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Q&A: The American Recovery and Reinvestment Act of 2009 (Recovery Act)

Published: September 30, 2010
Audience:
Temporary Assistance for Needy Families (TANF)
Types:
Q&A
Tags:
AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009 (Recovery Act)

TEMPORARY ASSISTANCE FOR NEEDY FAMILIES (TANF) PROGRAM
EMERGENCY FUND

Topics on this page:

General

Q1:    How much additional funding does the Emergency Contingency Fund (Emergency Fund) provide?

A1:    The Emergency Fund was appropriated $5 billion covering fiscal year (FY) 2009 and FY 2010.

Q2:    What can Emergency Fund dollars be used for?

A2:    Emergency Fund grants can be used to provide benefits and services to families that comply with the four statutory purposes of the Temporary Assistance for Needy Families (TANF) program.  The four purposes are:  (1) to provide assistance to needy families so that children may be cared for in their own homes or in the homes of relatives; (2) to end the dependence of needy parents on government benefits by promoting job preparation, work, and marriage; (3) to prevent and reduce the incidence of out-of-wedlock pregnancies and establish numerical goals for preventing and reducing the incidence of these pregnancies; and (4) to encourage the formation and maintenance of two-parent families.  However, the funds cannot be transferred to either the Social Services Block Grant or the Child Care and Development Block Grant.  Emergency funds are available until expended; a jurisdiction may carry over emergency funds for use in a later fiscal year. 

Q3:    Who is eligible to apply for these funds?

A3:    States, the District of Columbia, Guam, Puerto Rico, the Virgin Islands, and federally-recognized Indian Tribes and Alaska Native Organizations that are operating TANF programs are eligible to apply for these funds.

Q4:    Are there conditions that must be met in order to apply for these funds?

A4:    Yes, a jurisdiction eligible to apply for emergency funds must meet at least one of the following three conditions for a quarter during FY 2009 or FY 2010:

(1)  The jurisdiction’s average monthly assistance caseload in a quarter is higher than its average monthly assistance caseload for the corresponding quarter in the Emergency Fund base year (i.e., FY 2007 or FY 2008), and its expenditures for basic assistance in the quarter are higher than its expenditures for such assistance in the corresponding quarter of the Emergency Fund base year;

(2)  The jurisdiction’s expenditures for non-recurrent short-term benefits in the quarter are higher than its expenditures for such benefits in the corresponding quarter of the Emergency Fund base year (i.e., FY 2007 or FY 2008);

(3)  The jurisdiction’s expenditures for subsidized employment in the quarter are higher than such expenditures in the corresponding quarter of the Emergency Fund base year (i.e., FY 2007 or FY 2008).

Q5:    How does a jurisdiction apply for funding?

A5:    We are developing an application form to facilitate the submittal of necessary data to us.  Jurisdictions may apply for funds for the first three quarters of FY 2009 before the form has been approved for use by submitting the information described in the statute (see A4 above).  

Q6:    Are jurisdictions permitted to apply for funds using estimates for the base-year quarters of FY 2007 or FY 2008?

A6:    No, estimates for base-year quarters are unacceptable.  This is because the base years have passed and actual quarterly expenditures are available.  However, we will permit estimates for request-year quarters, but awards based on estimates must be revised once final data become available.

Q7:    What is the time frame for availability of these funds?

A7:    The $5 billion in emergency funds are available until the end of FY 2010.

Q8:    If a jurisdiction qualifies for funds, what amount can it receive?

A8:    A jurisdiction that qualifies under one or more of the aforementioned conditions will receive 80 percent of the amount by which Federal TANF expenditures and qualified State expenditures (Maintenance-of-Effort, or MOE) in the quarter for which it is requesting emergency funds exceed such expenditures in the corresponding base-year quarter.  Under the law, the Emergency Fund base year is the lesser of FY 2007 or FY 2008 for a category.  In other words, for the first category, it is the year with the lower assistance caseload; for the second, it is the year with the lower non-recurrent short-term benefit expenditures; for the third, it is the year with the lower subsidized employment expenditures.  A jurisdiction may request funds under any or all of the three categories.

The law imposes a cumulative cap on the amount of emergency funding that a jurisdiction can receive for the two-year period.  Cumulative combined grants from the existing Contingency Fund and the Emergency Fund cannot exceed 50 percent of the jurisdiction’s annual Federal TANF family assistance grant.  For example, if a State’s Federal TANF family assistance grant is $100 million, the State could receive no more than $50 million in funding from both the TANF Contingency Fund and the Emergency Fund combined during the two-year period.          

Q9:     Can income-eligible adults without children receive any of the TANF services that qualify a state to receive emergency funds (e.g., subsidized jobs and/or non-recurrent benefits), or are only low-income families with children able to benefit from the Emergency Fund?

A9:     Under limited circumstances an adult without children can receive a TANF service, as long as it does not constitute “assistance” as defined in the TANF regulations. Some categories of increased spending on these adults could make a jurisdiction eligible for emergency funds (for example, increased spending on subsidized employment).  While eligibility for the Emergency Fund is based on only three categories of increased expenditures, once they are awarded, Emergency Fund grants are Federal TANF funds.  Therefore, a jurisdiction that receives emergency funds must use the funds in virtually the same ways as it may use its annual Federal TANF block grant funds (except that emergency funds may not be transferred to either the CCDF or the SSBG programs).  For example, Federal TANF funds may be used in any manner that is reasonably calculated to accomplish a purpose of the TANF program.  Those are:  (a) help needy families so that children may be cared for in their own homes or in the homes of relatives; (b) end the dependence of needy parents on government benefits by promoting job preparation, work, and marriage; (c) prevent and reduce the incidence of out-of-wedlock pregnancies; and (d) encourage the formation and maintenance of two-parent families.

Examples of services (that do not meet the definition of “assistance”) that potentially could be provided to some single individuals without children include jobs skills training or re-training activities, employment placement services, subsidized employment, employment counseling services, mentoring and tutoring services, pre-marital and marital counseling, parental counseling or mediation services, teen pregnancy prevention services, financial counseling services, and financial planning seminars (e.g., topics such as household management, budgeting, banking, and handling of financial transactions).

Q10:  Can emergency funds be used for non-assistance poverty reduction programs such as teen pregnancy prevention?

A10:  Yes.  If a jurisdiction receives emergency funds, then it may use those funds in any manner that is reasonably calculated to accomplish a purpose of the TANF program.  One TANF purpose is to prevent and reduce the incidence of out-of-wedlock pregnancies.  Teen pregnancy prevention activities would be reasonably calculated to accomplish this purpose.

Q11:  Must a jurisdiction have both an increase in TANF expenditures and an increase in caseload to receive TANF emergency funds?

A11:  Not necessarily.  Emergency Fund grants are available to a jurisdiction if it has increased expenditures in any one of three categories:  basic assistance expenditures; non-recurrent short-term benefits expenditures; or subsidized employment expenditures.  Only for the basic assistance expenditures category must a jurisdiction also have an increase in its assistance caseload. 

