/A
Utah                                       N/A                          N/A            N/A                           4,628
Vermont                                  2,762                         0.27           1,381                            N/A
Virginia                                16,549                         1.61           8,274                            N/A
                                                                                              d
Virgin Islands                             554                           .05            77                             N/A
Washington                              22,675                         2.21         11,337                             N/A
                                                e
West Virginia                            9,805                         0.96           4,903                               1c
Wisconsin                               12,886                         1.26           6,443                            N/A
Wyoming                                    N/A                          N/A            N/A                           2,762
Totalf                              $1,025,788                       100.00       $512,401                         $78,962
Percentage of federal
allocationg                                 93%                         N/A            N/A                                7%

                                                                                                  (Table notes on next page)




                                      Page 28                                    GAO/HEHS-99-40 Welfare-to-Work Grants
Appendix II
Welfare-to-Work Formula Grants Awarded
for Fiscal Year 1998




Note: N/A = not applicable.
a
 The percentage of federal funds awarded is based on each state’s percentage of the
$1,025,787,658 in formula grant funds awarded by Labor.
b
 Each state match amount was calculated as one-half of the actual dollar award, rather than the
rounded amount shown as awarded, which was rounded to the nearest thousand.
c
 In order to receive the $17.4 million in federal formula funding available for Arizona, the state was
required to assure state matching funds of $8.7 million. Since the state assured a $4.5 million
match, it was awarded $9 million for fiscal year 1998.
d
 Labor waived the first $200,000 in matching funds for Guam and the Virgin Islands. Additionally,
Guam requested and was granted a waiver for the balance of its matching funds. The Virgin
Islands, however, assured a match of about $77,000.
e
 According to a Labor official, West Virginia’s federal formula grant was $500 less than the state’s
allotted amount as a result of a typographical error in its application. The state decided not to
apply for the additional funding, which, rounded to the nearest thousand dollars, is presented as
1.
f
Totals may not add because of rounding.
g
 This amount is based on the full, available amount of fiscal year 1998 federal formula funding,
$1,104,750,000. According to a Labor official, $78,962,342 of this amount was not awarded and
was returned to the U.S. Treasury by Labor.

Source: GAO analysis of Department of Labor data.




Page 29                                                  GAO/HEHS-99-40 Welfare-to-Work Grants
Appendix III

Welfare-to-Work Competitive Grants
Awarded May 27, 1998


               State or territory     Grantee                         Location            Award amount
               Alabama                United Way of Central           Birmingham              $4,997,966
                                      Alabama
               Arizona                City of Phoenix Human           Phoenix                  5,000,000
                                      Services Department,
                                      Employment and Training
                                      Division
               Arkansas               The City of Little Rock         Little Rock              5,000,000
               California             CHARO Alliance WtW              Los Angeles              3,999,650
               California             Los Angeles Private             Los Angeles              3,000,000
                                      Industry Council
               California             Private Industry Council of     San Francisco            4,189,231
                                      San Francisco, Inc.
               California             The Cambodian Family            Santa Ana                1,216,167
               California             Housing Authority of the        Los Angeles              5,000,000
                                      City of Los Angeles
               California             Community Rehabilitation        Long Beach               3,669,874
                                      Industries
               California             Merced Self-Employment          Merced                   1,879,120
                                      and Job Opportunity
                                      Coalition
               California             Oakland Private Industry        Oakland                  3,000,000
                                      Council
               California             City of Oakland, Office of      Oakland                  2,000,000
                                      Aging
               California             Richmond Private Industry       Richmond                 3,087,347
                                      Council
               California             Riverside County Economic Riverside                      4,450,000
                                      Development Agency
               Colorado               Rocky Mountain                  Denver                   1,460,864
                                      Service/Jobs for Progress,
                                      Inc.
               Connecticut            The WorkPlace, Inc.             Bridgeport               5,000,000
               District of Columbia   Consortium of Family            Washington, D.C.         1,965,601
                                      Employment Service
                                      Providers
               Florida                Florida Developmental           Tallahassee              1,660,396
                                      Disabilities Council
               Florida                Pinellas Workforce              Clearwater               1,500,000
                                      Development Board
               Georgia                Mayor’s Office of Citizens      Atlanta                  5,000,000
                                      Employment and Training,
                                      Atlanta
               Georgia                Goodwill Industries of          Macon                    5,300,000
                                      Middle Georgia
                                                                                              (continued)



               Page 30                                              GAO/HEHS-99-40 Welfare-to-Work Grants
Appendix III
Welfare-to-Work Competitive Grants
Awarded May 27, 1998




State or territory   Grantee                         Location            Award amount
Illinois             Bethel New Life                 Chicago                  2,739,506
Illinois             DePaul University               Chicago                  5,000,000
Illinois             City of Chicago, the            Chicago                  3,000,000
                     Chicago Workforce Board
Indiana              Indianapolis Private            Indianapolis             5,000,000
                     Industry Council
Indiana              River Valley Resources, Inc. Madison                     5,000,000
Kentucky             Louisville and Jefferson        Louisville               4,999,898
                     County Private Industry
                     Council
Massachusetts        Metropolitan Area Planning      Boston                   4,082,065
                     Council
Michigan             City of Detroit Employment      Detroit                  4,860,633
                     and Training Department
Michigan             City of Kalamazoo - Metro       Kalamazoo                  375,000
                     Transit System
New Jersey           County of Union                 Elizabeth                5,000,000
New Jersey           Hudson County                   Secaucus                 4,914,297
New Mexico           Catholic Social Services of     Albuquerque              1,343,133
                     Albuquerque, Inc.
New York             Non-Profit Assistance           New York                 4,871,904
                     Corporation
New York             Consortium for Worker           New York                 4,966,000
                     Education
North Carolina       Ladder to Success               Whiteville               2,638,601
Ohio                 The Corporation for Ohio        Athens                   5,000,000
                     Appalachian Development
Pennsylvania         Private Industry Council of     Philadelphia             4,351,247
                     Philadelphia, Inc.
Pennsylvania         Resources for Human             Philadelphia             1,866,460
                     Development, Inc.
Texas                Houston Works                   Houston                  5,000,000
Texas                Goodwill Industries of San      San Antonio              5,000,000
                     Antonio
Vermont              Northern Community              St. Johnsbury            3,132,518
                     Investment Corporation
Virginia             Hampton University Career       Hampton                  4,898,000
                     Advancement Resiliency
Virginia             Total Action Against            Roanoke                  2,736,272
                     Poverty, Inc.
Wisconsin            Private Industry Council of     Milwaukee                4,262,054
                     Milwaukee County
Multisite            IAM CARES                       AK, MO, OH, and          5,000,000
                                                     OR
                                                                             (continued)


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Appendix III
Welfare-to-Work Competitive Grants
Awarded May 27, 1998




State or territory     Grantee                       Location              Award amount
Multisite              The NOAH Group, L.L.C         PA, VA, and WA            7,800,000
Multisite              YouthBuild USA                CA, DC, GA, MN,           5,500,000
                                                     MO, ND, OH, WA,
                                                     and WV
Multisite              CET-Welfare-to-Work           CA, FL, IL, MD,           4,003,294
                       National Project              NC, NV, NY, TX,
                                                     and VA
Multisite              The Institute for             CA, DC, NY, OH,           4,427,318
                       Responsible Fatherhood        TN, and WI
                       and Family Revitalization
Multisite              National Association of       AL, AZ, CA, CT, IL,       4,912,658
                       Private Industry Councils     MD, MN, OR, and
                                                     TN
Total                  51 grants awarded                                    $199,057,074

Source: Department of Labor.




