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” Cash-Out in California: A History of Help and Harm An Analysis of California’s Food Stamp Cash-Out Policy for Recipients of SSI\/SSP Cash-Out in California: A History of Help and Harm An Analysis of California’s Food Stamp Cash-Out Policy for Recipients of SSI\/SSP Autumn Arnold & Amy Marinacci Cash-Out in California: A History of Help and Harm August 2003 California Food Policy Advocates 116 New Montgomery Street, Suite 633 San Francisco, CA 94105 Phone (415) 777-4422 Fax (415) 777-4466 Email [email protected] www.cfpa.net California Food Policy Advocates California Food Policy Advocates is a public policy and advocacy organization whose mission is to improve the health and well-being of low-income Californians by increasing their access to nutritious and affordable food. CFPA is California’s only statewide advocacy organization with a focus on food and nutrition for low-income people. The organization’s work emphasizes the critical importance of preserving, improving and expanding participation in the federal food programs, the state’s strongest tool in overcoming malnutrition and hunger. CFPA works with community-based organizations to identify critical food access problems and to mobilize effective solutions to them. CFPA uses research and analysis, advocacy, and community education and mobilization to ensure that every Californian has access to the nutrition required to grow, to learn, and to lead a productive life. Acknowledgements This issue paper was prepared by California Food Policy Advocates using data from Mathematica Policy Research, Inc. We are especially grateful to Casey McKeever for his help and expertise in deciphering the history of California’s cash-out policy. We also greatly appreciate the assistance of Ed Steinman, Ed Bolen, Jessica Bartholow, Kim Wade, Mike Papin, Patrick Waldron, Marshall Browne, George Manalo-LeClair, Jessica Reich, and USDA’s Food and Nutrition Service’s Western Region Office. California Food Policy Advocates is grateful to The California Endowment, The California Wellness Foundation, Community Food Nutrition Program, MAZON: A Jewish Response to Hunger, David and Lucile Packard Foundation, Rosenberg Foundation, Share Our Strength, and Hal Wallis Foundation, whose financial support made this issue paper possible. 6 TABLE OF CONTENTS Executive Summary ……………………………………………………………………………………………………… 7 Cash-Out in California: An Overview…………………………………………………………………………… 8 Key Questions about Ending Cash-Out………………………………………………………………………. 12 Conclusion………………………………………………………………………………………………………………….. 16 Appendix A: Summary of Gainers and Losers …………………………………………………….. 17 Appendix B: Examples of Gainers and Losers ……………………………………………………… 18 Appendix C: The History of Cash-Out in California …………………………………………………… 21 Appendix D: About SSI\/SSP ………………………………………………………………………………………. 28 Appendix E: States’ Supplementary Payments …………………………………………………………… 29 Appendix F: SSI\/SSP Payments Over Time………………………………………………………………… 31 Appendix G: The Falling Real Value of SSP………………………………………………………………… 32 7 EXECUTIVE SUMMARY Despite their difficulty in getting enough food, many low-income seniors and people with disabilities in California cannot receive assistance from the federal Food Stamp Program. They are ineligible because of a policy called cash-out. Under this policy, people who receive cash assistance from the Supplemental Security Income\/State Supplementary Payment (SSI\/SSP) program are not eligible for food stamps. California is the only state in which SSI\/SSP recipients are ineligible under this policy. Why Does California Have Cash-Out? California’s cash-out policy started in 1974 when the federal government began the combined federal-state Supplemental Security Income\/ State Supplementary Payment (SSI\/SSP) program. At that time, states were allowed to increase their state supplementary payment instead of administering food stamps to SSI\/SSP recipients. California opted for this cash-out policy and increased its monthly SSP grant by $10. Over time, the criteria for maintaining cash-out has changed. Instead of the inclusion of a discrete, or extra, $10 for food purchases in the SSP, California’s cash-out policy is now based on the state’s implementation of federal cost-of-living adjustments to the federal SSI benefit. California is allowed to maintain cash-out as long as its SSP is at least $156, the amount it provided to SSI\/SSP recipients as of March 1983.1 What Does Cash-Out Mean for Low-Income Californians? Under cash-out, many live-alone SSI\/SSP recipients are unable to get the same food assistance available to most other low-income people in California and throughout the United States. Ending cash-out would allow these SSI\/SSP recipients to receive much- needed food stamp benefits. At the same time, cash-out has a direct benefit for families with a disabled or elderly household member who receives SSI\/SSP: it allows the Food Stamp Program to disregard the household member’s SSI\/SSP income when determining the rest of the family’s eligibility and benefit levels. Ending cash-out would reduce these households’ food stamp benefits or eliminate them altogether. Should California End its Policy of Cash-Out? Although California’s cash-out policy hurts many low-income seniors and people with disabilities, ending cash-out at this time poses many significant risks\u2014including a likely net loss in benefits throughout the state, substantial benefit reductions for many low- income families, and the potential loss of $10 in cash assistance each month for all SSI\/SSP recipients. California Food Policy Advocates believes that until California is able to end cash-out in a way that will maximize benefits and participation among newly eligible people, mitigate the harm to low-income families, and protect the level of the SSP grant, ending cash-out is not an effective strategy for preventing hunger. Creating the conditions in which ending cash-out doesn’t cause harm will take a considerable, long-term effort. If we can achieve these conditions, ending cash-out will significantly improve the health and well being of hundreds of thousands of elderly and disabled people in California. 1 Federal law also permits California to reduce its total SSP expenditures to its total SSP expenditure level during 1983, which could result in an SSP of even less than $156. For more information, see Appendix C. 8 CASH-OUT IN CALIFORNIA: AN OVERVIEW For too many of California’s low-income seniors citizens and people with disabilities, hunger is a persistent and difficult reality. More often than not, they live on modest fixed incomes that do not cover the cost of basic necessities.2 Given the competing demands of shelter, food, and medical care, many low-income seniors and people with disabilities are unable to afford adequate, nutritious food. Their hunger, in turn, has devastating health consequences: studies show that hunger among elderly people, for example, exacerbates diseases, increases disability, decreases resistance to infection, and extends hospital stays. 3 Despite their difficulty in getting enough food, many low-income seniors and people with disabilities in California cannot receive assistance from the federal Food Stamp Program because they receive cash assistance through the Supplemental Security Income\/State Supplementary Payment (SSI\/SSP) program.4 California is the only state in which SSI\/SSP recipients are ineligible for food stamps. Why Are SSI\/SSP Recipients Ineligible for Food Stamps in California? The Food Stamp Program is our nation’s first line of defense against hunger. For roughly 1.75 million low-income Californians who meet income and asset tests, this program provides an average monthly benefit of $80 per person, available in coupons or on an electronic debit card that can be used to purchase food. These benefits, which are available to most households living with incomes below 130 percent of the Federal Poverty Line, are provided on a sliding scale based on income, household size and certain household expenses.5 In California, however, SSI\/SSP recipients are ineligible for food stamps because of a policy called cash-out. This policy started in 1974 when Supplemental Security Income (SSI) became a federal cash assistance program for low-income elderly, blind and disabled people. The federal government provides the majority of the assistance grant, while some states provide an optional supplement called the State Supplementary Payment (SSP). When the SSI\/SSP program started, California and other states were allowed to increase their state supplementary payment in lieu of allowing SSI\/SSP recipients to receive food stamps. To save state costs associated with administering federal food stamp benefits to SSI\/SSP recipients, California opted for this cash-out policy and increased its monthly SSP grant by $10. At the time, $10 in cash benefits was a fair substitute for the amount of 2 Among seniors, for example, 10 percent live in poverty while another 10 percent live very close to poverty See http:\/\/www.census.gov\/hhes\/poverty\/65+inctopov.html for more information. 3 Lee, Jung Sun and Edward Frongillo. Consequences of Food Insecurity in Elderly Persons Published 2001 by the American Society for Nutrition Sciences. 4 7 CFR, sec. 273.20. 5 Specific eligibility information can be found at http:\/\/www.fns.usda.gov\/fsp\/RecipElig.HTM 9 food stamp benefits for which the SSI\/SSP recipient in California would have been eligible. California took steps to maintain its cash-out status over time, primarily to avoid the high cost of administering food stamps to SSI\/SSP recipients. Congress developed a number of special exemptions to enable California to maintain its cash-out status. The most recent provision allows California to maintain cash-out as long as it passes through federal cost- of-living increases to the SSI portion of the grant.6 Based on federal policies regarding pass-through obligations, California meets this requirement\u2014and can therefore continue cash-out\u2014as long as its SSP is at least $156, the amount it provided to low-income elderly and disabled people as of March 1983.7 For a more detailed history of the cash-out policy, please see Appendix C. What Happened to the Original $10? Some advocates and administrators describe California’s cash-out policy by saying that SSI\/SSP recipients aren’t eligible for food stamps because they currently receive $10 cash in place of food stamps. While it is clear that USDA based California’s original cash-out status on a $10 increase in the state supplementary payment, it is no longer accurate to describe cash-out as a trade of food stamp eligibility for $10 in cash. California’s cash-out privileges are currently based on the state’s obligation to pass through cost-of-living adjustments to the federal SSI benefit, not the inclusion of an extra $10 in the SSP. In truth, California could cut its current SSP of $205 down to $156 and still maintain its cash-out status. In addition, California’s state law does not earmark in the SSP a discrete $10 for the replacement of food stamps or the purchase of food. Because it is not a discrete amount, the $10 originally included in California’s 1974 SSP is subject to the same cost-of-living adjustments and loss of value due to inflation as the rest of the SSP. As described in Appendix G, the federal SSI grant has kept pace with inflation while the SSP has lost 45 percent of its real value since 1974. Although California’s SSP is higher than the SSP of all but one other state, California’s SSI\/SSP recipients are now living much closer to the federal poverty line than they were when the program began. In 1980, for example, an SSI\/SSP grant put a recipient’s income at 128 percent of the federal poverty line. In 2002, an SSI\/SSP grant put a recipient’s income at 102 percent of the federal poverty line. Given the Food Stamp Program’s sliding-scale approach to awarding benefits, SSI\/SSP recipients, on average, would be eligible for more food stamp benefits today than the $10 they received in 1974. 6 Each year, the federal government increases the SSI portion of the grant to compensate for the loss of value due to inflation. California is considered to pass through these increases to SSI\/SSP recipients as long as it meets certain spending requirements for its SSP, which are outlined in detail on page 24. 7 Federal law also permits California to reduce its total SSP expenditures to its total SSP expenditure level during 1983, which could result in an SSP of even less than $156. For a more detailed explanation of this policy, please see Appendix C. 10 Who Gains and Who Loses Under Cash-Out? Under cash-out, many live-alone SSI\/SSP recipients are unable to get the same food assistance available to most other low-income people in California and throughout the United States. At the same time, cash-out has a direct benefit for families with a disabled or elderly household member who receives SSI\/SSP. Recent analysis by Mathematica Policy Research, Inc. (MPR)8 shows that under cash-out: !\” Roughly 650,000 SSI\/SSP recipients are unable to receive an average food stamp benefit of $18 for which they would otherwise qualify. If a live-alone SSI\/SSP recipient lived in any other state or received the same amount of income from any other source, he or she would be eligible for at least $10 in food stamps each month.9 The amount would likely increase if the recipient had high housing costs or medical expenses. MPR’s analysis predicts an average benefit of $18 per month if SSI\/SSP recipients were made eligible. !\” Given the very low food stamp participation rates of seniors and people with disabilities, MPR predicts that only 186,000 of these 650,000 people would get food stamps under an end to cash-out10, unless SSI\/SSP recipients were able to enroll in the Food Stamp Program through an automated application system. !\” Approximately 277,000 people get more food stamp benefits than they would without cash-out. These people are living in low-income households where one (or more) person is an SSI\/SSP recipient and others are not. Because SSI\/SSP recipients are ineligible for benefits under cash-out, California does not count their SSI\/SSP income when determining food stamp benefits for other people in their household. This policy means that families with disabled children, for example, can and do receive food stamps even though their total 8 Mathematica Policy Research, Inc. Policy Memo #8852-007, Modeling the Impact of Eliminating SSI Cash-out in California, December 9, 2002. Available at www.cfpa.net\/SSIanalysisMPR. 9 Cash-out is most detrimental to the elderly or disabled SSI\/SSP recipient who lives alone and has cooking facilities. In other circumstances, such as an SSI\/SSP recipient who is blind or two SSI\/SSP recipients living together, the relationship between SSI\/SSP grant levels and eligibility for the Food Stamp Program is more complicated. The income from a two-person SSI\/SSP grant, for example, is slightly above the food stamp income limit for a two-person household. Under normal circumstances, most couples would therefore not be eligible if cash-out ended. In many other states, however, all SSI\/SSP recipients\u2014regardless of income\u2014 are made automatically eligible for food stamps. This simplifies the program significantly by allowing states to determine that all SSI\/SSP recipients are eligible for food stamps. If California adopted this kind of automatic eligibility policy, two-person SSI\/SSP households and other SSI\/SSP recipients with income above the standard income guidelines would be made eligible for food stamps. Based on their relatively high income, they would most likely receive the minimum food stamp benefit of $10. 10 MPR’s analysis shows that for this smaller group of participants, the average monthly food stamp benefit is $16. This amount is slightly less than the average benefit of $18 if all newly eligible SSI\/SSP recipients received food stamps. 11 household income is above the program’s standard income limits. Depending on their circumstances, these households would lose an average of $47 or $66 per person per month under an end to cash-out. For more detailed examples of why a household gains or loses benefits under cash-out, please see Appendix B. For a table summarizing these results, please refer to Appendix A. Should California End its Cash-Out Policy? California’s cash-out policy undermines the federal Food Stamp Program’s role as a nutrition safety net for low-income people of all ages. Under cash-out, many SSI\/SSP recipients are unable to receive the same nutritional assistance available to most other low-income people in California and throughout the United States. On the other hand, California’s cash-out policy has a direct benefit for families with a disabled or elderly household member who receives SSI\/SSP. Ending cash-out would have significant negative consequences for families who currently benefit from the policy. Given this trade-off, any change to California’s cash-out policy require careful consideration of the likely outcomes. In determining whether to pursue a legislative end to cash-out, California Food Policy Advocates focused our analysis on three key questions: 1. Would ending cash-out increase food stamp participation and\/or benefits? 2. Is it possible to help some SSI\/SSP households without harming others? 3. Would ending cash-out trigger a reduction in California’s SSP grant? This report provides an analysis of these three questions, a discussion of CFPA’s decision not to pursue an end to cash-out at this time, and a summary of the long and complex history of the cash-out policy. Our estimates of who gains and who loses benefits under cash-out are based on analysis11 by Mathematica Policy Research, Inc. (MPR), a leading research firm in the areas of health care, welfare, education, employment, nutrition, and early childhood policies and programs in the United States. Their full analysis is available at www.cfpa.net\/SSIanalysisMPR. 11 Mathematica Policy Research, Inc. Policy Memo #8852-007, Modeling the Impact of Eliminating SSI Cash-out in California, December 9, 2002. Available at www.cfpa.net\/SSIanalysisMPR. 12 KEY QUESTIONS ABOUT ENDING CASH-OUT 1. Would Ending Cash-Out Increase Food Stamp Participation and Benefits? MPR’s baseline analysis predicts that ending cash-out would increase the number of people receiving food stamps by approximately 86,000 people, representing a 5-percent increase in caseload. At the same time, they estimate a net loss of 12.4 percent of food stamp benefits within the state of California, or roughly $217 million each year. Specifically, they predict the following: !\” An average monthly benefit of $16 for 186,000 new participants.12 These recipients would be elderly or disabled people who live alone or with another SSI\/SSP recipient. !\” Complete loss of benefits\u2014at an average monthly benefit of $47\u2014for 99,000 people living in households where one (or more) household member receives SSI\/SSP and the rest do not. !\” An average monthly benefit loss of $66 for 178,000 people living in households where one (or more) household member receives SSI\/SSP and the rest do not. These food stamp participants would receive an average monthly benefit of $21. !\” No change in benefits for 85 percent of the current caseload, or 1,470,000 people. While an end to cash-out would result in a net increase in the number of people receiving some amount of food stamps, roughly 277,000 people will lose some or all of their benefits, while 186,000 will gain new benefits. Households that lose all of their benefits will leave the Food Stamp Program, while other households will continue to participate at significantly lower benefit levels. These households will lose relatively large benefit amounts compared to the $16 that live-alone SSI\/SSP recipients will gain. Increasing Food Stamp Participation Through Automation In their analysis of California’s cash-out policy, MPR predicted food stamp participation rates based on well-documented trends in food stamp participation. These trends generally show low food stamp participation among seniors and people with disabilities. There are a number of reasons for low food stamp participation, including a burdensome application process and the stigma of receiving and using food stamps. Many seniors believe the benefits are too low to justify the time and hassle involved in getting food stamps. 12 This average benefit is slightly lower than the $18 average benefit for SSI\/SSP recipients that would occur if all newly eligible SSI\/SSP recipients enrolled in the Food Stamp Program through an automated system. This possibility is discussed under Increasing Food Stamp Participation Through Automation. 13 Currently, California struggles with a participation rate of 53 percent among all eligible people, while national statistics show that food stamp participation rates among the elderly hover around 30 percent. Most SSI\/SSP recipients in other states participate in the Food Stamp Program, but other states’ low SSP grants significantly increase the likelihood of participation.13 As part of this analysis, CFPA requested that MPR demonstrate the effect of 100-percent participation among newly eligible SSI\/SSP recipients. This high level of participation would only be possible with an automated enrollment system similar to those used in other states. Washington and South Carolina, for example, have developed centralized processing centers that automatically enroll SSI recipients in the Food Stamp Program. These centers use information from the Social Security Administration to complete the majority of the food stamp application. These automated enrollment centers remove much of the red tape and hassle that make seniors and people with disabilities less likely to enroll in the Food Stamp Program. Under a model of full participation for newly eligible SSI\/SSP recipients, Mathematica predicts: !\” An average monthly benefit of $18 for 650,000 new participants. These recipients would be elderly or disabled people who live alone or with another SSI\/SSP recipient. !\” Complete loss of benefits\u2014at an average monthly benefit of $45\u2014for 96,000 people living in households where one (or more) household member receives SSI\/SSP and the rest do not. !\” An average monthly benefit loss of $66 for 182,000 people living in households where one (or more) household member receives SSI\/SSP and the rest do not. These food stamp participants would receive an average monthly benefit of $22. !\” No change in benefits for 85 percent of the current caseload, or 1,470,000 people. Under this model, MPR shows a 32-percent increase in the number of people receiving food stamps in California. At the same time, they estimate a net loss of 4.2 percent of food stamp benefits within the state of California, or roughly $68 million each year. Given the substantial increase in participation and the relatively minor loss of benefits when nearly all newly eligible SSI\/SSP recipients receive food stamps, it is clear that a centralized, automated enrollment system would be an essential component of any end to cash-out in California. 13 Trends in Food Stamp Participation Rates, 1994-1999, U.S. Department of Agriculture, October 2001. 14 2. Is it Possible to Help Some SSI\/SSP Households Without Harming Others? California’s cash-out policy undermines some Californians’ ability to afford adequate, nutritious food. At the same time, cash-out provides a direct benefit to other households in California. USDA, the federal agency that administers food stamps, has repeatedly indicated that any change to cash-out in California must be applied to all SSI\/SSP recipients, even if the changes are harmful to some households. In the early 1990’s, USDA rejected two separate proposals from California to end cash-out without taking benefits away from mixed-status households\u2014i.e., households in which some members receive SSI\/SSP and some do not. First, it rejected the state’s proposal to treat all SSI\/SSP recipients as separate households for eligibility and benefit determination purposes, even if they live and purchase food with other, non-SSI\/SSP household members. USDA’s concern was that under this policy, SSI\/SSP recipients in mixed-status households could receive benefits even if they did not have an actual need for food assistance. USDA rejected a second proposal to end cash-out only for pure SSI households\u2014that is, individuals and couples who receive SSI\/SSP. In its response to California’s request, USDA noted that it had consulted with the Social Security Administration it is our joint position that we cannot legally split the SSI population in one State into cash-out and food stamp status. Therefore, your request is denied. 14 Although many advocates strongly favor a targeted end to cash-out, this history suggests that USDA will not grant California the authority to end cash-out for some but not all SSI\/SSP recipients. 3. Would Ending Cash-Out Trigger a Reduction in California’s SSP Grant? Because the SSP, under California law, does not include a discrete $10 amount for food, any end to cash-out should occur without a reduction in the SSP grant amount. California is not required by any law or regulation to reduce its SSP if it chooses to end cash-out. At the same time, all states have the discretion to raise or lower their SSP at any time and for any reason. California could reduce its SSP all the way down to $156\u2014or potentially even lower15\u2014and still maintain its cash-out policy. 14 Letter from Phyllis R. Gault, Acting Administrator of USDA’s Food and Consumer Services, to Eloise Anderson, Director of California Department of Social Services, November 9, 1992. 15 Federal law also permits California to reduce its total SSP expenditures to its total SSP expenditure level during 1983, which could result in an SSP of even less than $156. For a more detailed explanation of this policy, please see Appendix C 15 Previous attempts to end cash-out in California, which are described in Appendix C, have paired food stamp eligibility for SSI\/SSP recipients with a $10 reduction in the SSP grant\u2014even thought the SSP does not include a discrete $10 for food. Last fall, SSI recipients living in Los Angeles reported during a focus-group discussion that even a minor reduction in cash benefits would make it difficult for them to maintain their housing\u2014and they emphasized that an equivalent amount of food stamps does not have the same value as cash. Gaining $10 in food stamps (which is the minimum food stamp benefit for which any new recipient would be eligible), they told us, would not make up for a $10 reduction in cash assistance. Given the state’s history of pairing an end to cash-out with an SSP reduction of $10, as well as the constant threat of SSP reductions during tight budget times, ending cash-out is likely to trigger at least a $10 reduction in cash benefits for SSI\/SSP recipients. For an average food stamp benefit of $1816 for newly eligible food stamp recipients, this potential cash reduction is likely to make SSI\/SSP recipients worse off, not better. 16 During the most recent reauthorization of the federal Food Stamp Program, CFPA and other advocates unsuccessfully encouraged Congress to increase the minimum food stamp benefit from $10 to $25. This kind of change would significantly increase the average food stamp benefit for live-alone SSI\/SSP recipients, which would in turn lessen the impact of a $10 cut in cash assistance. 16 CONCLUSION Under cash-out, many people receiving SSI\/SSP are unable to receive the same nutrition assistance available to most other low-income people in California and throughout the United States. Cash-out makes them ineligible for food stamps, and their SSI\/SSP grant does not include a discrete amount for food based on the value of food stamps for which they would otherwise be eligible. While it is larger than that of almost all other states’, California’s SSP has lost 45 percent of its value since 1974, making it even more difficult for SSI\/SSP recipients to meet their basic needs.17 Ending cash-out would help at least 186,000 low-income seniors and people with disabilities\u2014and as many as 650,000\u2014by making them eligible for an average monthly food stamp benefit of approximately $18. At the same time, California’s cash-out policy has a direct benefit for families with a disabled or elderly household member who receives SSI\/SSP. Ending cash-out would have significant negative consequences for families who currently benefit from the policy: roughly 277,000 people would lose some or all of their food stamp benefits. Depending on their circumstances, these participants would lose an average monthly benefit of $47 or $66 per person. As described in this paper, ending cash-out at this time poses many significant risks\u2014 including a likely net loss in benefits for the state of California, substantial benefit reductions for many low-income families, and the potential loss of at least $10 in cash assistance each month for SSI\/SSP recipients in California. The high cost of enrolling large numbers of SSI\/SSP recipients in the Food Stamp Program (even with a centralized, automated system) creates an additional challenge, especially in this time of major state budget deficits and cuts to county social service agencies. Because of these risks, California Food Policy Advocates believes that ending cash-out at this time is not an effective strategy for preventing hunger among low-income Californians. But we also believe that it is possible to create policies in California that will reduce or eliminate the risks associated with ending cash-out\u2014specifically, ones that maximize benefits and participation among newly eligible people, mitigate the harm to low-income families who currently benefit from cash-out, and protect the level of the SSP grant. Given the complexity of the cash-out policy, as well as the current political and budgetary climate, creating these policies will require a considerable, long-term effort by advocates in California. If we can first establish the policies that reduce or eliminate existing risks, ending cash-out will significantly improve the health and well being of hundreds of thousands of elderly and disabled people in California\u2014without causing harm to other vulnerable Californians. 17 See Appendix E for a comparison of states’ supplementary payments, as well as Appendices F and G for more information on California’s SSP levels. 17 APPENDIX A: SUMMARY OF GAINERS AND LOSERS GAINERS AND LOSERS UNDER CASH-OUT Household type What happens under cash-out? What happens if cash-out ends? Who gains benefits under cash-out? Mixed-status households: i.e. households with both SSI\/SSP and non-SSI\/SSP members. Generally, any family with a disabled child, parent, or grandparent who receives SSI\/SSP. The SSI\/SSP recipient and their income are not counted when the rest of the family applies for food stamps. As a result, the family gains eligibility and\/or increased benefits for the rest of the household. Approximately 277,000 people in mixed- status households would lose some or all of their food stamp benefits. MPR’s analysis shows that 99,000 people would lose all of their benefit, at an average monthly benefit of $47. Roughly 178,000 people would lose an average monthly benefit of $66 but would continue to receive $21 each month. Who loses benefits under cash-out? Pure SSI\/SSP households: i.e. individuals and couples who live alone and receive SSI\/SSP.18 The single SSI\/SSP recipient is ineligible for food stamps, even though their monthly SSI\/SSP grant of $757 is well below the food stamp limit of $960 for a single person. At least 186,000\u2014and as many as 650,000\u2014 SSI\/SSP recipients would gain eligibility. MPR predicts that under an end to cash-out, roughly186,000 new food stamp participants would receive an average monthly benefit of $16. If California ended cash-out and implemented an automated enrollment system, as many as 650,000 new food stamp participants would receive an average benefit of $18. 18 Cash-out is most detrimental to the elderly or disabled SSI\/SSP recipient who lives alone and has cooking facilities. In other circumstances, such as an SSI\/SSP recipient who is blind or two SSI\/SSP recipients living together, the relationship between SSI\/SSP grant levels and eligibility for the Food Stamp Program is more complicated. The income from a two-person SSI\/SSP grant, for example, is slightly above the food stamp income limit for a two-person household. Under normal circumstances, most couples would therefore not be eligible if cash-out ended. In many other states, however, all SSI\/SSP recipients\u2014regardless of income\u2014are made automatically eligible for food stamps. This simplifies the program significantly by allowing states to determine that all SSI\/SSP recipients are eligible for food stamps. If California adopted this kind of automatic eligibility policy, two-person SSI\/SSP households and other SSI\/SSP recipients with income above the standard income guidelines would be made eligible for food stamps. Based on their relatively high income, they would most likely receive the minimum food stamp benefit of $10. 18 APPENDIX B: EXAMPLES OF GAINERS AND LOSERS Although it causes hardship for many senior citizens and people with disabilities, California’s cash-out policy helps some households. Following are detailed examples of how households gain or lose benefits under cash-out: Many pure SSI\/SSP households lose benefits under cash-out Under California’s cash-out policy, many SSI\/SSP recipients who live alone lose benefits for which they would otherwise be eligible. Cash-out is most detrimental to single-person elderly and disabled households who live independently and have cooking facilities, since their SSI\/SSP income is well below the established food stamp income guidelines. Example: How Cash-Out Hurts Single-Person SSI\/SSP Households Margaret is a single, 70-year-old woman receiving a monthly SSI\/SSP grant of $757 as her only income. Under cash-out, Margaret is not eligible for food stamps\u2014even though her monthly income is $200 less than the Food Stamp Program’s gross monthly income limit of $960 for a one-person household. Without cash-out, Margaret’s food stamp benefit would depend on her housing costs and other out-of-pocket expenses. If she lived in subsidized housing and paid 30 percent of her income for rent, she would likely be eligible for the minimum monthly benefit of $10.19 If she lived in Fresno and paid $400\/month for a studio apartment20, she would likely be eligible for approximately $39 per month in food stamps. If she lived in Los Angeles and paid $543 for a studio apartment, she would likely be eligible for approximately $82 per month in food stamps. While many seniors and disabled people do face high housing costs and could be eligible for food stamp benefits similar to the levels shown in the Fresno and Los Angeles examples, the average benefit for SSI\/SSP recipients made eligible under an end to cash-out would be close to the minimum benefit of $10. According to MPR’s analysis, newly eligible SSI\/SSP recipients would be eligible for an average monthly benefit of approximately $18.21 19 This $10 amount is the federal minimum food stamp benefit. It should not be confused with the $10 supplement that was given to SSI\/SSP households under cash-out in the 1970s but no longer exists as a discrete payment within California’s SSI\/SSP grant. 20 $400 and $543 represent the 2002 Fair Market Rents for a studio apartment in Fresno and Los Angeles, respectively. For more information on Fair Market Rents, please see www.huduser.org\/datasets\/fmr.html. In addition, this calculation assumes that households are paying for some heating or cooling costs and are using the standard utility allowance of $206 in their benefit calculation formula. 21 For a more detailed analysis of likely housing costs for SSI\/SSP recipients, please see MPR’s policy memo at www.cfpa.net\/SSIanalysisMPR. 19 As noted in Footnote 18 (Appendix A), couples who receive SSI\/SSP are likely to receive the minimum benefit under an end to cash-out. Their income from the two-person SSI\/SSP grant is slightly above the Food Stamp Program’s income limits, making it unlikely that they would qualify for much more than a total household allotment of $10. Mixed-Status Households gain benefits under cash-out California’s cash-out policy helps households that include SSI\/SSP and non-SSI\/SSP recipients. These households are known as mixed-status households. Under cash- out, the SSI\/SSP recipient and their SSI\/SSP income are excluded from the household when the household applies for food stamps.22 Because food stamp eligibility is based primarily on income, this income disregard helps households who would be ineligible if their family member’s SSI\/SSP grant were counted as income. Because food stamp benefit levels are also calculated based on income, cash-out makes it possible for households to get more benefits than they would otherwise receive. For families struggling to get food on the table\u2014especially with a disabled family member\u2014 California’s cash-out policy provides an important support. Example: How Cash-Out Helps Mixed-Status Households John and Linda have two children, one of whom is disabled and receives an SSI\/SSP payment of $650 per month. Linda earns $1,400 each month at her full-time job, while John stays home to care for their children. With Linda’s earnings and the child’s SSI\/SSP payment, the household’s total income is $2,050. This is above the Food Stamp Program’s gross income limit of $1,961 for a family of four, making them ineligible for food stamps. Household size Total Monthly Income Food Stamp Gross Monthly Income Limit Eligible for food stamps? 4 people $2,050 $1,961 No; gross income is too high. Under cash-out, however, the disabled child and her income are not counted when the family applies for food stamps. The rest of the family’s income\u2014$1,400 for a family of three\u2014is below the food stamp gross income limit of $1,628 for a family of three, which means that the non-SSI\/SSP family members are eligible for food stamps. Household size Total Monthly Income Food Stamp Gross Monthly Income Limit Eligible for food stamps? 3 people (cash- out excludes the disabled child) $1,400 (total income minus the $650 SSI\/SSP grant) $1,628 Yes. 22 7 CFR 273.20(c). 20 If the family pays $535 each month in rent for a two-bedroom apartment23, they will be eligible for a household food stamp benefit of approximately $115 each month. If they pay $823 each month in rent, they will be eligible for a household food stamp benefit of approximately $150 each month.24 According to MPR’s analysis, roughly 99,000 people would lose all of their benefits entirely if cash-out ended, at an average monthly benefit of $47 per person. Roughly 178,000 people would lose an average monthly benefit of $66 but would continue to receive $21 each month. 23 This calculation assumes no out-of-pocket expense deductions for medical costs or child care. It does assume that the family receives the standard utility deduction. 24 $535 and $823 represent the 2002 Fair Market Rents for a two-bedroom apartment in Fresno and Los Angeles, respectively. Fair Market Rents are determined by the U.S. Department of Housing and Urban Development. The current definition used for these areas is the 40th percentile rent, the dollar amount below which 40 percent of standard quality rental housing units rent in a given area. For more information on Fair Market Rents, please see http:\/\/www.huduser.org\/datasets\/fmr.html. 21 APPENDIX C: THE HISTORY OF CASH-OUT IN CALIFORNIA The long and extremely complicated history of California’s cash-out policy started in 1972, when SSI was created as a federal cash assistance program for low-income elderly, disabled and blind people under Public Law 92-603. Prior to the creation of a federal SSI program, states operated means-tested assistance programs for low-income elderly, blind and disabled people. These programs, which were operated by states but subsidized by the federal government, were established by the Social Security Act of 1935. Each state was responsible for setting its own standards for determining who would get assistance and how much they would receive. By the early 1960s, this system drew criticism for its crazy-quilt method of different eligibility requirements and payment levels in different states.25 The federal SSI program became operative in January 1974, with a monthly federal payment of $140 for a single individual. Under P.L. 92-603, the federal government encouraged states to supplement this federal payment with a state-funded grant, or State Supplementary Payment (SSP). Given the possibility of duplication between the assistance provided through SSI\/SSP and that of the Food Stamp Program, Congress took steps to prevent overpayment of benefits to SSI\/SSP recipients.26 P.L. 92-603 amended the Food Stamp Act to establish that no SSI\/SSP recipient would be eligible for food stamps.27 As the implementation date of P.L. 92-603 approached, however, it became clear that the total SSI\/SSP benefit amount in some states would be less than the amount that elderly, blind and disabled people had received under prior law. After the passage of P.L. 92-603 in 1972 but before its implementation in 1974, Congress took two steps to remedy this situation: !\” First, Congress mandated that each state must provide an SSP high enough to prevent a decrease in recipients’ base grant amount as a result of the transition from state to federal administration. (At the same time, states were not required to contribute more toward the cost of the SSP than they had contributed to their state-run programs for the aged, blind and disabled during 1972. This led to some federal supplementation of states’ SSP. For more detailed information on this supplementation, please see Footnote 28.) 25 Social Security Administration’s 2003 Annual Report of the SSI Program, available at http:\/\/www.ssa.gov\/OACT\/SSIR\/SSI03\/ProgramDescription.html#wp2341 26 California Legislative Council for Older Americans v. Harris (U.S. District Court 1981). 27 Public Law 92-603, Section 411. 22 !\” Second, Congress passed Public Law 93-23328 to allow states to maintain food stamp ineligibility for SSI\/SSP recipients under the new SSI\/SSP program if their state supplementary payment had been specifically increased to include the bonus value 29 of food stamps. The increase in the SSP, called cash-out , was based on the likely amount of food stamps for which SSI\/SSP recipients would be eligible. In California, that amount was $10. At that time, $10 in cash benefits was a fair substitute for the amount of food stamp benefits for which the SSI\/SSP recipient would have been eligible. Through cash-out, SSI\/SSP recipients received cash in lieu of food stamps without burdensome food stamp application and verification requirements. Cash-out allowed California to avoid the cost of administering food stamps to its SSI\/SSP population. Because California increased its SSP by $10 to include the bonus value of food stamps, the state retained food stamp ineligibility for SSI\/SSP recipients when the SSI\/SSP went into effect in 1974. Wisconsin, New York, Massachusetts and Nevada were the other states that opted for cash-out.30 Changes in Cash-Out Criteria By 1976, a federal cost-of-living increase in the SSI portion of the grant meant that California no longer met the criteria for cash-out.31 Nevada and New York also lost 28 Prior to the passage of P.L. 93-233, Public Law 93-86 was passed in 1973. According to House Report 95-1516, this law stated that food stamp eligibility for SSI recipients would be retained if the recipient failed to receive cash benefits commensurate with the total of the cash grant plus the food stamp bonus for which he or she would have been eligible in December 1973. This policy was soon replaced by P.L. 93-233 because states believed the policy under P.L. 93-86 would be extremely difficult and costly to administer. 29 Public Law 92-603, Section 401. Until 1977, food stamp recipients paid for their food stamps; the face value of the food stamps was higher than the cash amount they paid. The difference between this cash payment and the face value of food stamps was considered the bonus value . In 1977, the purchase requirement was removed. 30 House Report 95-1516. 31 House Report 94-1310. According to House Report 95-1516, states were not required to contribute more toward the cost of the SSP than they had contributed to their state-run programs for the aged, blind and disabled during 1972. In order to maintain this agreement and ensure that benefit levels did not drop, the federal government then paid the difference between the cost of the new supplementary payment and what the state had spent in 1972. The amount each state paid was referred to as its adjusted payment level , while the federal share of state supplementation was referred to as a federal hold harmless payment. As an incentive for states to increase their SSP to include the value of food stamps, they were permitted to include the value of food stamps in their adjusted payment level. Under P.L. 93-233, states with cash-out could maintain their cash-out status as long as the federal government was contributing to the cost of the SSP through the hold harmless provision of P.L. 92-603. When the federal government increased the SSI benefit level in 1976, California was no longer eligible for hold harmless payments, and as a result, faced the loss of its cash-out status. 23 their cash-out privileges in 1976, but they chose to restore food stamp eligibility to SSI\/SSP recipients. Because California wanted to retain its cash-out privileges, it asked Congress to establish new criteria for cash-out. In making its arguments to Congress, California estimated that only one third of SSI recipients would obtain food stamps if made eligible to participate.32 They predicted that administrative costs would be high compared to the federal benefits issued: $66 million to administer $24 million in food stamp benefits.33 This claim, while clearly inflated, convinced Congress to pass Public Law 94-37934. This new law amended P.L. 93-233 to base California’s cash-out status on two key conditions. To keep cash-out, California is required to: !\” Pass through federal cost-of-living adjustments35 to the SSI grant36 and, !\” Add cost-of-living adjustments to its state supplement in an amount based on AB 134, the state law in effect on June 1, 1976.37 Although federal law does not require states to apply an annual cost-of-living adjustment to the SSP, the state law in effect on June 1, 197638 does provide a cost-of- living calculation for SSP grant amounts. This new cash-out criteria linked cash-out privileges to state cost-of-living increases that would help to retain the real value of the SSP. A Lawsuit Against Cash-Out With the exception of 1975, California raised its SSP each year between 1974 and 1980. As a result, the real value of the SSP kept pace with inflation, which meant that SSI\/SSP recipients, on average, were not losing purchasing power or being harmed by their inability to receive food stamps. In 1981, however, California cut the SSP from $182 to $174. 32 National statistics have generally shown a 30 percent food stamp participation rate among seniors. According to a recent study by USDA, however, nearly all SSI\/SSP recipients participate when they are eligible. Trends in Food Stamp Participation Rates, 1994-1999, U.S. Department of Agriculture, October 2001. 33 Congressional Record, July 29, 1976, pp. 24386. 34 Public Law 94-379, 90 Stat. 1111. 35 To ensure that SSI benefits would maintain their value along with the rising cost of living, Congress passed P.L. 93-638 in 1975. This law added an annual cost-of-living adjustment (COLA) to the SSI payment based on the Consumer Price Index. The first COLA was provided in July 1976. While this law provided an important protection against inflation in the SSI grant, P.L. 93-638 did not establish a similar requirement that state supplementary payments be adjusted annually for inflation. 36 House Report 94-1310. 37 P.L. 94-379, (1)(3) 38 A.B. 134, Cal. Stats. 1973, ch. 1216 37. 24 Prior to the July 1, 1981 implementation of this SSP cut, advocates filed a lawsuit39 that sought to restore SSI\/SSP recipients’ food stamp eligibility. The plaintiffs argued that by cutting the SSP in 1981, California had not maintained the SSP cost-of-living adjustments required by AB 134, the law in effect on June 1, 1976. The plaintiffs then argued that the SSP cut violated P.L. 94-379, which linked California’s cash-out privileges to the maintenance of AB 134’s cost-of-living adjustments. In its defense, the state argued that the intent of P.L. 94-379 was that the absolute dollar amount of the SSP grant could not drop below the level in effect on June 1, 1976. The court found that California was in violation of P.L. 94-379. But instead of requiring the state to restore SSI\/SSP recipients’ food stamp eligibility, it gave the state a choice of either restoring food stamp eligibility for SSI recipients or adjusting the SSP to reflect the real value of the benefit in 1976. This judgment was issued on July 24, 1981, and was retroactive to January 1, 1981. Just before this ruling was implemented, Congress passed P.L. 97-18 and P.L. 97-3540. These laws amended P.L. 94-379 to allow California to continue cash-out without adhering to the court’s conclusion that the state must either restore food stamp eligibility or retain the real value of the SSP benefit over time. In seeking this legislation, California once again emphasized high administrative costs for providing food stamp benefits to its SSI\/SSP population. California Senator Hayakawa reported to Congress that it would cost approximately $80 million to administer just $30 million in benefits.41 P.L. 97-18 and P.L. 97-35 enabled the Secretary of Agriculture to find that California’s SSP included the value of food stamps if, in December 1980, the SSP was increased to include the value of food stamps and if the state continued to pass through the federal COLA. An additional complication in interpreting these requirements is the changing nature of the rules for passing through federal COLAs. Congress modified its federal COLA pass-through requirements with Public Law 94-485 in 1976 and Public Law 98-21 in 1983. States are considered to be in compliance with federal pass-through requirements if they either maintain their aggregate expenditures for state payments over time or maintain the individual supplementary payment at the March 1983 levels. To ensure compliance, Congress required states to meet these pass-through requirements or lose their eligibility for Medicaid reimbursements.42 In times of expanding SSI caseloads, 39 California Legislative Council for Older Americans (CALCOA) v. Harris (U.S. District Court 1981). 40 The criteria for maintaining cash-out is the same in the two bills. P.L. 97-18 was an emergency measure which authorized the continuation of cash-out through August 1981, while P.L. 97-35 made the authorization permanent. 41 Congressional Record, June 25, 1981, pp. 14043. 42 Elsa Orley Ponce, State Optional Supplementation of SSI Payments, 1974-95, Social Security Bulletin, 59, No. 1 (Spring 1996), p.53. 25 states gain a fiscal advantage by using the total expenditure method; they are allowed to spend a constant pool of supplemental funds on an increasing number of participants, reducing the supplementary payment given to each participant. In times of declining caseloads, they are allowed to revert to the supplementary payment level in place as of March 1983, which could decrease total state expenditures. California currently uses the individual payment method of satisfying federal pass-through requirements. Because California did increase its SSP in 1980, P.L. 97-35 effectively establishes that California may continue cash-out as long as it maintains an individual supplement payment level of at least $156, the amount it provided to low-income elderly and disabled people as of March 1983, or maintains a total expenditure on its SSP program43 equivalent to the amount it spent on the SSP in 1983. State Legislation to End Cash-Out In 1992, California’s Department of Social Services (CDSS) requested a set of waivers from USDA’s Food and Nutrition Service that would allow California to operate a demonstration project to end cash-out for all SSI\/SSP recipients and implement an automated food stamp enrollment system.44 Some of these waivers were not granted\u2014 for a number of reasons\u2014and as a result, California did not end its cash-out policy. Most notably, USDA rejected California’s proposal to treat all SSI\/SSP recipients as separate households for eligibility and benefit determination purposes, even if they purchased food together with other, non-SSI\/SSP household members. Their concern was that SSI\/SSP recipients in mixed-status households would receive benefits that did not reflect their actual need for food assistance. Shortly after the waivers were rejected, California passed Senate Bill 485, which reduced the SSP grant by $10 for pure SSI households\u2014i.e., households in which all of the members receive SSI\/SSP\u2014and directed the Department of Social Services to seek a targeted end to cash-out for these pure SSI\/SSP households. SB 485 also required a centralized food stamp application processing system so that counties would not be overwhelmed by having to administer food stamps to newly eligible SSI\/SSP recipients. Under this system, CDSS would mail a partially completed, simplified food stamp application to all eligible SSI\/SSP recipients. The applicant would complete and sign the form, then return it to CDSS where it would be processed centrally. If an SSI\/SSP recipient moved from a pure to a mixed household, they would become ineligible for food stamps and their SSP grant would increase by $10. 43 Federal law also permits California to reduce its total SSP expenditures to its total SSP expenditure level during 1983, which could result in an SSP of even less than $156. California chooses each year to use the individual payment method of meeting federal pass-through requirements, but this is not required. 44 California Welfare and Institutions Code 12200.5. 26 After the passage of SB 485, CDSS submitted to USDA a request to end cash-out for pure SSI households and allow them to receive food stamps through a centrally administered, automatic enrollment system. In its response to this request, USDA noted that it had consulted with the Social Security Administration it is our joint position that we cannot legally split the SSI population in one State into cash-out and food stamp status. Therefore, your request is denied. The letter goes on to cite Section 6(g) of the Food Stamp Act, which provides that no individual receiving SSI or State Supplementary Payments residing in a State which provides SSI supplemental benefits that include the bonus value of food stamps shall be eligible to participate in the Food Stamp Program. 45 Under this argument, because mixed-status households would continue to receive the bonus value of food stamps as determined in 1980, California cannot provide food stamps to any SSI\/SSP recipient. As a result, California did not implement the end to cash-out\u2014but it did cut the SSP grant from $223 to $186 in 1993. California’s Current Cash-Out Status The Legislature’s 1992 effort to end cash-out while reducing the SSP grant by $10 reflects the long-standing belief that the SSP continues to include $10 in lieu of food stamps. Many advocates and administrators continue to describe California’s cash-out policy by saying that SSI\/SSP recipients get $10 cash in place of food stamps. While it is clear that USDA predicated California’s cash-out status in 1974 on an increase of $10 in the SSP, it is no longer accurate to describe cash-out as a trade of food stamp eligibility for $10 in cash, for two important reasons: !\” First, California’s cash-out privileges are currently based on the state’s obligation to pass through cost-of-living adjustments to the federal SSI benefit, not the inclusion of an extra $10 in the SSP. Because California raised its SSP in 1980 in accordance with P.L. 97-35, California may now continue cash-out as long as it maintains an individual supplement payment level of at least $156, the amount it provided to low-income elderly and disabled people as of March 1983, or a total expenditure on its SSP program46 equivalent to the amount spent on the SSP in 1983. This policy (which is based on the federal pass-through requirements described on page 24) effectively ties the state’s cash-out privileges to its payment of a minimum SSP of $156, not the inclusion of a $10 food stamp-related supplement. 45 Letter from Phyllis R. Gault, Acting Administrator of USDA’s Food and Consumer Services, to Eloise Anderson, Director of California Department of Social Services, November 9, 1992. 46 Federal law also permits California to reduce its total SSP expenditures to its total SSP expenditure level during 1983, which could result in an SSP of even less than $156. California chooses each year to use the individual payment method of meeting federal pass-through requirements, but this is not required. 27 !\” Second, California’s SSP does not include a discrete $10 earmarked for the replacement of food stamps or the purchase of food. Although California’s SSP did increase by $10 in the early 1970s as part of the initial implementation of cash-out, state law does not require the provision of a $10 amount in lieu of food stamps. Because state law doesn’t earmark this amount for food purchases in lieu of food stamps, there is no longer a $10 amount for food separate from the rest of the SSP. And because it is not a discrete amount, the $10 originally included in California’s adjusted payment level in 1974 is subject to the same cost-of-living adjustments and loss of value due to inflation as the rest of the SSP. As discussed in Appendix G, the federal SSI grant has kept pace with inflation while the SSP has lost 45 percent of its real value since 1974. Although California’s SSP is higher than the SSP of all but one other state, California’s SSI\/SSP recipients are now living much closer to the federal poverty line than they were when the program began. In 1980, for example, an SSI\/SSP grant put a recipient’s income at 128 percent of the federal poverty line. In 2002, an SSI\/SSP grant put a recipient’s income at 102 percent of the federal poverty line. Given the Food Stamp Program’s sliding-scale approach to awarding benefits, SSI\/SSP recipients, on average, would be eligible for more food stamp benefits today than they were in 1974. In more recent years, some decision makers have attempted to close California’s sizable budget deficit by suspending cost-of-living adjustments or making direct cuts to the SSP grant. In 2003, for example, Governor Gray Davis proposed cutting state supplementary payments down to $156 the minimum amount needed to meet federal pass-through requirements and preserve cash-out. While the final 2003-04 budget did not enact this cut, it did suspend mid-year COLAs for SSI\/SSP, leaving the 2003 state supplement at $205. 28 APPENDIX D: ABOUT SSI\/SSP Low-income Californians who are unable to work because of age or disability must rely on state and federal assistance programs as their primary sources of income. The largest cash assistance program for low-income elderly, blind and disabled people in California is Supplemental Security Income\/State Supplementary Payment (SSI\/SSP). This program provides monthly cash assistance to over 1 million low-income elderly, blind and disabled people in California47: SSI\/SSP, which is administered by the Social Security Administration, is not dependent on prior work history or earnings. It is funded by general government funds, not Social Security taxes. SSI is a federal cash assistance grant that is combined with the State Supplementary Payment (SSP), a smaller, state-funded benefit that varies from state to state, to produce the total grant amount. With the exception of a partial earned-income disregard, the applicant’s monthly income from other sources must not exceed the SSI\/SSP grant. If an applicant does have other unearned income\u2014such as Social Security income or Veteran’s benefits\u2014the SSI\/SSP payment is reduced to account for the other income source. Unless an SSI\/SSP recipient is working, their typical maximum monthly income is $757 for an individual and $1,344 for a couple. 48 JANUARY 2003 INDIVIDUALS COUPLES Monthly Federal SSI Payment $552 $829 Monthly CA State Supplement Payment $205 $515 Total SSI\/SSP Payment in CA $757 $1,344 47 Supplemental Security Income\/State Supplementary Payment (SSI\/SSP) Monthly Report for January 2002. California Department of Social Services. Available at http:\/\/www.dss.cahwnet.gov\/research\/res\/pdf\/ssissp\/2002\/SSIJan02.pdf 48 These grant amounts are for seniors and people with disabilities who live independently and have cooking facilities. Benefit levels differ for blind people, people without cooking facilities, and people who live in residential facilities. For more information about Supplemental Security Income, see http:\/\/www.ssa.gov\/notices\/supplemental-security-income\/ NUMBER OF RECIPIENTS PERCENTAGE OF CASELOAD Elderly 337,303 31% Disabled 745,789 67% Blind 21,800 2% TOTAL 1,104,892 100% 29 APPENDIX E: STATES’ SUPPLEMENTARY PAYMENTS Some states add optional monthly supplements, called State Supplementary Payments (SSP), to the federally funded SSI grant. States are allowed to determine whether they will make these payments, to whom, and in what amount. Some states provide supplements to all people receiving SSI in their state, while others limit their state payments to certain groups of SSI recipients, such as the blind or residents of care facilities. 49 Other states do not have any kind of state supplementary payment. 50 California is one of 25 states that makes state payments to individuals and couples living independently. The following chart compares California’s 2002 SSP for individuals and couples living independently to those same payments in other states: PAYMENTS TO INDIVIDUALS LIVING INDEPENDENTLY PAYMENTS TO COUPLES LIVING INDEPENDENTLY STATE SSP SSI TOTAL SSP SSI TOTAL Alaska $362.00 $545.00 $907.00 $528.00 $817.00 $1,345.00 California $205.00 $545.00 $750.00 $515.00 $817.00 $1,332.00 Massachusetts $128.82 $545.00 $673.82 $201.72 $817.00 $1,018.72 New York $87.00 $545.00 $632.00 $104.00 $817.00 $921.00 Wisconsin $83.78 $545.00 $628.78 $132.05 $817.00 $949.05 Minnesota $81.00 $545.00 $626.00 $111.00 $817.00 $928.00 Rhode Island $64.35 $545.00 $609.35 $120.50 $817.00 $937.50 Vermont $59.04 $545.00 $604.04 $110.88 $817.00 $927.88 Oklahoma $53.00 $545.00 $598.00 $106.00 $817.00 $923.00 Idaho $52.00 $545.00 $597.00 $20.00 $817.00 $837.00 Colorado $37.00 $545.00 $582.00 $347.00 $817.00 $1,164.00 Nevada $36.40 $545.00 $581.40 $74.46 $817.00 $891.46 New Jersey $31.25 $545.00 $576.25 $25.36 $817.00 $842.36 Pennsylvania $27.40 $545.00 $572.40 $43.70 $817.00 $860.70 New Hampshire $27.00 $545.00 $572.00 $21.00 $817.00 $838.00 Washington $25.90 $545.00 $570.90 $19.90 $817.00 $836.90 Iowa $22.00 $545.00 $567.00 $44.00 $817.00 $861.00 South Dakota $15.00 $545.00 $560.00 $15.00 $817.00 $832.00 49 Alabama, Arizona, Connecticut, District of Columbia, Florida, Indiana, Kentucky, Louisiana, Maryland, Missouri, Montana, New Mexico, North Carolina, North Dakota, Ohio, South Carolina, Texas, and Virginia do not make supplementary payments to individuals and couples living independently. Illinois determines its SSP on a case-by-case basis. 50 States with no supplementary payments are Arkansas, Georgia, Kansas, Mississippi, Tennessee and West Virginia. 30 PAYMENTS TO INDIVIDUALS LIVING INDEPENDENTLY PAYMENTS TO COUPLES LIVING INDEPENDENTLY STATE SSP SSI TOTAL SSP SSI TOTAL Michigan $14.00 $545.00 $559.00 $28.00 $817.00 $845.00 Maine $10.00 $545.00 $555.00 $15.00 $817.00 $832.00 Wyoming $9.90 $545.00 $554.90 $25.12 $817.00 $842.12 Nebraska $8.00 $545.00 $553.00 $0.00 $817.00 $817.00 Delaware $5.00 $545.00 $550.00 $0.00 $817.00 $817.00 Hawaii $4.90 $545.00 $549.90 $8.80 $817.00 $825.80 Utah $0.00 $545.00 $545.00 $4.60 $817.00 $821.60 Oregon $1.70 $545.00 $546.70 $0.00 $817.00 $817.00 31 APPENDIX F: SSI\/SSP PAYMENTS OVER TIME Following are the maximum grant payment levels since 1974 to single, low-income senior citizens and people with disabilities under SSI\/SSP.51: EFFECTIVE DATE FEDERAL SSI PAYMENT CALIFORNIA’S STATE SUPPLEMENTARY PAYMENT COMBINED SSI\/SSP GRANT Jan. 1974 $140.00 $95.00 $235.00 Jan. 1975 $157.70 $89.00 $246.70 Jan. 1976 $167.80 $108.20 $276.00 Jul. 1977 $177.80 $118.20 $296.00 Jul. 1978 $189.40 $132.60 $322.00 Jul. 1979 $208.20 $147.80 $356.00 Jul. 1980 $238.00 $182.00 $420.00 Jul. 1981 $264.70 $174.30 $439.00 Jul. 1982 $284.30 $166.70 $451.00 Jul. 1983 $304.30 $156.70 $461.00 Jan. 1984 $314.00 $163.00 $477.00 Jan. 1985 $325.00 $179.00 $504.00 Jan. 1986 $336.00 $197.00 $533.00 Jan. 1987 $340.00 $220.00 $560.00 Jan. 1988 $354.00 $221.00 $575.00 Jan. 1989 $368.00 $234.00 $602.00 Jan. 1990 $386.00 $244.00 $630.00 Jan. 1991 $407.00 $223.00 $630.00 Jan. 1992 $422.00 $223.00 $645.00 Jan. 1993 $434.00 $186.00 $620.00 Jan. 1994 $446.00 $157.40 $603.40 Jan. 1995 $458.00 $156.40 $614.40 Jan. 1996 $470.00 $156.00 $626.00 Jan. 1997 $484.00 $156.00 $640.00 Jan. 1998 $494.00 $156.00 $650.00 Jan. 1999 $500.00 $176.00 $676.00 Jan. 2000 $513.00 $180.00 $693.00 Jan. 2001 $531.00 $181.00 $712.00 Jan. 2002 $545.00 $205.00 $750.00 Jan. 2003 $552.00 $205.00 $757.00 51 SSI\/SSP grants vary significantly based on the living situation of the recipient. Blind SSI\/SSP recipients, for example, have a higher maximum payment level, as do people with no cooking facilities and people receiving non-medical board and care. For more complete information on maximum grant amounts in California, please visit http:\/\/www.ssa.gov\/pubs\/11125.html#pay. 32 APPENDIX G: THE FALLING REAL VALUE OF SSP Because of its annual cost-of-living adjustment, the federal SSI payment has retained its real value over time. In contrast, California’s State Supplementary Payment has lost 45 percent of its real value since 1974. California law provides for an annual SSP COLA based on the California Necessities Index, but tight budget times have prompted budgetary action to suspend or reverse this statute. If the SSP had kept pace with inflation since 1974, it would now be $370 \u2014 or $165 higher than its present value of $205: Falling Value of California’s State Supplementary Payment (SSP) $0 $100 $200 $300 $400 $500 $600 19 74 19 75 19 76 19 77 19 78 19 79 19 80 19 81 19 82 19 83 19 84 19 85 19 86 19 87 19 88 19 89 19 90 19 91 19 92 19 93 19 94 19 95 19 96 19 97 19 98 19 99 20 00 20 01 20 02 Actual Federal SSI Payment Over Time Actual State Supplemental Payment Over Time SSI Level Needed to Maintain Real Value of SSI Over Time SSP Level Needed to Maintain Real Value of SSP Over Time 33 As the following chart depicts, the SSP has undergone a 45-percent loss in real value since 1974: Real Value of California’s SSP Over Time 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 110% 120% 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Real Value of California’s SSP as a % of the Real Value of the SSP in 1974 SSI\/SSP Grants and the Federal Poverty Line Although California’s SSP is higher than the SSP of all but one other state, the falling real value of the SSP means that California’s SSI\/SSP recipients are now living much closer to the federal poverty line than they were when the program began. In 1980, for example, an SSI\/SSP grant put a recipient’s income at 128 percent of the federal poverty line. In 2002, an SSI\/SSP grant put a recipient’s income at 102 percent of the federal poverty line. Given the Food Stamp Program’s sliding-scale approach to awarding benefits, SSI\/SSP recipients, on average, would be eligible for more food stamp benefits today than the $10 they received in 1974. 34 1980 1990 2000 2002 California’s SSI\/SSP as a percentage of the Federal Poverty Level 127.6 120.6 99.6 101.6 Food Stamps as a Protective Mechanism Against Loss of Income While no state is required by the federal government to maintain the real value of their State Supplementary Payment, SSI\/SSP recipients in all other states are eligible to receive food stamp benefits. The Food Stamp Program is adjusted annually to reflect increases in the cost of living through its benefit calculation formula and the maximum benefit amounts. For people who receive cash assistance and food stamps, food stamps act as a safety mechanism against the loss in the real value of their cash benefits\u2014 including temporary COLA suspensions or direct benefit reductions. As cash income becomes a lower percentage of the annually adjusted federal poverty level, families become eligible for more food stamps than they would have if the cash value were retained. Because they are ineligible for food stamps, California’s SSI\/SSP recipients do not benefit from this protective mechanism. ”