Q12:  Can a State use its TANF Contingency Fund dollars for expenditures in one of the three Emergency Fund categories to help it qualify for Emergency Fund dollars (e.g., use a TANF Contingency Fund award to create subsidized jobs)?  

A12:  Yes.  For each Emergency Fund category, a jurisdiction that qualifies may request 80 percent of the amount by which Federal TANF expenditures (including both TANF contingency funds and TANF emergency funds) and qualified State expenditures (i.e., maintenance-of-effort (MOE)) in the quarter for which it is requesting emergency funds exceed such expenditures in the corresponding base-year quarter.

Q13:   For a jurisdiction receiving a TANF Emergency Fund award for a prior quarter (for example the first two quarters of FY 2009), is the requirement that this award be expended in accordance with section 404 of the Social Security Act satisfied by the increased expenditures made by the jurisdiction during these quarters (for assistance, short-term non-recurrent benefits or subsidized employment) that exceeded the base year spending levels?

A13:   The requirement to use Emergency Funds in accordance with section 404 of the Social Security is not satisfied simply because the jurisdiction received an Emergency Fund award due to increased expenditures in a quarter.  See section 403(c)(6) of the Social Security Act (as amended by ARRA) which expressly addresses the use of emergency funds. 

The Congressional Conference Report (111-16) for section 2101 of the American Recovery and Reinvestment Act of 2009 (Recovery Act) explicitly states that the TANF Emergency Fund “. . . reimburses States for 80% of the increased expenditures on basic assistance (cash welfare), short-term non-recurrent benefits, or subsidized employment in TANF and separate State programs, up to a cap.”  Therefore, jurisdictions may use Federal TANF Emergency Funds to reimburse themselves for expenditures in past quarters that were made in accordance with section 404 of the Social Security Act.  They may also decide to spend those funds in the future on allowable benefits/activities that are in accordance with section 404 of the Social Security Act.

Also, please be advised of the following caveats:

  • Jurisdictions must report any revisions in expenditure amounts for all quarters in which they received Emergency Funds, as we must reconcile the award amounts accordingly. 
  • Federal TANF Emergency Funds must be spent in the jurisdiction’s TANF program in accordance with section 404 of the Social Security Act, unless a limitation, restriction, or prohibition elsewhere in law or the TANF regulations applies.  However, jurisdictions may not transfer any emergency funds to either the Social Services Block Grant or the Child Care and Development Block Grant because the transfer authority in section 404(d) of the Social Security Act only applies to Federal TANF grants under section 403(a) of the Social Security Act.
  • The same TANF programmatic rules that apply to Federal TANF block grant funds also apply to the use of Federal TANF emergency funds.  For example, if emergency funds are spent on assistance, requirements such as assignment of support rights and the Federal 60-month time limit must be met. 
  • If Federal TANF Emergency Funds are used to replace State-funded expenditures, the State must still meet its maintenance-of-effort requirement for the fiscal year. 

Q14:   On a prospective basis, does the jurisdiction satisfy the requirement of section 404 of the Social Security Act by using a TANF Emergency Fund award for current or future expenditures on assistance, short-term non-recurrent benefits or subsidized employment that exceeds the base year expenditures?

A14:   Yes, a jurisdiction that receives a TANF Emergency Fund award can use these funds to cover current and future expenditures for basic assistance, short-term non-recurrent benefits, and subsidized employment.  Those expenses may be the basis for subsequent TANF Emergency Fund awards.

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TANF Supplemental Fund

Q1:    Who qualifies for TANF Supplemental Funds, which have been extended via the Recovery Act through FY 2010?

A1:    A total of 17 States qualify for TANF Supplemental Funds for FY 2010.  They are as follows:  Alabama, Alaska, Arizona, Arkansas, Colorado, Florida, Georgia, Idaho, Louisiana, Mississippi, Montana, Nevada, New Mexico, North Carolina, Tennessee, Texas, and Utah.

Use Of Reserve/Carry-Over Fund

Q1:    Did the Recovery Act include a change in the use of unspent Federal TANF funds carried over into a succeeding fiscal year?

A1:    Yes.  The Recovery Act includes a provision that lifts the restriction on unspent Federal TANF funds reserved or “carried over” into a succeeding fiscal year.  Previously, carry-over funds could only be used to provide assistance (the ongoing basic needs payment, and supportive services such as transportation and child care to families not employed).  Now jurisdictions (States, Territories, D.C., and Tribes) may use any unspent Federal TANF money from a prior fiscal year to provide any allowable TANF benefit, service, or activity – i.e., not just assistance.

Q2:    Is it possible to transfer any of the carry-over money to the Social Services Block Grant Program and/or the Child Care and Development Block Grant Program?

A2:    No.  This part of the law did not change.  States, D.C., and Territories may only transfer up to 30% of their current fiscal year Federal TANF block grant funds to these programs.  (The transfer provision has never applied to Tribes operating approved Tribal TANF programs.)  Jurisdictions must spend any carry-over funds in their TANF programs.

Q3:    Is this change permanent?

A3:    Yes.

Q4:    Can TANF carry-over funds be used for non-assistance poverty reduction programs?

A4:     Yes, the ARRA allows jurisdictions administering TANF programs to use TANF program funds carried over from a prior year for any allowable TANF benefit, service, or activity.  Prior to FY 2009, these funds could be used to provide assistance to needy families.  However, such carry-over funds may not be transferred to either the CCDF or the SSBG programs.

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Caseload Reduction Credit/TANF Work Participation Rates

Q1:    Did the Recovery Act include a change in calculating a State’s caseload reduction credit for determining the work participation rate it must meet?

A1:    Yes, the caseload reduction credit reduces a State’s required work participation rate for a fiscal year by the decline in its caseload between FY 2005 and the year prior to the current fiscal year, called the comparison year.  The Recovery Act allows a State to substitute the lower of the FY 2007 or FY 2008 caseload for the normal comparison-year caseload in FYs 2009, 2010, and 2011.  This means that if a State serves more TANF families in the normal comparison year than it did in FYs 2007 or 2008, this provision holds the State harmless in the caseload reduction credit calculation.  This lowers the State’s target work participation rate for that year compared to what it would have been had we used the normal comparison year.

TANF Emergency Fund

Use Of Funds

Q1:    For a jurisdiction receiving a TANF Emergency Fund award for a prior quarter (for example the first two quarters of FY 2009), is the requirement that this award be expended in accordance with section 404 of the Social Security Act satisfied by the increased expenditures made by the jurisdiction during these quarters (for assistance, short-term non-recurrent benefits or subsidized employment) that exceeded the base year spending levels?

A1:    The requirement to use emergency funds in accordance with section 404 of the Social Security Act (Act) is not satisfied simply because the jurisdiction received an Emergency Fund award due to increased expenditures in a quarter. See section 403(c)(6) of the Act which expressly addresses the use of emergency funds.

