TANF-ACF-IM-2014-01 (Proposed Revisions to TANF Financial Data Collection)

Publication Date: January 14, 2014


State agencies administering the Temporary Assistance for Needy Families (TANF) Program and other interested parties


Proposed Revisions to TANF Financial Data Collection


Title IV-A, section 404 (a)(1) of the Social Security Act; 45 CFR part 265


To transmit the revised proposed forms and instructions for TANF financial data collection, in accordance with the announcement published in the Federal Register on January 14, 2014.

This IM supersedes TANF-ACF-IM-2013-03.


On January 14, 2014, the second Federal Register notice in relation to the proposed revisions to the TANF financial data collection was published, and the form and instructions were submitted for review by the Office of Management and Budget (OMB), in accordance with Paperwork Reduction Act of 1995 procedures (see: TANF Quarterly Financial Report ACF-196R- Submission for OMB Review & Comment Request Visit disclaimer page).

ACF revised the proposed ACF-196R form and instructions that were published in the Federal Register on September 12, 2013, based on comments received.  We added to the list of general instructions, and revised some expenditure categories and related definitions, resulting in greater clarity or eased reporting.  We also expanded our discussion of adjustments and revisions to prior data to provide examples and address concerns over how TANF financial reporting relates to the accounting method states use to track their expenditures.  Finally, we increased the estimated burden hours necessary to complete quarterly reports based on feedback from states.

Interested parties are invited to submit comments to OMB on the revised proposed form and instructions, which are attached to this Information Memorandum.  The deadline for submitting comments is February 12, 2014. Written comments and recommendations for the proposed information collection should be sent directly to the following:

Office of Management and Budget
Paperwork Reduction Project
Attn: Desk Officer for the Administration for Children and Families


States submit the ACF-196 Financial Report Form quarterly to the Administration for Children and Families’ (ACF) Office of Family Assistance (OFA) in order to provide information on how they spend their TANF block grant, state maintenance-of-effort (MOE) funds, and other federal TANF funds (e.g., Contingency and Emergency Contingency funds).  The ACF-196 was designed to monitor expenditures by grant year and ensure compliance with various statutory requirements governing the use of federal funds (e.g., the 30 percent cap on transfers and the 15 percent limit on administrative costs) and state MOE expenditures (e.g., compliance with the 75 or 80 percent historic spending requirements and the 15 percent administrative cap).  The Department of Health and Human Services, Congress, research organizations, and other stakeholders use the data collected to gain an understanding of the types of activities on which states are spending their funds and analyze trends in how states choose to distribute their program funds.  Accurate and complete expenditure data is crucial as it provides the foundation for a well-informed policy analysis.

After consideration of comments received and pending OMB approval, effective fiscal year (FY) 2015, the TANF financial data collection will involve two forms: the ACF-196R, which states will submit on a quarterly basis, and the ACF-196, which states will use to adjust expenditures submitted during fiscal years prior to FY 2015.  The proposed changes would be effective for data reporting for the first quarter of FY 2015 which is due February 14, 2015.  (Note that because implementation of these changes will entail new costs to ACF, final adoption will depend upon funding availability.).  After a state expends all funds for grant years prior to FY 2015, it will no longer need to use the ACF-196.

Approval of the ACF-196R would result in two basic changes to TANF quarterly financial reports.  The first is modifying and expanding the list of expenditure categories.  The second is to change the accounting method used to report expenditures and monitor grant awards.  We explain these changes in further detail below.

Expenditure Categories

The categories on the current ACF-196 have remained essentially unchanged since the report form was first developed.  Over time, state spending on cash assistance has declined and states have used more of their TANF and MOE funds to support a broad array of services for children and families.  This trend is reflected to a large degree by the increase in expenditures reported in the category of “Other.”  There is also little meaningful information collected in current ACF-196 reporting about a significant share of spending that is classified as assistance and non-assistance “Authorized Solely under Prior Law.”  The Claims Resolution Act of 2010 required states to submit additional data on expenditures reported in these categories for two periods in 2011.  This limited-time collection provided us with a greater understanding of how states were spending their funds and also demonstrated the limitations of our current reporting categories.

Another shortcoming of the current categories is that they are not mutually exclusive.  For example, a state may report TANF spending for pre-school under “Prevention of Out-of-Wedlock Pregnancies” or “Other” and possibly even “Child Care,” although the instructions specifically exclude such expenditures under child care.  If reporting is not consistent across states, it is difficult to do accurate cross-state comparisons or trend analyses.

In order to address these issues, OFA is proposing to revise the expenditure categories and accompanying definitions used in TANF financial data collection.  We are also adding ACF-196R–Part 2, which will require narrative descriptions of expenditures reported as “Other” and assistance and non-assistance “Authorized Solely Under Prior Law,” as well as an explanation of the methodology used to estimate expenditures, as appropriate.

Our aim is to eliminate ambiguity in definitions, create categories and definitions that are mutually exclusive, and gain greater insight into how states spend TANF and MOE funds without placing an undue reporting burden on states.  Ultimately, our intent is to have information that can better inform policymaking.

Accounting Method

Under the law, federal TANF funds (excluding Contingency Funds) remain available for spending in future years without fiscal year limitation.  Thus, the ACF-196 reporting was originally structured to require reporting of cumulative expenditures by category until all the funds in a grant year award have been expended.  Additionally, under the current approach, when a state discovers an error in prior reporting, it makes an adjustment in the current quarter’s reporting, obscuring any distinction between actual expenditures in the fiscal year and upward or downward adjustments from prior years.  As a result, it is impossible to determine the actual TANF expenditures that occur in a fiscal year.

Our proposed solution is to revise the quarterly TANF financial reporting so that states will be required to report actual expenditures made in a fiscal year with each open grant year award.  If a state needs to adjust an expenditure reported in a prior year, it will revise the report for the fiscal year in which that expenditure occurred, rather than account for that adjustment in the current year’s report.  Specifically, if a state needs to adjust an expenditure reported in a prior year after FY 2014, it will revise the ACF-196R pertaining to the fiscal year in which that expenditure occurred.  If the adjustment is for an expenditure submitted in a fiscal year prior to FY 2015, the respondent will revise the ACF-196 pertaining to the relevant grant year for expenditures cumulative through FY 2014.   (Because a state will only use the ACF-196 for this purpose, the reporting burden associated with this form will be significantly reduced).

To facilitate grants monitoring, the data collection system will generate a report displaying the cumulative expenditures made with each open grant year’s award.  The data collection system will also generate a report that sums expenditures made with each open grant year award during the fiscal year.  The data collection system will automatically update these reports each time a state revises expenditures reported in a prior year.


Please direct any inquiries to the appropriate TANF regional program managers or to maria.sciannameo@acf.hhs.gov.


  1. Forms ACF-196R-Part 1, ACF-196R-Part2
  2. Instructions for Completion of State TANF Financial Report Forms


Earl Johnson
Office of Family Assistance


Current as of: