Table of Contents

A Message from the Assistant Secretary for Children and Families

A Message from the Chief Financial Officer

Profile of the Agency

Organizational Chart

Supplemental Statement of Financial Position

Supplemental Statement of Operations

A MESSAGE FROM THE ASSISTANT SECRETARY

I am pleased to present the Administration for Children and Families’ (ACF) Audited Financial Statements for FY 1997, the second year ACF has prepared this annual document. ACF is the lead agency in the Department of Health and Human Services for programs serving America’s children, youth and families. Our programs are at the heart of the Federal effort to strengthen families and give all children a decent chance to succeed.

Fiscal Year 1997 was a year of success, collaboration and challenge. I’m proud to cite a few examples of our special achievements, though they certainly do not represent all of our successes--nor do they, on their face, describe the levels of effort by both ACF employees and our partners whose hard work ultimately caused these results.

• The welfare caseload declined by 4.3 million recipients--from 14.1 million in January 1993 to 9.8 million in September 1997--a drop of 31 percent since President Clinton took office. This is the largest welfare caseload decline in history and represents the lowest percentage of the population on welfare since 1970.
• $13 billion was collected in child support for FY 1997, and services were provided to over 19 million cases. In addition, over a million paternities were established and acknowledged, and almost five million absent parents were located.
• In February, the Child Care Bureau received Vice President Gore’s Hammer Award for exemplary customer service in providing new child care funds to States under the welfare reform law in just 39 days. The unprecedented accomplishment of the Child Care Bureau ensured that States received funds and guidance timely to provide child care for families moving and staying in work. Later, in October, President Clinton also hosted the first ever White House Conference on Child Care to focus the nation’s attention on the importance of addressing the need for safe, affordable, quality child care.
• Under a new initiative, Head Start expansion funds are being used for the first time to build partnerships with child care providers to deliver full-day and full-year Head Start services. Such services, in turn, can help parents attain full-time work while their children stay in one place all day, rather than spending half a day in Head Start and moving to child care for the remainder of the day.

During FY 1997, ACF and its partners--State, local and Tribal governments and non-profit/private sector grantees--continued to "focus on results" as we collaborated to achieve success. The three FY 1996 goals-- Economic Independence and Productivity of Families, Healthy Development of Children and Youth, and A Results-Oriented Organization--continued to frame our performance commitments as we entered FY 1997. They are the goals against which we reported our progress in the latest (spring 1997) edition of ACF’s report card--Achieving Success. Likewise, information in Achieving Success is the basis for the performance measures data included in the Overview of the FY 1997 Audited Financial Statements package we are presenting.

However, during the second half of FY 1997, while developing the FY 1999 Annual Performance Plan (required by the Government Performance and Results Act of 1993 (GPRA) to accompany the FY 1999 Budget Submission), ACF moved from the three goal structure to a strategic four goal framework:

• Increase Economic Independence and Productivity of Families
• Improve Healthy Development, Safety, and Well-Being of Children and Youth
• Increase the Health and Prosperity of Communities and Tribes
• Build a Results-Oriented Organization

Though similar to the former three, these four goals align more closely to the Department’s Strategic Plan, foster closer partnership collaborations, and will be the framework for ACF’s future performance measures reporting. In addition, we established seven agency-wide priorities for welfare reform, child support, child care, infants and toddlers, Head Start, child welfare, and increasing our capacity to work with our partners as they administer their own programs and we collaborate to achieve the goals and objectives of the FY 1999 Annual Performance Plan. Various crosscutting program initiatives and stronger collaborative efforts are underway at the national, State and local community levels.

ACF has negotiated a number of results-oriented partnership agreements and targets with individual States. Over the past three years, ACF programs have been working intensively with their partners (e.g., Child Support, Head Start, Refugee Resettlement and Community Services) and have made substantial progress towards a measurable results framework with performance measures and outcomes for operating programs. Within the last year, ACF’s Administration on Developmental Disabilities and child welfare programs have begun working with direct partners as well as advocacy groups and national educational/technical assistance organizations. Program-specific activity is underway in other areas (e.g., welfare reform and youth programs). A primary challenge is for partners to collaborate in crafting effective policies and programs that satisfy mutually agreed-upon objectives. The broad goals of these diverse jurisdictions and organizations are similar to those of ACF, but State and local programs often differ on specific targets and outcomes relevant to the particular needs of specific population groups and communities.

In addition to implementing GPRA, ACF confronted and still faces challenges on other fronts. For example, as a result of passage of the welfare reform legislation, States have been given increasing latitude in the administration of programs. The Temporary Assistance to Needy Families (TANF) legislation limits the duration of eligibility for public assistance, the percentage of the caseload who may be excluded from work requirements, and the conditions for teen parent assistance for which States may expect Federal support. The statute also allows States wide discretion in how services are designed to meet these and other provisions. Effective State decision-making requires timely and reliable information on the consequences of alternative policy and program choices and the experiences of other States. The nation has an enormous stake in this new approach to public assistance.

In another important arena, President Clinton signed a directive in December 1996 setting a goal for the nation to at least double by the year 2002 the number of children adopted or permanently placed. ACF

took on the challenge and on February 14, 1997 HHS presented the "Adoption 2002" action plan to help States set and meet urgent new adoption targets. I’m pleased to report that in November, the President signed into law the Adoption and Safe Families Act of 1997, enacting a key part of the plan by changing Federal law to require that children in foster care receive permanent placements within 12 months. As part of the President’s initiative, we also awarded 40 demonstration grants for programs aimed at increasing adoptions and reducing the number of children in foster care. ACF also awarded child welfare waivers to six States to allow them to test innovative strategies to improve child welfare systems.

ACF is an organization committed to achieving its mission which is, simply stated: To lead the nation in improving the economic and social well-being of families, children, individuals and communities. To do so, we must be flexible and able to respond to ever changing needs and new priorities. Our accomplishments do not come easily, nor are they achieved in a vacuum. Our partners and stakeholders are important allies as we work to succeed in meeting commitments to our customers. Thank you for your interest in ACF programs, its customers and shared efforts with our partners/stakeholders.

/s/

Olivia A. Golden

A Message from the Chief Financial Officer

As the new Chief Financial Officer of the Administration for Children and Families, I am pleased to have the opportunity to share with you ACF’s FY 1997 Audited Financial Statements.