Page 32                                            GAO/HEHS-99-40 Welfare-to-Work Grants
Appendix IV

Welfare-to-Work Competitive Grants
Awarded November 20, 1998


              State or territory     Grantee                         Location            Award amount
              Alabama                Stillman College                Tuscaloosa              $3,723,620
              Alaska                 Nine Star Enterprises, Inc.     Anchorage                1,279,499
              Arizona                Pima County Community           Tuscon                   3,180,776
                                     Services
              California             City of Long Beach              Long Beach               5,000,000
                                     Department of Community
                                     Development
              California             Goodwill Industries of          Los Angeles              4,098,265
                                     Southern California
              California             Beyond Shelter                  Los Angeles              1,199,700
              California             African American Unity          Los Angeles              1,357,885
                                     Center
              California             Catholic Charities of Los       Los Angeles              3,037,423
                                     Angeles
              California             Jobs for Homeless               Oakland                  1,365,336
                                     Consortium
              California             San Diego Workforce             San Diego                5,000,000
                                     Partnership, Inc.
              California             County of Tulare Private        Visalia                  3,824,201
                                     Industry Council, Inc.
              Colorado               United Cerebral Palsy of        Denver                   1,321,825
                                     Colorado
              Colorado               City and County of Denver       Denver                   3,598,915
              Connecticut            Community Action Agency         New Haven                2,923,000
                                     of New Haven, Inc.
              Connecticut            The Access Agency, Inc.         Willimantic              1,000,750
              District of Columbia   Washington Alliance             Washington, D.C.         5,000,000
              Florida                Goodwill Industries of North Jacksonville                5,000,000
                                     Florida, Inc.
              Florida                Miami-Dade County               Miami                    4,470,000
              Florida                Latin Chamber of                Miami                    2,100,000
                                     Commerce of USA
              Georgia                DeKalb Economic                 Decatur                  2,224,375
                                     Opportunity Authority, Inc.
              Georgia                City of Savannah                Savannah                 4,067,000
              Hawaii                 Hawaii County Economic          Hilo                     4,200,000
                                     Opportunity Council
              Illinois               Chicago Housing Authority       Chicago                  5,000,000
              Illinois               Community and Economic     Chicago                       5,000,000
                                     Development Association of
                                     Cook County, Inc.
              Indiana                City of Gary, Department of Gary                         5,000,000
                                     Health and Human Services
                                                                                             (continued)


              Page 33                                              GAO/HEHS-99-40 Welfare-to-Work Grants
Appendix IV
Welfare-to-Work Competitive Grants
Awarded November 20, 1998




State or territory   Grantee                         Location            Award amount
Iowa                 Labor Institute for             Des Moines               2,118,235
                     Workforce Development
Kansas               City of Topeka                  Topeka                   1,999,917
Kentucky             Community Action Council        Lexington                2,833,736
Louisiana            City of New Orleans             New Orleans              5,000,000
Maine                Workforce Development           Augusta                  3,212,516
                     Centers
Maryland             The Baltimore City Office of    Baltimore                3,330,199
                     Employment Development
Maryland             Prince Georges Private          Landover                 4,976,254
                     Industry Council
Massachusetts        Boston Technology Venture Boston                         1,139,388
                     Center, Inc.
Massachusetts        Action for Boston               Boston                   2,785,430
                     Community Development
                     Inc.
Minnesota            City of Minneapolis             Minneapolis              1,860,000
Minnesota            Rise Incorporated               Spring Lake Park         3,099,779
Mississippi          Hinds County                    Jackson                  3,294,191
Missouri             Advent Enterprises, Inc.        Columbia                 3,435,301
Missouri             Full Employment Council,        Kansas City              4,420,558
                     Inc.
Montana              S & K Holding Company,          Polson                   2,542,700
                     Inc.
New Hampshire        Southwestern Community          Keene                    1,000,000
                     Services, Inc.
New Jersey           Mercer County Office of         Trenton                  4,219,582
                     Training and Employment
New Jersey           County of Essex                 Newark                   4,900,000
New Mexico           Santa Fe SER/Jobs for           Santa Fe                 5,000,000
                     Progress, Inc.
New York             New York City Partnership New York                       5,000,000
                     and Chamber of Commerce
New York             City of New York Human          New York                 2,934,705
                     Resources Administration
New York             Wildcat Service Corporation New York                     2,007,017
New York             Buffalo and Erie Private        Buffalo                  4,917,903
                     Industry Council
North Carolina       UDI Community                   Durham                   3,728,134
                     Development Corporation
North Carolina       Bennett College                 Greensboro               5,000,000
Ohio                 Private Industry Council of     Columbus                 4,997,630
                     Columbus and Franklin
                     County, Inc.
                                                                             (continued)


Page 34                                            GAO/HEHS-99-40 Welfare-to-Work Grants
Appendix IV
Welfare-to-Work Competitive Grants
Awarded November 20, 1998




State or territory   Grantee                        Location              Award amount
Ohio                 Columbus Urban League          Columbus                  3,149,984
Oklahoma             Eastern Workforce              Muskogee                  2,848,115
                     Development Board, Inc.
Pennsylvania         District 1199C Training and    Philadelphia              4,449,928
                     Upgrading Fund of the
                     National Union of Hospital
                     and Healthcare Employers
Puerto Rico          Centro de Capacitacion y       Caguas                    5,000,000
                     Asesoramiento
Rhode Island         Providence/Cranston            Providence                3,859,284
                     Private Industry Council
South Dakota         Oglala Lakota College          Kyle                      2,293,326
Tennessee            Tennessee Urban League         Chattanooga               5,000,000
                     Affiliates
Tennessee            Nashville/Davidson County      Nashville                 4,016,694
                     Private Industry Council
Texas                Dallas County Local            Dallas                    5,000,000
                     Workforce Development
                     Board
Texas                Tarrant County Workforce       Fort Worth                3,254,864
                     Development Board
Texas                County of Webb                 Laredo                    1,000,000
Utah                 Five County Association of     St. George                3,000,000
                     Governments
Vermont              Central Vermont Community Barre                          3,120,140
                     Action Council
Virginia             Alexandria Redevelopment       Arlington                 1,090,000
                     and Housing Authority
Virginia             Richmond Private Industry      Richmond                  4,993,775
                     Council
Washington           Washington State Labor         Seattle                   4,619,684
                     Council (AFL-CIO)
Washington           Seattle-King County Private    Seattle                   5,000,000
                     Industry Council
West Virginia        Human Resources                Morgantown                4,934,876
                     Development Foundation
Multisite            Johns Hopkins University       AZ, CA, CT, FL, IA,       4,996,535
                                                    IL, MD, ME, OR,
                                                    and RI
Multisite            The America Works              AK, CA, FL, IN,           7,872,505
                     Partnership                    and NJ
Multisite            The Enterprise Foundation      CO, DC, MD, MO,           8,000,000
                                                    OR, and TX
Multisite            International Association of   MA, MN, NJ, and           4,204,777
                     Jewish Vocational Services     PA
                                                                             (continued)


Page 35                                           GAO/HEHS-99-40 Welfare-to-Work Grants
Appendix IV
Welfare-to-Work Competitive Grants
Awarded November 20, 1998




State or territory     Grantee                        Location               Award amount
Multisite              Hispanic Association of        AZ, CA, and TX               4,321,269
                       Colleges and Universities
Multisite              Marriott International         CA, CO, FL, GA,              3,536,250
                       Community Employment           IL, KY, LA, MD, MI,
                       and Training Programs          MO, NC, NV, OH,
                                                      PA, TX, and VA
Total                  75 grants awarded                                       $273,287,751

Note: These awards were announced by Labor on November 20, 1998; however, a Labor official
noted that the amounts listed are proposed award amounts.

Source: Department of Labor.




Page 36                                            GAO/HEHS-99-40 Welfare-to-Work Grants
Appendix V

Arizona’s Welfare-to-Work Formula Grant
Program for Fiscal Year 1998

                        In Arizona, the Department of Economic Security is the welfare-to-work
                        federal grant recipient and state administering entity. Arizona submitted
                        its welfare-to-work plan on August 5, 1998. On August 20, 1998, Labor
                        awarded fiscal year 1998 formula grant funds to the state totaling
                        $9,000,000. Although Arizona was eligible for about $17,418,000 in federal
                        welfare-to-work funds, the state did not identify matching funds sufficient
                        to receive its maximum federal allocation. Instead, Arizona assured
                        $4,500,000 in state matching funds over the 3-year grant period. According
                        to a state official, the state match appropriated by the state legislature was
                        $1.5 million for 1998; state officials anticipate the legislature will
                        appropriate the remaining $3 million in 1999.