The congressional conference report for section 2101 of the American Recovery and Reinvestment Act of 2009 (Recovery Act) explicitly states that the TANF Emergency Fund “. . . reimburses States for 80% of the increased expenditures on basic assistance (cash welfare), short-term non-recurrent benefits, or subsidized employment in TANF and separate State programs, up to a cap.” Therefore, jurisdictions may use Federal TANF emergency funds to reimburse themselves for expenditures in past quarters that were made in accordance with section 404 of the Act. They may also decide to spend those funds in the future on allowable benefits/activities that are in accordance with section 404 of the Act.

Also, please be advised of the following caveats:

  • Jurisdictions must report any revisions in expenditure amounts for all quarters in which they received emergency funds, as we must reconcile the award amounts accordingly.
  • Federal TANF emergency funds must be spent in the jurisdiction’s TANF program in accordance with section 404 of the Act, unless a limitation, restriction, or prohibition elsewhere in law or the TANF regulations applies. However, jurisdictions may not transfer any emergency funds to either the Social Services Block Grant or the Child Care and Development Block Grant because the transfer authority in section 404(d) of the Act only applies to Federal TANF grants under section 403(a) of the Act.
  • The same TANF programmatic rules that apply to Federal TANF block grant funds also apply to the use of Federal TANF emergency funds. For example, if emergency funds are spent on assistance, assignment of support rights and the Federal 60-month time limit requirements must be met.
  • If Federal TANF emergency funds are used to replace State-funded expenditures, the State must still meet its maintenance-of-effort requirement for the fiscal year.

Q2:    On a prospective basis, does the jurisdiction satisfy the requirement of section 404 of the Social Security Act by using a TANF Emergency Fund award for current or future expenditures on assistance, short-term non-recurrent benefits or subsidized employment that exceeds the base year expenditures?

A2:    Yes, a jurisdiction that receives a TANF Emergency Fund award can use these funds to cover current and future expenditures for basic assistance, short-term non-recurrent benefits, and subsidized employment. Those expenses may be the basis for subsequent TANF Emergency Fund awards.

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Administrative Costs

Q1:  Should a jurisdiction requesting emergency funds include administrative costs when reporting expenditures for basic assistance, non-recurrent short-term benefits, or subsidized employment?

A1:    The administrative costs associated with each type of expenditure measured by the Emergency Fund could be included with the expenditures for a category. While administrative costs are not program expenditures, they are necessary to permit the program to operate and to incur basic assistance, non-recurrent short-term benefit and subsidized employment costs. Therefore, a jurisdiction may opt to include associated administrative costs with each category under the Emergency Fund.

If a jurisdiction does opt to include administrative costs, it must allocate the portion of its total administrative costs that are associated with each respective funding category. Thus, for example, it should only include the administrative costs associated with providing basic assistance in the basic assistance expenditures. In addition, if the jurisdiction includes the administrative costs in a request-year quarter, it must also include them in the base-year quarters.

Jurisdictions should continue to report expenditures that meet the definition of “administrative costs” in the TANF regulations separately on their respective TANF financial reports. 

Third-Party Expenditures

Q1:  Under what circumstances can a State count expenditures by a third party as State spending for purposes of the Emergency Fund?

A1:   A State that has appropriate agreements in place and otherwise follows Federal requirements is allowed to count third-party expenditures as maintenance-of-effort (MOE) if the expenditures are for eligible families and meet a TANF purpose.  Any dollars claimed as MOE in accordance with those requirements and spent in any of the three Emergency Fund categories will count when calculating the amount of emergency funds for which the State is eligible. 

We remind States that the regulations at 45 CFR 263.2(e) specify the requirements for counting third-party expenditures as MOE.  Policy Announcement TANF-ACF-PA-2004-01, issued December 1, 2004, provides additional guidance concerning third-party expenditures counted as MOE, including the restriction on counting as MOE third-party expenditures used to satisfy a cost-sharing requirement of another Federal program.

Q2:   If a State claims the value of third-party as MOE in FY 2009 or FY 2010, will ACF adjust Emergency Fund base-year expenditure data to include similar third-party spending if the State did not claim such expenditures as MOE in the base year?

A2:   Yes.  HHS has the authority under the Recovery Act to adjust caseload and expenditure data to ensure that the respective request-year and base-year quarters are comparable “with respect to the groups of families served and types of aid provided.”  This adjustment language is intended to ensure that a jurisdiction that has made changes to the structure of its program or funding sources has neither a disadvantage nor an advantage because of those changes.  In general, we will make any adjustments to quarterly base-year data rather than request quarters. 

If the State claims third-party MOE in a request quarter but did not claim those third-party expenditures as MOE in the corresponding quarter of a base year, we will adjust the base-year data to include comparable expenditures made by that third party in the base year.  We will make these adjustments because the Emergency Fund is intended to reimburse jurisdictions for the increase in expenditures in the category; base-year expenditures by a third party factor into calculating the amount of the increase.  We will adjust the data whether the third party providing services is another governmental agency or a non-governmental organization.  The State must include such third party data in its application for emergency funds. 

To illustrate the sort of data that HHS needs to make this adjustment, suppose a State establishes an agreement in FY 2009 with ABC community group to count the funds that ABC expends in its emergency housing program as MOE.  The State complies with all Federal requirements to count those expenditures as MOE and correctly includes this program in its State plan as a non-recurrent, short-term benefit.  In applying for emergency funds, the State should provide information on the expenditures that ABC made in FY 2007 and FY 2008 for TANF-eligible families in the emergency housing program so that we can fund the increase in the expenditure category in FY 2009.

Q3:   If HHS adjusts base-year data for third-party expenditures, does the State need to revise its MOE claiming to include those expenditures in FY 2007 or FY 2008?

A3:   No.  The point of such an adjustment is to account for the fact that those expenditures were not MOE expenditures in the base year.

Q4:   Is it permissible for a foundation or other private entity to donate funds to a State that it could use as part of its increased expenditures in one of the three Emergency Fund categories?

A4:   Yes, a third party could make an unrestricted cash donation to a State’s general treasury.  Such a cash donation that a State subsequently spends as MOE in one of the three Emergency Fund categories must comport with applicable Federal requirements, including the requirements of 45 part 92 and 45 CFR 263.2(e).

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Child Support Debt

Q1:   May Federal TANF or State MOE funds be used to reduce, pay off, or offset child support arrearages or debts owed by non-custodial parents?

A1:   Yes, under certain circumstances, it is permissible to use Federal TANF, including TANF Recovery Act funds or State MOE funds to pay a benefit to a non-custodial parent to reduce or pay off child support arrearages owed to the family. While the State may also waive debt owed to the State, the State may not reimburse itself for the waived debt through TANF funds or count a waiver of debt owed to the State as a MOE expenditure.