For FY 1997, as in the previous year, ACF received a "qualified" opinion from the auditors that "the Principal Financial Statements...present fairly, in all material respects, the financial position of...ACF..." with the exception of specific weaknesses identified with accounting services and systems. I am delighted that ACF itself had no findings that contributed to the qualified opinion. This supports the Assistant Secretary’s FY 1997 statement of reasonable assurance to the Secretary that ACF is in compliance with the Federal Managers’ Financial Integrity Act.

From a substantive, programmatic point of view, ACF has taken control. Responsible for leading the implementation of the critical new welfare reform law to overhaul the Nation’s welfare program, in FY 1997 ACF obligated almost $35 billion in grants to States, counties, cities, territories, tribal organizations, as well as public and private local agencies. Approximately $17 billion of that was awarded to eligible grantees under the old Aid to Families with Dependent Children (AFDC) Act and the new Temporary Assistance to Needy Families (TANF) program. Thanks to the combined efforts of ACF, other Federal agencies, States, and the Executive Branch, we saw progress in the movement of families from welfare to work, and in creative partnerships and strategies to provide families the needed supports to continue the downward trend in the welfare rolls.

In FY 1997, ACF senior managers and their staffs also collaborated with HHS officials and OMB reviewers to develop the FY 1999 ACF Performance Plan that accompanied our FY 1999 budget submission. That planning process and document--required by the Government Performance and Results Act of 1994--was a unique learning experience where we began to merge performance measurement data with the budget process. The FY 1999 Plan describes significant progress made by many of ACF’s programs in implementing comprehensive approaches to planning and performance measurement. This was not an easy task. We described in some detail both our progress and difficulties in confronting the three major technical challenges we identified last year--developing quantifiable performance goals, coordinating and consolidating critical individual program measures into crosscutting outcome measures linked to the strategic plan, and collecting data for many of our measures. We will continue to face similar challenges during future refinements of the Plan.

As we become more sophisticated in developing these plans, linking them to the budget process, and reporting results through this structure, such activities will help us move closer to understanding and eventually implementing managerial cost accounting. Managerial cost accounting (capturing both direct and indirect costs by program area) is a new requirement for Federal agency accounting beginning in FY 1998.

Based on this year’s audit, I am concerned that accounting activities performed on ACF’s behalf by the HHS accounting agency--the Program Support Center (PSC)--continue to negatively affect how the auditors opine on ACF. Auditors consider the entire ACF "entity" while conducting their audit, incorporating the PSC in all references to ACF management. This puts ACF in the position of being held accountable for PSC problems over which we have little control.

We have spent the last few years identifying problems and urging solutions so that ACF can feel more confident about oversight of ACF funds that are tracked and disbursed through the CORE accounting system. We have raised concerns to Department officials that improvements to PSC accounting activities must be made promptly. We will continue to work with HHS to help identify ways accounting services and systems can be improved, and will seek recourse through the Board of Directors of the Service and Supply Fund which governs PSC activities.

The new cost accounting requirement raises fresh concerns about our accounting capabilities. This new requirement may broaden the gap between the reality of PSC accounting capabilities and our auditor’s expectations. Managerial cost accounting will also require major procedural and cultural changes in the internal ACF processes. We look forward to Departmental guidance and training that will help lead ACF and other operating divisions toward the accomplishment of this new requirement.

We commend the Department’s success in becoming an official OMB pilot for the Accountability Report--a consolidation of many separate financial management reporting mechanisms. We hope that ACF will be able to move in that direction in the future and reduce much of the burden created by responding to separate reporting streams.

We are encouraged that the auditors have raised issues and identified important financial management weaknesses that may otherwise have languished without appropriate attention. We are committed to assisting in and supporting this valuable audit process.

/s/

Elizabeth M. James

The Administration for Children and Families, within the U.S. Department of Health and Human Services is responsible for Federal programs that address the needs of vulnerable children and families throughout our society, including Native Americans, individuals with developmental disabilities, refugees, and legalized aliens. Through its Federal leadership, ACF promotes:

In FY 1997, ACF was responsible for Federally administering and/or managing approximately 50 programs listed in the Catalog of Federal Domestic Assistance. These are classified in the Federal budget functionally as OTHER INCOME SECURITY, SOCIAL SERVICES, TRAINING AND EMPLOYMENT, and CRIMINAL JUSTICE ASSISTANCE.

ACF staff administer and manage the grant programs in both the headquarters and regional offices. The headquarters offices are organized across distinct programmatic lines of authority with a supporting staff office structure (see list below for offices that manage grants). The ten regional offices operate in a five regional Hub structure--the Northeast, Southeast, Midwest, West-Central and Pacific-West--with Hub sites located in the five ACF regional offices that serve the largest caseloads (New York, Atlanta, Chicago, Dallas and San Francisco). The ACF Organization Chart is on page 29.

• Office of Child Support Enforcement (OCSE)
• Administration on Children, Youth and Families (ACYF)
• Office of Family Assistance (OFA)
• Administration for Developmental Disabilities (ADD)
• Office of Community Services (OCS)
• Administration for Native Americans (ANA)
• Office of Refugee Resettlement (ORR)
• Office of Planning, Research and Evaluation (OPRE)

ACF serves and otherwise assists clients diverse in culture, language and ethnicity from low income and/or otherwise vulnerable populations by awarding a variety of grants to States, territories, `tribes, profit and not-for-profit organizations, and universities, etc. See charts below for a graphic comparison of the number of grants by office versus the value of grants managed by those same offices.

 ACF appropriations for FY 1997 were $40.7 billion, approximately $7.4 billion more than for FY 1996. This represented 11 percent (%) of all HHS appropriations and more than 2.5 percent of all Federal appropriations (see charts that follow). Federal administrative costs were less than one-half percent of total ACF spending. The increase in appropriations for FY 1997 was largely due to increased funding for welfare reform.

The majority of ACF appropriations--almost $27.1 billion (67%)--were for OTHER INCOME SECURITY (Aid to Families with Dependent Children (AFDC), Temporary Assistance to Needy Families (TANF), Child Support Enforcement (CSE), the Low Income Home Energy Program (LIHEAP), Refugee Assistance, and the Child Care and Development Fund (CCDF)). $12.5 billion (31%) was appropriated for SOCIAL SERVICES (Head Start, Social Services and Community Services Block Grants (SSBG and CSBG, respectively), Foster Care and Adoption Assistance, etc. and all ACF administrative expenses). $1.0 billion was appropriated for TRAINING AND EMPLOYMENT for the Job Opportunities and Basic Skills training program. ACF Children and Family Services appropriation language included a transfer of $20 million from the Department of Justice (CRIMINAL JUSTICE ASSISTANCE).