                        Arizona required its 16 Private Industry Councils9 to amend their JTPA
                        plans with descriptions of how formula grant funds would be expended
                        and to submit these amended plans for state review and approval, rather
                        than submitting formal welfare-to-work plans. According to a state official,
                        local plans were reviewed in November 1998, and the Private Industry
                        Councils planned to implement their welfare-to-work formula grant
                        programs between November 1998 and January 1999.


                        The Arizona state plan outlined the full range of federally allowable
Activities and Target   welfare-to-work activities and targeting strategies from which the local
Populations             service delivery areas may specify the target population and mix of
                        services most appropriate for their local needs. According to the state
                        plan, service delivery areas will determine the target group(s) to be served,
                        and potential welfare-to-work clients may be directly referred to the
                        service delivery areas by the state welfare recipient employment and
                        training program, the Division of Child Support Enforcement, or the
                        superior court through court order. A local official said that since the
                        approval of the state plan, the Arizona Department of Economic Security
                        has urged service delivery areas to recruit participants through direct
                        referrals from the state welfare service system’s employment and training
                        program, rather than design their own recruiting programs.

                        The Arizona state plan provided local areas with guidance on the provision
                        of local activities and services. Specifically, the plan outlined four
                        categories of job readiness, each of which includes a specific mix of
                        services based on the participant’s characteristics: Not Ready, Almost
                        Ready, Ready, and Post Placement. However, local service delivery areas

                        9
                         Private Industry Councils are the local grant recipients under the Job Training Partnership Act (JTPA)
                        and are responsible for administering the assistance in a local service delivery area. JTPA requires that
                        each local area have a plan detailing its proposed use of funds.



                        Page 37                                                  GAO/HEHS-99-40 Welfare-to-Work Grants
                   Appendix V
                   Arizona’s Welfare-to-Work Formula Grant
                   Program for Fiscal Year 1998




                   may determine the target population and mix of services most appropriate
                   for their area’s needs.


                   Arizona allocated all of the $9,000,000 federal formula grant to the local
Substate Formula   service delivery areas using the following formula: 50-percent weight was
Allocations        given to the number of people under poverty in excess of 7.5 percent of
                   the service delivery area population, and 50-percent weight was given to
                   the number of welfare recipients in the service delivery area having
                   received assistance for at least 30 months. Three of the service delivery
                   areas—Apache, Graham, and Greenlee Counties—received no federal
                   funds because their formula allocations of the $9 million federal grant fell
                   below the required minimum of $100,000; however, as shown in table V.1,
                   Arizona allocated state matching funds to each of these service delivery
                   areas. Arizona planned to use 15 percent of the state match for state
                   welfare-to-work administration, and the balance of the state match was
                   allocated to the service delivery areas using the same formula applied to
                   the federal funds. Local service delivery areas must limit welfare-to-work
                   administrative costs to 15 percent of their formula grant award.

                   Although Arizona assured $4.5 million in matching funds for the full
                   $9 million federal welfare-to-work award, the state legislature
                   appropriated $1.5 million of the match during 1998. Arizona has an official
                   state document, referenced in the federal grant agreement, that controls
                   the disbursement of funds according to the amount of state match
                   provided. According to a state official, until additional matching funds are
                   appropriated, service delivery areas are only entitled to their allocations of
                   the $3 million in federal funds that have been matched with $1.5 million in
                   state funds. Allocations based on the current and full state match are
                   included in table V.1.




                   Page 38                                    GAO/HEHS-99-40 Welfare-to-Work Grants
                                                 Appendix V
                                                 Arizona’s Welfare-to-Work Formula Grant
                                                 Program for Fiscal Year 1998




Table V.1: Arizona’s Substate Welfare-to-Work Formula Grant Allocations
                                                                                                                Total funds available for
                               Federal formula fund allocationa               Match allocation                      welfare-to-work
                                         Initial   Total potential              Initial   Total potential             Initial    Total potential
                                    allocation          allocation         allocation          allocation        allocation           allocation
                                based on $1.5      based on $4.5       based on $1.5      based on $4.5      based on $1.5       based on $4.5
Service delivery area           million match       million match      million match       million match     million match        million match
Apache County                                $0                  $0           $16,238             $48,714            $16,238             $48,714
Cochise County                         145,200              435,600            58,934             176,801            204,134             612,401
Coconino County                         39,750              119,250            16,134              48,402             55,884             167,652
Gila/Pinal Consortium                  167,400              502,200            67,944             203,833            235,344             706,033
Graham County                                 0                   0            35,639             106,917             35,639             106,917
Greenlee County                               0                   0             5,483              16,449               5,483             16,449
Maricopa County                        389,250             1,167,750          157,989             473,966            547,239           1,641,716
Mohave/La Paz Consortium                80,550              241,650            32,694              98,081            113,244             339,731
Navajo County                           45,300              135,900            18,386              55,159             63,686             191,059
Navajo Nation                          416,700             1,250,100          169,130             507,391            585,830           1,757,491
City of Phoenix                        679,800             2,039,400          275,917             827,752            955,717           2,867,152
Pima County                            541,500             1,624,500          219,784             659,352            761,284           2,283,852
Santa Cruz County                       50,700              152,100            20,578              61,734             71,278             213,834
Yavapai County                          47,550              142,650            19,300              57,899             66,850             200,549
Yuma County                            132,900              398,700            53,941             161,824            186,841             560,524
Tribal Service Delivery Area           263,400              790,200           106,909             320,726            370,309           1,110,926
Total                              $3,000,000          $9,000,000         $1,275,000          $3,825,000         $4,275,000         $12,825,000
                                               a
                                                The federal formula fund allocation numbers include both the substate formula funds and the
                                               governor’s discretionary funds, which are 85 percent and 15 percent of the total federal
                                               welfare-to-work award, respectively.

                                               Source: Arizona Department of Economic Security.




                                                 Arizona allocated 100 percent of the federal formula grant funds to the
Governor’s                                       local service delivery areas. The state retained none of the allowable
Discretionary Funds                              15 percent governor’s discretionary funds ($1,350,000) at the state level.


                                                 Of the participants enrolled in welfare-to-work programs, the state
Performance Goals                                planned to place 56 percent of participants in unsubsidized jobs; of those
                                                 placed, the goal is that 56 percent will still be working after 6 months and
                                                 have a 1-percent increase in earnings over this time.




                                                 Page 39                                             GAO/HEHS-99-40 Welfare-to-Work Grants
Appendix VI

California’s Welfare-to-Work Formula Grant
Program for Fiscal Year 1998

                        In California, the Employment Development Department is the
                        welfare-to-work federal grant recipient and state administering entity.
                        California submitted its welfare-to-work plan to Labor on June 30, 1998.
                        On July 20, 1998, Labor awarded fiscal year 1998 formula grant funds to
                        the state totaling $190,417,247. The state assured $95,208,624 in state
                        matching funds over the 3-year grant period. According to a state official,
                        the state match was appropriated by the legislature, and $10 million was
                        budgeted for 1998. This state match was appropriated to the California
                        Department of Social Services, to be allocated among the state’s county
                        welfare departments for welfare-to-work activities. The welfare
                        departments, in collaboration with service delivery areas, locally elected
                        officials, and other local stakeholders, will determine how to use the state
                        matching funds to meet the welfare-to-work needs of their communities.

                        California’s 52 local service delivery areas were required to submit
                        welfare-to-work plans for state review and approval. California believed it
                        was important for local areas to exhibit a sense of program direction
                        before receiving welfare-to-work funding and wanted to ensure that
                        workforce development agencies had coordinated their proposed
                        welfare-to-work activities with the state’s 58 county welfare departments.
                        The state legislature passed a law allowing the local areas to prepare joint
                        plans; consequently, there are a total of 41 local plans. For example, the
                        eight local service delivery areas in Los Angeles County prepared one plan
                        for the entire county. According to a state official, as of September 30,
                        1998, 22 individuals were enrolled in welfare-to-work formula grant
                        programs statewide.