” CalWORKs Welfare to Work Participation Study July 2005 COUNTY WELFARE DIRECTORS ASSOCIATION OF CALIFORNIA 925 L STREET, SUITE 350 * SACRAMENTO, CA 95814 (916) 443-1749 * WWW.CWDA.ORG 2 CONTENTS Chapter Page Executive Summary 5 I. Introduction 7 Purpose of the Study 7 Background: Welfare Reform 7 Study Process 9 Selection Process 9 II. Current Practices for the Calculation of Work Performance Rates: Recommendations for Change 11 WTW 30 Completion County Calculation of the WPR 12 Overview of County Responses 12 Finding #1- Participation Verification and Documentation 12 Finding #2- Participating in an Activity Numerator 13 Finding #3 Partial Month Participation Numerator 13 Finding #4 Aided in the Review Month Denominator 14 Finding #5 Sanctions Denominator 17 How State and Federal Differences Impact the Rate 17 Countable Activities 18 Exemptions and Good Cause 19 How Unemployment Rates Impact the WPR 23 III. County Strategies for Customer\/Client Engagement 26 Early Engagement 26 Ongoing Participation and Re-engagement Strategies 27 Customer\/Client Engagement 27 Customer\/Client and Family Focused Work Plans 28 Monitoring Participation 29 Moving Beyond Non-Compliance and Sanctions 30 Customer\/Client Choice Broad Range of Activities 31 Language-Related Services 34 Post-Employment\/Job Retention Services 35 Organizational Structure 35 Performance Standards and Reports 35 Classification of Employees 36 Function: Generic vs. Specialized 36 Training 36 Employee Recognition 37 Budget Impacts 37 3 IV. Conclusion and Next Steps 39 Acknowledgements 40 Attachments 41 Attachment 1: County Performance Standards 41 Attachment 2: County Activities and Specialized Practices 45 Attachment 3: County Demographics February 2004 52 4 TABLES Table Page Table 1: Invited Counties WTW Client Pool- Activities Mental Health, Substance Abuse, Domestic Violence 19 Table 2: Volunteer Counties WTW Client Pool Activities Mental Health Substance Abuse, Domestic Violence 19 Table 3: Invited Counties: Mandatory Enrollees Who Do Not Meet Federal Participation Requirements 20 Table 4: Volunteer Counties: Mandatory Enrollees Who Do Not Meet Federal Participation Requirements 20 Table 5: Fresno County, Orange County, Santa Clara County: WPR Comparative: State Regulations Utilized for WPR versus Federal Regulations Utilized for WPR 21 Table 6: Invited Counties WTW Client Pool Enrolled, Exempt, Sanctioned, Good Cause, Non-Compliance 22 Table 7: Invited Counties WTW Client Pool Enrolled, Exempt, Sanctioned, Good Cause, Non-Compliance 23 Table 8: Invited County Demographics: Population, WTW enrolled, Work Participation Rate, Unsubsidized Employment, Unemployment Rate 24 Table 9: Volunteer County Demographics: Population, WTW enrolled, Work Participation Rate, Unsubsidized Employment, Unemployment Rate 24 Table 10: Invited County Education Level and Language Proficiency 32 Table 11: Volunteer County Education Level and Language Proficiency 32 5 EXECUTIVE SUMMARY The 1996 Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) and the enactment of Temporary Assistance for Needy Families (TANF) made dramatic changes to welfare programs in the United States. In order to meet the legislation’s major goal, fostering self-sufficiency through work, states were given significant flexibility to design eligibility criteria, benefit rules and programs that would provide tools for families to transition from welfare to work. California counties have historically desired to operate meaningful programs that give families tangible tools to improve their lives. Beginning most notably in the mid-1980s with the enactment of Greater Avenues for Independence (GAIN), counties tested new models and created new programs aimed at improving customer service. Local governments built partnerships with working-poor families, based on individuals’ willingness to take ownership of their lives along with each county’s commitment to provide programs that support self- sufficiency. Since the federal TANF program was enacted in 1996, the employment rates for current and former welfare recipients have increased dramatically. In addition, California has witnessed significant declines in caseloads. Between January 1998 and December 2002, the U.S. Office of Family Assistance reported that TANF caseloads in California dropped by 48.4 percent. Additionally, CalWORKs Performance Incentive funds enabled counties to mount major initiatives to provide comprehensive services to welfare families. Through these county efforts, thousands of parents who were struggling to make ends meet have entered the workforce, backed by a network of services designed specifically to meet their needs. As the emphasis on work participation rates is increasing at both the national and state level, the County Welfare Directors Association of California (CWDA) sought to identify and showcase quality Welfare to Work (WTW) programs operated by California counties. To that end, CWDA formed a Work Participation Rate Workgroup tasked with surveying counties regarding their practices and providing useful information for counties and policymakers alike. This report, a product of that effort, reports the findings from two surveys regarding participation rate calculations and promising county efforts to increase participation in Welfare to Work activities. KEY FINDINGS Through the survey process, much has been learned. First, flexibility in program design is the major reason for success, and the flexibility in the current law manifests itself in a number of ways. At the state level, California has expanded the services available to customers beyond those prescribed by federal law, in order to meet the unique needs of its customers. Increasing the types of services that are available to clients gives each individual and family a better chance of reaching the goal of self-sufficiency. At the local level, counties have developed programs designed to meet the needs of each individual being served, rather than a utilizing a cookie-cutter approach. At the individual level, Welfare to Work plans entered into by TANF participants must assess and address the unique needs of each client. Second, any complete measure of county performance must include participation in activities that meet California rules as well as those meeting federal rules. Because California is committed to building partnerships for success, welfare clients are participating in programs 6 that are designed to address learning disabilities, domestic violence, mental health and substance abuse, as well as the language and educational needs of individuals and families. In some situations, individuals are determined to be exempt from participating in WTW activities for a specific time period using exemption criteria set forth in state law. However, many of the programs designed to meet the needs of California clients, and most of the exemption criteria, are not countable under federal law. Thus, looking only at federal participation rates paints too narrow a picture of county performance. Third, instructions provided by California Department of Social Services (CDSS) for the calculation of the WPR lack clarity and direction. Without further clarity, it is not possible to compare rates across counties. Counties that participated in the CWDA surveys do not use the same methodology when determining whether a case is to be included in the denominator and the numerator of the WPR calculation, because they interpret CDSS instructions differently. These different interpretations can have a significant impact on the calculation of statewide participation. Finally, commitment at the county welfare director level is essential to ensure that welfare clients can make the transition to self-reliance. Articulating a clear vision, setting performance standards, supporting creative approaches to reducing client barriers, allocating adequate resources for specialized services and recognizing successful outcomes all are necessary to build strong partnerships among employees, local communities and working families. NEXT STEPS 1. Engage in a joint CWDA-CDSS workgroup to clarify specific policies related to the calculation of the Work Participation Rate (WPR). Clarification in the following areas will lead to increased accuracy and continuity in the calculation of the WPR. Policy clarifications may also increase reported county and state participation rates. Numerator Calculation: a. Define the phrase participating in an activity . b. Clarify how to determine hours for partial month participation. Denominator Calculation: a. Clarify when a county should consider a newly approved CalWORKs case active and therefore include it in the denominator. b. Clarify when a case shall be included in or excluded from the denominator when the household contains a family member who has been sanctioned. 2. Disseminate the findings of the report through the convening of a one-day symposium sponsored by CWDA. The symposium will provide a collaborative learning environment to facilitate the distribution of the key findings of the report, to share innovative approaches, and to identify strategies to increase work participation rates throughout the state. 3. On an ongoing basis, encourage collective learning opportunities through the development of conference sessions on customer engagement strategies at upcoming CWDA and CalWORKs conferences. 7 I. INTRODUCTION PURPOSE OF THE STUDY Proposed changes to the TANF program at the federal level, client participation changes mandated by Senate Bill 1104 (Statutes of 2004) and the Governor’s proposed budget for 2005-06 continue to increase pressure on counties to meet work participation requirements. TANF Reauthorization is overdue and it is anticipated that action will be taken this year. For all of these reasons, it is imperative that counties position themselves to meet or exceed work participation performance goals. At this time, however, there is no formal methodology in place to share information regarding work participation rate (WPR) performance and current practices among counties. Although each county reports monthly rates to the California Department of Social Services (CDSS), these reported rates are not disseminated. Additionally, disparities exist across counties not only in the monthly rate but also how each county calculates its rate. In recognition of the many implications of increased federal work participation rate (WPR) requirements and the state-proposed performance measurement system, the County Welfare Directors Association of California (CWDA) created the WPR Workgroup to investigate, document and share current practices within counties demonstrating sustained high WPR over time. In addition, the workgroup was charged with identifying emerging strategies that could assist counties in attaining higher work participation rates in the future. Initial discussions within the workgroup identified a need to review the process by which counties report monthly participation data to CDSS. To understand how some counties attain high levels of participation, the workgroup determined that it was critical to understand how participation data was collected and reported by each county. As a result, two surveys were created. The first focused on determining how counties calculate the WPR at the local level and identification of improvements or modifications of the calculation methodology. The second focused on identifying practices to engage and sustain client participation in WTW activities that can ultimately lead to self-sufficiency. BACKGROUND: WELFARE REFORM AND RECENT DEVELOPMENTS Congress passed the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) in 1996. This act created sweeping changes to the country’s welfare system through a $16.5 billion annual block grant program, Temporary Assistance for Needy Families (TANF), which replaced the 60-year-old Aid to Families with Dependent Children (AFDC) program. Congress believed that by increasing states’ flexibility to operate the TANF program and provide assistance to needy families, four goals would be achieved: 1. Children would be cared for in their own homes or in the homes of relatives, 2. Dependency of needy parents on government benefits would be reduced through the promotion of job preparation, work and marriage, 3. Out of wedlock pregnancies would be reduced and\/or prevented, and 4. Formation and maintenance of two-parent families would be encouraged. Fostering self-sufficiency through work remains the major goal of PRWORA. The act requires states to meet minimum levels of work participation and offers bonuses for high performance 8 in specific areas. In order to meet participation goals and foster self-sufficiency, states were given significant flexibility to design their own eligibility criteria and benefit rules. PRWORA requires states to engage a specified percentage of their caseload in specific work and work-related activities. In addition, PRWORA requires individuals to participate in work or work-related activities for a minimum number of hours per week. In 1997, the required minimum participation rate for all families was 25 percent. The rate increased each year to a high of 50 percent for 2002 and each year thereafter. The rate for two-parent families began at 75 percent in 1997 and increased to 90 percent starting in 1999 and each year thereafter. States are allowed a pro-rata reduction on their participation rate based upon the caseload reduction they realized as a result of welfare reform. California implemented a state-only program for two-parent families, due to a high degree of concern that the 90-percent two-parent participation rate set in PRWORA could not be achieved. In the most recent report released in November 2004 by the Office of Family Assistance, California met the minimum participation requirements for all families through 2002. However, the main reason California met the minimum was the federal caseload reduction credit. In 2002, California’s required minimum participation rate was reduced to 7 percent as a result of receiving a significant credit for caseload reduction (43 percent). If this credit did not exist, California would not have met the 50 percent participation rate without taking other action to increase participation. The TANF program, originally authorized for five years, is overdue for reauthorization at the federal level. Bills are currently under consideration in both the House and Senate. The main reauthorization vehicles in each house would impact both the required minimum participation rates and how participation rates are calculated. The Senate bill, currently unnumbered, eliminates the separate two-parent family rate and introduces one rate for all families, beginning at 50 percent in 2006 an increasing by 5 percentage points each year until it reaches 70 percent in 2010. In addition, the Senate bill would eliminate the existing caseload reduction credit and replace it with an employment credit. This credit is capped and the amount of credit states can apply against their participation requirement would decrease over time. The House of Representatives’ proposed bill, H.R. 240, also eliminates the separate two-parent family rate and introduces one rate that increases to 70 percent over the course of several years. Under the House vehicle, the caseload reduction credit would be changed to reflect more recent declines in caseload. Both bills have similar provisions requiring universal engagement of welfare-to-work eligible participants within a specified time frame after they enter the program. Depending on the final structure of the Reauthorization bill, higher participation rates and potentially lower credits could impact California. However, the universal engagement provisions probably would not greatly affect the state, because California has had similar provisions in state law since 2004. SB 1104 (Statutes of 2004) required universal engagement of recipients in WTW activities; required participation in certain core work activities for a minimum of 20 hours per week; and eliminated prior statute limiting client participation in welfare-to-work activities to no more than 24 months. In general, counties now have a 90-day timeframe to work with each new client to develop and sign an initial WTW plan. The purpose is to engage individuals early in the process in order to increase participation in WTW activities. Eliminating the time limit for WTW participation allows CalWORKs recipients to participate for a longer period of time in the full range of approved activities, enhancing their potential to become self-sufficient. 9 An additional proposal now before the Legislature would further change the CalWORKs program structure, with the goal of increasing clients’ participation in work and work-related activities. As part of his 2005-06 budget strategy, Governor Schwarzenegger proposed a three-year Pay for Performance program in which counties would earn funds based on their performance on several outcome measures and their improvements over time. The Legislature adopted the proposal with a few modifications, including some proposed by counties and other stakeholders. In its current form, the program will provide up to $30 million during 2006-07 to counties that meet specified standards in three areas. These three areas include the number of CalWORKs recipients who are employed; the rate of participation in federally allowable activities and key state activities such as mental health, substance abuse and domestic violence treatment; and the number of CalWORKs recipients who are employed in the three months after they exit the program. Key elements of the plan include: Requiring the state to work with counties to develop the specific standards on which counties will be measured; Allowing 25 percent of earned funds to spent on eligible families with incomes up to 200 percent of poverty; Providing Pay for Performance funds to counties that perform in the top 20 percent of all counties on a standard, in addition to counties meeting the standard. The pending TANF Reauthorization, enactment of SB 1104, and the likely enactment of a new Pay for Performance program all serve to increase the emphasis on each county’s WPR performance. This report is intended to provide insight into how counties can work together and with the state to meet and\/or exceed the federal requirements, increase their overall WPR and avoid sanctions. STUDY PROCESS Participating counties completed two in-depth surveys. The first survey focused on the calculation of the WPR based on the existing WTW 30 process. Twenty counties participated in the phase of the project. Participating counties included: Alameda, Calaveras, El Dorado, Fresno, Imperial, Kern, Kings, Lake, Mono, Orange, Riverside, Sacramento, San Bernardino, San Diego, San Luis Obispo, Santa Clara, Santa Cruz, Solano, Stanislaus and Yuba. The second survey focused on each county’s CalWORKs\/WTW program in an effort to highlight unique approaches to increase work participation. County agencies have a great deal of flexibility within the design of their specific WTW programs. However, very little is known or shared about counties’ strategies to successfully engage TANF recipients in work activities. The strategies that counties report using feature a combination of policies, services and administrative procedures that are unique to each county but could provide helpful information and ideas for other counties. Out of the original 20 counties, 18 participated in this phase of the project. Sacramento County and Mono County were unable to complete the second phase due to prior commitments. SELECTION PROCESS The 20 counties selected for the study represented rural, suburban and urban areas spread throughout California. Counties could participate in the study by either being invited or by volunteering. To identify 10 counties to invite, the workgroup reviewed six quarters of WPR data for the period of July 2002 through December 2003. Nine of the 10 completed 10 completed both surveys. The participation rates in these counties, for the month of February 2004, ranged from a low of 36.45 percent to a high of 53 percent as reported to CDSS via the WTW 30. In addition to the 10 invited counties, the other 48 California counties were given an opportunity to volunteer to participate in the study. The inclusion of volunteer counties ensured that the dynamic differences within the state were addressed. Counties face several challenges in serving the CalWORKs population, including economic conditions, geographic conditions and population diversity. Based on the characteristics of each county (specifically, the size and geographical location, the number of customers served in the CalWORKs program and client demographics such as ethnicity and primary language), 10 additional volunteer counties were selected to participate. The population of each county participating in the study ranged from 44,533 individuals to more than 3 million individuals. During the study month, February 2004, the number of adults served in the CalWORKs program ranged from a low of 340 adults to a high of 20,749 adults in the counties. Enrollment in the WTW program ranged from 165 to 18,793 adults. 11 II. CURRENT PRACTICES FOR THE CALCULATION OF WORK PERFORMANCE RATES The purpose of the first survey completed by all 20 counties was to determine how each county independently interpreted and applied CDSS instructions issued in All-County Letters (ACLs) and All-County Information Notices (ACINs) in order to calculate the monthly WPR for the state-required WTW 30 report. Responses to the survey revealed that all counties adhere to the directions provided in ACL 99-85, ACIN I-16-1 and ACL 03-17, which outline how to complete the WTW 30 report, determine what cases are to be included in the numerator and denominator and calculate the WPR. However, the study revealed that counties interpret instructions related to the numerator and the denominator differently. The extent to which counties interpret the policies inconsistently impacts the accuracy of the overall WPR calculation. Based on the survey findings, policy clarification is needed to ensure consistency in the WPR calculation and to ensure accurate reporting. In summary, the survey results give rise to the following recommendations. 1. Clarify and define specific policies and terms related to the calculation of the WPR. Clarification in the following areas will lead to increased accuracy and continuity in the calculation of the WPR. Policy clarifications may help to increase county rates. a. Define the phrase participating in an activity . In order to determine whether a case is to be included in the numerator, a county must determine if an individual is participating. b. Clarify how partial month participation should be determined for inclusion in the numerator. Basically, when an individual participates for only part of the month, due to an activity ending, clarify how hours of participation are to be calculated. c. Clarify the meaning of the phrase receive a CalWORKs grant for the month . Currently, in order for a case to be included in the denominator, a county must determine if a case meets the following condition, receive a CalWORKs grant for the month. If a case is determined not to be receiving a CalWORKs grant, it is excluded from the WPR calculation entirely. d. Clarify when cases with sanctioned individuals should be excluded from the denominator. Identify whether the time frame identified in ACL 99-85, ACIN 1-16-01 and ACL 03-17 is accurate, or if all cases with sanctioned individuals (regardless of time in sanction) are to be excluded from the denominator. 2. Recognize that county performance includes both the federally countable work participation rate and state-allowable activities, exemptions and good-cause determinations. Evaluate the existing state-only program for two-parent families to determine whether including this population in the state sample and Based on the survey findings, policy clarification is needed to ensure consistency in the WPR calculation and to ensure accurate reporting. 12 the federal WPR calculation would increase the WPR based on the current work participation of this sub-group. 3. Evaluate the possibility of extending job search from six weeks to 12 weeks in counties whose unemployment rate exceeds the federal unemployment rate by 1.5 percentage points. High unemployment rates increase the number of adults in need of CalWORKs and WTW services. Increased unemployment rates may negatively impact a WTW customer’s ability to obtain employment within their respective communities. Each of these findings and recommendations is explained in further detail below. WTW 30 COMPLETION COUNTY CALCULATION OF THE WPR A major goal of the 20-county survey was to determine how each county independently interprets and applies CDSS instructions to calculate its monthly WPR for the WTW 30 reports submitted to the state. Survey responses revealed that all counties adhere to the directions provided in ACL 99-85, ACIN I-16-1, and ACL 03-17, outlining how to complete the WTW 30 report, determine what cases are to be included in the numerator and denominator and calculate the WPR. However, the survey also found that counties interpret instructions related to the numerator and the denominator differently. The degree to which there is inconsistency in how counties interpret the policies provided by CDSS impacts the accuracy of the WPR calculation. Based on the survey findings, policy clarification is needed to ensure consistency in the calculation of the numerator and the denominator to ensure accurate WPR reporting. The WPR of the invited counties ranged from a low of 36.45 percent to a high of 53 percent in February 2004. Seven of the counties reported a WPR that was equal to or exceeded 50 percent. Of the volunteer counties, the WPR ranged from a low of 11.2 percent to a high of 41.7 percent. Only two of the volunteer counties had a WPR that was over 36 percent (Alameda and Riverside). Overview of County Responses An in-depth analysis of county responses revealed five areas of inconsistency. In order to understand the inconsistencies, each one has been broken into a separate finding. Each finding relates to county specific practices and identifies the potential for variance that could either increase or decrease a county’s calculated and reported WPR. This summary is intended to provide a framework in which to evaluate each potential variance, as well as to provide specific information that will assist in improving the WTW 30 process. Finding #1 Participation Verification and Documentation Counties were asked whether client participation was verified during the monthly WTW 30 case review process.1 All 10 invited counties responded that they had developed verification procedures and were using those processes to research client participation during the preparation of the WTW 30. However, the methods used by counties to verify participation varied greatly. This was consistent with the findings of 1 Note that any additional procedures used during the WTW 30 process would, to some degree, be a secondary verification as participation generally is documented in client case files and\/or the county’s automation system by county WTW staff. 13 the volunteer counties. Two volunteer counties indicated that they also utilized a client self-declaration process for verifying participation in some or all of their activities. One volunteer county indicated that no additional steps are taken to verify client participation during the WTW 30 process that is, the county relies on the documentation provided by WTW staff in the client file and automated system. Counties indicated that the manner in which client hours of participation are documented within their automated systems impacts the final determination of whether or not the client is considered to be participating for the required number of hours in a countable activity. This determination impacts the reported WPR. Some counties participating in the study indicated that research at the case manager level, in addition to reviewing information recorded on automated systems, may lead to increased county participation rates. Finding #2 Participating in an Activity – Numerator Counties define the terms participating in an activity differently. When evaluating whether a case should be included in the numerator for All Families Meeting Work Participation Requirements, survey responses indicated three different methodologies in use across the counties. Counties defined participating in an activity in the following ways: (1) A client is considered participating when he\/she is actually participating in the activity and meeting the mandatory hour requirements. (2) A client is considered participating when he\/she is scheduled in an activity (3) A client is considered participating when he\/she is either scheduled or participating in an activity. Because the number of cases included in the numerator directly impacts the county’s reported WPR, this variance between counties can have a direct impact on the statewide rate. Finding #3 Partial Month Participation – Numerator How a county determines hours of participation impacts the whether or not a client is considered to be participating and, therefore, whether he or she is included in the numerator. The survey found a significant degree of variation between counties in determining client participation when a client participates for only a partial month. Partial-month participation may occur because an activity has ended and the client’s new scheduled activity has not yet begun; a client has stopped attending an activity; the client is enrolled in an educational activity and there is a semester break; etc. County responses indicated that there are several approaches to this determination; however, the first approach listed is the most common. Each methodology and its potential impact on the county WPR are described below. Partial participation is determined by: (1) The actual hours for which the client participated. If the hours are less than the federal requirements, the case is not included in the numerator. This can decrease the county’s reported WPR if the activity ended mid- month and the client is awaiting the start of another activity. (2) The average number of hours of participation. This calculation is based on the average number of days the client participated and the client’s 14 activity start date. Depending on the hours of participation, this may or may not increase the reported WPR. (3) Whether the client participated for the majority of the report month. If the client is determined to have participated for the majority of the report month, the client is considered to have met the participation requirements. This could increase the reported WPR. (4) Successful completion of an activity. This method takes into account the client’s hours of participation in conjunction with an evaluation of whether the client successfully completed the activity without dropping out. If the client is determined to have dropped out of the activity, then the client is not considered to have met the participation requirements. This could decrease the reported WPR (5) Whether the partial-month activity is shown as closed. When a partial- month activity shows closed, participation in the activity is not counted. The case would be considered as not participating and excluded from the numerator. This could decrease the reported WPR. (6) Weekly average participation. The county would convert the client’s number of hours in monthly employment to weekly hours and combine the hours with qualifying weekly hours from other activities. Once the total hours are calculated, the hours are compared to standard weekly average. Averaging the hours could lead to a higher reported WPR. (7) Whether the client participated the required hours for at least a portion of the report month. If the client participated the required number of hours for the partial month the case is included in the numerator. Utilizing participation for a partial month instead of a full month could lead to a higher reported WPR (8) Average days participated during the month. Determining the activity start date and calculating an average of days participated during the month, based on that activity start date. This may or may not increase the reported WPR. (9) Average hours of participation over the month. Utilizing an average instead of actual could increase or decrease the reported WPR. (10) The client’s planned activity hours for the month. This methodology, which is the least used among this list, may increase the reported WPR. Finding #4 Aided in the Review Month – Denominator Both invited and volunteer counties reported a significant degree of variation within the methodologies used to determine if and when a newly approved CalWORKs case is considered active in the report month. Each county was asked the following question, For new cases, what date does your county use to determine if the case is active in the report month for the purposes of the WTW 30 (report)? County responses to this question were inconsistent. Upon receipt of the monthly list of sample cases generated by CDSS, counties must first determine which cases will be excluded from the review. Excluded cases are not considered in the numerator or denominator and therefore are not considered in the county WPR calculation. For inclusion in the denominator, a case must meet the specifications outlined in ACL 99-86, ACIN I-16-01 and ACL 03-17. Excluded cases include cases that are not aided in the review month. 15 Responses to the survey indicated that eight different methodologies were being used to determine if a case received a CalWORKs grant for the month and should therefore be included in the denominator. Each methodology and its potential impact on the county WPR are described below. It is important to note that this may be one of many factors impacting the county’s reported WPR. (1) A new case is considered active in the report month and in receipt of a CalWORKs grant based on the case’s Application Date. Counties are required to process applications within 45 days. During the initial eligibility determination, the county is not required to enroll an adult in a WTW activity. The case would be included in the denominator; however, the client is very likely not participating in an activity during this time and therefore would not be included in the numerator. Using the application date is thus likely to decrease the county’s reported WPR. (2) A new case is considered active in the report month and in receipt of a CalWORKs grant based on the case’s Eligibility Determination Date. This may or may not lead to an increased or decreased WPR. However, when compared to utilization of the Application Date, this methodology could increase the reported WPR. Whether this methodology would lead to an increase or decrease would depend on how quickly the county enrolls the adult into an activity and the adult participates in that activity. (3) A new case is considered active in the report month and in receipt of a CalWORKs grant in any month in which the case was entitled to cash grant. This can lead to a decrease in the WPR, simply due to processing requirements. For example, a family may apply for CalWORKs during the month of May. Based on processing timelines, the county may retroactively approve a partial grant for May in June or July. Because of this, the case would be included in the WTW 30 denominator for May if it was pulled as a sample case by CDSS. However, a county is not required to enroll an individual into a work activity until it is determined that the family is eligible for TANF which did not occur until June or July and so the family would almost certainly be shown as non- participating in May. (4) A new case is considered active in the report month and in receipt of a CalWORKs grant for the month based on the eligibility effective date. For the same example as in (3) above, this would mean that the person who applied in May but was found eligible in July was active for the purposes of participation rate calculation starting in July. This methodology could increase or decrease the reported WPR; however, compared to using the application date, entitlement date and\/or eligibility determination date, it could have a positive impact on the WPR. Whether this methodology ultimately would lead to an increase or decrease in WPR would depend on when the county enrolls the adult into an activity. (5) A new case is considered active in the report month and in receipt of a CalWORKs grant for the month based on the initial date of benefit issuance. Similar to (4) above, this methodology could increase or decrease the reported WPR; however, compared to using the 16 application date, entitlement date and\/or eligibility determination date, it could have a positive impact on the reported WPR. Whether this methodology would lead to an increase or decrease in the WPR would depend on when the county enrolls the adult into an activity. (6) A new case is not considered active for the report month in the first month of aid. A new case is considered active in the report month only beginning in its second month of aid. This may lead to an increase in the reported WPR, because this client has a much greater chance of being enrolled in a WTW activity and thus eligible to be included in both the numerator and the denominator. Compared to using the application date, entitlement date and\/or eligibility determination date, this methodology could have a positive impact on the WPR. (7) A new case is considered active in the report month based on the date a person is scheduled for a WTW activity or the date of the WTW registration. This methodology has the possibility of increasing the reported WPR since this client may have greater chance of being included in both the numerator and the denominator, if the client is not only enrolled but is also participating in an activity. (8) A new case is considered active in the report month based on the date the person participated in or attended his\/her initial WTW activity. This methodology has the possibility of increasing the WPR since the client has a greater chance of being eligible to be included in both the numerator and the denominator. Compared to using the application date, entitlement date and\/or eligibility determination date, this methodology could have a positive impact on the reported WPR. Instructions issued by CDSS via ACL 99-85, ACIN 1-16-01, and ACL 03-17 do not provide an explanation of how counties are to determine if and when a case is in receipt of a CalWORKs grant. As a result, counties have created their own definitions, as indicated above. Varying definitions directly impact each county’s WPR calculation and the overall state WPR. The date used by the county first drives whether or not the case is included in the denominator and then drives whether the case is considered to be participating. For these reasons, it is critical to define when a newly approved case is to be considered an active case. In most counties, there is a period of time between when a client is determined eligible for CalWORKs and when the client is enrolled in or participating in a WTW activity. A recent study conducted by Riverside County study related to participation in the WTW program indicated that more than 25 percent of the clients considered not engaged in WTW activities were new applicants who had received TANF for fewer than 30 days. Looking at the data over time, however, Riverside County determined that a significant percentage of these individuals did participate in WTW activities during a 10-month period. Following participants over time provides a clearer picture of the WTW process and the journey of a participant through the system. Point-in-time measures, such as the WPR, provide a snapshot of participation but do not fully reflect what is occurring at the county level. 17 Finding #5 Sanctions – Denominator Survey responses indicated an inconsistent understanding of whether cases containing an unaided (sanctioned) adult or minor head-of-household are to be included in the WPR calculation. Some counties indicated that all cases containing a sanctioned adult or minor head of household were excluded from both the numerator and the denominator when determining the WPR. On the other hand, other counties indicated that they followed the information contained within ACL 99-85, ACIN 1-16- 01 and ACL 03-17. The state-issued letters indicate that a case must be included in the denominator when either an adult or minor head-of household was sanctioned for more than three months in a twelve-month period. The counties that are including sanction cases in the denominator experience a decreased participation rate. When a client fails to show up for his or her initial activity, counties report that it can take up to 130 days to either re-engage the client or apply a sanction to the case. When the client does not attend Job Search or fails to attend an assessment appointment the county must initiate non-compliance procedures per ACL 04-41 and EAS Section 42-721. First, the county must send a notice to the client indicating that a sanction will be imposed if he\/she fails to attend a good-cause appointment. The county must schedule the appointment within 20 days of the date of the notice. The client has the right to reschedule the appointment once during this period. This may delay participation for an additional time frame. Per counties responding to the survey, the total time period may be as long as 130 days, up to 90 days to sign the WTW plan under the SB 1104 universal engagement requirements, plus up to 20 days for the initial good-cause appointment, and up to an additional 20 days for a rescheduled appointment. During the time when the county is providing notice to the client and setting up the good-cause appointment, the case may be selected for inclusion in the sample that is reviewed in order to determine the county’s WPR. If this were to occur, the county would be required to exclude the case in the numerator due to non-participation but include the case in the denominator. This results in a negative impact on the county’s WPR, lowering the monthly rate, even though the county is adhering to state law. HOW STATE AND FEDERAL DIFFERENCES IMPACT THE WPR The WPR calculation completed monthly by each county is based on federal TANF regulations and is not aligned with current CDSS CalWORKs regulations. Conflicts between federal law and state requirements in the areas of countable activities, exemptions and good cause can have a significant impact on each county’s work participation performance. When analyzing county performance in CalWORKs, it is thus important to take into account the federally countable WPR, as well as state-countable activities, required state participation exemptions and good-cause determinations made when a client has not participated in a scheduled activity. Survey counties reported varied percentages of individuals who were enrolled in activities that are not countable under federal law, who were exempt or who were in receipt of good cause for non-participation. Despite the variance, however, these cases had considerable impact on each county’s WPR and the overall state rate. 18 Countable Activities The study found that enrollment into activities that are required by the state but not countable toward federal participation rates can artificially lower a county’s reported WPR. Federal regulations require adults in single-parent families to participate for at least 30 hours per week. To be counted as a work activity for the federal WPR, at least 20 of the 30 hours must be devoted to at least one of nine core activities listed in the chart. The remaining 10 hours are federally countable if they are in one or more of the nine core activities and\/or in three other activities: job skills training that directly relates to employment, education that directly relates to employment and satisfactory attendance in secondary school (only for individuals who do not have a high school diploma or GED). For adults in two-parent families, a total of 35 hours per week are required. To be counted as work for the federal WPR, 30 hours per week must be spent in core activities and the remaining 5 hours are federally countable if they are spent in one or more of the nine core activities and\/or in the three other activities. California regulations (EAS Section 42-711) require counties to enroll clients into activities that are not allowable under federal law, including assessment and treatment for mental health, substance abuse, domestic violence and learning disabilities. Although an individual may spend many hours participating in the above activities, these hours are not countable toward the federal WPR. This disparity can make a county’s federal rate appear much lower than its overall participation rate when state rules are taken into account. Mental health, substance abuse and domestic violence assessments and activities are critical to the individual and their family. These activities help clients develop the skills necessary to attain work, achieve self-sufficiency, and increase the safety and well being of each family member. Because of the differences between federal and state law, individuals participating in necessary mental health, substance abuse and domestic violence services do not meet the federal work participation requirements unless they are engaged in 30 or 35 hours of federally countable hours each week in addition to their treatment hours. The total number of clients enrolled into mental health, substance abuse, and domestic violence activities varied by county. The percent of total mandatory WTW participants enrolled into one or more of these activities in the invited counties ranged from a low of 2.1 percent in Kern County to a high of 13.4 percent in Orange County (Table 1). Most counties indicated that between 2.1 percent to 4.9 percent of their WTW participants were enrolled in mental health, substance abuse, and\/or domestic violence activities. Two counties exceeded an enrollment rate of 10 percent. FEDERAL CORE ACTIVITIES Unsubsidized employment Subsidized employment Subsidized public-sector employment Work experience On-the-job training Job readiness assistance Community service Vocational education Providing child care for a community service participant NON-CORE ACTIVITIES Job skills training directly related to employment. Education directly related to employment. Satisfactory attendance in secondary school. 19 TABLE 1: INVITED COUNTIES WTW CLIENT POOL -ACTIVITIES All (Other) Families and Two Parent Families County Total Mandatory Participants1 Enrolled WTW Mental Health Services (1) Substance Abuse Services (2) Domestic Violence (3) Total (1,2,3) Imperial 2653 2391\/90% 88\/3.3% 7\/.3% 4\/.2% 99\/3.7% Kern 12,592 7,994\/63% 219\/1.7% 38\/.3% 6\/.04% 263\/2.1% Kings 1,850 1,149\/62% 145\/7.8% 34\/1.8% 43\/2.3% 222\/12% Orange 9,238 6,726\/73% 672\/7.3% 60\/.6% 506\/5.5% 1238\/13.4% San Bernardino 30,699 18,793\/61% 544\/1.8% 230\/.7% 93\/.3% 867\/2.8% San Diego 9,958 5,554\/56% 183\/1.8% 81\/.8% 10\/.1% 274\/2.8% Santa Clara 9,715 6,746\/69% 220\/2.3% 136\/1.4% 73\/.8% 429\/4.4% Stanislaus 5,782 4,529\/78% 119\/2.1% 79\/1.4% 85\/1.5% 283\/4.9% Yuba 1,148 838\/73% 33\/2.9% 13\/1.1% 8\/.7% 54\/4.7% Statewide 327,994 210,429\/64% 7781\/2.4% 2180\/.7% 3252\/1% 13213\/4% WTW25\/25A February 2004, Data Cells 1,28,30,32 The rates in the voluntary counties were somewhat higher than the invited counties. (Table 2) The percent of total mandatory WTW participants enrolled into mental health, substance abuse, and\/or domestic violence activities ranged from a low of 2.2 percent in Fresno County to a high of 14.2 percent in El Dorado County (Table 2). TABLE 2: VOLUNTEER COUNTIES WTW CLIENT POOL -ACTIVITIES All (Other) Families and Two Parent Families County Total Mandatory Participants2 Enrolled Mental Health Services (1) Substance Abuse Services (2) Domestic Violence (3) Total (1,2,3) Alameda 12,614 8941\/70% 84\/.7% 6\/.04% 281\/2.2% 371\/2.9% Calaveras 303 165\/54% 10\/3.3% 8\/2.6% 4\/1.3% 22\/7.3% El Dorado 704 448\/64% 47\/6.7% 30\/4.3% 23\/3.3% 100\/14.2% Fresno 20,407 11,339\/56% 239\/1.2% 189\/.9% 17\/.08% 445\/2.2% Lake 1,086 546\/50% 43\/4% 23\/2.1% 3\/.3% 69\/6.4% Riverside 14,251 8209\/58% 325\/2.3% 80\/.6% 56\/.4% 461\/3.2% San Luis Obispo 1,302 903\/69% 19\/1.5% 11\/.8% 3\/.2% 33\/2.5% Santa Cruz 1,486 1021\/69% 55\/3.7% 16\/1% 58\/3.9% 129\/8.7% Solano 2,867 2529\/88% 43\/1.5% 23\/.8% 8\/.3% 74\/2.6% Statewide 327,994 210,429\/64% 7781\/2.4% 2180\/.7% 3252\/1% 13213\/4% WTW25\/25A February 2004, Data Cells 1,28,30,32 These figures demonstrate that counties’ actual participation rates were generally higher than their federal-only participation rates. Exemptions and Good Cause When an evaluation is conducted solely to determine how the inclusion of cases containing exempt individuals and individuals granted good cause impact individual county WPR’s (those situations in which federal and state regulations conflict), the findings reveal a considerable impact. Out of eighteen counties, two-thirds experienced an impact of 15 percent or more. This means that if Exemption and Good Cause cases were removed from the WPR calculation, county rates would increase by 15 percent in two-thirds of the counties participating in this study. The impact of Exemptions and Good Cause on the participation rate for invited counties ranged from a low of 9 percent to a high of 27 percent. Seven of the invited counties 2 Total Mandatory includes enrolled, exempt, sanction, and good cause. Enrolled is the total number of individuals who were enrolled at any time during the month. This count includes non-compliance, employed, and any individual who has been sent a notice scheduling him\/her for a WTW appraisal. 20 reported that at least 15 percent or more of all mandatory enrollees were not participating in the WTW program due to either an exemption or good cause. Of the seven counties, four of the counties experienced rates that exceeded 20 percent (Table 3 Column 3). It is important to note that there is no statewide information that reflects the number of individuals exempt by exemption category. The number of exempt individuals utilized for this analysis included single parents with a child under one, the only allowable exemption under Federal law. As a result, the percentage increase in the WPR from placing Exempt and Good Cause cases in a separate State program would be somewhat less than the percentages identified above. TABLE 3: INVITED COUNTIES: TOTAL MANDATORY ENROLLEES WHO DO NOT MEET FEDERAL PARTICIPATION REQUIREMENTS3 County Total Mandatory Do Not Meet Federal Participation Requirements Exempt, Good Cause, \/ % of Mandatory Do Not Meet Federal Participation Requirements Exempt, Good Cause, Non-Compliant\/ % of Mandatory** Do Not Meet Federal Participation Requirements Exempt, Sanction, Good Cause, Non- Compliant\/ \/% of Mandatory Imperial 2653 240\/9% 400\/15% 424\/16% Kern 12,592 2,228\/17% 3,559\/28% 5,929\/47% Kings 1,850 348\/19% 434\/23% 787\/43% Orange 9,238 1,330\/15% 1,393\/15% 2,575\/28% San Bernardino 30,699 8,138\/27% 10,401\/34% 14,169\/46% San Diego 9,958 2,400\/24% 3,398\/34% 5, 402\/54% Santa Clara 9,715 2,140\/22% 2,819\/29% 3,658\/38% Stanislaus 5,782 700\/12% 836\/15% 1,389\/24% Yuba 1,148 236\/21% 284\/25% 363\/32% Statewide 327,994 60,850\/19% 85,122\/26% 141,837\/43% Voluntary counties participating in the study experienced similar impacts on their WPR, however the impact in this group ranged from 7 percent to a high of 31 percent. Six of the nine counties reported that over 15 percent of all mandatory enrollees were not participating in the WTW program due to an exemption or a good cause (Table 4). TABLE 4: VOLUNTARY COUNTIES: TOTAL MANDATORY ENROLLEES WHO DO NOT MEET FEDERAL PARTICIPATION REQUIREMENTS4 COUNTY TOTAL MANDATORY Do Not Meet Federal Participation Requirements Exempt and Good Cause\/ % of Mandatory Do Not Meet Federal Participation Requirements Exempt, Good Cause, Non- Compliant\/ % of Mandatory** Do Not Meet Federal Participation Requirements Exempt, Sanction, Good Cause, Non- Compliant\/ \/% of Mandatory Alameda 12,614 1471\/12% 2818\/22% 5020\/40% Calaveras 303 93\/31% 105\/35% 150\/50% El Dorado 704 205\/29% 235\/33% 286\/40% Fresno 20,407 2082\/10% 4191\/21% 11,177\/55% Lake 1,086 336\/31% 408\/38% 612\/56% Riverside 14,251 3712\/26% 6038\/42% 8386\/59% San Luis Obispo 1,302 204\/16% 329\/25% 524\/40% Santa Cruz 1,486 306\/21% 857\/58% 1016\/68% Solano 2,867 210\/7% 480\/17% 608\/21% Statewide 327,994 60,850\/19% 85,122\/26% 141,837\/43% 3 The percentages might be slightly lower when single parent cases with an exemption for a child under one year of age are excluded from the overall count; however, the data were not available in this level of detail. 4 The percentages might be slightly lower when single parent cases with an exemption for a child under one year of age are excluded from the overall count; however, the data were not available in this level of detail. 21 Counties are required to calculate their WPR rates monthly and report the findings to CDSS via the WTW 30 process. In addition to calculating the monthly WPR for the WTW 30 report, three counties conducted a separate review for the purposes of this study utilizing state regulations to determine their County Participation Rate. Fresno, Orange and Santa Clara counties used federal requirements as outlined in ACL 99-85, plus requirements in state regulations, to calculate their county rates. These rates exclude all individuals\/cases that were exempt or in receipt of good cause from the numerator and the denominator and defined countable activities utilizing CDSS regulations. As demonstrated in Table 5, when counties utilize CDSS regulations to determine the County Participation Rate, their WPR increases significantly. The average monthly increase in the WPR over a 12-month period ranged from 15 percent to 30 percent in these three counties alone. The independent assessments completed by Fresno County, Orange County and Santa Clara County indicate that county performance in California should be based on state law, not just on federal law and federally countable activities. TABLE 5: STATE REGULATIONS UTILIZED FOR WPR VERSUS FEDERAL REGULATIONS UTILIZED FOR WPR Month Fresno Orange Santa Clara State WPR Federal WPR Difference State WPR Federal WPR Difference State WPR Federal WPR Difference 10\/03 49% 36% \u2191 13% 69% 41% \u2191 28% 65% 48% \u2191 17% 11\/03 38% 32% \u2191 6% 82% 51% \u2191 31% 64% 54% \u219110% 12\/03 43% 24% \u2191 19% 74% 40% \u2191 34% 70% 49% \u2191 21% 01\/04 42% 28% \u2191 14% 80% 44% \u2191 36% 63% 52% \u2191 11% 02\/04 35% 21% \u2191 14% 82% 50% \u2191 32% 66% 50% \u2191 16% 03\/04 38% 22% \u2191 16% 78% 40% \u2191 38% 62% 39% \u2191 23% 04\/04 52% 33% \u2191 19% 77% 46% \u2191 31% 65% 58% \u2191 13% 05\/05 56% 33% \u2191 23% 78% 45% \u2191 33% 58% 46% \u2191 12% 06\/04 47% 25% \u2191 22% 68% 40% \u2191 28% 64% 50% \u2191 14% 07\/04 49% 33% \u2191 17% 65% 43% \u2191 22% 60% 52% \u2191 8% 08\/04 47% 29% \u2191 18% 63% 47% \u2191 16% 62% 51% \u2191 11% 09\/04 53% 29% \u2191 23% 67% 42% \u2191 25% 64% 44% \u2191 20% Avg. \u2191 17% \u2191 30% \u2191 15% Exemptions The inclusion of cases with exempt individuals in the WPR calculation results in reduced rates for all counties and the state as a whole. Federal regulations provide only one exemption from work participation: A single custodial parent caring for a child who is younger than 12 months of age is not required to participate in work activities. The state recognizes this exemption and allows counties to exclude this population from the WPR. Under current California law, counties have the option to shorten the time a single custodial parent is exempt from participation in work activities. In addition, when a single custodial parent has more than one child, the exemption period allowed under California law is limited to 12 weeks. This time limitation may be extended to six months on a case-by-case basis. California regulations (EAS Sections 42-712.41 through 42- 712.49) require counties to exempt individuals from participation in WTW for several reasons beyond the one exemption allowed by federal law. Federal regulations provide only one exemption from work participation: A single custodial parent caring for a child who is younger than 12 months of age is not required to participate in work activities. 22 According to criteria developed by the state, counties are required to exempt the following individuals from participating: 1. A child under the age of 16. 2. An individual 16, 17, or 18 years of age attending full-time school in 12th grade or below, or attending vocational or technical school. 3. An individual who is 16 or 17 years of age who has obtained a high school diploma or GED and is enrolled or planning to enroll in postsecondary education. 4. An individual who is 60 years of age or older. 5. An individual who has a disability that is expected to last at least 30 calendar days and that impairs the individual’s ability to be regularly employed or participate in a welfare-to-work activity. 6. An aided non-parent caretaker relative who has primary responsibility and providing care for a child who is a dependent or ward of the court, receiving Kin-GAP benefits, or is at risk of placement in foster care. 7. An individual whose presence is required in the home because of the illness or incapacity of another member of the household. 8. The parent or other relative who has primary responsibility for personally providing care to a child six months of age or under. 9. A woman who is pregnant if the pregnancy impairs her ability to be regularly employed or participate in welfare to work activities. 10. An individual who is a full-time volunteer in the Volunteers in Services to America Program (VISTA). In February 2004, 16 percent of all California WTW mandatory registrants were exempt from participation. Of the invited counties, four counties exceeded the state average. The percentage of exempt individuals per invited county ranged from 9 percent to 24 percent (Table 6). TABLE 6: INVITED COUNTIES WTW CLIENT POOL5 All (Other) Families and Two Parent Families COUNTY TOTAL MANDATORY (TM) ENROLLED\/ % OF TM EXEMPT\/ % OF TM SANCTION\/ % OF TM GOOD CAUSE\/ % OF TM NON- COMPLIANCE\/ % OF TM Imperial 2,653 2,391\/90% 238\/9% 24\/.9% 2\/.07% 160\/6% Kern 12,592 7,994\/63% 1,435\/11% 2,370\/19% 793\/6% 1,331\/11% Kings 1,850 1,149\/62% 333\/18% 353\/19% 15\/.8% 86\/4.6% Orange 9,238 6,726\/73% 1,192\/13% 1,182\/13% 138\/1.5% 63\/.7% San Bernardino 30,699 18,793\/61% 6,031\/20% 3,768\/12% 2,107\/7% 2,263\/7% San Diego 9,958 5,554\/56% 2,400\/24% 2,004\/20% 0\/0% 998\/10% Santa Clara 9,715 6,746\/69% 1,485\/15% 839\/9% 645\/7% 689\/7% Stanislaus 5,782 4,529\/78% 587\/10% 553\/10% 113\/2% 136\/2% Yuba 1,148 838\/73% 223\/19% 79\/7% 8\/.7% 53\/5% Statewide 327,994 210,429\/64% 50,911\/16% 56,715\/17% 9,939\/3% 24,272\/7% Source: February 2004 WTW25\/WTW25A 5 Total mandatory includes enrolled, exempt and sanction. Enrolled is the total number of individuals who were enrolled at any time during the month. This includes good cause, non-compliance, any individual enrolled in state approved activities and any individual who has been sent a notice scheduling him\/her for a WTW appraisal. 