The chart below reflects the spending by budget function.

The major ACF grant programs during FY 1997 fall roughly within the budget functions as follows:

On August 22, 1996 President Clinton signed into law "The Personal Responsibility and Work Opportunity Reconciliation Act of 1996" (PRWORA), a comprehensive bipartisan welfare reform plan that established the Temporary Assistance for Needy Families (TANF) program. This legislation has dramatically changed the nation's welfare system into one that requires work in exchange for time-limited assistance. The law contains strong work requirements, a performance bonus to reward States for moving welfare recipients into jobs, State maintenance of effort requirements, comprehensive child support enforcement, and supports families moving from welfare to work--including increased funding for child care and guaranteed medical coverage.

TANF--which replaces the former Aid to Families with Dependent Children (AFDC), Job Opportunities and Basic Skills Training (JOBS) and Emergency Assistance (EA) programs--gives States, Territories, and Federally recognized Indian Tribes and Alaska Native Regional Non-Profit Corporations (2) administering TANF programs new flexibility in the design of welfare programs which promote work and responsibility and strengthen families². In FY 1997, an estimated $13.4 billion³ in Federal payments went to the States and Tribes, Alaska Native Regional Non-Profit Corporations, American Samoa, Guam, Puerto Rico, and the Virgin Islands for assistance to approximately four million families (approximately ten million individuals). States, Tribes and Territories establish the amount of need standard (the amount required by a particular size family in order to live) and assistance payment level. See additional discussion of TANF under "Welfare Reform" in the Accomplishments and Challenges sections of this report.

The CSE program is a Federal/State partnership authorized by title IV-D of the Social Security Act. It promotes family self-sufficiency by securing regular and timely child support payments. State CSE programs locate parents, establish paternity, establish and enforce support orders, and collect payments.

In FY 1997, $13 billion was collected in child support, and services were provided to over 19 million cases through the CSE program. In addition, over a million paternities orders were established and acknowledged (of which 349,356 were in-hospital paternities), over a million new support orders were established, and almost five million absent parents were located. The Federal government funds 66 percent of program costs and makes incentive payments based on program efficiency and effectiveness as well as collections realized. The Federal government also provides 90 percent matching for paternity testing and 80 or 90 percent matching for some statewide computer systems. Under the new welfare law of 1996, each State must operate a child support enforcement program that meets new Federal requirements in order to be eligible for TANF block grants. See additional discussion of CSE activities under "Child Support Initiatives" in the Accomplishments section of this report.

Refugee Assistance programs, authorized by the Refugee Act of 1980, and programs of assistance to Cuban and Haitian entrants, authorized under Title V of the Refugee Education Assistance Act of 1980, were established to assist refugees and Cuban/Haitian entrants to become employed, economically self-sufficient, and assimilated into society as soon as possible after their arrival in the U.S. Federal funds are provided to States and non-profit organizations, such as voluntary agencies, to help offset the costs of resettlement. Increasing refugee employment and reducing welfare dependency are major emphases.

For FY 1997, Congress provided net appropriations of $425 million to provide grants for refugee assistance and services in the form of cash assistance, medical assistance, preventive health services, administrative costs, social services, and targeted assistance. In FY 1997, approximately 75,614 refugees, 832 Amerasians and 935 entrants were admitted to the U.S. These figures do not include Cuban parolees from Havana.

The Repatriation Program assists U.S. citizens and dependents who are returned to the U.S. by the State Department. If an American citizen in a foreign country becomes ill, is without funds, or needs to be returned to the U.S. because of a threatening situation in a foreign country, necessary services and loans to these citizens are provided through this program. An Emergency Repatriation Plan is also established by HHS in coordination with other federal agencies, voluntary organizations, and States to implement large scale repatriation operations in the event of a national security emergency. In FY 1997, 258 citizens in 187 cases received assistance at a cost of about $914 thousand (including both assistance and administrative costs).

²Title 1 of Public Law 104-193 (PRWORA), amended Title IV-A of the Social Security Act by replacing the AFDC, JOBS and EA programs with TANF during FY 1997 depending on when a State’s, Tribe’s or territory’s TANF plan became effective, but no later than July 1, 1997. ³Grants are based on the Federal share of State expenditures for AFDC and JOBS expenditures for FYs 94 and 95 or the average of FYs 92-94,
whichever is greatest. Grants incorporated an adjustment for States that had an Emergency Assistance plan amendment approved during
FY 1994 or FY 1995. State amounts may be reduced for Tribal Family Assistance Grants.

With LIHEAP funds, the Federal government provides grants to States, territories, Indian tribes, and tribal organizations to assist low-income households in meeting the costs of home heating and cooling needs. States and tribes may make the payments directly to eligible households or to home energy suppliers who comply with legislative provisions. LIHEAP funds can also be used by grantees to help low-income households deal with energy-related crises or pay for repairs to make their homes more energy efficient.

In FY 1997, $1.2 billion in grants (including $215 million in contingency funds) was awarded to all 50 states, the District of Columbia, six territories, and 124 Indian tribes and tribal organizations. An estimated 5.5 million households received help with heating costs and winter crisis assistance in FY 1995, the most recent year for which this information is available.

In FY 1997, the newly established Child Care and Development Fund (CCDF), which includes the Child Care Entitlement authorized by Welfare Reform and the Child Care and Development Block Grant, made available $2.9 billion to States and approximately $59 million to Tribes. This new program, authorized by the welfare reform law, assists low-income families and those transitioning off welfare to obtain child care so they can work or attend training/education. The award represents an increase in child care funding of $568 million for States over FY 1996.

The major change for federally subsidized child care services under CCDF is the requirement for States to serve families through a single, integrated child care system. Four Federal child care programs are now combined. Three programs--AFDC/JOBS Child Care, Transitional Child Care, and At-Risk Child Care (formerly called Title IV-A child care)--were repealed, and all child care funding is now combined under the former Child Care and Development Block Grant (CCDBG) program. Subsidized child care services will be available to eligible parents through certificates or contracted programs. Parents may select any legally operating child care provider.

