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Q & A: Penalty Process

TANF Program Policy Questions and Answers

Published: April 30, 2012
Audience:
Temporary Assistance for Needy Families (TANF)
Topics:
TANF Guidance
Types:
Q&A
Tags:
Penalty Process, TANF Program Policy Questions and Answers

Penalty Process:

Q1: When exactly is a penalty assessed?

A1: We will follow the provisions of the final TANF regulations both during the interim period before the regulations go into effect and for penalties taken under the final rules. In both cases, if a State is subject to a penalty for misuse of TANF funds (whether intentional or not) or failure to repay a Federal loan, we will reduce the State’s family assistance grant for the quarter that immediately follows our final decision. For any other penalty violation, we will reduce the State’s family assistance grant for the fiscal year that immediately follows our final decision. However, with respect to penalties assessed for violations that occurred during fiscal years 1997, 1998 and 1999, we would take a penalty sooner at the request of the State.

In any case, we will not assess a penalty until the reasonable cause and corrective compliance process is concluded, if applicable. Also, if the State appeals to the Departmental Appeals Board, we will not assess a penalty until the appeals process is completed.

Q2: Could you summarize the penalty provisions?

A2: Please consult the following two tables. The first provides the regulatory citation, primary method for determining penalty liability4, and penalty amount for each TANF provision. The second shows whether reasonable cause and corrective compliance are available.

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4As discussed in the preamble at 62 FR 17800-17802, we may use additional methods such as supplemental reviews to identify a State's penalty liability.


 

 

TABLE 1. TANF PENALTY PROVISIONS --

REGULATORY CITATIONS, PRIMARY METHOD OF DETERMINING PENALTY LIABILITY, AND PENALTY AMOUNTS

VIOLATION

REG

PRIMARY METHOD

PENALTY AMOUNT

Misusing TANF funds

263.10

Single audit

Amount of misused TANF funds

Intentionally misusing TANF funds

263.10

Single audit

Amount of penalty for misuse plus 5% of adjusted SFAG

Failing to submit report as required

265.8

Self-evident

4% reduction of adjusted SFAG for each quarter State fails to report as required

Failing to meet minimum work participation rate

261.50

TANF Data Report

Up to 21% of adjusted SFAG

Failing to participate in IEVS

264.11

Single audit

2% of adjusted SFAG

Failing to penalize recipients for child support enforcement non-cooperation

264.31

Single audit

1% to 5% of adjusted SFAG, depending on number of violations

Failing to repay Federal loan

264.40

Self-evident

Outstanding loan amount plus interest

Failing to meet TANF MOE requirement

263.8

TANF Financial Report

Dollar-for-dollar reduction of amount of SFAG payable

Failing to enforce the 5-year time limit

264.2

TANF Data Report

5% of adjusted SFAG

Failing to remit contingency funds if the Contingency Fund MOE requirement is not met

264.76

TANF Financial Report

Amount of contingency funds not remitted

Sanctioning parents needing care for child under 6

261.57

Single audit

Up to 5% of adjusted SFAG

Failing to replace penalty reduction with State funds

264.50

TANF Financial Report

No more than 2% of adjusted SFAG plus amount of shortfall

Failing to meet TANF MOE requirement in year when WtW was received

263.8

TANF Financial Report

Reduction of the SFAG payable by the amount of the WtW formula grant paid

Failing to penalize recipients who refuse to engage in work

261.54

Single audit

1% to 5% of adjusted SFAG

 

 


 

 

TABLE 2. TANF PENALTY PROVISIONS--

AVAILABILITY OF REASONABLE CAUSE AND CORRECTIVE COMPLIANCE

VIOLATION

REASONABLE CAUSE AVAILABLE

CORRECTIVE COMPLIANCE AVAILABLE

Misusing TANF funds

X

X

Intentionally misusing TANF funds

X

X

Failing to submit report as required

X

X

Failing to meet minimum work participation rate

X

X

Failing to participate in IEVS

X

X

Failing to penalize recipients for child support enforcement non-cooperation

X

X

Failing to repay Federal loan    
Failing to meet TANF MOE requirement    
Failing to enforce the 5-year time limit

X

X

Failing to remit contingency funds if the Contingency Fund MOE requirement is not met    
Sanctioning parents needing care for child under 6

X

X

Failing to replace penalty reduction with State funds    
Failing to meet TANF MOE requirement in year when WtW was received    
Failing to penalize recipients who refuse to engage in work

X

X

 

Q4: Are States bound by the guidance OFA provides in the form of program instructions, policy announcements, and Q's and A's?

A4: OFA has a long history of issuing policy guidance in the form of program instructions, policy announcements, and other documents. OFA has treated such guidance as authoritative and binding upon States and applied such guidance when making decisions on matters such as audit findings, QC penalties, and State plan approvals.

Under TANF, guidance issued in the form of program instructions, policy announcements, and posted Q's and A's has similar significance. While we no longer approve State plans or take QC penalties, we do apply such policy guidance in making decisions about audit findings and TANF penalties.

The TANF Q's and A's format differs from the format that we previously used, but is no less authoritative. We adopted the electronic Q&A format because we thought it would be more user-friendly and accessible. Also, we thought Q's and A's were more appropriate for TANF -- in that they could accommodate not only specific policy interpretations, but also statements about options available to States under the general principle of State flexibility.

Our goal in issuing guidance continues to be to give States as much flexibility as possible to implement effective, innovative and creative programs that support work and responsibility. However, as States gain experience operating their programs and explore the new possibilities available to them under TANF, we continue to receive requests for additional policy guidance.