                        In California, the local service delivery areas are responsible for
Activities and Target   developing welfare-to-work programs to meet their communities’
Populations             demographic and workforce needs. California’s state plan noted that given
                        the diversity of the state’s local service delivery areas, no one service
                        strategy could be effectively applied statewide. A state official explained
                        that urban areas with many employment opportunities may choose to
                        focus heavily on work experiences in the private sector. On the other
                        hand, rural areas, with fewer employers, may rely heavily on community
                        service work experiences in their welfare-to-work programs.


                        California allocated 85 percent, or $161,854,660, of the federal formula
Substate Formula        grant to the local service delivery areas using the following formula:
Allocations             55-percent weight was given to the number of people with incomes below



                        Page 40                                   GAO/HEHS-99-40 Welfare-to-Work Grants
Appendix VI
California’s Welfare-to-Work Formula Grant
Program for Fiscal Year 1998




the poverty level in excess of 7.5 percent of the service delivery area
population; 15-percent weight was given to the number of unemployed
people in the service delivery area; and 30-percent weight was given to the
number of adults receiving welfare for at least 30 months in the service
delivery area. This formula was developed to ensure that all local areas
would receive the $100,000 federally required minimum allocation.
California limited local service delivery areas to an administrative cost cap
of 13 percent.




Page 41                                      GAO/HEHS-99-40 Welfare-to-Work Grants
                                    Appendix VI
                                    California’s Welfare-to-Work Formula Grant
                                    Program for Fiscal Year 1998




Table VI.1: California’s Substate
Welfare-to-Work Formula Grant                                               Federal                                            Federal
Allocations                                                           formula fund                                       formula fund
                                    Service delivery area                allocation Service delivery area                   allocation
                                    Alameda                              $1,520,686 Orange                                 $3,710,069
                                    Anaheim                                1,189,382 Richmond                                  659,692
                                    Butte                                  1,264,767 Riverside                               5,854,845
                                    Carson/Lomita/Torrance                   525,315 Sacramento                              6,387,277
                                    Contra Costa                           1,114,932 San Benito                                182,595
                                    Foothill                               1,248,269 San Bernardino City                     2,143,859
                                    Fresno                                 7,454,107 San Bernardino County                   6,968,031
                                    Golden Sierra                            812,364 San Diego                             11,837,010
                                    Humboldt                                 698,513 San Francisco                           2,367,832
                                    Imperial                               1,600,430 San Joaquin                             3,455,691
                                    Kern/Inyo/Mono                         4,567,951 San Luis Obispo                           628,217
                                    Kings                                    756,657 San Mateo                                 524,928
                                    Long Beach                             3,792,464 Santa Ana                               2,357,717
                                    Los Angeles City                     32,080,060 Santa Barbara                            1,315,774
                                    Los Angeles County                   22,153,146 Santa Clara                              2,774,645
                                    Madera                                   759,106 Santa Cruz                                872,717
                                    Marin                                    185,201 Southeast Los Angeles                   1,414,751
                                                                                     County
                                    Mendocino                                465,475 Shasta                                    924,260
                                    Merced                                 1,888,102 Solano                                    986,910
                                    Monterey                               1,629,955 Sonoma                                    940,612
                                    Mother Lode                              443,480 South Bay                               2,136,470
                                    Napa                                     209,898 Stanislaus                              2,659,779
                                    Northern Rural Training                1,179,503 Tulare                                  3,603,117
                                    and Employment
                                    Consortium
                                    North Central Counties                 1,620,726 Ventura                                 1,818,111
                                    North Santa Clara Valley                 340,448 Verdugo                                 2,080,540
                                    Job Training Consortium
                                    Oakland                                3,013,624 Yolo                                      734,648
                                    Totala                                                                               $161,854,660
                                    Note: This table does not include state matching funds because the state match was
                                    appropriated to the California Department of Social Services to be allocated among the state’s
                                    county welfare departments for welfare-to-work activities.
                                    a
                                    Total does not add because of rounding.

                                    Source: California State Welfare-to-Work Formula Grant Plan.




                                    Page 42                                                GAO/HEHS-99-40 Welfare-to-Work Grants
                      Appendix VI
                      California’s Welfare-to-Work Formula Grant
                      Program for Fiscal Year 1998




                      The governor’s welfare-to-work discretionary funds, 15 percent of the
Governor’s            formula funds, totaled $28,562,587. With $23 million of these funds, as
Discretionary Funds   shown in table VI.2, the state funded 24 projects throughout the state that
                      were selected on a competitive basis. The state required that the proposed
                      use of these discretionary funds be coordinated with local workforce
                      preparation and welfare reform partners, and applicants were encouraged
                      to develop linkages with businesses, economic development practitioners,
                      and supportive service agencies. Consequently, the grantees will use the
                      funds in conjunction with other local resources to support a mix of the
                      federally allowable welfare-to-work employment activities and services as
                      determined by the local community.




                      Page 43                                      GAO/HEHS-99-40 Welfare-to-Work Grants
                               Appendix VI
                               California’s Welfare-to-Work Formula Grant
                               Program for Fiscal Year 1998




Table VI.2: Projects Awarded
Governor’s Welfare-to-Work     Awardee                                           Location              Award amount
Discretionary Funds Through    Asian American Drug Abuse Program, Inc.           Los Angeles                 $785,280
Competition in California
                               Amador-Tuolumne Community Action Agency           Jackson                      660,118
                               Chrysalis                                         Los Angeles                1,095,436
                               Community Career Development, Inc.                Los Angeles                1,570,560
                               Contra Costa County Social Service Department Martinez                         784,031
                               El Dorado County Department of Social             Placerville                  942,415
                               Services
                               Fresno County Economic Opportunities              Fresno                     1,583,158
                               Commission
                               Goodwill Industries of Southern California        Los Angeles                1,005,168
                               Housing Authority of San Bernardino County        San Bernardino               942,336
                               Human Resources Agency of Santa Cruz              Santa Cruz                   785,280
                               County
                               Joint Efforts, Inc.                               San Pedro                    785,280
                               Kern County                                       Bakersfield                  785,280
                               Labor’s Community Services Agency                 San Diego                    488,904
                               Learning Center of Tehama County                  Red Bluff                  1,089,600
                               Mendocino County Social Services Department Ukiah                              728,650
                               North Santa Clara Valley Job Training             Sunnyvale                    866,244
                               Consortium
                               Pacific Asian Consortium in Employment            Los Angeles                  785,280
                               Rubicon Programs, Inc.                            Richmond                     664,893
                               Sacramento County Department of Human             Sacramento                   808,917
                               Assistance
                               San Diego Housing Commission                      San Diego                  1,439,057
                               San Joaquin County Private Industry Council       Stockton                   1,091,121
                               South Bay Center for Counseling                   El Segundo                   783,709
                               Vietnamese Community of Orange County             Santa Ana                    954,129
                               Youth Employment Partnership, Inc.                Oakland                    1,575,154
                               Total                                                                      $23,000,000
                               Source: California Employment Development Department.



                               An additional $1.5 million of the governor’s discretionary funds was
                               awarded through a competitive process to six regional collaboratives to
                               promote and encourage education and leadership through a cooperative
                               process. The six award recipients included Humboldt County, Ventura
                               County, San Joaquin County, East Bay Works, Los Angeles County
                               Collaborative, and the Inland Empire. The remaining $4,062,587 in




                               Page 44                                           GAO/HEHS-99-40 Welfare-to-Work Grants
                    Appendix VI
                    California’s Welfare-to-Work Formula Grant
                    Program for Fiscal Year 1998




                    governor’s welfare-to-work discretionary funds will be used by the state
                    for welfare-to-work administration.


                    Recognizing that local performance goals may differ somewhat from those
Performance Goals   in the state plan, California set three performance goals for the
                    welfare-to-work program as benchmarks to assist the state in providing
                    technical assistance to local areas. California’s initial formula grant
                    program performance goals for the first year include (1) a placement rate,
                    (2) a follow-up employment rate, and (3) a follow-up increase in earnings
                    goal. In 1997, California had an average caseload of about 830,000, some of
                    whom will be provided assistance under welfare-to-work. The state goals
                    for welfare-to-work are to place a minimum of 45 percent of
                    welfare-to-work program participants in unsubsidized employment; of
                    those placed, a minimum of 70 percent should be employed 6 months after
                    placement, and their average weekly wage at a 6-month follow-up should
                    increase by 10 percent over the average weekly wage at placement. The
                    state required that local plans describe local performance goals for
                    placements, job retention, and increased earnings.