A minimum of four percent of CCDF funds must be used to improve the quality of child care and offer additional services to parents, such as resource and referral counseling regarding the selection of appropriate child care providers to meet their child’s needs. To improve the health and safety of available child care, many States have provided training grants and loans to providers, improved monitoring, compensation projects, and other innovative programs. All States and tribes were required to submit comprehensive plans by July 1, 1997. In July 1997, President Clinton proposed new child care regulations, which include a new approach to help more children in child care receive the immunizations they need on time. For additional information, see the Accomplishments section of this report.

The Head Start program provides comprehensive developmental, health, social and parent involvement services to low-income pre-school children and their families. It is based on the philosophy that a child benefits from a comprehensive, interdisciplinary program which fosters development and remedies problems through a broad range of services. Head Start involves the child's entire family and community.

Grants to conduct Head Start programs are awarded to local public or private, non-profit agencies. Grantees must provide 20% of the total cost of the program from non-Federal sources. Head Start programs operate in all 50 States, the District of Columbia, Puerto Rico, and the U.S. territories. At least 10 percent of the enrollment opportunities in each program must be made available to children with disabilities.

In FY 1997, the enrollment of approximately 794,000 pre-school children from low-income families in almost 1500 local Head Start programs was made possible by grants amounting to $3.981 billion. Since its inception in 1965, more than 16.8 million children and families have received services. Head Start has provided children with educational, social, medical, dental, nutrition, and mental health services while their families have had the benefit of social services. An essential part of every Head Start program is the involvement of families in parent education and program planning and operation.

President Clinton’s signing of the Head Start Act Amendments of 1994 also established the new Early Head Start program which expands the benefits of early childhood development to low income families with children under three and to pregnant women. Services include quality early education in and out of the home; home visits; parent education, including parent-child activities; comprehensive health services, including services to women before, during and after pregnancy; nutrition; and case management and peer support groups for parents. Projects must coordinate with local Head Start programs to ensure continuity of services for children and families. In FY 1997, Early Head Start funds were four percent of the total Head Start appropriation, or $159.2 million. See further discussion of Head Start in the Accomplishments section of this report.

For those children who cannot remain safely in their homes, foster care provides a stable environment that assures a child’s safety and well-being while their parents attempt to resolve the problems that led to the out of home placement, or when the family cannot be reunified, until the child can be placed permanently with an adoptive family. Foster Care and Adoption Assistance programs provide Federal matching funds to States which directly administer the programs.

Children in foster care numbered more than 500,000 in 1996, up from 340,000 in 1988. Most of these children will return to their homes, but more than 100,000 cannot return safely. Many of these children are considered to have "special needs" because they are older, members of minority or sibling groups, or physically, mentally or emotionally disabled. They often need special assistance in finding adoptive homes. In FY 1997, over 100,000 children received adoption assistance, which is a subsidy to families who adopt special needs children. See the section on Challenges for additional information concerning adoption initiatives.

In FY 1997, approximately $4.0 billion was awarded for Foster Care, Adoption Assistance and Independent Living. These programs are funded jointly by the Federal and State governments. Monthly payments to families and institutions vary from State to State. In 1997, benefits were paid on behalf of approximately 290,000 foster children per month and the average monthly number of children for whom adoption assistance payments were made was about 146,000. Over 85,000 (estimated) children participated in Independent Living programs.

In FY 1997, $2.5 billion in Federal funds was provided to the States for social services under the annual Social Services Block Grant. States have responsibility for determining the services they will provide, the distribution method, and eligibility requirements. Each State's allocation from the total appropriation is based on its population.

States use the funds for social services to achieve economic self-sufficiency; to prevent or remedy neglect, abuse, or exploitation of children or adults; to avoid or reduce inappropriate institutionalization; and to provide appropriate referral for institutional care. States have great variation in their definition, design, programs, and range of services. The most frequently provided services are: child day care; home-based services which help individuals or families with household and personal care; protective services which prevent or remedy abuse, neglect, or exploitation of children or adults; special services for the physically, mentally, or emotionally disabled; and social support.

Child Welfare Services help State public welfare agencies keep families together. Authorized under title IV-B1 of the Social Security Act, Child Welfare Services are available to children and their families without regard to income. State services include: preventive intervention aimed at keeping children within the home; services to develop alternative placements, such as foster care or adoption if children cannot remain at home; and reunification services so that children can return home if at all possible.

In FY 1997, $292 million was appropriated for Child Welfare Services. Funds were distributed to States in the form of grants to establish, extend, and strengthen child welfare services. Each State received a base amount of $70,000. Additional funds were distributed by a formula based on the State's population of children under age 21 and the complement of the average per capita income. The State share of expenditures is 25 percent.

HHS/ACF has other programs that address the welfare of children at risk. The Adoption Opportunities program eliminates barriers to adoption and helps to find permanent homes for children, particularly those with special needs who would benefit from adoption. The Abandoned Infants Assistance program provides grants to help identify ways to prevent the abandonment of children in hospitals and to identify and address the needs of infants and young children, particularly those with acquired immune deficiency syndrome (AIDS) and prenatal drug or alcohol exposure. In FY 1997, funding for Adoption Opportunities was $13 million; for Abandoned Infants Assistance, it was $12 million.

The 1993 amendments to the Social Security Act created the Family Preservation and Support Services program (title IV-B2). Family Preservation and Support Services grants focus on strengthening families, preventing abuse, and protecting children. These grants help State child welfare agencies and Indian Tribes operate preventive family preservation services and community-based family support services for families at risk or in crisis.

Family Support Services--often provided at the local level by community-based organizations--are voluntary, preventive activities to help families nurture their children. They include respite care for parents and caregivers, early development sceening of children to identify their needs, tutoring, health education for youth, and a range of center-based activities. Family Preservation Services typically are activities that help families alleviate crises that might lead to out-of-home placements of children because of abuse, neglect, or parental inability to care for their children. Funding for Family Preservation and Family Support Services was $240 million in FY 1997.

Enacted in 1974 under the Runaway Youth Act, and subsequently expanded to include homeless youth, this program was created in response to widespread concern about the alarming number of runaways who cross State lines and are exposed to exploitation. Today an estimated 500,000 to 1.5 million young people run away from or are forced out of their homes, and an estimated 200,000 are homeless.

