Tuesday, February 16, 2010

Creating Jobs with the TANF Emergency Fund

To fight high unemployment rates in their communities, many states are accessing the TANF Emergency Fund to provide jobs to their residents. Authorized through the American Recovery and Reinvestment Act of 2009 (ARRA), the TANF Emergency Fund provides additional funding to states for increased expenditures in basic assistance, short-term non-recurrent benefits, and subsidized employment for federal fiscal years 2009 and 2010. Financed through public funds, subsidized employment is designed to provide a bridge to future, permanent employment by providing employees with needed work-place training, work experience, and connections to employers.

This provides an enormous opportunity for states to get creative in meeting the employment needs of struggling families. States receive reimbursement for 80 percent of subsidized employment costs over their base period for the full range of expenses related to a subsidized employment program. States can claim reimbursement for subsidized employment positions for TANF families or a state can choose to serve a broader group of low-income families with children, including noncustodial parents. The reimbursable costs include the actual wage subsidy as well as the costs of workplace benefits, supervision and training, and administrative costs.

To meet the twenty percent portion of the increase that is not reimbursed by TANF ARRA funds, states may partner with “third-party” organizations. HHS has stated that expenditures from entities other than the state can count as state expenditures for the purpose of the TANF “maintenance-of-effort” (MOE) requirement. Since TANF Emergency Funds are available to reimburse states for increases in TANF or MOE spending, states can use this “third-party MOE” option to partner with local government entities and nongovernmental organizations to provide benefits or services to families. Claiming third-party spending as MOE does not require that the services or funds be transferred to the state; rather, the state must have a written agreement with the third-party allowing the state to count the expenditure toward its MOE requirement.

Several states and localities are creating or expanding subsidized employment programs using the TANF Emergency Fund. Some states are choosing to focus job creation efforts on areas of high unemployment while others are using funds to expand jobs in particular sectors. Los Angeles County’s Transitional Subsidized Employment (TSE) program has enrolled over 3000 participants in its program, providing up to 12 months of subsidized employment at a $10 per hour wage rate with non-profit and public agencies and 6 months with private entities (with the possibility of an additional six months of on-the-job training). San Francisco County has also received significant attention for its efforts through the JOBS NOW program which has placed more 1000 residents back to work since May 2009 and plans to reach 3000 by September 2010. In both cases, the cost of the employer supervision and training is used to meet the State’s 20 percent match and MOE requirement. The added benefit of designing the program in this way is that if a State assumes that supervision and training costs equal no more than 25 percent of the employee’s wage cost, HHS will accept the State’s assumption without additional documentation.

For more information on using the TANF Emergency Fund to support subsidized employment, please see the following resources:

HHS FAQs on the Temporary Assistance for Needy Families (TANF) Program Emergency Fund, http://www.acf.hhs.gov/programs/ofa/recovery/tanf-faq.htm

The Emergency Fund for TANF Programs, Policy Announcement, TANF-ACF-PA-2009-01, http://www.acf.hhs.gov/programs/ofa/policy/pa-ofa/2009/pa200901.htm

Clarification that third party cash or in-kind may count toward a State’s or Territory’s TANF maintenance-of-effort (MOE) requirement, Policy Announcement, TANF-ACF-PA-2004-01, http://www.acf.hhs.gov/programs/ofa/policy/pa-ofa/2004/pa200401.htm

Opportunities Under the TANF Emergency Fund Created by The Federal Recovery Act, http://www.cbpp.org/files/7-29-09tanf.pdf

CLASP TANF Emergency Fund Resources,

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