                    Page 45                                      GAO/HEHS-99-40 Welfare-to-Work Grants
Appendix VII

Massachusetts’ Welfare-to-Work Formula
Grant Program for Fiscal Year 1998

                        In Massachusetts, the Department of Labor and Workforce Development is
                        the welfare-to-work federal grant recipient and its quasi-public subentity,
                        the Corporation for Business, Work and Learning, is the state
                        welfare-to-work administering entity. Massachusetts submitted its
                        welfare-to-work plan on January 7, 1998. On February 25, 1998, Labor
                        awarded fiscal year 1998 formula grant funds to the state totaling
                        $20,692,295. The state assured $10,346,148 in state matching funds over the
                        3-year grant period, specifically assuring $5 million for 1998. According to
                        a state official, this match is from funds previously appropriated by the
                        state legislature for adult basic education and child care programs; the
                        matching funds will be used to serve welfare-to-work-eligible participants
                        through these programs.

                        In Massachusetts, each of the 16 Regional Employment Boards10 was
                        required to submit a “preplan” proposing local welfare-to-work strategies,
                        and these plans were incorporated into the state welfare-to-work plan.
                        Once Labor awarded the formula grant, the state required the Regional
                        Employment Boards to submit final plans containing additional details
                        such as local performance goals. According to a state official, the state had
                        approved all of the local plans by April 1998 and, as of September 30, 1998,
                        434 individuals were enrolled in welfare-to-work formula grant programs
                        statewide out of the target population of 7,000 likely to lose cash benefits
                        by December 1, 1998.


                        The state planned to use welfare-to-work funds to target and assist welfare
Activities and Target   recipients facing the most significant barriers to employment. The state’s
Populations             welfare-to-work program focused on serving welfare recipients nearing
                        the state-imposed 24-month deadline for cash assistance. A state official
                        said that about 7,000 welfare recipients in Massachusetts were expected to
                        lose cash assistance benefits as of December 1, 1998. Within the state
                        focus, the local service delivery areas may further specify the target
                        population and choose the mix of services most appropriate for their
                        area’s needs.

                        The state plans to spend at least 70 percent of formula funds on the
                        hardest-to-employ long-term welfare recipients as required by law and up
                        to 30 percent of the grant funds on individuals with characteristics of
                        long-term welfare recipients. According to a state official, Massachusetts’
                        welfare-to-work program staff are finding it easier to initially enroll all

                        10
                          In Massachusetts, the Regional Employment Boards are the Private Industry Councils. The difference
                        is that the Regional Employment Boards are given responsibility for overseeing the assistance
                        provided by a number of programs, in addition to JTPA, that the Private Industry Councils oversee.



                        Page 46                                                GAO/HEHS-99-40 Welfare-to-Work Grants
                   Appendix VII
                   Massachusetts’ Welfare-to-Work Formula
                   Grant Program for Fiscal Year 1998




                   participants under the 30-percent expenditure category (long-term welfare
                   recipient). In order to enroll participants under the 70-percent expenditure
                   category (those determined to be the hardest to employ), additional
                   testing is necessary to verify eligibility characteristics. Although state and
                   local officials are confident that there are enough people with the
                   necessary characteristics to satisfy the 70-percent requirement, they note
                   that the additional assessment needed for their eligibility determination is
                   expensive and time consuming.


                   Massachusetts allocated 85 percent of the federal formula grant, or
Substate Formula   $17,588,452, to the local service delivery areas using the following formula:
Allocations        50-percent weight was given to the number of people with incomes below
                   the poverty level in excess of 7.5 percent of the service delivery area
                   population; 10-percent weight was given to the number of unemployed
                   people in the service delivery area; and 40-percent weight was given to the
                   number of long-term welfare recipients in the service delivery area having
                   received assistance for at least 30 months. By the substate formula, all of
                   the areas received more than the required $100,000 minimum; however,
                   the state decided to allot a minimum of $400,000 to each local area.
                   Consequently, as shown in table VII.1, $524,808 of the governor’s
                   welfare-to-work discretionary funds were used to increase the allocations
                   for five local service delivery areas to this level. According to a state
                   official, the Regional Employment Boards may use no more than
                   12.23 percent of their grants for welfare-to-work administrative purposes.




                   Page 47                                    GAO/HEHS-99-40 Welfare-to-Work Grants
                                       Appendix VII
                                       Massachusetts’ Welfare-to-Work Formula
                                       Grant Program for Fiscal Year 1998




Table VII.1: Massachusetts’ Substate
Welfare-to-Work Formula Grant                                            Federal formula        Governor’s fund             Total federal
Allocations                            Service delivery area              fund allocation            allocation                  funding
                                       Berkshire County                           $280,805               $119,195                $400,000
                                       Boston                                    5,927,502                      N/A             5,927,502
                                       Bristol County                              566,464                      N/A               566,464
                                       Brockton                                    498,272                      N/A               498,272
                                       Cape Cod and Islands                        193,764                 206,236                400,000
                                       Franklin/Hampshire                          640,600                      N/A               640,600
                                       Hampden County                            2,997,136                      N/A             2,997,136
                                       Lower Merrimack Valley                    1,253,900                      N/A             1,253,900
                                       Metro-North                                 821,102                      N/A               821,102
                                       Metropolitan South West                     373,313                  26,687                400,000
                                       New Bedford                               1,005,099                      N/A             1,005,099
                                       Northern Middlesex                          634,865                      N/A               634,865
                                       Northern Worcester                          263,537                 136,463                400,000
                                       South Coastal                               363,773                  36,227                400,000
                                       Southern Essex                              671,190                      N/A               671,190
                                       Southern Worcester                        1,097,130                      N/A             1,097,130
                                       Total                                  $17,588,452                $524,808            $18,113,260
                                       Notes: This table does not include state matching funds because the state match is from funds
                                       previously appropriated by the state legislature for state adult basic education and child care
                                       programs; the matching funds will be used to serve welfare-to-work-eligible participants through
                                       these programs. However, the table does include governor’s discretionary funds that were
                                       allocated to five local service delivery areas to raise their allocations up to the $400,000
                                       state-imposed minimum funding level for welfare-to-work programs.

                                       N/A = not applicable.

                                       Source: Massachusetts Department of Labor and Workforce Development.




                                       The governor’s welfare-to-work discretionary funds, 15 percent of the
Governor’s                             formula funds, totaled $3,103,843. The state planned to use these funds for
Discretionary Funds                    the following purposes: $524,808 to subsidize the five service delivery
                                       areas allocated the lowest amount of welfare-to-work formula funding;
                                       $165,000 to the Corporation for Business, Work and Learning to provide an
                                       information system technology upgrade capable of handling interagency
                                       welfare-to-work data; $718,562 for state welfare-to-work administration;
                                       and $1,695,473 for the Department of Transitional Assistance to
                                       supplement its program of assessment and structured employment
                                       assistance.




                                       Page 48                                                GAO/HEHS-99-40 Welfare-to-Work Grants
                    Appendix VII
                    Massachusetts’ Welfare-to-Work Formula
                    Grant Program for Fiscal Year 1998




                    Although specific, numeric performance goals were not included in the
Performance Goals   state plan, the state proposed to serve 3,979 welfare-to-work participants
                    and will measure placement in private sector employment, placement in
                    any employment, the duration of placement, and increases in earnings.
                    The state required each local service delivery area to specify performance
                    goals based on these measurements.