Grants to public and private agencies provide short-term shelter, crisis intervention, and family reunification services to runaway and homeless youth and their families. In FY 1997, approximately $43.7 million in Federal appropriations helped to fund more than 400 youth shelters (basic centers) that provided short-term emergency shelter, food, clothing, counseling, and other support services to approximately 80,000 young people age 11 to 18. Additionally, through the Transitional Living Program over 75 programs were funded with $14.9 million to help homeless youth, ages 16 to 21 make a successful transition to self-sufficient living and avoid long-term dependency on social services. Among those youth who entered basic centers, 67 percent were reunited with their families.

Through Community Services programs, the Federal government provides annual funding to States, territories, Indian tribes and tribal organizations, universities, and other non-profit groups to assist low-income people in local communities. Community Services funds, including the Community Services Block Grant (CSBG) and the Low Income Home Energy Assistance Program (LIHEAP), are primarily used to meet employment, education, housing, income management, energy, health, and emergency needs of the poor.

In FY 1997, $490 million was appropriated to award Community Services Block Grants to 56 States and territories and the Commonwealth of Puerto Rico. A total of $3 million was awarded directly to 64 Indian tribes and tribal organizations. Most funds are allocated to approximately 1000 community action agencies or migrant or seasonal farmworker organizations. For FY 1997, among other Community Services programs, $31 million was appropriated for the Urban and Rural Community Economic Development program; $12 million for the National Youth Sports Program; and $4 million for the Community Food and Nutrition program.

The Administration for Developmental Disabilities ensures that the programs authorized under the Developmental Disabilities Assistance and Bill of Rights Act assist States to plan for and assure that persons with developmental disabilities receive the services, other assistance and opportunities necessary to enable them to achieve their maximum potential through increased independence, productivity, inclusion, and integration into the community.

In FY 1997, grants amounting to approximately $114.2 million supported: the development of coordinated systems of services through statewide plans; the establishment of protection and advocacy systems to assist individuals in exercising their human and legal rights; interdisciplinary training, technical assistance, and information/dissemination activities provided by agencies affiliated with a university; and projects which focus on the most pressing national issues affecting people with developmental disabilities and their families.

The Administration for Native Americans (ANA) promotes the goal of social and economic self-sufficiency and the enhancement of the institutions of self-governance for Indian tribes and organizations and other Native American communities. Under the Native American Programs Act of 1974 (NAPA) , as amended, ANA is the only Federal program with a mandate to serve all Native Americans regardless of where they live or their tribal or group affiliation. Native Americans total over 2.2 million individuals. Tribes and organizations of American Indians, Native Hawaiians, Alaska Native Villages, and other Native American Pacific Islanders, including American Samoans, received approximately 250 competitive NAPA grants annually to encourage self-sufficiency.

In 1997, about $34.9 million in Federal appropriations supported community-based development programs which strengthen tribal and community economic and social bases. Program goals include: enhancing local decisionmaking among community and tribal governments; developing economic activities that provide jobs leading to increased self-sufficiency; and promoting local access to and control and coordination of services that safeguard the health and well-being of Native Americans and that lead to self- supporting communities.

In FY 1997, a total of $62 million in funds appropriated under the Children and Families Services appropriation was spent to develop and share successful methods of prevention, intervention, and treatment of domestic violence and its victims. Funds helped support programs and projects to prevent incidents of family violence, and provide immediate shelter and related assistance for the victims of family violence and their dependents. Also, the Violent Crime Trust Fund financed an additional $12 million for these activities (see CRIMINAL JUSTICE ASSISTANCE).

In FY 1997, ACF obligated $142.9 million against the $143.1 million appropriated by Congress which supported usage of 1,657 FTE (full-time equivalents, as opposed to "on board staff") and related expenses associated with administering over $40.7 billion in Federal programs. In addition, ACF obligated $10.9 million in reimbursements, primarily from Child Support Enforcement for technical assistance provided and operation of the Federal Parent Locator System. Total funds obligated for Federal Administrative activities were $153.7 million. At the end of FY 1997, ACF had 875 employees in its Washington, D.C. headquarters and 764 employees in the ten regional offices. This represented a 4.2 percent decrease from the number of staff during FY 1996. Of the 1,639 ACF employees on board on September 30, 1997, 1,615 were full-time permanent and 24 were part-time employees. The chart at left indicates the ACF FTE Usage for FYs 1992-1997.

ACF's efforts at de-layering and right-sizing have included an agency-wide initiative to increase the supervisor to staff ratio from an average of 1:4.64 in FY 1993 to an average of 1:9 by FY 1999. By the end of FY 1997, ACF was able to achieve an average supervisor-staff ratio of 1:7.05. This was achieved by redeploying personnel and restructuring certain management positions.

Job Opportunities and Basic Skills (JOBS) training program See discussion under Temporary Assistance for Needy Families (TANF) on page 3.

In addition to the $62 million in funds appropriated under the Children and Families Services appropriation for Family Violence programs, $20 million of funds transferred from the Trust Fund were spent on shelter and services for battered women, and on the education and prevention of sexual abuse of runaway, homeless and street youth. These funds also supported the Domestic Violence Hotline which has received over 160,000 calls since it became operational on February 21, 1996. The vast majority of these calls are from individuals who have never before reached out for assistance. To support the tremendous response to this service, the hotline received $1.2 million in funding for FY 1997.

The FY 1997 (Spring) edition of Achieving Success⁴--ACF’s "report card" on performance results-- continued to report against the three broad goals documented in FY 1996:

GOAL 1: :ECONOMIC INDEPENDENCE AND PRODUCTIVITY OF FAMILIES
Measurably improve the economic independence and productivity of families by
reforming the welfare system and by stimulating the changes in attitude and behavior
necessary to achieve results.

 ACF administers programs that promote the economic and social well-being of children, youth, and families, focusing particular attention on vulnerable populations including low income children, refugees, Native Americans, and the developmentally disabled. These programs derive from dozens of legislative authorities and a diversity of funding and governance arrangements. ACF provides Federal funding, and State, local, territories, Tribes, or community-based organizations or non-profit grantees deliver program services.

ACF and its partners are jointly responsible for the success of programs that support several HHS goals and provide primary program support for the HHS goal to improve the economic and social well-being of individuals, families, and communities in the United States. Working toward increasing the economic independence and productivity of families and improving the healthy development, safety and well-being of children, ACF and its partners have developed performance goals and measures that will track their success in increasing employment, independent living, affordable quality child care, parental responsibility, and improvements in the health status, and permanency of children and youth.

