Final TANF Rule as published in the Federal Register 4/12/1999

17810 Federal Register / Vol. 64, No. 69 / Monday, April 12, 1999 / Rules and Regulations
responsibility for four penalty
provisions—two on use of Federal funds
and two on MOE requirements—where
the level of State expenditures on
administrative costs is a key issue. On
many occasions, we have heard
statements about the importance of
having clear Federal standards for any
penalty decisions that we make. In that
context, we have both the authority and
the responsibility to provide standards
in this area.
As we indicated in the preamble to
the proposed rule, we considered not
proposing a Federal definition. While
that option had some appeal, we were
not disposed to deferring totally to State
definitions. The philosophy underlying
the administrative cost caps is very
important; in order to protect needy
families and children, it is critical that
the substantial majority of Federal
TANF funds and State MOE funds go
towards helping needy families.
We also indicated that we thought
that, by providing a general framework
to States, we could avoid numerous
disputes with individual States about
whether their definitions represented a
‘‘reasonable interpretation of the
statute.’’
(d) Applying Other Federal Definitions
Comment: A substantial number of
commenters suggested that the TANF
program adopt the definition proposed
for the Child Care and Development
Fund. A much smaller number
suggested that we adopt the definition
in effect under the Job Training and
Partnership Act (JTPA) program.
Commenters argued that adoption of
these other definitions would improve
program consistency and simplify
program operations at the local level.
They also endorsed CCDF’s exclusion of
‘‘eligibility determination’’ as an
administrative cost. One argued that the
different definition could put local
agencies in the untenable position of not
being able to hire staff.
Response: In terms of program
coordination, we do not believe that
there is a strong advantage to selecting
the CCDF definition over JTPA’s. Where
TANF programs work extensively with
local providers of employment and
training services, compatibility with
JTPA may be more important; where
TANF and child care programs are
administered by a single agency or use
a common set of service providers,
compatibility with child care providers
may be more important.
In the NPRM, we noted that our
proposed definition was closely related
to the JTPA definition and thus should
facilitate the coordination of WtW and
TANF activities and support the
transition of hard-to-employ TANF
recipients into the workforce. As
caseloads decline and the proportion of
hard-to-serve clients rises, coordination
between these two programs may
become even more critical.
While adopting the CCDF definition
might facilitate TANF and CCDF
coordination, we do not believe that this
coordination depends upon a uniform
definition. Also, given the differences in
the caps of the two programs (15 percent
versus 5 percent) and the different
legislative histories, there is little reason
to believe that Congress intended a
uniform definition.
(e) Treatment of Eligibility
Determinations
Comment: Many of those commenting
on this issue objected to our proposed
inclusion of eligibility determination
within the administrative costs
definition. Some argued that eligibility
determination was not an administrative
activity and was not easily or logically
separable from case management. Still
others commented on the burden
associated with our proposal, the
general need for State flexibility in this
area, and the potential negative effects
on a State’s ability to fund critical staff
who work directly with clients.
One State agency indicated that the
distinction in our proposal was not
burdensome and would require only a
slight change in its Random Moment
Study.
Many commenters took strong
exception to our characterization of any
portion of the eligibility determination
process as administrative. Among other
things, they were concerned that: (1) it
was inconsistent with existing State
practice; (2) the nature of work with
families is undergoing significant
change, and application of the
traditional AFDC approach is no longer
appropriate; (3) because eligibility
determination is part of the case
management function, it should be
categorized as a program or service
function than administration; (4) the
administrative responsibilities of staff
performing functions such as screening
and assessment are integral to providing
services; (5) front-line eligibility
determination is arguably a direct
service, under the first statutory goal of
the TANF program; and (6) as workers
assume new roles, differentiating
between eligibility and service delivery
is becoming increasingly difficult and
less useful.
A couple of commenters indicated
that our regulations needed to draw a
clearer line between administrative and
program costs. One commenter
provided several specific examples of
situations where the line between
administrative and program costs that
we drew in the proposed rule was
unclear, such as in diversion and
sanction activities and in determining
hardship exceptions and compliance
with behavioral requirements.
A significant number of commenters
spoke to the burden of the proposed
requirement on TANF agencies. They
argued that State and local systems are
not geared towards allocating expenses
this way. They do not want to divert
resources to this activity.
Commenters also made a general plea
for flexibility, saying that States need
flexibility in order ‘‘for the role of front
line staff to continue to evolve to best
meet the goals of welfare reform’’ and to
enable States to build partnerships with
local service providers.
Finally, several commenters noted
that we presented this policy only in the
preamble, not in the regulation itself.
Response: While we do not want our
rules to distort State choices about how
to deliver services or to divert State
resources to cost accounting activities
unnecessarily, we have a responsibility
to uphold the intent of the statutory
administrative cost cap provisions by
ensuring that States are not spending
large amounts of money on eligibility
determinations rather than program
benefits or services.
Also, we do not agree that States must
incur a significant administrative
burden in order to identify the costs
associated with eligibility determination
activities. We recognize that the nature
of staff responsibilities is changing and
the line between case management and
eligibility determination is blurring.
Thus, it may be more difficult to
develop rules for allocating the time of
workers between administrative and
program activities. However, once a
State develops its allocation rules, the
process of allocating staff time is
straightforward and no more difficult
than the current cost allocation process.
We also recognize that the TANF
program offers the possibility for States
to administer programs in new ways.
We understand that States are moving
towards blended functions, and we
support such efforts. These final rules
do not in any sense require States to
have separate administrative and
program staff. They merely require that
States provide a reasonable method for
determining and allocating
administrative and program costs.
Welfare agencies have a long history
of identifying the costs of eligibility
determinations and allocating these
costs as administrative activities. A
variety of other significant, related
programs—such as Medicaid, the Child