                    Page 49                                  GAO/HEHS-99-40 Welfare-to-Work Grants
Appendix VIII

Michigan’s Welfare-to-Work Formula Grant
Program for Fiscal Year 1998

                        In Michigan, the Michigan Jobs Commission is the welfare-to-work federal
                        grant recipient and state administering entity. Michigan submitted its
                        welfare-to-work plan on December 11, 1997. On January 29, 1998, Labor
                        awarded fiscal year 1998 formula grant funds to the state totaling
                        $42,226,331. The state assured $21,113,166 in matching funds over the
                        3-year grant period. According to a state official, this match was
                        appropriated by the state legislature, and $10 million was appropriated
                        through September 30, 1998.

                        Michigan required its 25 local service delivery areas to submit two local
                        plans for state review and approval: one for the federal formula grant
                        funds and another for state matching funds appropriated by the state
                        legislature. According to a state official, all of the local plans were
                        approved by September 4, 1998, and, as of September 30, 1998, about 340
                        individuals were enrolled in welfare-to-work formula grant programs
                        statewide.


                        The state planned to use welfare-to-work funds primarily to serve
Activities and Target   noncustodial parents. On July 1, 1998, Michigan instituted a statewide
Populations             noncustodial parent program and, depending on their eligibility, these
                        parents may be served with welfare-to-work funds. To increase child
                        support payments, Michigan’s state plan emphasized serving unemployed
                        noncustodial parents who have child support payments in arrears and
                        whose dependents are receiving TANF assistance; the failure of
                        noncustodial parents to participate in the welfare-to-work program
                        without good cause could lead to their incarceration. Local service
                        delivery areas must devote 50 percent of their welfare-to-work grant funds
                        to assist this population. Michigan distributed its governor’s discretionary
                        formula funds to the local areas, providing them with more funding to
                        meet their noncustodial parent expenditure goal. Furthermore, the courts
                        will identify and refer eligible participants to welfare-to-work programs.
                        Within this state focus on noncustodial parents, the local service delivery
                        areas designed their own strategies for the use of welfare-to-work funds,
                        including services to the hardest-to-employ TANF clients referred to
                        welfare-to-work programs by the state welfare agency. For all
                        welfare-to-work participants, the state plan emphasized vigorous case
                        management during the first 90 days of employment to ensure employment
                        retention.




                        Page 50                                  GAO/HEHS-99-40 Welfare-to-Work Grants
                       Appendix VIII
                       Michigan’s Welfare-to-Work Formula Grant
                       Program for Fiscal Year 1998




                       Michigan allocated all of the $42,226,331 federal formula grant to the local
Substate Allocations   service delivery areas using the following formula: 50-percent weight was
                       given to the number of people with incomes below the poverty level in
                       excess of 7.5 percent of the service delivery area population, and
                       50-percent weight was given to the number of welfare recipients in the
                       service delivery area who had received assistance for at least 30 months.

                       Along with the federal formula funds, Michigan obligated $19,212,981 in
                       state matching funds to the local service delivery areas, for a total of
                       $61,439,312, using the same formula applied to the federal funds. Although
                       two local service delivery areas were allocated less than $100,000 by
                       formula, as shown in table VIII.1, the state provided them with their
                       formula allocations of both federal and state welfare-to-work funds.
                       Michigan planned to use 9 percent ($1,900,185) of the state matching funds
                       for welfare-to-work administration; service delivery areas may spend up to
                       15 percent of their allocations on welfare-to-work administration.




                       Page 51                                    GAO/HEHS-99-40 Welfare-to-Work Grants
                                    Appendix VIII
                                    Michigan’s Welfare-to-Work Formula Grant
                                    Program for Fiscal Year 1998




Table VIII.1: Michigan’s Substate
Welfare-to-Work Formula Grant                                                                                                  Total
Allocations                                                           Federal formula                               welfare-to-work
                                    Service delivery area             fund allocationa      Match allocation        funds allocated
                                    Region 7B                                 $796,073               $362,214             $1,158,287
                                    Calhoun ISD                                882,675                 401,617              1,284,292
                                    Saginaw/Midland/Bay                      2,340,684              1,065,012               3,405,696
                                    Berrien/Cass/Van Buren                   1,376,057                 626,106              2,002,163
                                    The Job Force                              456,446                 207,683                664,129
                                    City of Detroit                         16,073,065              7,313,244             23,386,309
                                    Eastern U.P.                               189,105                  86,043                275,148
                                    Career Alliance                          3,475,444              1,581,327               5,056,771
                                    CAPC                                       727,984                 331,232              1,059,216
                                    Thumb Area                                 522,321                 237,656                759,977
                                    Kalamazoo/St. Joseph                       870,407                 396,035              1,266,442
                                    West Central                               648,456                 295,048                943,504
                                    Lansing Tri-County                       1,091,952                 496,838              1,588,790
                                    Macomb/St. Clair                           890,831                 405,328              1,296,159
                                    Muskegon/Oceana                          1,063,814                 484,035              1,547,849
                                    Northeast                                  477,161                 217,108                694,269
                                    Northwest                                  571,142                 259,870                831,012
                                    Oakland County                           1,218,317                 554,335              1,772,652
                                    Western U.P.                               337,368                 153,503                490,871
                                    Livingston                                   23,681                 10,775                 34,456
                                    Washtenaw                                  418,295                 190,324                608,619
                                    SEMCA                                    5,498,733              2,501,923               8,000,656
                                    Ottowa                                       42,987                 19,559                 62,546
                                    ACSET/Allegan                            1,362,353                 619,870              1,982,223
                                    South Central                              870,980                 396,296              1,267,276
                                    Total                                  $42,226,331            $19,212,981            $61,439,312
                                    a
                                     The federal formula fund allocation numbers include both the substate formula funds and the
                                    governor’s discretionary funds, which are 85 percent and 15 percent of the total federal
                                    welfare-to-work award, respectively.

                                    Source: Michigan Jobs Commission.




                                    Michigan allocated 100 percent of the federal formula grant funds to the
Governor’s                          local service delivery areas. The state retained none of the allowable
Discretionary Funds                 15 percent governor’s discretionary funds ($6,333,950) at the state level.




                                    Page 52                                               GAO/HEHS-99-40 Welfare-to-Work Grants
                    Appendix VIII
                    Michigan’s Welfare-to-Work Formula Grant
                    Program for Fiscal Year 1998




                    Performance goals were not included in the state plan, but Michigan
Performance Goals   planned to measure duration of placement into unsubsidized employment,
                    increased child support collection, and earnings, measured after 90 days of
                    employment and other times throughout the year.




                    Page 53                                    GAO/HEHS-99-40 Welfare-to-Work Grants
Appendix IX

New York’s Welfare-to-Work Formula Grant
Program for Fiscal Year 1998

                        In New York, the Department of Labor is the welfare-to-work federal grant
                        recipient and state administering entity. New York submitted its
                        welfare-to-work plan on June 29, 1998. On September 11, 1998, Labor
                        awarded fiscal year 1998 formula grant funds to the state totaling
                        $96,886,094. The state assured $48,443,047 in state matching funds over the
                        3-year grant period. According to a state official, the state provided half of
                        the state match through a legislative appropriation and required local
                        service delivery areas to provide the remaining half of the state match
                        through in-kind or cash contributions.

                        New York requested that an alternate agency be designated to administer
                        the welfare-to-work program in 2 of its 33 service delivery areas. The
                        Secretary of Labor granted waivers for these two areas, and the
                        welfare-to-work program is administered by the human services agencies
                        for New York City and the Syracuse/Onondaga area. The state required
                        these two human services agencies and the remaining 31 Private Industry
                        Councils to submit plans proposing local welfare-to-work strategies and
                        incorporated these plans in the New York State welfare-to-work plan. As
                        of September 30, 1998, a state official said that most of the local areas
                        were designing their welfare-to-work eligibility determination processes in
                        conjunction with the local social services departments, but none of the
                        local areas had reported enrollments of welfare-to-work participants in the
                        formula grant program.


                        New York’s state plan for formula funds proposed a general focus on
Activities and Target   improving the connection to work, providing postemployment assistance,
Populations             and serving the needs and requirements of employers. The state plan
                        emphasized serving individuals with disabilities, many of whom have
                        experienced long-term welfare dependency but are no longer exempt from
                        work requirements. Within these state initiatives, the local service delivery
                        areas may further specify the target population and choose the mix of
                        services most appropriate for their area needs.