ACF also coordinates its programs with other HHS agencies, particularly those that provide medical and dental services and health insurance to low income families, including the Administration on Aging, the Health Care Financing Administration, Health Resources and Services Administration and the Substance Abuse and Mental Health Services Administration.

Other Federal agencies have related goals that complement and supplement ACF’s goals, including the Departments of Labor (improving job readiness and employment among low income people), Housing and Urban Development (improving the quality and supply of inexpensive housing), Agriculture (assuring that the nutritional needs of low income people are met), Transportation (helping welfare recipients obtain affordable transportation to the workplace), Education (improving early education efforts and readiness to work skills), and Justice (supporting non-violence programs). ACF participants in a number of interagency workgroups that work to assure coordination among these programs.

ACF’s programs are administered in a complex partnership environment in which varying Federal, State, local, and community-based funding sources and programs deliver services. While the broad goals of these jurisdictions and organizations are similar to ACF’s, State and local programs often differ on specific targets and outcomes relevant to the particular needs of specific population groups and communities. In this decentralized environment, ACF’s ability to achieve its goals and objectives depends on working effectively with State, local, and tribal governments and other stakeholders.

⁴ Note that the Spring edition of Achieving Success reported data available at that time for FY 1996-1997 targets. No later edition was issued during FY 1997.

Recognizing this, ACF has engaged in extensive consultation with its partners and stakeholders to develop and gain their support for mutually agreed-upon performance goals and measures, while allowing for maximum flexibility at the local level. These discussions have included not only direct partners but also advocacy groups and national educational/technical assistance organizations. This effort to reach consensus on outcomes has prompted extensive discussion of strategic objectives, legislative requirements, and data sources and availability and has led to a fuller understanding of the expected program outcomes and the relationship of process and output measures to those outcomes.

In areas where results are quantifiable and where data are available or more easily obtained, such as for child support collections, ACF expects to report on results sooner. In other areas, where expected outcomes are qualitative or depend on the agreement of State and local agencies to provide data, considerable effort will be needed to achieve consensus on the appropriate outcomes and measures of success, and to design, develop, and implement appropriate systems for data collection.

The status of individual program progress in developing performance measures and partnership agreements on these measures is described below. Examples of objectives and targets have been selected from Achieving Success and incorporated in the text to help illustrate the types of performance measures being developed for specific programs. Numbers in brackets represent targets as opposed to actuals. Note that in Achieving Success these programs may have targets under more than one goal and/or objective, and that these goals, objectives and targets may change based on new or different programs and/or priorities. Senior staff performance plans also have been developed to reflect ACF’s goals, objectives, and program performance measures.

Economic independence and productivity of families is one of the strategic goals Congress wanted to achieve in creation of TANF. Beyond providing States with flexibility in program design and funding, Congress established work participation performance standards and created a High Performance Bonus (HPB) incentive system to facilitate the achievement of this goal. Under the new law, recipients must work after two years on assistance, with few exceptions. Twenty-five percent of all families in each state must be engaged in work activites or have left the rolls in fiscal year (FY) 1997, rising to 50 percent in FY 2002. Single parents must participate for at least 20 hours per week the first year, increasing to at least 30 hours per week by FY 2000. Two-parent families must work 35 hours per week by July 1, 1997.

OFA consulted with a wide variety of State welfare agencies and other interested parties to develop suggested outcomes and measurements for successful administration of TANF. Also, OFA has been working to implement the concepts and recommendations of the AFDC Quality Assurance (QA) Academy Report. To the extent possible, OFA will continue to coordinate efforts to: 1) integrate welfare-to-work performance measures with those of programs with common goals, such as Child Support Enforcement, child care and Department of Labor programs; 2) encourage other related programs to move toward a compatible outcome-based performance measurement system within the framework of the new welfare reform legislation.

With the pilot phase of its GPRA project completed, OCSE continued building on its past success with State partners. Having achieved a consensus Strategic Plan with Outcome Measures, OCSE has been working with the States to implement the measures by developing standard definitions, revised reporting forms and instructions.

Based on recommendations developed by OCSE in consultation with States, Congress is considering bipartisan legislation that would establish a new performance-based incentive funding system. For further information, see the Accomplishments section of this report.

OCSE workgroups completed assessments to determine the kind of training and technical assistance needed by State and local child support agencies. In response to the assessments, the workgroups, the regional ACF offices, the National Training Center and the Technical Assistance Branch developed plans for implementing the training and technical assistance requested. In addition, OCSE developed a comprehensive document of assistance for the States. Many of those activities are underway or have been completed through conferences, retreats, meetings, publications, policy guidance, training, and on-site technical assistance.

GOAL 1 Objective: PROMOTE PARENTAL RESPONSIBILITY.

Target: Increase the amount of total child support collections to $13.7 billion in FY 97.

FY 1997 represents the second year that the Office of Refugee Resettlement (ORR) has provided technical assistance and participated in negotiations with each State regarding goal-setting on the six employment and self-sufficiency ORR outcome measures based on the previous year's actual performance.

FY 1997 Annual Outcome Goal Plans for the 46 states and the District of Columbia participating in the State-administered program have been reviewed and approved. Quarterly progress toward achieving projected goals on the six ORR performance measures is tracked by State, and in the case of California, by county. ORR uses the revised quarterly performance report (QPR), which was implemented January 1, 1996, to track progress toward achieving goals and to provide technical assistance, as appropriate.

ORR extended performance measurement to Wilson/Fish alternative projects in FY 1996 by negotiating goal-setting with these grantees on the same six ORR outcome measures as part of their application to ORR for continued funding. Outcome goals will be negotiated on a project by project basis for newly approved projects and during the Wilson/Fish grant continuation process for existing projects.

Effective with the beginning of calendar year 1997, ORR also extended performance measurement to its second largest grant program, the Match Grant program. This program strives to achieve early self-sufficiency for newly-arrived refugees by welfare avoidance. In FY 1996, appropriate performance measures for setting annual outcome goals for the Match Grant program were developed in consultation with the grantees.

