House Committee Hearing on Reforming TANF: Accountability, Fraud, and State Spending

TANF Program Overview and Concerns

• 💡 The Temporary Assistance for Needy Families (TANF) program, created in 1996, is facing calls for reform due to unaddressed state audit findings, a lack of meaningful performance metrics, and increasing use for non-assistance services without sufficient accountability.
• 🎯 TANF has seen a significant shift from direct cash assistance to non-assistance spending, which accounted for about 44% of state spending in FY2022, while direct assistance spending dropped to 25%.
• 📈 Unused federal TANF funds held by states have more than doubled from $4 billion in FY2015 to $10 billion in FY2023, with a substantial portion being unobligated.

Oversight and Reporting Deficiencies

• 🔍 The Government Accountability Office (GAO) found issues with state reporting on TANF expenditures, including incomplete narrative explanations for non-assistance spending, hindering HHS oversight.
• ⚠️ 37 states had TANF deficiencies in their single audit reports, with 22 having material weaknesses, indicating critical risks and issues in program administration.
• ⏳ Many audit findings are repeat issues, with some remaining unresolved for over a decade, highlighting a lack of timely corrective action by states and insufficient oversight from HHS.

Fraud Risks and Management Challenges

• 🚨 The TANF program, with over $30 billion in annual spending, is at risk for fraud, exacerbated by opportunistic fraudsters and complex program structures.
• 💰 Noteworthy examples of fraud include millions misspent or converted for personal use in Mississippi and large-scale EBT card skimming in California.
• 📉 HHS has identified 21 fraud risk categories but falls short on fundamental fraud risk management, lacking formal assessment procedures, stakeholder consultation, clear risk tolerance definitions, and prioritization of risks.

State-Level Innovations and Challenges

• 🛠️ States like Ohio utilize TANF for non-assistance programs such as Prevention, Retention, and Contingency (PRC) for employment support, Benefit Bridge to prevent benefit cliffs, and youth employment programs.
• 🤝 Kinship caregivers in Marian County, Ohio, receive TANF support for home repair, legal services, and basic needs for children, addressing a critical gap for families raising relatives' children.
• ⚠️ Concerns were raised about the impact of federal regional office closures and staff firings on states' ability to receive timely guidance and technical assistance for TANF programs.

Legislative and Policy Recommendations

• 📜 GAO recommended that Congress consider providing HHS with enhanced statutory authority to collect more information on TANF expenditures to improve oversight.
• ⚖️ Proposals include giving HHS tools to penalize states for gross malfeasance and requiring timely management decisions on audit findings.
• 🚀 Efforts are underway to encourage states to share best practices for data collection and program improvement, particularly for non-assistance services, to enhance transparency and effectiveness.