                        New York allocated 85 percent, or $82,353,180, of the federal formula grant
Substate Formula        to the local service delivery areas using the following formula: 50-percent
Allocations             weight was given to the number of people with incomes below the poverty
                        level in excess of 7.5 percent of the service delivery area population,
                        25-percent weight was given to the number of long-term welfare recipients
                        in the service delivery area having received assistance for at least 30
                        months, and 25-percent weight was given to the number of unemployed



                        Page 54                                   GAO/HEHS-99-40 Welfare-to-Work Grants
                                          Appendix IX
                                          New York’s Welfare-to-Work Formula Grant
                                          Program for Fiscal Year 1998




                                          people in the service delivery area. By using this formula, as shown in
                                          table IX.1, all of the service delivery areas in New York qualified for more
                                          than $100,000 in formula funds. Local areas can use up to 15 percent of
                                          their funding for administrative costs.


Table IX.1: New York’s Substate Welfare-to-Work Formula Grant Allocations
                                              Federal formula       State match      Local in-kind or   Total funds available
Service delivery area                          fund allocation         allocation       cash match       for welfare-to-work
Oyster Bay                                           $406,989           $101,747            $101,747                $610,483
Hempstead/Long Beach                                  697,284            174,321             174,321               1,045,926
Suffolk County                                       1,501,134           375,284             375,284               2,251,702
New York City                                       58,483,523a       14,620,881          14,620,881              87,725,285
Yonkers City                                          694,484            173,621             173,621               1,041,726
Westchester County Balance                            787,626            196,907             196,907               1,181,440
Rockland County                                       364,907              91,227             91,227                 547,361
Dutchess/Putnam                                       315,083              78,771             78,771                 472,625
Orange County                                         698,684            174,671             174,671               1,048,026
Ulster County                                         331,636              82,909             82,909                 497,454
                                                              a
Sullivan County                                       246,071              61,518             61,518                 369,107
Albany/Rensselaer/Schenectady                        1,270,215           317,554             317,554               1,905,323
Columbia/Greene                                       257,107              64,277             64,277                 385,661
Fulton/Montgomery/Schoharie                           426,013            106,503             106,503                 639,019
Saratoga/Warren/Washington                            455,907            113,977             113,977                 683,861
Clinton/Essex/Franklin/Hamilton                       618,555            154,639             154,639                 927,833
Jefferson/Lewis                                       493,460            123,365             123,365                 740,190
St. Lawrence County                                   512,484            128,121             128,121                 768,726
Herkimer/Madison/Oneida                              1,051,568           262,892             262,892               1,577,352
Broome/Tioga/Tompkins                                 842,144            210,536             210,536               1,263,216
Chenango/Delaware/Otsego                              457,801            114,450             114,450                 686,701
Cayuga/Cortland                                       384,836              96,209             96,209                 577,254
Syracuse/Onondaga                                    1,238,839           309,710             309,710               1,858,259
Oswego County                                         391,178              97,795             97,795                 586,768
Chemung/Schuyler/Steuben                              674,720            168,680             168,680               1,012,080
Ontario/Seneca/Wayne/Yates                            480,778            120,195             120,195                 721,168
Rochester City                                       1,926,488           481,622             481,622               2,889,732
Monroe County Balance                                 420,825            105,206             105,206                 631,237
Genesee/Livingston/Orleans/Wyoming                    438,531            109,633             109,633                 657,797
Niagara County                                        680,567            170,142             170,142               1,020,851
Buffalo/Erie/Cheektowaga/Tonawanda                   3,676,328           919,082             919,082               5,514,492
                                                                                                                  (continued)



                                          Page 55                                       GAO/HEHS-99-40 Welfare-to-Work Grants
                        Appendix IX
                        New York’s Welfare-to-Work Formula Grant
                        Program for Fiscal Year 1998




                            Federal formula             State match         Local in-kind or        Total funds available
Service delivery area        fund allocation              allocation           cash match            for welfare-to-work
Allegany/Cattaraugus                  557,202                 139,301                139,301                        835,804
Chautauqua County                     570,213                 142,553                142,553                        855,319
     b
Total                             $82,353,180            $20,588,299            $20,588,299                  $123,529,778

                        Note: The state provided half of the matching funds through a legislative appropriation and
                        required local service delivery areas to provide the remaining half of the matching funds through
                        in-kind or cash contributions.
                        a
                         Through the federal formula fund allocation to substate areas, New York City received
                        $58,483,523 and Sullivan County received $246,071. However, these two service delivery areas
                        applied for and received additional federal welfare-to-work funding through the governor’s
                        discretionary funds, amounting to $2,168,000 for New York City and $61,000 for Sullivan County.
                        These amounts are not included here.
                        b
                        Numbers may not add because of rounding.

                        Source: New York State Department of Labor.




                        New York planned to use the governor’s discretionary funds, 15 percent of
Governor’s              the formula funds or $14,532,914, for several purposes, awarding grants to
Discretionary Funds     a variety of organizations—some to supplement allocations to service
                        delivery areas, others to independent organizations. The largest amount of
                        funding, $8.5 million, was allocated to a multiagency effort called the New
                        York Works Employment Retention and Advancement program for
                        innovative projects to serve “work-limited” individuals, such as people
                        with mental illness, substance abusers, and people with disabilities.
                        Through this program, the state will fund, on a competitive selection basis,
                        as many projects as possible, with awards ranging from a $50,000
                        minimum to an $850,000 maximum. These projects will provide specific
                        services to move clients into employment and provide postemployment
                        services to help working participants keep their jobs and increase their
                        earnings.

                        New York also planned to use $2,229,000 of the governor’s funds for grants
                        to two local service delivery areas. Although all of the local service
                        delivery areas in the state had the opportunity to obtain additional
                        welfare-to-work moneys from the governor’s discretionary funds, only two
                        applied. New York City and Sullivan County, the service delivery areas
                        with the highest and lowest formula grants, received $2,168,000 and
                        $61,000, respectively. New York’s client information campaign received
                        $3,271,000 of the funds for projects designed to help clients make
                        informed employment choices while transitioning off welfare. These




                        Page 56                                                GAO/HEHS-99-40 Welfare-to-Work Grants
                    Appendix IX
                    New York’s Welfare-to-Work Formula Grant
                    Program for Fiscal Year 1998




                    projects include an update of the state’s resource guide, a faith-based
                    initiative, a CD-ROM, teleconferences, and an agreement with the state’s
                    Department of Transportation print shop for printed materials. Finally,
                    about $500,000 was designated for the Office of Alcohol and Substance
                    Abuse Services to provide services for welfare-to-work-eligible substance
                    abusers.


                    The state planned to place 38 percent of the those who receive assistance
Performance Goals   through the welfare-to-work grant program in unsubsidized jobs;
                    furthermore, the state planned that of those placed, 46 percent are to
                    continue to be employed after 6 months and to have an increase in
                    earnings of $214 over this time period.




                    Page 57                                    GAO/HEHS-99-40 Welfare-to-Work Grants
Appendix X

Wisconsin’s Welfare-to-Work Formula Grant
Program for Fiscal Year 1998

                        In Wisconsin, the Department of Workforce Development is the
                        welfare-to-work federal grant recipient and state administering entity.
                        Wisconsin submitted its welfare-to-work plan on April 13, 1998. On June
                        15, 1998, Labor awarded fiscal year 1998 formula grant funds to the state
                        totaling $12,885,951.11 Collectively, the state and local service delivery
                        areas assured $6,442,976 in state matching funds over the 3-year grant
                        period. According to a state official, local service delivery areas were
                        required to match their federal allocations, and recipients of the
                        governor’s discretionary funds matched their allocations.

                        Wisconsin required its 11 local administrative entities to submit local
                        welfare-to-work plans for state review and approval.12 One local service
                        delivery area chose not to submit a plan.13 According to a state official, as
                        of September 30, 1998, no welfare-to-work participants had been enrolled
                        statewide in formula grant programs.


