TANF-ACF-PI-2010-04 (Use of Federal TANF Carry-Over funds for any allowable TANF benefit, service, or activity)
- Temporary Assistance for Needy Families (TANF)
- Regulations, TANF Final Rule
- Program Instructions (PI)
- Federal TANF Carry-Over funds
States, the District of Columbia, Territories, and Tribes administering the Temporary Assistance for Needy Families (TANF) program under title IV-A of the Social Security Act, and other interested parties.
Use of Federal TANF Carry-Over funds for any allowable TANF benefit, service, or activity.
To share the final rule published April 6, 2010, which implements the statutory change to section 404(e) of the Social Security Act as enacted by the American Recovery and Reinvestment Act of 2009. This change allows States, Tribes, and Territories to use TANF program funds carried over from a prior year for any allowable TANF benefit, service, or activity.
Section 403(c) of the Social Security Act; Section 404(e) of the Social Security Act; 45 CFR § 286.
On February 17, 2009, the President signed the American Recovery and Reinvestment Act of 2009 (Pub.L. 111-5), which included a provision to lift the restriction on unspent Federal TANF funds reserved or “carried over” into a succeeding fiscal year. The interim final rule amending 45 CFR 286 was published at 74 FR 25161 on May 27, 2009, and was adopted as a final rule without change, effective April 6, 2010.
Before Public Law 111-5, carry-over funds could only be used to provide assistance (i.e., ongoing basic needs payments, and supportive services such as transportation and child care to families who are not employed). Prior law (section 404(e) of the Act, entitled “Authority to Reserve Certain Amounts for Assistance”) allowed States and Indian Tribes operating approved Tribal TANF programs to reserve Federal TANF funds that they receive “for any fiscal year for the purpose of providing, without fiscal year limitation, assistance under the State or tribal program funded under this part'' (Title IV, Part A of the Act). Based on the reading of this section, it was concluded that States and Tribes could only use reserve or “carry-over” funds to provide TANF assistance, defined in 45 CFR 260.31 for States and in 45 CFR 286.10 for Tribes, and to pay for the administrative expenses associated with providing the assistance. The statutory language also precluded States from transferring “carry-over” funds to either the Social Services Block Grant Program (SSBG) under Title XX of the Act or the Child Care and Development Block Grant Program (also known as the Child Care Discretionary Fund within the Child Care and Development Fund (CCDF)). (The transfer provision in section 404(d) of the Act does not apply to Tribes.)
Section 2103 of Division B of Public Law 111-5 amends section 404(e) of the Social Security Act by allowing States, the District of Columbia, Territories, and Tribes to use the carry-over funds for any allowable TANF benefit, service, or activity, and not just assistance, or “to provide, without fiscal year limitation, any benefit or service that may be provided under the State or tribal program funded under this part.” Thus, States now have flexibility to use carry-over funds for a wide array of benefits, services, or activities. Examples of such benefits, services, or activities may include job skills training or re-training activities, employment counseling services, parental counseling services, teen pregnancy prevention activities, services for victims of domestic violence, and after-school programs.
Because the amended section 404(e) continues to specify that carry-over funds may only be used ``under this part''--i.e., in the TANF program, States may not transfer any carry-over funds to either the CCDF or SSBG programs. States may only transfer current year Federal TANF funds (up to the statutory limit) to these programs.
Note that we have amended 45 CFR 286.60 because the limitation on the use of carry-over funds explicitly appeared in this section. We have deleted paragraph (b) which previously read, “A Tribe may expend funds beyond the fiscal year in which awarded only on benefits that meet the definition of assistance at Sec. 286.10 or on the administrative costs that directly associated with providing that assistance.” This sentence is no longer accurate because the law removes the restriction. We have revised the remaining language to provide that a Tribe may reserve amounts awarded to it, without fiscal year limitation, to provide assistance, benefits, and services in accordance with the requirements at 45 CFR 286.35 or 286.40, if applicable.
No change in the regulations related to the State TANF program was necessary, as those regulations spoke more broadly about improper uses of TANF funds and did not contain specific language about the former requirement that carry over funds into subsequent years be used only for “assistance”.
Inquiries about this document should be directed to the appropriate Office of Family Assistance (OFA) Regional Office TANF Program Manager.
Ann H. Barbagallo
Office of Family Assistance
- Final Rule Carry Over Funds (29.41 KB)
Last Reviewed: October 29, 2015