The State may use TANF or MOE funds to pay all or part of the child support debt owed to the custodial family in two ways: the State can directly pay off the arrearage in the form of a child support payment; or the State can pay a benefit to a custodial parent that the custodial parent accepts in lieu of unpaid child support owed to the family. For example, the State (or a third-party such as a community-based organization) could offer the custodial parent a payment equal to all or part of the amount of the debt owed to the family, conditioned on the custodial parent’s waiver of an equivalent amount of child support debt owed to the family. For reasons described below, it will generally be preferable to structure the payment as a benefit in lieu of child support. Note that any compromise of child support debt owed to the custodial family must be a voluntary choice by the custodial parent

A State may have a number of objectives for reducing child support debt, including increasing the income of a custodial family and offering a non-custodial parent a “clean slate” to improve future employment and child support outcomes. Emerging research from the University of Wisconsin suggests that reduction of large child support debts may increase child support payments. A State might structure a program in which the State will pay all or some of the arrearage owed to the family in return for the non-custodial parent’s participation in specified employment or training or other activities. Under the Recovery Act, a State may receive 80 percent reimbursement for increased costs for basic assistance, nonrecurrent short term benefits, and subsidized employment, and could provide any of these forms of help to a needy non-custodial parent, either in conjunction with or separate from a program of arrearage reduction.

However, in order to use TANF or MOE funds to pay for debt reduction, either the non-custodial parent or the custodial parent and children receiving the benefit must be “needy” as defined by the State in its State Plan and meet the other eligibility requirements specified by the State for this benefit. Note that payment in full or partial satisfaction of child support owed would not constitute “TANF assistance,” and the custodial parent receiving the benefit would not need to meet the requirements to be eligible to receive TANF assistance. ACF cautions that as a matter of prudent use of TANF or MOE funds, although it is technically permissible, it would be inadvisable to use such funds to pay debts unless both parties are needy.

ACF recommends structuring a payment as a benefit in lieu of child support rather than as child support because of the consequences that follow if the payment is treated as child support. If the State structures the arrearage payment as child support, then any funds paid as child support must be distributed in accordance with section 457 of the Act, including the requirement that assigned support, once collected, is retained and shared between State and Federal governments. Under section 457, a custodial family will be able to receive the full amount of child support payment only if none of the family members ever received TANF assistance or Federally-funded foster care maintenance payments and the non-custodial parent has no other children. However, if the non-custodial parent has children living in more than one family, or if any member of the custodial family has a history of assistance receipt, child support payments will be distributed across families, and potentially to pay assigned arrearages. In those circumstances, the State will not be able to assure that the benefit is used only to benefit a needy family.

For these reasons, we recommend that the processing and payment of a nonrecurring benefit to a custodial family be made outside of the State’s child support enforcement program, and not treated as a child support payment. This will prevent any confusion over whether or not the funds will be distributed to multiple families or used to repay State-owed debt.

States also have the authority under existing law to write off or reduce State-owed child support debt. A number of States have implemented child support “debt leveraging” approaches which condition reduction of assigned arrearages on the non-custodial parent’s participation in work activities and payment of ongoing support. As explained above, the amount of the State debt that is written off does not constitute an expenditure of TANF or MOE funds.

The Federal fiscal interest in arrears does not arise until a collection is made; thus, no Federal share is owed on uncollected arrearages, whether or not they are waived. OCSE PIQ-99-03 (March 22, 1999) states that “Federal law does not prohibit State (or private) settlement of a judgment obligation, consistent with State law governing settlement of any other money judgment…. The Federal interest does not vest until support is available for distribution.”

Interested States may consider combining debt reduction with other strategies to improve the ability of a non-custodial parent to maintain employment and pay regular child support payments. For example, the State should review and adjust the underlying support order at a realistic level that the non-custodial parent can afford to pay. In addition, States are encouraged to urge both parents in appropriate circumstances to work out a co-parenting plan, participate in mediation or parenting classes, or otherwise agree to improve their co-parenting relationship. Both parents may be more receptive to developing a positive co-parenting relationship given that the custodial parent has received a substantial benefit (a payment that was unlikely to be received) and the non-custodial parent has received a waiver of a substantial debt.

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New Spending Test

Q1:   Does the “new spending test” apply to maintenance-of-effort expenditures (MOE) that come from non-governmental, third-party organizations?

A1:   The TANF rules (at 45 CFR 263.5) include a provision known as the “new spending test,” which is intended to ensure that States maintain a meaningful financial commitment to TANF.  Adopted as part of the original TANF rules in 1999 to implement the statutory provision contained in the 1996 law, the provision prevents a State from counting toward the maintenance-of-effort (MOE) requirement expenditures that were not part of the State’s IV-A (AFDC and related) programs unless they are higher than the State’s spending on that program in FY 1995.

We have determined that this provision does not apply to funds expended by non-governmental entities that a State counts as MOE.  It only applies to State or local governmental programs.  Thus, if a State wishes to include third party expenditures among its expenditures for purposes of qualifying for the Emergency Contingency Fund, the third party expenditures need not be in excess of a FY 1995 level of spending.

Q2:   How does the “new spending test” apply to a program when it is funded with a mix of State or local government expenditures and non-governmental, third-party expenditures?

A2:  If the program existed in FY 1995 and was not part of the authorized and allowable IV-A program activities, then the new spending test does apply.  In that case, the State would have to factor out the non-governmental expenditures from the FY 1995 base and current year expenditures.  The new spending calculation would apply to the remaining State or local governmental expenditures, but would not apply to non-governmental expenditures. 

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Purchase of Gift Cards

Q1:   Can a TANF jurisdiction purchase gift cards for TANF recipients?

A1:   Yes, providing gift cards as an award to TANF recipients is a permissible use of Federal TANF funds (including TANF related ARRA funds) and State maintenance-of-effort (MOE) funds so long as the expenditure can be justified as meeting one or more of the statutory purposes of the TANF program as described in section 401 of the Social Security Act.  Depending on their purpose, gift cards may be considered as basic assistance or non-assistance (including as a non recurrent short-term benefit provided that the regulatory requirements at 45 CFR 260.31(b)(1) for States or 45 CFR 286.10(b)(1) for Tribes are satisfied) depending on the purpose of the cards.  Further, TANF jurisdictions must adhere to their disclosure and confidentiality requirements with regard to the sharing of TANF case information with retailers.   

Q2:   At what point do expenditures for gift cards occur?

A2:   For TANF program purposes, the expenditure occurs at the time the gift cards are purchased from a retailer.  However, any unredeemed portion of a gift card must be returned to the TANF agency and treated as a rebate or credit (see 2 CFR Part 220 Appendix A, C5).  The returned amount must be spent on an allowable TANF purpose.  These requirements will necessitate an agreement between the TANF jurisdiction and the retailer involving the return of any unredeemed amounts (and the time frame for doing so) to the TANF jurisdiction.  The fiscal control and accounting procedures explained in the regulations at 45 CFR 92.20 as well as the audit requirements at 45 CFR 92.26 will apply to these expenditures.  TANF jurisdictions must exercise sufficient oversight to ensure that unredeemed amounts on these gift cards are identified and documented.
           
Note: We understand that not all businesses will be able to meet the requirement mandating the return of unredeemed amounts, and we recognize that in some cases, this will preclude purchasing gift cards from them, but we have concluded that this policy is needed in order to ensure that program funds are actually spent for the purposes for which they’re intended under the statute.

Q3:   If the retailer of the gift cards agrees to donate a portion of the card’s value to the State TANF agency, can the donated amount be treated as a third-party contribution to the State TANF agency’s MOE requirement?