ORR is now finalizing its Annual Report to Congress for FY 1996; this report will contain data on the performance of States participating in the State-administered program. These data will include each State's or county's annual outcome goals and actual performance on the six ORR outcome measures for FY 1996. The FY 1997 volume of ORR's Annual Report to Congress will contain more detailed information on the performance of Wilson/Fish alternative projects and the Match Grant program.

ORR will continue to collect, track and refine its performance data for the State-administered program. During FY 1997, ORR designed a database to collect, track and analyze performance data on the Wilson/Fish alternative projects and the Match Grant program.

GOAL 1 Objective: PROMOTE EMPLOYMENT.

Target: Increase the number of refugees entering employment from employment-related social services by 5% annually.

The Administration on Developmental Disabilities (ADD) and the Developmental Disabilities Program Network have jointly developed a document in response to GPRA that defines the mission, vision, and direction of ADD, State Developmental Disabilities Councils (DDCs), Protection and Advocacy Systems (P&As), University Affiliated Programs (UAPs), and Projects of National Significance (PNS). Although not without its problems, this was a collaborative process involving consumer, parent, grantee, and professional association representatives.

The "Roadmap to the Future" links program components and ADD to a shared mission and vision of the independence, productivity, and integration and inclusion of people with developmental disabilities and their families through its principles, goals, desired outcomes, and performance measures. It charts the direction of DDCs, P&As, UAPs, PNS, and ADD in addressing current and emerging issues and trends facing individuals with developmental disabilities and their families. To reflect changing trends and circumstances as well as to incorporate new goals and more useful performance measures that influence change, The Roadmap will be modified periodically. The Roadmap is expected to create a new impetus for individual and collaborative efforts on behalf of people with developmental disabilities.

ADD will use The Roadmap to identify areas for cross-program collaboration; develop strategies at the community, State and Federal levels; develop program-specific performance measures to gauge success; and report progress. The first year of ADD and DD Network experiences will be used to establish baseline data for developing targets.

Target: Increase the number of individuals with developmental disabilities employed in integrated settings, e.g., competitive and supported employment, by 10% annually.

• Estimate based on best available data SOURCE: State MR/DD Agency Survey
  **Estimated projection of State Day and Employment Services
  NOTE: 1994-96 data has been revised since last edition.

Access to good, affordable child care is critical to the achievement of self-sufficiency by welfare clients through employment. Child care subsidies also help the working poor remain self-sufficient. Established in FY 1996 as a result of PRWORA, the Child Care Bureau worked with States and tribes to assist low income working families who need child care that is safe, healthy and affordable through block grants to States.

NOTE: 1994 data revised from 1,446,000; 1995 SOURCE: ACF-700, ACF-108, ACF-115
total is underestimated since IV-A data from nine States were not reported; final 1996 data not yet
available.

Performance Measures are being established by the Head Start Bureau to determine the range of effects enrollment in Head Start has on both children and their families. This includes children's physical, social and cognitive development. Also to be assessed are parents' perceptions of their children's development and the progress that parents make in meeting their personal goals. These measures of children's progress and development will be used to improve the quality of service delivery in the Head Start program.

In the Spring of 1997, the Head Start Bureau piloted a data collection effort from 2400 families. Full implementation of the data collection began in the Fall of 1997 with 3,200 families at 160 Head Start centers. The data collection included interviews with staff and parents, classroom observations, direct child assessments and indirect child assessments by teachers and parents. In the Spring of 1998 another data collection will be completed which will include Head Start children who will be entering kindergarten and who will be tracked through their kindergarten year.

The project envisions the establishment of ongoing systems for the collection, analysis and reporting of information supporting the performance measures that have been identified for Head Start. While data sources are available for some areas of interest, other areas will require further developmental work before they can be assessed. This is particularly the case with the definition and assessment of measures dealing with child and family outcomes. Head Start intends to issue updated progress reports on the Performance Measures Initiative. Presently, the Bureau plans to update the first progress reports in late 1997 when the first stage of data collection, now underway, has been completed. Head Start will continue to develop tools to be used in classroom observations.

GOAL 2 Objective: IMPROVE THE HEALTHY STATUS OF ALL CHILDREN.

ACYF continues to develop a new results-oriented strategy for reviewing federally assisted child and family service programs. As part of its consultation strategy, ACYF staff held a series of focus groups which have provided valuable input that has been used to guide the work. The consultation with State Child Welfare representatives will continue throughout the development of the new strategy and the pilot reviews.

A State self-assessment and protocol for on-site reviews has been developed. In FY 1995 on-site reviews were piloted in Mississippi, Ohio, West Virginia, Washington, and Nevada; in FY 1996 pilot reviews were conducted in Illinois, South Carolina and Connecticut; and in FY 1997 reviews took place in New Hampshire and Utah. The purposes of these reviews are: (1) to test the concepts currently under consideration and to obtain needed feedback from States, regional offices and consumers of child and family services, and (2) to further refine the review process and the instruments that have been developed. In addition, draft regulations governing the new review procedures are being developed for publication in the Federal Register. The pilot testing in the States will be completed in early FY 1998.

The Children’s Bureau also has begun to implement recommendations from the "Adoption 2002" Initiative which responds to President Clinton’s December 14, 1996 directive to Secretary Shalala to double the number of children placed in adoption and guardianships from the public foster care system by the Year 2002. Regional Offices are working with States to establish the final "Adoption 2002" baseline and targets by April 1998. Data from the Department’s Adoption and Foster Care Analysis and Reporting System (AFCARS) will be the primary source of data. For additional information, see the Challenges section of this report.

The Community Services Block Grant (CSBG) statute requires that States secure from eligible entities a community action plan which includes a description of outcome measures to be used to monitor success in promoting self-sufficiency, family stability and community revitalization. The CSBG Task Force on Monitoring and Assessment, established by OCS in 1994 to assist the Community Services Network in operating and managing its programs, has adopted the GPRA planning and performance measure model for establishing accountability. Results-Oriented Management and Accountability (ROMA) is a management practice that incorporates the use of outcomes or results into the administration, management, and operation of human services. It provides a framework of national goals at the family, community and agency levels for a flexible transition to an outcome orientation and an opportunity to create and use a variety of indicators for local community action agencies. ROMA encompasses: 1) a menu of outcome-oriented measures which leave maximum flexibility at the local level; 2) implementation tools for measuring incremental successes and assessing agency capacity such as scales and self-assessment matrices; 3) electronically-provided economic and demographic data mapping at the neighborhood level for conducting community needs assessment and planning; 4) training and technical assistance plans to ensure timely phasing of the total approach; 5) reporting compatible with local, State and Federal need for information.

