HHS Policy Guidance on Maintenance of Effort, Assistance, and Penalties: Summary and Discussion

Mark Greenberg

Center for Law and Social Policy

Mark Greenberg summarizes and discusses the recent Policy Announcement issued by the Department of Health and Human Services (HHS) that relates to the use of state funds in the federal Temporary Assistance for Needy Families (TANF) program. An important feature of the Policy Announcement is that in order to receive a full TANF block grant, a state must demonstrate maintenance of effort by expending at least eight percent of its historic spending level. A state may use any one of three approaches to fulfill its spending requirement: spending federal TANF program funds, using funds from segregated state TANF programs, or using funds from separate state programs. However, states must be aware that the three methods of expending funds incur different federal requirements, such as federal work and child support requirements and support time limits.

Because the HHS guidance is incomplete and unclear, it reduces effectiveness of the program and puts states at risk of incurring federal penalties. The guidance does not discuss insufficiencies of the TANF program respecting access to job training, readiness, and search, nor does it discuss a $13 billion short fall from the support for 1994 spending levels. Additionally, the guidance is unclear about statutory provisions as basic as what constitutes "assistance," "vocational training," or "community service" under the TANF program. Ambiguities in the HHS guidance leave states only the option of avoiding such penalties by seeking to follow the intent of the statute and applying it within reasonable interpretation of the statutory language.

Vol. IV, No. 2, p. 315 (1997)

 

Revised July 17, 2003 (MD)