23 The findings for invited counties are consistent with the findings of the volunteer counties, five of which exceeded the state average. The percentage of exempt participants in volunteer counties ranged from 7 percent to 29 percent (Table 7). TABLE 7: VOLUNTEER COUNTIES WTW CLIENT POOL5 All (Other) Families and Two Parent Families COUNTY TOTAL MANDATORY (TM) ENROLLED\/ % of TM EXEMPT\/ % of TM SANCTION\/ % of TM GOOD CAUSE\/ % of TM NON- COMPLIANCE\/ % of TM Alameda 12,614 8,941\/70% 1,262\/10% 2,202\/17% 209\/2% 1347\/11% Calaveras 303 165\/54% 83\/27% 45\/15% 10\/3% 12\/4% El Dorado 704 448\/64% 163\/23% 51\/7% 42\/6% 30\/4% Fresno 20,407 11,339\/56% 1,976\/10% 6,986\/34% 106\/.5% 2109\/10% Lake 1,086 546\/50% 320\/29% 204\/19% 16\/1% 72\/7% Riverside 14,251 8,209\/58% 2,501\/18% 2,330\/16% 1,211\/8% 2326\/16% San Luis Obispo 1,302 903\/69% 202\/16% 1,95\/15% 2\/.2% 125\/10% Santa Cruz 1,486 1,021\/69% 294\/20% 1,59\/11% 12\/1% 551\/37% Solano 2,867 2,529\/88% 210\/7% 128\/4% 0\/0% 270\/9% Statewide 327,994 210,429\/64% 50,911\/16% 56,715\/17% 9,939\/3% 24272\/27% Source: February 2004 WTW25\/WTW25A Good Cause Counties are required to apply good cause criteria (EAS Section 42.713.2) when clients enrolled in WTW fail to participate. For the purposes of calculating the WPR, counties are required to include individuals who receive good cause for not participating in their WPR calculations. This has a negative impact on the county and state participation rates. The state average for the percent of individuals determined to have good cause as compared to total mandatory participants was 3 percent for the month of February 2004. Of the invited counties, three counties exceeded the state rate. The percentages ranged from 0 percent to 7 percent (Table 6). Four counties reported that less than 1 percent of the WTW mandatory participants were in a good cause status. This is consistent with the findings of the volunteer counties. Three of the volunteer counties either met or exceeded the state rate of 3 percent. The percentages ranged from 0 percent to 8 percent. (Table 7) Five counties reported a rate of 1 percent or less. More review in this area may be needed to determine county policies and procedures regarding the granting of exemptions and\/or good cause. HOW UNEMPLOYMENT RATES IMPACT THE WPR High unemployment rates may have a direct impact on the number of adults in need of CalWORKs and WTW services. Higher unemployment can make it more difficult for WTW participants to find work in their communities. The study revealed that 7 of the 10 counties reporting above-average unemployment rates also experienced increased levels of adults on aid as well as increased enrollment in WTW. Five of the invited counties reported double-digit unemployment rates ranging from 12.8 percent and 17.5 percent for February 2004. These rates far exceeded the state’s rate of 6.6 percent and the federal rate of 5.5 percent for the same month. The majority of these counties also reported a higher percentage of adults receiving CalWORKs grants; two-thirds reported a higher percentage of their adult CalWORKs population enrolled in the WTW program as compared to the state average. The six counties that reported unemployment 24 rates above the state average reported that only 20 percent to 33 percent of their participants had obtained employment during the month of February 2004. TABLE 8: INVITED COUNTIES DEMOGRAPHICS Highlighted areas represent counties in which the unemployment rate exceeds the state rate COUNTY POPULATION (Individuals) CALWORKS*\/ % OF POPULATION (Adults) WELFARE TO WORK**\/ % OF CALWORKS (Adults) WPR UNSUBSIDIZED EMPLOYMENT*** \/(% OF WTW POPULATION) UNEMPLOYMENT RATE*** Imperial 196,000 2,628\/1.3% 2,391\/91% 50.3% 739\/31% 17.5% Kern 724,900 8,736\/1.2% 7,994\/92% 53% 2,446\/31% 14.0% Kings 137,000 1,560\/1.1% 1,149\/74% 34.2% 376\/33% 16.3% Orange 3,017,298 8,116\/.26% 6,726\/83% 50% 2,597\/39% 3.6% San Bernardino 1,888,550 20,749\/1.1% 18,793\/91% 51.6% 7,542\/40% 5.5% San Diego 2,900,000 12,182\/.4% 5554\/46% 52% 2,022\/36% 4.0% Santa Clara 1,718,500 8,815\/.5% 6746\/77% 50% 1,377\/20% 6.9% Stanislaus 481,600 5,176\/1.1% 4529\/88% 36.5% 1,052\/23% 12.8% Yuba 63,000 1,467\/2.3% 838\/57% 50% 218\/26% 16% State of California 35,394,062 277,403\/.8% 210,429\/76% unknown 63,045\/30% 6.6% * CA 237 CW Report Item 8a2 (Cells 69,70,and 71) and 8b2 (cells 87,88, and 89) **WTW 25\/WTW 25A Total Enrolled- Feb. 2004 ***February 2004 Half of the volunteer counties that experienced unemployment rates over the State unemployment rate of 6.6 percent also reported a higher percentage of clients receiving CalWORKs grants. Volunteer counties that experienced unemployment rates exceeding 6.6 percent reported that between 17 percent to 23 percent of their participants were employed. TABLE 9: VOLUNTEER COUNTIES DEMOGRAPHICS Highlighted areas represent counties in which the unemployment rate exceeds the state rate COUNTY POPULATION (Individuals) CALWORKS*\/ % OF POPULATION (Adults) WELFARE TO WORK**\/ % OF POPULATION (Adults) WPR UNSUBSIDIZED EMPLOYMENT\/ %OF WTW POPULATION UNEMPLOYMENT RATE*** Alameda 1,498,000 10,470\/.6% 8941\/85% 36.7% 2901\/32% 6.2% Calaveras 44,533 340\/.7% 165\/49% 34% 59\/36% 8.5% El Dorado 156,299 755\/.5% 448\/59% 28.8% 168\/38% 6.1% Fresno 823,900 15281\/1.9% 11,339\/74% 21% 2641\/23% 15.5% Lake 65,000 940\/1.5% 546\/58% 27.9% 119\/22% 11.3% Riverside 1,782,650 11445\/.6% 8209\/72% 41.7% 4180\/51% 5.7% San Luis Obispo 253,118 1073\/.4% 903\/84% 20% 166\/18% 3.3% Santa Cruz 260,000 1185\/.5% 1021\/86% 29% 173\/17% 10.5% Solano 412,336 2753\/.6% 2529\/92% 11.2% 586\/23% 6.1% State of California 35,394,062 277,403\/.8% 210,429\/76% unknown 63,045\/30% 6.6% * CA 237 CW Report Item 8a2 (Cells 69,70,and 71) and 8b2 (cells 87,88, and 89) **WTW 25\/WTW 25A Total Enrolled- Feb. 2004 ***February 2004 Under federal law, if the unemployment rate of the state is at least 50 percent greater than the unemployment rate of the United States, the period of time that the job search activity is countable toward the calculation of the WPR extends from 6 weeks to 12 weeks in a one- year period. The federal unemployment rate for this period of February 2004 was 5.6 percent. For California to qualify, California’s rate of unemployment for the same period would need to be equal to or exceed 8.4 percent. In February 2004, California’s statewide unemployment rate was less than the unemployment rates of many of its counties. Thus, counties that exceeded 8.4 percent unemployment could not take advantage of the extended job search provisions in federal 25 TANF law. For those counties, this limitation may have impacted their ability to move clients into employment early in the WTW process. It is important to note that 9 of the 18 counties studied (50 percent) had unemployment rates that exceeded 8.4 percent (Table 8 and Table 9). Statewide, 28 counties reported unemployment rates greater than 8.4 percent in February 2004. Although currently prohibited by federal law for inclusion as a countable activity, the extension of the job search activity to 12 weeks would help WTW enrollees who reside in counties that experience high unemployment rates to find employment earlier in the WTW process. State law provides that job search activities may be extended beyond four weeks (EAS Section 42-711.534). However, when participation in the activity extends beyond four consecutive weeks or six weeks within a federal fiscal year, the activity is not countable under federal law and the county’s WPR is negatively impacted. To assist clients, recognize the continuing high unemployment in some counties and eliminate the impact on the WPR the state could establish a state-only program to exclude the above cases from the WPR calculation, absent a change in federal law extending job search activities when specific counties\/districts within a state exceeded federal unemployment rates by 1.5 percent. 26 III. COUNTY STRATEGIES FOR CUSTOMER ENGAGEMENT California counties are committed to developing and administering WTW programs in a manner that best meets our customers’ needs. Flexibility is the key. Since the introduction of PRWORA and its implementation in California via the CalWORKs statutes, counties have diligently worked to develop programs that address the barriers that prevent single parents and families from achieving self-sufficiency. In order to increase the work performance rates statewide, the study counties were asked to share information about how WTW programs are administered in their county. Specifically, the participating counties were asked to share how their unique approaches to meeting customer needs increased work performance rates and client employment. Counties provided operational information and strategies in the following areas: Early Engagement Ongoing Participation and Re-Engagement Participation Monitoring Organizational Structure Budget Impacts EARLY ENGAGEMENT Research suggests that engaging clients early in the WTW program is half the battle. Once engaged, clients demonstrate a willingness to take personal responsibility for attaining self- sufficiency. Delayed engagement results in lower work participation rates for counties and creates a cycle of non-participation and continued dependence for clients. Counties participating in the survey identified that informing clients early in the eligibility determination process about work requirements and available support services is critical for improving work participation rates. In fact, the majority of counties participating in the study provide information regarding the WTW program in the client’s initial CalWORKs application Intake interview. Case managers of varying classifications, Eligibility Technician to Social Worker, explain work participation requirements. Providing transportation to appointments and child care providers when there is not an alternative method of transportation for the client. Providing clients raffle tickets to orientation and conducting a monthly gift basket drawing. Utilizing cheerful-looking invitations. Making second appointment letters more official with clear language about the potential imposition of a sanction. Contacting clients prior to their initial appointment through phone calls and reminder mailings. Conducting or referring clients to orientation sessions the same day a client applies for TANF. Offering orientation and assessment sessions in multiple languages, in multiple locations, at multiple times throughout the day. Scheduling orientation and appraisal appointments on the same day. A SAMPLE OF PROMISING PRACTICES AMONG COUNTIES 27 Riverside County informs individuals applying for CalWORKs cash assistance about WTW participation requirements prior to the application interview. Initial Contact Case Management (ICCM) staff conduct informational sessions, prior to the application interview, in order to ensure clients understand the importance participation in WTW programs, expectations, and available supportive services. Delays in a client’s participation in his or her first activity often are attributed to their inability to attend scheduled appointments. Most counties indicated that high client no-show rates for orientation and appraisal were due to barriers such as a lack of adequate transportation and child care, substance abuse, domestic violence and\/or mental health issues. ONGOING PARTICIPATION AND RE-ENGAGEMENT STRATEGIES Early engagement is important but it is not enough to sustain client participation. Counties utilize several methodologies to encourage and assist clients in successfully completing the activities outlined in the WTW plans. Diversity in the activities offered by counties as well as ongoing communication play a key role in helping participants stay in activities and remain motivated. Counties have also developed specific strategies to increase ongoing customer participation as well as re-engage customers during episodes of non-compliance and sanction. Case managers utilize special assessment tools to determine client needs as well as strength-based practices to regularly follow-up with clients, reassess individual and family circumstances, modify employment goals, address barriers to participation\/employment, and provide encouragement. Counties shared specific practices in the following areas: Customer\/Client Engagement Customer\/Client and Family Focused Work Plans Participation Monitoring Moving Beyond Non-Compliance and Sanctions Customer\/Client Choice- Broad Range of Activities Language Services Post Employment and Job Retention Customer\/Client Engagement Counties stressed the fact that successful customer engagement begins early and continues throughout the participant’s time in the WTW program. As noted above, giving customers information early in the application process helps to ensure successful outcomes for participants and leads to increased work performance rates. Each county affirmed that customer engagement begins with the first customer contact, but that is only the beginning. Upon approval for TANF, customers must be notified of the requirement to participate in an orientation\/appraisal interview. In most counties, notification occurs through letters sent to the customers. In order to increase participation, Kern County schedules a home visit rather than an office visit for the initial orientation\/appraisal appointment. In addition, the participant is contacted prior to the appointment to remind him\/her of the date and time. Imperial, Kings, San Diego, Riverside and San Luis Obispo counties conduct home visits when a client misses his or her first scheduled Counties affirmed that customer engagement begins with the first client contact but that is only the beginning. 28 appointment. The home visit is used to assess whether the customer has special needs, to assist in reducing family related barriers and to reduce the likelihood of a sanction. Counties have designed orientation sessions and appraisal processes to meet the needs of the participants. For example, in counties that serve customers that are not proficient in the English language, customers are scheduled for sessions that are conducted in their primary language. Counties have also established sites that are convenient for the customer and provide transportation for individuals who identify the need. Santa Cruz County conducts orientation sessions for the WTW program during the initial application interview. In Yuba County, both orientation and appraisal are conducted during the initial application interview. Both counties have determined that this process reduces the number of times the participant must attend scheduled appointments, provides the case manager with information about participants needs early in the process, initiates engagement between the client and the case manager and reduces incidents of no-show and non- compliance. In addition to conducting orientation and appraisal during the initial application process, Kings County requires the applicant to participate in an upfront job search diversion program. Applicants are screened for the diversion program. If the applicant has emergency needs, additional services are provided. Imperial County has centrally located orientation and appraisal activities. Orientation and appraisal are conducted in three major cities and transportation is available. Orange County conducts an orientation session immediately upon the conclusion of the application interview. This practice also decreases the number of trips a customer must make and is assisting in increasing the county’s WPR. Customer\/Client and Family Focused Work Plans All survey counties stressed the importance of the WTW plan and the critical role it plays in customer engagement. To be effective, the work plan must match the interests and abilities of the participant. The message communicated by counties to participants is that self- sufficiency is achieved through work. However, counties understand that the path to self- sufficiency is likely to be different for each participant. Therefore, the WTW plan is centered on the participant’s unique strengths, needs and goals. Once a participant has attended orientation, appraisal and job search (which may vary depending on his or her needs), the case manager works closely with the participant to select activities that best meet his or her employment and personal success goals utilizing strength-based practices. This approach helps an individual identify his or her existing capabilities and resources. Stanislaus County identified that strength-based practices help identify the abilities and capabilities of the customer, create a collaborative relationship between the customer and the case manager and build on what is working for the customer. Strength- based practices can ensure that individuals are actively involved in making decisions about their future. When the individual has the opportunity to partner in the development of the plan, he or she has a higher degree of commitment and a higher success rate, as demonstrated by the invited counties’ work participation rates. When an individual has the opportunity to partner in the development of the plan, he or she has a higher degree of commitment and a higher success rate. 29 According to the survey counties, it is important for case managers to use information from customer assessments, including basic skills assessments; identification of learning disabilities, mental health, substance abuse, and domestic violence needs; information from social workers; and evaluations provided by staff and contractors that conducted job search activities, to assist with the identification of activities that will help each participant achieve self-sufficiency. During the appraisal and assessment process, case managers work with individuals to identify family needs including housing, transportation, child care, medical issues, a child with a disability or a child in need of counseling, mental health services, drug and alcohol services, domestic violence services and school attendance issues. Some counties reported that case managers are working together with other professionals, such as social workers in children’s services and the participants, to develop coordinated case plans where appropriate. Counties report that they utilize the WTW plan to clearly identify participation requirements and the consequences of non-participation. The WTW plan: (1) Identifies the participant’s strengths and addresses the needs of the entire family. (2) Is utilized to establish goals for the participant and is revised to meet the participant’s needs (3) Is a plan that the participant can refer to over time (4) Provides a roadmap for the participant by defining what activities are required and the time frames to meet participation requirements to achieve self- sufficiency and avoid sanctions Monitoring Participation Monitoring each client’s progress is critical to continued participation in program activities. Continuously assessing a participant’s progress towards achieving the goals outlined in his or her WTW plan is an essential part of assuring high participation. Progress monitoring allows case managers to recognize the accomplishments of the participants, immediately identify nonparticipation, reengage the participant quickly by helping to resolve barriers that prevent participation and hold participants responsible for achieving self-sufficiency. The methods utilized to track participation at the case-worker level are fairly consistent between counties. Nine counties reported that they review each participant’s progress on at least a monthly basis. These counties rely on monthly attendance reports, employer records, quarterly income reports, personal interactions with customers and progress reports to determine participant progress. Information about participants’ progress is obtained from providers, contractors and participants themselves via phone, mail, office visits and e-mail. Three of the nine counties review progress on a weekly basis, depending on the activity in which the participant is enrolled. Communication between case managers and providers\/contractors is essential in determining participation and results. In order to confirm the participant’s progress in designated activities, San Diego County case managers utilize information from attendance reports, progress forms and site visits to track each participant’s progress. Information is received from vocational and educational institutions, service providers and employers. Orange County requires case managers to make at least one monthly contact with each participant to discuss the entire case\/family situation, including a discussion of attendance and progress in any WTW activity. In addition, each case manager is required to conduct a 30 minimum of two in-person meetings with the participant to review the participant’s progress towards meeting the goals outlined in the WTW plan and assessing individual\/family needs. Yuba County utilizes office assistants to monitor participant attendance. The office assistants update attendance records daily and notify case managers regarding non-participation. Moving Beyond Non-Compliance and Sanctions Study counties indicated that they use sanctions as a last resort when a participant does not participate in an assigned activity and fails to either establish or follow through with a conciliation plan. Survey responses indicated that counties view the sanction process as a way to encourage an individual to participate in the WTW program; that is, sanctions are not a punishment, but rather an opportunity to motivate an individual to cooperate while identifying and resolving barriers to participation. Curing a sanction restores the grant to its original amount Generally, WTW participants are subject to sanctions when they fail or refuse, without good cause, to sign a WTW contract; participate in any assigned program activity, including a self- initiated program (SIP); provide required proof of satisfactory progress in any assigned program activity, including a SIP; or accept a job offer that meets criteria specified in the state regulations. The state average for the percent of individuals determined to be in non- compliance as compared to total mandatory participants was 7 percent. Eleven of the study counties reported rates that equaled or exceeded the state rate. (Table 3 and Table 4) When the county identifies that an individual has failed to comply with one or more of these program requirements, the county is required to send a written notification to the individual. Several counties go beyond the mandated notification process in order to attempt to re- engage the customer during periods of non-compliance. Common practices include phone calls to the participant and scheduled office visits to help determine why the participant was unable to comply with their assigned activity. Eight of the study counties encourage home visits, in addition to the methods listed above, to assess participant’s progress towards achieving the goals outlined in the WTW plan: Imperial, Kern, Kings, Riverside, San Bernardino, San Diego, Stanislaus and Yuba. Home visits are used to re-engage the participant, continue the collaborative relationship between the customer and the case manager, identify barriers, establish good cause for non- participation and build on what is already working for the customer. Ideally, home visits can help to prevent sanctions from occurring. Orange County contacts other case managers to assist in re-engaging the participant. Ongoing service workers for CalWORKs, including ancillary, child care and transportation staff, are assigned to re-engage the WTW participant and work as a team to promote cooperation and compliance and meet the needs of the participant. Stanislaus County utilizes strength-based coaching and counseling techniques to re-engage participants. If the case manager is not successful in re-engagement, a referral is made to the Building Successful Tomorrow’s Team, a multidisciplinary team consisting of social workers, a public health nurse, and a substance abuse counselor. A home visit and assessment are conducted. The team then works in partnership with the participant and the case manager to help prevent or cure a sanction. The state average for the percent of individuals sanctioned as compared to total mandatory participants was 17 percent in February 2004. Five counties exceeded the state rate. County 31 sanction percentages ranged from low of less than 1 percent to a high of 34 percent. (Table 6 and Table 7). A study conducted by Riverside County confirms that individuals sanctioned for non- participation do not remain in the sanction status for a long duration. In fact, more than half of the individuals sanctioned in Riverside County, became exempt, cured their sanction or went off of aid within 10 months. Patience and perseverance can ultimately lead to increased work participation. Many counties participating in the study indicated a desire to focus concentrated resources on sanctioned individuals. Several counties utilize various outreach strategies to encourage sanctioned individuals to participant. Case managers work with sanctioned individuals to develop strategies to resolve barriers, identify and enroll in activities that support his\/her interests and receive supportive services that will lead to self-sufficiency. San Bernardino County recently implemented a pilot program with the primary focus of re- engaging sanctioned participants. The pilot program included inviting the participant to the office to pick-up his\/her monthly check. Case managers discussed with the individual the reason why he\/she chose a sanction. Of more than 500 individuals contacted, approximately 20 percent cured the sanction and have stayed compliant since that time. In the same pilot, some clients chose to terminate their case, rather than supply the information necessary to impose vendor pay. Orange County uses a specialized social worker to bring sanctioned individuals back into the WTW program. The social worker contacts the client, discusses the value of participation and offers services to overcome barriers that may exist for the client and his or her family. Stanislaus County also utilizes the skills of social workers to re-engage sanctioned individuals. Case managers refer sanction cases to the Building Successful Tomorrows (BST) team. The team consists of three social workers, one alcohol and drug specialist and a public health nurse. The case manager, BST team and client work together to develop a plan of re-engagement. Kern County’s case managers send letters to sanctioned individuals inviting them to participate and listing the steps needed to cure the sanction. In addition, Kern County has dedicated three staff positions to perform outreach activities with the sanctioned population, including making home calls, calling and sending letters. Riverside County has case managers specifically assigned to stay in contact with sanctioned participants and offer assistance for curing the sanction. Kings County, like Kern County, also conducts periodic reviews on sanctioned individuals (at least every six months). The periodic reviews consist of follow-up contact by phone, mail and home visits. Customer\/Client Choice – Broad Range of Activities The design of the CalWORKs program gives counties a considerable amount of discretion and flexibility in the development of WTW services. Section 11322.6 of the Welfare and Institutions Code identifies 19 separate kinds of activities allowable under state law. Federal law defines only 12 allowable work activities. As noted earlier, this variance can artificially lower the WPR each county reports to the state. However, because state law provides 32 broader flexibility to meet client needs, CalWORKs clients may have a better chance of attaining self-sufficiency. As of February 2004, 130,284 individuals statewide were participating in WTW activities. Of these, approximately 67,466 individuals (52 percent) were participating in some form of actual employment (unsubsidized employment, self-employment, subsidized private\/public sector employment and supported work or transitional employment. An additional 25,201 (19 percent) were enrolled in some type of education\/training and 13,213 (10 percent) were enrolled in mental health, substance abuse or domestic abuse services. The remaining individuals 24,404 (19 percent) were enrolled in appraisal, assessment, reappraisal, job search\/job readiness, Self-Initiated Programs or other activity allowable under state law. Per the 2000 Census 33.2 percent of California residents over the age of 18 have less than a high school diploma\/GED. Based on county records the percentage of clients currently enrolled in the Welfare to Work program that do not have a high school diploma\/GED ranges from a low of 29 percent to a high of 73 percent (Table 10 and Table 11). TABLE 10: EDUCATION LEVEL AND LANGUAGE PROFICIENCY WTW ENROLLEES (Invited Counties) COUNTY EDUCATION LEVEL (NO HIGH SCHOOL DIPLOMA\/ GED) PRIMARY ETHNIC ORIGIN NOT PROFICIENT IN ENGLISH PRIMARY LANGUAGES (EXCLUDING ENGLISH) Imperial 43% White, Hispanic, Black 33% Spanish, American Sign, Filipino Kern 48.4% Hispanic, White, Black 10% Spanish, Tagalog, Cambodian Kings 45% White, Hispanic, Black 15% Spanish, Portuguese, Hmong Orange 45% Hispanic, White, Vietnamese 28% Spanish, Vietnamese, Farsi San Bernardino 50.7% Hispanic, Black, White 8.3% Spanish, Vietnamese, Cambodian San Diego 42% White, Hispanic, Black 30% Spanish, Vietnamese, Arabic Santa Clara 54% Hispanic, White, Vietnamese 31% Spanish, Vietnamese Stanislaus 49% White, Hispanic, Cambodian 10% Spanish, Cambodian, Assyrian Yuba 29% White, Hispanic, Laotian 7% Spanish, Cambodian, Hmong California 33.2%* 9.1%** Spanish, Cambodian, Hmong *Overall population (2000 Census) ** Overall population: Language other than English Spoken (2000 Census) TABLE 11: EDUCATION LEVEL AND LANGUAGE PROFICIENCY WTW ENROLLEES (Volunteer Counties) COUNTY EDUCATION LEVEL (NO HIGH SCHOOL DIPLOMA\/ GED) PRIMARY ETHNIC ORIGIN NOT PROFICIENT IN ENGLISH PRIMARY LANGUAGES (EXCLUDING ENGLISH) Alameda 32.8% Black, Hispanic, White 11.8% Spanish, Cantonese, Vietnamese Calaveras 35% White, Hispanic, American Indian 0% none El Dorado Not available White, Hispanic, Black 1% Spanish, Farsi Fresno 56.5% White, Hispanic, Black 10.9% Spanish, Hmong Lake 50% White, Hispanic 5% Spanish Riverside 34.8% Hispanic, White, Black 9.2% Spanish, Vietnamese San Luis Obispo Not available White, Hispanic, Black Not available Spanish Santa Cruz 73% White, Hispanic, Vietnamese 10% Spanish, Vietnamese Solano Not available White, Black, Hispanic Not available Spanish, Tagalog, Vietnamese California 33.2%* 9.1%** Spanish, Cambodian, Hmong *Overall population (2000 Census) ** Overall population: Language other than English Spoken (2000 Census) 33 Counties participating in the study have developed a broad range of activities for customers participating in their counties. The activities are designed to meet clients’ unique needs, including education, while increasing participation and employment. The design of the CalWORKs program gives counties considerable discretion to develop vocational training; on-the job training; education; and substance treatment, domestic violence and mental health services. Because there are too many unique programs to name individually in this report, the programs are outlined by county in a separate attachment. (Attachment 2), with a few programs highlighted below in order to demonstrate the diverse offerings. San Diego County has incorporated mini-workshops during Network Center\/Job Search. The workshops provide information on legal services, criminal record expungement, motor vehicle violations, court processes, budgeting, credit repair, partnering, health relationships, self-esteem, employment background screening and Section 8 Housing. Kern County has developed weeklong workshops that help participants build life and coping skills. These workshops are utilized as short-term activities, when participants are awaiting the start of a longer-term activity. Kern County utilizes this approach to increase participation while also offering instruction in necessary life skills. Like Kern County, Santa Clara County also identified the need to develop short activities while clients wait for entry into their next scheduled activity. The county’s response is entitled The Bridge, a program using the nationally recognized motivational life skill curriculum of Women in Community Service. Participation can be as short as one week or up to eight weeks. Santa Clara has also implemented the CalCAP program, which works with part-time employed clients to identify strategies to locate full-time employment while also developing appropriated activities to complete their hourly participation requirements. Stanislaus County has implemented multiple vocational training programs for clients. These programs are designed in partnership with local colleges, other county departments, community collaborates, and schools. In addition, the programs have been designed to meet challenges in education levels and language skills. Available programs include Certified Nursing Assistant, Office Assistant, Welding Certification, Construction Technology, Manufacturing Operator, Maintenance Welding, Print Press Processes, Flexographic Printing, Automotive Brakes and Suspension and Automotive Transmissions and Transaxles. In addition, in partnership with Modesto City Schools, Center for Senior Services, and the county’s Adult Services Division, monolingual Spanish clients and English-speaking clients are trained in Home Health Care. Clients graduating the program are certified and placed with elderly individuals and persons with disabilities needing In-Home Supportive Services. Yuba County designed a specialized program to serve the unique requirements of its customer base. The county’s CanWORKs program provides specialized work activities for participants who live in the county’s most remote areas. The county also developed a contractor apprentice program called Youth Build. The program enables clients to obtain a high school diploma while learning job skills building houses for low-income families to purchase. The program provides educational opportunities and employment opportunities while giving valuable assets to the community at large. 34 Solano County has developed a program for parents that become employed during Job Club, but are determined to be underemployed. The program provides activities and workshops designed at increasing wages and responsibility. PRIDE workshops include topics on reducing the stress of parenting, moving beyond the past, managing money, exploring careers, test taking, typing, math skills, and job advancement. Fresno County has implemented two programs, JOBS First and JOBS 2000. Through JOBS First and JOBS 2000, clients not only receive job search and assessment they also receive child support and legal services through interagency agreements. Each mon,th a class of participating clients goes to court with the assistance of a Public Defender and District Attorney to settle misdemeanor legal issues that have impaired their ability to become employed and self-sufficient. Language-Related Services It is much more difficult to access and provide federally allowable WTW activities when clients are not proficient in the English language. A county with a larger percentage of WTW clients who have diverse language needs may have a harder time increasing its WPR. In the 2000 Census, 39.5 percent of California residents reported that a language other than English was the primary language spoken at home and 9.1 percent of California residents do not speak English. Based on county records, the percentage of clients enrolled in the WTW who are not proficient in the English language can be as high as 33 percent (Table 10 and Table 11). A person who is enrolled in a basic education course, English as a Second Language course and other educational programs must also be participating in 20\/30 hours in at least one of nine core activities. This means that a client must be participating in more than one activity during the week to meet federal work participation requirements. Customers participating in vocational training may only participate for up to 12 months in order to have their participation considered a countable activity when calculating federal work participation rates. In addition, counties are limited in the number of clients who can be considered meeting work participation requirements through participation in educational activities. Only 30 percent or less of all cases included in the WPR numerator may be deemed as meeting federal requirements through participation in specified educational activities (ACL 99-85). A number of significant barriers, including a lack of resources, can limit a county’s ability to ensure sufficient opportunities for enrollment into countable WTW activities, including work experience, on the job training and community service sites for monolingual clients. Counties participating in the study indicted that relatively few training options are available for clients who are not proficient in English. In order to address language barriers, Imperial County developed a partnership between Imperial Valley Regional Occupational Program and local adult schools to create a six-month English immersion program. Graduates of the program can continue in pre-GED and GED classes. Orange County has developed employment opportunities in multiple employment sectors for participants who speak limited English. In addition, vocational training and basic education classes are available in Spanish and Vietnamese. Stanislaus County, in partnership with Modesto Junior College, Department of Employment and Training, City of Modesto, Stanislaus County Planning and Community Development 35 and Habitat for Humanity, developed a preconstruction training program for Spanish- speaking WTW participants. The 20-week program focuses on helping students prepare for a career in the construction industry. The program provides English as a Second Language courses, as well as courses in occupational math, basic English, construction safety and training, life skills and job development. Post- Employment\/Job Retention Services Counties responding to the survey identified that post-employment\/job retention services help individuals and families who have transitioned to self-sufficiency remain self-reliant. However, survey responses indicate that reductions in CalWORKs funding at the county level have limited the resources that can be dedicated to these services. Solano County implemented the Career Success Program to assist participants who have been discontinued from aid due to earned income for a period of up to twelve months. The program provided family mentoring services, referrals and linkages to local and community resources, employment and career promotion workshops, and assistance and reimbursement for supportive services. During a 12-month period, 437 families were referred to the program. Of the 437 families, 302 received services. The goal of the program is to assist participants with job retention services thereby reducing recidivism. In addition to Career Success Program , Solano County has implemented the READY program. This program serves customer who become employed in through Job Club but are considered to be underemployed. El Dorado County provides transportation assistance and distributes a monthly newsletter to individuals and families that have transitioned off of aid. The monthly newsletter provides information about job retention and job advancement opportunities. Riverside County provide mentoring, case management, employment counseling, job coaching, job leads, resume assistance, substance abuse counseling, mental health counseling, domestic violence intervention and other services that assist customers in remaining employed. Kern County, Orange County, and Yuba County provide assistance with transportation and case management services. San Diego County, Santa Clara County and Stanislaus County indicated that, while there are services available to customers, cuts to the program have occurred during the past year due to reduced allocations. ORGANIZATIONAL STRUCTURE: STAFFING, FUNDING IMPACTS, TRAINING, AND PERFORMANCE EXPECTATIONS Performance Standards and Reports Several of the counties surveyed indicated that they have implemented performance standards for individual case managers, units, and\/or local offices. By measuring performance, counties report that they are promoting accountability and motivating managers, supervisors, and case workers to work closely with clients in order to increase work participation and employment. (Attachment 1) Although the performance standards vary between counties, individual counties have established specific targets and measures that are to be attained by employees. Counties attribute increased client participation to their performance measures. Some counties that have established performance standards utilize the set performance standards in employee evaluations\/reviews; however, some counties report that their ability to implement 36 performance standards at the case manager level is impacted by the need for the standards to be negotiated with collective bargaining units. Most county Social Service Agencies provide presentations to their Board of Supervisors regarding the WTW program. The Directors provide annual reports that articulate the goals, accomplishments and success of the program. Orange County has established a Work Participation Rate Workgroup whose purpose is to promote and strive to improve the county’s work participation rate. The Workgroup, comprised of program, operations, administrative, district, and contractor staff, developed and conducted a worker survey to determine workers’ perceptions regarding work participation and their methods for encouraging clients’ participation. Action items were developed addressing strategies to improve the participation rate. The Work Participation Rate is also a standing agenda item discussed at all Divisional Management meetings and Program meetings. The information discussed at these monthly meetings is disseminated to the Supervisors and line staff in the district offices. By continuously mentioning the participation rate, all line staff, Eligibility, Welfare to Work, and Ancillary, Child Care and Transportation workers, will understand how all of their roles contribute to it and to a clients’ effort at becoming self-sufficient. Classification of Employees Classifications include Social Worker, Employment and Eligibility Specialists, Employment Services Technicians, Family Services Specialists, Staff Service Analysts and their respective supervisory positions. Seven of the nine counties utilize Social Workers when providing Welfare to Work services to enrollees. San Diego and Orange County have specific regions within the county in which employment services for mandatory WTW enrollees are provided through the utilization of contracts. A little over half (54 percent) of Orange County’s current WTW client population is served by a contract agency. San Diego County has divided its current WTW client population into six regions, four of which are served by a contract agency. Function: Generic vs. Specialized The majority of counties participating in the study reported that specialized case managers are designated to provide case management for WTW enrollees. Their primary responsibility is providing employment services. Caseload assignments vary greatly among counties. The average monthly caseload for a specialized case manager ranges from a low of 67 enrolled clients to a high of 130 enrolled clients. Five counties Lake, San Luis Obispo, Solano, Stanislaus and Yuba have elected to utilize case managers for generic services. Case managers that provide employment services to mandatory enrollees also perform the continuing eligibility determination for several other public assistance programs, including CalWORKs, Food Stamps and Medi-Cal. Caseloads for these workers also vary by county, from an average of 49 families to 130 families. Employee Recognition Counties have identified that employee recognition is important. Some counties reported that they have formal recognition programs in place that reward staff for meeting and exceeding performance expectations in the WTW program. Other counties report that there are informal avenues utilized for staff recognition. 37 In counties where formal recognition programs exist, employee recognition may consist of time off, acknowledgement in evaluations, certificates of appreciation and\/or opportunities to earn credits that can be exchanged for gift cards to local restaurants or movie theaters. For example, San Diego County has devised a monthly recognition program for employees that meet or exceed performance goals and outcomes. In addition, yearly Quality First bonuses may be received by employees for high achievement in designated outcome areas. Employee Training Each county responding to the survey identified an ongoing commitment to expanding the talents and knowledge of the case managers responsible for providing employment services through extensive training programs. Counties focused their training curriculum in areas that would be most beneficial in engaging clients in work participation. The most common training topics included early identification of barriers such as domestic violence, mental health, and substance abuse, interviewing techniques including an emphasis on Family Focused Strength Based Decision Making, and program updates on items such as regulation changes. BUDGET IMPACTS During the past year, the majority of counties participating in the study indicated that funding issues have impacted their ability to fill positions that are essential to administering the Welfare to Work program. In addition, the reductions have resulted in the reduction of services available for clients required to participate in WTW.6 For example, Santa Clara County indicated that they have been understaffed by 20 percent during the past year and have just begun to fill vacant positions. San Diego County identified a decrease of 37 position within the two county-managed regions as a result of decreased State allocations. Alameda, El Dorado, Kern, Kings, Orange, Riverside, San Bernardino, San 6 For further detail on budget impacts to the CalWORKs program, see the California Budget Project’s Stretched Thin: State Budget Cuts Threaten California’s Health and Human Services Programs, available on the Internet at http:\/\/www.cbp.org\/2004\/0405stretchedthin.pdf. Employee Training Programs Offered by Survey Counties Behavioral Health Services Overview Child Care Program Overview Chronic Neglect and Intervention Civil Rights\/Diversity Training Community Collaboration and Marketing Compliance and Sanction Critical Incident Training Crime Prevention and Personal Safety Customer Service Domestic Violence Electronic Benefit Transfer Training Empowering Participants\/Empowering Ourselves Family focused Strength Based Decision Making Interviewing Techniques Leadership Learning Disabilities Linkages Training (Child Welfare and TANF) Managing Workplace Stress Quarterly Reporting Service Provider Fairs Serving the Hard to Serve Success Signals (Communication Styles) Time Management 38 Diego, San Luis Obispo, Santa Cruz, Solano and Stanislaus counties all indicted that hiring restrictions have been put in place due to budget shortfalls. Counties reported that budget shortfalls had not only impacted staffing, but had also had a significant impact on the types of programs and activities available to clients. For example, Santa Clara County terminated its Sanctioned Client Project due to insufficient funding. The project was an outreach program designed to encourage sanctioned individuals to cure the sanction and participate in the WTW program. Individuals were provided with information on how he\/she could correct the sanction as well as information on the many program activities offered through WTW. Imperial County eliminated funding for its economic development coordinator and transportation coordinator. Kern County was required to reduce the frequency and availability of job search workshops and eliminated paid work experience. In order to operate within its allocation, San Bernardino County eliminated some vocational training contracts, limiting choices for clients. Kings County eliminated relocation services and some of its contracts with educational providers. Solano County also reduced the amount of funds available to clients for car repairs a vital service especially when public transportation is not available to help clients get to their jobs on time and reduced the amount of contracted vocational and education services by 25 percent during the past two years. 39 IV. CONCLUSION AND NEXT STEPS The findings and recommendations in this report present a blueprint for a number of next steps. Counties, CDSS and the Legislature have an opportunity to work in partnership to continue the work begun in 1997 with the enactment of federal welfare reform legislation and in 1998 when California’s version of welfare reform began. As last year’s SB 1104 shows, the job is not yet complete, and opportunities to build on existing programs and enhance participation continue to present themselves. The CWDA workgroup identified the following specific next steps. Engage in a joint CWDA-CDSS workgroup to clarify specific policies related to the calculation of the Work Participation Rate (WPR). Clarification in the following areas will lead to increased accuracy and continuity in the calculation of the WPR. Disseminate the findings of the report through the convening of a one-day symposium sponsored by CWDA. The symposium will provide a collaborative learning environment to facilitate the distribution of the key findings of the report, to share innovative approaches, and to identify strategies to increase work participation rates throughout the state. On an ongoing basis, encourage collective learning opportunities through the development of conference sessions on customer engagement strategies at upcoming CWDA and CalWORKs conferences. These steps are just the beginning. Additional recommendations may arise as the findings of the surveys, described in detail in this report, are considered and discussed more broadly. 40 ACKNOWLEDGEMENTS CWDA would like to thank and acknowledge the following individuals for their contribution to the study: CWDA Work Participation Rate Workgroup Phil Ansell Los Angeles County Kathy Harwell Stanislaus County Julie Hornback Fresno County Cynthia Hinckley Riverside County Alette Lundeberg Santa Clara County Cathy Senderling County Welfare Directors Association of California County Participants Alameda County Kings County San Diego County Chet P. Hewitt Peggy Montgomery Joan Zinser Marietta Jubert John Semas Dennis Mirabelli Richard Read Lake County Karen Clabeaux Dorthy Hicks Carol J. Huchingson San Luis Obispo County Charles Schwab Kathy Harrison Leland W. Collins Calaveras County Patricia Shuman Natalie Walter Terri Beaudreau Mono County Santa Clara County Mary Antus Ed Zylman Will Lighbourne El Dorado County Phil Hurtz Alette Lundeberg John Litwinovich Orange County Raul Aldana Mike Petee Angelo Doti Santa Cruz County Jenny Wilson Ann Myers Cecilia Espinola Fresno County Riverside County Carol Walberg Don Pierce Dennis Boyle Jan Picolorich Julie Hornback Cynthia Hinckley Solano County Judy Lemos Robert C. Hughes Patrick O. Duterte Deborah Martinez Jennifer De La Ossa-Ramirez Sheri Toy Roselinda Torres Planning and Evaluation Section Stanislaus County Imperial County Sacramento County Ken Patterson James Semmes Penelope Clarke Lydia Toledo Carla E. Moore Kathy Beeler Virginia Wilson Kern County San Bernardino County Rob Biesemeier Beverly Beasley Carol L. Anselmi Kathy Harwell Stephen Peiz Daryl Rhoden Yuba County Christopher Cushner Linda Haugan Suzanne Nobles Diana Clavel 41 ATTACHMENT 1: COUNTY PERFORMANCE STANDARDS 42 ATTACHMENT 1: COUNTY PERFORMANCE STANDARDS COUNTY PERFORMANCE MEASURE\/TARGET EMPLOYEE CLASSIFICATION Calaveras Enrollment of all participants within 30 days of cash aid approval Case Manager Fresno 70% of all customers must be engaged in an activity each month Case Manager Imperial 80 direct job referrals monthly Case Manager Kern Exceed federal participation requirement of 50% Minimum 70% of cases participating in full time WTW activity Minimum 85% of cases reflect timely case management Monthly contact on 100% cases Program Case Manager Case Manager Case Manager Orange 80% of mandatory WTW clients are engaged in approved activities Overall participation rate for both one and two parent assistance units equal to 65%. Note: Contractor is paid an incentive payment for each quarter that the participation rate is met. Case Manager Contractor Riverside Performance standards are set for customer participation, employment, education, and training. Case Manager Supervisor Managers San Bernardino 5% of the office total monthly caseload transitions into employment (includes active, sanction and exempt clients) 50% Work Participation Rate monthly Case Manager Each Regional Office San Diego 60% of the Region’s active CalWORKs participants in one-parent cases shall be participating in approved work activities for 128 hours per month (an average of 32 hours per week). 75% of the Region’s active CalWORKs two-parent cases shall have a parent or parents participating in approved work activities for a total of 140 hours per month (an average of 35 hours per week). 50% of the Region’s active CalWORKs participants shall be engaged in employment. 70% of the Region’s active CalWORKs participants who became employed shall remain continuously employed for 30 consecutive calendar days. 65% of the Region’s active CalWORKs participants who enter employment shall remain continuously employed for at least 90 consecutive calendar days. Applied to each Region 43 San Diego (continued) 1.5% of the Region’s number of active participants monthly shall reach the goal of having retained continuous employment for at least 180 consecutive calendar days or longer. The average hourly wage of the Region’s active employed CalWORKs participants shall increase by 2% per year. The baseline measurement is taken July 1st of each year and compared to the average wages on June 30th of the following year. 90% of the Region’s former CalWORKs participants who exit CalWORKs cash assistance because of employment shall remain independent t of CalWORKs cash assistance for at least 6 calendar months. 3.5% of the Region’s number of active Welfare-to-Work participants shall exit CalWORKs each month due to employment and remain independent of CalWORKs cash assistance for one (1) full calendar month. 5% of the number of the Region’s active Welfare-to-Work participants shall obtain employment and retain that employment for at least 180 days. Both active participants who continue to receive CalWORKs and those who exit CalWORKs while employed shall be counted as actuals. The percentage increase in participants by region earning $10.00 per hour or more compared to the established baseline. The percentage decrease of Welfare-to-Work participants in each Region’s participant pool who have been on TANF\/CalWORKs 30 months or longer as compared to the established baseline. San Luis Obispo Work Participation Rates Region Santa Clara 85% Work Participation Management Stanislaus Increase enrollment in WTW activities by 3% for the period of July 2004 through June 2005 Increase the number of WTW customers transitioning to employment by 5% Increase the number of WTW customers who remain employed six months beyond attaining self-sufficiency Increase the number of personal responsibility plans by 5% Note: The above performance standards were established in July 2004 and are to be implemented in January 2005. Case Manager and Management 45 ATTACHMENT 2: COUNTY ACTIVITIES AND SPECIALIZED PRACTICES 46 ATTACHMENT 2: COUNTY ACTIVITIES AND SPECIALIZED PRACTICES County Innovative Activities and Specialized Practices to Address Barriers reported in WTW Survey Alameda Domestic Violence Specialists and Behavioral Health Care Services workers are located at each office. Calaveras Created Supporting Success Groups facilitated by Psychiatric Social Worker- this program offers help in many areas including Self-Esteem, Assertiveness Skills, Communication Skills, Relationship Issues, Setting Boundaries, and Social Skills. The groups help people gain success in seeking and maintaining employment. Group sessions and meetings are scheduled around bus schedules. Bus passes are provided to participants El Dorado The County was given an award for best practices regarding integrated employment services offered by their Rehab unit in Employment Services. The services offered are Alcohol and Drug (AOD), Mental Health, Domestic Abuse (DA) and other services. WTW clients participate in employment activities while receiving personalized support services. To assist clients the WTW program will pay mileage as well provide car repairs, assistance with DMV registration (one time only) and car insurance (one time only). County has a Family Loan program available (for clients who qualify) that can assist WTW clients purchase a car. Established Linkages committee. On a monthly basis a Linkages meeting is scheduled to discuss difficult clients in order to avoid sanctions. With the clients permission DHS staff along with other agency staff who have been serving the client meet to discuss the client and try to develop a more effective approach for serving the client. El Dorado County was awarded a Certificate of Commendation by the California Institute for Mental Health for best practices in providing integrated employment-focused services in the areas of mental health, addiction, domestic violence and physical barriers. Fresno Programs that encourage client participation include: Tattoo Removal Service, Money Management instruction Earned Income Tax Credit (EITC) filing assistance JOBS First and JOBS 2000 through which clients receive not only job search and assessment services but also Child Support and legal services provided through Inter-Department agreements. Each month a class of participating clients is taken to Court with the assistance of a Public Defender and District Attorney to settle many misdemeanor legal issues that have hampered their ability to become employed and self-sufficient. Contract many specialized needs including the provision of domestic violence services, transportation services (including during non-traditional work hours), interpretation\/translation services. Contract with Community Providers for full case management of Refugee clients. Contractors provide the full spectrum of employment services with the added benefit to the client of caseworkers who speak their native language and understand their culture. Imperial Developed and partnered with Regional Occupational Program and local school districts to have 32 hours\/week English Immersion classes, Adult Basic Education, GED and Job Readiness classes of monolingual participants. Co-location of Behavioral Health Unit has increased communication between partners. This allows for immediate outcomes in cause determination. Kern Developed weeklong workshops that help build life and coping skills while also serving the purpose of providing a short-term activity between longer activities. Full range of WTW activities are offered in the smaller and geographically dispersed communities in the county to address the transportation difficulties many participants have in getting to the larger community of Bakersfield. In partnership with the Mental Health Department, developed a weeklong workshop facilitated by Mental Health staff. The workshop provides a support group setting for identifying Mental Health\/Substance Abuse\/Domestic Violence issues. Employed an in-house DV counselor to address DV issues. This improved the coordination of services, likely resulting in improved participation rates for individuals with these barriers. In addition to providing services and workshops in their primary language, some offices in Kern County have provided orientation sessions specific to seasonal farm workers to help incorporate them back into WTW activities when the season ends. Kings Developed a Life Skills program which has been extremely successful in identifying barriers and finding the means to overcome barriers to personal success Spanish language services and staff with those language skills work together to overcome barriers to participation. Vanpools and AITS (ag worker transport) efforts have targeted certain employees to assist in transportation services 47 Lake A video handbook has been developed to explain the WTW program and activities. Orange On-the-Job Training and Work Experience for the WTW participants through the Workforce Investment Boards located at the One-Stop Centers. Multi-Disciplinary Team meetings involving various workers associated with a case addressing client barriers in a positive setting to develop a case action plan to optimize the client’s involvement in Welfare to Work activities. Individuals attending an MDT meeting include WTW Case Manager, Public Health Nurse, Behavior Health Services staff, Ongoing Services Worker for the CalWORKs eligibility case, Ancillary, Child Care and Transportation worker, Domestic Abuse services worker, and Children and Family Services Social Worker. This is in conjunction with specialized WTW activities to address participants’ barriers dealing with Domestic Abuse, Behavior Health, and Substance Abuse issues. All of these activities assist clients in achieving self- sufficiency and meet the CalWORKs regulations but do not fulfill the federal Welfare to Work regulations Addition of a Public Health Nurse utilized to meet with the client, determine barriers to participation, and participate in the Multi-Disciplinary Team meetings. SSA contracts with the Health Care Agency for Public Health Nurses. These individuals are collocated in CalWORKs offices and perform a variety of services for CalWORKs and non-CalWORKs clients, including attending MDT meetings, conducting home visits to determine individual and family health needs, and liaisons with doctors and other health care providers. Domestic Abuse units are specialized in working with this vulnerable population to ensure that clients are receiving the support and assistance needed with priority focused on self-sufficiency and work participation. The Domestic Abuse Services activity and the Domestic Abuse Waiver component were created so that participants who have current or past domestic abuse issues that impact the ability to participate in regular WTW activities could participate in activities directly related to domestic abuse. Examples of these activities include Community Based Services, individual or group counseling for parents and children, Mental Health or Substance Abuse services, medical services, Immigration Services, parenting skills training, independent living and financial planning, and court related activities. Occupational Therapy through the Health Care Agency’s Behavioral Health program assists clients who are not able to enter unsubsidized employment at the present time. Mutual Client program allows participants to work on the Children and Family Services (CFS) case plan if the participant has an active CFS case. The CFS case plan activities are integrated into the WTW plan allowing the participant’s hours to count toward WTW participation Language need – Many of the activities are available in Spanish and Vietnamese which are impact languages in Orange County, including vocational training, job search, one stop services, assessments, case management and basic education. Employment opportunities are developed in multiple employment sectors, and as many as possible are available to those who speak limited English. Additional activities are available through collaboration with local refugee providers and community organizations for unique language needs. Specialized Job Search A specialized job search function has been developed for certain marginalized populations and English language learners – vocational assessment is available for the same population. Through current and past memoranda with agencies such as Goodwill Industries and the Department of Rehabilitation and Regional Center, services are offered to disabled clients. Learning Disabilities – Learning disabilities screening and evaluations are offered to all English-speaking participants. Learning disabilities that are suspected from school and work history can be evaluated by Spanish-speaking professional, pending the finalization of other screening tools. Support Services – Contracted support services that address multiple needs, and are available in all impact languages. These services include emergency childcare and transportation, professionalism, basic needs (housing, clothing, food), domestic abuse and transitional shelter. Supportive Services – Supportive services including child care, transportation and ancillary services are available to all participants, and are case managed by bi-lingual staff, including Stage 2 and 3 through the Alternative Payment Program. Prevention Services The Prevention Services activity was created to allow the participant to work on the activities that have been identified as part of a risk assessment. This allows the participant to work on a prevention services plan and have the hours counted toward WTW participation. Activities which fall into this component are Community Based Services, individual or group counseling for parents and children, Mental Health or Substance Abuse services, medical services or immunizations for children, attendance at school counseling appointments, parenting skills training, independent living and financial planning, and court related activities. Refugee Services – The program designed to serve non-English speaking participants was enhanced to meet the needs of refugees by providing language-specific services. Refugees are also eligible to receive other services such as transportation, which is available to all other WTW participants. 