A3:   Yes, the retailer’s donation can be treated as a third-party in-kind contribution to the State TANF agency’s MOE requirement provided that the regulatory requirements at 45 CFR 92.3, 92.24, and 263.2(e) are met.  A key feature of these requirements is the need to establish a documented agreement between the State TANF agency and the retailer that allows the State TANF agency to count the value of the retailer’s contribution toward its MOE requirement.  Further, the State TANF agency will count the retailer’s donation to the value of the gift cards as an MOE expenditure at the time the gift cards are actually purchased by the State TANF agency.

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Subsidized Employment Questions

Q1:  May a jurisdiction subsidize a job in the public sector?

A1:  Yes, public sector subsidized employment is an allowable activity.  This could be in any setting including, local or county office or in State or Tribal government.

Q2:  Are there any special rules for determining program costs in public sector employment?

A2:  No, the same cost principles apply to public sector subsidized employment that apply to other aspects of the TANF program; however, we remind jurisdictions of the importance of adhering to the principles of determining allowable costs expressed in OMB Circular A-87.  In particular, they stipulate that costs must be reasonable and that consideration should be given to arm’s length bargaining in setting reasonable costs. 

Q3:  May a jurisdiction use TANF funds to create or preserve jobs in its human services agency?

A3:  Yes, but a jurisdiction cannot simply re-categorize program administrative staffing costs as subsidized employment.  The Emergency Fund is not intended to cover the existing costs of TANF program administration.

Q4:  If a State subsidizes a job, can the employer’s costs for supervision and training or the employer’s share of wages count as a third-party contribution for purposes of TANF maintenance-of-effort (MOE) and the Emergency Fund spending requirements?

A4:  The employer’s costs for supervising and training a subsidized employee can count as a State expenditure for MOE and the Emergency Fund, but not the employer’s unreimbursed wage costs.  While the TANF agency’s wage subsidy to an employer is part of the cost of the subsidized employment program, the employer’s share of the wages paid to a subsidized employee is not a subsidy and thus cannot be considered a program expenditure for MOE.  To count the value of employer supervision and training as MOE, the expenditures must meet a TANF purpose and the State must meet all the requirements of 45 CFR 263.2 (e) and the applicable provisions of Part 92 relating to counting the third-party contributions as MOE.  Among the applicable requirements of Part 92 is the prohibition on counting the costs or the value of third-party expenditures if they have or will be used to meet cost sharing requirements of another Federal program.

Q5:  Is there a methodology for computing the employer’s costs for supervising and training a subsidized employee for purposes of counting such costs as a State expenditure for MOE and the Emergency Fund?

A5:  If a State assumes that supervision and training costs equal no more than 25 percent of the employee’s wage cost, we will accept the State’s assumption without additional documentation.  If a State thinks its supervision and training costs exceed this amount, it must submit a justification documenting greater costs.  We will consider such requests on a State-by-State basis.

Q6: Can a State use TANF funds to create a subsidized employment slot if the State determines that a wage subsidy is needed to prevent a TANF-eligible individual from being laid off? 

A6:  The TANF regulations at 45 CFR 261.70 explicitly provide that a State may not create a subsidized job slot when an individual is on layoff from the same or a substantially equivalent job, and that a State may not create a subsidized job slot when an employer has terminated an individual from employment or caused an involuntary reduction in its work force in order to fill the vacancy with a subsidized worker. 

Apart from these regulatory prohibitions, the program operates under the general principle that any expenditure of TANF funds must be reasonably calculated to accomplish the purposes of TANF.  For example, we think it is reasonable to assume that if a State’s subsidized employment program provided a TANF-eligible individual with an employment opportunity that would not have been available in the absence of the subsidy, then the subsidized employment meets a TANF purpose.  In some instances, a State could conclude that saving a job for a TANF-eligible individual would further the purposes of TANF, but States need to be vigilant to ensure that TANF and MOE funds are actually accomplishing TANF purposes and not simply subsidizing activity that would have occurred in the absence of the subsidy.

Q7:  If a State claims the value of third-party subsidized employment expenditures as MOE in FY 2009 or FY 2010, will ACF adjust Emergency Fund base-year expenditure data to include similar third-party spending as subsidized employment if the State did not claim such expenditures as MOE in the base year?

A7:  If the subsidized employment program existed in the base year but the State did not claim it as MOE, ACF will adjust the base year data.  If the employer did not participate in a subsidized employment program in the base year, there are no expenditures with which to adjust base-year data.

Q8:  What costs may a jurisdiction include in the subsidized employment category when applying for TANF emergency funds?

A8: A jurisdiction may include the subsidized portion of an employee’s wage, benefits, employer-related taxes, tools and uniforms, and other costs directly related to the actual work performed.  For example, child care, transportation, and related support services may be included in subsidized employment expenditures if they are necessary for the subsidized employee to participate in the subsidized employment program.  It may include related training or education as well, if necessary to meet the requirements of the job or to provide an opportunity for advancement, and as long as the subsidized job is the predominant activity.

In addition, a State may count employee supervision and training costs toward its maintenance-of-effort (MOE) requirement. Supervision and training equal to up to 25 percent of an employee’s wage requires no additional documentation; if such costs exceed 25 percent, they must be supported with documentation.

Some of the costs described above (e.g., tools and uniforms needed to accept a job) could count as non-recurrent, short-term benefits expenditures, as long as they meet the three criteria for non-recurrent, short-term benefits.

As a general rule, to qualify as MOE, expenditures cannot have originated from funds provided by another Federal program or be expenditures from State funds that are made as a condition of receiving Federal funds under another program.

Q9:  May a jurisdiction count the purchase of materials necessary for public works projects (e.g., installing a drainage system or repairing roads) as MOE expenditures for a subsidized employment program if the public works project employs a TANF program’s subsidized employment participants?

A9: The purchase of materials for a public works project is generally not countable as MOE expenditures relating to a jurisdiction’s subsidized employment program.

Q10:  Do all expenditures related to hours worked by subsidized employees on or before September 30, 2010, qualify for reimbursement by the TANF Emergency Fund?

A10: Subject to the availability of funds, the TANF Emergency Fund may reimburse expenditures that result in the provision of benefits or services to recipients on or before September 30, 2010.

In the context of subsidized employment, this means that the TANF Emergency Fund may reimburse subsidized employment that occurs on or before September 30, 2010. A jurisdiction may make payments to reimburse employers or contractors after September 30, 2010; however, it may only receive TANF Emergency Fund reimbursement for expenditures related to the hours worked by subsidized employees on or before September 30, 2010.

Please note that any expenditures related to processing claims for reimbursement (e.g. payments to contractors or employers) that occur after September 30, 2010, do not qualify as expenditures that may be reimbursed by the TANF Emergency Fund because the jurisdiction will not incur the expense related to this activity until after September 30, 2010. While these expenditures do not qualify for reimbursement by the TANF Emergency Fund, a jurisdiction may use TANF funds, including previously earned TANF emergency funds, to cover these costs.

