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TANF-ACF-PI-2012-02 (TANF Incentives and Compliance with 2 CFR Part 225)

Published: June 27, 2012
Audience:
Temporary Assistance for Needy Families (TANF)
Topics:
Data Collection and Reporting
Types:
Program Instructions (PI)
Tags:
TANF Incentives

TO:

State, Territory, and Tribal agencies administering the Temporary Assistance for Needy Families (TANF) Program.

SUBJECT:

TANF Incentives and Compliance with 2 CFR Part 225.

REFERENCES:

2 CFR Part 225 (OMB Circular A-87); 45 CFR 263.11(b); 45 CFR 286.45(c).

PURPOSE:

To provide guidance on the use of Federal TANF and State Maintenance of Effort (MOE) funds for incentives in compliance with the prohibition of entertainment activities in 2 CFR Part 225.

BACKGROUND:

Certain TANF jurisdictions have requested guidance on the use of incentives for TANF clients or participants. The State and Tribal TANF regulations (45 CFR 263.11(b) and 45 CFR 286.45(c) respectively) require TANF jurisdictions to comply with OMB Circular A-87, now codified at 2 CFR Part 225. 2 CFR Part 225 provides that "costs of entertainment, including amusement, diversion, and social activities and any costs directly associated with such costs (such as tickets to shows or sports events, meals, lodging, rentals, transportation, and gratuities) are unallowable."

POLICY:

TANF program activities with objective criteria for the delivery of benefits and the determination of eligibility that are reasonably calculated to accomplish one or more statutory purpose of TANF are allowable; some types of incentives that are provided contingent upon participation in such a TANF activity are also allowable. Cash incentives are an example of an incentive that a TANF program may use to encourage participation in a TANF activity. However, not all types of incentives are allowable. For example, 2 CFR Part 225 explicitly prohibits costs related to entertainment; therefore, entertainment incentives (such as tickets to shows or sports events, meals, lodging, rentals, transportation, and gratuities) are unallowable. Therefore, entertainment incentives and any costs directly related with such costs (such as tickets to shows or sports events, meals, lodging, rentals, transportation, and gratuities) are unallowable. Note that this applies to both Federal TANF and State Maintenance of Effort (MOE) funds.

INQUIRIES:

Please direct inquiries to the TANF Program Manager in your Region.

 

/s/
Earl S. Johnson
Director
Office of Family Assistance