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GAO-12-929R 1 (2012-07-23)

handle is hein.gao/gaobacgic0001 and id is 1 raw text is: 





J GAO
         Accountability * Integrity * Reliability
United States Government Accountability Office
Washington, DC 20548


July 23, 2012


The Honorable Geoff Davis
Chairman
Subcommittee on Human Resources
Committee on Ways and Means
House of Representatives

Dear Mr. Chairman:

Subject: Temporary Assistance for Needy Families: More States Counting Third Party
         Maintenance of Effort Spending


Each year, the Temporary Assistance for Needy Families (TANF) block grant provides $16.5
billion in federal funds to states to assist low-income families. While the block grant provides
states with a fixed amount of federal dollars annually, it also includes a requirement that states
maintain a significant portion of their own historic financial commitment, called maintenance-of-
effort, to welfare-related programs. In fiscal year 2011, states spent a total of $33 billion for
TANF-related benefits and services-$18 billion in federal TANF funds and $15 billion in state
MOE. This total includes any expenditures made by third parties, such as nonprofit
organizations, that states counted toward their MOE requirement. Some concerns have been
raised that counting third party nongovernmental expenditures towards a state's MOE may not
be in keeping with the intent of MOE requirements directed toward state and local governments.
Concerns have also been expressed that this option may reduce the overall level of services
available to low-income families in a state if, for example, that state counts services already
provided by third parties while reducing its own spending.

Consequently this report discusses the (1) extent to which states count third party
nongovernmental expenditures toward their states' MOE requirements, (2) types of third party
nongovernmental benefits and services provided, and (3) the reasons states cited for counting
third party nongovernmental MOE. To obtain this information, we developed a questionnaire
and pre-tested it with three state TANF directors.1 We then distributed it by e-mail to TANF
directors for all 50 states and the District of Columbia2 and received a 100 percent response
rate. Where necessary, we followed up with states to clarify their responses. We also reviewed
relevant federal laws and regulations, and spoke with officials from and reviewed relevant


1 In this questionnaire and report, third party nongovernmental MOE expenditures counted toward TANF MOE
spending refers to (1) the value of in-kind contributions for allowable costs from nongovernmental third parties
(including nonprofit organizations, corporations, or other private parties), or (2) cash donations by nongovernmental
third-parties used by the state for a TANF allowable purpose.
2 For the purposes of this report, we include the District of Columbia as a state.


GAO-12-929R TANF Third Party Maintenance of Effort

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