 

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Nutritional Supplement

Q1:   A TANF agency is interested in cooperating with a community-based organization, such as a Boys and Girls Club, to provide meals for TANF eligible school children during the summer when they are unable to get their free/reduced Price school lunches. This would only be during the summer months when the children are not in school and the funding would go to the third party agency doing meal prep. Would this qualify as a non-recurrent short-term benefit?

A1: Yes, the above benefit satisfies the criteria as specified in the Federal regulations at 45 CFR 260.31(b)(1) - - i.e., it deals with an episode of need (the loss of the school breakfast/lunch program), will not extend beyond four months (covers the school summer recess), and is not intended to replace or substitute for the family’s ongoing need for food. TANF jurisdictions that are interested in establishing such a benefit are advised to consider partnership and resource sharing opportunities that may be available from other Federal programs that provide similar benefits. In particular, Department of Agriculture programs can help to address the nutritional needs of children during the summer recess. A State may wish to explore options for using its funds to promote the expansion or development of services at summer feeding sites. For example, in some communities, summer feeding programs are not available because of a lack of sponsors or sites. In others, summer nutritional program locations face difficulties in getting children and youth to attend their programs; this may be due to a lack of transportation resources available to low-income households, especially in rural communities, or because the program does not offer a set of activities needed to generate sufficient attendance. Since Federal reimbursement is based on the number of meals served, summer nutritional program sites often experience a shortage in compensation for administrative and food preparation costs. TANF funds can be used to cover any portion of program costs that are not otherwise reimbursed. States can also support summer feeding programs by providing TANF funds for transporting children to a summer nutritional program site (which is especially important in rural areas), as well as covering the cost of recreational activities that help to attract more youth and children to program locations.

Serving Older Youth

Q1:  Under what circumstances can TANF agencies provide Federally-funded TANF assistance payments to a single individual over the age of 18?

A1: As background, decisions about benefits and services to be provided under the TANF program and related expenditures of funds must satisfy one or more of the four statutory purposes of the TANF program, which can be found at section 401 of the Social Security Act or 42 USC 601. Purpose One is to “provide assistance to needy families so that children may be cared for in their own homes or in the homes of relatives”; Purpose Two is to “end the dependence of needy parents on government benefits by promoting job preparation, work, and marriage”; Purpose Three is to “prevent and reduce the incidence of out-of-wedlock pregnancies . . .”; and Purpose Four is to “encourage the formation and maintenance of two-parent families.” Purposes One, Three, and Four are applicable to this discussion about providing TANF benefits and services to older youth.

The basic TANF provision, found at section 408(a)(1) of the Social Security Act or 42 USC 608(a)(1), specifies that except in the case of a pregnant woman, no assistance may be provided to families without a minor child. “A State to which a grant is made under section 403 shall not use any part of the grant to provide assistance to a family unless the family includes a minor child who resides with the family (consistent with paragraph (10)) or a pregnant individual.” Under section 419(2) of the Social Security Act or 42 USC 619(2), a minor child is either under age 18, or under age 19 and is a full-time student in a secondary school (or in the equivalent level of vocational or technical training).

In addition, if there is a minor child in the family unit, a State may choose to include other household members, including older siblings, when calculating assistance payments. According to the preamble to the final TANF regulations (see Federal Register/Vol. 64, No. 69/Monday, April 12, 1999, page 17823), “At minimum, an eligible family must consist of a minor child who resides with a parent or other caretaker relative (or consist of a pregnant individual). Beyond this minimum configuration, States may add other relative household members to comprise the eligible family.” Therefore, a sibling over the age of 18 may be included when calculating assistance payments as long as there is a minor child in the family unit.

Q2:  May a jurisdiction serve youth over the age of 18 in a subsidized employment program?

A2: Yes. A jurisdiction may use Federal TANF funds to serve older youth in non-assistance programs, such as subsidized employment, under TANF statutory Purpose One. Since TANF Purpose One refers to “children” rather than “minor children,” a jurisdiction has discretion to establish a reasonable definition of “child” for this purpose that exceeds the age level of a minor child. We have concluded that a jurisdiction could reasonably set an age for a child that includes an individual under the age of 25, (or a lower age if the jurisdiction chooses). This definition could, but need not, coincide with an applicable age of majority under a jurisdiction’s law. This does not in any way affect a jurisdiction’s authority to use Federal TANF funds to provide assistance to needy families with children, because “assistance” is limited to families that include a minor child (as defined by statute) or a pregnant woman. Using Federal TANF funds, a jurisdiction may provide non-assistance benefits, including subsidized employment, to older youth when reasonably calculated to accomplish Purpose One, whether or not they are residing in the home of their parent or caretaker relative. However, maintenance-of-effort (MOE) expenditures for older youth under Purpose One are limited to expenditures for older youth who are residing in the home of a parent or caretaker relative. This is because except for expenditures authorized under the Healthy Marriage and Responsible Fatherhood provisions of the TANF statute, the TANF regulations limit the use of MOE funds to members of eligible families, which the regulations at 45 CFR 263.2(b) specify must include “a child living with a custodial parent or other adult caretaker relative.” A jurisdiction may interpret “custodial parent” to include a parent who had previously been the custodial parent, in the case of a child who is no longer a minor child.

Given this distinction in eligibility by funding source, a State should not claim MOE expenditures (including donated third-party supervision and training costs) for any youth living independently who does not have a child, is not a pregnant woman, or is not a non-custodial parent. Please note that if a State commingles Federal and MOE funds, the more restrictive rules would apply. Thus, in this situation, the requirement to expend the funds for eligible families would apply to the commingled funds.

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Reimbursement of Expenditures for Goods Distributed After September 30, 2010

Q1:  If a jurisdiction purchases a quantity of goods to distribute to TANF-eligible households as non-recurrent, short-term benefits, may the jurisdiction receive an Emergency Fund award for all goods purchased on or before September 30, even if some of the goods are not distributed by September 30?

A1: The TANF Emergency Fund may only reimburse expenditures that result in the actual provision of goods or services to beneficiaries on or before September 30, 2010. Accordingly, while the purchase of the goods can be an allowable use of TANF funds, only the portion that results in the actual provision of benefits or services on or before September 30, 2010 will be eligible for TANF Emergency Fund reimbursement.

Treatment of Foregone Revenue or Debt Forgiveness as a TANF Expenditure

Q1:  If a State partners with a third-party organization to provide a service to a TANF-eligible individual at a discounted price, may the State count the third party’s foregone revenue as a qualified State expenditure? Similarly, if the State or a partnering third-party organization will forgive some or all of a TANF-eligible client’s outstanding debt, may the State count the forgiven debt as a qualified State expenditure?

A1: No, a State may not count foregone revenue or forgiven debt as a qualifying State expenditure. The TANF definition of “Expenditure” at 45 CFR 260.30 states that an expenditure “. . . does not include any amounts that merely represent avoided costs or foregone revenue.”

Q2:  Are there any alternatives to help TANF-eligible families overcome debts, arrearages or other financial problems using the Emergency Fund?