48 Riverside Fulltime employment is the goal that is stressed in Riverside County. For clients working towards that goal, use of combined job club, job search and motivational workshops plus individual job counseling is used. Job Developers are involved in developing job leads to fit individuals. Contracts have been initiated with schools throughout the county to provide remedial Education, ESL and computer skills. Transportation funds are available for everyone participating in WTW. San Bernardino Developed specialized classes in Spanish and Vietnamese MOU with County Mental Health. The County Mental Health staff is co-located in some of the WTW offices, which improves the show rate for participants that are referred for services. Contract with agencies that provide substance abuse and domestic violence counseling. These agencies attend office staff meetings at times so that they can continue to provide accurate information to their CalWORKs clients. Currently have a contract with a company that provides assessment services to help identify customers who may have Learning Disabilities. Recently signed an MOU with Public Health to provide services to the exempt population. Public Health nurses review CA 61’s. They visit clients who have short-term disabilities to see whether they can intervene and get them needed services quicker. For long term disabilities, they refer them to apply for SSI. Established contracts with schools and community based organizations to provide ESL classes. Provide Job Services activities in Spanish and Vietnamese San Diego The regions have incorporated mini-workshops during Network Center\/Job Search. Staff and community partners provide information on: Legal Assistance, Criminal Expungement, DMV, Court Process, Budgeting, Credit Repair, Domestic Violence, Drug and Alcohol Information, Mental Health, Parenting, Healthy Relationships, Self-Esteem, Employment Background screening, Section 8 Housing, and Resume writing. Have access to additional resources that allow the client the ability to resolve barriers that could interfere with participation. Participants can also work on resumes, practice their typing skills, and work with Job Developers, job search via the Internet, and\/or brainstorm with their peers. Drug and Alcohol and Mental Health services available that can be incorporated in a participant’s WTW plan. For participants with Learning Disabilities, accommodations must be included in their plan to facilitate success. Spanish Orientation and Job Clubs and provide interpreters for other languages. Assign hard to place participants at County WEX sites and continually develop additional WEX training sites in remote areas and those that will utilize limited English speaking employees. Work with participants to develop basic transportation planning skills, teaching them about web sites like Yahoo Driving Directions, Map Quest and how to access public transportation telephone numbers. Mandatory screening for AOD, voluntary screening for MH, and the opportunity to self-declare DV at CalWORKs Intake and again at WTW orientation\/appraisal. All participants are offered an LD screening. In addition to the screening and referral process, the AOD and MH providers hold workshops during Job Search\/Network Center to provide our participants with ways to address their barriers and function in society with work and family. Conduct specialized English-proficiency testing ,conduct specialized Job Clubs, Assign to ESL or basic education training, Assign to Bilingual staff who understand the language and culture, Provide access to a Multilingual Mental Health Provider Have extended office hours including being open one Saturday a month in a couple regions. Welcoming walk-ins. Plan to implement SSI Advocacy for unemployable clients Plan to implement pilot project using county-contracted doctor to assess client employability Designated participation as Pay Point for new contracts effective July 2005. Contractors will be paid ONLY if they meet required participation rate. Plan on implementing remote learning sites at libraries for clients who live far from the office. Evaluating plan to pay work support allowance to working clients to motivate job retention San Luis Obispo Contract with Goodwill through the Goodwill Works OJT program. Goodwill case managers provide feedback and in depth client assessments. Santa Clara Have developed two programs to increase participation rate. The Bridge is a special program for clients as they wait entry into their next scheduled activity. This program utilizes the nationally recognized motivational life skill curriculum of Women in Community Service . Clients can participate in the program one to eight weeks. The program is able to work with clients as they wait for a new activity or when their service provider has a scheduled break in service. CalCAP, works with the part-time employed clients identifying strategies to locate full-time employment while also developing appropriate back-fill hours for the WtW. 49 Santa Clara (continued) The Guaranteed Ride Program arranges one to forty rides for CalWORKs participants. Once enrolled in the program, clients may receive rides to\/from work or to job interviews whenever their regular mode of transportation is unavailable. This service is provided by a local paratransit provider and includes stops at childcare or elementary school as needed and delivery to the workplace\/scheduled activity. Local refugee programs have been supplemented by CalWORKs Incentive funding. As a result, specialized VESL programs have been developed for clients with language barriers. These programs are time limited (less than 6 months) and include employment goals. Established specialized support services such as onsite social workers, onsite DV counselor, LD services, and an intensive case management model, referred to as Pathways. Referrals are also made for services in these areas for clients who have more than one need to a team of professionals that are contracted to deal with these multiple issues. CWES has bilingual workers who meet the needs of the major groups of LEP clients. The partnership between Adult School Districts and Community Colleges, and Refugee Providers has also created 22 program sites that serve LEP clients. Almost all the sites have school liaisons who work closely with CalWORKs clients Specifics: 1. SCC provides CalWORKs orientation in English, Spanish and Vietnamese in group setting. Individual orientations are provided by bilingual workers as necessary to meet non-English proficient clients’ needs. 2. Clients answer self appraisal questionnaire about their English level at Intake. 3. Clients identified as needing ESL and not successful at job club are referred to Adult Education providers who further develop a service plan for up to 12 months (can be concurrent with Vocational Training). 4. Non-English proficient clients also can receive ESL in the Community Colleges, concurrent with other college activities. 5. Non-English proficient clients who have refugee background and have 6 years or less of educational in their homeland are often referred to Central Intake Unit for refugee specific services (see more details in the next question for refugee specific services). Santa Cruz Implemented the Pathways Program to increase client participation. Special vocationally focused ESL Classes on site, Literacy Services (Tutoring), Self-Employment Classes, Social Work Assessments, On- site mental health counseling, SSI advocacy, On- site substance abuse assessment and referral, Emergency ride home program (tax vouchers) for bus riders, Families in Transition Housing, Scholarships, Microenterprise Training, Women’s Ventures (non-traditional apprentice training for women), Financial Literacy classes and Pathways case management model. Solano Implemented procedures for Clerical Assistants to contact clients prior to scheduled appointment for Orientation. Call script includes date and time of Orientation appointment, explanation of Orientation, explanation of Job Club, questions about Doctor appointments, childcare needs and transportation. Implemented SMART team to address domestic violence, substance abuse, and mental health issues Provide post aid retention activities Stanislaus The following programs have been implemented to meet the unique needs of clients participating in WTW: Right Start Program Utilizing an outcome based performance contract, clients are referred to Kelly Services to obtain employment. The contractor is reimbursed based on the number of clients employed and the duration of employment. ARBOR Utilizing an outcome based performance contract, clients are referred to Arbor for an intensive four-week Job Services program with an emphasis on self-directed job search. ARBOR receives payment only for those clients who are placed in unsubsidized employment. Services provided by ARBOR include: vocation\/career assessment, interview techniques, resume preparation, placement opportunities, job retention strategies, basic computer skills, self-esteem and motivation training. Pre-Construction This vocational training program is administered in partnership with Modesto Junior College, City of Modesto, American GI Forum, and the Habitat for Humanity. Pre-Construction training is a specially designed course that lasts 16 weeks and equips participants with the knowledge and skill required for success in the Construction Industry. CVOC Spanish speaking customers participate in a contracted Job Club\/Job Search program through the Central Valley Opportunity Center. CVOC conducts extensive assessments and develops an employability plan for each participant. Stanislaus Co Literacy Program This contracted service provides testing, assessment, case management, reading classes, English as a Second Language Classes, spelling classes, math tutoring, and pre-GED counseling. Often Literacy Services are coupled with Vocational Training and Community Service placement activities. 50 Stanislaus (continued) Welding certification program and Accelerated Skills in Industry Program. Accelerated Skills Industry Program (which is a collaborative effort between CSA and MJC to provide TANF recipients training in manufacturing, construction, automotive repair and printing, while they earn college credits. Intensive case management services are provided on-site by MJC and by a Family Services Specialist outstationed at MJC on a part time basis), IHSS (a partnership with Modesto City Schools and the IHSS Program to fill an unmet need within Stanislaus Co for trained providers to provide in-home care for the elderly\/disabled residents of our County), On-site Behavioral Health Services for customers (that include AOD, MH and Domestic Abuse Services) and Intense services from the Building Successful Tomorrow’s Team (BST) to address barriers to family self-sufficiency and help the customer become engaged and successful in the WTW Program. A Learning Disability Orientation has been created specifically for those customers who have identified Learning Disabilities, English as a Second Language classes are available for our mono-lingual customers, Literacy classes are available for customers with limited literacy skills, a limited number of training classes are available for mono-lingual Spanish participants Assistance with SSI for those customers who are not able to participate in WTW due to a permanent medical\/ psychological\/ psychiatric condition The partnerships established with Behavioral Health and Recovery Services, the Haven Women’s Center (Domestic Abuse Services), Modesto Junior College (Learning Disabilities) play an integral role in providing customers with services that address barriers to self-sufficiency and assists them in being successful in obtaining and maintaining a safe and healthy living arrangement for themselves and their children and obtaining skills that will enable them to become financially self-sufficient. These services when provided collaboratively with the customer have increased the likelihood that the customer will be successful in whatever activity they are assigned to or participating in Yuba Implemented a program called CanWORKs that provides work activities for participants who live in the remote hill areas of the county. Offer job skills training and education directly related to employment activities as well as Regional Occupational Program (ROP) classes such as Certified Nurses Assistant and Office Technology classes on-site. Offer a contractor apprentice program called Youth Build that enables participants to obtain a high school diploma while learning job skills as they build houses for low-Income families to purchase English-as-a-Second-Language classes through local Office of Education and are developing non-English speaking work experience sites. Established a multi-disciplinary team approach that helps to coordinate the efforts of all parties involved in resolving an individual’s barriers to participation. The team may consist of staff from Employment Services, Child Welfare Services, Prevention Services, and any community agency staff that is involved. Co-located with mental health counselors, substance abuse counselors, staff from the local domestic abuse shelter, Children’s Home Society, Yuba College, and the Family Support division. Children’s Home Society is contracted to provide assistance with all childcare needs and Yuba College staff administer the Learning Disability testing and evaluation. This One-Stop concept has helped to facilitate coordination of services. It also helps to provide individuals with prompt service and enables case managers to respond immediately to urgent situations that may arise. 52 ATTACHMENT 3: COUNTY DEMOGRAPHICS – FEBRUARY 2004 53 Invited Counties: IMPERIAL WPR: 50.26% Unemployment Rate: 19% CalWORKs Demographics: Overall CalWORKs Active: (February 2004 Active During the Month) a. CalWORKs All other families: Number of cases: 2223 b. CalWORKs 2 parent families: Number of cases: 516 c. Safety Net: 2 parent families\/All families Number of cases: 219 d. CalWORKs Zero Parent families: Number of cases: 859 e. TANF Timed out families: Number of cases: 222 Total: 4039 CalWORKs Mandatory WTW WTW 25 (February 2004-Active During the Month) a. Two Parent (Separate State Program) CalWORKs WTW Enrollees (number) 556 Exemptions (number) 90 Exemptions (% of total active Two Parent CalWORKs) 17.4% Good Cause 0 WTW Sanctions (number) 13 WTW Sanctions (% of total mandatory enrollees) 2% b. All (other) Families CalWORKs WTW Enrollees (number) 1835 Exemptions (number) 188 Exemptions (% of total active All families CalWORKs) 8.5% Good Cause 2 WTW Sanctions (number) 11 WTW Sanctions (% of total mandatory enrollees) .05% Total Enrollees 2391 Total Exempt\/Sanction\/Good Cause 304 Percentage not enrolled 12.7% 54 Invited Counties: Kern WPR 53% Unemployment Rate: 10.7% CalWORKs Demographics: Overall CalWORKs Active: (February 2004 Active During the Month) a. CalWORKs All other families: Number of cases: 7214 b. CalWORKs 2 parent families: Number of cases: 1438 c. Safety Net: 2 parent families\/All families Number of cases: 811 d. CalWORKs Zero Parent families: Number of cases: 6371 e. TANF Timed out families: Number of cases: 1393 Total: 17,227 CalWORKs Mandatory WTW WTW 25 (February 2004-Active During the Month) a. Two Parent (Separate State Program) CalWORKs WTW Enrollees (number) 2330 Exemptions (number) 119 Exemptions (% of total active Two Parent CalWORKs) 8.3% Good Cause 287 WTW Sanctions (number) 486 WTW Sanctions (% of total mandatory enrollees) 17.3% b. All (other) Families CalWORKs WTW Enrollees (number) 5664 Exemptions (number) 1316 Exemptions (% of total active All families CalWORKs) 18.2% Good Cause 506 WTW Sanctions (number) 1884 WTW Sanctions (% of total mandatory enrollees) 25% Total Enrollees 7994 Total Exempt\/Sanction\/Good Cause 4598 Percentage not enrolled 57.5% 55 Invited Counties: Kings WPR 34.2% Unemployment Rate: 11% CalWORKs Demographics: Overall CalWORKs Active: (February 2004 Active During the Month) a. CalWORKs All other families: Number of cases: 1214 b. CalWORKs 2 parent families: Number of cases: 229 c. Safety Net: 2 parent families\/All families Number of cases: 166 d. CalWORKs Zero Parent families: Number of cases: 898 e. TANF Timed out families: Number of cases: 124 Total: 2631 CalWORKs Mandatory WTW WTW 25 (February 2004-Active During the Month) a. Two Parent (Separate State Program) CalWORKs WTW Enrollees (number) 314 Exemptions (number) 76 Exemptions (% of total active Two Parent CalWORKs) 33.2% Good Cause 48 WTW Sanctions (number) 486 WTW Sanctions (% of total mandatory enrollees) 13.3% b. All (other) Families CalWORKs WTW Enrollees (number) 835 Exemptions (number) 257 Exemptions (% of total active All families CalWORKs) 21.2% Good Cause 13 WTW Sanctions (number) 305 WTW Sanctions (% of total mandatory enrollees) 26.8% Total Enrollees 1149 Total Exempt\/Sanction\/Good Cause 625 Percentage not enrolled 35.2% 56 Invited Counties: Mono WPR 46% Unemployment Rate.: 5.6% CalWORKs Demographics: Overall CalWORKs Active: (February 2004 Active During the Month) a. CalWORKs All other families: Number of cases: 28 b. CalWORKs 2 parent families: Number of cases: 4 c. Safety Net: 2 parent families\/All families Number of cases: 0 d. CalWORKs Zero Parent families: Number of cases: 23 e. TANF Timed out families: Number of cases: 0 Total: 55 CalWORKs Mandatory WTW WTW 25 (February 2004-Active During the Month) a. Two Parent (Separate State Program) CalWORKs WTW Enrollees (number) 2 Exemptions (number) 3 Exemptions (% of total active Two Parent CalWORKs) 75% Good Cause 0 WTW Sanctions (number) 3 WTW Sanctions (% of total mandatory enrollees) 60% b. All (other) Families CalWORKs WTW Enrollees (number) 19 Exemptions (number) 5 Exemptions (% of total active All families CalWORKs) 17.9% Good Cause 0 WTW Sanctions (number) 4 WTW Sanctions (% of total mandatory enrollees) 17.4% Total Enrollees 21 Total Exempt\/Sanction\/Good Cause 15 Percentage not enrolled 41.7% 57 Invited Counties: Orange WPR 50% Unemployment Rate: 3.2% CalWORKs Demographics: Overall CalWORKs Active: (February 2004 Active During the Month) a. CalWORKs All other families: Number of cases: 6867 b. CalWORKs 2 parent families: Number of cases: 1665 c. Safety Net: 2 parent families\/All families Number of cases: 1161 d. CalWORKs Zero Parent families: Number of cases: 7792 e. TANF Timed out families: Number of cases: 1056 Total: 18,541 CalWORKs Mandatory WTW WTW 25 (February 2004-Active During the Month) a. Two Parent (Separate State Program) CalWORKs WTW Enrollees (number) 2300 Exemptions (number) 216 Exemptions (% of total active Two Parent CalWORKs) 12.9% Good Cause 16 WTW Sanctions (number) 167 WTW Sanctions (% of total mandatory enrollees) 6.8% b. All (other) Families CalWORKs WTW Enrollees (number) 4426 Exemptions (number) 976 Exemptions (% of total active All families CalWORKs) 14.2% Good Cause 122 WTW Sanctions (number) 1015 WTW Sanctions (% of total mandatory enrollees) 18.7% Total Enrollees 6726 Total Exempt\/Sanction\/Good Cause 2512 Percentage not enrolled 27.2% 58 Invited Counties: San Bernardino WPR 51.6% Unemployment Rate: 5.2% CalWORKs Demographics: Overall CalWORKs Active: (February 2004 Active During the Month) a. CalWORKs All other families: Number of cases: 18355 b. CalWORKs 2 parent families: Number of cases: 2456 c. Safety Net: 2 parent families\/All families Number of cases: 1387 d. CalWORKs Zero Parent families: Number of cases: 10951 e. TANF Timed out families: Number of cases: 2507 Total: 35,656 CalWORKs Mandatory WTW WTW 25 (February 2004-Active During the Month) a. Two Parent (Separate State Program) CalWORKs WTW Enrollees (number) 4581 Exemptions (number) 1095 Exemptions (% of total active Two Parent CalWORKs) 44.6% Good Cause 870 WTW Sanctions (number) 782 WTW Sanctions (% of total mandatory enrollees) 14.6% b. All (other) Families CalWORKs WTW Enrollees (number) 14212 Exemptions (number) 4936 Exemptions (% of total active All families CalWORKs) 26.9% Good Cause 1237 WTW Sanctions (number) 2986 WTW Sanctions (% of total mandatory enrollees) 17.4% Total Enrollees 18793 Total Exempt\/Sanction\/Good Cause 11906 Percentage not enrolled 38.8% 59 Invited Counties: San Diego WPR 52% Unemployment Rate: 3.6% CalWORKs Demographics: Overall CalWORKs Active: (February 2004 Active During the Month) a. CalWORKs All other families: Number of cases: 10,361 b. CalWORKs 2 parent families: Number of cases: 1544 c. Safety Net: 2 parent families\/All families Number of cases: 1071 d. CalWORKs Zero Parent families: Number of cases: 9853 e. TANF Timed out families: Number of cases: 1892 Total: 24721 CalWORKs Mandatory WTW WTW 25 (February 2004-Active During the Month) a. Two Parent (Separate State Program) CalWORKs WTW Enrollees (number) 1504 Exemptions (number) 279 Exemptions (% of total active Two Parent CalWORKs) 18% Good Cause n\/a WTW Sanctions (number) 238 WTW Sanctions (% of total mandatory enrollees) 15.8% b. All (other) Families CalWORKs WTW Enrollees (number) 4050 Exemptions (number) 2121 Exemptions (% of total active All families CalWORKs) 20.47% Good Cause n\/a WTW Sanctions (number) 1766 WTW Sanctions (% of total mandatory enrollees) 30.4% Total Enrollees 5554 Total Exempt\/Sanction\/Good Cause 4404 Percentage not enrolled 44.2% 60 Invited Counties: Santa Clara WPR 50% Unemployment Rate: 5.5% CalWORKs Demographics: Overall CalWORKs Active: (February 2004 Active During the Month) a. CalWORKs All other families: Number of cases: 6757 b. CalWORKs 2 parent families: Number of cases: 1577 c. Safety Net: 2 parent families\/All families Number of cases: 776 d. CalWORKs Zero Parent families: Number of cases: 4468 e. TANF Timed out families: Number of cases: 873 Total: 14451 CalWORKs Mandatory WTW WTW 25 (February 2004-Active During the Month) a. Two Parent (Separate State Program) CalWORKs WTW Enrollees (number) 2193 Exemptions (number) 285 Exemptions (% of total active Two Parent CalWORKs) 18% Good Cause 477 WTW Sanctions (number) 175 WTW Sanctions (% of total mandatory enrollees) 7.4% b. All (other) Families CalWORKs WTW Enrollees (number) 4553 Exemptions (number) 1200 Exemptions (% of total active All families CalWORKs) 17.8% Good Cause 168 WTW Sanctions (number) 664 WTW Sanctions (% of total mandatory enrollees) 12.7% Total Enrollees 6746 Total Exempt\/Sanction\/Good Cause 2969 Percentage not enrolled 30.6% 61 Invited Counties: Stanislaus – WPR 36.45% Unemployment Rate: 10.1% CalWORKs Demographics: Overall CalWORKs Active: (February 2004 Active During the Month) a. CalWORKs All other families: Number of cases: 4048 b. CalWORKs 2 parent families: Number of cases: 995 c. Safety Net: 2 parent families\/All families Number of cases: 472 d. CalWORKs Zero Parent families: Number of cases: 2925 e. TANF Timed out families: Number of cases: 470 Total: 8480 CalWORKs Mandatory WTW WTW 25 (February 2004-Active During the Month) a. Two Parent (Separate State Program) CalWORKs WTW Enrollees (number) 1335 Exemptions (number) 109 Exemptions (% of total active Two Parent CalWORKs) 11% Good Cause 34 WTW Sanctions (number) 131 WTW Sanctions (% of total mandatory enrollees) 8.9% b. All (other) Families CalWORKs WTW Enrollees (number) 3194 Exemptions (number) 478 Exemptions (% of total active All families CalWORKs) 11.8% Good Cause 79 WTW Sanctions (number) 422 WTW Sanctions (% of total mandatory enrollees) 11.7% Total Enrollees 4529 Total Exempt\/Sanction\/Good Cause 1253 Percentage not enrolled 21.7% 62 Invited Counties: Yuba WPR 50% Unemployment Rate: 13% CalWORKs Demographics: Overall CalWORKs Active: (February 2004 Active During the Month) a. CalWORKs All other families: Number of cases: 901 b. CalWORKs 2 parent families: Number of cases: 231 c. Safety Net: 2 parent families\/All families Number of cases: 146 d. CalWORKs Zero Parent families: Number of cases: 560 e. TANF Timed out families: Number of cases: 108 Total: 1946 CalWORKs Mandatory WTW WTW 25 (February 2004-Active During the Month) a. Two Parent (Separate State Program) CalWORKs WTW Enrollees (number) 245 Exemptions (number) 46 Exemptions (% of total active Two Parent CalWORKs) 19.9% Good Cause 0 WTW Sanctions (number) 13 WTW Sanctions (% of total mandatory enrollees) 5% b. All (other) Families CalWORKs WTW Enrollees (number) 593 Exemptions (number) 177 Exemptions (% of total active All families CalWORKs) 19.6% Good Cause 8 WTW Sanctions (number) 66 WTW Sanctions (% of total mandatory enrollees) 10% Total Enrollees 838 Total Exempt\/Sanction\/Good Cause 310 Percentage not enrolled 27% 63 Volunteer Counties: Alameda WPR 36.7% Unemployment rate : 5.4% CalWORKs Demographics: Overall CalWORKs Active: (February 2004 Active During the Month) f. CalWORKs All other families: Number of cases: 9783 g. CalWORKs 2 parent families: Number of cases: 1480 h. Safety Net: 2 parent families\/All families Number of cases: 1471 i. CalWORKs Zero Parent families: Number of cases: 3300 j. TANF Timed out families: Number of cases: 2096 Total: 18130 CalWORKs Mandatory WTW WTW 25 (February 2004-Active During the Month) a. Two Parent (Separate State Program) CalWORKs WTW Enrollees (number) 1852 Exemptions (number) 292 Exemptions (% of total active Two Parent CalWORKs) 19.7% Good Cause 21 WTW Sanctions (number) 416 WTW Sanctions (% of total mandatory enrollees) 18.3% b. All (other) Families CalWORKs WTW Enrollees (number) 7089 Exemptions (number) 970 Exemptions (% of total active All families CalWORKs) 10% Good Cause 188 WTW Sanctions (number) 1786 WTW Sanctions (% of total mandatory enrollees) 20% Total Enrollees 8941 Total Exempt\/Sanction\/Good Cause 3673 Percentage not enrolled 29.1% 64 Volunteer Counties: Calaveras WPR 34.02% Unemployment rate : 6.1% CalWORKs Demographics: Overall CalWORKs Active: (February 2004 Active During the Month) a. CalWORKs All other families: Number of cases: 220 b. CalWORKs 2 parent families: Number of cases: 37 c. Safety Net: 2 parent families\/All families Number of cases: 5 d. CalWORKs Zero Parent families: Number of cases: 114 e. TANF Timed out families: Number of cases: 396 Total: 792 CalWORKs Mandatory WTW WTW 25 (February 2004-Active During the Month) a. Two Parent (Separate State Program) CalWORKs WTW Enrollees (number) 34 Exemptions (number) 16 Exemptions (% of total active Two Parent CalWORKs) 43% Good Cause 4 WTW Sanctions (number) 13 WTW Sanctions (% of total mandatory enrollees) 27.7% b. All (other) Families CalWORKs WTW Enrollees (number) 131 Exemptions (number) 67 Exemptions (% of total active All families CalWORKs) 33.8% Good Cause 6 WTW Sanctions (number) 32 WTW Sanctions (% of total mandatory enrollees) 19.6% Total Enrollees 165 Total Exempt\/Sanction\/Good Cause 138 Percentage not enrolled 45.5% 65 Volunteer Counties: El Dorado WPR 28.8% Unemployment Rate: 4.2% CalWORKs Demographics: Overall CalWORKs Active: (February 2004 Active During the Month) a. CalWORKs All other families: Number of cases: 524 b. CalWORKs 2 parent families: Number of cases: 106 c. Safety Net: 2 parent families\/All families Number of cases: 21 d. CalWORKs Zero Parent families: Number of cases: 333 e. TANF Timed out families: Number of cases: 66 Total: 1050 CalWORKs Mandatory WTW WTW 25 (February 2004-Active During the Month) a. Two Parent (Separate State Program) CalWORKs WTW Enrollees (number) 116 Exemptions (number) 31 Exemptions (% of total active Two Parent CalWORKs) 29.2% Good Cause 12 WTW Sanctions (number) 7 WTW Sanctions (% of total mandatory enrollees) 6% b. All (other) Families CalWORKs WTW Enrollees (number) 332 Exemptions (number) 132 Exemptions (% of total active All families CalWORKs) 25% Good Cause 30 WTW Sanctions (number) 44 WTW Sanctions (% of total mandatory enrollees) 13.3% Total Enrollees 448 Total Exempt\/Sanction\/Good Cause 256 Percentage not enrolled 36.36% 66 Volunteer Counties: Fresno WPR 21% Unemployment Rate: 12% CalWORKs Demographics: Overall CalWORKs Active: (February 2004 Active During the Month) a. CalWORKs All other families: Number of cases: 9942 b. CalWORKs 2 parent families: Number of cases: 2954 c. Safety Net: 2 parent families\/All families Number of cases: 2198 d. CalWORKs Zero Parent families: Number of cases: 6970 e. TANF Timed out families: Number of cases: 1760 Total: 23824 CalWORKs Mandatory WTW WTW 25 (February 2004-Active During the Month) a. Two Parent (Separate State Program) CalWORKs WTW Enrollees (number) 3679 Exemptions (number) 687 Exemptions (% of total active Two Parent CalWORKs) 23.3% Good Cause 37 WTW Sanctions (number) 2381 WTW Sanctions (% of total mandatory enrollees) 39.2% b. All (other) Families CalWORKs WTW Enrollees (number) 7660 Exemptions (number) 1289 Exemptions (% of total active All families CalWORKs) 13% Good Cause 69 WTW Sanctions (number) 4605 WTW Sanctions (% of total mandatory enrollees) 37.5% Total Enrollees 11339 Total Exempt\/Sanction\/Good Cause 9068 Percentage not enrolled 44.4% 67 Volunteer Counties: Lake WPR 29.91% Unemployment Rate: 5.7% CalWORKs Demographics: Overall CalWORKs Active: (February 2004 Active During the Month) a. CalWORKs All other families: Number of cases: 652 b. CalWORKs 2 parent families: Number of cases: 138 c. Safety Net: 2 parent families\/All families Number of cases: 59 d. CalWORKs Zero Parent families: Number of cases: 469 e. TANF Timed out families: Number of cases: 118 Total: 1436 CalWORKs Mandatory WTW WTW 25 (February 2004-Active During the Month) a. Two Parent (Separate State Program) CalWORKs WTW Enrollees (number) 164 Exemptions (number) 63 Exemptions (% of total active Two Parent CalWORKs) 45.6% Good Cause 2 WTW Sanctions (number) 43 WTW Sanctions (% of total mandatory enrollees) 20.8% b. All (other) Families CalWORKs WTW Enrollees (number) 382 Exemptions (number) 257 Exemptions (% of total active All families CalWORKs) 39.5% Good Cause 14 WTW Sanctions (number) 161 WTW Sanctions (% of total mandatory enrollees) 29.7% Total Enrollees 546 Total Exempt\/Sanction\/Good Cause 540 Percentage not enrolled 49.7% 68 Vounteer Counties: Riverside WPR 41.7% Unemployment Rate: 6.1% CalWORKs Demographics: Overall CalWORKs Active: (February 2004 Active During the Month) a. CalWORKs All other families: Number of cases: 9789 b. CalWORKs 2 parent families: Number of cases: 1156 c. Safety Net: 2 parent families\/All families Number of cases: 708 d. CalWORKs Zero Parent families: Number of cases: 7107 e. TANF Timed out families: Number of cases: 1571 Total: 20,331 CalWORKs Mandatory WTW WTW 25 (February 2004-Active During the Month) a. Two Parent (Separate State Program) CalWORKs WTW Enrollees (number) 1257 Exemptions (number) 274 Exemptions (% of total active Two Parent CalWORKs) 23.7% Good Cause 182 WTW Sanctions (number) 443 WTW Sanctions (% of total mandatory enrollees) 26.3% b. All (other) Families CalWORKs WTW Enrollees (number) 6952 Exemptions (number) 2227 Exemptions (% of total active All families CalWORKs) 22.7% Good Cause 1029 WTW Sanctions (number) 1887 WTW Sanctions (% of total mandatory enrollees) 21.3% Total Enrollees 8209 Total Exempt\/Sanction\/Good Cause 6047 Percentage not enrolled 42.4% 69 Volunteer Counties: San Luis Obispo – WPR 20% Unemployment Rate : 3% CalWORKs Demographics: Overall CalWORKs Active: (February 2004 Active During the Month) a. CalWORKs All other families: Number of cases: 886 b. CalWORKs 2 parent families: Number of cases: 143 c. Safety Net: 2 parent families\/All families Number of cases: 21 d. CalWORKs Zero Parent families: Number of cases: 561 e. TANF Timed out families: Number of cases: 119 Total: 1730 CalWORKs Mandatory WTW WTW 25 (February 2004-Active During the Month) a. Two Parent (Separate State Program) CalWORKs WTW Enrollees (number) 228 Exemptions (number) 38 Exemptions (% of total active Two Parent CalWORKs) 26.6% Good Cause 0 WTW Sanctions (number) 28 WTW Sanctions (% of total mandatory enrollees) 10.9% b. All (other) Families CalWORKs WTW Enrollees (number) 675 Exemptions (number) 164 Exemptions (% of total active All families CalWORKs) 18.5% Good Cause 2 WTW Sanctions (number) 167 WTW Sanctions (% of total mandatory enrollees) 19.4% Total Enrollees 903 Total Exempt\/Sanction\/Good Cause 394 Percentage not enrolled 30.3% 70 Volunteer Counties: Santa Cruz WPR 29% Unemployment Rate : 5.7% CalWORKs Demographics: Overall CalWORKs Active: (February 2004 Active During the Month) a. CalWORKs All other families: Number of cases: 894 b. CalWORKs 2 parent families: Number of cases: 128 c. Safety Net: 2 parent families\/All families Number of cases: 49 d. CalWORKs Zero Parent families: Number of cases: 646 e. TANF Timed out families: Number of cases: 185 Total: 1902 CalWORKs Mandatory WTW WTW 25 (February 2004-Active During the Month) a. Two Parent (Separate State Program) CalWORKs WTW Enrollees (number) 191 Exemptions (number) 45 Exemptions (% of total active Two Parent CalWORKs) 35% Good Cause 1 WTW Sanctions (number) 24 WTW Sanctions (% of total mandatory enrollees) 11.1% b. All (other) Families CalWORKs WTW Enrollees (number) 830 Exemptions (number) 249 Exemptions (% of total active All families CalWORKs) 27.9% Good Cause 11 WTW Sanctions (number) 135 WTW Sanctions (% of total mandatory enrollees) 14% Total Enrollees 1021 Total Exempt\/Sanction\/Good Cause 465 Percentage not enrolled 31.3% 71 Volunteer Counties: Solano WPR 11.2% Unemployment Rate: 5.2% CalWORKs Demographics: Overall CalWORKs Active: (February 2004 Active During the Month) a. CalWORKs All other families: Number of cases: 1345 b. CalWORKs 2 parent families: Number of cases: 269 c. Safety Net: 2 parent families\/All families Number of cases: 32 d. CalWORKs Zero Parent families: Number of cases: 1083 e. TANF Timed out families: Number of cases: 171 Total: 2900 CalWORKs Mandatory WTW WTW 25 (February 2004-Active During the Month) a. Two Parent (Separate State Program) CalWORKs WTW Enrollees (number) 480 Exemptions (number) 24 Exemptions (% of total active Two Parent CalWORKs) 9% Good Cause 0 WTW Sanctions (number) 35 WTW Sanctions (% of total mandatory enrollees) 6.7% b. All (other) Families CalWORKs WTW Enrollees (number) 2049 Exemptions (number) 186 Exemptions (% of total active All families CalWORKs) 13.8% Good Cause 0 WTW Sanctions (number) 93 WTW Sanctions (% of total mandatory enrollees) 4.3% Total Enrollees 2529 Total Exempt\/Sanction\/Good Cause 338 Percentage not enrolled 11.8% ”

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” Child-only CalWORKs Study Report #1 When Adults Are Left Out: CalWORKs Child-only Cases in Seven Counties May 2007 Richard Speiglman Hans Bos [email protected] [email protected] Speiglman Norris Associates Lorena Ortiz Oakland, California [email protected] Berkeley Policy Associates Oakland, California When Adults Are Left Out: CalWORKs Child-only Cases in Seven Counties i ACKNOWLEDGEMENTS Core funding for this project was provided by: Alameda County, Social Services Agency City and County of San Francisco, Human Services Agency Humboldt County, Health and Human Services Agency San Mateo County, Human Services Agency Santa Clara County, Social Services Agency Sonoma County, Human Services Department Stanislaus County, Community Services Agency Meeting space and support for meeting costs were provided by The San Francisco Foundation, The Stuart Foundation, and the East Bay Community Foundation. Many individuals contributed to the study, whether by assisting with study design, providing access to relevant data, or helping with interpretation of findings. We are especially appreciative for the contributions of Daniel Kaplan, Dan Kelly, Michael Hunsinger, Lorena Gonzalez, Gina Sessions, Roy Redlich, and Nicole Pollack key county contacts and their associates in data management and information technology, policy, planning, employment services, and other positions. We wish to acknowledge the essential roles played by Will Lightbourne, Glen Brooks, Trent Rhorer, and Chet Hewitt, county directors participating in the Bay Area Social Services Consortium, and Michael Austin, BASSC Staff Director. Their initial and on-going interest in and support for the study has been critical. We are indebted to the contributions provided by many colleagues who participated in our cross-county study meetings. Particularly noteworthy, in light of their formal roles at the meetings, were Carol Lamont, The San Francisco Foundation, Kathy Harwell, Stanislaus County; Stuart Oppenheim, Child and Family Policy Institute of California; Elizabeth K. Anthony and Cathy Vu, University of California, Berkeley; and Jean C. Norris, Speiglman Norris Associates. Finally, we would like to thank Patricia Spikes Calvin for providing assistance with formatting and publication of the report. Thank you all! Speiglman Norris Associates (SNA) is a two-person partnership formed to conduct social and behavioral research and evaluation studies. The partners had, at the time the partnership was established in 2004, worked together for seven years on research and evaluation projects through the Public Health Institute, a large non-profit located in Oakland. SNA’s principals have extensive experience in project design, questionnaire development, primary data collection through telephone and in-person surveys and key informant interviews, preparation and analysis of administrative and survey data, and presentation of results in reports and in peer- reviewed publications as well as at conferences. SNA and its principals have conducted research and evaluation studies on welfare reform (longitudinal, panel studies of the effects of the elimination of SSI benefits for alcoholics and addicts and of barriers to departure from CalWORKs), housing and homelessness, substance use and abuse, mental health, health services utilization, employment, and criminal justice. Topically related to this project, working When Adults Are Left Out: CalWORKs Child-only Cases in Seven Counties ii with the CalWORKs\/Child Welfare Partnership Project, Speiglman surveyed California counties regarding linkages programs and practices. Berkeley Policy Associates (BPA) is an independent, employee-owned, woman-owned firm dedicated to providing information to facilitate decision-making in public policy. BPA has a national reputation for high quality work in conducting program evaluation and public policy research in a wide range of substantive areas. BPA is committed to conducting research that makes a real difference in people’s lives, and has developed special expertise in studying ways of assisting people who encounter obstacles to full participation in society due to such barriers as a lack of education or job training, a history of poverty or dependence on public assistance, age, disability, health, limited English-language skills, or responsibilities associated with caring for children. BPA staff has the experience and know-how to select the most appropriate research methods, and to design, coordinate, and carry out data collection and analysis activities for a wide range of research methodologies. BPA has special expertise in designing large-scale evaluations with multiple research objectives. Other areas of methodological expertise include: extraction and analysis of large-scale databases, random assignment, development of performance indicators and standards, participatory evaluation, surveys, focus groups, statistical analysis and econometric modeling, collection and analysis of longitudinal data, key informant interviews, and Delphi panels. When Adults Are Left Out: CalWORKs Child-only Cases in Seven Counties iii TABLE OF CONTENTS INTRODUCTION …………………………………………………………………………………………………………..1 THE PRESENT STUDY………………………………………………………………………………………………….2 DEFINING CHILD-ONLY CASES…………………………………………………………………………………….2 REPORT FOCUS ………………………………………………………………………………………………………….3 PRIOR RESEARCH……………………………………………………………………………………………………….4 THE SEVEN COUNTIES ………………………………………………………………………………………………..6 METHODS ……………………………………………………………………………………………………………………7 Data Sources……………………………………………………………………………………………………………..7 Timing and Missing Data……………………………………………………………………………………………..8 Creation of Analysis Files and Variables………………………………………………………………………..8 Objectives of the Analyses …………………………………………………………………………………………..8 FINDINGS…………………………………………………………………………………………………………………….8 Size and Composition of the Child-only Caseload …………………………………………………………..8 The Size of Child-Only Cases …………………………………………………………………………………….12 Age and Other Demographic Background Characteristics………………………………………………13 Employment and Work Participation ……………………………………………………………………………18 Welfare Receipt………………………………………………………………………………………………………..19 CONCLUSIONS…………………………………………………………………………………………………………..29 REFERENCES ……………………………………………………………………………………………………………30 APPENDIX A. The Research Literature on Child-only TANF Cases: Parent\/caregiver and Child Characteristics …………………………………………………………………………………. 31 When Adults Are Left Out: CalWORKs Child-only Cases in Seven Counties iv LIST OF FIGURES Figure 1: Distribution of Child-only Cases in Sample Counties …………………………………………………9 Figure 2: Percent of County CalWORKs Caseload without Aided Adults……………………………………9 Figure 3: Distribution of Child-only CalWORKs Cases across Key Subgroups ………………………….11 Figure 4: Average Age of Adults Associated with Child-only Subgroups…………………………………..14 Figure 5: Average Age of Children in Different Types of Child-only Cases ……………………………….15 Figure 6: Language Composition of Child-only Caseload, by County……………………………………….17 Figure 7: Estimated Employment Rate by County and Subgroup ……………………………………………19 Figure 8: Retroactive Activity of Active CalWORKs Child-only Cases………………………………………21 Figure 9: Retroactive Activity of Active CalWORKs Cases in Santa Clara County, by Subgroup …22 Figure 10: Retroactive Activity of Active CalWORKs Cases in Alameda County, by Subgroup ……23 Figure 11: Retroactive Activity of Active CalWORKs Cases in San Francisco, by Subgroup……….24 Figure 12: Retroactive Activity of Active CalWORKs Cases in Humboldt County, by Subgroup…..25 Figure 13: Retroactive Activity of Active CalWORKs Cases in San Mateo County, by Subgroup…26 Figure 14: Retroactive Activity of Active CalWORKs Cases in Sonoma County, by Subgroup…….27 Figure 15: Retroactive Activity of Active CalWORKs Cases in Stanislaus County, by Subgroup….28 LIST OF TABLES Table 1: Number of CalWORKs Cases and Those Associated with Them ……………………………….12 Table 2: Average Case Size and Number of Children and Adults per Case ……………………………..13 Table 3: Ethnicity of Individuals on Child-only and Other Cases, by County and Subgroup…………16 Table 4: Prior Year CalWORKs Benefits by County and Child-only Status ……………………………….20 When Adults Are Left Out: CalWORKs Child-only Cases in Seven Counties Page 1 INTRODUCTION Over one-half of California CalWORKs cases are now child-only: the grant is calculated to support only the dependent child(ren) in the family, not adults.1 Since they themselves are unaided, the parents and other caregiver adults associated with child-only cases because of sanctions, time limits, and other reasons described below are no longer subject to time limits or work requirements, and, with some exceptions, neither are they entitled to participate in CalWORKs welfare-to-work activities nor to receive services such as CalWORKs’ child care and transportation subsidies or behavioral health care services. Gibbs and colleagues conclude that, while the children in child-only cases have not been identified as having experienced maltreatment [and] are outside the child welfare system’s protective mandate . . . they may be in need of supportive services (Gibbs et al., 2004: ES-1).2 Nevertheless, from the perspective of concern for child welfare, a major public policy issue concerning these child-only cases is how to ensure the safety and well-being of the children in child-only cases without resorting to the expense and intrusion of foster care intervention. From the self-sufficiency perspective, concern focuses on the status and potential of the parent or caregiver. On the child welfare side, one observer suggests that programs be developed for early intervention and case management, following systematic assessment that targets children’s risk of abuse and neglect. As a review of the literature on child-only cases makes evident, the potential value of a variety of supplemental services and resources is also evident. On the self-sufficiency side, among parents able to work, policy-makers’ and practitioners’ focus will need to be on addressing barriers to work, securing better-paid employment or subsidized work, and, among disabled parents and caretakers, on maximizing access to auxiliary sources of help. The June 28, 2006, Interim Final Rule implementing the February 2006 reauthorization of the Temporary Assistance for Needy Families (TANF) program emphasized work participation among many child-only case parents and other caregivers who were previously ignored in computation of the State’s federally-mandated 50 percent rate. As a consequence of the change, parents in sanctioned and timed-out cases are to contribute to the work participation rate computation. County welfare directors needing to determine how to approach these and other child-only populations require data describing the adults associated with the child-only cases. Beyond a modest amount of information available on sanctioned cases, very little is known about the parents and other caregivers, their characteristics, and the characteristics of their children. Generally to date, concern among policy-makers has not reached the threshold required to consider how to address the unmet needs of the adults connected to the various categories of child-only cases referenced above, or to focus on the kinds of interventions needed to meet the adults’ and the children’s needs. 1 Nationally, in Fiscal Year 2003 child-only cases including those in which the parent was sanctioned comprised 41 percent of TANF cases (U.S. Department of Health and Human Services, 2006). Over half (53 percent) involved children living with kin caretakers, 19 percent parents receiving SSI, 18 percent families in which the parents’ legal status was problematic, and 6 percent sanctioned parents. 2 As one group put it, child-only cases do appear to straddle the murky boundary between cash assistance and child welfare (Hetling, Saunders, & Born, 2005: 25). When Adults Are Left Out: CalWORKs Child-only Cases in Seven Counties Page 2 The salience of the issue increased with Governor Arnold Schwarzenegger’s January 10, 2007, release of his Proposed 2007-09 Budget (Schwarzenegger, 2007). Many current child-only CalWORKs cases would lose cash assistance through the proposed implementation of a full- family sanction as well as the imposition of time limits for children covered under the Safety Net program or as children of parents not qualified because of their immigrant or felony status ([California] Legislative Analyst’s Office, 2007). If the Governor’s proposals are implemented, the California Legislative Analyst’s Office projects, California will witness a 12 percent reduction in the CalWORKs caseload in Fiscal Year 2007-08 ([California] Legislative Analyst’s Office, 2007). Relatively little is known about the children and adults associated with child-only cases, but it has been understood that this is a heterogeneous population. Whether or not the Governor’s proposals are implemented, the social welfare of child-only case children and their parents and other caregivers presents an important challenge for local and state policy, planning, and program development. THE PRESENT STUDY Planning-oriented applied research has been initiated in a two-phase study within seven California counties (Alameda, Humboldt, San Francisco, San Mateo, Santa Clara, Sonoma, and Stanislaus). The counties contracted with Speiglman Norris Associates (SNA) for project coordination and oversight. The study’s Phase 1 involves the analysis of county administrative data to characterize the groups of child-only cases and the family members comprising the groups. SNA subcontracted with Berkeley Policy Associates (BPA) to arrange delivery and conduct statistical analysis of required county data, and SNA and BPA collaborated in the preparation of this report. It is understood, though, that administrative data are limited in the domains they cover. Hence, a second project phase involving face-to-face or telephone interviews with adults associated with a subset of child-only cases will assess and describe the resources and needs of these families. This information will contribute to an understanding of parents’ and caregivers’ ability to depart from the cash assistance provided to the family by the CalWORKs program while still providing on-going care for the children. In doing this Phase 2 will reveal parents’ and caregivers’ potential barriers to employment and areas in which new or improved services might promote change. The final project report, combining findings from both phases of the study, is scheduled for December 2007. It is anticipated that study results will assist county and state personnel in their efforts to address policy and program needs. A third project objective, not yet incorporated in the study but a likely Phase 3 of the project, would involve specific assessment of the statuses and needs of children in child-only CalWORKs cases. DEFINING CHILD-ONLY CASES Adult caretakers in child-only cases include the following groups of parents and non-parents: Non-parental caregiver cases. Also known as non-needy relative or kinship, these are cases in which adults, many of them relatives in informal kinship care When Adults Are Left Out: CalWORKs Child-only Cases in Seven Counties Page 3 arrangements3 who are not themselves eligible for CalWORKs aid, care for a child who is receiving CalWORKs assistance. Not-qualified immigrant cases. These are cases in which the parent or parents do not qualify for CalWORKs assistance because of their immigration status. In these families U.S. citizen children qualify for CalWORKs assistance. Safety Net cases. These are cases that have exceeded 60 months of CalWORKs assistance. In these families the adults are no longer eligible for assistance, but children continue to be eligible for aid under the state-funded Safety Net program.4 Sanctioned cases. Under CalWORKs rules, parents who do not participate in mandatory welfare-to-work activities or who do not meet other program requirements are subject to sanction. These sanctions cause them to be excluded from the CalWORKs benefit calculations, which effectively turns the case into a child-only case. SSI cases. These are cases in which one or both parents receive SSI benefits, which disqualify them from also receiving CalWORKs assistance. In the remainder of this report, we divide the child-only caseload in each county into the above subgroups. While to some degree parents might shift from one child-only category to another, for the most part we expect relative stability. There are also other, small groups of child-only cases. These include, for example, cases in which parents\/caregivers are ineligible due to drug convictions, their membership in Kin-Gap and Foster Care households supported by CalWORKs funds, their membership in households in which the parent did not cooperate with assigning parental rights for child support purposes, and cases in which parents were convicted of welfare fraud.5 These cases are not explicitly broken out in this report. They do feature in overall summary statistics on counties’ CalWORKs caseloads. REPORT FOCUS The following pages reference the recently completed BASSC literature review of studies about the characteristics of adults and children associated with child-only cases under the CalWORKs and other TANF programs. This is followed by presentation of a table summarizing factors that have been found to be associated with child-only cases. Subsequently we present findings from analyses of county-level, administrative data from seven counties to describe adults and children involved in child-only cases. These findings are compared with results for non-child-only cases. Topics addressed include: 3 Not included are relative caregivers serving the children’s needs under a court order or voluntary placement agreement under the auspices of a child welfare agency. 4 This subgroup was populated starting in January 2003, the earliest date that recipients of CalWORKs could have received cash assistance for 60 months. 5 Together these cases were estimated to total 5 percent of the child-only caseload in federal fiscal year 2004-2005 (Smilanick, 2006). When Adults Are Left Out: CalWORKs Child-only Cases in Seven Counties Page 4 The distribution of child-only cases, by type of case, within and across counties Number of child-only cases and number of adults and children associated with the cases, by county Estimates of average case size, including number of adults and number of children, by county Average age of adults and children associated with child-only cases, by county and by type of case Race\/ethnicity of case membership, by county and type of case Language composition of child-only caseload, by county Parent\/caregiver employment rates, by county and type of case Receipt of CalWORKs benefits in last year, including months on assistance, total grant received, latest grant amount, and grant per case member and per child on case, by county Welfare dynamics as measured by months of continuous receipt of CalWORKs assistance, by county and by type of case PRIOR RESEARCH A separate document prepared by the BASSC Research Response Team reviews published and unpublished literature addressing child-only TANF cases (Anthony et al., 2007). Among other content, the BASSC Team reviews the history of child-only cases and focuses on the literature on the five groups of child-only cases addressed in this study. In that regard Anthony et al. discuss formation of the five groups and, for both adults and children, outline group member characteristics, adults’ and children’s well-being, adults’ barriers to employment, and families’ challenges on aid. Few family strengths or resources are identified, but the number of challenges is daunting. In preparation of this report we studied the BASSC literature review as well as many of the documents referenced therein and additional resources. In all we found just over 30 research studies of particular value. While that would seem to be a relatively large number, the vast majority of the studies addressed only sanctioned cases (23 studies) and non-parental or kinship cases (10 studies). Supplemented by two studies that referenced child-only cases as a group, only five studies concerned themselves with time limits and only three each with the not- qualified immigrant and SSI groups.6 Appendix A constitutes one, large table that summarizes areas covered in the existing literature by child-only group. In this table, an x denotes the existence of at least one study addressing the topic for a particular child-only group. A T denotes such coverage in the context of a more general analysis comparing child-only with all other TANF cases. 6 In fact, two of the three studies concerned with immigrants, two of the three addressing SSI cases, two of the ten concerned with kinship cases, and one of the twenty-three dealing with sanction cases are also the studies commenting on child-only cases as a whole. When Adults Are Left Out: CalWORKs Child-only Cases in Seven Counties Page 5 Many of the studies summarized in the appendix table examined how child-only cases differed from other welfare cases in their demographic make-up. Studies generally found adults associated with child-only cases to be older and more likely to be married than those in welfare cases with aided adults. Studies also consistently found that certain ethnic groups were overrepresented in child only cases relative to other TANF cases and found that child-only cases were generally larger. Considering the parent\/caregivers’ human capital characteristic, the literature includes findings on longer time on aid for all child-only groups, compared to aided families. In the case of parent\/caregiver personal health and other personal challenges, looking, for example, at mental health problems, the literature finds that all five child-only groups are more likely to suffer from mental health problems, both compared to other non-child-only TANF cases and compared to another child-only group. This depiction in Appendix A is designed to create an image both of where research exists and, even if briefly, of the associations found. The summary does not constitute a meta-analysis, and is very limited in what it does. It does not present information on effect sizes, or even relative magnitude of effects, number of studies, or location or date of studies. Nor does this summary assess quality of study design. The research summarized in Appendix A covers a wide range of important potential relationships between child-only status (or membership in specific child-only subgroups) and family characteristics and outcomes. In general, these relationships cannot be interpreted as causal due to the non-experimental and cross-sectional nature of the data. Hence the studies tell us relatively little about the actual relationship between a particular characteristic and child- only CalWORKs status. Consider housing problems and their association with sanctions, for example. Overcrowded or unsafe housing may necessitate a parent’s spending more time with the children, resulting in a CalWORKs sanction. But a sanction and loss of income may also lead to problematic housing arrangements. And certainly there could be a third factor like substance abuse that remains invisible in the housing-sanction association but that might explain both problems. The findings presented in this report for the seven study counties highlight some of the same individual and family characteristics seen in the literature. Phase 2 of the project, which will revolve around in-depth interviews with sampled child-only recipients in the counties, will cover the variables not available in the county data on which this report is based. Appendix A also contains guidance for development of the questionnaire to be used in study Phase 2. Without going into them in detail, we note that Phase 2 interviews will pursue domains left largely untouched by Phase 1. Interview topics may include marital status, English skills, educational attainment, job skills and employment history, childcare and transportation challenges, health insurance and other benefits, housing and hunger, health, mental health, substance abuse, and domestic violence history, and need to care for family members or others. When Adults Are Left Out: CalWORKs Child-only Cases in Seven Counties Page 6 THE SEVEN COUNTIES Five of the seven participating counties are in the San Francisco Bay Area. Humboldt County is a northern, coastal jurisdiction, and Stanislaus County is located east of Santa Clara County, in California’s Central Valley. The following data provided by the U.S. Census Bureau (2007) provide a partial overview of the counties and their residents: Alameda Humboldt San Francisco San Mateo Santa Clara Sonoma Stanislaus Population, 2005 est. 1,448,905 128,376 739,426 699,610 1,699,052 466,477 505,505 White non- Hispanic persons 38.0% 80.9% 44.1% 47.3% 39.9% 70.5% 51.8% Black persons 13.8% 1.1% 7.3% 3.4% 2.8% 1.6% 3.1% Am Indian or Alaskan Native persons 0.7% 5.4% 0.5% 0.5% 0.8% 1.4% 1.5% Asian persons 24.2% 1.9% 32.9% 23.4% 30.2% 3.8% 5.0% Persons of Hispanic or Latino origin 20.8% 7.6% 13.7% 22.6% 24.9% 21.1% 37.6% Foreign born persons, 2000 27.2% 4.5% 36.8% 32.3% 34.1% 14.3% 18.3% High school graduates age 25+, 2000 82.4% 84.9% 81.2% 85.3% 83.4% 84.9% 70.4% Median household income, 2003 $56,166 $32,123 $51,302 $64,998 $68,167 $52,034 $41,524 Per capita money income, 1999 $26,680 $17,203 $34,556 $36,045 $32,795 $25,724 $16,913 % below poverty, 2003 10.7% 15.6% 12.0% 6.8% 8.8% 8.8% 14.2% Land area, square mi, 2000 737 3,572 46 449 1,290 1,575 1,493 When Adults Are Left Out: CalWORKs Child-only Cases in Seven Counties Page 7 The seven counties demonstrate wide variety in size and population density, from San Francisco’s 46 square miles, with 10,000 persons per square mile, to Humboldt County’s 3,572 square miles and only 35 persons per square mile. Per capita income also varies, from $16,913 in Stanislaus County and $17,203 in Humboldt County to over double the figures, $36,045, in San Mateo County. Percent of population ages 25 and up with a high school degree is stable across six of the seven counties, at 81 to 85 percent. However in Stanislaus County the rate is 70 percent. Especially relevant for analyses below is distribution of county population by race\/ethnicity. The Alameda and Santa Clara County populations are the most broadly distributed, including Non- Hispanic Whites, Blacks, Asians, and Latinos. Humboldt County is predominately White, accompanied by the largest proportion of American Indians and Alaskan Natives among the seven counties. San Francisco and San Mateo Counties are broadly distributed. Sonoma and Stanislaus Counties are predominately White, non-Hispanic with relatively large proportions of Latinos. METHODS Data Sources The findings presented in this report were obtained from county administrative record data, provided to us by the seven counties for the specific purpose of this study. These data come from a variety of county data systems, which are designed and used to administer the county’s CalWORKs program and other public benefits. The data are a combination of individual-level variables, describing individual adults and children receiving CalWORKs assistance, and case- level variables, which capture case-level status variables and monthly CalWORKs payments to each case. For the purpose of our analyses, we merged these two types of data, using a case ID variable to match individuals to cases and vice versa. In some of the counties, all data were already merged together like this (at the individual level). In analyzing data for those counties we re-aggregated the individual-level data for case-level analyses. All data were provided to BPA in a de-identified format. This means that individual adults and children were identified only by case ID and individual ID variables. Speiglman Norris Associates, prime contractor for the project, requested that Independent Review Consulting, Inc. (IRC) review the project’s human subjects’ protection protocol. IRC found the project exempt from the requirements of institutional review board review. Analysis of the data was done on a county-by-county basis, using SAS software. We did not merge county files because each county sent us a different set of variables, with different contents and formats. In subsequent research, we will explore the possibility of creating a single study master file, which would enable us to make direct statistical comparisons across the counties. The data processing required to create such a file was beyond the scope of this project. The county data we received did not cover the same time period for each county. The current month represented in most of the analyses presented here ranged from November 2006 in Santa Clara County to February 2007 in San Francisco. Given the relative stability of the overall caseload, such variation in the time period covered by the analyses is not problematic. When Adults Are Left Out: CalWORKs Child-only Cases in Seven Counties Page 8 Timing and Missing Data Due to delays in obtaining county data there are some missing data in this report. Not all the counties are represented in all the tables, and in some cases a county is represented by only part of its caseload. Specifically, this report has the following major missing data: Historical food stamp data were missing in almost every county. Consequently, planned analysis of food stamp outcome data are not presented in this report. Employment data were missing in one county (Sonoma) and were considered unreliable by some of the other counties. We present these data with appropriate caveats. Creation of Analysis Files and Variables One of the primary purposes of this report was to highlight the characteristics and welfare dynamics of different categories of child-only cases (described above). Creation of these categories was more complicated than we anticipated. Different counties have different ways to identify, for example, non-parental caregiver cases or cases with not-qualified immigrants. In some counties, these groups were neatly identified with mutually exclusive categories, and in other counties there were significant overlaps between subgroups. In our analyses we used whatever subgroup variables the counties prepared for us and did not subject the creation of these subgroup variables to examination. The creation of subgroup variables, demographic variables, and employment and welfare outcomes often required assumptions to be made and categories to be collapsed in more or less arbitrary ways. We do not extensively document these analytical decisions in this report and we do not expect them to have major impacts on the results as we present them. However, we do expect that certain county-specific statistics in this report may not match exactly comparable statistics from other sources. Objectives of the Analyses The subsequent analytical sections of this report include county-specific findings on the size and composition of the child-only CalWORKs caseload, key demographic characteristics of adults and children on the caseload, employment outcomes, and welfare dynamics. In all these analyses we compare child-only cases to cases with aided adults, make comparisons across different subgroups of child-only cases, and make comparisons across the counties. FINDINGS Size and Composition of the Child-only Caseload Cases in which children are the only aided individuals constitute a significant proportion of the CalWORKs caseload in the study counties. Figure 1 shows the distribution of child-only and non-child-only cases across the counties.7 7 The figures shown here and elsewhere are from the last month of county data made available to BPA for this study. This ranges from October 2006 through February 2007. When Adults Are Left Out: CalWORKs Child-only Cases in Seven Counties Page 9 Figure 1 Distribution of Child-only Cases in Sample Counties 8423 2203 7447 4663 9841 2588 7264 1682 4371 1221 1201 510 1157 1096 Alameda Humboldt San Francisco San Mateo Santa Clara Sonoma Stanislaus Child Only All Other Source: BPA calculations from county CalWORKs data. Aside from the marked differences in the size of the CalWORKs caseloads across the counties, the figure shows some variation in the proportion of each county’s CalWORKs caseload that is accounted for by child-only cases. As highlighted further in Figure 2 below, many of the counties have no aided adults on approximately half of their CalWORKs cases. This proportion ranges from a low of 31 percent in Humboldt County to a high of 52 percent in San Mateo and Stanislaus counties. Figure 2 Percent of County CalWORKs Caseload without Aided Adults Source: BPA calculations from county CalWORKs data. 52% 52% 51% 46% 46% 42% 31% San Mateo Stanislaus Santa Clara Alameda San Francisco Sonoma Humboldt When Adults Are Left Out: CalWORKs Child-only Cases in Seven Counties Page 10 In the remainder of this section, we divide the child-only caseload in each county into the subgroups described earlier in this report. These subgroups are as follows: Non-parental cases Not-qualified immigrant cases Safety Net cases Sanctioned cases SSI cases Other groups of child-only cases, small in number, often fell into other categories as well and are included in the overall statistics on child-only cases as a whole. It is not straightforward to categorize child-only cases into these subgroups. The primary reason for this is that many child-only cases have two parents associated with them, and often there are other adults associated with these cases as well. Both parents do not always fall into the same subgroup category, and the status of each individual parent can change over time. In providing us with data to create these subgroup breakdowns, some counties gave us two subgroup flags for each child-only case, while other counties gave us case-level flags, which pre-sorted the cases into the various subgroups. Also, in some cases the case-level Safety Net program indicator did not match up with individual parent-level Time on Aid flags, which are designed to identify when parents have exhausted their 60 months on CalWORKs. In our analysis, we created child-only subgroups by including cases in one of the subgroups if any of the relevant subgroup variables flagged that case. For some counties this resulted in subgroups that overlapped to a certain extent. For example, a child-only case could have a parent associated with it who is an SSI recipient and another parent who is a not-qualified immigrant. In this example such a case would be included in both the SSI and not-qualified immigrant subgroups. For identifying Safety Net cases we used the aid code rather than the Time on Aid flags created for the individual parents. Figure 3 displays this breakdown into child-only subgroups for each of the study counties. It shows a great deal of cross-county variation in the distribution of cases across subgroups. Also, note that these subgroups sometimes overlap, and such overlaps are much more significant for some counties than for others. Thus, the subgroup proportions do not always sum to 100 percent, and sometimes sum to more than 100 percent.8 As an illustration of the cross-county differences, the proportion of sanctioned parents ranged from 1 percent in Humboldt County to 26 percent in San Mateo County. Non-parental caregivers range from 6 percent in San Francisco to 35 percent in San Mateo County. Not- qualified immigrant cases range from 8 percent in Humboldt Country to 59 percent in San Mateo County. Safety Net cases range from 8 percent in San Mateo County to 25 percent in San Francisco, and SSI parent cases range from 11 percent in Santa Clara County to 51 percent in Humboldt County. 