                        Wisconsin planned to target noncustodial parents with its formula grant
Activities and Target   funds and, because its TANF caseload is low, the state also proposed to
Populations             assist individuals receiving TANF child care subsidies rather than cash
                        assistance. A state official explained that for working families, child care
                        subsidies are considered TANF payments, making recipients eligible for
                        welfare-to-work as long-term TANF recipients. Within the state’s focus, the
                        local service delivery areas may further specify the target population and
                        choose the mix of services most appropriate for their area’s needs.


                        Wisconsin allocated local service delivery area funding from 85 percent, or
Substate Formula        $10,953,058, of the federal grant using the following formula: 50-percent
Allocations             weight was given to the number of people with incomes below the poverty
                        level in excess of 7.5 percent of the service delivery area population, and

                        11
                          On April 20, 1998, Wisconsin submitted a written request to Labor for $12,711,210 in federal
                        welfare-to-work funds. This amount reflected a reduction from the state’s federal formula allotment to
                        account for $174,741 in welfare-to-work funds declined by one of the local service delivery areas. On
                        June 1, 1998, the state sent Labor a letter transmitting its signed grant agreement requesting the full
                        $12,885,951. Although the service delivery area still declined to accept the funds, the state requested
                        that the full amount be awarded to the state so that it could allocate maximum funding to all local
                        jurisdictions. Wisconsin obligated all its formula funds except for the $174,741, which the state plans
                        to return to Labor.
                        12
                         Wisconsin is encouraging its Private Industry Councils to expand their focus and convert to
                        Workforce Development Boards. Thus, depending on the area, the local administrative entity for the
                        welfare-to-work program may be either a Private Industry Council or a Workforce Development Board.
                        13
                          Prior to July 1, 1998, Marathon County, North Central, and Central were separate service delivery
                        areas but were then combined into a single Workforce Development Area called North Central. Before
                        the restructuring, the Central portion declined to participate in the welfare-to-work program.



                        Page 58                                                  GAO/HEHS-99-40 Welfare-to-Work Grants
Appendix X
Wisconsin’s Welfare-to-Work Formula Grant
Program for Fiscal Year 1998




50-percent weight was given to the number of long-term welfare recipients
in the service delivery area having received assistance for at least 30
months. Since one service delivery area could not obtain matching funds
for its allocation of $174,741 and chose not to participate in the
welfare-to-work program, Wisconsin deducted this amount from the total
substate funds available and allocated $10,778,317 of the federal funds
among the remaining delivery areas, as shown in table X.1. Two local
service delivery areas, Waukesha-Ozaukee-Washington and Marathon
County, qualified for less than the $100,000 federally required minimum;
consequently, their allocations reverted to the governor’s discretionary
funds before being issued to the two local areas. Local service delivery
areas may use up to 15 percent of their welfare-to-work funds for
administrative costs.




Page 59                                     GAO/HEHS-99-40 Welfare-to-Work Grants
                                  Appendix X
                                  Wisconsin’s Welfare-to-Work Formula Grant
                                  Program for Fiscal Year 1998




Table X.1: Wisconsin’s Substate
Welfare-to-Work Formula Grant                                                   Federal
Allocations                                                                     formula       Local match Total funds available
                                  Service delivery area                      allocation         allocation for welfare-to-work
                                  Southeastern                                $527,326             $263,663                   $790,989
                                  Fox Valley (Northern Lake
                                  Winnebago and
                                  Winne-Fond-Lake)                             136,811               68,406                     205,217
                                  Marathon Countya                               76,644              38,322                     114,966
                                  South Central (Dane County
                                  and South Central)                           287,479              143,740                     431,219
                                  Northwest                                    441,405              220,703                     662,108
                                  Centrala                                             0                    0                            0
                                  West Central                                 486,902              243,451                     730,353
                                  Waukesha-Ozaukee-
                                  Washington                                     64,216              32,108                      96,324
                                  North Centrala                               155,832               77,916                     233,748
                                  Bay Area (Northeastern and
                                  Lake Michigan)                               364,646              182,323                     546,969
                                  Southwest (Southwest and
                                  Rock County)                                 337,801              168,901                     506,702
                                  Western                                      473,712              236,856                     710,568
                                  Milwaukee                                  7,425,543            3,712,772                 11,138,315
                                  Totalb                                  $10,778,317           $5,389,159                 $16,167,476
                                  Note: This table does not show state matching funds because local service delivery areas in
                                  Wisconsin were required to match their federal allocations.
                                  a
                                   Since the Central portion of the new North Central service delivery area declined to participate in
                                  the welfare-to-work program, North Central’s other two portions—Marathon County and North
                                  Central—were funded as separate entities under welfare-to-work. Therefore, although the state
                                  technically has only 11 service delivery areas, 13 service delivery areas are listed in this table,
                                  including North Central’s three subsections.
                                  b
                                  Totals may not add because of rounding.

                                  Source: Wisconsin Department of Workforce Development.




                                  The governor’s discretionary welfare-to-work funds, 15 percent of the
Governor’s                        formula fund allocation, totaled $1,932,893 and are planned to be used for
Discretionary Funds               a variety of purposes, many independent of the service delivery areas. For
                                  example, $1,092,959 was awarded to the state’s Department of Corrections
                                  to provide employment assistance to noncustodial parents in correctional
                                  institutions, on parole, or on probation; $180,000 to the state’s Bureau of
                                  Apprenticeship Standards for an apprenticeship program; $90,000 to the




                                  Page 60                                                  GAO/HEHS-99-40 Welfare-to-Work Grants
                    Appendix X
                    Wisconsin’s Welfare-to-Work Formula Grant
                    Program for Fiscal Year 1998




                    United Migrant Opportunity Services for projects serving migrants and
                    seasonal farmworkers in rural areas; $180,000 to be allocated among 8
                    projects serving Southeast Asian immigrants; $100,000 to the state’s
                    Division of Economic Support to modify its data support system; $100,000
                    to the Division of Workforce Excellence for welfare-to-work
                    administration; and $189,934 to the Division of Economic Support to hire
                    research analysts. Additionally, the allocations for the two local service
                    delivery areas that received under $100,000 were temporarily added to the
                    governor’s discretionary funds and were reallocated to the two local areas.


                    A state official said that Wisconsin did not include specific, numeric
Performance Goals   performance goals in its state plan, but the service delivery areas have
                    local goals that are similar to their JTPA performance measures. Wisconsin
                    had approximately 30,000 TANF recipients in 1997, some of whom will
                    receive assistance from welfare-to-work. Of those who receive assistance
                    from welfare-to-work, the goal is for a significant percentage to obtain
                    unsubsidized employment, ranging from 40 percent in Milwaukee to
                    80 percent in other areas of the state; of those placed in unsubsidized
                    employment, duration goals range from 40 percent of participants
                    remaining employed after 3 months in Milwaukee to 70 percent remaining
                    employed after 12 months in areas with lower unemployment; and for
                    wage increases, the goal is that participants will experience a countable
                    increase in earnings, such as the goal of a 40-percent wage increase over
                    previous wage levels in Milwaukee, with starting wages as high as $7.75 an
                    hour.




                    Page 61                                     GAO/HEHS-99-40 Welfare-to-Work Grants
Appendix X
Wisconsin’s Welfare-to-Work Formula Grant
Program for Fiscal Year 1998




Page 62                                     GAO/HEHS-99-40 Welfare-to-Work Grants
Appendix X
Wisconsin’s Welfare-to-Work Formula Grant
Program for Fiscal Year 1998




Page 63                                     GAO/HEHS-99-40 Welfare-to-Work Grants
Related GAO Products


              Welfare Reform: Implementing DOT’s Access to Jobs Program
              (GAO/RCED-99-36, Dec. 8, 1998).

              Welfare Reform: Early Fiscal Effects of the TANF Block Grant
              (GAO/AIMD-98-137, Aug. 18, 1998).

              Welfare Reform: States Are Restructuring Programs to Reduce Welfare
              Dependence (GAO/HEHS-98-109, June 18, 1998).

              Welfare Reform: Transportation’s Role in Moving From Welfare to Work
              (GAO/RCED-98-161, May 29, 1998).




(205362)      Page 64                                 GAO/HEHS-99-40 Welfare-to-Work Grants
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