A2:Yes, a State could charge a third party a participation fee. A State could also accept a donation from a third-party company that is participating in a repayment program with the State to assist TANF-eligible individuals pay past-due bills. Both the fee and the donation can be considered program income in accordance with 45 CFR 92.25. Section 92.25(b) defines program income as “gross income received by the grantee…directly generated by a grant support activity or earned only as a result of the grant agreement during the grant period.” The preamble to the original TANF rule provides further guidance: “States must use such program income for the purposes of the TANF program and for allowable TANF activities. We will not require States to report on the amount of program income earned, but they must keep on file financial records on program income earned and the purposes for which it is used in the event of an audit or review.” (See 64 Fed. Reg. 17840 (April 12, 1999).)

Further information about third-party cash donations can be found in the following PI: http://www.acf.hhs.gov/programs/ofa/policy/pa-ofa/2004/pa200401.htm.

When spent in a qualifying Emergency Fund category, the participation fee or donation could leverage additional emergency funds which the State could then use to pay the third party on behalf of TANF-eligible individuals with past-due bills.

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Summer Food Service Program and TANF Eligibility

Q1:  Would using TANF funds to support Summer Food Service Program (SFSP) sites require that every participating child be evaluated for TANF eligibility based on individual income?

A1:No. Many SFSP sites do not require individual case eligibility determinations for participants. For example, Open Sites serve children in geographical areas where 50 percent or more of the local children are eligible for free or reduced price school meals. Enrolled Sites serve identified groups of children of which at least 50 percent are eligible for free or reduced price school meals. According to guidelines set by the U.S. Department of Agriculture (USDA), all the children who attend Open or Enrolled Sites are eligible to receive meals at no charge, regardless of their individual eligibility.

If a SFSP site meets the criteria set by USDA to be an Open or Enrolled Site, then a jurisdiction may consider all participating children (regardless of individual family income) to be eligible for TANF-funded non-recurrent, short-term benefits related to that SFSP.

On the other hand, Camp Sites receive USDA reimbursement only for meals served to children who are eligible for free and reduced-price meals. Since these sites determine eligibility based on an individual income criterion, a jurisdiction may only use Federal TANF funds or claim State maintenance-of-effort (MOE) for SFSP-related services provided to eligible children.

Q2:  Does the requirement to verify qualified alien status apply to children participating in the SFSP?

A2:No. Jurisdictions only need to verify qualified alien status for benefits that are Federal public benefits. According to Title IV of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, in order for a benefit to be considered a Federal public benefit, it must be provided to an “individual, household, or family eligibility unit.” HHS has previously determined that benefits that are generally targeted to communities or specified sectors of the population without individual eligibility determinations of need do not fall within the definition of Federal public benefits (63 Fed. Reg. 41658, 41660 [Aug. 4, 1998]).

Q3:  Do the IEVS requirements at section 1137 apply to children participating in the SFSP?

A3:ACF has previously stated that the IEVS requirements apply to any applicant or recipient of a TANF-funded benefit, whether assistance or non-assistance, where income or citizenship and alienage are a condition of eligibility (http://www.acf.hhs.gov/programs/ofa/polquest/ievsys.htm). As described above, individual income and qualified alien status are not conditions of eligibility for children attending Open and Enrolled SFSP Sites.

Therefore, the IEVS requirements do not apply where a jurisdiction uses Federal TANF funds or claims State maintenance-of-effort (MOE) to support Open and Enrolled SFSP Sites.

Please note that the IEVS requirements do apply when TANF funds or MOE funds are expended in the TANF Program to support SFSP-related services at Camp Sites, since these sites determine eligibility based on an individual income criterion. However, the IEVS requirements do not apply to benefits provided under a separate State program.

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Procedures to Allocate TANF Emergency Funds Once Claims Exceed $5 Billion 

Q1:  What procedures will be used to allocate the remainder of the $5 billion appropriated by Congress if the total amount of claims made for TANF emergency funds exceeds $5 billion?

A1: Congress appropriated $5 billion for the TANF Emergency Fund. If all jurisdictions sought the maximum amount for which they qualified, total claims on the Fund would exceed $5 billion. We know that some jurisdictions do not intend to seek the full amount for which they could qualify, but it is still possible that total claims could reach or exceed $5 billion. If the total of awards and applications reaches $5 billion, all applicants that apply before the $5 billion point is reached and respond to comments and information requests in a timely manner can receive the full amount for which they qualified. All subsequent applicants will be in a queue, based on the date we receive the application, to receive funding if it becomes available.

Additional funding may become available after September 30 if one or more jurisdictions qualify for fewer funds than originally was awarded due to having overestimated expenses. In such a case, the jurisdiction’s award would be reduced and funds already expended in excess of the final award would need to be returned. If any funds from the $5 billion become deobligated after September 30, we will adjust awards to jurisdictions based on their place in the queue. However, a jurisdiction can only receive such a payment from the remainder of the $5 billion if it actually received an award in fiscal year (FY) 2010. If the jurisdiction did not receive an award in FY 2010, either because it did not apply or because there were no funds remaining from the $5 billion to award based on its place in the queue, the jurisdiction will be unable to qualify for any amount available as a result of return of deobligations.

Estimating TANF Expenditures for TANF-Funded Food Bank Benefits

Q1: Can a TANF jurisdiction use a reasonable methodology to estimate the TANF and/or MOE expenditures for a food distribution program that it operates in partnership with a community food bank? Can it report these estimated expenditures for reimbursement by the TANF Emergency Fund?

A1: Yes, once the jurisdiction determines the needy family standard applicable to the food bank, it may reimburse food bank expenditures for those individuals that would meet the jurisdiction’s neediness definition, as well as those who meet the TANF requirement related to having a child, using a reasonable estimation methodology. TANF expenditures must be made in a manner that reasonably accomplishes a TANF purpose, and providing emergency food to needy families with children squarely fits within allowable expenditures under the first purpose of TANF.

Typically, TANF expenditures for benefits or services are based on making individual determinations of need and family composition. However, the TANF regulations do not require that such an approach must be applied in all instances. The provision of emergency food assistance in the context of a food bank presents special circumstances under which such individualized determinations may be difficult or impossible, because food assistance is provided without making individualized income determinations or taking individual applications, with a food bank largely relying on the fact that only individuals and families in substantial need are likely to seek food bank assistance. Accordingly, in such circumstances, it is reasonable for a jurisdiction to make use of a reasonable estimation methodology to determine the share of overall expenditures attributable to needy families, and only that share can be reimbursed with TANF emergency funds.

The jurisdiction will be accountable to auditors for the estimation methodology used to determine the portion of eligible recipients that may be used as a basis for claimed TANF expenditures.

Q2: Would a food distribution program operated in partnership with a community food bank qualify as an exception to the “federal public benefit” definition, thereby eliminating the need for a jurisdiction to verify the immigration status of recipients of food bank benefits?

