TANF Emergency Contingency Fund (ECF): Opportunities for County Welfare Departments

1. TANF Emergency Contingency Fund (ECF):Opportunities for County Welfare Departments CWDA - Joint Meeting Self Sufficiency and Fiscal Committees April 16, 2009

2. Presentation Overview • Funding • Allowable Activities • Next Steps • Questions 2

3. Funding Overview • What is the ECF? • How much is available? • How will counties claim this funding?  • Will counties be able to receive advances? • How can counties cover the 20% not being funded through the ECF? • What if the Non-ECF 20% is provided by a 3rd party? 3

4. What is the ECF? • A new source of 80 percent federal funding to reimburse spending increases in FFYs 2009 and 2010 over a base year (either FFY07 or FFY08) in three categories of TANF‐related expenditures. • Basic Assistance • Non-Recurrent Short-Term Benefits • Subsidized Employment 4

5. How much funding is available? • Total available for California is $1.8 billion across FFY 2009 and 2010. • Under current grant levels, the state of California may qualify for roughly $400 million ECF for CalWORKs grant expenditures and homeless assistance. • Up to $1.4 billion available for local claims related to basic assistance, non-recurring benefits and subsidized employment. 5

6. How Will Counties Claim This Funding? • CDSS will submit application to ACF, including projection of ECF-qualifying expenditures • ACF will provide cash advance to state from ECF, and state will provide cash advance to counties • CDSS will issue guidance to counties • Counties will claim 100% of eligible expenditures using new PIN codes being developed by CDSS • Actual claims will be reconciled and trued up with advance amounts • Still awaiting clarification regarding retroactive claiming within the stimulus period 6

7. How Can Counties Cover the 20% Not Funded Through ECF? • Funding must be TANF or MOE-eligible. • CalWORKs Single Allocation • CalWORKs Fraud Incentives • Other non-federal funds that are MOE-eligible (not used to match or satisfy a federal MOE other than TANF) • Includes 3rd-party match that consists of TANF and/or MOE-eligible dollars 7

8. What if the Non-ECF 20% is Provided by 3rd Party Match? • Allowable per ACF TANF Policy Announcement 2004-01 • Third party cash or in-kind may count as TANF maintenance-of-effort (MOE) expenditures • The cost-sharing requirement may be met through allowable State or local cash expenditures, expenditures for allowable costs by other non-Federal third parties (e.g., a non-profit organization, private employer or other private party), cash donations by non-Federal third parties, as well as the value of third party in-kind contributions • Expense can be incurred directly by third party but must be documented and claimed by the county. 8

9. How is Third-Party Match Claimed? • Invoices from third party covers all costs, including allowable expenses used as match. Payable from invoice to only include portion of invoice to be paid from new ECF funds (or other matching funds as appropriate), e.g Cal Success, UC Davis 9

10. Third-Party Match Example

11. Allowable Activities • For what activities can this funding be used? • For what populations can this funding be used? • What are some examples of allowable activities in each of the 3 allowable categories? • What displacement rules apply to subsidized employment? • What happens if subsidized employment clients income-off aid? 11

12. For what activities can this funding be used? • Basic Assistance (currently includes CalWORKs Grants, Homeless Assistance, and Kin-GAP) • ‘”cash, payments, vouchers, and other forms of benefits designed to meet a family’s ongoing basic needs” not including child care, transportation or other supportive services • Non-Recurrent Short-Term Benefits (Diversion) • payments that are “designed to deal with a specific crisis situation or episode of need,” are not intended to meet recurrent or ongoing needs, and will not extend beyond four months. 12

13. For what activities can this funding be used? (cont’d) • Subsidized Employment Based on the ACF‐196 category for “work subsidies.” This category includes “payments to employers or third parties to help cover the cost of employee wages, benefits, supervision or training.” HHS specifically directs states to include “all expenditures related to operating a subsidized employment program, including the cost of overseeing the program, developing work sites, and providing training to participants.” 13

14. For What Populations Can This Funding Be Used? • Basic Assistance • Can only be provided to families who are otherwise receiving assistance under the state’s TANF program: CalWORKs participants, sanctioned participants, adults on safety net cases where children are still aided, and Kin-GAP. The usual WPR rules apply, including which cases are in/out of denominator. CWDA is seeking to include non-custodial parents of CalWORKs children. 14

15. For What Populations Can This Funding Be Used? (cont’d) • Subsidized Employment & Non-Recurrent Short-Term Benefits • Currently limited to families that can receive services under the CalWORKs Single Allocation; however, CWDA is seeking to expand the eligible service population to include all CalWORKs families (including child-only cases) and families with children (including non-custodial parents) with income under 200% of federal poverty level.

