TANF-ACF-PI-2010-09 (Q & A on the TANF Contingency Fund for Fiscal Years (FY) 2011 and 2012)
States operating Temporary Assistance for Needy Families (TANF) programs and other interested parties.
Questions and Answers on the TANF Contingency Fund for Fiscal Years (FY) 2011 and 2012.
Section 403(b) of the Social Security Act, Section 409(a)(10) of the Social Security Act, 45 CFR 260.30, 45 CFR 264.0, and 45 CFR 264.70 – 264.77. PURPOSE:
To respond to questions about the Contingency Fund, particularly with respect to depletion of the Fund before the end of a fiscal year.
The Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996 (P.L.104-193, as amended) created a Contingency Fund to assist States in meeting the need for welfare assistance during periods of economic downturn. PRWORA initially authorized the TANF program through FY 2002. When the Deficit Reduction Act of 2005 (P.L. 109-171) reauthorized the TANF program through FY 2010, it extended the Contingency Fund. The Continuing Appropriations Act of 2011 (P.L. 111-242) provided Federal funding for the Contingency Fund for FY 2011 (up to $506 million can be awarded) and FY 2012 (up to $612 million can be awarded).
TANF Program Instruction TANF-ACF-PI-97-8, dated October 27, 1997, provided the initial guidance to States on the requirements for receiving contingency funds and instructions for applying for these funds. That Program Instruction (PI) has been superseded by the Contingency Fund requirements in the TANF regulations at 45 CFR 264, Subpart B.
TANF Program Instruction TANF-ACF-PI-2008-04, dated May 6, 2008, addressed questions from States about receiving contingency funds, including application procedures and the basic requirements for receiving, retaining, and remitting contingency funds. That PI provided a basic application form and a table that shows each State’s 100 percent Contingency Fund Maintenance-of-Effort (MOE) requirement.
TANF Program Instruction TANF-ACF-PI-2009-06, dated September 21, 2009, provided responses to questions about how various Contingency Fund requirements would apply when the Fund is depleted before the end of a fiscal year.
We have received questions about how the various Contingency Fund provisions will be applied in the event the Fund is depleted before the end of a fiscal year.
Contingency funds are additional Federal funds available to States, at their request, when unfavorable economic conditions exist. They are considered provisional payments, according to section 403(b)(3)(A) of the Social Security Act. This is because the exact amount of contingency funds that the State may actually keep is not determined until after the fiscal year ends. A State that receives a provisional payment must meet specific spending requirements to keep some or all of the contingency funds.
QUESTIONS AND ANSWERS:
Question: When can a State apply for contingency funds for FY 2011 and FY 2012?
Answer: A State may apply up to one month before the month for which it is requesting contingency funds, e.g., December 1, 2010, for the January 2011 Contingency Fund award. As under current practice, a State can request a payment for the full fiscal year or for specific months.
Frequency of Contingency Fund Provisional Payments
Question: How will Contingency Fund provisional payments be distributed, given the possibility that the Fund may run out during a particular month in FY 2011 and FY 2012?
Answer: Once we determine a State’s eligibility, we will make provisional payments on a monthly basis. Otherwise, it would be possible for some States to receive a payment for all three months of a quarter, while other States that become eligible for or apply later in the quarter would not receive funds, because we had advanced some States up to three months in payments.
Making Payments "in the Order in which the Secretary Receives Requests for Such Payments"
Question: The statute specifies that the Secretary shall make payments “in the order in which the Secretary receives requests for such payments.” How will the Administration for Children and Families (ACF) make this determination?
Answer: For States requesting Contingency Fund awards for October and/or November 2010, all applications received before November 24, 2010, shall be considered to have been submitted at the same time. Thereafter, all applications that are received before the first day of a month for which funds are being requested shall be considered to have been submitted at the same time. For example, an application for the month of January 2011 received on December 10, 2010, and one received December 20, 2010, will be deemed to have been received at the same time. Once a month for which funds are being requested begins, the order will be based on the date in which we receive the application. The application may be sent electronically or by mail.
If a State has applied for the full fiscal year or for specific months in advance, we will deem such a request to be a new application before the beginning of each month and it will be given the same priority as any other application that arrives in the one-month period before the beginning of each new month.
Requirements in the Event the Fund is Depleted
Question: If the Contingency Fund does not have enough money to make all the payments that have been requested for the year, how will the funds be distributed?
Answer: In the event the Fund is depleted before the end of the year, we will follow the procedures described in Program Instruction TANF-ACF-PI-2009-06, dated September 21, 2009, with respect to how various requirements apply when the Fund is depleted before the end of a fiscal year.
Once a State is eligible for Contingency Funds, it must submit a written request in the form of a letter signed by the Governor or his/her legal designee. We have attached a request form which we recommend using for this purpose.
Please send the written request to the Director of the Division of Mandatory Grants, Office of Grants Management with a copy to the Director, Office of Family Assistance (OFA) at the following address:
Administration for Children and Families
370 L'Enfant Promenade, SW
Washington, DC 20447
Inquiries about this document should be directed to the appropriate OFA Regional Office TANF Program Manager.
Earl S. Johnson
Office of Family Assistance