A2:Yes, a food bank distribution program to needy families meets an exception within Title IV of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (hereinafter, ‘the Act’). If a program meets an exception recognized within the Act, verification of immigration status does not apply. Specifically, a food distribution program at a food bank falls under the exception created by Attorney General Order No. 2049, 61 FR 45985 (1996):

 ...In addition to certain statutory exceptions, the Act authorizes the Attorney General to establish limited exceptions to these provisions for the following kinds of benefits:

Programs, services, or assistance (such as soup kitchens, crisis counseling and intervention, and short-term shelter) specified by the Attorney General, in the Attorney General's sole and unreviewable discretion after consultation with appropriate Federal agencies and departments, which (i) deliver in-kind services at the community level, including through public or private nonprofit agencies; (ii) do not condition the provision of assistance, the amount of assistance provided, or the cost of assistance provided on the individual recipient's income or resources; and (iii) are necessary for the protection of life or safety ... [qualify as exception to the Act]

A food distribution program delivers an in-kind, non-recurrent short-term benefit at the community level and will provide a nutritional service to needy families during the summer months. Thus, based on provisions of the Act and the Attorney General’s order, a jurisdiction does not have to verify citizenship for these types of programs when operated in partnership with a community food bank.

Q3: Do the IEVS requirements at section 1137 apply to food bank programs where the portion of the eligible population is estimated using a reasonable methodology?

A3: ACF has previously stated that the IEVS requirements apply to any applicant or recipient of a TANF-funded benefit, whether assistance or non-assistance, where income or citizenship and alienage is a condition of eligibility (please see Q&A’s at http://www.acf.hhs.gov/programs/ofa/polquest/ievsys.htm).

As described in Answer 1, eligibility is not determined on an individual, case-by-case basis; therefore, verification of an individual’s income is not necessary for receipt of TANF-funded food bank benefits, i.e., while the program has an income standard, it is not applied individually.

As described in Answer 2, States do not need to verify the qualified alien status of any recipient of food bank benefits since these benefits fall under the exception created by Attorney General Order No. 2049, 61 FR 45985 (1996).

Therefore, the IEVS requirements do not apply to TANF-funded food bank programs that use a reasonable estimation methodology to determine the portion of recipients who meet income eligibility requirement.

States also have the option to operate food distribution programs in partnership with community food banks as a separate State program since it has been previously determined that the IEVS requirements do not apply to benefits provided under a separate State program.

http://www.justice.gov/archive/opd/agorderf.htm

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Procedures to Allocate TANF Emergency Funds Once Claims Exceed $5 Billion 

Q1:  What procedures will be used to allocate the remainder of the $5 billion appropriated by Congress if the total amount of claims made for TANF emergency funds exceeds $5 billion?

A1: Congress appropriated $5 billion for the TANF Emergency Fund. If all jurisdictions sought the maximum amount for which they qualified, total claims on the Fund would exceed $5 billion. We know that some jurisdictions do not intend to seek the full amount for which they could qualify, but it is still possible that total claims could reach or exceed $5 billion. If the total of awards and applications reaches $5 billion, all applicants that apply before the $5 billion point is reached and respond to comments and information requests in a timely manner can receive the full amount for which they qualified. All subsequent applicants will be in a queue, based on the date we receive the application, to receive funding if it becomes available.

Additional funding may become available after September 30 if one or more jurisdictions qualify for fewer funds than originally was awarded due to having overestimated expenses. In such a case, the jurisdiction’s award would be reduced and funds already expended in excess of the final award would need to be returned. If any funds from the $5 billion become deobligated after September 30, we will adjust awards to jurisdictions based on their place in the queue. However, a jurisdiction can only receive such a payment from the remainder of the $5 billion if it actually received an award in fiscal year (FY) 2010. If the jurisdiction did not receive an award in FY 2010, either because it did not apply or because there were no funds remaining from the $5 billion to award based on its place in the queue, the jurisdiction will be unable to qualify for any amount available as a result of return of deobligations.

Qualifying Expenditures On or Before September 30, 2010

Q1: Under what circumstances may a jurisdiction receive TANF Emergency Fund reimbursement for electronic transfers, vouchers, gift cards, and basic assistance payments benefits or services, in light of the September 30, 2010, expiration of the TANF Emergency Fund?

A1: Subject to the availability of funds, the TANF Emergency Fund may reimburse expenditures that result in the provision of benefits or services to recipients on or before September 30, 2010.

Electronic Transfer Cards: There are two distinct kinds of electronic transfer cards — pre-funded debit cards, and “day of draw” cards.

  • Pre-funded Debit Card: In a pre-funded debit card, the amount of the benefit is actually transferred to the recipient’s card. Thus, the jurisdiction incurs the expenditure related to the provision of the benefit when funds are loaded onto a recipient’s debit card. The TANF Emergency Fund may reimburse expenditures for funds transferred onto pre-funded debit cards on or before September 30, 2010. Please note that a jurisdiction may impose a deadline by which a recipient must redeem funds that have been loaded onto a debit card; any unredeemed portion of funds must be returned to the TANF agency and be spent on an allowable TANF purpose.
  • “Day of Draw” Card: While “Day-of-Draw” cards authorize a benefit amount on a particular date, a transfer of funds to a third-party contractor that holds each recipient’s account occurs only when a recipient makes a purchase with his or her card. Since there is no actual transfer of funds onto this type of benefit card, a jurisdiction does not incur any expenditure until a recipient makes a purchase. In this case, a jurisdiction may only receive reimbursement from the TANF Emergency Fund for card purchases made on or before September 30, 2010.


Vouchers: A voucher is a commitment to make payment to a retailer once a recipient redeems it in exchange for a good or service. A jurisdiction incurs the expenditure related to the provision of the benefit at the time the voucher is redeemed. A jurisdiction may therefore only receive reimbursement by the TANF Emergency Fund for purchases made with vouchers on or before September 30, 2010.

Gift Cards: For TANF program purposes, the expenditure occurs at the time the gift cards are purchased from a retailer. However, in order to qualify for reimbursement by the TANF Emergency Fund as a non-recurrent, short-term benefit, a jurisdiction must provide the gift card to recipients on or before September 30, 2010. Please refer to the Q&A’s regarding the Purchase of Gift Cards for more information (available at http://www.acf.hhs.gov/programs/ofa/recovery/tanf-faq.htm#_Gift_Cards).

Basic Assistance: Basic assistance may be provided either in the form of checks or electronic transfer payments:

  • Basic Assistance Checks: A jurisdiction incurs the expenditure for basic assistance payments provided via check at the time it is cashed by a recipient. The TANF Emergency Fund may reimburse expenditures for payments that are given to recipients and cashed on or before September 30, 2010.
  • Basic Assistance via Electronic Transfer Cards: If a jurisdiction utilizes pre-funded debit cards to provide basic assistance payments, the TANF Emergency Fund may reimburse expenditures for funds transferred onto pre-funded debit cards on or before September 30, 2010. However, if a jurisdiction authorizes a basic assistance benefit amount onto “Day-of-Draw” cards, a jurisdiction may only receive reimbursement from the TANF Emergency Fund for “Day-of-Draw” card purchases made on or before September 30, 2010.