Reporting processes also are being streamlined and tailored dependent upon "the need to know." The technical assistance and training which are being provided include measuring and publicizing results; surveying partners and customers; use of technology; and negotiating between State and local levels to resolve problems. Tools such as scales to measure incremental progress, survey methodology and consensual methods to resolve disputes are increasingly being used to enhance implementation of the GPRA process.

In November 1995, OCS issued LIHEAP model performance goals and measures for grantees to use at their option for FY 1997. Since November 1995, OCS staff have been working with the National Energy Assistance Directors' Association (NEADA) in conducting pilot studies with several States interested in implementing one or more of the LIHEAP model performance goals and measures. In June 1997, OCS selected one of the three LIHEAP model performance goals for use under GPRA. OCS staff will work with NEADA over the next year in planning for the implementation of GPRA performance measures for LIHEAP.

⁵These statistics reflect information developed prior to the Adoption 2002 Initiative and do not include the additional 7,000 guardianships incorporated in the more recent FY 1996 baseline figure of 27,000 adoptions/guardianships.

Target: Maintain at 25% or higher the percent of LIHEAP recipient households that have young children under 6.

Ongoing consultation with tribal and Native community leaders has resulted in performance measures which relate to broader ACF goals. Increasing capacity-building and infrastructure development for tribes and Native organizations, particularly through the development of codes, court systems, and the revision of existing tribal constitutions, is one of the new performance measures for ANA. This emphasis on capacity-building ties into the larger ACF goals to facilitate changes effected by welfare reform by working together with our partners in innovative ways. For both economic and social development, capacity-building and infrastructure development are key factors. In order to measure this goal, a baseline from existing data will be created.

The role of elders in all aspects of tribal and community life is essential; support of tribal elders and efforts to provide a voice for their concerns has been an important emphasis area for ANA. The ANA Commissioner's support for the Tribal Elders Initiative, which provides opportunities for meeting regularly with tribal elders, is an example of this commitment. ANA will measure the number of grants and other projects which include elder participation and establish a baseline for future performance measurement.

Reflecting governmentwide efforts to improve technological communications with our partners, ANA is committed to improving internal and external technological capabilities. An example of ANA efforts in this area is the creation of an ANA Web Page where partners can download application forms and other pertinent information. Improving technological capabilities is an important component in being responsive to ANA grantees and, in the long-term, should result in lower administrative costs for the Federal government and the grantees.

Provision of training and technical assistance services increased significantly from FY 1995 to FY 1996, largely due to the creation of a National Contract for urban Indian organizations and non-federally recognized tribes. The number of T/TA providers increased from four to five, and all contractors increased their actual number of site visits. In FY 1997 through FY 1999, ANA projects are to remain at a relatively constant level (+2% or -2%) and intend to measure both the individual attendance at T/TA workshops/sessions as well as the number of workshops/sessions held.

Target: Maintain or increase the provision of outreach services by training and technical assistance (T&TA) providers to the diverse Native American population, with particular emphasis on urban Native organizations, rural and non-Federally recognized Tribes.

ACF will continue to revise and refine its objectives and establish performance measures which contribute to the achievement of ACF’s strategic cross-program goals. These broad goals will be the basis for collaborating with State agencies and local grantees on achieving economic and social outcomes. This focused approach will facilitate data collection and sharing across levels of government and between governments and private-sector organizations.

GOAL 3 Objectives: SATISFY CUSTOMERS AND PARTNERS.

Target: Increase the ACF-wide manager-to-staff ratio from 1:5 in FY 1993 to 1:7.5 by the end of FY 1997 and to 1:9 by FY 1999.

Source: HHS Personnel Data

ACF’s Office of Program Support (which became part of the new Office of Administration effective January 2, 1998) has begun looking at ways to incorporate under Goal 3 select financial management goals documented in the FY 1997 Chief Financial Officers (CFO) Five Year Plan (1998-2002):

• Enhance ACF’s efforts to develop a results-oriented environment for its own activities and the activities of its grantees in accordance with the requirements of GPRA;
• Distribute resources commensurate with programmatic priorities and strategic goals;
• Support ACF program offices in implementing the TANF, child care, and Tribal provisions of PRWORA.
• Ensure that ACF’s financial systems both safeguard the financial resources entrusted to the Agency and facilitate oversight of ACF’s programmatic and financial operations;
• Successfully implement the Government Management and Reform Act (GMRA) by ensuring that ACF’s audited financial statements provide fundamental accounting of the resources entrusted to us;
• Integrate the myriad of oversight and control functions, such as CFO-related activities, budget planning, Federal Managers’ Financial Integrity Act (FMFIA), and systems reviews;
• Further strengthen ACF systems and processes to prevent the inadvertent overcommitment of allotments and allowances;
• Ensure that ACF continues to have first class ADP capabilities and other technologies to improve productivity, dissemination of information, and customer services, and to reduce costs;
• Provide ongoing leadership to streamline the process of announcing, awarding, and managing grants in ACF;
• Streamline financial and administrative processes to reduce lead times and increase responsiveness while, at the same time, maintaining/enhancing internal controls;
• Ensure that ACF grants are issued timely and accurately and improve guidance and technical assistance to grantees; and,
• Strengthen financial management capabilities and skills within ACF.

An important example of a major management initiative undertaken to improve ACF’s ability to administer and manage its grants and be more responsive to our customers is discussed in the Accomplishments section of this report under "New/Improved Technologies."

 As part of the development of ACF’s draft FY 1999 Performance Plan, ACF and ASMB jointly provided two day-long workshops on the GPRA requirements and the OMB and HHS guidance. Forty ACF staff who were directly responsible for developing sections of the GPRA plan attended from all parts of the Agency.

To more effectively achieve its mission, ACF deviated slightly from its Achieving Success three-goal structure while drafting the GPRA performance plan. The FY 1999 plan has ACF programs organized under three major strategic goals and the Agency’s workforce and workplace initiatives under a fourth internal strategic goal:

Economic Independence and Productivity for Families

Healthy Development, Safety and Well-being of Children and Youth

Healthy Communities and Tribes

A Results-Oriented Organization

ACF’s draft GPRA Plan now links directly to three HHS Strategic Plan goals: