TANF Regulation: Fiscal Provisions u Funding Options u MOE Requirements u Financial Principles u Definition of Expenditure u Admin Costs u Penalties / Annual Report u Use of Funds u Expenditure Report

Federal TANF FundsState MOE Funds TANF Grant Commingled State & Federal TANF Segregated State TANF Separate State Program TANF PROGRAM Potential Funding Options Transfer to: CCDF & SSBG

Maintenance of Effort

u Each FY a State participates in TANF ä80% of what spent in FY 1994, or ä75% if meet work participation rates u If Tribe (or consortium) is awarded TFAG, then MOE amount is reduced by same percentage as the reduction in the State’s SFAG Basic MOE Requirements

TANF PROGRAM State Federal Commingled State and Federal TANF Segregated State TANF Separate State Program Qualifying MOE Funds and Eligible Families

MOE Funds Must Be Spent on Eligible Families u Families must meet: 1) Family composition requirement –child 1/w parent or other adult relative, or –pregnant woman 2) Financial eligibility criteria established by State –per appropriate income and resources (when applicable) standards –contained in TANF plan

MOE Eligible Families Include u Citizens u Aliens -- which ones depends on –State funds used –Whether Federal, State, or local public benefit u Families ineligible due to 5-year time limit

Commingled Federal Public Benefit: - Qualified aliens unless specified in AG notice, then: all aliens in eligible families Segregated State or local public benefit: - qualified aliens - nonimmigrants - parolees - illegals (if per State law after 8/22/96) unless specified in AG notice, then: all aliens in eligible families Non State or local public benefit: - all aliens State or local public benefit - qualified aliens - nonimmigrants - parolees - illegals (if per State law after 8/22/96) unless specified in AG notice, then: all aliens in eligible families Non State or local public benefit: - all aliens State TANF Program Sep State or Local Prgrm

MOE Eligible Families Include u Citizens u Aliens -- which ones depends on –State funds used –Whether Federal, State, or local public benefit u Families ineligible due to 5-year time limit

Funds Must Be Used in Ways That “Qualify” u Cash Assistance –Including any part of State’s share of child support collection sent to the family & disregarded u Child care assistance Under all programs: TANF (commingled, segregated) & separate

u Educational activities if –Provided to increase self-sufficiency, job training, & work; and –The service is not available to other residents without cost and without regard to their income (e.g., generally excludes public education) Funds Must Be Used in Ways That “Qualify” (cont.)

u Any other benefits or services that are reasonably calculated to accomplish a purpose of the TANF program u Benefits/services that exclusively fall under 404(a)(2) do not qualify Funds Must Be Used in Ways That “Qualify” (cont.)

u Administrative costs in connection with the above activities –Up to 15% of countable expenditures –Except costs for information technology & computerization for tracking and monitoring Funds Must Be Used in Ways That “Qualify” (cont.)

TANF Regulation: Fiscal Provisions 4 Funding Options 4 MOE Requirements u Financial Principles u Definition of Expenditure u Admin Costs u Penalties / Annual Report u Use of Funds u Expenditure Report

Financial Principles for MOE u Cost to provide service must result from an expenditure –Rainy day fund setaside -- not an expenditure –Tax relief measures that solely reduce tax liability -- not an expenditure u Only expenditures made during the FY count u May not use Federal funds

u May not double-count, –except Child care expenditures for eligible families under CCDF Matching Fund, up to CCDF MOE amount, may double-count u Only “new spending” counts for pre- existing State & local programs u Expenditures to replace SFAG reduction due to penalty(ies) do not count Financial Principles for MOE (continued)

Definition of Expenditure u Expenditure means any amount of Federal TANF or State MOE funds that a State expends, spends, pays out, or disburses consistent with the requirements of parts 260 through 265 of this chapter. - - See preamble discussion and regulations at §

: What the Term "Refundable" Does Not Mean: u Not simply a tax refund check to a taxpayer

When Are Expenditures On State or Local Tax Credits Allowable Expenditures for TANF? u The refundable portion of tax credits paid to eligible families is a TANF expenditure. We count only the State's actual payment to the family for that portion of the credit that the family did not use to offset their tax liability. - - See preamble discussion and regulations at §

TAX CREDIT CALCULATION EXAMPLE Earned income tax credit (EITC): $200 Tax liability: - $ 75 If actually paid to the family, the refundable portion of EITC could be as much as:$125

Administrative Costs ( Statutory Provisions) u 15% limit on Fed. and State administrative expenditures u Excludes costs for information technology and computerization for tracking and monitoring TANF requirements

Administrative Costs - - costs necessary for the proper administration of the TANF program or separate State programs. --general administration, eligibility determination, and coordination of these programs, including indirect (or overhead) costs. - - See §263.0(b) of preamble and reg

Administrative Costs u 15% cap applies to post-transfer amount (line 4 of the ACF 196) u explicitly includes eligibility determination as an administrative cost. u The nature of contract services determines whether contract costs count against the cap. (see the following examples) - - See preamble discussion and regulations at §§ 263.0, 263.2, and

Administrative Costs Examples: Nature of Contract Services u Contract provides program services only: the entire cost of the contract is program costs. u Contract provides only administrative services to the State: the entire cost of the contract counts towards the 15% cap.

Administrative Costs Examples: Nature of Contract Services u Contract provides both program and administrative services: the portion of the contract costs associated with providing administrative services is administrative costs and counts towards the cap, while the portion associated with program services does not not.

TANF Regulation: Fiscal Provisions 4 Funding Options 4 MOE Requirements 4 Financial Principles 4 Definition of Expenditure 4 Admin Costs u Penalties / Annual Report u Use of Funds u Expenditure Report

Penalty -- Failure to Meet MOE u Reduction in SFAG following year: –Difference and –WtW formula grant, if applicable u Must replace difference by spending additional State funds under TANF u No reasonable cause or corrective compliance

Annual Report u With 4th quarter data report or as a separate report u Report on all programs for which State claims MOE expenditures

Annual Report (cont.) u Name of each program and statement of purpose u Description of major activities provided to eligible families within each program u If applicable, description of work activities in each separate MOE program in which eligible families are participating u Per program: total annual State expenditures & total amount claimed as MOE u Per program: average monthly total number or the total number of eligible families served for which State claims MOE expenditures as of the end of the year

u Eligibility criteria of families served under each program/activity u State whether program/activity had been previously authorized & allowable as of 8/21/96 under prior law u If not previously authorized & allowable, give FY 95 expenditures u Certification that all families for which State claims MOE expenditures met State’s criteria for “eligible families” Annual Report (cont.)

Use of Federal TANF Funds

Use Federal TANF Funds 4In any manner reasonably calculated to accomplish a purpose of TANF (a)(1) –provide assistance to needy families –end dependence of needy parents by promoting job preparation, work, and marriage –reduce & prevent out-of-wedlock pregnancies, and –encourage formation & maintenance of 2- parent families

Use Federal TANF Funds (cont.) 4In any manner authorized under old programs, as of 9/30/95 or 8/21/ (a)(2) –covers activities not permissible under 404(a)(1) –allowable, if activities authorized via former approved IV-A or IV-F plan –408 provisions n/a -- e.g., 408(a)(1) –per financial criteria in former approved plan

Use Federal TANF Funds (cont.) 4To transfer up to 30% per year to CCDBG &/or SSBG (up to 10% for FY’s 97-00; 4.25% eff. FY 2001) (d) 4To reserve amount for subsequent years (e) –must be expended to provide “assistance” under TANF –may not transfer reserved funds to CCDBG or SSBG

Considerations u 15% admin. cap unless excepted u Prohibitions in 408 of Act & 115(a)(1) of PRWORA & limitations in 404 (e.g., reserve funds) apply even if an activity seems otherwise consistent with a purpose of TANF u OMB Circular A-87 & 45 CFR Part 92 apply to TANF

Considerations (cont.) u May use Federal TANF funds to match other grant programs only if authorized by law -- funds so used subject to TANF requirements u Use program income for allowable TANF activities u Do not use TANF funds for construction or purchase of facilities or buildings u Use reasonable interpretations of statutory language for any provisions not addressed in the final rule

Misuse 4Violations of: sections 404, 408 & other provisions of the Act; section 115(a)(1) of PRWORA 4Violations of provisions of Part 92 or OMB Circular A-87 4Examples: –Administrative expenditures in excess of cap –In appropriate transfers including transfers to CCDBG or SSBG in excess of caps

1. Families that receive federally-funded “assistance” or any MOE-funded “assistance” or “non- assistance” must also meet the family composition requirement (have a child living with a parent or other adult-caretaker relative, or be a pregnant woman. 2. This column and the next one do not apply if Federal funds have been commingled with State MOE funds. Potential Services to Families

TANF Regulation: Fiscal Provisions 4 Funding Options 4 MOE Requirements 4 Financial Principles 4 Definition of Expenditure 4 Admin Costs 4 Penalties / Annual Report 4 Use of Funds u Expenditure Report

Federal TANF FundsState MOE Funds TANF Grant Commingled State & Federal TANF Segregated State TANF Separate State Program TANF PROGRAM Transfer to: CCDF & SSBG Potential Funding Options

ACF-196

ACF-196 Line Items AVAILABLE FEDERAL FUNDS 1. Awarded 2. Transferred To CCDF Discretionary 3. Transferred To SSBG 4. Adjusted SFAG $$

EXPENDITURE CATEGORIES 5. EXPENDITURES ON ASSISTANCE a. BASIC ASSISTANCE b. CHILD CARE c. OTHER SUPPORTIVE SERVICES d. ASSISTANCE AUTHORIZED SOLELY UNDER PRIOR LAW ACF-196 Line Items

Top Portion of ACF-196

EXPENDITURE CATEGORIES 6. EXPENDITURES ON NON-ASSISTANCE a. WORK RELATED ACTIVITIES/EXPENSES 1. Work Subsidies 2. Education 3. Other Work Activities/Expenses b. CHILD CARE c. TRANSPORTATION 1. Job Access 2. Other ACF-196 Line Items

EXPENDITURE CATEGORIES 6. EXPENDITURES ON NON-ASSISTANCE (continued) d. Individual Development Accounts e. Refundable Earned Income Tax Credits f. Other Refundable Tax Credits g. Diversion Payments h. Prevention Of Out-of-wedlock Pregnancies i. 2-parent Family Formation And Maintenance j. Administration k. Systems l. Other ACF-196 Line Items

Total and Balances 7. Total Expenditures 8. Transitional Services For Employed 9. Federal Unliquidated Obligations 10. Unobligated Balance ACF-196 Line Items

Middle of ACF-196 Column: A B C D

State Replacement Funds & Quarterly Estimate 11. State Replacement Funds 12. Estimate for Next Quarter Ended ACF-196 Line Items

Bottom of ACF-196

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