16. Examples of ECF Allowable Activities • Basic Assistance • Rental Subsidies • Ongoing food assistance • Ongoing utility payment • Subsidized Employment: Wage subsidies, benefits, payroll costs, placement costs, worksite development, supervision and training provided by an intermediary (functioning like a temporary employment agency) or by an employer in the public, private, or non-profit sector 16

17. Examples of ECF Allowable Activities (cont’d) • Non-Recurrent Short-Term Benefits: Eviction prevention Move-in costs Emergency food One-time back to school expenses Utility shut-off prevention Rental Subsidies up to 4 months Emergency Shelter

18. What displacement rules apply to subsidized employment? • State (MPP 42-720) and federal (261.70) law prevent direct displacement of employees • Notification to labor unions • No reduction in wages & benefits or non-overtime & overtime work for non-subsidized employees • No filling of promotional opportunities unless through a competitive process open to recipients • Compliance with collective bargaining and HR procedures • No filling positions caused by a reduction in force caused by intent to use a wage subsidy position • No early termination of contracts if intent is to use wage subsidy positions 18

19. What happens if Subsidized Employment Client Incomes Off Aid? • A subsidized employee may continue to receive a partial CalWORKs grant or may exit CalWORKs, depending on the wage rate, hours of work, and size of the Assistance Unit • If the employee exits CalWORKs due to the subsidized earnings, the family will cease counting in the WPR, but can still receive the wage subsidy for 12 months from date of CalWORKs exit 19

20. Next Steps • Has ACF issued rules regarding this funding? • What will CDSS issue to enable counties to claim this funding? When? • Are there any unresolved issues regarding counties’ access to this funding? 20

21. Has ACF issued rules regarding this funding? • Yes, on April 3: • Suggests application • Suggests new form • More rules coming… 21

22. What will CDSS issue to enable counties to claim this funding? When? • CFL and ACL/ACIN • CDSS still going through Administrative Review process, and will work with CWDA on the CFL and ACL/ACIN. Specific timeline is not known, but work is proceeding quickly. 22

23. What will CDSS issue to enable counties to claim this funding? When? • CDSS has also asked certain counties and CWDA to estimate quarterly ECF expenses for purposes of the 09-10 State Budget and CDSS requests to ACF for ECF advance funding. CDSS will likely ask all counties for quarterly estimates in the future

24. Unresolved issues regarding counties’ access to this funding? • Ability to provide services beyond CalWORKs Single Allocation allowable and to populations beyond CalWORKs Single Allocation eligible. Assessment of administrative authority and/or need for legislative authorization underway. • Final calculation of and mechanism to cover base year expenditures for subsidized employment and short-term non-recurrent benefits. • Overall concurrence from the Administration is still needed. 24

25. Caseload Reduction Credit • ARRA modifies the caseload reduction credit calculation for FYs 2009, 2010 and 2011 • In those years a state may use either the prior FY to calculate its reduction credit (as per current rules) or the reduction credit it qualified to receive when the comparison year was FY 07 or FY08, whichever was more favorable • As a result of this hold harmless provision, states will not see their caseload reduction credit decrease simply due to the fact that more people were assisted during the stimulus period

26. Additional Resources • ACF TANF Policy Announcement 2009-01: Initial Guidance Regarding the New ECF • ACF TANF Policy Announcement 2009-02: Temporary Modification of the Caseload Reduction Credit • ACF TANF Policy Announcement 2004-01: Use of Third Party Match • Center for Law and Social Policy (CLASP): http://www.clasp.org/ • National Transitional Jobs Network (NTJN): http://www.transitionaljobs.net/

27. Questions??? • ??? 27