8 In San Mateo County, the overlaps are particularly noteworthy. Child-only case categories sum to 145 percent. In discussions with county staff we were told that these overlaps occur because many individuals are associated with multiple cases. When Adults Are Left Out: CalWORKs Child-only Cases in Seven Counties Page 11 It is not obvious from the data analysis what explains the variation across the counties in the types of families served by CalWORKs in child-only cases. In all likelihood, the cross-county variation in this distribution is explained by a combination of differences in caseload demographics, county economic conditions, and county administrative policies and procedures. For example, counties with a lower representation of Safety Net cases may be more accommodating in their implementation of time limit exemptions and extensions. Alternatively, they may be more successful in their efforts to assist CalWORKs recipients in transitioning from welfare to work. In contrast, a high representation of not-qualified immigrant parents among child-only cases may reflect a combination of county demographics and outreach efforts to provide services to U.S.-born children whose parents are not-qualified immigrants. Figure 3 Distribution of Child-only CalWORKs Cases across Key Subgroups 17% 1% 19% 26% 18% 2% 16% 19% 8% 16% 59% 40% 39% 23% 15% 19% 6% 35% 11% 24% 29% 24% 22% 25% 8% 15% 5% 16% 21% 51% 21% 18% 11% 20% 22% Alameda Humboldt San Francisco San Mateo Santa Clara Sonoma Stanislaus Sanctioned parents Not qualified immigrants Non-parental caregivers Safety Net cases SSI parents ` Source: BPA calculations from county CalWORKs data. When Adults Are Left Out: CalWORKs Child-only Cases in Seven Counties Page 12 The Size of Child-Only Cases After dividing each county’s caseload into child-only cases and other cases, we attempted to calculate the average case size for each type of case. In doing so, it appeared that some counties collect and provided us with data on all the adults associated with child-only cases, while others keep and provided more limited data on adults. Table 1 shows a breakdown of the results by county. Table 1 Number of CalWORKs Cases and Those Associated with Them Child Only All Other Child Only All Other Child Only All Other Child Only All Other Alameda 8,423 9,841 46,207 42,952 26,649 24,833 18,998 18,651 Humboldt 510 1,157 1,253 2,679 603 1,498 643 1,167 San Francisco 2,203 2,588 5,973 6,824 2,188 2,734 3,785 4,090 San Mateo 1,201 1,096 6,203 4,887 3,209 2,467 2,994 2,420 Santa Clara 7,447 7,264 38,792 31,484 20,955 17,113 17,837 14,371 Sonoma 1,221 1,682 5,695 7,269 3,013 3,856 2,682 3,413 Stanislaus 4,663 4,371 14,441 13,928 4,457 5,666 9,984 8,262 All counties 25,668 27,999 118,564 110,023 61,074 58,167 56,923 52,374 Adults ChildrenCases Individuals Source: BPA calculations from county CalWORKs data. Alameda, Santa Clara, Sonoma, and San Mateo counties stand out in this table because in these counties more adults appear to be associated with child-only cases than children. This is not the case in the other counties. We suggest that this finding may reflect more extensive data gathering on the various household members in child-only households in those four counties, rather than a significant difference in the actual make-up of the child-only cases in these counties. Additionally, county differences may reflect differential prevalence of the various child- only groups, differences in prevalence of married parents, and, accordingly, variation in number of adults associated with child-only cases. For example, a county such as Santa Clara, with relatively more immigrant families among the child-only caseload, and hence more two-parent families, would be expected to report more adults associated with child-only cases. Table 2 summarizes the cross-county differences in Table 1 by presenting estimates of the average case size and the average number of children in each case. This table clearly demonstrates the impact of the additional adults in Alameda, Santa Clara, San Mateo, and Sonoma Counties on the average child-only case sizes in these counties (although the non- child-only cases were larger in these counties as well). Data recording differences involving adults should not influence count of number of children per case in child-only cases, however. Nevertheless, the same counties remain at the high end. The average number of children in these cases ranges from 1.3 in Humboldt County and 1.8 in San Francisco to 2.3 in Alameda, 2.4 in Santa Clara, and 2.5 in San Mateo Counties. For average number of children in all other cases, the numbers are much closer together, ranging from 1.0 in Humboldt County and 1.6 in San Francisco to 2.2 in San Mateo County.9 9 The average of 1.0 in Humboldt County may be problematic, since the minimum number of children per case is 1 for most cases. The exception is new cases involving women who are pregnant with their first child. When Adults Are Left Out: CalWORKs Child-only Cases in Seven Counties Page 13 Table 2 Average Case Size and Number of Children and Adults per Case Child Only All Other Child Only All Other Child Only All Other Alameda 5.5 4.4 2.3 1.9 3.2 2.5 Humboldt 2.5 2.3 1.3 1.0 1.2 1.3 San Francisco 2.7 2.6 1.7 1.6 1.0 1.1 San Mateo 5.2 4.5 2.5 2.2 2.7 2.3 Santa Clara 5.2 4.3 2.4 2.0 2.8 2.4 Sonoma 4.7 4.3 2.2 2.0 2.5 2.3 Stanislaus 3.1 3.2 2.1 1.9 1.0 1.3 All counties 4.6 3.9 2.2 1.9 2.4 2.1 Case size Children\/case Adults\/case Source: BPA calculations from county CalWORKs data. With the exception of Alameda County and Santa Clara County, in each county the average number of children per case is very consistent across the counties, regardless of child-only status. Subtracting the number of children from the overall case size results in an estimate of the number of adults on a case. There is a significant amount of variation across counties in this measure as well. For child-only cases, San Francisco and Stanislaus show only one adult on each of these cases, most likely the person who is the designated payee (but who is unaided him or herself). In our analyses we explored whether there were meaningful differences in the average case size across the child-only subgroups introduced above. On average, safety net cases and those including not-qualified immigrant parents were somewhat larger than cases in the other subgroups, but the differences generally were modest (data not presented tabularly). Age and Other Demographic Background Characteristics Figure 4 presents the average age of adult associated with child-only cases in the various subgroups discussed above. These data were not available for San Francisco. For comparison purposes, the figure also presents the average age of aided adults on non- child-only cases. The age pattern across the subgroups is remarkably similar across the counties. In each county, the adults on child-only cases are older than those on non-child-only cases, and in each county, the non-parental caregivers and SSI parents are older than those in the other subgroups. The average age of non-parental caregivers ranges from 41.6 years in San Mateo County to 51.6 years in Humboldt County. For SSI parents, the average age ranges from 36.8 years in Sonoma County to 43.4 years in Stanislaus County. Among adults associated with child-only cases, those who are not-qualified immigrants are the youngest. Their average ages, from 31.2 to 37.2 years, are similar to aided adults in the non-child-only caseload. When Adults Are Left Out: CalWORKs Child-only Cases in Seven Counties Page 14 Figure 4 Average Age of Adults Associated with Child-only Subgroups Source: BPA calculations from county CalWORKs data. 34.3 32.0 33.6 35.3 34.5 33.9 43.7 51.6 41.6 42.0 42.3 42.2 32.6 37.2 34.4 33.2 31.2 32.4 35.9 38.4 36.0 36.7 34.7 37.4 38.0 42.2 39.1 38.3 36.8 43.4 33.1 32.2 34.3 33.7 32.8 30.9 Alameda Humboldt San Mateo Santa Clara Sonoma Stanislaus Sanctioned parents Non-parental caregivers Not qualif ied immigrants Safety Net cases SSI parents Non-child only When Adults Are Left Out: CalWORKs Child-only Cases in Seven Counties Page 15 Figure 5 shows very similar patterns for the children on these cases. (This figure includes San Francisco). Children in cases with non-parental caregivers (mean ages ranging from 10.0 to 11.2 years) and SSI parents (mean ages ranging from 10.4 to 11.7 years) tend to be older than non-child-only case children (mean ages ranging from 6.9 to 8.0 years). Figure 5 Average Age of Children in Different Types of Child-only Cases Source: BPA calculations from county CalWORKs data. Table 3 displays a breakdown of the ethnic composition of the county caseloads by subgroup. These are individual data showing the individually recorded ethnicities of children and adults on the county caseloads. Thus, if a case has 3 adults and 2 children, it accounts for five observations in this analysis.10 The table shows a great deal of variation in ethnicity both across the subgroups within each county and across the counties. Several clear patterns emerge. Looking at the first panel of data we see, among child-only cases, Latinos are the plurality group in San Mateo, Santa Clara, Sonoma, and Stanislaus Counties. For Alameda and San Francisco 10 An examination of results for one county, in which each case was granted only one observation, showed virtually no difference from the results in Table 3. 9.4 7.9 10.0 8.9 7.5 9.8 8.4 11.2 10.9 10.9 10.0 11.0 10.6 10.2 7.7 6.4 8.2 7.9 8.4 9.9 7.3 10.2 10.3 10.9 9.8 9.8 11.2 9.9 11.0 10.4 11.7 11.1 10.5 11.4 11.2 7.6 7.1 8.0 6.9 7.9 7.9 7.6 Alameda San Francisco Santa Clara Stanislaus San Mateo Humboldt Sonoma Sanctioned parents Non-parental caregivers Not qualified immigrants Safety Net cases SSI parents Non-child only When Adults Are Left Out: CalWORKs Child-only Cases in Seven Counties Page 16 Counties, Blacks constitute the largest group. White recipients make up the greatest proportion of cases in Humboldt County. Table 3 Ethnicity of Individuals on Child-only and Other Cases, by County and Subgroup Alameda Humboldt San Francisco San Mateo Santa Clara Sonoma Stanislaus Asian 10.7% 5.9% 15.1% 3.2% 13.8% 3.1% 5.8% Black 46.0 2.7 48.8 16.9 6.1 4.2 6.7 Latino 25.2 6.8 26.0 63.7 66.1 53.4 47.1 Native American 0.2 11.1 0.3 0.5 0.4 2.8 0.3 White 10.2 73.2 5.0 14.1 7.7 36.2 39.0 Pacific Islander 0.4 0.4 3.5 1.6 0.7 0.3 1.1 Asian 12.1 0.0 8.9 2.3 16.6 0.0 7.4 Black 56.5 16.7 63.6 10.9 7.3 10.0 6.0 Latino 12.2 0.0 14.2 79.5 55.4 15.0 38.1 Native American 0.5 16.7 0.6 0.3 0.7 10.0 0.6 White 10.9 66.7 5.1 6.3 12.4 65.0 46.3 Pacific Islander 0.3 0.0 5.6 0.7 1.6 0.0 1.6 Asian 3.5 1.1 9.6 5.7 4.3 1.4 3.1 Black 58.1 3.3 66.9 32.0 12.2 7.2 7.9 Latino 13.1 4.4 16.9 22.6 55.1 14.4 34.9 Native American 0.4 24.2 0.6 1.5 0.9 4.0 0.5 White 16.2 65.9 4.5 34.5 19.8 71.9 53.0 Pacific Islander 0.7 1.1 1.1 3.7 1.1 1.1 0.6 Asian 1.4 31.7 5.1 1.6 0.8 0.2 0.3 Black 0.8 0.0 0.5 1.6 0.0 0.0 0.1 Latino 92.2 58.5 90.0 93.4 94.6 99.4 98.7 Native American 0.0 0.0 0.0 0.0 0.0 0.0 0.0 White 1.8 9.8 1.2 2.0 0.5 0.4 0.8 Pacific Islander 0.5 0.0 2.2 1.4 0.4 0.0 0.2 Asian 18.5 11.3 24.5 0.0 38.0 9.6 8.1 Black 55.0 1.9 60.5 58.4 10.1 5.8 10.8 Latino 6.7 4.7 5.9 28.1 38.2 15.4 40.1 Native American 0.2 6.6 0.1 0.0 0.5 1.9 0.1 White 11.3 75.5 4.1 13.5 7.0 67.3 38.6 Pacific Islander 0.5 0.0 4.1 0.0 0.5 0.0 0.0 Asian 19.2 9.2 22.4 3.5 39.9 11.7 18.3 Black 52.3 4.0 50.4 42.1 11.0 8.0 8.3 Latino 6.0 1.2 12.2 24.8 29.5 15.9 21.6 Native American 0.1 9.2 0.9 1.5 0.8 6.3 0.2 White 12.6 76.1 10.3 27.2 12.4 58.2 49.5 Pacific Islander 0.3 0.4 2.0 1.0 0.4 0.0 2.1 Asian 8.6 2.6 18.1 9.1 15.8 2.2 3.4 Black 51.0 3.0 43.5 29.8 9.3 6.4 7.5 Latino 16.5 4.3 17.4 33.4 51.5 22.8 39.1 Native American 0.4 12.4 0.4 0.1 0.6 4.0 0.4 White 15.4 77.6 13.3 24.6 15.6 64.3 48.4 Pacific Islander 1.1 0.2 3.8 3.1 1.6 0.3 1.3 Safety Net cases SSI parents Non-child only cases Child only cases Sanctioned parents Non-needy relative Not qualified immigrants Source: BPA calculations from county CalWORKs data. When Adults Are Left Out: CalWORKs Child-only Cases in Seven Counties Page 17 Looking at differences between child-only cases overall and non-child-only cases (the last panel), we find, in Alameda County, that child-only cases are more likely to be Latino and less likely to be Black or White. In Humboldt County child-only cases are more likely to be Asian and Latino and somewhat less likely to be White. In San Francisco, child-only cases are more likely to be Latino and less likely to be White. San Mateo County child-only cases are much more likely to be Latino and less likely to be each of the other groups except Native American. Santa Clara County child-only cases are more likely Latino and less likely each of the other groups. In Sonoma County Latino child-only cases are over twice as prevalent as are Latino non-child-only cases. Stanislaus County child-only cases are more likely Latino and less likely White. These findings are driven by the fact that individuals in child-only cases with not-qualified immigrant parents are almost exclusively Latinos. The only exception to this is Humboldt County, where a sizeable minority of individuals in not-qualified immigrant cases is Asian. In Alameda County, San Francisco, San Mateo County, Santa Clara County, and Stanislaus County, Black recipients are more highly represented among Safety Net cases. In Alameda Humboldt, San Francisco, and Sonoma Counties, Black recipients are significantly more likely to be sanctioned than other ethnic groups. In San Francisco, Alameda, San Mateo, and Santa Clara Counties, Black recipients are also more likely to be non-parental caregivers or, in Alameda, Santa Clara, and Stanislaus Counties, SSI parents. In each county, compared to their prevalence among child-only cases over-all, Asian recipients are disproportionately SSI benefit recipients. Closer analysis of the make-up of these Asian groups finds that they are often specific refugee groups. In Alameda County, most Asian SSI parents are Cambodian, and in Humboldt County many are Laotian or Hmong (data not displayed). Humboldt County is the only county in our sample with a significant representation of Native Americans. Overall, they account for more than 11 percent of child-only cases in Humboldt County. Figure 6 summarizes the language composition of the child-only caseload in each of the counties. These again are individual-level variables, measured for each person on the caseload, as described above in our discussion of Table 3. Figure 6 Language Composition of Child-only Caseload, by County Source: BPA calculations from county CalWORKs data. 11% 12% 13% 19% 17% 52% 41% 44% 22% 70% 92% 71% 48% 46% 54% 74% 4% 2% 3%0% 4% Alameda Humboldt San Francisco San Mateo Santa Clara Sonoma Stanislaus English Spanish Other When Adults Are Left Out: CalWORKs Child-only Cases in Seven Counties Page 18 The figure shows that, in all counties except for San Mateo, Sonoma, and Santa Clara Counties, at least 70 percent of child-only CalWORKs cases are English-speaking. In San Mateo County the majority is Spanish-speaking, and in Santa Clara County there is no majority language. As expected, but not shown in the figure, the subgroup of not-qualified immigrant parents is the one child-only subgroup in which Spanish is the predominant language in all the counties. Employment and Work Participation An important question from the perspective of both individual families and county policy makers is whether adults associated with child-only cases work and how much they earn. Although State law does not currently deny CalWORKs cash assistance to the children of sanctioned and timed-out parents who are not engaged in work-related activities, these individuals are now considered work-eligible , and their employment status is factored into the county’s work participation rate which, in turn, determines the possible imposition of financial sanctions on the State and county. Earned family income is also considered in the grant calculations for all types of child-only cases, and families who have earnings from employment are likely to be better off financially than families who rely entirely on CalWORKs assistance and other public benefits. Unfortunately, it is a challenge to collect and analyze administrative employment data for CalWORKs child-only cases. Employment data on the adults in these cases are not regularly used for case management, because adults associated with child-only cases are not mandated to participate in employment or employment-related activities. As a result, the employment data we obtained from the study counties thus far generally are not complete or reliable enough to present in this report. Employment and family income are also an important focus of the second phase of this study, which includes in-depth fieldwork with adults who are part of CalWORKs child-only families. In Figure 7 we present current employment rates (assessed at the time of the data extract for the study) for child-only subgroups in all counties except Sonoma, which did not provide these data. These rates vary considerably. Non-child-only case employment rates range from 16.9 percent in Alameda County to 47.4 percent in San Mateo County. For sanctioned parents, employment rates vary from 0 percent (Humboldt County) to 55.2 percent (San Mateo County). Employment rates among non-parental caregivers variy from 0 percent in Alameda County to 22.5 percent in Santa Clara County. Employment rates are highest overall for not-qualified immigrants, ranging from 19.9 percent in Stanislaus County to 61.0 percent in San Mateo County. Among safety net cases the variation in employment rate is quite large, extending from 16.4 percent in Humboldt County to 58.9 percent in Santa Clara County. Finally, the employment rate for SSI parents is only 3.5 percent in Humboldt County, but as high as 27.8 percent in Santa Clara County. When Adults Are Left Out: CalWORKs Child-only Cases in Seven Counties Page 19 Figure 7 Estimated Employment Rate by County and Subgroup Source: BPA calculations from county CalWORKs data. Welfare Receipt A major component of our analysis of the county data has been to create a profile of the welfare use of the child-only cases and the various subgroups. The purpose of these analyses is to help predict how long an average child-only case will remain open and how much assistance the average child-only recipient receives per month or per year. To conduct these analyses we requested that each county provide us with at least a year’s worth of historical data on CalWORKs receipt and food stamp receipt. Table 4 presents five essential CalWORKs statistics for child-only cases and non-child-only cases. For each of the seven counties, the table shows the average number of months recipients received CalWORKs benefits in the prior year, the total amount of CalWORKs benefits received, the latest monthly grant amount, the grant amount per person on the case and the grant amount per child on the case. The latter distinction mirrors the one we introduced above and is intended to correct for any cross-county differences in how case membership is recorded. 13.8 17.3 55.2 29.3 17.4 3.1 23.5 19.1 22.5 5.4 30.3 23.8 43.5 61.0 53.8 19.9 16.4 58.9 34.9 4.9 3.5 9.6 16.0 27.8 9.5 16.9 13.5 35.7 47.4 43.4 37.4 27.5 38.5 44.6 Alameda Humboldt San Francisco San Mateo Santa Clara Stanislaus Sanctioned parents Non-parental caregivers Not-qualified immigrants Safety Net cases SSI parents Non-child only 0.0 When Adults Are Left Out: CalWORKs Child-only Cases in Seven Counties Page 20 Table 4 Prior Year CalWORKs Benefits by County and Child-only Status Alameda Humboldt SF San Mateo Santa Clara Sonoma Stanislaus # of Months of data 12 7 12 12 12 11 12 Months on assistance 10.6 6.4 10.5 10.5 10.3 9.6 10.8 Total grant received 5213 3235 4866 5007 5063 4455 5238 Latest grant amount 451 502 417 467 450 450 470 Grant per case member 82 281 232* 101 86 97 152 Grant per child on case 200 398 232 187 188 206 220 Months on assistance 9.4 5.6 8.6 8.7 8.8 8.5 9.3 Total grant received 5589 3220 5013 5022 5307 4634 5293 Latest grant amount 570 578 487 568 542 529 573 Grant per case member 131 346 192 151 125 123 180 Grant per child on case 301 578 306 258 274 262 303 Child only cases Non-child only cases Note: Because counties account for case membership differently, cross-county comparisons of the grant per case member may not be valid. Source: BPA calculations from county CalWORKs data. The table shows that the average number of months of CalWORKs receipt in the prior year is greater for recipients who are part of child-only cases than for those in cases with aided adults. (Please note that the Humboldt data only cover 7 months, and Sonoma data cover 11 months). Excluding Humboldt and Sonoma Counties, child-only cases were aided between 10.3 and 10.8 months in the prior year, which compares to a range of 8.6 – 9.4 months for non-child-only cases, again excluding Humboldt and Sonoma Counties. However, during these aided months, child-only recipients receive significantly lower grants than those on non-child-only cases. In each of the counties the average grant amount is at least $70 higher for cases with aided adults and $180 higher in the case of Humboldt County. Because unaided adults are usually included as part of the CalWORKs case, the average grant per household member is significantly lower for child-only cases than for non-child-only cases. In Alameda and Santa Clara, both of which provided data on adults associated with child-only cases, the average grant per individual was between $82 and $86 for individuals on child-only cases and between $125 and $131 for those on cases with aided adults. The higher monthly grants are also reflected in higher total annual grants for cases with aided adults, despite the fact that this group received CalWORKs assistance for fewer months. Across the counties there was relatively little difference in the amount of CalWORKs payments. Figure 8 offers a more precise way to examine welfare dynamics among child-only CalWORKs recipients. Using monthly CalWORKs benefit variables for individual cases in the counties, we created a retrospective history of each individual case. Starting in the month covered by the latest county data (February 2007 for San Francisco, for example), we counted back in time and for each of the preceding 11 months (6 for Humboldt County, 10 for Sonoma County) assessed what percent of cases already were active during that month. Higher percentages indicate When Adults Are Left Out: CalWORKs Child-only Cases in Seven Counties Page 21 greater persistence of receipt and possibly greater dependence on assistance.11 Such persistence is likely to extend into the future, which makes an analysis like this useful for policymaking and forecasting purposes. . Figure 8 Retroactive Activity of Active CalWORKs Child-only Cases 60% 65% 70% 75% 80% 85% 90% 95% 100% -11 -10 -9 -8 -7 -6 -5 -4 -3 -2 -1 No w Months prior to data request P er ce nt c on tin uo us ly o n ai d si nc e m on th Alameda Santa Clara San Francisco Humboldt Stanislaus Sonoma San Mateo Source: BPA calculations from county CalWORKs data Among the counties, the figure shows some differences in the persistence of child-only cases. In Santa Clara and Stanislaus Counties, more than 75 percent of current recipients have been on aid continuously for at least a year. In Alameda, San Francisco, and Sonoma Counties, this number is less than 70 percent, and the other counties fall in between these numbers. This means that Santa Clara and Stanislaus Counties serve more longer-term recipients than do the other counties and possibly experience less churning in their caseloads. For individual counties it is possible to explore how these dynamics vary across the five different subgroups of the county CalWORKs caseload. Figures 9-15 do so for all the counties. In each case a sixth line traces activity for all other cases. 11 Because this analysis examines continuous receipt of assistance, it is possible that shorter durations are partially caused by churning, where individuals leave assistance for a month to return in a subsequent month. However, one would expect to see less churning among child-only as opposed to all other cases. When Adults Are Left Out: CalWORKs Child-only Cases in Seven Counties Page 22 Figure 9 describes these patterns for Santa Clara County. The first thing to note from Figure 9 is the significant difference in CalWORKs persistence between child-only cases and all other cases. Only 58 percent of cases with aided adults were continuously active for a year, as indicated by the dashed line toward the bottom of the figure. None of the child-only subgroups in Santa Clara County falls below 70 percent on this measure. There also is significant variation in persistence among the child-only subgroups. As might be expected, those in the Safety Net and SSI groups have the highest level of continuous welfare receipt at about 88 percent for the full year. On the other hand, only 73 percent of not-qualified immigrants and non-parental caregivers received assistance continuously for a full year. Figure 9 Retroactive Activity of Active CalWORKs Cases in Santa Clara County, by Subgroup 40% 50% 60% 70% 80% 90% 100% -11 -10 -9 -8 -7 -6 -5 -4 -3 -2 -1 Now Months prior to data request Pe rc en t c on tin uo us ly o n ai d si nc e m on th Non-parental caregivers Not qualified immigrants Safety Net Sanctioned SSI All other Source: BPA calculations from county CalWORKs data When Adults Are Left Out: CalWORKs Child-only Cases in Seven Counties Page 23 Figure 10 repeats this analysis for Alameda County. Compared to the Santa Clara County graph, the lines are lower, representing generally less continuous time on aid. The figure shows much less variation in welfare dynamics across the subgroups, with the exception of the SSI parents subgroup (which has the greatest persistence on aid) and the non-child-only cases, which, as was the case in Santa Clara County, were least likely to be on aid continuously for a full year. Fewer than half of active cases with aided adults in Alameda County were already on CalWORKs a year earlier. Figure 10 Retroactive Activity of Active CalWORKs Cases in Alameda County, by Subgroup 40% 50% 60% 70% 80% 90% 100% -11 -10 -9 -8 -7 -6 -5 -4 -3 -2 -1 Now Months prior to data request P er ce nt c on tin uo us ly o n ai d si nc e m on th Non-parental caregivers Not qualified immigrants Safety Net Sanctioned SSI All other Source: BPA calculations from county CalWORKs data. When Adults Are Left Out: CalWORKs Child-only Cases in Seven Counties Page 24 The third county for which we conducted this analysis is San Francisco. As shown in Figure 11, the variation in welfare durations across the subgroups is similar to that in Alameda County, with Safety Net and SSI cases showing longer durations and non-child only cases showing the shortest durations of all. Length of time receiving benefits for not-qualified immigrants is almost as low as for non-child-only cases. Figure 11 Retroactive Activity of Active CalWORKs Cases in San Francisco, by Subgroup 40% 50% 60% 70% 80% 90% 100% -11 -10 -9 -8 -7 -6 -5 -4 -3 -2 -1 Now Months prior to data request P er ce nt c on tin uo us ly o n ai d si nc e m on th Non-needy caregivers Not qualified immigrants Safety Net Sanctioned SSI All other Source: BPA calculations from county CalWORKs data. When Adults Are Left Out: CalWORKs Child-only Cases in Seven Counties Page 25 Figure 12 shows similar dynamics for Humboldt County, which, as discussed, only provided 7 months of longitudinal data for these analyses. In Humboldt County the relative differences between child-only and other cases were larger than in other counties and the persistence of sanctioned cases was particularly remarkable. Figure 12 Retroactive Activity of Active CalWORKs Cases in Humboldt County, by Subgroup 40% 50% 60% 70% 80% 90% 100% -11 -10 -9 -8 -7 -6 -5 -4 -3 -2 -1 Now Months prior to data request P er ce nt c on tin uo us ly o n ai d si nc e m on th Non-parental caregivers Not qualified immigrants Safety Net Sanctioned SSI All other Source: BPA calculations from county CalWORKs data. When Adults Are Left Out: CalWORKs Child-only Cases in Seven Counties Page 26 Figure 13 shows these results for San Mateo County. The patterns look quite different from the other counties, with Safety Net participants showing less persistent long-term CalWORKs receipt than in the other counties. This is likely a result of the way in which San Mateo County defines its subgroups, which, as discussed above, differs from the other counties. Figure 13 Retroactive Activity of Active CalWORKs Cases in San Mateo County, by Subgroup 40% 50% 60% 70% 80% 90% 100% -11 -10 -9 -8 -7 -6 -5 -4 -3 -2 -1 No Months prior to data request P er ce nt c on tin uo us ly o n ai d si nc e m on th Non-parental caregivers Not qualified immigrants Safety Net Sanctioned SSI All other Now Source: BPA calculations from county CalWORKs data. When Adults Are Left Out: CalWORKs Child-only Cases in Seven Counties Page 27 Figure 14 describes the cross-subgroup differences in welfare dynamics for Sonoma County. Like the others, the chart shows that child-only cases have longer welfare durations, although the relative durations of the various cases follow a different pattern than in some of the other counties. Most notably, sanctioned cases, which are a relatively small part of Sonoma County’s caseload, show very short welfare durations relative to the other subgroups in Sonoma County and relative to sanctioned cases in other counties. Figure 14 Retroactive Activity of Active CalWORKs Cases in Sonoma County, by Subgroup 40% 50% 60% 70% 80% 90% 100% -10 -9 -8 -7 -6 -5 -4 -3 -2 -1 Now Months prior to data request Pe rc en t c on tin uo us ly o n ai d si nc e m on th Non-parental caregivers Not qualified immigrants Safety Net Sanctioned SSI All other Source: BPA calculations from county CalWORKs data. When Adults Are Left Out: CalWORKs Child-only Cases in Seven Counties Page 28 Lastly, Figure 15 shows patterns of welfare receipt for subgroups in Stanislaus County. This county shows very similar patterns to those in Santa Clara County, with the safety net and SSI cases being the longest lasting and the not-qualified immigrant cases and non-child only cases lasting the shortest. Figure 15 Retroactive Activity of Active CalWORKs Cases in Stanislaus County, by Subgroup 40% 50% 60% 70% 80% 90% 100% -11 -10 -9 -8 -7 -6 -5 -4 -3 -2 -1 Now Months prior to request Pe rc en t c on tin uo us ly o n ai d si nc e m on th Non-parental caregivers Not qualified immigrants Safety Net Sanctioned SSI All other Source: BPA calculations from county CalWORKs data. When Adults Are Left Out: CalWORKs Child-only Cases in Seven Counties Page 29 CONCLUSIONS Child-only cases are larger than one might expect, including more adults than cases that have aided adults on them. Case size varies significantly across counties, however, possibly indicating variation in how counties count adults, rather than actual variation in the family size of child only cases. Child-only parents and children are older than those on other CalWORKs cases. There is significant cross-county variation in the representation of different types of child- only cases in the child-only caseload. This means that different counties must develop their own policy approaches to address the needs of child-only families. The ethnic and language background of different types of child-only cases varies significantly. More research is needed on how different groups of CalWORKs recipients end up on the caseload and how counties can best serve them. CalWORKs child-only cases have significantly longer welfare histories than non-child- only cases. This creates opportunities for counties to develop policies targeted at promoting self-sufficiency among child-only families. Among child-only cases, substantial variation is evident in length of continuous time receiving aid. Further research is warranted to understand these differences and to suggest appropriate policy and\/or program adjustments. Welfare grants received by child-only families are both smaller in size compared to those received by other families and shared by more individuals. Because of this, it is likely that child-only families experience greater material hardship than non-child-only families. When Adults Are Left Out: CalWORKs Child-only Cases in Seven Counties Page 30 REFERENCES Anthony, E. K., Vu, C. M., & Austin, M. J. (2007). Children and Caregivers in TANF Child-Only Cases: Identifying Unique characteristics, Circumstances, and Needs. Berkeley: Bay Area Social Services Consortium, School of Social Welfare, University of California. [California] Legislative Analyst’s Office. (2007). Analysis of the 2007-08 Budget Bill. [Sacramento]. Retrieved March 13, 2007, from http:\/\/www.lao.ca.gov\/analysis_2007\/health_ss\/healthss_anl07.pdf. Gibbs, D., Kasten, J., Bir, A., Hoover, S., Duncan, D., & Mitchell, J. B. (2004). Children in Temporary Assistance for Needy Families (TANF) Child-Only Cases with Relative Caregivers, Final Report. Triangle Park, NC: RTI International. Hetling, A., Saunders, C., & Born, C. E. (2005). Maryland’s Child-Only Caseload: A Comparison of Parental and Non-Parental Cases. Baltimore: University of Maryland School of Social Work. Schwarzenegger, A. (2007). Building a better California, 2007-08 California State Budget. Retrieved February 6, 2007, from http:\/\/www.buildingabettercalifornia.com\/. Smilanick, P. (2006). Personal communication from Paul Smilanick, Research Program Specialist, California Department of Social Services, on estimated distribution of child- only cases, Federal Fiscal Year, 2004-2005. U.S. Census Bureau. (2007). State & County QuickFacts. Retrieved March 12, 2007, from http:\/\/quickfacts.census.gov\/qfd\/states\/06\/06001.html. U.S. Department of Health and Human Services. (2006). Temporary Assistance for Need Families Program (TANF), Seventh Annual Report to Congress: Administration for Children and Families, Office of Family Assistance. When Adults Are Left Out: CalWORKs Child-only Cases in Seven Counties Page 31 APPENDIX A. The Research Literature on Child-only TANF Cases: Parent\/caregiver and Child Characteristics Safety Net Sanction Immigrant Kinship SSI Number of studies specific to group 5 23 3 10 3 Number of studies applicable to all child-only cases 2 Parent\/caregiver\/family Characteristics Demographics Race\/ethnicity effects x x x x x Children older x x x Parent\/caregiver older T T T xT T Parent\/caregiver younger T Parent\/caregiver more likely married T T T xT T Parent\/caregiver less likely married x x x Fewer children in household x More members of household x xT x Human capital Longer time on aid xT T T xT xT More likely to receive aid again x Limited English skills x x Limited education xT T x Limited employment (history or current) T xT x x Few job skills x Limitation on ability to work legally x Significant barriers to employment x When Adults Are Left Out: CalWORKs Child-only Cases in Seven Counties Page 32 Safety Net Sanction Immigrant Kinship SSI Parent\/caregiver\/family Characteristics, continued Logistics Childcare difficulties T xT Transportation difficulties T T Income and benefits Higher income T T Lower income xT x X No health insurance xT T xT T T No sick leave x No vacation leave x Hardships Food insecurity; use of food banks, soup kitchens x xT xT Difficulty paying rent, utilities; financial hardships x x x No phone service T Shared housing; housing problems; neighborhood quality problems x T x Fewer hardships T Personal health and other personal challenges Poor health; illness; limited ability to work xT xT T T xT Learning disability; difficulty understanding rules and policies xT Substance abuse T xT T xT T Mental health problem xT xT xT xT xT Domestic violence history x xT Caring for other family members T Criminal involvement T T T T T When Adults Are Left Out: CalWORKs Child-only Cases in Seven Counties Page 33 Safety Net Sanction Immigrant Kinship SSI Child Characteristics Physical health problems; hospitalizations x x x Hospitalizations less likely x Food insecurity x Emotional or behavioral health or mental problems x x x Developmental problems x School problems T T T T T Education unmet need x History of maltreatment, abuse, neglect x xT x Police trouble T T T T T Key x = compared to one or more other subgroup(s) T = compared to TANF recipients generally Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties Child-only CalWORKs Study Report #2 Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties March 2008 Richard Speiglman [email protected] Yongmei Li [email protected] Speiglman Norris Associates 440 Grand Ave., Suite 210 Oakland, CA 94610 Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties ii About the Authors Richard Speiglman is Managing Partner, Speiglman Norris Associates (Oakland, CA) and Research Consultant, Child and Family Policy Institute of California. He has engaged in social and behavioral research and evaluation, often collaborating with advocates, policy-makers, program administrators, and representatives of philanthropy as well as principals of other research organizations. Currently his work focuses on (1) the status of parents and caregivers associated with TANF cases that include no aided adult and (2) the well-being of their children. Previous projects have dealt with public drunkenness policy, homelessness, sentencing of recidivist drinking drivers, the implementation of California’s Proposition 36 (treatment for persons convicted of drug offenses), supported housing, shallow rent subsidies, and SSI for alcoholics and drug addicts. Speiglman studied sociology before completing doctoral work in criminology (UC Berkeley) and a postdoc with the Alcohol Research Group (Public Health, UC Berkeley). Yongmei Li is Research Analyst, Speiglman Norris Associates (Oakland, CA). Her research interests lie in the intersection of population health, poverty, and intervention of public policy and medical treatment. She has evaluated the role of in-kind assistance programs on the dynamics of food insecurity in the US, and has conducted a range of research on the impact of the 1996 Welfare Reform on the economic and social existence of disadvantaged populations the child-only CalWORKs cases, single-mother welfare recipients and immigrants. Her earlier research involved nutritional intervention among HIV\/AIDS cases in South Africa and Jamaica, as well as water shortage issue in the desert State of New Mexico. She received her Ph.D. in Public Health from Tulane University School of Public Health and Tropical Medicine. Origins of This Report Phase 2 of the CalWORKs Child-only Study has been carried out with the encouragement and financial support provided by the five study counties. We express our sincere thanks to those counties, to the social\/human\/community services agencies and their directors, and to Mike Austin, Director of the Bay Area Social Services Consortium, who served as our initial ambassador to the directors. The authors would like to acknowledge the essential contributions that many generous individuals made to this report. We are indebted to the key county contacts for Phase 2 of the study Lorena Gonzalez (San Mateo County), Kathy Harwell and Nicole Pollack (Stanislaus County), Dan Kaplan (Alameda County), Dan Kelly (San Francisco), Gina Sessions (Santa Clara County) as well as their colleagues in the county social\/human\/community services agencies, and all members of our Advisory Committee. We especially value the frank exchanges that took place when we presented preliminary findings to county staff as we moved toward this report. Jodie Berger, Gloria Bruce, Lisa Dasinger, Andrea Ford, Mike Herald, Eve Hershcopf, Carol Lamont, Corey Newhouse, Cathy Senderling, and Noelle Simmons provided valuable comments on earlier drafts of this or related documents. We express our sincere appreciation to them and also recognize the work undertaken by our collaborators Jean Norris and Bill Lapp at Speiglman Norris Associates and our partners at Berkeley Policy Associates and the Center for Applied Local Research. Many colleagues including those in the Child-only Group have discussed this project with us over the past months and years. We thank them for their insights. One of these individuals, Stuart Oppenheim, we name because of his consistent and creative assistance as this project rolled out and rolls on. Despite all this support and assistance, responsibility for the report ultimately rests only with the authors. For more information about the study contact Richard Speiglman ([email protected]) at (510) 419-0456. Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties iii CONTENTS Executive Summary ………………………………………………………………………………………………….. vii Study Background………………………………………………………………………………………………………..1 County Context ……………………………………………………………………………………………………………6 Study Design……………………………………………………………………………………………………………….7 Barriers to Employment ………………………………………………………………………………………………17 Study Limitations and Interpretation of Findings……………………………………………………………..21 Findings ……………………………………………………………………………………………………………………22 Demographic Overview………………………………………………………………………………………….22 Alameda County Sanctioned Parents ………………………………………………………………………..25 San Mateo County Sanctioned Parents………………………………………………………………………27 Alameda County Safety Net (Timed-out after 60 months) Parents …………………………………29 San Francisco Safety Net (Timed-out after 60 months) Parents……………………………………..31 Santa Clara County Safety Net (Timed-out after 60 months) Parents ……………………………..34 Stanislaus County Safety Net (Timed-out after 60 months) Parents ……………………………….36 Findings across Sites ……………………………………………………………………………………………..42 Conclusions and Policy Implications ……………………………………………………………………………..59 References ………………………………………………………………………………………………………………..65 Appendix Table A-3. Survey Respondent Characteristics and Potential Barriers, by County……………71 Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties iv TABLES ES-1 Percent of Income Spent on Housing by Type of Residence, Receipt of Housing Subsidy, and Receipt of Rental Income, Sites Combined ……………………………………….xiv 1 County and CalWORKs Caseload Characteristics……………………………………………………6 2 Sample Recruitment and Interview Language …………………………………………………………9 A-3 Survey Respondent Characteristics and Potential Barriers, by County……………………….71 4 Respondent Grouping by Employment History……………………………………………………..43 5 Distribution of Number of Barriers by Employment History, Sites Combined…………….44 6 Distribution of Barriers by Employment History, Sites Combined ……………………………45 7 Barriers by Employment Status, Sites Combined …………………………………………………..52 8 Number of Barriers by Employment Status, Sites Combined……………………………………53 9 Employment by Number of Barriers, Sites Combined…………………………………………….54 10 Percent of Income Spent on Housing by County, Type of Residence, Receipt of Housing Subsidy, and Receipt of Rental Income, Sites Combined ……………………………58 11 Percent of Study Participants Reporting Neighborhood Conditions a Big Problem, Sites Combined………………………………………………………………………………………………..59 Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties v FIGURES ES-1 Number of Barriers to Employment, Sites Combined…………………………………………… xiii ES-2 Employment in Last Week as Function of Number of Barriers………………………………..xiv 1 Sample Versus Population: Alameda County Sanction……………………………………………11 2 Sample Versus Population: San Mateo County Sanction…………………………………………12 3 Sample Versus Population: Alameda County Safety Net…………………………………………13 4 Sample Versus Population: San Francisco Safety Net …………………………………………….14 5 Sample Versus Population: Santa Clara County Safety Net……………………………………..15 6 Sample Versus Population: Stanislaus County Safety Net ……………………………………….16 7 Barriers to Employment, Sites Combined …………………………………………………………….24 8 Barriers to Employment, Alameda County Sanction ………………………………………………26 9 Barriers to Employment, San Mateo County Sanction…………………………………………….28 10 Barriers to Employment, Alameda County Safety Net ……………………………………………30 11 Barriers to Employment, San Francisco County Safety Net……………………………………..33 12 Barriers to Employment, Safety Net, Santa Clara County………………………………………..35 13 Barriers to Employment, Safety Net, Stanislaus County………………………………………….38 14 Service Need and Receipt, Full Sample………………………………………………………………..38 15 Service Need and Receipt, Alameda County Sanction…………………………………………….39 16 Service Need and Receipt, San Mateo County Sanction ………………………………………….39 17 Service Need and Receipt, Alameda County Safety Net………………………………………….40 18 Service Need and Receipt, San Francisco County Safety Net …………………………………..40 19 Service Need and Receipt, Santa Clara County Safety Net………………………………………41 20 Service Need and Receipt, Stanislaus County Safety Net ………………………………………..41 21 Count of Barriers ……………………………………………………………………………………………..48 22 Number of Barriers by Work History Past Three Years…………………………………………..49 23 Number of Barriers by Work History Last Year…………………………………………………….49 24 Number of Barriers by Employment Status Last Week …………………………………………..50 25 Employment in Last 12 Months as Function of Number of Barriers ………………………….55 26 Employment in Last Week as Function of Number of Barriers…………………………………55 Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties vi Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties vii Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties Executive Summary March 2008 Study background. Since California adopted the federal Temporary Assistance for Needy Families (TANF) program as the California Work Opportunities and Responsibility to Kids (CalWORKs) program in 1997, the composition of the California welfare population has changed radically. While at its onset the vast majority of CalWORKs cases included an aided adult, over half of CalWORKs cases now receive aid just for the children. The adults either never were eligible or have been excluded from cash aid and receipt of most services. The child-only cases include those with: 1) parents timed-out, having reached the five-year, lifetime limit on receipt of aid (safety net cases), 2) parents sanctioned for non-compliance with CalWORKs program requirements (sanction cases), 3) parents of citizen children who are themselves considered not-qualified immigrants (immigrant parent cases), 4) parents receiving Supplemental Security Income (SSI) benefits for themselves (SSI parent cases), and 5) non- parental caregivers. Parents associated with sanctioned and safety net cases were at one time aided adults on a CalWORKs case. At some point, however, this status changed, and the parents lost aid. For safety net cases, this is because they used up their 60 months of lifetime CalWORKs aid. Sanctioned parents who may have received aid for any length of time short of 60 months became unaided when the county sanctioned them for non-compliance with welfare-to-work regulations. Parents and caregivers in the other three case types, however, because of their ineligibility, may themselves never have been aided. Lacking information about most child-only cases, and being concerned about the status of both parents\/caregivers and children associated with these cases, the Child-only Study was initiated to promote sound CalWORKs policy and program through researching child-only and aided adult CalWORKs cases and informing policy-makers and CalWORKs program administrators about these low-income California families. This report is the second in a series presenting research on the composition, characteristics, and needs of child-only cases in California counties. Child-only Study Report #1 analyzed county administrative data to understand (1) the prevalence of subgroups of child-only cases by county, (2) the characteristics of family members comprising child-only cases by subgroup and by county, and (3) the patterns of history of receipt of aid by subgroup and by county. This second report is based on interviews with timed-out and sanctioned parents concerning personal, community, and family characteristics that may serve as barriers to work. Previous Literature. Relatively little attention has been paid to child-only cases. While in the early years of welfare reform many studies were conducted of TANF participants and leavers, very little is known about families who receive limited aid just for their children. Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties viii Sanctioned Parents.1 The national literature reports that sanctioned families tend to be more disadvantaged and vulnerable than other families on welfare, to experience greater difficulty in understanding rules and sanction policy, and to be more likely than non-sanctioned recipients to have experienced personal and family challenges and complex life circumstances. As a group, sanctioned parents have significant barriers to employment, are less likely to be employed, and are more likely to become recipients of cash aid again in comparison to non-sanctioned parents. Risk factors for sanction include having longer history of welfare receipt, being of younger age, having less education and less formal employment history, never having been married, having more children, being African American, and having more employment barriers. Barriers to employment include substance abuse, mental health problems, domestic violence, health problems, disabilities, few job skills, low levels of education, and child care and transportation problems. Safety Net Cases. Parents reaching time limits (safety net cases in California) tend to exhibit similar characteristics with multiple barriers to self-sufficiency, younger age, longer time receiving aid, younger children, lack of high school diploma, lack of work experience, lack of child care, involvement in the child welfare system, disability, physical and mental health problems, domestic violence, alcohol or drug problems, conviction for a crime, and language barriers. In California, it has been found that those timing out after 60 months of aid disproportionately speak Vietnamese and other non-English languages. Study Design. This report is based on a cross-sectional study of sanctioned and safety net parents associated with child-only cases in five Northern California jurisdictions representing a range of economic, demographic, and urban\/suburban\/rural contexts: Alameda, San Francisco, San Mateo, Santa Clara, and Stanislaus Counties. Four of the five participating counties are located in the San Francisco Bay Area. Stanislaus County is located east of Santa Clara County in California’s Central Valley. The study relies on self-reported data derived from face-to-face interviews with a random sample of 143 female parents associated with CalWORKs child-only cases in the five counties. Counties selected the category of CalWORKs cases in which they were most interested for purposes of this study. Those persons interviewed are parents aged 18 and older who speak English, Spanish, or Vietnamese and who either had been sanctioned (in Alameda and San Mateo Counties) or timed-out (in Alameda, San Francisco, Santa Clara, and Stanislaus Counties) from receipt of cash assistance for themselves. While families of interest included both single-parent and two-parent households, only mothers were interviewed. Hence, the relatively few households led by single fathers were excluded from the study population. Because of timing and availability of information from which the potential sample was drawn, the sample represents parents in families with somewhat longer episodes as child-only cases. Interviews took place between July 5 and November 14, 2007. The survey took about one hour and covered a variety of topics, including demographics, employment status and work experience, household income, material hardships, child care, respondent physical health, respondent cognitive and mental health, respondent use of alcohol and other drugs, respondent experience of partner abuse and partner control, children’s health, and need for and receipt of services. 1 Sanctioned cases include those in California where aid is terminated only for the parents and those in most states where aid is terminated for all family members (full-family sanction). A similar distinction exists also with reference to timed-out cases. In most states there is no safety net program such as California’s that provides aid for the children of timed-out parents. Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties ix Response Rates. Twenty-five mothers were interviewed in San Francisco, San Mateo, and Stanislaus Counties, and twenty-six were interviewed in Santa Clara County. In Alameda County 21 sanctioned and 21 safety net parents were interviewed. Overall, 16 cases were interviewed in Vietnamese, 4 in Spanish, and 123 in English. Response rates, apparently associated with the accuracy and usefulness of telephone number data provided by the counties to the fieldwork team, ranged from 39.6 percent (Alameda County sanction cases) to 61.9 percent (Santa Clara County safety net cases). Measurements. Barriers to employment may be internal (such as educational attainment and poor health) or external (such as problems with transportation, child care, and a partner’s discouragement about work, school, or training). Barriers may also be categorized as involving: Human capital (educational attainment, work experience) Family responsibility (child under six, child care problems, child health limitations) Participant’s health (physical health, mental health, alcohol or drug problems, learning disability, domestic violence, partner control), and Logistical problems or material hardships (transportation problems, residential or living instability, emergency food use) Building on previous research findings, this study examines data on the following 14 potential barriers to employment. Survey questions focus on the study participant and her spouse or partner, children, neighborhood and other environments, and household.2 Unless otherwise stated, each barrier refers to the respondent’s current status. Barriers include: 1. Education: less than high school diploma or General Educational Development (GED). 2. Lack of full-time work experience: last worked 30 or more hours per week three or more years ago, if ever. 3. Transportation: has no driver’s license or no access to a car, or quit a job or was unable to start a job in the last 12 months due to transportation problems. 4. Residential or living instability: now living in another person’s place, in a shelter, homeless on the street, or moved out of home two or more times in the last 12 months. 5. Relies on emergency food programs (food banks, food pantries, or soup kitchens) for bags of food, bag lunches, or cooked meals. 6. Has a child under six. 7. Experiences child care problems getting child care has been a problem for the respondent in finding or keeping a job in the past 12 months. 8. Physical health: self-rated fair or poor health, or limiting physical health condition. 9. Learning disability: needed extra help with school\/learning or diagnosed with learning disability. 10. Mental health: limiting mental health condition, or depression, generalized anxiety disorder or stressful events in last 12 months. 11. Alcohol or drug problems: abuse of or dependence on alcohol or other drugs in the last 12 months. 2 We do not attempt to define or to focus on the CalWORKs assistance unit utilized by county CalWORKs eligibility offices. Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties x 12. Domestic violence: experienced physical or sexual abuse by a partner in the last 12 months. 13. Partner control: intimate partner discouraged, did not help, or harassed respondent regarding work, or made it difficult to go to work, school or training, or caused the respondent to lose a job, or drop out of school or training in the last 12 months. 14. Child has limiting health condition that prevents her\/him from basic activities such as eating and walking without assistance. Study Limitations and Interpretation of Findings. Reported statistics such as percentages or means reflect the actual responses recorded by the fieldwork team but also are assumed to be estimates of the status of the population studied in each site. However, the small number of respondents limits the stability of estimates and the ability to compare findings across study sites. In other words, this study provides descriptive documentation of individual county samples rather than comparative analyses. When findings are reported by combining results across sites we do not take account of differences in county population size by weighting results. Hence, combined site totals do not provide estimates of characteristics for any specific child-only case population. Findings. Study findings demonstrate that female parents associated with sanctioned and safety net child-only cases in five Northern California counties have many similar demographic and household characteristics, experience substantial material hardships, and have poor employment histories. These mothers also appear to be in need of a variety of services to address potential barriers to employment. Although the sanctioned and safety net child-only parents in this sample share many barriers and other characteristics, each study site also has its own barriers fingerprint. Specific barriers contribute differently to the barrier burden for individual counties. Demographics. Respondent age ranges from 18 to 58 years, and the average age of the six samples varies from 32.1 years (San Mateo County sanction) to 38.7 years (Santa Clara County safety net). Race\/ethnic composition of the samples varies greatly. In San Francisco and in Alameda County’s sanction and safety net samples, the majority of mothers interviewed are African American. In San Mateo and Stanislaus Counties the plurality group is Latino\/Hispanic, and in Santa Clara County the plurality group is Asian. The mean household size across counties ranges from about four (Alameda County sanction, Alameda County safety net, San Francisco safety net) to about five (San Mateo County sanction, Santa Clara County safety net, Stanislaus County safety net). The average number of adults per household in addition to the respondent varies from 0.5 (San Francisco safety net) to 1.4 (San Mateo County sanction). Mean number of children in households varies from 2.2 (Alameda County sanction) to 2.8 (Santa Clara County safety net). The average age of the youngest child per household varies from 5.7 years (San Mateo sanction) to 8.6 years (Alameda County sanction). Forty-two percent of the combined sample has a child less than six years of age. Educational Attainment. Depending on study site, from one-third to over one-half of mothers have not attained a GED or high school diploma. Overall, prevalence of education lower than GED or high school diploma is 40.6 percent. These and other findings are compared to rates for the female population aged 18 to 58, with income level below 200 percent of the Federal Poverty Line (FPL). In the case of educational attainment, study participants’ accomplishments are lower in some cases substantially lower in three of the sites. Lowest educational attainment is in the Alameda County sanction and San Francisco safety net sites. Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties xi Employment. Several measures of lack of employment are reported, including (1) lack of full- time employment (30 or more hours per week) within the past three years (49.0% of total study sample), lack of employment in the last year (58.0%), and lack of current (last week) employment (70.6%). Lack of recent full-time employment is especially prevalent in the safety net sites of San Mateo County (60.0%), Stanislaus County (60.0%), and Santa Clara County (57.7%), and the Alameda County sanction (42.9%) site. Household Income. Household income ranges from about one-third to two-thirds of the California Budget Project’s 2006 basic family budget. The most important and stable cash income item is the CalWORKs grant for children, which comprises from one-third to one-half of monthly household income in the six sites and ranges from a mean of $461 in Stanislaus County to a mean of $665 in Santa Clara County. Other sources of cash income exist, and their contribution varies widely across sites. In each site, 95 percent or more of non-cash income derives from Food Stamps. Material Hardships. One-third of the mothers experienced residential instability. That is, they were living in another person’s home, in a shelter, were homeless on the streets, or had moved at least twice in the last 12 months. The prevalence of this barrier ranged from 8.0% among San Francisco safety net study participants to 52.0% among San Mateo County sanction participants. Reliance on emergency food programs (43.4% of the combined sample) varies by site, with from 3.9 to 20.0 percent of mothers using soup kitchens in the previous 12 months. In comparison, the national rate is less than one percent. Residential overcrowding is prevalent. Percent of mothers reporting an average of more than one person per room in her residence ranged from 14.3 to 36.0 percent, depending on the study site. In the national general population, according to the U.S. Department of Housing and Urban Development (HUD), 2.4 percent of persons are estimated to be residing in such crowded situations. In a related measure, the rate of homelessness among mothers surveyed is four to14 times that of the national rate. Despite relatively large investments in housing costs, mothers reported that neighborhood problems were common. Twenty percent or more of mothers assessed as a big problem five neighborhood characteristics: (1) too many cars, (2) trash and litter, (3) people using or selling drugs, (4) no safe place for children to play, and (5) not safe to walk alone at night. A clear association is evident between mothers who report no safe place for children to play and those who say they skipped work, school, or training in the last year because they were worried about their child’s safety. Child Care Problem. Depending on the site, from 15.4 to 36.0 percent of study participants report that child care is a problem to get or keep a job. Health. From 28.0 to 52.0 percent of mothers, depending on site, report fair or poor health. Overall, physical health problems are experienced by 36.4 percent of the full sample. Among study respondents, depending on site, the prevalence of mental health barriers (overall, 26.6%) is two to seven times the general population rate for psychological distress. Survey results for last-year drug use range from 14.3 to 48.0 percent, depending on site, compared to 10.7 percent among the general population. Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties xii One in five study participants needed extra help with school or learning or has been diagnosed with a learning disability. The prevalence of learning disability ranges from 9.5 percent to 28.0 percent across sites. Reports of domestic violence experience in the last year range from 7.7 percent to 10.1 percent. Partner control, depending on site, spans the range from 0 to 23.8 percent of cases. Child limiting health conditions range in prevalence from 11.5 to 33.3 percent, depending on site. The Stanislaus county sample has the largest proportion of mothers with physical health (52.0%) and mental health (44.0%) barriers. Transportation. The most prevalent barrier for the combined sample is transportation which affects 61.5 percent of all respondents. It is also the number one barrier for each site except Santa Clara County, where lack of recent work experience is most prevalent (57.7%). Multiple Barriers. Mothers were found to have from zero to 10 barriers (see Figure ES-1). While two mothers have no barriers, and one has 10 barriers, 30 have four barriers. On average, the combined sample has 4.3 barriers to employment. The San Mateo County sanction sample has on average 5.2 barriers, the largest average number among the six samples. Regarding the relationship between the employment outcomes and the number of barriers, this study finds that any more than one barrier substantially reduces likelihood of employment. Slightly over two-thirds of mothers with only one barrier worked in the current time period (see Figure ES-2). A barrier count of two or more reduces the likelihood of employment substantially, down to one participant in four. The number of barriers appears to affect current employment status more than employment status in the last year. Compared to study participants working the week previous to interview, on average barriers are fifty percent more prevalent among those not working the previous week. Particularly salient, in addition to lack of recent (last three years) full-time work, are child care problems, mental health problems, alcohol or drug problems, domestic violence, and partner control. With regard to the last three barriers, it is noteworthy that the prevalence of each barrier is relatively low 13 percent or less. However the apparent influence of the barriers is high. For example, individuals not employed last week are 2.7 times as likely as those with work in the last week to be found to have alcohol or drug abuse or dependence. Housing Costs. Table ES-1 examines housing cost burden for four groups of study participants. These groups are defined by whether they live in their own place (Groups A, B, and C), whether they receive a subsidy toward the cost of their housing (Groups A and B), and whether they receive $20 or more of rental income from others for their housing unit (Group A). Group D is composed of those who live in someone else’s place and receive neither a subsidy nor rental income of $20 or more. Three out of five study participants (Groups A and B, 61.7%) receive a housing subsidy that contributes to the cost of their monthly housing bill. Among those 87 households, 15 also benefit financially by receiving more than $20 monthly in rental income (Group A). That is, persons sharing the housing provide a monthly stipend. As a result of these two forms of financial assistance, on average Group A, the individuals receiving subsidies and rental income, spends 15.4 percent of income on housing. Group B, with subsidy but no rental income, devotes 25.3 percent of income to housing costs. Both amounts fall within the 30 percent considered affordable by HUD. There are, however, two sizeable groups of study participants who do not Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties xiii benefit from housing subsidies. Members of Group C reside in their own place, have no subsidy, and do not receive rental income of $20 or more. Percent of income spent on housing ranges, depending on site, from 15 percent to 74 percent. On average, across the six study sites, these households devote 54.5 percent of income to rent, a figure considered unsustainable and putting the occupants at risk of homelessness. Additionally, one-third of these household are considered over-crowded, having, on average, more than two persons per bedroom. A final group, Group D, is comprised of people who live in another person’s place. These mothers have no housing subsidy and no rental income. On the contrary, they provide rental income to others. Rent costs range from 14.9 to 44.3 percent of income, with a group mean of 38.8 percent of income. Forty percent of these living units have more than two persons per bedroom. Figure ES-1. Number of Barriers to Employment, Sites Combined 0 10 20 30 40 0 1 2 3 4 5 6 7 8 9 10 Number of barriers Number of mothers Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties xiv Figure ES-2. Employment in Last Week as Function of Number of Barriers Table ES-1. Percent of Income Spent on Housing by Type of Residence, Receipt of Housing Subsidy, and Receipt of Rental Income, Sites Combined Group Type of residence Housing subsidy receipt Rental income receipt n % % of income to housing A. Own \/ rent, receive housing subsidy, rental income > $20 15 10.6% 15.4% B. Own \/ rent, receive housing subsidy, no rental income > $20 72 51.1% 25.3% C. Own \/ rent, no subsidy, no rental income > $20 25 17.7% 54.5% D. In other person’s place, no subsidy, no rental income > $20 25 17.7% 38.8% Other 4 2.8% 36.6% Total 141 99.9% 32.2% Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties xv Conclusions and Policy Implications. Because this study is cross-sectional and does not follow households over time, we cannot conclude that a causal relationship exists between the potential barriers and employment outcomes. However, published results from other longitudinal studies assist our interpretation of the data collected from households for this study. We find strong indication that at least half of the 14 barriers identified are negatively associated with employment. Previous TANF studies that typically focused on cases with full families receiving aid (as opposed to child-only studies), find the following barriers to have significant negative effects on employment over time: (1) limited educational attainment, (2) transportation barriers, (3) child care problems, (4) physical health problems, (5) learning disability, (6) mental health problems, and (7) alcohol and other drug problems. To our knowledge, the following barriers as we define them have not yet been examined in longitudinal studies (1) residential instability, (2) use of emergency food programs, and (3) presence of child under six. Factors previously studied but that have not been found to predict subsequent employment are: (1) domestic violence, (2) partner control, and (3) child’s limiting condition. It remains to be seen, both for these and other characteristics primarily studied for their effects in aided adult families, how the impact of these barriers might differ for child-only cases. In the light of other research results, our findings suggest the following: The vast majority of mothers in both safety net and sanctioned child-only cases face multiple barriers to employment. Eleven percent of parents associated with sanctioned and timed-out child-only cases had no barriers or only one barrier to employment; the remaining 89 percent had more than one barrier. While having zero or one barrier is associated with a 69 percent chance of current employment, having two or more barriers is associated with a 24 percent chance of current employment. Parents with two or more barriers have only a 39 percent chance of having worked any hours in the past year. Barriers that have the greatest negative association with past-week employment are, in order of importance: (1) lack of recent (last three years) full-time work experience, (2) alcohol or other drug problems, (3) mental health problems, (4) partner control, (5) child care problems, and (6) domestic violence. Barriers with the greatest negative association with work in the previous 12 months are, in order of importance: (1) lack of recent (last three years) full-time work experience, (2) child care problems, (3) alcohol or other drug problems, (4) mental health problems and residential instability (tie), and (6) education less than GED or high school diploma and physical health problems (tie). Despite a large investment in welfare-to-work programs, many of the mothers in the study expressed needs whether for additional child care, help with utility bills, or assistance finding housing that were not met. Additional findings that highlight program and policy issues include the following: Mothers associated with sanctioned and timed-out CalWORKs cases are not young, and their limited educational background and work experience in the last three years suggest Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties xvi that substantial investment in human capital will be required before they successfully enter and remain in the workforce. They have other challenging barriers as well. As one study advisor put it, these women live in a soup of problems . . . their will-power will not resolve most of the problems. The majority of mothers surveyed have relatively young children. Hence, the typical family will not quickly leave CalWORKs because the children have aged-out. There is thus substantial need for assistance for these families but also great opportunity for longer-term programmatic intervention. Many study participants reside in problematic neighborhoods. Substantial parental attention is required to sustain children in those environments. Therefore, parental decisions not to engage in work but instead to remain available to children may constitute positive personal and social decisions. County social services administrators, asked to comment during an early review of study findings, suggested that for parents both to work full-time and to carry our parental responsibilities may require work with flexible hours, the ability to keep in phone contact with children, and other accommodations. However, these are jobs that people with low educational attainment and little work experience are unlikely to acquire. Barriers span a range of conditions, some short-term in nature and others that are unlikely to change very quickly. Recent (last three years) full-time work experience is central to both current and last-year employment. Current employment appears to be especially sensitive to health-related and interpersonal barriers as well as child care problems and residential instability. Barriers associated with lack of employment in the longer-term (12 months) cover a broader terrain, including educational attainment and physical health problems. Given what is known from previous studies on aided adult cases, it is likely that the focus for policy and practice should be on the past year barriers to work, supplemented by a focus on overcoming transportation barriers. To promote self-sufficiency among mothers associated with child-only cases, a combined effort will likely be required, involving: The identification of resources and services that families need to surmount these barriers and the funding and placement of these services within the county The identification of new or alternate funding sources to support services that cannot be paid for with CalWORKs funding Increased use of exemptions and expanded reasons for exemption from welfare-to-work activities, when appropriate, for parents with barriers to employment Introduction of advocacy and case management services to support sanctioned and timed- out parents in their efforts to secure financial and personal support From a longer-term, national perspective, it is possible that a partial disability program may be required for some parents.3 Currently, many individuals with apparently sustained and significant barriers to work do not qualify as disabled under SSI regulations but nonetheless are ill-equipped to work either full-time or consistently enough to support themselves and their 3 See, in this regard, Blank (2007) and her proposal for a Temporary and Partial Work Waiver Program. Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties xvii children.4 Those who fall short of qualifying for the SSI benefit often qualify for CalWORKs and county General Assistance programs instead, which are not flexible enough or adequately resourced to serve this population well. In addition to supports for parents, the children in some child-only families may also require specialized assistance. Currently, the CalWORKs program lacks direction or capacity to address those needs. Some needs may be met outside CalWORKs by existing family services, county health and mental health programs, and other agencies or be met informally in the context of family life, child care, preschool, or public school. Relying on school, preschool, and child care, however, seems unrealistic. Too often school districts, agencies, or family child care programs are underfunded, teachers are overwhelmed, and too few special resource staff are available. We really do not yet know how the children are faring in child-only families, and it remains for future research to examine children’s well-being, to learn where they currently acquire support, and to ascertain what additional assistance they may require to thrive. The point is, one county colleague stated, that we need to put these families in a different relationship with poverty. How to accomplish that is not clear. The above recommendations would be a challenge to pursue in any environment but especially in California today, when every consideration for appropriate financial support must be weighed against the challenges of a major budget deficit. To reach combined objectives of policy change and program innovation, the State and counties will need to work both within and outside their jurisdictions as they determine institutional ownership for the array of problems catalogued. One starting point would involve a focused look at the gap between needed and missing services that are reviewed in the report. More than ten percent of mothers reported that help was needed with utility costs, extra child care, help finding housing, and free or inexpensive work clothing. Five to ten percent said they needed assistance with physical health problems, mental health problems, support groups, and attorney services. While these needs may be, or may constitute elements of, barriers to employment, it remains unclear which community or county agencies hold responsibility for addressing them, or for coordinating their resolution. In California, the absence of a full-family sanction, like the support provided by safety net benefits for timed-out families, is understood as critical to sustain the children in CalWORKs families. About 80 percent of the households that we studied are able tenuously to make ends meet, either because they have access to a housing subsidy or live in another person’s residence and have cash aid and Food Stamps. In a number of cases study participants both had a housing subsidy and shared space with housemates. We did not examine housing conditions other than cost and overcrowding. Given the negative effects of crowding, we do not know the extent to which shared housing proves to be a benefit or a liability to those families and, especially, the children in them. But we can imagine the difficult, additional compromises that these high-need families would have to make if their CalWORKs grant were to diminish further or become unavailable. Loss of the CalWORKs grant could affect the ability of relatively large numbers of individuals the majority of them children to remain housed or provide for other needs. Depending on the precise type of housing subsidy involved, in case of loss of CalWORKs aid or other income, the subsidy might increase to at least partially offset the loss of income. But where that does not 4 In fact, many recipients of SSI have some association with AFDC or TANF (Nadel, Wamhoff, and Wiseman, 2003\/2004, p.26). See also Pavetti and Kauff (2006). Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties xviii happen, loss of benefits may have devastating effects on housing security. Many study participants already pay more than 30 percent of their income towards housing costs. Without additional assistance from housing subsidies, if their income were to drop and the family continue to live in the same situation, the percent of income devoted to housing costs would climb further.5 Future Research. While the study provides important knowledge about the number and impact of challenges that mothers in child-only CalWORKs families face in obtaining and keeping employment, the effect of the reduced grant on children’s well-being remains unknown. The researchers and sponsors of the CalWORKs Child-only Study, the study’s Advisory Committee, and several entities providing financial support to the study have identified a need for the next study to focus specifically on child well-being. As well as expanding the survey to include other types of child-only cases not yet studied (immigrant parents, non-parental caregivers, SSI parents) the next study phase should highlight information on the status of children in all child- only cases including safety net and sanction child-only cases and particularly address the question of with which sorts of cases community or county agencies ought to be actively involved to promote child well-being and prevent disruption of the family and involvement of the child welfare system. We anticipate the use of a variety of methods key informant interviews, focus groups, and parent\/caregiver surveys to accomplish this objective. This information, among other things, will prove useful in guiding county prevention planning and early intervention programs. Our goal, as we acquire more knowledge about parents, caregivers, and children involved in child-only cases, is to continue working with a range of stakeholders other researchers, policy- makers, program administrators, advocates, and representatives of philanthropy to identify where and when CalWORKs services and other resources are available that would support families on an ongoing or emergency basis. Implications for non-child-only CalWORKs cases may also become evident, particularly with respect to strategies to help families with multiple barriers well before they are sanctioned or reach their time limits on aid. As we gather more information, it may be appropriate to organize, implement, and evaluate demonstration projects to show the effects of interventions on child well-being, the necessity for child welfare system engagement, and the promotion of families’ ability to survive and thrive beyond poverty. 5 A broader perspective must also be considered. Where increased housing assistance shores up a decline in a CalWORKs grants, that assistance become unavailable for others potentially in need of it. The net effect community-wide would be an increase in homelessness or in marginal or dangerous housing situations. Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties 1 Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties STUDY BACKGROUND Since California adopted the federal Temporary Assistance for Needy Families (TANF) program as the California Work Opportunities and Responsibility to Kids (CalWORKs) program in 1997, the composition of the California welfare population has changed radically.6 While at its onset the vast majority of CalWORKs cases included an aided adult, over half of CalWORKs cases now receive aid just for the children because the adults either never were eligible or have been excluded from cash aid and receipt of services (Smilanick, 2007).7 Five major categories define 95 percent of child-only cases, those with: 1) parents timed-out, having reached the five-year, lifetime limit on receipt of aid (safety net cases), 2) parents sanctioned for non-compliance with CalWORKs work participation program requirements (sanctioned cases), 3) parents of citizen children who are themselves considered not-qualified immigrants (immigrant parent cases), 4) parents receiving SSI benefits for themselves (SSI parent cases), and 5) non-parental caregivers.8 For shorter or longer periods of time, parents associated with the first two categories sanctioned and safety net cases were at one time aided adults on a CalWORKs case. At some point, however, this status changed, and the parents lost aid. For safety net cases, this is because they used up their 60-month lifetime limit of CalWORKs aid. Sanctioned parents could have received aid for any length of time short of 60 months. They became unaided at the point at which the county sanctioned them for non-compliance with welfare-to-work regulations. Parents and caregivers in the other three case types, however, because of their ineligibility, may themselves never have been aided. Historically, the adults associated with child-only cases have not been subject to time limits or work requirements, and typically the unaided adults are not entitled to services such as CalWORKs child care and transportation subsidies or behavioral health care services. As a result central goals of the federal TANF and California CalWORKs programs appeared not to apply. 9 However, sanctioned and timed-out parents are now part of states’ and counties’ work participation rate calculations. In light of lack of information about most child-only cases, and concern about the status of both parents\/caregivers and children associated with these cases, the Child-only Study was initiated to promote sound CalWORKs policy and program through researching child-only and aided adult 6 Congress passed, and President Bill Clinton signed the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA, P.L. 104-193, 110 Stat. 2105) on August 22, 1996, creating the TANF program. Through AB1542, CalWORKs, California’s implementation of TANF, was signed into law on August 11, 1997. 7 With CalWORKs operating under new regulations provided for by the federal Deficit Reduction Act of 2005, however, timed-out and sanctioned parents now contribute to calculation of the State’s Work Participation Rate. 8 Non-parental caregivers are often referred to as non-needy family members. 9 Central goals include to end the dependence of needy families on government benefits by promoting job preparation, work, and marriage (42 USC 601) and to break the cycle of poverty by giving recipients both the incentives and the tools to move from welfare and to self-reliance. A number of publications use this latter or similar language to reference the promise of TANF. For this particular quotation see Linhardt, 1998. Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties 2 CalWORKs cases and informing policy-makers and CalWORKs program administrators about these low-income California families. This report is the second in a series reporting research on the composition, characteristics, and needs of child-only cases in California counties. It completes Phase 2 of a proposed three-phase study. Phase 1 analyzed county administrative data to answer three primary questions: What is the prevalence of subgroups of child-only cases by county? How do characteristics of family members comprising child-only cases vary by subgroup and by county? What are the dynamics of history of receipt of aid?10 In accomplishing its objectives, Report #1 compares child-only with non-child-only CalWORKs cases. According to Report #1, welfare grants received by child-only families are both smaller in size compared to those received by other families and shared by more individuals, compared to grants provided to families with aided adults. Accordingly, Report #1 concludes that child-only families experience greater material hardship than non-child-only families (Speiglman, Bos and Ortiz, 2007, p. 29) . Apart from concern about material hardships, Report #1 also leaves us with research questions about need for services and characteristics other than demographics that can be assessed as potential barriers to employment. It is pointed out in Report #1 that the cross-county variation in the distribution of child-only cases is explained by differences in multiple factors including caseload demographics. In other words, specific categories of child-only CalWORKs cases may differ substantially in demographics compared to the general child-only caseload for each site. Phase 2 of the child-only study, involving interviews with timed-out and sanctioned parents concerning barriers to work and other topics, is the subject of the present report. The authors have also designed a third study phase, to focus on the situations of parents associated with the other categories of child-only cases and to assess child well-being among the range of child-only families. A section at the conclusion of this report on next steps provides additional information about the rationale and plans for Phase 3. In the pages that follow we review relevant literature, describe the context of the study counties, summarize the study design, and present study findings. Findings include a profile of results for each study site, and findings across sites. The report concludes with a note on study limitations, brief discussion section, and comments on future research. The Literature on Sanction and Safety net parents and Barriers to Work California is a relatively generous state in terms of cash grants to support children when the parents or caregivers are not eligible for CalWORKs benefits, or CalWORKs is terminated for adults.11 Under CalWORKs, time limits and sanctions are applied only to the adult. In the former case, when the parent(s) has reached the 60-month time limit, the grant size is recalculated to 10 Report #1, Speiglman, Bos and Ortiz, When Adults Are Left Out: CalWORKs Child-only Cases in Seven Counties (May 2007), is at: http:\/\/www.cfpic.org . 11 However, the value of a CalWORKs grant remains far below that of an AFDC grant and has continued to decline since inception of the CalWORKs program. In 2007 the purchasing power of the maximum CalWORKs aid payment for a family of three was 10.9% below the comparable 1998 CalWORKs aid payment and 38.9% below the 1988 AFDC aid payment. Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties 3 reflect loss of one (single-parent) or two (two-parent) family members from the case.12 In the latter case, CalWORKs recipients who fail to meet program requirements may be sanctioned by a reduction or full elimination of the adult portion of the family grant. Hence, the rise in the numbers of child-only cases is driven by CalWORKs policy (MaCurdy et al., 2000) as well as by parent behavior, employment opportunities, and a host of other factors. In particular, the Safety Net program supporting children of timed-out adults increased from zero, for the first five years of the CalWORKs program, to approximately 5,300 in 2003 and 40,000 in 2005 as adults reached their time limits and were removed from aid (Smilanick, 2006). While, especially in the years following PRWRORA, a great many studies were conducted of TANF Participants and leavers, relatively little attention has been paid to child-only cases.13 Most prior research either did not distinguish child-only cases from the general TANF population, or, as in our earlier work, specifically excluded child-only cases from the population under study (Norris and Speiglman, 2003, 2005). Nevertheless, some key studies exist, and, in terms of identifying parents’ barriers to work, these earlier studies provide an important base from which to launch this report. Sanctions. Sanctioned cases include those in California where aid is terminated only for the parents and those in most states where aid is terminated for all family members (full-family sanction). The national literature, reporting on jurisdictions both with and without full-family sanctions, finds that sanctioned families tend to be more disadvantaged and vulnerable than other families on welfare (Moffitt and Roff, 2000; Cherlin et al., 2001; Bloom and Winstead 2002). Sanctioned adults may experience greater difficulty in understanding rules and sanction policy (Fein & Karweit, 1997; General Accounting Office, 1998). They are much more likely than non- sanctioned recipients to have experienced personal and family challenges and complex life circumstances (Wu et al., 2004; Kramer, 1998). As a group, sanctioned parents have significant barriers to employment, are less likely to be employed, and are more likely to become recipients of cash aid again when compared to non-sanctioned parents (Kramer, 1998; Pavetti, Derr & Hesketh, 2003). Correlates of sanction include being younger, less educated, never married, having more children, and being African American (Pavetti et al., 2004; Kalil, Seefeldt & Wang, 2003; Cherlin et al. 2002). Barriers to employment include substance abuse, mental health problems, domestic violence, health problems, disabilities, few job skills, low levels of education, and child care and transportation issues (Kaplan, 2004). Studies of sanctioned parents in California lend support to some of the above findings. Drawing on administrative data, Ong and Houston (2005) examined CalWORKs sanction patterns in Alameda, Fresno, Kern, and San Diego Counties. Characteristics of single parents found to be associated with a lower probability of being sanctioned include primary language non-English, living in counties other than San Diego, having younger children, and recent employment history. Single fathers were slightly more likely to be sanctioned than single mothers. African Americans were more likely to be sanctioned compared to Whites. 12 A similar financial impact results when an additional child is born into the family but because of California’s family cap is not supported by additional aid (Cleveland, 2007). 13 See, however, the review conducted by Austin, Anthony, and Vu (2007). Prior research highlights the diversity in the composition and characteristics of the child-only cases across the nation (Farrell et al., 2000; U.S. Department of Health and Human Services, 1999, 2004). Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties 4 Studying the population of CalWORKs participants in the county of Los Angeles, and partially at odds with the Ong and Houston findings, Moreno and colleagues (2005) documented five factors that increase the probability of being sanctioned, age younger than 25, being non-white, English speaking, currently being single, and not utilizing non-specialized supportive services. This study also highlighted barriers to returning to compliance: transportation and childcare problems, missing orientation due to late receipt of official appointment notice, a history of unemployment in the year prior to entering welfare-to-work program, and having an infant. These authors suggested that sanctioned participants are frequently unable to comply with program requirements because they do not receive needed supportive services (page xi). Looking at sanction dynamics in Wisconsin from 1997 to 2003, Wu and colleagues (2004) associated a higher probability of sanction with a longer history of welfare receipt, less formal employment history, and more employment barriers. Previous research also highlights the economic profile of the sanctioned adults. These studies collectively indicate that, compared with other welfare leavers parents\/caregivers whose families no longer receive TANF assistance both sanctioned and timed-out parents have higher rates of financial difficulties, including food insecurity, and that sanctioned welfare leavers are less likely to be employed, and have lower earnings and less income than individuals who left welfare for other reasons (USGAO, 2000; Pavetti & Bloom, 2001). Time limits. A similar distinction between California and other state policy exists also with reference to timed-out cases. In most states there is no safety net program such as California’s that provides aid for the children of timed-out parents. Parents reaching time limits also tend to exhibit hard-to-serve characteristics with multiple barriers to self-sufficiency, including involvement in the child welfare system, disability or health problems, and conviction for a crime (Social Research Institute, 1999). They also tend to be long-time aid recipients or to cycle on and off assistance (The Finance Project, 2005). Using Panel Study of Income Dynamics (PSID) national data on the monthly patterns of AFDC receipt during the 1980s and early 1990s, Duncan and his colleagues (1997) estimated the number and characteristics of recipient families likely to be affected by the 60-month time limit, as well as how quickly families will reach the limits. They found that like sanctioned adults, those affected by time limits are likely to have a child under age three, never been married, lack a high school diploma, have no work experience, and be of a young age (Duncan, Harris & Boisjoly, 1997). In general, this timed-out adult population has diverse needs that range from assistance with basic needs and intensive job preparation services to ongoing job training or social service intervention (Kaplan, 2001). In a 2004 study of welfare leavers in Los Angeles, Moreno and colleagues (2004) compared non- timed-out with timed-out recipients. They found that the latter worked more hours at lower wages and that a reduction in cash assistance did not seem to be associated with major disruptions in family structure of the timed-out recipients. Instead, it appeared that Section 8 housing support saved some timed-out former recipients from eviction. At the same time, the likelihood of shelter utilization was higher among timed-out participants. Furthermore, timed- out adults were 2.5 times more likely to need drug or alcohol counseling services but less likely to need child care. The authors attributed the latter finding to the fact that timed-out parents were disproportionately from two-parent families. This study found the following major barriers to employment among both timed-out and non-timed-out leaver groups: domestic violence, Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties 5 transportation problems, drug and alcohol use, mental health problems, lack of child care, disability or other health barriers, and language barriers. Importantly, the authors note, the effect of cash reduction is more pronounced for smaller families (with no more than 3 members) than bigger families who have more wage earners. Furthermore, during the first six months after January 1, 2003, when the first cohort of CalWORKs recipients timed-out, the poverty rate among timed-out adults increased by eight percent (from 61% to 69%) at the same time that the poverty rate declined by six percent (from 72% to 66%) among the comparison groups still on aid. Finally, this study identified that stress was prevalent among the timed-out population and concluded that stress is less an effect of time limits and more an effect of simply being poor, because the same level of stress also occurred among CalWORKs recipients who left aid for other reasons. Focusing on CalWORKs aid recipients within six months of timing-out, Crow and Anderson (2004), in the first report from a time limits study currently on-going, found that a typical family reaching the time limit lost $95 in net benefits, a sum that could have a substantial impact to a household with a marginal income. They also identified significant variation across counties in tracking time on aid and administering exemptions and extensions, as well as variations also in recipients’ knowledge of benefits and services available before and after they reach the time limit. In the second time limits study report, London and Mauldon (2006) described CalWORKs families in six focus counties as they approach the time limit. One of the key findings is that barriers to employment are pervasive, including depression, anxiety, stressful events, alcohol or drug use, domestic violence, and health conditions that limit work. In addition, in terms of ethnicity, the CalWORKs population nearing the time limit is more ethnically diverse than the population not nearing the time limit, including a larger proportion speaking Vietnamese and other non-English languages. More than half have very young children. Their earnings are low, and job-related benefits are limited. Barriers to Employment among CalWORKs Recipients. Research on barriers to employment among CalWORKs recipients in general, rather than child-only cases, also inform the current study. In assessing barriers to employment among aided adult CalWORKs recipients in San Joaquin County, Norris and Speiglman (2005) identified a comprehensive set of barriers: health- related (physical and mental health, family violence, alcohol and drug use), human capital (work skills, education, language skills, criminal justice system involvement), family responsibility (child care), and logistics (car or driver’s license). This study also examined the relationship between the number of barriers and the probability of being employed. More specifically, the more barriers a respondent reported, the less likely he or she was to be working full-time, and reporting a large number of barriers was associated with a significant reduction in part-time work as well (p. 2). In addition, child care and transportation are identified as barriers that were consistently and strongly associated with poorer work outcomes and greater reliance on welfare. These findings indicate both similarities with and differences from an earlier study of aided adults in Alameda County (Norris and Speiglman, 2003), where almost two-thirds of the sample reported a transportation barrier; but child care was of less concern (24.5%). Other major barriers included lack of a high school diploma or GED (40%), symptoms of drug or alcohol abuse (almost one-third), and physical health and activity limitation (one-fifth to one-fourth). Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties 6 COUNTY CONTEXT This report is based on a cross-sectional study of two groups of parents associated with child- only cases in five Northern California jurisdictions that had participated in Phase 1 of the Child- only Study, Alameda, San Francisco, San Mateo, Santa Clara, and Stanislaus Counties. Four of the five participating counties are located in the San Francisco Bay Area. Stanislaus County is located east of Santa Clara County in California’s Central Valley. Table 1 provides an overview of the counties studied. Table 1. County and CalWORKs Caseload Characteristics14 Alameda San Francisco San Mateo Santa Clara Stanislaus Population, 2005 est. 1,448,905 739,426 699,610 1,699,052 505,505 White non-Hispanic persons 38.0% 44.1% 47.3% 39.9% 51.8% Black persons 13.8% 7.3% 3.4% 2.8% 3.1% American Indian or Alaskan Native persons 0.7% 0.5% 0.5% 0.8% 1.5% Asian persons 24.2% 32.9% 23.4% 30.2% 5.0% Persons of Hispanic or Latino origin (non-White) 20.8% 13.7% 22.6% 24.9% 37.6% Foreign born persons, 2000 27.2% 36.8% 32.3% 34.1% 18.3% High school graduates age 25+, 2000 82.4% 81.2% 85.3% 83.4% 70.4% Median household income, 2003 $56,166 $51,302 $64,998 $68,167 $41,524 Per capita money income, 1999 $26,680 $34,556 $36,045 $32,795 $16,913 % below poverty, 2003 10.7% 12.0% 6.8% 8.8% 14.2% Land area, square mi, 2000 737 46 449 1,290 1,493 Population density (persons per square mile) 1,966 16,074 1,558 1,317 339 Number of CalWORKs cases 18,264 4,791 2,297 14,711 9,034 Number of CalWORKs cases per thousand population 12.6 6.5 3.3 8.7 17.9 Percent of CalWORKs caseload comprised of child-only cases 46% 46% 52% 51% 52% Percent of child-only CalWORKs cases defined by county as sanctioned 17% 19% 26% 18% 16% Percent of child-only CalWORKs cases defined as timed-out 24% 25% 8% 15% 16% The five counties demonstrate wide variety along virtually all measures report in Table 1: land area, population density, population ethnic composition, income, and poverty level. Unadjusted for poverty measures, fertility rates or other factors, but echoing per capita income measures, 14 County data in top portion of table derived from U.S. Census Bureau (2007) as summarized in Speiglman, Bos, and Ortiz (2007). Material below the dark line represents calculations using administrative data provided by study counties depicting CalWORKs cases at a point in time in the November 2006 to February 2007 period (Speiglman, Bos and Ortiz, 2007). Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties 7 CalWORKs caseloads range from 3.3 per thousand population in San Mateo County to 17.9 per thousand in Stanislaus County, a factor of 5.4. With one exception, the percent of cases that are sanctioned is fairly consistent across the five counties. The proportion sanctioned in San Mateo County is about half-again as large as the other counties. Wider variation is evident in terms of proportion of child-only cases that are timed-out. San Mateo County exhibits the lowest percent (8%), followed by Santa Clara and Stanislaus Counties (respectively 15% and 16%), and Alameda and San Francisco Counties (24% and 25%). Data presented here indicate that in addition to more cases per capita Stanislaus County faces two additional challenges compared to other counties in the provision of welfare-to-work activities. Percent of population age 25 and up with a high school degree is ten to fifteen percentage points lower in Stanislaus County. Additionally, its low population density suggests that placement and accessibility of services may be particularly problematic. STUDY DESIGN The report is based on cross-sectional, face-to-face interviews with a random sample of 143 female parents associated with sanctioned and safety net CalWORKs child-only cases in the five counties. Counties selected the category of CalWORKs cases in which they were most interested for purposes of this study. Those persons interviewed are adults aged 18 and older who either had been sanctioned (in Alameda and San Mateo Counties) or timed-out (in Alameda, San Francisco, Santa Clara, and Stanislaus Counties) from receipt of cash assistance for themselves. In each county potential respondents were limited to those who speak one of the two languages in which interviews were conducted (see Table 2). Potential respondents recruited for interview were, for each site, drawn randomly from a sampling frame comprised of the female population of sanctioned or timed-out parents in the county who had a non- institutional, within-county mailing address and were known to speak English or, depending on site, Spanish or Vietnamese. Our objective was to complete interviews with 25 parents in each site. Since Alameda County elected to have studied samples of both its sanctioned and timed-out caseload, we have five counties but six study sites. The sample was drawn from administrative data provided by study counties for our use in generating analyses for Report #1. When potential survey respondents were recruited some five or more months later, based on updated information provided by the counties, we eliminated from the sampling frame individuals who had not still been in sanctioned or timed-out status within two months of initiation of interviews.15 Accordingly, the sample is somewhat biased toward inclusion of individuals with longer episodes as parents on child-only cases. Survey participant recruitment. Speiglman Norris Associates, in collaboration with the Center for Applied Local Research (C.A.L.-Research) the fieldwork agency that conducted the survey interviews and the five study counties, designed a letter informing potential respondents of the 15 So that potential study participants could be contacted for recruitment to the study, counties provided the fieldwork team with names, addresses, and phone numbers. When providing these data counties at our request also indicated month during which each potential participant’s family most recently received CalWORKs financial assistance and whether the case remained a sanctioned or timed-out case at that time. Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties 8 study and requesting their participation. Letters were, depending on the county, translated from English into Vietnamese or Spanish and then printed on county social\/human\/community services agency letterhead and signed by a senior official in the relevant agency. Potential respondents were invited to return a postal card indicating their interest or disinterest in participating or to phone C.A.L.-Research to arrange an interview. If, after two weeks, C.A.L.- Research had not received a card or phone call, fieldwork team members initiated phone calls and the use of follow-up letters to make contact and recruit the sample. Initially, recruitment letters were sent to approximately 40 potential respondents per county. In sites for which that number proved inadequate for sample recruitment, additional letters were mailed. Potential participants who were found to live outside the geographical area comprising the five study counties, to have no mailing address, or not to be conversant in English, Vietnamese, or Spanish (a total of eleven persons) were disqualified from study participation. By time of interview ten respondents were no longer receiving cash assistance for their children. Data from these individuals were retained for analysis in light of the fact that they had recently received aid. Most individuals who were not recruited could not be contacted by phone or mail. (Many potential respondents’ phones were found to be disconnected.) Thirty-one potential respondents (11% of those sent recruitment letters) declined to participate in the study, four agreed to participate but never did, and another 79 potential study participants could not be contacted. Interviews took place between July 5 and November 14, 2007. The survey took about one hour and covered a variety of topics, including demographics, employment status and work experience, household income, material hardships, child care, respondent physical health, respondent cognitive and mental health, respondent use of alcohol and other drugs, respondent experience of partner abuse and partner control, children’s health, and need for and receipt of services. Most survey questions were derived from one of two previous surveys: The time limits study (Bos, Mauldon, et al.) and the San Joaquin County CalWORKs study (Speiglman, Norris, et al.). Responses were recorded on paper survey instruments and subsequently entered and re- entered into two databases which where then compared for purposes of verification. Differences were investigated in the original instrument and corrections made to what became the final data submitted for coding and analysis. Protection of human subjects. The Phase 2 protocol for the protection of human subjects was reviewed and approved by the Institutional Review Board serving Speiglman Norris Associates. Among other protections, county officials were unaware of which parents were invited to participate in or actually completed an interview. Response rates. For each county Table 2 depicts the number of persons completing the survey as well as the number invited to participate. Table 2 also displays participant language as well as the response rate for each county. Twenty-five mothers were interviewed in San Francisco, San Mateo, and Stanislaus Counties, and twenty-six were interviewed in Santa Clara County. In Alameda County 21 sanctioned and 21 safety net parents were interviewed. Overall, 16 women were interviewed in Vietnamese, 4 in Spanish, and 123 in English. Response rates appear to have been associated with the accuracy and hence usefulness of telephone number data provided by the counties to the fieldwork team. Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties 9 Table 2. Sample Recruitment and Interview Language Sanction Safety Net Alameda San Mateo Alameda San Fran. Santa Clara Stanislaus Recruitment Persons eligible and invited to participate 53 42 49 47 42 46 Persons completing survey 21 25 21 25 26 25 Response rate 39.6% 59.5% 42.9% 53.2% 61.9% 54.3% Interview language English 17 23 20 25 15 23 Vietnamese 4 0 1 0 11 0 Spanish 0 2 0 0 0 2 Since we have data on race\/ethnicity for both the county populations (included in Report #1) and for respondents included in the Phase 2 sample, this information provides a basis for judging how representative our recruitment procedures proved to be. Figures 1 through 6 depict the distribution of race\/ethnicity for the two groups for each study site. Two constraints limit the precision of this comparison: interview languages and coding practices. The fact that we utilized no more than two interview languages per site limited the diversity of the study samples and our ability to replicate the site population distributions. Differences in coding of race\/ethnicity also limited comparability.16 Taking into consideration these facts, we find that sampling and recruitment appeared to have good to very good results in Alameda, Santa Clara, and San Francisco Counties.17 In Stanislaus County, along with our not interviewing in any Asian language, coding of respondent race\/ethnicity appears to explain differences between population and sample. Results for San Mateo County are not easily explained in this fashion. Study participants identifying as Latino or Hispanic were half the rate expected from findings displayed in Report #1 (40.0% as opposed to 79.5%). We believe that the discordance between sample and population reflects imprecision in San Mateo County’s strategy for coding type of child-only case, a problem that was also evident in Report #1.18 It is our best estimate that the Phase 2 16 Two constraints are operating. First, to protect our research participants from possible identification by study site officials, we provide detail only on African American\/Black, Asian, Latino\/Hispanic, and White race\/ethnic groups. All other study participants are categorized Other. Second, we do not know how counties elect to code parents and caregivers who report multiple racial\/ethnic identities and whether our strategies resemble theirs. 17 In San Francisco, given limitations on number of interview languages, we are not surprised to find that our sample includes proportionately fewer Asians compared to the population statistics displayed in Report #1. In the case of study participants, other respondents in terms of race\/ethnicity, a category not used in the population database, further challenges our ability to make a strict comparison. 18 In this regard see footnote 8 in Report #1. Table 1 in this report carries forward any problems with Report #1 data. Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties 10 Report #1 are probably flawed. Generally, across the sites, we take these results as indicative of a reasonably representative sample of the populations studied. Across the data fields, the similarity in respondents’ age lends further support for the representativeness of the sample of Phase 2. The average age of each Phase 2 site closely matches that of the corresponding Child-Only CalWORKs category in Report #1.19 19 We are further pleased to find that 11.2 percent of respondents spoke Vietnamese, compared to 11.7 percent in the sampling frame. Similarly, 2.8 percent of respondents spoke Spanish, compared to 2.1 percent in the sampling frame. Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties 11 Figure 1. Sample Versus Population: Alameda County Sanction Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties 12 Figure 2. Sample Versus Population: San Mateo County Sanction Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties 13 Figure 3. Sample Versus Population: Alameda County Safety Net Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties 14 Figure 4. Sample Versus Population: San Francisco Safety Net Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties 15 Figure 5. Sample Versus Population: Santa Clara County Safety Net Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties 16 Figure 6. Sample Versus Population: Stanislaus County Safety Net Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties 17 BARRIERS TO EMPLOYMENT One of the major research questions of the Phase 2 study, and hence this report, is to identify mothers’ barriers to employment. This study builds on previous research and considers that both sanctioned and timed-out parents face a range of difficulties apart from poverty. These difficulties can be either internal (such as educational attainment and poor health) or external (such as problems with transportation, child care, and a partner’s discouragement about work, school, or training). Barriers may also be conceptualized as involving human capital (educational attainment, work experience), family responsibility (child under six, child care problem, child health limitation), study participant’s health (physical health, mental health, alcohol or drug problem, learning disability, domestic violence, partner control), and logistical problems or material hardships (transportation problems, residential instability, emergency food use). This study defines 14 barriers to employment. Unless otherwise stated, each barrier refers to the respondent’s current status. We note that the concept barrier may be somewhat misleading, for two reasons. First, our assumptions about what constitutes an actual barrier to employment may be incorrect. For example, as we note below, we assume that a crowded household may inhibit work activity. At the same time, additional help with parenting may be present in a larger household and actually free a parent to pursue school, training, or work. Second, while we know from previous longitudinal as well as cross-sectional work that there is strong evidence of an association between some barriers and lack of work, clearly this association is not 100 percent. Some people ascertained as having a barrier do not, in fact, demonstrate effects of any such barrier. We return to discussion of barrier meaning at the conclusion of the report. Some of the barriers are not modifiable in the short run. Examples include education, learning disability, and certain limiting health conditions. Other barriers can be diminished more rapidly, depending on how much external assistance may be required and be accessible. For example, work experience could quickly be acquired if other impediments to work were successfully addressed. Transportation challenges could be improved rather quickly on the individual level by providing parents with automobiles and fuel vouchers. On the community level improvements to public transportation or co-location of housing and work sites are possible, but very expensive, requiring time for planning and construction. Alcohol or drug problems can be treated where such services are culturally appropriate, easily available, provide child care and other supports, and are free. As for child care, qualities such as excellent provider training and skill, proximal location, flexible schedule, and affordable, are not necessarily easily and quickly put in place. Numbers 1 14 identifying the barriers are referenced below in site profiles. 1. Education: less than High School graduation or General Educational Development (GED). Either a diploma or GED, equivalent in many work places to a high school diploma, is a pre-requisite for many positions. Depending on type of work sought, lacking one of these credentials may serve as a barrier to employment. 2. Lack of full-time work experience: last worked 30 or more hours per week three or more years ago. Limited work experience has been identified as a significant predictor of reduced work activity among welfare recipients (Zedlewski, 2002). Previous CalWORKs studies consider work skills important components of a person’s human capital, and Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties 18 identify having few work skills as a barrier to employment in San Joaquin and Alameda Counties (Norris and Speiglman, 2005; Norris and Speiglman, 2003). The current study measures work experience in the past three years, which serves as an indirect measure of work skills. 3. Transportation: has no driver’s license or no access to a car, or quit a job or was unable to start a job last year due to transportation problems. Norris and Speiglman (2005, 2003) found having no car or license a logistic barrier to employment. The current study takes a more comprehensive approach by adding a question as to whether transportation difficulty affects work. More specifically, we considered mothers to have a transportation barrier if they reported that they had no license or car or quit a job or were unable to start a job last year due to a transportation problem. 4. Residential or living instability: now living in another person’s place, in a shelter, homeless on the street, or moved out of home two or more times in the last 12 months. Most concretely, lack of housing makes securing employment difficult, since typically prospective employers require an address for a job applicant (Sard 1993). Living instability, defined by the current study as any of four forms of inadequate housing and regular moving, is more than merely a material hardship. Coping with marginal living conditions, loss of sleep, and other challenges of physical strain and mental anxiety can distract the respondent from seeking a job or, because of erratic attendance or performance, can interfere with keeping work. 5. Relies on emergency food programs food banks, food pantries, or soup kitchens for bags of food, bag lunches, or cooked meals. This behavior is hypothesized as a barrier to employment in light of the necessity to be available when and where food is provided rather than to be responsive to a work schedule and because of travel and other time required to use these emergency food services. 6. Has a child under six: time involved in nurturance and caregiving, liaison with child care and preschool providers and kindergarten or first grade staff, may make challenging the objective of full-time work.20 7. Experiences child care problems: difficulty locating someone or someplace safe, reliable, and affordable to care for children can present problems in finding or keeping a job. The process of looking for or keeping a caregiver for one’s child is time-consuming and can interfere with adults’ employment. Parents may need to balance their time, economic resources, and work logistics. Ironically, when a family budget is tight, parents may have to give up employment to avoid the expense of safe and reliable child care. 8. Physical health: self-rated fair or poor health, or has limiting physical health condition. Zedlewski (2002) used self-reported poor physical or mental health as an important measure of a barrier to work among welfare recipients. The Norris and Speiglman (2005, 2003) and London and Mauldon (2006) studies of the CalWORKs populations used limiting physical health conditions as a barrier. The current study uses a broader definition by combining both the poor health and limiting condition criteria. 20 A weak correlation between barriers 6 and 7 (child under six and child care problems) suggests that in a regression analysis one might be eliminated from this list. Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties 19 9. Learning disability: either needed extra help with school\/learning or diagnosed with learning disability. Norris and Speiglman (2005, 2003) found low English proficiency and limited language ability as potential limits on work. In this study we instead consider learning disability a barrier potentially as important as limited education and work skills. 10. Mental health: limiting mental health condition, or depression, generalized anxiety disorder (according to DSM-IV) or stressful events in last 12 months. Norris and Speiglman (2005, 2003) and London and Mauldon (2006) identified mental health problems as barriers to work among CalWORKs recipients. 11. Alcohol or drug problems: either abuse of or dependence on alcohol or other drugs in the last 12 months. We have found measures of alcohol and drug problems to have only limited power in predicting work and welfare outcomes (Norris and Speiglman, 2003). Nevertheless, we remain concerned about studying the potential influence of substance abuse on access to and retention of work. 12. Domestic violence: experienced either physical or sexual abuse by a partner in the last 12 months. Both of our previous CalWORKs studies have identified domestic violence by a spouse or partner as a barrier to work. It may affect the mothers physically and mentally and thus interfere with daily life activities, work included. This study considers domestic violence and partner control separate barriers because of presumed differences in pathways to (lack of) work. Domestic violence differs from partner control in that the former might not be directly related to intentional discouragement from work. 13. Partner control: intimate partner discouraged, did not help, or harassed respondent regarding work, or an intimate partner made it difficult to go to work, school or training, or caused the respondent to lose a job, or drop out of school or training in the last 12 months. 14. Child has limiting health condition: children’s limiting health conditions prevent them from basic activities such as eating and walking without assistance. An attentive caregiver is crucial, and a parent may find that the cost of employment is not merited, given the special child care needs required.21 Notes on Selected Measures The following descriptions of several measures and caveats are important for better understanding of this report. Income. For purposes of this report household income is composed of cash and non-cash. Survey questions about income are posed to elicit information about household income derived from household members who share resources. When computing per capita income, for example, the study assumes that all household members share income. Cash income for the last month is defined as including the following items for the respondent, her partner, children, and others in the household with whom respondent shares income: take- home money from jobs, income from a business or self-employment, CalWORKs grant, payments received for child support, a pension, SSI, SSDI, or other disability payment, Social Security payment, rent payment to the household, unemployment compensation, foster care 21 No correlation was found between barriers 14 (child has limiting health condition) and 7 (child care problems). Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties 20 funds received, and any other money income received by respondent or others in the household with whom she shares money. For this population the most stable and important source of cash income comes from the CalWORKs grant for children. Other significant components of cash income include mothers’ earnings, partners’ earnings, rent payments to the household, and SSI. There is considerable variation across counties in components other than the CalWORKs grant. For this study non-cash income includes Food Stamps, Women, Infants and Children Nutrition Program (WIC) benefits, free or reduced price school lunches, free or reduced price school breakfasts, and transportation vouchers. Across counties, most households receive Food Stamps, by far the major component of non-cash income. The value of items other than the Food Stamps is trivial. Basic Family Budget. The basic family budget, a measure of economic well-being, was developed by the California Budget Project (CBP) as an alternative to the Federal Poverty Line which is considered an obsolete measure (California Budget Project, 2007). The CBP builds a basic family budget based on the cost of housing, food, child care, and other essentials needed to support a family without public or private assistance. The cost estimates are made for four hypothetical families: (1) a single adult, (2) a single working parent with two children, (3) a two- parent family with two children and one working parent, and (4) two working parents with two children. Taking into account the substantial variation of housing and other costs throughout the state, the CBP provides basic family budgets for 10 regions. For the purpose of the current study, we use regional estimates for a two-parent family with two children and one working parent in the five individual counties. We consider this group to be closest to our survey population based on the demographic and household characteristics. Employment. This report highlights three major employment variables in order to document the dynamics of employment: whether employed, in school, or training last week (working last week or not working but had a job), hours worked last year (30 hours per week as the threshold of full- time work) or in school, or training, whether worked 30 or more hours per week sometime in the past three years. Compared to prior research that mostly focused on current and recent employment status, this study has an advantage by tracking the employment history in greater detail. Furthermore, the measure of being in school or training in the past year adds to a better understanding of mothers’ involvement in work or work-related activity, a primary concern of policy-makers.22 Food Insecurity and Hunger. Hunger and food insecurity measures were standardized for the national Current Population Survey in 1995 with an 18-question scale (USDA, 2007). For this study, following guidance from the United States Department of Agriculture, we selected four questions from the Food Insecurity Scale that fall solidly above the cut points for Adult Food Insecurity, Adult Hunger, Child Food Insecurity, and Child Hunger. Thus our findings likely lead to underreporting of actual food insecurity and hunger. Comparisons of Findings. The Phase 2 study was not intended to compare the six subsamples, and their small sizes makes doing so statistically problematic. Instead, selected comparisons are made between each subsample and a measure of the status of the general population. For this purpose, we use as the comparison group California Health Interview Survey (CHIS, mostly 2005) as one of the data sources, focusing on CHIS findings for the female population of the 22 We do not, however, as Zabkiewicz and Schmidt (2007) have done, deconstruct job search and employment, finding that correlates of job hours and job retention differ. Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties 21 relevant site who are between 18 and 58 years of age.23 The age range is equivalent to that of our sample. At times, we further restrict the comparison group to those with a family income lower than 200% of the Federal Poverty Line. Other sources of comparison include findings at the national level by American Second Harvest (2006), the Department of Health and Human Services (2006), the Department of Housing and Urban Development (2007), the National Institute of Mental Health (2007), and the National Law Center on Homelessness and Poverty (2004). Not always are we able to limit these other comparison groups, as we are able to do with CHIS, to resemble gender, age, and poverty status of our study samples. However, in several cases contrast with the general population rather than more limitedly with poor women ages 18 58 makes sense to us. STUDY LIMITATIONS AND INTERPRETATION OF FINDINGS Reported statistics such as percentages or means reflect the actual responses recorded by the fieldwork team but also are assumed to be estimates of the status of the population studied in each site. However, the small number of respondents limits the stability of estimates and the ability to compare findings across study sites. In other words, this study phase provides a descriptive documentation of individual county samples rather than comparative analyses. When we report findings by combining results across sites we do not take account of differences in county population size by weighting results. It is important to remember that findings are generalizeable only to the populations represented in the study. Probably the greatest study limitation is that these data, derived from a cross sectional survey, are unable to provide information on which potential barriers actually play out as barriers over time, as respondents do or do not attempt to or actually secure employment or engage in school or training programs. All information in this document is based on respondent self-report. While we have no reason to doubt the validity or reliability of any particular measure, it must be kept in mind that because of memory limitations or other reasons respondents might be unable to answer some questions reliably or, whether because of conscious or unconscious reasons might, alternatively, have reason to inflate or deflate the seriousness of particular aspects of their situations. Finally, this study was not designed to support detailed analyses of respondent or household income or other financial statuses. In particular, we did not attempt to comprehend how respondents balanced their monthly budgets (or their daily lives). In this regard, for example, we did not attempt to measure in-kind services, such as babysitting or other services that might be contributed to or traded by the individual respondent or household. (The potential value of these services might be considerable.) 23 CHIS findings are available at http:\/\/www.chis.ucla.edu\/main\/. Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties 22 Reading results: findings, estimates, confidence intervals, and sample size Findings versus estimates. Reported statistics such as percentages or means reflect the actual responses recorded by the fieldwork team. Hence the statistics are assumed to tell the story for the sample in each site. Thus, we find that 30.8% of sample members in Santa Clara County report that they are in fair or poor health. By the same token we estimate that that percentage reflects the status of the entire Santa Clara County safety net population of English- and Vietnamese-speaking female parents associated with safety net cases, or at least the status of the population that can be recruited to participate in an interview. Use of sample findings as site estimates presumes sample sizes are large enough to produce stable estimates (see below). 95% confidence interval. For some variables, 95 percent confidence intervals are reported together with the mean or percentage. Confidence intervals are used to indicate the precision of an estimate. The 95 percent confidence interval implies that we are 95 percent certain that the actual estimate falls between the two reported values. A smaller or tighter confidence interval is a more precise estimate than a larger one. Sample size. It is important to keep in mind that each subsample is small in size, ranging from 21 to 26 respondents. As a result, each respondent represents 4% to 5% of the site’s total sample. Thus, for example, for either of the Alameda County samples, having selected or recruited one more Latino respondent would have doubled the Hispanic race\/ethnic proportion. Similarly, one respondent’s having a slightly altered recollection of alcohol use in the past year could, in four sites, have doubled the percent of the site sample assessed as having alcohol dependence. While percentages are particularly unstable in this regard, sample means are much less dependent on a particular respondent’s answer to a specific question. Reading results: time frames It is important to take into account the time frame of each variable. Some variables are set in the time frame of the past 12 months before the survey, others reference the current period, the last 30 days, or three years ago. Reading results: household versus assistance unit One distinction to be made is between a household, the concept we utilize in this report, and a CalWORKs assistance unit as defined and utilized by county CalWORKs eligibility offices. A household, the survey unit for many questions in this study, differs from a CalWORKs assistance unit in that a household includes all people living under a roof, regardless of the blood relations, precise nature of income and expense sharing that may take place, and other factors that might be considered in determining members of an assistance unit. FINDINGS Demographic overview. The six site samples differ substantially by race and ethnicity (for this and other findings see Table A-3 among the Appendices). The San Francisco safety net, Alameda sanction, and Alameda safety net samples are predominantly African American Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties 23 (72.0%, 71.4% and 57.1% respectively), while the San Mateo sanction, Santa Clara safety net and Stanislaus safety net samples have more Hispanics (40.0%, 34.6% and 48.0% respectively). The Stanislaus and San Mateo samples have a considerable number of Whites (24.0% and 20.0% respectively), and the Santa Clara sample has the largest proportion of Asians (42.3%). Respondent ages range from 18 to 58 years, and the average age of the six samples varies from 32.1 years (San Mateo County) to 38.7 years (Santa Clara County). In four of the sites, on average, all respondents have stayed in California for over eighty percent of their lifetime. In Santa Clara and Stanislaus Counties respondents have resided in California 64.8 and 71.8 percent of the time. The mean household size across counties ranges from 3.9 – 4.0 (Alameda sanction, Alameda safety net, San Francisco safety net) to 4.7 5.0 (San Mateo sanction, Santa Clara safety net, Stanislaus safety net). Mean number of adults per household other than the respondent varies from 0.5 (San Francisco safety net) to 1.4 (San Mateo sanction). Mean number of children in the sample households varies from 2.2 (Alameda sanction) to 2.8 (Santa Clara safety net). The average age of the youngest child per household varies from 5.7 years of age (San Mateo sanction) to 8.6 years (Alameda sanction). Forty-two percent of the combined sample has a child under six years of age. Mean number of years that study participants first received CalWORKs benefits ranges from an average of nine years in San Mateo County to fifteen in Stanislaus County. The individual county profiles below provide detailed descriptions of two categories of child- only welfare cases. Figure 7 displays overall distribution of barriers among the six study sites. Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties 24 Individual Barriers: nged: educational attainment lower than GED traigo: lack of working experience last worked 30+ hours\/week more than 3 years ago transp2: transportation barrier respondent has no driver’s license, or has no access to a car, or quit or did not start a job because of transportation problem instab: residential or living instability living in other’s home, or in shelter, or homeless on streets, or moved at least twice in last 12 mos tinsec: tangential food insecurity used food banks, soup kitchens or other emergency food assistance last 12 months undersix: has child under six years of age childc: child care a problem to get or keep job bphys: physical health rated fair or poor or has limiting physical health condition ldb: learning disability bmental: mental\/emotional health problems bsubs: alcohol or drug abuse or dependence bvio: domestic physical or sexual violence control: partner discouraged, not helped, or harassed respondent regarding job or school or training childhlth: child has limiting health condition Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties 25 Alameda County Sanctioned Parents Demographic and Household Characteristics. The 21 Alameda County sanctioned parents are predominantly African American (71.4%), with Asians accounting for 19.1 percent of the sample. Mothers average 35.9 years of age, and 47.6 percent of them have an educational level lower than GED (Barrier 1). Fifty-seven percent of the sample is never married, and 23.8 percent live with a spouse or partner. The average household size is 3.9, including an average of 2.2 children, with the youngest child a mean age of 8.6 years. A much bigger proportion lives in a large city (71.4%) than a small city (23.8%) or rural area (4.8%). No respondent owns a home; 85.7 percent lives in a rental unit, and 14.3 percent stays at another person’s place. Employment Status and Work History. One-third of the sample was employed last week, and the same number of mothers looked for a job in the past 30 days. A smaller proportion (23.8%) worked at least 30 or more hours per week for at least two weeks in a row last year, and 42.9 percent were neither working nor in training or school last year. Nearly 43 percent did not have a full-time work experience in the past three years (Barrier 2). Household Income. The average household income in the last month was composed of much more cash ($1,375) than non-cash ($255). The CalWORKs grant ($509) and earnings and other income from the partner (an average of $415 for 8 partners) contributed to the cash income. Food Stamps provided $258 per household per month on average for 20 of the 21 households, essentially accounting for all of the non-cash income reported. Last month’s per capita income averages $458 (median: $475), of which the CalWORKs grant accounted for 49.2 percent. As a whole, the monthly household income accounts for 49.2 percent of the California Budget Project 2006 basic family budget for Alameda County. Material Hardships. About 19 percent of the sample lives in overcrowded housing, 9.5 percent was in a shelter and the same number was homeless on the streets last year. Nearly ten percent of mothers moved out of their home at least twice last year. Based on study definitions 28.6 percent of the sample is categorized as living unstably (Barrier 4). Transportation limitations are pervasive. Over 40 percent of mothers (42.9%) have no driver’s license, 42.9% have no access to a car, 14.3% quit a job last year due to transportation problems, and 28.6% did not start a job last year because of transportation problems (Barrier 3 total = 52.4%). In the last year a majority of households did not have enough money for utility payments (52.4%), basic essentials (47.6%), food (38.1%) and rent (33.3%). Despite a large number (47.6%) of households using emergency food programs (Barrier 5), 38.1 percent of the sample has food insecurity among adults, and 9.5 percent has food insecurity among children. Child Care. One-third of the sample has a child below six years of age (Barrier 6), and 23.8 percent identifies child care as a problem in finding or keeping a job (Barrier 7). One-third of the sample does not receive child care assistance for a child below six years of age. As a result of the child care burden, nearly 20 percent of the mothers were either late or absent from work, and the same number, worried about their children’s safety, skipped work or school last year. Respondent Health. About 38 percent of the sample reports having fair or poor health status, and 19 percent reports that physical health problems limit their ability to work (Barrier 8 total = 38.2%). High blood pressure affects 38.1 percent of the sample, 19.1 percent has asthma, and 9.5 percent has diabetes. Nineteen percent stayed overnight in the hospital sometime last year. Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties 26 One in ten mothers (9.5%) reports that they have been diagnosed with a learning disability (Barrier 9). Based on DSM-IV criteria, one respondent (4.8%) was diagnosed with depression, one with generalized anxiety disorder, and one experienced one or more stressful events last year. One respondent also was limited in work activity by her emotional health. In sum, 9.5 percent of the sample is defined as having a mental health barrier to employment (Barrier 10). Alcohol and Drug Use. None of the 21 mothers has alcohol abuse or dependence, and 4.8% has a drug abuse or dependence problem, according to DSM-IV (Barrier 11 total = 4.8%). Domestic Violence and Partner Control. Nineteen percent of the sample experienced physical violence by an intimate partner last year. None experienced sexual violence by a partner (Barrier 12 total = 19.0%). About nineteen percent is discouraged, or not helped or harassed by a partner at work, and the same number of mothers reported that their partner caused them to lose a job or drop out of school or training last year. A larger proportion (23.8%) reported that their partner made work, school or training difficult last year (Barrier 13 total = 23.8%). Children’s Health. The usual place for children’s medical care included a doctor’s office (61.9%), hospital or ER (38.1%), and clinic (9.5%). Nearly 29 percent of the sample has at least one child with a limiting health condition (Barrier 14). The child needing most care is on average 9.7 years old and has 2.3 limiting health conditions. The impact of children’s limiting health is that 14.3 percent of mothers either cannot work or has her work hours reduced. Barriers to Employment. This sample has on average 4.1 barriers to employment. The transportation barrier affects the largest proportion of the sample (52.4%), followed by education lower than GED (47.6%), reliance on emergency food programs (47.6%), lack of recent work experience (42.9%), physical health problems (38.1%), having a child below six years of age (33.3%), and experiencing problems of partner control (33.3%) (see Figure 8). The number of barriers appears to have a bigger impact on employment last year and last week rather than during the earlier period (see Figure 8). Service Needs. A total of 16 mothers report on average 3.2 needed services. Nearly 43 percent of the sample needed help with utility payments, and 33.3 percent actually received it. One-third needed child care services, but only 4.8 received the needed help. Other service needs include work clothing (23.8%), physical health services (19.1%), mental health services (19.1%), and legal services (19.1%). See Figure 15 below. Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties 27 San Mateo County Sanctioned Parents Demographic and Household Characteristics. The 25 San Mateo County sanctioned parents have an average age of 32.1 years. This sample has a high proportion of Hispanics (44%), followed by African Americans (32%) and Whites (28%). Forty percent of the sample has an education level lower than GED (Barrier 1). Three-quarters (76%) are never married, and twelve percent live with a spouse or partner. On average households have 4.7 people, among whom 2.3 are children. The average age of the youngest child in these households is 5.7 years. Over two-thirds of the sample (68%) lives in small cities, with the rest living in big cities. Fifty- six percent of households have rental accommodations, and 44% live in another person’s place. Employment Status and Work History. Sixteen percent of mothers was employed the week before the interview, and the two mothers who reported usual hours of work averaged four hours per week. Twenty percent of the sample worked full-time for at least two weeks in a row last year, and 60 percent did not work full time in the past three years (Barrier 2). Nearly half (48%) of the sample was neither working nor in school or training last year, although 72 percent report they were able to take a job offer if one had been made. Household Income. The average household income in the last month was composed of much more cash ($860) than non-cash ($235). The CalWORKs grant ($488), Food Stamps ($259) and earnings and other income by the partner (an average of $113 for 11 partners) were the major income components. On average for households in this sample the per capita monthly income of $278 (median: $260) is 32.2 percent of the California Budget Project’s 2006 basic family budget for San Mateo County. The CalWORKs aid accounts for 55.3% of the monthly household income. Material Hardships. Thirty-six percent of the sample lives in overcrowded conditions. Twelve percent of mothers resided in a shelter or were homeless on the streets in the last year, and eight percent moved out of her home at least twice in the last year (Barrier 4 total = 52%). Eighty percent of the sample is categorized as having a transportation barrier to employment in that they lack a driver’s license, access to a car, and\/or have not started or have quit a job, school, or training because of transportation problems (Barrier 3). A considerable proportion of the sample reported that in the last year they lacked enough money for utilities (52%), for food (44%), for rent (36%) and for basic essentials (32%). In 36 percent of the sample the respondent was food-insecure, and 16 percent had children who experienced food insecurity. Forty-eight percent of the sample used emergency food programs last year (Barrier 5). Child Care. Over half of the sample (52%) has a child below six years of age (Barrier 6). Thirty-six percent identified child care as a problem for finding or keeping a job (Barrier 7), with affordability being the major reason. Nearly one-third (32%) of the sample did not receive child care assistance for one or more child under six years of age. As a result of the child care challenge, 32 percent of the sample was late or absent from work, school, or training in the past year. Further, 24 percent of mothers skipped work, school, or training in the last year because they were concerned about their child’s safety. Respondent Health. Twenty-eight percent of the sample rates their health status as fair or poor, and 12 percent finds ability to work limited by health (Barrier 8 total = 28%). One-quarter Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties 28 (24%) have had asthma, 20 percent high blood pressure, and 12 percent diabetes. Nearly one quarter (24%) stayed overnight in a hospital sometime last year. Twenty-eight percent of the sample needed extra help while at school, and 12 percent has a diagnosed learning disability (Barrier 9 total = 28%). According to DSM-IV criteria, 28 percent has depression, and 16 percent has generalized anxiety disorder. In addition, 24 percent reports having experienced stressful events in the last year. Based on study definitions, 36 percent of the sample has a mental health barrier to employment (Barrier 10). Alcohol and Drug Use. Twelve percent of mothers are categorized as having an alcohol or drug problem barrier (Barrier 11). These include alcohol abuse (4%), alcohol dependence (4%), drug abuse (8%), and\/or drug dependence (12%). Domestic Violence and Partner Control. Sixteen percent of the sample experienced physical violence by an intimate partner in the last 12 months (Barrier 12). Eight percent report that their partners discouraged, or did not help them with work, school, or training, or harassed them (Barrier 13). Children’s Health. More than one-third of the sample (68%) usually takes their children to a doctor or nurse for needed care, and 32 percent rely on a hospital or ER. Twenty-eight percent of the sample has at least one child with a limiting health condition (Barrier 14). As a result, eight percent of the mothers have reduced their work hours in order to take care of their children. Barriers to Employment. Respondents in this sample are assessed as having on average 5.2 barriers to employment. The most prevalent barriers are as follows: transportation (80%), lack of recent work experience (60%), living instability (52%), having a child less than six years of age (52%), and reliance on emergency food programs (48%). See Figure 9. The total number of barriers appears to affect both recent employment status and work experience in the past three year. Mothers who did not work in the past three years, last year, or last week all have more barriers compared to their counterparts who did work in that time period. Services Needed. Twenty mothers (80% of the sample) report an average of 3.2 needed services. Forty percent of the sample needs help with finding housing. Thirty-six percent needs help with utility bills, 24 percent with child care, and 20 percent with getting into a support group. There is substantial disparity between the above needs and the actual receipt of assistance. See Figure 16 below. Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties 29 Alameda County Safety Net (Timed-out after 60 months) Parents Demographic and Household Characteristics. The 21 safety-net cases in Alameda County average 35 years of age. The majority (57.1%) is African American, followed by Asians (14.3%), Whites (9.5%), Hispanics (4.8%), and Other (14.3%). The educational attainment of one-third of the sample is below the GED level (Barrier 1). Most (57.1%) are never married, and 28.6 percent live with a spouse or partner. On average a household is comprised of four people, among whom 2.4 are children. A sizeable proportion (57.1%) of these households lives in large cities, and almost all (95.2%) reside in rental accommodations. Employment Status and Work History. One-third (33.3%) of the sample was employed in the week before the survey, but on average the employed usually work part-time (28.7 hours a week). Only 19 percent worked full-time (30 hours a week) for at least two weeks in a row last year. Thirty-eight percent of the sample did not have full-time work experience in the past three years (Barrier 2), and the same proportion neither worked nor was in school or training in the past year. Household Income. The average household income in the last month was composed of much more cash ($1,278) than non-cash ($360). The CalWORKs grant ($545) and earnings and other income from the partner (on average $519 for 8 partners) contributed about equally to the cash income. Food Stamps provided $373 per household per month on average, essentially accounting for all of the non-cash income reported. The per capita monthly income averages $421 (median: $324), with the CalWORKs grant accounting for 40.3 percent of household income last month. The average household income amounts to 47.3 percent of the California Budget Project 2006 basic family budget for Alameda County. Material Hardship. One in four sample members (23.8%) lives in an overcrowded situation. In the year prior to the survey, 9.5 percent were homeless on the streets, and 4.8 percent moved out of their homes two or more times. The resulting figure for the unstable living barrier is 19.1 percent (Barrier 4). About half of the sample (52.4%) has transportation problems (Barrier 3), including having no driver’s license, no access to a car, and\/or having not started or quit a job, school, or training because of a transportation problem. A substantial proportion of mothers reported that they lacked enough money for utilities (52.4%), basic essentials (47.6%), food (33.3%), and rent (28.6%) in the previous 12 months. Over one-quarter of households (28.6%) used emergency food programs in the last year (Barrier 5), and the same percent is assessed as having food insecurity among adults. Fourteen percent have food insecurity among household children. Child Care. Over forty percent (42.9%) of the sample has a child below six years of age (Barrier 6). All of those who report child care as a problem for finding or keeping a job (23.8%; Barrier 7) identify affordability as a reason. Over one-quarter of the sample (28.6%) did not receive child care assistance for a child younger than six. Child care problems caused 14.3% of the sample to be late for or absent from work, school or training in the last year, and almost one in ten (9.5%) skipped work, school, or training in the last year because of concern about children’s safety. Respondent Health. Nearly one-third of the sample (28.6%) rate their health status as fair or poor. One in seven (14.3%) consider their work limited by their physical health (Barrier 8 total = 28.6%). One in four mothers (23.8%) have had asthma, and one in ten (9.5%) have been hospitalized in the past year. Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties 30 About one in five sample members (19.1%) has a learning disability barrier (Barrier 9), i.e. they either needed extra help while in school (14.3%), or they were diagnosed with a learning disability (9.5%). None of the sample suffers from depression or generalized anxiety disorder, and 9.5 percent experienced stressful events in the last year (Barrier 10 = 9.5%). Alcohol and Drug Use. Alcohol and drug problems appear to be few in this sample. Only 4.8 percent of the sample is seen as having abused alcohol, and the same proportion as having abused drugs. None of the sample has alcohol or drug dependence (Barrier 11 = 4.8%). Domestic Violence and Partner Control. This sample appears to be free of partner control problems (Barrier 13), but 9.5 percent experienced physical violence by an intimate partner in the last year (Barrier 12). Children’s Health. The usual places for children’s medical care include a doctor’s office (76.2%), hospital or ER (23.8%), and clinic (4.8%). One-third of the sample has at least one child with limiting health conditions (Barrier 14). The impact of children’s health conditions is that 19.0 percent of mothers either cannot work, or their work hours are reduced. Barriers to Employment. On average sample respondents have 3.4 barriers to employment. The top barriers encountered by this sample include transportation (52.4%), having a child under six years of age (42.9%), lack of recent work experience (38.1%), educational attainment lower than GED (33.3%), and child’s limiting health conditions (33.3%) (see Figure 10). The number of barriers appears to affect employment consistently over time. Mothers who worked full-time in the past 3 years have an average of 3.1 barriers, while those who did not work have an average of 4 barriers. As for more recent work experience, those who worked last year have an average of 2.6 barriers. In contrast, those who did not work last year have 4.3 barriers. On average current employees (worked last week) have 2.3 barriers, while those unemployed typically have four barriers. Needed Services. Eighteen of the 21 mothers identified an average of 2.4 services needed in the 12 months prior to the survey. The most need for assistance was with utility bills (42.9%), followed by help finding housing and legal help, each for 14.3% of respondents (Figure 17). While one in three sample members needing legal assistance or assistance with utility bills received it, two in three needing help with housing got help. Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties 31 San Francisco Safety Net (Timed-out after 60 months) Parents Demographic and household characteristics. The twenty-five San Francisco Safety net parents are predominantly African Americans (72%), and have an average age of 35.1 years. Just over half (56%) have attained less than a GED\/high school diploma (Barrier 1). Sixty-eight percent of the sample is never married, and 12 percent lives with a spouse or partner. On average, sample members reside in a household of four people, among whom 2.5 are children. At the time of interview, the majority (96%) of this sample reported living in a rented space. The rest stayed in a shelter or place other than a rental, an owner-occupied unit, or at someone else’s place. Employment Status and Work History. Both current and recent full-time employment rates of this sample are well below one-third. At the time of the interview about one in four (28%) mothers was employed, working 23 hours per week on average. In the 12 months prior to the interview, only 20 percent of the sample worked full-time (30 hours or more per week) for at least two weeks in a row. Forty percent neither worked nor were in school or training, and the rest either worked part-time or were in school or training. Regarding work experience, 32 percent either never worked full-time for two weeks in a row or last did so more than three years ago (Barrier 2). Despite the low employment rate, 56 percent of the mothers reported that they looked for a job in the 30 days prior to the survey, and 84 percent of the sample reported that they could have taken a job if one were offered. Household Income and Poverty Status. The average household income in the last month was composed of more cash ($703) than non-cash ($368). The CalWORKs grant (mean of $505 for 21 households receiving this assistance) far surpassed earnings and other income from the partner (mean of $30 for 9 households) in terms of cash income contributions. Virtually all of the households’ monthly non-cash income was provided by Food Stamps: on average $387 per household per month for 23 households. The average per capita income of the surveyed households for the last month was $310 (median: $259), among which the CalWORKs grant provided 50.6 percent of income. This income put the average sample household at 31.4 percent of the California Budget Project 2006 basic family budget for San Francisco. Material Hardships. One in four mothers (24.0%) lives in overcrowded housing. Eight percent of the sample was deemed residentially unstable in light of having resided in a shelter in the course of the previous year (Barrier 4). In the last 12 months 60 percent of households did not have enough money for utilities, 32 percent did not have enough for food, and 28 percent did not have enough for rent. Additionally, 48 percent reported that they used emergency food programs in the year prior to the survey (Barrier 5). Despite access to emergency food, 24 percent of mothers and 8 percent of their children experienced food insecurity in the 12 months before the survey. Additionally, 84 percent of sample members experience a transportation barrier, having no driver’s license, no access to a car, and\/or quit a job or did not start a job in the last year due to transportation problems (Barrier 3). However, this definition may have different meaning in San Francisco compared to other counties. If work is available within-county, people in San Francisco may have less need for a car due both to smaller geographical area and better access to public transportation. Child Care. Forty percent of mothers have a child less than six years of age (Barrier 6), and 24 percent report that in the last 12 months finding child care was a problem for getting or keeping a job (Barrier 7). Among mothers with child care problems, half identified affordability as a reason. In the 12 months prior to the survey, 12 percent of all respondent were so worried about Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties 32 their children’s safety that they skipped work, training, or school to stay home with their children. Respondent Health. Based on their subjective rating, 28 percent of mothers have fair or poor health status, and twelve percent are limited in their work by physical health problems. A total of 32 percent are categorized as having a physical health barrier (Barrier 8). Nearly one-third (32%) of the sample has high blood pressure, 16 percent have been diagnosed with asthma, and 20 percent stayed overnight in a hospital sometime in the past 12 months. Eight percent reported they had been diagnosed with a learning disability, and another 16 percent needed extra help when they were in school (Barrier 9 total = 20%). Based on their reported symptoms, 20 percent of mothers are diagnosed with depression and 4 percent with generalized anxiety disorder, according to DSM-IV criteria. Twelve percent report experiencing stressful events in the previous 12 months, among whom two-thirds report that the stressful events interfered a lot with their life or work or ability to care for their children. Sixteen percent report they are limited in their work by mental or emotional health problems. In total, our assessment suggests that 28 percent of the sample has a mental health barrier (Barrier 10). Alcohol and Other Drug Use. None of the 25 mothers is categorized as abusing alcohol or being alcohol dependent. Sixteen percent are assessed as abusing drugs, with eight percent drug dependent, for a total alcohol or drug problem barrier rate of 16 percent (Barrier 11). Domestic Violence and Partner Control. In the year prior to the survey, eight percent of mothers experienced both physical and sexual violence by an intimate partner (Barrier 12). Regarding partner control, 12 percent reports that their partner discouraged them from work, or refused to help, or made it difficult to get or keep a job or go to school or training, or harassed them at work, or caused them to lose their job or quit school or training (Barrier 13). Children’s Health. While 76 percent of mothers usually take their children to a doctor, nurse, or clinic for medical care, 24 percent rely on a hospital or emergency room for care. Twelve percent of households have at least one child with a health condition that limits the child’s daily activities such as eating and walking (Barrier 14). For one in three households with a child with a limiting condition, the child’s health limitation resulted in a reduction of work hours for the mother. Barriers to Employment. Overall, the San Francisco safety-net cases were assessed as having an average of 4.2 potential barriers to employment. Only one respondent was found to have no potential barrier according to study definitions. Among the 14 barriers, the five most prevalent among San Francisco cases include: transportation (84%), education lower than GED (56%), reliance on emergency food program (48%), having child under six years of age (40%), lack of recent work experience (32%), and physical health problems (32%) (see Figure 11). Interestingly, the number of barriers does not appear to vary significantly by employment status in the previous 12 months. Thirteen mothers who did not work in the last year are found to have an average of 4.2 barriers, while 12 mothers who did work last year have a statistically indistinguishable 4.1 barriers to employment. However, the number of barriers appears to be associated with work experience and, to a lesser degree, with current employment status. Mothers who last worked full-time three or more years ago on average have 5.6 barriers; in contrast, those who worked full-time within the past three years have 3.5 barriers. On average currently employed mothers have 3.7 barriers; those unemployed have 4.4 barriers. Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties 33 Services Needed. Eighteen of the 25 mothers identified an average of 3.3 services needed in the 12 months prior to the survey. The biggest need for assistance was with utility payments (36%), followed by mental health services (24%), clothes for work (24%), child care (20%), physical health services (16%), support group (16%), help with alcohol or drug problems (16%), and inexpensive legal services (16%) (see Figure 18). In many cases, mothers secured the assistance they required. But disparities between need for and receipt of assistance were sizeable. For example, for the top three areas of need, five of nine San Francisco study participants received needed help with utilities, half of those who needed mental health service actually got it, but only one in six of those who needed work clothing received assistance. Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties 34 Santa Clara County Safety Net (Timed-out after 60 months) Parents Demographic and Household Characteristics. Santa Clara County’s 26 Safety net parents were on average 38.7 years of age. This group is composed of far more Hispanics (42.3%) and Asians (34.6%) than Whites (11.5%) and African Americans (7.7%). Over one-third (34.6%) of the sample has educational attainment lower than GED (Barrier 1). About 46 percent of the sample is never married, and 31 percent live with a spouse or partner. The sample has an average household size of 5 people, among whom 2.8 are children. The majority (88.5%) of the sample lives in big cities. Over half of the sample (57.7%) has rental accommodations, but 23.1 percent live in another person’s place. One in ten (11.5%) owns her own home, and 7.8 percent reside in a shelter or another place. Employment Status and Work Experience. Just over one-third of the sample (38.5%) was employed last week. For that third of mothers, the reported usual hours of work per week averaged 28.2, close to full-time employment by the CalWORKs standard of 30 hours a week. However, only 3.9 percent worked full-time for at least two weeks in the last year. In addition, 57.7 percent of the sample did not work full-time within the past three years. Almost one-half (46.2%) was neither working nor in school or training last year. About one-third of mothers (34.6%) looked for a job last week. Only 30.8 percent of mothers said they could have taken a job offer if one were made. Household Income and Poverty Status. The average household income in the last month was composed of much more cash ($1,910) than non-cash ($367). The CalWORKs grant ($665) and earnings and other income from the partner (on average $918 for 11 partners) contributed substantially to the cash income. Food Stamps provided $365 per household per month on average. The per capita income of these 26 households averages $526 (median $467). The CalWORKs grant received by this sample accounts for 32.8 percent of total household income. Household income of this sample put it at 67.8 percent of the California Budget Project 2006 basic family budget for Santa Clara County. Material Hardships. Nearly thirty-five percent (34.6%) of the sample lives in overcrowded conditions. In addition twelve percent stayed in a shelter or were homeless on the streets in the past year, and 9.5 percent moved at least twice last year. Based on study definitions, 42.3 percent of the sample is categorized as living unstably (Barrier 4). One-third (38.5%) of the sample has no driver’s license and\/or no access to a car and\/or quit or was unable to take a job, go to school, or training in the last year because of a transportation problem (Barrier 3). A substantial number of mothers reported material needs that went unmet in the last year due to lack of money. More specifically, 69.2 percent did not have enough for basic essentials. Hardships were also in the area of insufficient funds for utility payments (30.8%), for rent (19.2%), and for food (19.2%). One in five mothers (19.2%) experienced food insecurity. For children the rates was 3.9 percent in this sample. One-half of households (50.0%) used emergency food programs (Barrier 5). Child Care. Almost one-half (46.2%) of the sample has a child below six years of age (Barrier 6), and 15.4 percent identified childcare as a problem for finding or keeping a job (Barrier 7). Among households that report child care problems, most consider affordability to be the major issue. Additionally, 42 percent of the sample did not receive child care assistance for a child under age six, and 11.5 percent was late or absent from work, school, or training because of child Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties 35 care problems. Finally, 19.2 percent of mothers skipped work, school or training last year because of worries about their child’s safety. Respondent Health. About one-third of the sample (30.8%) report they have fair or poor health, and 15.4 percent report that their work was limited by physical health problems (Barrier 8 total = 38.5%). Nearly 27 percent of the sample report they have had asthma, 11.5 percent high blood pressure and 3.9 percent diabetes. Over nineteen percent had an overnight stay in the hospital in the past year. Four of the 26 mothers (15.4%) report having been diagnosed with a learning disability (Barrier 9). According to DSM-IV criteria, 11.5 percent have depression, and 7.7 percent have generalized anxiety disorder. One in five (19.2%) report stressful events in the past year, and 7.7 percent considered the stressful events affected their life and work a lot. Based on study definitions, 26.9 percent of the sample has a mental health barrier to employment (Barrier 10). Alcohol and Drug Use. An alcohol or drug problem barrier is calculated for 11.5 percent of the sample (Barrier 11): 3.9 percent is assessed as having alcohol abuse, 3.9 percent alcohol dependence, 3.9 percent drug dependence, and 7.7 percent drug abuse. Domestic Violence and Partner Control. Physical violence was experienced by 7.7 percent of the sample in the past year (Barrier 12). No respondent experienced partner control in that time period (Barrier 13). Children’s Health. The majority of the sample (88.5%) usually takes their children to a doctor’s office for care, and a small number relies on a hospital or ER (3.9%) or a clinic (7.7%). One in ten households (11.5%) have at least one child with a limiting health condition (Barrier 14). The impact on mothers is that 3.9 percent of them had work hours reduced. Barriers to Employment. On average, this sample has 4 barriers to employment. The most prevalent barrier is lack of work experience in the past three years (57.7%), followed by reliance on emergency food programs (50.0%), having a child below six years of age (46.2%), living instability (42.3%), transportation (38.5%) and respondent physical health (38.5%) (see Figure 12). The number of barriers appears to affect earlier work experience and current employment but not employment status in the last year. Serviced Needed. Sixteen out of the 26 mothers report they need an average of 2.9 services. Those most needed include child care (30.8%), finding housing (19.2%), utility payments (15.4%), and a support group (15.4%) (see Figure 19). There is substantial disparity between need and actual receipt of needed services. Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties 36 Stanislaus County Safety Net (Timed-out after 60 months) Parents Demographic and Household Characteristics. The 25 Stanislaus County Safety net parents average 37 years of age. Nearly half (48%) of the sample is Hispanic, and 32 percent White. One-third (32%) of the sample has an educational level lower than GED (Barrier 1). Fifty-two percent is never married, and 28 percent lives with a spouse or partner. This sample’s average household size is 4.9, with on average 2.7 children per household. Thirty-six percent of mothers live in big cities, 60 percent in small cities, and 4 percent in a rural area. Nearly one-quarter (24%) of the sample stays at another person’s residence, with the rest renting their own space. Employment Status and Work History. Twenty-eight percent of the sample was employed in the week before the survey, and none worked full-time within the last year. Despite the low employment rate, 44 percent of the sample was looking for a job in the past 30 days, and 56 percent reported they could have taken a job if one were offered. Regarding work experience, 60 percent did not work full-time within the past three years (Barrier 2), and the same proportion was neither working nor in school or training last year. Household Income and Poverty Status. The average household income in the last month was composed of much more cash ($1,237) than non-cash ($310). The CalWORKs grant (mean of $461 for 22 mothers) and partner earnings and other income (mean of $435 for 12 households) contributes to the cash income. Food Stamps provided on average $344 monthly for 21 households. The per capita income in the last month averaged $335 (median $321), of which 36.7 percent was the CalWORKs grant. The household income put this sample at 58.2 percent of the California Budget Project 2006 basic family budget for Stanislaus County. Material Hardships. Forty percent of the sample is categorized as having a barrier due to living instability (Barrier 4). This barrier is based on currently staying at another’s place (24%), having resided in a shelter or homeless on the streets (4%), or moved out of home at least twice last year (4%). In addition, 36 percent live in overcrowded conditions. Sixty percent lack a driver’s license, access to a car, and\/or quit or did not start a job, school, or training because of transportation problems (Barrier 3). A substantial number of mothers reported that they have material needs that went unmet in the last year due to lack of money. More specifically, 72 percent did not have enough for basic essentials, 40 percent for utility payments, 24 percent for food, and 20 percent for rent. Eight percent of mothers experienced food insecurity in the past year. Children’s food insecurity affected eight percent of sample members. Over one-third of the sample utilized emergency food in that 12-month period (Barrier 5). Child Care. Thirty-six percent of the sample has a child below six years of age (Barrier 6), and 16 percent identifies child care as a problem in finding or keeping a job (Barrier 7). Affordability, location, and hours were specified as reasons for child care problems. Thirty-two percent of the sample did not receive child care assistance for a child under age six. As a result of childcare challenges, eight percent of the sample reported being late for work, school, or training. The same percent skipped work, school, or training due to concerns about their children’s safety. Respondent Health. Over one-half of the sample (52%) rated their health status as fair or poor, and among those mothers 4 of 13 reported that their physical health limited their ability to work (Barrier 8 total = 52.0%). Asthma affects nearly half of the sample (48%), and sixteen percent Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties 37 has high blood pressure. A smaller number (8%) has diabetes. One-fifth of the sample stayed overnight in a hospital sometime last year, and sixteen percent reports that their work was limited by a physical health condition. Eight percent of the sample was diagnosed with a learning disability, and 24 percent needed extra help while in school (Barrier 9 total = 24.0%). Based on DSM-IV criteria, depression affects over one-third (36%) of the sample, and generalized anxiety disorder affects 16 percent. Twenty-four percent reported experiencing stressful events last year, and two-thirds of them (16% of the sample) consider that this experience affected their work or life a lot. Based on study definitions, 44 percent of the sample has a mental health barrier to employment (Barrier 10). Alcohol and Drug Use. Twelve percent of the sample is categorized as having alcohol or drug problems (Barrier 11), which include alcohol abuse (4%), alcohol dependence (4%), drug abuse (8%) and\/or drug dependence (4%). Domestic Violence and Partner Control. In the year prior to the interview, 12 percent of the sample experienced physical violence, and 4 percent experienced sexual violence by an intimate partner (Barrier 12 total = 12.0%). Eight percent of the sample experienced partner control related to work, school, or training by being discouraged or not helped or being harassed by their intimate partner (Barrier 13). Children’s Health. The usual places for children’s medical care include a doctor’s office (72% of the sample), the hospital or ER (20%), a clinic (8%), and other places (4%). Nearly one- quarter (24%) of the sample report they have at least one child with a limiting health condition (Barrier 14). The child needing most care averages 10.9 years of age. As a result of children’s health problems, 12 percent of mothers had their work hours reduced in the previous year. Barriers to Employment. The Stanislaus sample averages 4.6 barriers per respondent. Barriers that affect a large proportion of the sample include lack of recent work experience (60%), transportation (60%), physical health (52%), mental health (44%), and living instability (40%) (see Figure 13). The total number of barriers appears more highly associated with distant work experience than employment status in the past year or past week, but the impacts are all in the same direction the number of barriers is inversely associated with probability of being employed. Services Needed. Nineteen of the 25 mothers report need for at least one and, on average, three services. The most needed service is for assistance with utility payments: 36 percent of the sample needed help, and 20 percent of the sample received assistance. Other needed services include support group (28%), physical health services (24%), child care (24%), and mental health services (16%) (see Figure 20). Needs are fully met in none of these areas. Help with child care assistance was least forthcoming, provided to only one of the six individuals noting the need. Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties 38 Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties 39 Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties 40 Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties 41 Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties 42 Findings across Sites A key policy focus of the CalWORKs Child-only Study is mothers’ employment status and potential barriers to work. As discussed above, we hypothesize that mothers’ limited income, material hardships, and corresponding personal and other barriers compromise their ability to get to and engage in work. Study findings demonstrate that female parents associated with sanctioned and safety net child-only cases in five Northern California counties have many similar demographic and household characteristics, experience substantial material hardships, and have poor employment histories. They also appear to be in need of a variety of services to address potential barriers to employment. With work such a central concept to the study, as we specify above, we look especially at three employment measures: current (last week) employment, full-time employment (30 or more hours per week) within the previous three years, and employment in the last year beyond any current employment. Employment. In light of the multiple employment measures used, we categorize respondents into four distinct groups according to employment history. Toward this end, as summarized in Table 4, we define the following four groups: 1. Group 1. Little work history. No history of 30 or more hours of work per week in the last three years, worked for less than 20 weeks last year, and unemployed last week. 2. Group 2. Currently unemployed, some full-time work history. Some history of 30 or more hours of work per week in the last three years, mixed incidence of working last year, all unemployed last week. 3. Group 3. Currently employed, some full-time work history, no work last year. Some history of 30 or more hours of work per week in the last three years, no work last year, and employed last week. 4. Group 4. All others, 11 of the 13 members of Group 4 lack 30 or more hours of work per week in the last three years.24 We do not ascertain why individuals might fall into one or another of the groups. Explanations may range from chronic to acute life events (psychiatric problems or the birth or death of a family member, for example) to variation in local labor markets to change in access to a car. Accordingly, we note, a particular respondent’s location in one of these four groups could easily change over a relatively short period of time. 24 Group 4 includes those currently unemployed but worked for 20 or more weeks last year; or currently employed and worked for 19 weeks or less last year; or currently employed but did not work last year. Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties 43 Table 4. Respondent Grouping by Employment History Group number Group description n Percent Currently employed Work in past year History of full-time work in last 3 years 1 Little work history 59 41.3% No Less than 20 weeks No 2 Currently unemployed, some full-time work history 40 28.0% No Mixed Yes 3 Currently employed, some full-time work history, no work last year 31 21.7% Yes No Yes 4 All others 13 9.1% Mixed Mixed Mixed Total 143 100.1% It is evident that members of Group 1 have a poor work history in the past three years, and it is telling that Group 1 is also the largest group, comprising 41.3 percent of the full sample across counties. Groups 2 and 3 are in a better situation in that members of each group have experienced some full-time work in the last three years, but their status relative to one another is ambiguous. According to Table 5, Group 1 averages 5.1 barriers, Groups 2 and 3 respectively average 3.9 and 3.5 barriers, and Group 4 is in between with an average of 3.8 barriers. Examination of the distribution of the number of barriers in Table 5 reveals that while one-third of respondents categorized in Group 1 have seven or more barriers, less than 10 percent of the other group members has such a large number of barriers. In addition to findings displayed in Table 5, we also tabulated the relationship between group assignment and the array of 14 specific barriers for the combined sample. Table 6 displays results for Groups 1 to 3 (Group 4 is deleted in light of its heterogeneity and small number of cases). In seven of the 14 barrier areas, the prevalence of barriers was higher for Group 1 members, compared to both Group 2 and Group 3 members. Especially noteworthy were the higher prevalence of use of emergency food programs, having a child under age 6, and mental health problems. We conclude that the groupings provide a useful overview of work experience in association with potential barriers. Examination of the distribution of these groups across counties indicates that San Mateo County (sanction cases) and Stanislaus County (safety net cases) appear to have the most problematic sample members (data not displayed). In each of these two counties, 52 percent of the mothers are categorized as in Group 1. At the other extreme, San Francisco County mothers appear to have the best employment profile, with 28 percent in Group 1. Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties 44 Table 5. Distribution of Number of Barriers by Employment History, Sites Combined Number of Barriers Group 1 Little work history (n=59) Group 2 Currently unemployed, some FT work history (n=40) Group 3 Currently employed, some FT work history, no work last year (n=31) Group 4 All others (n=13) 0 0 2.5% 3.2% 0 1 3.4% 5.0% 25.8% 15.4% 2 8.5% 15.0% 9.7% 7.7% 3 15.3% 20.0% 6.5% 23.1% 4 18.6% 20.0% 25.8% 23.1% 5 15.3% 25.0% 9.7% 7.7% 6 5.1% 7.5% 9.7% 15.4% 7 20.3% 0 3.2% 7.7% 8 6.8% 2.5% 6.5% 0 9 5.1% 2.5% 0 0 10 1.7% 0 0 0 Mean (95% CI) 5.1 (4.5-5.6) 3.9 (3.3-4.5) 3.5 (2.7-4.3) 3.8 (2.6-4.9) Median 5 4 4 4 Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties 45 Table 6. Distribution of Barriers by Employment History, Sites Combined Barrier #25 Barrier Group 1 (n=59) Group 2 (n=40) Group 3 (n=31) 1 Education lower than GED 44.1% 35.0% 38.7% 2 Lack recent work experience 100% 0 0 4 Transportation 62.7% 70.0% 58.1% 4 Living instability 37.3% 30.0% 29.0% 4 Reliance on emergency food programs 50.9% 40.0% 32.3% 5 Has child under six 50.9% 32.5% 35.5% 5 Child care problem 40.6% 40.6% 16.7% 6 Physical health 33.9% 40.0% 38.7% 6 Learning disability 20.3% 15.0% 25.8% 7 Mental health 33.9% 27.5% 16.1% 8 Alcohol or drug abuse or dependence 10.2% 17.5% 6.5% 9 Domestic violence 11.9% 15.0% 12.9% 10 Partner control 10.2% 10.0% 6.5% 11 Child with limiting health condition 18.6% 22.5% 32.3% Barriers to employment. The sanctioned and safety net child-only parents in this sample share many barriers and other characteristics, but each study site also appears to have its own barriers fingerprint. That is, specific barriers contribute differently to the barrier burden for individual counties. It is informative to examine the survey findings in light of comparison data available on the general population. Survey respondents are not typical residents of the study sites. Many disparities in the areas of education, marital status, home ownership, crowding, homelessness, use of emergency food sources, current employment status, self-rated health status, mental distress, and drug use are striking, and certainly the distribution of respondents by race\/ethnicity is quite distinct, compared to the general population in each site. Immediately following this paragraph we present an overview of barrier findings, followed by discussion of employment outcomes and presentation of relationship between barriers, total count of barriers, and employment status. Educational attainment. Depending on study site, from one-third to over one-half of mothers have not attained a GED or high school diploma (see Appendix Table A-3, Section 1). Overall, prevalence of education lower than GED is 40.6 percent. These and other findings are compared 25 Barrier number correspond to section number in Table A-3. Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties 46 to rates for the female population aged 18 to 58, with income level below 200 percent of the Federal Poverty Line (FPL). In the case of education, study participants’ accomplishments are lower in some cases substantially lower in three of the sites. Lowest educational attainment is in the Alameda County sanction and San Francisco safety net sites. Educational attainment is worrisome across all sites, but it is more worrisome in some sites (Alameda County sanction and San Francisco safety net). Likewise, lack of recent work experience is omnipresent, but worse in San Mateo, Santa Clara, and Stanislaus Counties. Marital status. Across sites, marital status of survey participants uniformly differs from that of women 18 58 below 200 percent of the FPL (Table A-3, Section 1). Survey respondents are 50% to 160% more likely to be single\/never married than women in the general population living below the FPL Employment. Depending on the site, from 12.0 to 30.8 percent of mothers were employed in the last week (Table A-3, Section 2). Comparable figures for work among the general female population aged 18 to 58 ranged from 58.4 to 69.3 percent. Nearly half (49.0%) of the combined sample lacks recent full-time work experience (did not work 30 or more hours a week in the past three years). This barrier claims a substantial proportion of the following samples: safety net samples in San Mateo County (60.0%), Stanislaus County (60.0%), and Santa Clara County (57.7%), and the Alameda County sanction sample (42.9%). Household Income. Across sites, non-cash income is less variable than cash income. In each site, 95 percent or more of non-cash derives from Food Stamps. The most important and stable cash income item is the CalWORKs grant for children, which ranges from a mean of $461 in Stanislaus County to a mean of $665 in Santa Clara County (see Table A-3, Section 3). Other sources of cash income exist, and their contribution varies widely across sites. Using the CalWORKs grant as the denominator and the total income from other items as the numerator, the resulting percentage represents other items’ contribution as a percent of the CalWORKs grant contribution. This percentage ranges from 66 percent (San Francisco County) to 217 percent (Santa Clara County) (results not presented tabularly). This variation explains why study participants in certain sites such as Santa Clara County have a much higher income even though the major contributing item, CalWORKs, is relatively stable in size across sites. A more detailed examination of the components of cash income shows both similarities and differences across counties. The first similarity is that mothers’ earnings contribute a considerable amount even though this is unexpected based on reportedly infrequent or erratic employment. More specifically, mothers’ total earnings (mean times n ) account for as low as 32 percent of the total CalWORKs grant in one site, and as high as 69 percent in another. Other major items of cash income include partners’ earnings (1 – 59% of CalWORKs income depending on site), rent payment to the household (0 – 69% of CalWORKs income depending on site), SSI for the respondent or her partner or children, and even children’s earnings (1 – 23% of CalWORKs income). Material hardships. Residential instability barriers affect one-third (32.2%) of the full sample. Residential overcrowding is prevalent among study participants. Percent of mothers reporting more than one person per room in her residence ranged from 14.3 to 36.0 percent, depending on study site (Table A-3, Section). In the national general population, according to the U.S. Department of Housing and Urban Development, 2.4 percent of persons are estimated to be Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties 47 residing in such crowded situations. The rate of homelessness among study respondents is four to fourteen times that of the national rate. Reliance on emergency food programs (43.4% of the combined sample) varies by site, with from 3.9 to 20.0 percent of survey respondents using soup kitchens in the previous 12 months. The national rate is less than one percent (America’s Second Harvest, 2006). Child care problem. Depending on the site, from 15.4 to 36.0 percent of study participants report a child care problem. Health. Reports of fair or poor health 28.0 to 52.0 percent of mothers, depending on site are comparable to or greater than a similar measure for women with incomes less that 200 percent of the FPL (Table A-3, Section 6). At the same time, reports of asthma are consistently greater among our survey respondents, compared to the general population in the same site, and, depending on site, high blood pressure and diabetes are more prevalent. Overall, physical health problems are experienced by 36.4 percent of the full sample. Among study respondents, depending on site, mental health barriers (overall, 26.6%) are double to seven times the general population rate for psychological distress. (Rates of psychological distress among women in the general population ages 18 to 58 living below 200 percent FPL range from 6.2 to 12.5 percent. Table A-3, Section 7). Our survey results for last-year drug use range from 14.3 to 48.0 percent, depending on site, compared to 10.7 percent among the general population (Table A-3, Section 8). Learning disability ranges in prevalence from 9.5 percent to 28.0 percent across sites. Domestic violence ranges in prevalence from 7.7 percent to 10.1 percent. Partner control, depending on site, spans the range from 0 to 23.8 percent of cases Child limiting health condition ranges in prevalence from 11.5 to 33.3 percent, depending on site. The Stanislaus county sample has the largest proportion of mothers with physical health (52.0%) and mental health (44.0%) barriers. Transportation. The most prevalent barrier for the combined sample is transportation which affects 61.5 percent of all 143 mothers. It is also the number one barrier for all county samples except Santa Clara County, where lack of recent work experience is the top barrier (57.7%). Housing and neighborhood. Among survey respondents, home ownership existed only in one site, where 11.5 percent indicated that they lived in a residence they own (Table A-3, Section 1). Among the general population of women aged 18 to 58, residence in a home they owned was estimated, depending on site, to range from 31.7 to 63.1 percent of mothers. Summary. Combining data from all the sites, the most prevalent barriers are transportation (61.5% of the combined sample; see Table A-3 section 13), work experience (49.0%), reliance on emergency food programs (43.4%), having a child under six years (42%), and education lower than GED\/diploma (40.6%). Respondent physical health problems are experienced by 36.4 percent of the full sample, and residential instability affects one-third (32.2%) of the full sample. Barrier count. As shown in Section 14 of Table A-3 and presented graphically in Figure 21, we find, on average, the combined sample has 4.3 (95% confidence interval: 3.9 – 4.6) barriers to Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties 48 employment. The San Mateo County sanction sample has the largest number of barriers (5.2) among the six samples. The last six rows of Table A-3, Section 14 (and presented graphically in Figures 22, 23, and 24) show the relationship between the number of barriers and the probability of being employed. A consistent, inverse relationship is evident: the number of barriers is negatively associated with the probability of working full-time in the past three years, or of working sometime last year, or of being employed last week. For example, mothers who worked 30 or more hours per week for at least one week in the past three years have a mean of 3.6 barriers, while those who did not have that work record averaged 4.9 barriers (Figure 22 and Table 8). Similarly, mothers currently working have a mean of 3.5 barriers; those not currently employed, 4.6 barriers (Figure 24 and Table 8). These relationships are evident at the site level in virtually every comparison in Table A-3, Section 14. Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties 49 Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties 50 Barrier-by-barrier, this relationship is specifically shown in Table 7 below. Table 7 reports the prevalence of barriers by employment status displayed for each of three time periods. The first panel depicts barriers by work of 30 or more hours a week within the last three years. A ratio column separates prevalence for those who did not and those who did work that amount in the three-year time period. Thus we find, for example, that study participants who did not work in the three-year period were 1.2 times as likely to have education lower than GED or high school diploma, compared to those who did work 30 or more hours in the three-year period (prevalence of 44.3% versus 37.0%). We highlight the ratio for barriers that are 0.8 or less or 1.2 or more. In the case of the three-year time frame, six of the barrier ratios are 1.2 or greater, while only three are 0.8 or below. On average, barriers are ten percent more prevalent among those who have not worked full-time within the past three-years As the employment timeframe draws more immediate, barriers appear to exert more influence. In the last-12-month period six barriers are 1.2 times as prevalent among those not reporting work as among those reporting work. Only one barrier is at 0.8 or below. On average the barriers are thirty percent more prevalent among those without one-year work experience. Especially powerful, in addition to not having worked 30 hours in the past three years, are living instability, child care problems, mental health problems, and alcohol or drug problems. The picture is even more dramatic in terms of current (last week) employment. Nine barriers are found to have an effect of 1.2 or greater, and on average the barriers are fifty percent more prevalent among those not working the previous week. Particularly salient, in addition to lack of longer-term work history, are child care problems, mental health, alcohol or drug problems, domestic violence, and partner control. With regard to the last three barriers, it is noteworthy that the prevalence of each barrier is relatively low; in each case, 13 percent of less. However the apparent influence of the barriers, as measured by the ratios, ranges as high as 2.7. That is, for example, individuals not employed last week are 2.7 times as likely as those with work in the last week to be found to have alcohol or drug abuse or dependence. Table 8 takes a similar approach, examining number of barriers by work in the three different time periods. For each panel we highlight the cell in the cumulative percent column in which two-thirds of study participants are found. Thus, for the examination of number of barriers by Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties 51 full-time work (30 or more hours) in the past three years we find that two-thirds of those without such a work history have six or fewer barriers. The corresponding figure for those with the work history in that time period is four or fewer barriers. In terms of work in the last week, two-thirds of study participants not working have five or fewer barriers. Two-thirds of those working in the last week have four or fewer barriers. On average, for each time period of interest, those not working have significantly more barriers than those working. For the past-week, for example, those not reporting work are found to have an average of 4.6 barriers. Those reporting work in that period are found to have on average 3.5 barriers. Both Table 7 and Table 8 contribute to the understanding that disparity of employment probability is greater with regard to current status than last year or three-year status. This suggests that, despite the fact that many barriers refer to lifetime, past year, or general status, the relationship with work is time-sensitive. Table 9 displays the cumulative effect of barriers. Ignoring the first row, for zero barriers, in light of such a small n, it appears that one barrier is the threshold above which the disparity of employment probability becomes obvious. That is, slightly over two-thirds of mothers with only one barrier worked in the time period of interest. However, this relationship reverses in the rest of the table, for mothers with two or more barriers. A barrier count of two or more substantially reduces the likelihood of employment. As was evident also in Table 7, the number of barriers appears to affect current employment status more than employment status in the last year. Figures 25 and 26 depict, respectively, the drop in employment for the last 12-month period and the last week. B ar rie rs to W or k: C al W O R K s Pa re nt s T im ed -o ut o r S an ct io ne d in F iv e C ou nt ie s 52 Ta bl e 7. B ar ri er s b y Em pl oy m en t S ta tu s, Si te s C om bi ne d B ar rie r W or ke d 30 + hr s\/ w ee k in la st 3 y ea rs A ny w or k in la st 1 2 m on th s Em pl oy ed la st w ee k N o (n =7 0) R at io Ye s (n =7 3) N o (n =8 3) R at io Ye s (n =6 0) N o (n =1 01 ) R at io Ye s (n =4 2) Ed uc at io n lo w er th an G ED 31 44 .3 % 1. 2 27 37 .0 % 36 43 .4 % 1. 2 22 36 .7 % 41 40 .6 % 1. 0 17 40 .5 % La ck fu ll- tim e w or k ex pe rie nc e la st 3 y ea rs 70 10 0. 0% N A 0 0. 0% 55 66 .3 % 2. 7 15 25 .0 % 61 60 .4 % 2. 8 9 21 .4 % Tr an sp or ta tio n 37 52 .9 % 0. 9 42 57 .5 % 47 56 .6 % 1. 1 32 53 .3 % 57 56 .4 % 1. 1 22 52 .4 % R es id en tia l o r l iv in g in st ab ili ty 25 35 .7 % 1. 2 21 28 .8 % 30 36 .1 % 1. 4 16 26 .7 % 35 34 .7 % 1. 3 11 26 .2 % R el ia nc e on e m er ge nc y fo od p ro gr am s 34 48 .6 % 1. 3 28 38 .4 % 37 44 .6 % 1. 1 25 41 .7 % 46 45 .5 % 1. 2 16 38 .1 % H as c hi ld u nd er s ix 36 51 .4 % 1. 6 24 32 .9 % 36 43 .4 % 1. 1 24 40 .0 % 45 44 .6 % 1. 2 15 35 .7 % C hi ld c ar e pr ob le m 15 37 .5 % 1. 3 18 28 .1 % 20 40 .8 % 1. 7 13 23 .6 % 26 25 .7 % 1. 5 7 16 .7 % Ph ys ic al h ea lth 24 34 .3 % 0. 9 28 38 .4 % 32 38 .6 % 1. 2 20 33 .3 % 37 36 .6 % 1. 0 15 35 .7 % Le ar ni ng d is ab ili ty 14 20 .0 % 1. 0 14 19 .2 % 16 19 .3 % 1. 0 12 20 .0 % 18 17 .8 % 0. 7 10 23 .8 % M en ta l h ea lth 22 31 .4 % 1. 4 16 21 .9 % 25 30 .1 % 1. 4 13 21 .7 % 32 31 .7 % 2. 2 6 14 .3 % Al co ho l o r d ru g ab us e or de pe nd en ce 6 8. 6% 0. 7 9 12 .3 % 10 12 .1 % 1. 5 5 8. 3% 13 12 .9 % 2. 7 2 4. 8% D om es tic v io le nc e 7 10 .0 % 0. 7 10 13 .7 % 10 12 .1 % 1. 0 7 11 .7 % 13 12 .9 % 1. 4 4 9. 5% Pa rtn er c on tro l 6 8. 6% 1. 0 6 8. 2% 7 8. 4% 1. 0 5 8. 3% 10 9. 9% 2. 1 2 4. 8% C hi ld li m iti ng h ea lth co nd iti on 13 18 .6 % 0. 7 19 26 .0 % 17 20 .5 % 0. 8 15 25 .0 % 21 20 .8 % 0. 8 11 26 .2 % m ea n ra tio 1. 1 1. 3 1. 5 B ar rie rs to W or k: C al W O R K s Pa re nt s T im ed -o ut o r S an ct io ne d in F iv e C ou nt ie s 53 Ta bl e 8. N um be r of B ar ri er s b y Em pl oy m en t S ta tu s, Si te s C om bi ne d W or ke d 30 + hr s\/ w ee k in la st 3 y ea rs A ny w or k in la st 1 2 m on th s Em pl oy ed la st w ee k N o (n =7 0) Ye s (n =7 3) N o (n =8 3) Ye s (n =6 0) N o (n =1 01 ) Ye s (n =4 2) # of ba rr ie rs n % cu m % n % cu m % n % cu m % n % cu m % n % cu m % n % cu m % 0 0 0. 0% 0. 0% 2 2. 7% 2. 7% 1 1. 2% 1. 2% 1 1. 7% 1. 7% 1 1. 0% 1. 0% 1 2. 4% 2. 4% 1 3 4. 3% 4. 3% 11 15 .1 % 17 .8 % 4 4. 8% 6. 0% 10 16 .7 % 18 .4 % 4 4. 0% 5. 0% 10 23 .8 % 26 .2 % 2 5 7. 1% 11 .4 % 10 13 .7 % 31 .5 % 10 12 .1 % 18 .1 % 5 8. 3% 26 .7 % 11 10 .9 % 15 .9 % 4 9. 5% 35 .7 % 3 12 17 .1 % 28 .5 % 10 13 .7 % 45 .2 % 14 16 .9 % 35 .0 % 8 13 .3 % 40 .0 % 18 17 .8 % 33 .7 % 4 9. 5% 45 .2 % 4 14 20 .0 % 48 .5 % 16 21 .9 % 67 .1 % 15 18 .1 % 53 .1 % 15 25 .0 % 65 .0 % 19 18 .8 % 52 .5 % 11 26 .2 % 71 .4 % 5 10 14 .3 % 62 .8 % 13 17 .8 % 84 .9 % 12 14 .5 % 67 .6 % 11 18 .3 % 83 .3 % 19 18 .8 % 71 .3 % 4 9. 5% 80 .9 % 6 5 7. 1% 69 .9 % 6 8. 2% 93 .1 % 6 7. 2% 74 .8 % 5 8. 3% 91 .6 % 7 6. 9% 78 .2 % 4 9. 5% 90 .4 % 7 13 18 .6 % 88 .5 % 1 1. 4% 94 .5 % 12 14 .5 % 89 .3 % 2 3. 3% 94 .9 % 12 11 .9 % 90 .1 % 2 4. 8% 95 .2 % 8 4 5. 7% 94 .2 % 3 4. 1% 98 .6 % 4 4. 8% 94 .1 % 3 5. 0% 99 .9 % 5 5. 0% 95 .1 % 2 4. 8% 10 0. 0% 9 3 4. 3% 98 .5 % 1 1. 4% 10 0. 0% 4 4. 8% 98 .9 % 0 0. 0% 99 .9 % 4 4. 0% 99 .1 % 0 0. 0% 10 0. 0% 10 1 1. 4% 99 .9 % 0 0. 0% 10 0. 0% 1 1. 2% 10 0. 1% 0 0. 0% 99 .9 % 1 1. 0% 10 0. 1% 0 0. 0% 10 0. 0% To ta l 70 99 .9 % 73 10 0. 0% 8 3 10 0. 1% 60 99 .9 % 1 01 10 0. 1% 42 10 0. 0% M ea n (9 5% C I) 4. 9 (4 .4 -5 .4 ) 3. 6 (3 .2 -4 .1 ) 4. 6 (4 .1 -5 .1 ) 3. 8 (3 .3 -4 .3 ) 4. 6 (4 .2 -5 .0 ) 3. 5 (2 .9 -4 .2 ) Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties 54 Table 9. Employment by Number of Barriers, Sites Combined Number of Barriers n Did no work last 12 months Worked sometime last 12 months n Unemployed last week Employed last week 0 2 50.0% 50.0% 2 50.0% 50.0% 1 13 30.8% 69.2% 14 28.6% 71.4% 2 15 66.7% 33.3% 15 73.3% 26.7% 3 21 66.7% 33.3% 22 81.8% 18.2% 4 30 50.0% 50.0% 30 63.3% 36.7% 5 22 54.6% 45.4% 23 82.6% 17.4% 6 11 54.6% 45.4% 11 63.6% 36.4% 7 14 85.7% 14.3% 14 85.7% 14.3% 8 7 57.1% 42.9% 7 71.4% 28.6% 9 4 100% 0 4 100% 0 10 1 100% 0 1 100% 0 Mean (95% CI) 4.6 (4.1-5.1) 3.8 (3.3-4.3) 4.6 (4.2-5.0) 3.5 (2.9-4.2) Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties 55 Figure 25. Employment in Last 12 Months as Function of Number of Barriers . Figure 26. Employment in Last Week as Function of Number of Barriers Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties 56 Other Measures. There are many measures reported in Table A-3 but not discussed in the site profiles. We emphasize just a few here. Not included as a barrier were reports of problems with cognitive skills. Table A-3, Section 7 specifies proportion of mothers, by site, reporting problems with memorization, calculation, filing forms, and spelling. Each of these probably impedes access to employment within various occupations. While we tabulated as a barrier having children with a limiting health conditions, in this report we did not discuss the array of conditions that those children were reported to have, from asthma and allergies to attention deficit, behavioral problems, developmental delay and other chronic diseases. Table A-3, Section 11 displays the prevalence of each condition by site. Estimates of the domestic violence barrier ranged from 7.7 percent in the Santa Clara County safety net sample to 19.1 percent for the Alameda County sanction sample. Not incorporated in the barrier estimate is another related measure that reports frequency of mothers’ calling police for threats by an intimate partner in the last year (Table A-3, Section 9). In four of the six sites, prevalence of calls to police is greater than prevalence of domestic violence. We note the existence of two measures we have termed material hardships, but which may in fact relate also to physical health or child care barriers. Depending on site, from 9.5 to 28.0 percent of mothers report that in the last 12 months they have not gotten needed health care for themselves or a child (Table A-3, Section 4). And, depending on site, from 9.5 to 32.0 percent of mothers say that in the last 12 months they have not gotten needed medicine for themselves or a child. Finally, it is noteworthy for a study of barriers that in each site from eight to sixteen percent of mothers report they have applied for Supplemental Security Income (SSI) benefits (not presented tabularly). Although we did not include SSI application in any of the fourteen barriers studied, the basis for the SSI application may well serve as a substantial barrier to employment. Several mothers were denied SSI, and we have no information about the resources that went into those applications or the likelihood that some mothers will ultimately prove successful in their efforts. Housing. Three out of five study participants (61.7%) receive a housing subsidy that contributes to their monthly housing bill (see Table 10). Among those 87 households, Group A comprises 15 households, benefits financially by receiving more than $20 monthly in rental income. That is, persons sharing the housing provide a monthly stipend for the privilege. As a result of these two forms of financial assistance, on average the subsidy-plus-rental-income group expends 15.4 percent of income on housing. Group B, the subsidy-only group, devotes 25.3 percent of income to housing costs. Both rates fall within the 30 percent considered affordable by the U.S. Department of Urban Development (US Department of Housing and Urban Development, nd). Furthermore, compared to study participants with other housing arrangements, crowding is relatively infrequent among these two groups. Just seven and six percent of study participants categorized respectively in Groups A and B report having an average of more than two persons per bedroom. Twenty percent of Group A and 14 percent of Group B households have more than an average of one person per room. There are, however, two sizeable groups of study participants who do not benefit from housing subsidies. Members of Group C, comprised of 25 respondents, live in their own place, have no subsidy and do not receive rental income of $20 or more. Depending on site, percent of income Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties 57 spent on housing ranges from about 15 percent up to 74 percent. On average, across the six study sites, these households devote 54.5 percent of income to rent, a figure considered unsustainable. Thirty-two percent of household have, on average, more than two persons per bedroom, and 28 percent have more than an average of one person per room. Group D respondents, including a second 25 study participants, live in another person’s place. These respondents have no housing subsidy and no rental income. On the contrary, they provide rental income to others. Funds expended on rent range from 14.9 to 44.3 percent of income. The mean amount is 38.8 percent of income. Forty percent of these living units have more than two persons per bedroom, and over half (52%) have more than one person per room. We also inquired about the neighborhoods in which study participants reside. The question posed, with reference too many cars, loud music or other noise, trash and litter, people loitering, people using or selling drugs, crime, poor access to public transportation, no safe place for children to play, and not safe to walk alone at night, was as follows: Consider your neighborhood to be the area within about a 5 minute walk of your home. Please tell me if the following things are not a problem, some problem, or a big problem in your neighborhood. In at least two study sites, 20 percent or more of mothers said that each of several conditions too many cars, loud music or other noise, trash and litter, people loitering, people using or selling drugs, crime, no safe place for children to play, and not safe to walk alone at night presented a big problem. (Interestingly, poor access to public transportation did not make this threshold.) Furthermore, a strong association was evident between mothers who reported no safe place for children to play and those who said they skipped work, school, or training in the last year because they were worried about their child’s safety. Conditions are particularly problematic among Alameda County sanction, San Francisco safety net, and Stanislaus County safety net families. Table 11 highlights in yellow the cells in which percents are between 15 and 35 and in peach the cells that are 35 percent or greater. As is evident, conditions are particularly problematic among Alameda County sanction, San Francisco safety net, and Stanislaus County safety net families. No particular topical area appears to be more of a problem than the others. B ar rie rs to W or k: C al W O R K s Pa re nt s T im ed -o ut o r S an ct io ne d in F iv e C ou nt ie s 58 T ab le 1 0. P er ce nt o f I nc om e Sp en t o n H ou si ng b y C ou nt y, T yp e of R es id en ce , R ec ei pt o f H ou si ng S ub si dy , a nd R ec ei pt o f R en ta l I nc om e, S ite s C om bi ne d Sa nc tio n Sa fe ty N et A la m ed a Sa n M at eo A la m ed a Sa n Fr an ci sc o* Sa nt a C la ra * St an is la us To ta l G ro up n % % o f in co m e to ho us in g n % % o f in co m e to ho us in g n % % o f in co m e to ho us in g n % % o f in co m e to ho us in g n % % o f in co m e to ho us in g n % % o f in co m e to ho us in g n % % o f in co m e to ho us in g A . O w n \/ re nt , re ce iv e ho us in g su bs id y, re nt al in co m e > $2 0 4 19 .1 % 23 .6 % 2 8. 0% 6. 7% 2 9. 5% 14 .0 % 0 7 28 .0 % 13 .6 % 0 15 10 .6 % 15 .4 % B . O w n \/ re nt , re ce iv e ho us in g su bs id y, no re nt al in co m e > $2 0 9 42 .9 % 30 .2 % 9 36 .0 % 28 .3 % 16 76 .2 % 23 .7 % 21 87 .5 % 20 .6 % 6 24 .0 % 29 .1 % 11 44 .0 % 27 .8 % 72 51 .1 % 25 .3 % C . O w n \/ re nt , n o su bs id y, no re nt al in co m e > $2 0 4 19 .1 % 66 .6 % 3 12 .0 % 50 .4 % 2 9. 5% 15 .5 % 3 12 .5 % 14 .6 % 5 20 .0 % 73 .5 % 8 32 .0 % 62 .7 % 25 17 .7 % 54 .5 % D . O th er pe rs on ‘s pl ac e, n o su bs id y, no re nt al in co m e > $2 0 2 9. 5% 14 .9 % 10 40 .0 % 44 .3 % 1 4. 8% 20 .3 % 0 6 24 .0 % 37 .9 % 6 24 .0 % 41 .6 % 25 17 .7 % 38 .8 % O th er 2 9. 5% 57 .3 % 1 4. 0% 4. 0% 0 0 1 4. 0% 27 .7 % 0 4 2. 8% 36 .6 % T ot al 21 10 0. 1% 37 .0 % 25 10 0. 0% 37 .6 % 21 10 0. 0% 21 .8 % 24 10 0. 0% 19 .1 % 25 10 0. 0% 34 .3 % 25 10 0. 0% 42 .3 % 14 1 99 .9 % 32 .2 % *C as e no t i nc lu de d be ca us e of m is si ng re sp on se . Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties 59 Table 11. Percent of Study Participants Reporting Neighborhood Conditions a Big Problem, Sites Combined Sanction Safety Net Alameda County San Mateo County Alameda County San Francisco Santa Clara County Stanislaus County Too many cars 38.1% 16.0% 14.3% 44.0% 23.1% 40.0% Loud music, noise 14.3% 20.0% 14.3% 28.0% 7.7% 16.0% Trash and litter 19.1% 8.0% 23.8% 48.0% 11.5% 16.0% People loitering 19.1% 0.0% 9.5% 48.0% 0.0% 20.0% Using selling drugs 14.3% 4.0% 9.5% 52.0% 11.5% 24.0% Crime 19.1% 8.0% 0.0% 56.0% 3.9% 24.0% Poor transportation 0.0% 8.0% 4.8% 8.0% 0.0% 16.0% No safe place for kids 19.1% 8.0% 14.3% 40.0% 11.5% 24.0% Not safe to walk around at night 23.8% 16.0% 23.8% 52.0% 7.7% 16.0% CONCLUSIONS AND POLICY IMPLICATIONS Because this study is cross-sectional and does not follow households over time, we cannot conclude that a causal relationship exists between the potential barriers and employment outcomes. However, published results from other longitudinal studies assist our interpretation of the data collected from households for this study. We find strong indication that at least half of the 14 barriers identified are negatively associated with employment. Previous TANF studies that typically focused on cases with full families receiving aid (as opposed to child-only studies), find the following barriers to have significant negative effects on employment over time: (1) limited educational attainment, (2) transportation barriers, (3) child care problems, (4) physical health problems, (5) learning disability, (6) mental health problems, and (7) alcohol and other drug problems. To our knowledge, the following barriers as we define them have not yet been examined in longitudinal studies (1) residential instability, (2) use of emergency food programs, and (3) presence of child under six. Factors previously studied but that have not been found to predict subsequent employment are: (1) domestic violence, (2) partner control, and (3) child’s limiting condition. It remains to be seen, both for these and other characteristics primarily studied for their effects in aided adult families, how the impact of these barriers might differ for child-only cases. Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties 60 In the light of other research results, our findings suggest the following: The vast majority of mothers in both safety net and sanctioned child-only cases face multiple barriers to employment. Eleven percent of parents associated with sanctioned and timed-out child-only cases had no barriers or only one barrier to employment; the remaining 89 percent had more than one barrier. While having zero or one barrier is associated with a 69 percent chance of current employment, having two or more barriers is associated with a 24 percent chance of current employment. Parents with two or more barriers have only a 39 percent chance of having worked any hours in the past year. Barriers that have the greatest negative association with past-week employment are, in order of importance: (1) lack of recent (last three years) full-time work experience, (2) alcohol or other drug problems, (3) mental health problems, (4) partner control, (5) child care problems, and (6) domestic violence. Barriers with the greatest negative association with work in the previous 12 months are, in order of importance: (1) lack of recent (last three years) full-time work experience, (2) child care problems, (3) alcohol or other drug problems, (4) mental health problems and residential instability (tie), and (6) education less than GED or high school diploma and physical health problems (tie). Despite a large investment in welfare-to-work programs, many of the mothers in the study expressed needs whether for additional child care, help with utility bills, or assistance finding housing that were not met. Additional findings that highlight program and policy issues include the following: Mothers associated with sanctioned and timed-out CalWORKs cases are not young, and their limited educational background and work experience in the last three years suggest that substantial investment in human capital will be required before they successfully enter and remain in the workforce. They have other challenging barriers as well. As one study advisor put it, these women live in a soup of problems . . . their will-power will not resolve most of the problems. The majority of mothers surveyed have relatively young children. Hence, the typical family will not quickly leave CalWORKs because the children have aged-out. There is thus substantial need for assistance for these families but also great opportunity for longer-term programmatic intervention. Many study participants reside in problematic neighborhoods. Substantial parental attention is required to sustain children in those environments. Therefore, parental decisions not to engage in work but instead to remain available to children may constitute positive personal and social decisions. County social services administrators, asked to comment during an early review of study findings, suggested that for parents both to work full-time and to carry our parental responsibilities may require work with flexible hours, the ability to keep in phone contact with children, and other accommodations. However, these are jobs that people with low educational attainment and little work experience are unlikely to acquire. Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties 61 Barriers span a range of conditions, some short-term in nature and others that are unlikely to change very quickly. Recent (last three years) full-time work experience is central to both current and last-year employment. Current employment appears to be especially sensitive to health-related and interpersonal barriers as well as child care problems and residential instability. Barriers associated with lack of employment in the longer-term (12 months) cover a broader terrain, including educational attainment and physical health problems. Given what is known from previous studies on aided adult cases, it is likely that the focus for policy and practice should be on the past year barriers to work, supplemented by a focus on overcoming transportation barriers. To promote self-sufficiency among mothers associated with child-only cases, a combined effort will likely be required, involving: The identification of resources and services that families need to surmount these barriers and the funding and placement of these services within the county The identification of new or alternate funding sources to support services that cannot be paid for with CalWORKs funding Increased use of exemptions and expanded reasons for exemption from welfare-to-work activities, when appropriate, for parents with barriers to employment Introduction of advocacy and case management services to support sanctioned and timed- out parents in their efforts to secure financial and personal support From a longer-term, national perspective, it is possible that a partial disability program may be required for some parents.26 Currently, many individuals with apparently sustained and significant barriers to work do not qualify as disabled under SSI regulations but nonetheless are ill-equipped to work either full-time or consistently enough to support themselves and their children.27 Those who fall short of qualifying for the SSI benefit often qualify for CalWORKs and county General Assistance programs instead, which are not flexible enough or adequately resourced to serve this population well. In addition to supports for parents, the children in some child-only families may also require specialized assistance. Currently, the CalWORKs program lacks direction or capacity to address those needs. Some needs may be met outside CalWORKs by existing family services, county health and mental health programs, and other agencies or be met informally in the context of family life, child care, preschool, or public school. Relying on school, preschool, and child care, however, seems unrealistic. Too often school districts, agencies, or family child care programs are underfunded, teachers are overwhelmed, and too few special resource staff are available. We really do not yet know how the children are faring in child-only families, and it remains for future research to examine children’s well-being, to learn where they currently acquire support, and to ascertain what additional assistance they may require to thrive. The point is, one county colleague stated, that we need to put these families in a different relationship with poverty. How to accomplish that is not clear. The above recommendations would be a challenge to pursue in any environment but especially in California today, when 26 See, in this regard, Blank (2007) and her proposal for a Temporary and Partial Work Waiver Program. 27 In fact, many recipients of SSI have some association with AFDC or TANF (Nadel, Wamhoff, and Wiseman, 2003\/2004, p.26). See also Pavetti and Kauff (2006). Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties 62 every consideration for appropriate financial support must be weighed against the challenges of a major budget deficit. To reach combined objectives of policy change and program innovation, the State and counties will need to work both within and outside their jurisdictions as they determine institutional ownership for the array of problems catalogued. One starting point would involve a focused look at the gap between needed and missing services that are reviewed in the report. More than ten percent of mothers reported that help was needed with utility costs, extra child care, help finding housing, and free or inexpensive work clothing. Five to ten percent said they needed assistance with physical health problems, mental health problems, support groups, and attorney services. While these needs may be, or may constitute elements of, barriers to employment, it remains unclear which community or county agencies hold responsibility for addressing them, or for coordinating their resolution. In California, the absence of a full-family sanction, like the support provided by safety net benefits for timed-out families, is understood as critical to sustain the children in CalWORKs families. About 80 percent of the households that we studied are able tenuously to make ends meet, either because they have access to a housing subsidy or live in another person’s residence and have cash aid and Food Stamps. In a number of cases study participants both had a housing subsidy and shared space with housemates. We did not examine housing conditions other than cost and overcrowding. Given the negative effects of crowding, we do not know the extent to which shared housing proves to be a benefit or a liability to those families and, especially, the children in them. But we can imagine the difficult, additional compromises that these high-need families would have to make if their CalWORKs grant were to diminish further or become unavailable. Loss of the CalWORKs grant could affect the ability of relatively large numbers of individuals the majority of them children to remain housed or provide for other needs. Depending on the precise type of housing subsidy involved, in case of loss of CalWORKs aid or other income, the subsidy might increase to at least partially offset the loss of income. But where that does not happen, loss of benefits may have devastating effects on housing security. Many study participants already pay more than 30 percent of their income towards housing costs. Without additional assistance from housing subsidies, if their income were to drop and the family continue to live in the same situation, the percent of income devoted to housing costs would climb further.28 Future Research. While the study provides important knowledge about the number and impact of challenges that mothers in child-only CalWORKs families face in obtaining and keeping employment, the effect of the reduced grant on children’s well-being remains unknown. The researchers and sponsors of the CalWORKs Child-only Study, the study’s Advisory Committee, and several entities providing financial support to the study have identified a need for the next study to focus specifically on child well-being. As well as expanding the survey to include other types of child-only cases not yet studied (immigrant parents, non-parental caregivers, SSI parents) the next study phase should highlight information on the status of children in all child- only cases including safety net and sanction child-only cases and particularly address the question of with which sorts of cases community or county agencies ought to be actively involved to promote child well-being and prevent disruption of the family and involvement of 28 A broader perspective must also be considered. Where increased housing assistance shores up a decline in a CalWORKs grants, that assistance become unavailable for others potentially in need of it. The net effect community-wide would be an increase in homelessness or in marginal or dangerous housing situations. Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties 63 the child welfare system. We anticipate the use of a variety of methods key informant interviews, focus groups, and parent\/caregiver surveys to accomplish this objective. This information, among other things, will prove useful in guiding county prevention planning and early intervention programs. Our goal, as we acquire more knowledge about parents, caregivers, and children involved in child-only cases, is to continue working with a range of stakeholders other researchers, policy- makers, program administrators, advocates, and representatives of philanthropy to identify where and when CalWORKs services and other resources are available that would support families on an ongoing or emergency basis. 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Discussion Paper no. 1282-04, Institute for Research on Poverty. Zabkiewicz, D. & Schmidt, L. (2007). Behavioral health problems as barriers to work: Results from a 6-year panel study of welfare recipients. Journal of Behavioral Health Services & Research. Vol. 34: 2. Zedlewski, S. (2002). Work and Barriers to Work among Welfare Recipients in 2002. Urban Institute. Washington, DC. Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties 69 APPENDIX Barriers to Work: CalWORKs Parents Timed-out or Sanctioned in Five Counties 70 B ar rie rs to W or k: C al W O R K s Pa re nt s T im ed -o ut o r S an ct io ne d in F iv e C ou nt ie s 71 Ta bl e A -3 . Su rv ey R es po nd en t C ha ra ct er ist ic s a nd P ot en tia l B ar ri er s, by C ou nt y V ar ia bl e Sa nc tio n Sa fe ty N et N am e D es cr ip tio n A la m ed a (n =2 1) Sa n M at eo (n =2 5) A la m ed a (n =2 1) Sa n Fr an . (n =2 5) Sa nt a C la ra (n =2 6) St an isl au s (n =2 5) 1. D em og ra ph ic a nd H ou se ho ld C ha ra ct er ist ic s A 2 A ge (9 5% C I) 35 .9 (3 1. 8- 39 .9 ) 32 .1 (2 8. 5- 35 .7 ) 35 .0 (3 2. 4- 37 .6 ) 35 .1 (3 2. 2- 38 .0 ) 38 .7 (3 5. 5- 41 .8 ) 37 .0 (3 4. 4- 39 .5 ) Y 1 R ac e\/ et hn ic ity A fr ic an A m er ic an 71 .4 % 32 .0 % 57 .1 % 72 .0 % 7. 7% 4. 0% A si an 19 .1 % 0 14 .3 % 4. 0% 42 .3 % 0 H is pa ni c 4. 8% 40 .0 % 4. 8% 8. 0% 34 .6 % 48 .0 % W hi te 0 20 .0 % 9. 5% 0 11 .5 % 24 .0 % O th er 4. 8% 8. 0% 14 .3 % 16 .0 % 3. 9% 24 .0 % in ca % o f l ife tim e in C A 85 .7 % 89 .6 % 89 .7 % 84 .0 % 64 .8 % 71 .8 % ng ed Lo w er th an G ED 47 .6 % (2 6% -7 0% ) 40 .0 % (2 1% -6 1% ) 33 .3 % (1 5% -5 7% ) 56 .0 % (3 5% -7 6% ) 34 .6 % (1 7% -5 6% ) 32 .0 % (1 5% -5 4% ) *C H IS 2 00 5 Lo we r t ha n H ig h sc ho ol (in co m e < 20 0% o f FP L) 31 .9 % 45 .1 % 31 .9 % 31 .3 % 45 .0 % 42 .3 % *C H IS 2 00 5 Lo we r t ha n hi gh sc ho ol (fe m al e po p. 1 8- 58 y ea rs ) 11 .2 % 9. 9% 11 .2 % 8. 7% 12 .7 % 21 .4 % M ar i M ar ita l s ta tu s N ev er m ar rie d 57 .1 % 76 .0 % 57 .1 % 68 .0 % 46 .2 % 52 .0 % M ar rie d, w ith 19 .1 % 0 14 .3 % 4. 0% 30 .8 % 8. 0% M ar rie d, a pa rt 4. 8% 8. 0% 9. 5% 12 .0 % 3. 9% 16 .0 % Se pa ra te d 9. 5% 0 4. 8% 4. 0% 0 8. 0% D iv or ce d\/ w id ow ed 9. 5% 16 .0 % 14 .3 % 12 .0 % 19 .2 % 16 .0 % co ha b Li vi ng w ith sp ou se \/p ar tn er 23 .8 % 12 .0 % 28 .6 % 12 .0 % 30 .8 % 28 .0 % C 1 Sh ar e in co m e w ith p ar tn er 19 .0 % 12 .0 % 14 .3 % 12 .0 % 30 .8 % 24 .0 % B ar rie rs to W or k: C al W O R K s Pa re nt s T im ed -o ut o r S an ct io ne d in F iv e C ou nt ie s 72 V ar ia bl e Sa nc tio n Sa fe ty N et N am e D es cr ip tio n A la m ed a (n =2 1) Sa n M at eo (n =2 5) A la m ed a (n =2 1) Sa n Fr an . (n =2 5) Sa nt a C la ra (n =2 6) St an isl au s (n =2 5) *C H IS 2 00 5 M ar ita l s ta t; in c< 20 0% F PL Si ng le (n ev er m ar rie d) 32 .3 % 30 .9 % 32 .3 % 45 .2 % 17 .8 % 21 .0 % M ar rie d 44 .3 % 46 .5 % 44 .3 % 37 .2 % 45 .3 % 61 .1 % Li ve s w ith p ar tn er 3. 4% 13 .6 % 3. 4% 6. 0% 24 .2 % 8. 4% Se pa ra te d\/ di vo rc ed \/w id ow ed 20 .1 % 8. 9% 20 .1 % 11 .6 % 12 .7 % 9. 5% *C H IS 2 00 5 M ar ita l s ta tu s, ge n po p Si ng le (n ev er m ar rie d) 22 .8 % 18 .5 % 22 .8 % 30 .0 % 17 .4 % 18 .1 % M ar rie d 57 .9 % 62 .9 % 57 .9 % 49 .7 % 62 .1 % 62 .9 % Li ve s w ith p ar tn er 7. 2% 7. 4% 7. 2% 9. 3% 10 .1 % 7. 2% Se pa ra te d\/ di vo rc ed \/w id ow ed 12 .1 % 11 .2 % 12 .1 % 11 .0 % 10 .4 % 11 .8 % B 10 H ou se ho ld si ze 3. 9 (3 .3 -4 .4 ) 4. 7 (3 .9 -5 .5 ) 4. 0 (3 .3 -4 .8 ) 4. 0 (3 .2 -4 .8 ) 5. 0 (4 .4 -5 .6 ) 4. 9 (4 .1 -5 .7 ) B 11 N um be r o f o th er a du lts 0. 7 (0 .2 -1 .1 ) 1. 4 (0 .8 -2 .0 ) 0. 6 (0 .3 -1 .0 ) 0. 5 (0 .2 -0 .8 ) 1. 2 (0 .7 -1 .7 ) 1. 2 (0 .7 -1 .8 ) B 13 N um be r o f c hi ld re n 2. 2 (1 .9 -2 .5 ) 2. 3 (1 .9 -2 .7 ) 2. 4 (1 .8 -3 .0 ) 2. 5 (1 .8 -3 .3 ) 2. 8 (2 .2 -3 .3 ) 2. 7 (2 .2 -3 .2 ) D 1a A ge y ou ng es t c hi ld 8. 6 (6 .4 -1 0. 8) 5. 7 (3 .9 -7 .6 ) 7. 5 (5 .0 -9 .9 ) 7. 3 (5 .2 -9 .4 ) 6. 8 (5 .1 -8 .6 ) 7. 1 (5 .0 -9 .3 ) B 1 U rb an \/R ur al La rg e ci ty 71 .4 % 32 .0 % 57 .1 % 92 .0 % 88 .5 % 36 .0 % Sm al l c ity 23 .8 % 68 .0 % 42 .9 % 4. 0% 11 .5 % 60 .0 % R ur al a re a 4. 8% 0 0 4. 0% 0 4. 0% B 3 R es id en ce R en t o r O w n 85 .7 % 56 .0 % 95 .2 % 96 .0 % 69 .2 % 76 .0 % O th er 's h ou se \/a pt . 14 .3 % 44 .0 % 4. 8% 0 23 .1 % 24 .0 % Sh el te r, ot he r 0 0 0 4. 0% 7. 8% 0 *C H IS 2 00 5 Re sid en ce , g en p op Re nt 38 .6 % 39 .9 % 38 .6 % 63 .1 % 39 .3 % 31 .7 % O wn 59 .2 % 55 .5 % 59 .2 % 34 .4 % 55 .3 % 64 .8 % O th er a rr an ge m en t 2. 3% 4. 6% 2. 3% 2. 4% 5. 4% 3. 5% B ar rie rs to W or k: C al W O R K s Pa re nt s T im ed -o ut o r S an ct io ne d in F iv e C ou nt ie s 73 V ar ia bl e Sa nc tio n Sa fe ty N et N am e D es cr ip tio n A la m ed a (n =2 1) Sa n M at eo (n =2 5) A la m ed a (n =2 1) Sa n Fr an . (n =2 5) Sa nt a C la ra (n =2 6) St an isl au s (n =2 5) 2. Em pl oy m en t S ta tu s a nd W or k Ex pe ri en ce em pl oy ed Em pl oy ed n ow (F 1 or F 9) 33 .3 % 16 .0 % 33 .3 % 28 .0 % 38 .5 % 28 .0 % F1 W or ke d la st w ee k 19 .1 % 12 .0 % 28 .6 % 20 .0 % 30 .8 % 20 .0 % F9 H as jo b, n ot a t w or k la st w k 14 .3 % 4. 0% 4. 8% 8. 0% 7. 7% 8. 0% F5 U su al h ou rs o f w or k \/ w ee k 31 .5 n= 4 4. 0 n= 2 28 .7 n= 6 23 .2 n= 5 28 .2 n= 8 24 .6 n= 5 F1 3 W ee ks w or ke d la st y ea r 34 .6 n =1 0 15 .6 n= 9 33 .5 n= 10 20 .4 n= 11 31 .9 n =8 21 .2 n= 9 F1 4 Lo ok ed fo r jo b la st 3 0 da ys 33 .3 % 60 .0 % 57 .1 % 56 .0 % 34 .6 % 44 .0 % F1 6 C ou ld h av e ta ke n jo b of fe r 52 .4 % 72 .0 % 61 .9 % 84 .0 % 30 .8 % 56 .0 % F1 4 ta b F1 6 Lo ok ed fo r A N D c ou ld ha ve ta ke n jo b of fe r 33 .3 % 48 .0 % 52 .4 % 52 .0 % 23 .1 % 40 .0 % *C H IS 2 00 5 W or k sta tu s, ge n po p W or ke d la st we ek 58 .4 % 62 .9 % 58 .4 % 69 .3 % 59 .0 % 59 .3 % H as a jo b no t w or ke d la st wk 3. 9% 2. 6% 3. 9% 3. 3% 4. 9% 4. 5% Lo ok in g fo r j ob 4. 2% 3. 2% 4. 2% 7. 6% 3. 1% 4. 1% No t w or ki ng \/ n ot lo ok in g 33 .5 % 31 .4 % 33 .5 % 19 .9 % 33 .0 % 32 .1 % F1 8 W or ke d fo r 30 +h ou rs a w ee k fo r at le as t 2 w ee ks in a ro w la st y ea r 23 .8 % 20 .0 % 19 .0 % 20 .0 % 3. 9% 0 Ta b F5 F 18 A ve ra ge h rs w or k pe r w k no w fo r th os e w ho w or ke d 30 + ho ur s a w k fo r 2 w ks in a r ow la st y r 20 (n =1 ) 8 (n =1 ) 20 (n =1 ) 0 0 0 tri ag o La st w or ke d 30 + ho ur s m or e th an 3 y ea rs a go 42 .9 % 60 .0 % 38 .1 % 32 .0 % 57 .7 % 60 .0 % F2 1 Tr ai ni ng o r sc ho ol la st y r 23 .8 % 28 .0 % 14 .3 % 44 .0 % 26 .9 % 12 .0 % ne ith er N ei th er w or ke d no r in sc ho ol \/tr ai ni ng la st y ea r 42 .9 % 48 .0 % 38 .1 % 40 .0 % 46 .2 % 60 .0 % B ar rie rs to W or k: C al W O R K s Pa re nt s T im ed -o ut o r S an ct io ne d in F iv e C ou nt ie s 74 V ar ia bl e Sa nc tio n Sa fe ty N et N am e D es cr ip tio n A la m ed a (n =2 1) Sa n M at eo (n =2 5) A la m ed a (n =2 1) Sa n Fr an . (n =2 5) Sa nt a C la ra (n =2 6) St an isl au s (n =2 5) 3. H ou se ho ld In co m e an d Po ve rt y St at us ca sh i C as h la st m on th $1 37 5 $8 60 $1 27 8 $7 03 $1 91 0 $1 23 7 J1 _3 c C al W O R K s f or c hi ld re n $5 09 (n =2 1) $4 88 (N =2 5) $5 45 (n =2 1) $5 05 (n =2 1) $6 65 (n =2 3) $4 61 (n =2 2) J1 _2 j C as h by p ar tn er $4 15 (n =8 ) $1 13 (n =1 1) $5 19 (n =8 ) $3 0 (n =9 ) $9 18 (n =1 1) $4 35 (n =1 2) no nc as hi i N on -c as h la st m on th $2 55 $2 35 $3 60 $3 68 $3 67 $3 10 K 2a Fo od S ta m ps u su al m on th $2 58 (n =2 0) $2 59 (n =2 1) $3 73 (n =2 0) $3 87 (n =2 3) $3 65 (n =2 5) $3 44 (n =2 1) no ns ta m p N on c as h ot he r th an F oo d St am ps $1 0 (n =2 0) $1 5 (n =2 1) $6 (n =2 0) $1 3 (n =2 3) $1 6 (n =2 5) $1 5 (n =2 1) sh ar ec al C al W O R K s s ha re o f m on th ly h ou se ho ld in co m e 34 .8 % 55 .3 % 40 .3 % 50 .6 % 32 .8 % 36 .7 % pm in co m e Pe r ca pi ta m on th ly in co m e m ea n $4 58 ($ 35 0 - $ 56 5) m ed : $ 47 5 m ea n $2 78 ($ 18 3 - $ 37 2) m ed : $ 26 0 m ea n $4 21 ($ 30 8 - $ 53 3) m ed : $ 32 4 m ea n $3 10 ($ 23 4 - $ 38 6) m ed : $ 25 9 m ea n $5 26 ($ 38 5 - $ 66 8) m ed : $ 46 7 m ea n $3 35 ($ 26 1 - $ 40 9) m ed : $ 32 1 m ra tio M on th ly in co m e as % o f co un ty p ov er ty li ne iii 49 .2 % 32 .2 % 47 .3 % 31 .4 % 67 .8 % 58 .2 % J1 9 St ill g ot fo od st am ps w he n ca sh w el fa re st op pe d 85 .7 % 72 .0 % 85 .7 % 92 .0 % 84 .6 % 84 .0 % B ar rie rs to W or k: C al W O R K s Pa re nt s T im ed -o ut o r S an ct io ne d in F iv e C ou nt ie s 75 V ar ia bl e Sa nc tio n Sa fe ty N et N am e D es cr ip tio n A la m ed a (n =2 1) Sa n M at eo (n =2 5) A la m ed a (n =2 1) Sa n Fr an . (n =2 5) Sa nt a C la ra (n =2 6) St an isl au s (n =2 5) 4. M at er ia l H ar ds hi ps pp rp pb C ro w di ng : p pr o r pp b 19 .1 % 36 .0 % 23 .8 % 24 .0 % 34 .6 % 36 .0 % pp r H ou si ng o ve rc ro w de d (p er so ns p er ro om > 1) 14 .3 % 24 .0 % 19 .1 % 24 .0 % 30 .8 % 36 .0 % *[ H U D ] 2 00 7 M or e th an 1 p er so n pe r r oo m : n at io na l r at e 2. 4% (a ll po pu la tio n) pp b H ou si ng o ve rc ro w de d (p er so ns p er b ed ro om > 2) 9. 5% 28 .0 % 9. 5% 12 .0 % 23 .1 % 24 .0 % tra ns p2 Tr an sp or ta tio n as b ar ri er (a ny o f H 1, H 2, H 6, H 7) 52 .4 % 80 .0 % 52 .4 % 84 .0 % 38 .5 % 60 .0 % H 1 H as n o dr iv er ‘s li ce ns e 42 .9 % 60 .0 % 28 .6 % 72 .0 % 26 .9 % 52 .0 % H 2 H as n o ac ce ss to a c ar 42 .9 % 64 .0 % 23 .8 % 88 .0 % 15 .4 % 60 .0 % H 6 La st y ea r q ui t j ob d ue to tra ns po rta tio n pr ob le m s 14 .3 % 16 .0 % 9. 5% 8. 0% 3. 9% 8. 0% H 7 La st y r n ot st ar te d jo b du e to tra ns po rta tio n pr ob le m 28 .6 % 32 .0 % 33 .3 % 24 .0 % 15 .4 % 20 .0 % I9 La st y ea r no t g ot h ea lth ca re , r es po nd en t o r ch ild 9. 5% 28 .0 % 14 .3 % 16 .0 % 15 .4 % 4. 0% I1 0 La st y ea r no t g ot m ed ic in e, r es po nd en t o r ch ild 23 .8 % 12 .0 % 9. 5% 32 .0 % 11 .5 % 8. 0% L1 o r L 5 In sh el te r or h om el es s 14 .3 % 12 .0 % 9. 5% 8. 0% 12 .0 % 4. 0% L1 In sh el te r l as t y ea r 9. 5% 4. 0% 0 8. 0% 3. 9% 4. 0% L5 H om el es s o n st re et s l as t y r 9. 5% 8. 0% 9. 5% 0 7. 7% 4. 0% *N at io na l La w Ce nt er 20 04 H om el es sn es s: n at io na l r at e: 1 % (a ll po pu la tio n) B ar rie rs to W or k: C al W O R K s Pa re nt s T im ed -o ut o r S an ct io ne d in F iv e C ou nt ie s 76 V ar ia bl e Sa nc tio n Sa fe ty N et N am e D es cr ip tio n A la m ed a (n =2 1) Sa n M at eo (n =2 5) A la m ed a (n =2 1) Sa n Fr an . (n =2 5) Sa nt a C la ra (n =2 6) St an isl au s (n =2 5) L1 6 M ov ed o ut o f h om e 2+ tim es la st y r 9. 5% 8. 0% 4. 8% 0 3. 9% 4. 0% in st ab Li vi ng in st ab ili ty la st y r 28 .6 % 52 .0 % 19 .1 % 8. 0% 42 .3 % 40 .0 % L1 0a N ot e no ug h fo r re nt la st y r 33 .3 % 36 .0 % 28 .6 % 28 .0 % 19 .2 % 20 .0 % L1 0c N ot e no ug h fo r fo od la st y r 38 .1 % 44 .0 % 33 .3 % 32 .0 % 19 .2 % 24 .0 % *C H IS 2 00 5 No t e no ug h fo r f oo d (in co m e < 20 0% F PL ) 40 .0 % 27 .7 % 40 .0 % 28 .5 % 34 .7 % 41 .6 % L1 0b N ot e no ug h fo r ut il la st y r 52 .4 % 52 .0 % 52 .4 % 60 .0 % 30 .8 % 40 .0 % L1 3 N ot e ng h fo r ba sic s l as t y r 47 .6 % 32 .0 % 47 .6 % 36 .0 % 69 .2 % 72 .0 % L2 0 H ou se ho ld lo st c ar la st y r 28 .6 % 12 .0 % 4. 8% 4. 0% 15 .4 % 12 .0 % tin se c L2 1 or L 22 Em er ge nc y fo od u se 47 .6 % 48 .0 % 28 .6 % 48 .0 % 50 .0 % 36 .0 % L2 1 G ot b ag s o f f oo d la st y ea r 47 .6 % 48 .0 % 23 .8 % 48 .0 % 50 .0 % 36 .0 % * Am er ic a' s Se co nd H ar ve st (2 00 6) G ot b ag s o f f oo d fro m c hu rc h or fo od b an ks : n at io na l r at e: 7 .9 % L2 2 U se d so up k itc he n la st y ea r 9. 5% 20 .0 % 4. 8% 8. 0% 3. 9% 12 .0 % * Am er ic a' s Se co nd H ar ve st (2 00 6) U se d so up k itc he n: n at io na l r at e: 0 .7 % L2 3 A du lt fo od in se cu ri ty la st ye ar 38 .1 % 36 .0 % 28 .6 % 24 .0 % 19 .2 % 8. 0% L2 4 A du lt hu ng er la st y ea r 23 .8 % 24 .0 % 14 .3 % 20 .0 % 7. 7% 8. 0% L2 5 C hi ld fo od in se cu ri ty la st ye ar 9. 5% 16 .0 % 14 .3 % 8. 0% 3. 9% 8. 0% L2 6 C hi ld h un ge r la st y ea r 9. 5% 0 9. 5% 8. 0% 3. 9% 8. 0% B ar rie rs to W or k: C al W O R K s Pa re nt s T im ed -o ut o r S an ct io ne d in F iv e C ou nt ie s 77 V ar ia bl e Sa nc tio n Sa fe ty N et N am e D es cr ip tio n A la m ed a (n =2 1) Sa n M at eo (n =2 5) A la m ed a (n =2 1) Sa n Fr an . (n =2 5) Sa nt a C la ra (n =2 6) St an isl au s (n =2 5) 5. C hi ld c ar e M 1 H rs o f c . c ar e fo r yo un ge st ch ild 0 -5 y ea rs o ld 2. 9 11 .7 13 .3 8. 9 6. 1 2. 2 M 10 H rs o f c . c ar e fo r yo un ge st ch ild 6 -1 1 ye ar s o ld 1. 6 3. 7 8. 8 6. 8 3. 5 5. 8 M 20 H rs o f c . c ar e fo r yo un ge st ch ild 1 2- 17 y ea rs o ld 2. 6 1. 9 2. 9 7. 9 3. 2 0 M 21 H rs se lf ca re b y yo un ge st ch ild 1 2- 17 y ea rs o ld 7. 1 14 .9 7. 6 9. 8 4. 1 9. 5 M 6g N o ch ild c ar e as sis ta nc e (f or c hi ld re n 0- 5 ye ar s) 33 .3 % 32 .0 % 28 .6 % 32 .0 % 42 .3 % 32 .0 % M 8 D iff ic ul t f in di ng c hi ld c ar e (0 -5 y ea rs o ld ) 9. 5% 20 .0 % 19 .0 % 16 .0 % 7. 7% 12 .0 % M 18 D iff ic ul t f in di ng c hi ld c ar e (6 -1 1 ye ar s o ld ) 19 .0 % 20 .0 % 9. 5% 12 .0 % 3. 9% 12 .0 % M 28 D iff ic ul t f in di ng c hi ld c ar e (1 2- 17 y ea rs o ld ) 19 .0 % 8. 0% 9. 5% 0 0 0 un de rs ix H as c hi ld u nd er si x 33 .3 % 52 .0 % 42 .9 % 40 .0 % 46 .2 % 36 .0 % ch ild c (N 1) Fi nd in g ch ild c ar e a pr ob le m la st y ea r 23 .8 % 36 .0 % 23 .8 % 24 .0 % 15 .4 % 16 .0 % R ea so n fo r ch ild c ar e pr ob le m (t ho se w ho h ad ch ild c ar e pr ob le m ) N 2a A ff or da bi lit y 60 .0 % 88 .9 % 10 0% 50 .0 % 75 .0 % 75 .0 % N 2b Lo ca tio n 20 .0 % 33 .3 % 20 .0 % 33 .3 % 25 .0 % 50 .0 % N 2c H ou rs 20 .0 % 11 .1 % 20 .0 % 33 .3 % 25 .0 % 50 .0 % N 2d C hi ld 's M ed ic al N ee ds 0 11 .1 % 20 .0 % 0 0 0 N 2e Tr us t 20 .0 % 22 .2 % 40 .0 % 33 .3 % 25 .0 % 0 N 2f O th er re as on 20 .0 % 11 .1 % 20 .0 % 16 .7 % 0 75 .0 % B ar rie rs to W or k: C al W O R K s Pa re nt s T im ed -o ut o r S an ct io ne d in F iv e C ou nt ie s 78 V ar ia bl e Sa nc tio n Sa fe ty N et N am e D es cr ip tio n A la m ed a (n =2 1) Sa n M at eo (n =2 5) A la m ed a (n =2 1) Sa n Fr an . (n =2 5) Sa nt a C la ra (n =2 6) St an isl au s (n =2 5) *C H IS 2 00 5 Re as on n ot fi nd in g ch ild ca re (i nc om e < 2 00 % F PL ) Af fo rd ab ili ty 33 .0 % - 33 .0 % - 27 .8 % 8. 6% No p ro vi de r h ad sp ac e - - - - 45 .3 % - H ou rs a nd lo ca tio n - - 70 .3 % - 80 .7 % Co ul dn 't af fo rd q ua lit y ca re 50 .2 % - 50 .2 % - - - Co ul dn 't fin d qu al ity - - 16 .8 % - 10 .8 % - O th er re as on 16 .8 % - 16 .8 % - 16 .2 % 10 .8 % *C H IS 2 00 5 Re as on n ot fi nd in g ch ild ca re (g en p op ) Af fo rd ab ili ty 2 2. 2% - 2 2. 2% 24 .1 % 11 .6 % 6. 3% No p ro vi de r h ad sp ac e - - - 21 .2 % 23 .1 % 19 .5 % H ou rs a nd lo ca tio n 6. 4% - 6. 4% 11 .2 % 0 58 .8 % Co ul dn 't af fo rd q ua lit y ca re 21 .9 % - 21 .9 % 9. 2% 0 7. 6% Co ul dn 't fin d qu al ity 8. 2% - 8. 2% 20 .4 % 44 .3 % 7. 9% O th er re as on 38 .9 % 76 .2 % 38 .9 % 13 .9 % 21 .0 % 0 C hi ld c ar e ca us in g: N 3a R es po nd en t's b ei ng la te fo r w or k\/ sc ho ol \/tr ai ni ng 19 .1 % 16 .0 % 9. 5% 12 .0 % 7. 7% 8. 0% N 3b R es po nd en t's a bs en ce fr om w or k\/ sc ho ol \/tr ai ni ng 14 .3 % 28 .0 % 14 .3 % 12 .0 % 7. 7% 0 ta b ab ov e Ei th er b ei ng la te o r a bs en t 19 .1 % 32 .0 % 14 .3 % 12 .0 % 11 .5 % 8. 0% N 4 W or rie d ab ou t c hi ld sa fe ty , sk ip pe d w or k, sc ho ol , tra in in g la st y ea r 19 .0 % 24 .0 % 9. 5% 12 .0 % 19 .2 % 8. 0% B ar rie rs to W or k: C al W O R K s Pa re nt s T im ed -o ut o r S an ct io ne d in F iv e C ou nt ie s 79 V ar ia bl e Sa nc tio n Sa fe ty N et N am e D es cr ip tio n A la m ed a (n =2 1) Sa n M at eo (n =2 5) A la m ed a (n =2 1) Sa n Fr an . (n =2 5) Sa nt a C la ra (n =2 6) St an isl au s (n =2 5) 6. R es po nd en t P hy sic al H ea lth Fa irp oo r Fa ir o r po or h ea lth 38 .1 % 28 .0 % 28 .6 % 28 .0 % 30 .8 % 52 .0 % *C H IS 2 00 5 Fa ir or p oo r h ea lth ( i nc om e< 20 0% F PL ) 30 .3 % 14 .6 % 30 .3 % 35 .7 % 25 .4 % 38 .7 % *C H IS 2 00 5 Fa ir or p oo r h ea lth , g en p op 20 .8 % 10 .1 % 20 .8 % 17 .3 % 12 .2 % 20 .0 % O 1b Ev er h ad a st hm a 19 .1 % 24 .0 % 23 .8 % 16 .0 % 26 .9 % 48 .0 % *C H IS 2 00 5 D ia gn os ed a sth m a, g en p op 12 .6 % 17 .6 % 12 .6 % 10 .0 % 9. 6% 13 .9 % O 1c H ad h ig h bl oo d pr es su re 38 .1 % 20 .0 % 14 .3 % 32 .0 % 11 .5 % 16 .0 % *C H IS 2 00 5 H ig h bl oo d pr es s, ge n po p 15 .3 % 15 .4 % 15 .3 % 8. 7% 13 .0 % 15 .5 % O 1d Ev er h ad d ia be te s 9. 5% 12 .0 % 0 0 3. 9% 8. 0% *C H IS 2 00 5 D ia gn os ed d ia be te s, ge n po p 4. 0% 1. 4% 4. 0% 1. 8% 4. 9% 5. 2% O 3 (O 4) H os pi ta l s ta y la st y ea r 19 .0 % 24 .0 % 9. 5% 20 .0 % 19 .2 % 20 .0 % Li m hl th H ea lth li m its R 's w or k 19 .0 % 24 .0 % 19 .0 % 20 .0 % 23 .1 % 16 .0 % O 7 Li m ite d by p hy si ca l h ea lth 19 .0 % 12 .0 % 14 .3 % 12 .0 % 15 .4 % 16 .0 % O 8 Li m ite d by e m ot io na l h ea lth 4. 8% 20 .0 % 9. 5% 16 .0 % 11 .5 % 16 .0 % O 9 Li m ite d fo r 1 2 + m on th s 14 .3 % 8. 0% 14 .3 % 12 .0 % 19 .2 % 12 .0 % *C H IS 2 00 5 In ab ili ty to w or k du e to ph ys \/m en ta l h lth , g en p op 22 .9 % 20 .8 % 22 .9 % 26 .8 % 19 .3 % 30 .9 % bp hy s Ph ys ic al h ea lth b ar ri er 38 .1 % 28 .0 % 28 .6 % 32 .0 % 38 .5 % 52 .0 % B ar rie rs to W or k: C al W O R K s Pa re nt s T im ed -o ut o r S an ct io ne d in F iv e C ou nt ie s 80 V ar ia bl e Sa nc tio n Sa fe ty N et N am e D es cr ip tio n A la m ed a (n =2 1) Sa n M at eo (n =2 5) A la m ed a (n =2 1) Sa n Fr an . (n =2 5) Sa nt a C la ra (n =2 6) St an isl au s (n =2 5) 7. R es po nd en t C og ni tiv e an d M en ta l H ea lth C og ni tiv e sk ill s p ro bl em s R 1 M em or iz at io n 0 16 .0 % 9. 5% 12 .0 % 19 .2 % 16 .0 % R 2 C al cu la tio n 4. 8% 8. 0% 9. 5% 4. 0% 15 .4 % 24 .0 % R 3 Fi lin g fo rm s 28 .6 % 12 .0 % 14 .3 % 8. 0% 30 .8 % 12 .0 % R 4 Sp el lin g 14 .3 % 28 .0 % 28 .6 % 20 .0 % 23 .1 % 32 .0 % ld b Le ar ni ng D isa bi lit y ba rr ie r 9. 5% 28 .0 % 19 .1 % 20 .0 % 15 .4 % 24 .0 % R 5 N ee de d ex tra h el p or tra in in g in sc ho ol 0 28 .0 % 14 .3 % 16 .0 % 3. 9% 24 .0 % R 6 D ia gn os ed le ar ni ng di sa bi lit y 9. 5% 12 .0 % 9. 5% 8. 0% 15 .4 % 8. 0% *N IM H 2 00 7 N at io na l A D H D ra te : 3 -5 % o f c hi ld re n C og ni tiv e pr ob le m s o r LD af fe ct s r es po nd en t' s j ob R 7a N o im pa ct 23 .8 % 24 .0 % 28 .6 % 8. 0% 26 .9 % 12 .0 % R 7b H ar de r t o ge t\/k ee p jo b 19 .0 % 12 .0 % 19 .0 % 8. 0% 23 .1 % 24 .0 % R 7c H ar d to g et \/k ee p a go od jo b 14 .3 % 12 .0 % 23 .8 % 8. 0% 7. 7% 24 .0 % R 7d O th er im pa ct 4 .8 % 4. 0% 0 4. 0% 0 12 .0 % de pr es si on D ep re ss io n (D SM -I V ) 4. 8% 28 .0 % 0 20 .0 % 11 .5 % 36 .0 % S1 7 In te rf er ed w ith li fe \/ w or k 9. 5% 28 .0 % 0 8. 0% 15 .4 % 36 .0 % an xi et y G en er al iz ed a nx ie ty di so rd er (D SM -I V ) 3. 8% 16 .0 % 0 4. 0% 7. 7% 16 .0 % T2 5 In te rf er ed w ith sc ho ol , w or k or c hi ld c ar e or h om e 4. 8% 24 .0 % 9. 5% 12 .0 % 15 .4 % 28 .0 % U 1 H ad st re ss fu l e ve nt 4. 8% 24 .0 % 9. 5% 12 .0 % 19 .2 % 24 .0 % B ar rie rs to W or k: C al W O R K s Pa re nt s T im ed -o ut o r S an ct io ne d in F iv e C ou nt ie s 81 V ar ia bl e Sa nc tio n Sa fe ty N et N am e D es cr ip tio n A la m ed a (n =2 1) Sa n M at eo (n =2 5) A la m ed a (n =2 1) Sa n Fr an . (n =2 5) Sa nt a C la ra (n =2 6) St an isl au s (n =2 5) U 3 In te rf er ed w ith li fe o r w or k or c hi ld c ar e A lo t 0 20 .0 % 0 8. 0% 7. 7% 16 .0 % So m e 4. 8% 4. 0% 9. 5% 4. 0% 11 .5 % 4. 0% A li ttl e 0 0 0 0 0 4. 0% bm en ta l M en ta l h ea lth b ar ri er 9. 5% 36 .0 % 9. 5% 28 .0 % 26 .9 % 44 .0 % *C H IS 2 00 5 Ps yc ho lo gi ca l d ist re ss (in co m e < 20 0% F PL ) 6. 2% 8. 2% 6. 2% 11 .1 % 6. 7% 12 .5 % *C H IS 2 00 5 Ps yc ho lo gi ca l d ist re ss (g en p op ul at io n) 4. 9% 3. 6% 4. 9% 6. 0% 3. 5% 5. 9% 8. A lc oh ol a nd D ru g U se dr an k D ra nk in ty pi ca l w k la st y r 52 .4 % 44 .0 % 52 .4 % 56 .0 % 26 .9 % 52 .0 % V 2 La rg es t # dr in ks si ng le d ay N on e 47 .6 % 48 .0 % 42 .9 % 44 .0 % 69 .2 % 40 .0 % 1- 3 dr in ks 47 .6 % 28 .0 % 38 .1 % 44 .0 % 15 .4 % 44 .0 % 4- 10 d rin ks 4. 8% 24 .0 % 19 .1 % 8. 0% 7. 7% 12 .0 % 11 -2 0 dr in ks 0 0 0 4. 0% 3. 9% 4. 0% *C H IS 2 00 5 Bi ng e dr in ki ng la st m on th , ge n po p 12 .0 % 13 .0 % 12 .0 % 18 .1 % 9. 0% 14 .3 % al ci nt er A lc oh ol a bu se 0 4. 0% 4. 8% 0 3. 9% 4% al cd ep A lc oh ol d ep en de nc e 0 4. 0% 0 0 3. 9% 4% dr ug us e D ru g us e la st y ea r 23 .8 % 48 .0 % 14 .3 % 20 .0 % 15 .4 % 20 .0 % *D H H S (2 00 6) U se d an y dr ug la st ye ar , n at io na l r at e: 1 0. 7% dr ug ab us e D ru g ab us e 4. 8% 8. 0% 4. 8% 16 .0 % 7. 7% 8. 0% dr ug de p D ru g de pe nd en ce 4. 8% 12 .0 % 0 8. 0% 3. 9% 4. 0% bs ub s A lc oh ol o r dr ug p ro bl em 4. 8% 12 .0 % 4. 8% 16 .0 % 11 .5 % 12 .0 % B ar rie rs to W or k: C al W O R K s Pa re nt s T im ed -o ut o r S an ct io ne d in F iv e C ou nt ie s 82 V ar ia bl e Sa nc tio n Sa fe ty N et N am e D es cr ip tio n A la m ed a (n =2 1) Sa n M at eo (n =2 5) A la m ed a (n =2 1) Sa n Fr an . (n =2 5) Sa nt a C la ra (n =2 6) St an isl au s (n =2 5) 9. D om es tic V io le nc e W 2 Ex pe ri en ce d ph ys ic al vi ol en ce la st y ea r 19 .0 % 16 .0 % 9. 5% 8. 0% 7. 7% 12 .0 % W 6 Ex pe ri en ce d se xu al vi ol en ce la st y ea r 0 0 0 8. 0% 0 4. 0% bv io D om es tic v io le nc e 19 .1 % 16 .0 % 9. 5% 8. 0% 7. 7% 12 .0 % W 11 C al le d po lic e fo r th re at s by in tim at e pa rt ne r la st ye ar 28 .6 % 12 .0 % 4. 8% 20 .0 % 19 .2 % 12 .0 % 10 . P ar tn er C on tr ol co nt r ( F3 1) D isc ou ra ge d or n ot h el pe d or h ar as se d by p ar tn er re ga rd in g w or k 19 .1 % 8. 0% 0 8. 0% 0 8. 0% W 8 In tim at e pa rt ne r m ad e go in g to w or k, tr ai ni ng o r sc ho ol d iff ic ul t o r ha ra ss ed w hi le th er e la st y ea r 23 .8 % 0 0 12 .0 % 0 4. 0% W 10 In tim at e pa rt ne r ca us ed re sp on de nt to lo se jo b, dr op o ut o f s ch oo l\/t ra in in g la st y ea r 19 .1 % 0 0 12 .0 % 0 0 co nt ro liv Pa rt ne r co nt ro l 23 .8 % 8. 0% 0 12 .0 % 0 8. 0% *C H IS 2 00 5 Co nt ro l i n CA , g en p op : 5 .5 % B ar rie rs to W or k: C al W O R K s Pa re nt s T im ed -o ut o r S an ct io ne d in F iv e C ou nt ie s 83 V ar ia bl e Sa nc tio n Sa fe ty N et N am e D es cr ip tio n A la m ed a (n =2 1) Sa n M at eo (n =2 5) A la m ed a (n =2 1) Sa n Fr an . (n =2 5) Sa nt a C la ra (n =2 6) St an isl au s (n =2 5) 11 . C hi ld re n' s H ea lth U su al p la ce m ed ic al c ar e P1 a D oc to r\/n ur se 61 .9 % 68 .0 % 76 .2 % 68 .0 % 88 .5 % 72 .0 % P1 b H os pi ta l\/E R 38 .1 % 32 .0 % 23 .8 % 24 .0 % 3. 9% 20 .0 % P1 c C lin ic 9. 5% 0 4. 8% 8. 0% 7. 7% 8. 0% P1 d O th er p la ce 0 0 0 0 0 4. 0% ch ild hl th (P 2) C hi ld (r en ) w ith li m iti ng he al th c on di tio n 28 .6 % 28 .0 % 33 .3 % 12 .0 % 11 .5 % 24 .0 % P4 A ge o f c hi ld w ho n ee ds m os t c ar e 9. 7 (m ed . 8 .5 ) (n =6 ) 9. 0 (m ed . 1 1) (n =7 ) 11 .6 (m ed . 1 3) (n =7 ) 9. 0 (m ed . 8 ) (n =3 ) 9. 3 (m ed . 1 1. 5) (n =3 ) 10 .9 (m ed . 1 0) (n =6 ) C hi ld 's c on di tio ns (a m on g th os e w ho n ee d m os t h el p) P5 a A st hm a 19 .0 % 20 .0 % 33 .3 % 8. 0% 11 .5 % 8. 0% P5 b A lle rg ie s 4. 8% 12 .0 % 19 .0 % 0 3. 9% 4. 0% P5 c A tte nt io n de fic it 4. 8% 4. 0% 0 0 3. 9% 16 .0 % P5 d A ut is m 0 4. 0% 0 0 0 0 P5 e B eh av io ra l 14 .3 % 16 .0 % 0 4. 0% 7. 7% 12 .0 % P5 f D ev el op m en ta l d el ay 4. 8% 16 .0 % 0 4. 0% 0 4. 0% P5 g Lo ss o f s ig ht \/h ea rin g 0 0 4. 8% 0 3. 9% 0 P5 h C er eb ra l p al sy o r p ar al ys is 0 0 0 0 3. 9% 0 P5 i R es pi ra to ry 4. 8% 8. 0% 4. 8% 4. 0% 3. 9% 8. 0% P5 j O th er c hr on ic 14 .3 % 12 .0 % 9. 5% 4. 0% 3. 9% 8. 0% ch hl th N um be r of h ea lth c on dt ns 2. 3 3. 3 2. 1 2. 0 3. 7 2. 5 C hi ld 's h ea lth a ffe ct s re sp on de nt w or k P9 a C an 't w or k 9. 5% 0 9. 5% 0 0 0 P9 b H ou rs re du ce d 9. 5% 8. 0% 14 .3 % 4. 0% 3. 9% 12 .0 % Ei th er P 9a o r P 9b 14 .3 % 8. 0% 19 .0 % 4. 0% 3. 9% 12 .0 % P9 e O th er 9. 5% 8. 0% 0 0 0 0 B ar rie rs to W or k: C al W O R K s Pa re nt s T im ed -o ut o r S an ct io ne d in F iv e C ou nt ie s 84 V ar ia bl e Sa nc tio n Sa fe ty N et N am e D es cr ip tio n A la m ed a (n =2 1) Sa n M at eo (n =2 5) A la m ed a (n =2 1) Sa n Fr an . (n =2 5) Sa nt a C la ra (n =2 6) St an isl au s (n =2 5) 12 . N ee d fo r an d R ec ei pt o f S er vi ce s X 1a Ph ys ic al h ea lth 19 .0 % 8. 0% 9. 5% 16 .0 % 11 .5 % 24 .0 % X 3a G ot h el p 19 .0 % 8. 0% 0 4. 0% 7. 7% 16 .0 % X 1b M en ta l h ea lth 19 .1 % 16 .0 % 9. 5% 24 .0 % 11 .5 % 16 .0 % X 3b G ot h el p 14 .3 % 12 .0 % 4. 8% 12 .0 % 7. 7% 12 .0 % X 1c Su pp or t g ro up 14 .3 % 20 .0 % 0 16 .0 % 15 .4 % 28 .0 % X 3c G ot h el p 9. 5% 12 .0 % 0 8. 0% 7. 7% 16 .0 % X 1d C hi ld c ar e 33 .3 % 24 .0 % 4. 8% 20 .0 % 30 .8 % 24 .0 % X 3d G ot h el p 4. 8% 8. 0% 0 8. 0% 3. 9% 4. 0% X 1e A lc oh ol \/d ru g 0 16 .0 % 4. 8% 16 .0 % 3. 9% 12 .0 % X 3e G ot h el p 0 12 .0 % 4. 8% 12 .0 % 3. 9% 4. 0% X 1f D om es tic v io l. 9. 5% 4. 0% 9. 5% 4. 0% 11 .5 % 8. 0% X 3f G ot h el p 4. 8% 4. 0% 0 0 7. 7% 8. 0% X 1g U til ity b ill s 42 .9 % 36 .0 % 42 .9 % 36 .0 % 15 .4 % 36 .0 % X 3g G ot h el p 33 .3 % 16 .0 % 14 .3 % 20 .0 % 3. 9% 20 .0 % X 1h Fi nd h ou sin g 9. 5% 40 .0 % 14 .3 % 12 .0 % 19 .2 % 12 .0 % X 3h G ot h el p 0 12 .0 % 9. 5% 8. 0% 3. 9% 4. 0% X 1i A tt or ne y 19 .1 % 8. 0% 14 .3 % 16 .0 % 3. 9% 8. 0% X 3i G ot h el p 4. 8% 4. 0% 4. 8% 4. 0% 3. 9% 4. 0% X 1j W or k cl ot hi ng 23 .8 % 16 .0 % 9. 5% 24 .0 % 11 .5 % 8. 0% X 3j G ot h el p 9. 5% 8. 0% 0 4. 0% 0 4. 0% X 1k O th er 4. 8% 12 .0 % 14 .3 % 20 .0 % 7. 7% 8. 0% X 3k G ot h el p 4. 8% 4. 0% 0 0 3. 9% 4. 0% X 4 O th er su pp or t 47 .6 % 56 .0 % 76 .2 % 44 .0 % 38 .5 % 44 .0 % ne ed s N um be r of se rv ic es n ee de d 3. 2 (n =1 6) 3. 2 (n =2 0) 2. 4 (n =1 8) 3. 3 (n =1 8) 2. 9 (n =1 6) 3. 0 (n =1 9) B ar rie rs to W or k: C al W O R K s Pa re nt s T im ed -o ut o r S an ct io ne d in F iv e C ou nt ie s 85 V ar ia bl e Sa nc tio n Sa fe ty N et N am e D es cr ip tio n O ve ra ll (n =1 43 ) A la m ed a (n =2 1) Sa n M at eo (n =2 5) A la m ed a (n =2 1) Sa n Fr an . (n =2 5) Sa nt a C la ra (n =2 6) St an isl au s (n =2 5) 13 . B ar ri er s t o Em pl oy m en t ( w ith 9 5% c on fid en ce in te rv al ) ng ed Lo w er th an G ED 40 .6 % (3 2 - 4 8% ) 47 .6 % (2 4- 71 % ) 40 .0 % (1 9- 61 % ) 33 .3 % (1 1- 55 % ) 56 .0 % (3 5- 77 % ) 34 .6 % (1 5- 54 % ) 32 .0 % (1 2- 52 % ) tri ag e La ck re ce nt fu ll- tim e w or k ex pe rie nc e 49 .0 % (4 1 - 5 7% ) 42 .9 % (2 0- 66 % ) 60 .0 % (3 9- 81 % ) 38 .1 % (1 5- 61 % ) 32 .0 % (1 2- 52 % ) 57 .7 % (3 7- 78 % ) 60 .0 % (3 9- 81 % ) tra ns p Tr an sp or ta tio n 61 .5 % (5 3 - 7 0% ) 52 .4 % (2 9- 76 % ) 80 .0 % (6 3- 97 % ) 52 .4 % (2 9- 76 % ) 84 .0 % (6 9- 99 % ) 38 .5 % (1 8- 59 % ) 60 .0 % (3 9- 81 % ) in st ab R es id en tia l o r liv in g in st ab ili ty 32 .2 % (2 4 - 4 0% ) 28 .6 % (8 -5 0% ) 52 .0 % (3 1- 73 % ) 19 .1 % (1 -3 7% ) 8. 0% (- 3 -1 9% ) 42 .3 % (2 2- 63 % ) 40 .0 % (1 9- 61 % ) tin se c R el ie s o n em er ge nc y fo od 43 .4 % (3 5 - 5 2% ) 47 .6 % (2 4- 71 % ) 48 .0 % (2 7- 69 % ) 28 .6 % (8 -5 0% ) 48 .0 % (2 7- 69 % ) 50 .0 % (2 9- 71 % ) 36 .0 % (1 6- 56 % ) un de rs ix H as c hi ld u nd er si x 42 .0 % (3 4 - 5 0% ) 33 .3 % (1 1- 55 % ) 52 .0 % (3 1- 73 % ) 42 .9 % (2 0- 66 % ) 40 .0 % (1 9- 61 % ) 46 .2 % (2 6- 67 % ) 36 .0 % (1 6- 56 % ) ch ild c C hi ld c ar e pr ob le m 31 .7 % (2 3 - 4 1% ) 23 .8 % (8 -6 9% ) 36 .0 % (2 0- 65 % ) 23 .8 % (6 -5 7% ) 24 .0 % (9 -5 5% ) 15 .4 % (1 -4 6% ) 16 .0 % (1 -4 3% ) B ar rie rs to W or k: C al W O R K s Pa re nt s T im ed -o ut o r S an ct io ne d in F iv e C ou nt ie s 86 V ar ia bl e Sa nc tio n Sa fe ty N et N am e D es cr ip tio n O ve ra ll (n =1 43 ) A la m ed a (n =2 1) Sa n M at eo (n =2 5) A la m ed a (n =2 1) Sa n Fr an . (n =2 5) Sa nt a C la ra (n =2 6) St an isl au s (n =2 5) bp hy s Ph ys ic al h ea lth 36 .4 % (2 8 - 4 4% ) 38 .1 % (1 5- 61 % ) 28 .0 % (9 -4 7% ) 28 .6 % (8 -5 0% ) 32 .0 % (1 2- 52 % ) 38 .5 % (1 8- 59 % ) 52 .0 % (3 1- 73 % ) ld b Le ar ni ng di sa bi lit y 19 .6 % (1 3 - 2 6% ) 9. 5% (- 4 -2 3% ) 28 .0 % (9 -4 7% ) 19 .1 % (1 -3 7% ) 20 .0 % (3 -3 7% ) 15 .4 % (1 -3 0% ) 24 .0 % (6 -4 2% ) bm en ta l M en ta l h ea lth 26 .6 % (1 9 - 3 4% ) 9. 5% (- 4 -2 3% ) 36 .0 % (1 6- 56 % ) 9. 5% (- 4 -2 3% ) 28 .0 % (9 -4 7% ) 26 .9 % (9 -4 5% ) 44 .0 % (2 3- 65 % ) bs ub s A lc oh ol o r d ru g pr ob le m 10 .5 % (5 - 16 % ) 4. 8% (- 5 -1 5% ) 12 .0 % (- 2 -2 6% ) 4. 8% (- 5 -1 5% ) 16 .0 % (1 -3 1) 11 .5 % (- 2 -2 5% ) 12 .0 % (- 2 -2 6% ) bv io D om es tic vi ol en ce 11 .9 % (7 - 17 % ) 19 .1 % (1 -3 7% ) 16 .0 % (0 -3 1% ) 9. 5% (- 4 -2 3% ) 8. 0% (- 3 -1 9% ) 7. 7% (- 3 -1 9% ) 12 .0 % (- 2 -2 6% ) co nt ro l Pa rtn er c on tro l 8. 4 % (4 - 13 % ) 23 .8 % (4 -4 4% ) 8. 0% (- 3 -1 9% ) 0 (0 -0 ) 12 .0 % (- 2 -2 6) 0 (0 -0 ) 8. 0% (- 3 -1 9% ) ch ild hl th C hi ld w ith lim iti ng h ea lth co nd iti on 22 .4 % (1 5 - 2 9% ) 28 .6 % (8 -5 0% ) 28 .0 % (9 -4 7% ) 33 .3 % (1 1- 55 % ) 12 .0 % (- 2 -2 6% ) 11 .5 % (- 2 -2 5% ) 24 .0 % (6 -4 2% ) B ar rie rs to W or k: C al W O R K s Pa re nt s T im ed -o ut o r S an ct io ne d in F iv e C ou nt ie s 87 V ar ia bl e Sa nc tio n Sa fe ty N et N am e D es cr ip tio n O ve ra ll (n =1 43 ) A la m ed a (n =2 1) Sa n M at eo (n =2 5) A la m ed a (n =2 1) Sa n Fr an . (n =2 5) Sa nt a C la ra (n =2 6) St an isl au s (n =2 5) 14 . B ar ri er C ou nt (w ith 9 5% c on fid en ce in te rv al ) cb C ou nt o f ba rr ie rs 4. 3 (3 .9 - 4. 6) 4. 1 (3 .0 -5 .2 ) 5. 2 (4 .4 -6 .1 ) 3. 4 (2 .5 -4 .3 ) 4. 2 (3 .4 -5 .0 ) 4. 0 (2 .9 -5 .0 ) 4. 6 (3 .8 -5 .3 ) cb & tri ag o If la st w or ke d 30 + ho ur s\/ w ee k 3+ ye ar s a go (n =7 0) 4. 9 (4 .4 - 5. 4) 4. 2 (2 .5 -6 .0 ) 5. 9 (4 .7 -7 .1 ) 4. 0 (2 .5 -5 .5 ) 5. 6 (4 .1 -7 .2 ) 4. 4 (3 .0 -5 .8 ) 5. 0 (4 .1 -5 .9 ) cb & tri ag o If la st w or ke d 30 + ho ur s\/ w ee k in pa st 3 y ea rs (n =7 3) 3. 6 (3 .2 - 4. 1) 4. 0 (2 .4 -5 .8 ) 4. 2 (3 .2 -5 .2 ) 3. 1 (1 .8 -4 .3 ) 3. 5 (2 .6 -4 .5 ) 3. 4 (1 .7 -5 .1 ) 3. 9 (2 .7 -5 .1 ) cb & F 13 If d id n ot w or k la st y ea r ( n= 83 ) 4. 6 (4 .1 - 5. 1) 4. 5 (2 .6 -6 .3 ) 5. 8 (4 .5 -7 .0 ) 4. 3 (2 .9 -5 .7 ) 4. 2 (2 .9 -5 .5 ) 4. 1 (2 .8 -5 .3 ) 4. 8 (3 .8 -5 .7 ) cb & F 13 If w or ke d la st ye ar (n =5 7) 3. 8 (3 .3 - 4. 3) 3. 7 (2 .3 -5 .1 ) 4. 3 (3 .4 -5 .3 ) 2. 6 (1 .2 -4 .0 ) 4. 1 (2 .7 -5 .5 ) 4. 1 (1 .7 -6 .5 ) 4. 2 (3 .0 -5 .4 ) cb & em pl oy ed If c ur re nt ly un em pl oy ed (n =1 01 ) 4. 6 (4 .2 - 5. 0) 4. 2 (2 .8 -5 .6 ) 5. 5 (4 .6 -6 .5 ) 4. 0 (2 .9 -5 .1 ) 4. 4 (3 .3 -5 .4 ) 4. 3 (3 .0 -5 .5 ) 4. 7 (3 .9 -5 .6 ) cb & em pl oy ed If c ur re nt ly em pl oy ed (n =4 2) 3. 5 (2 .9 - 4. 2) 3. 9 (1 .8 -6 .0 ) 3. 8 (1 .7 -5 .8 ) 2. 3 (0 .5 -4 .0 ) 3. 7 (2 .0 -5 .5 ) 3. 5 (1 .4 -5 .6 ) 4. 1 (2 .5 -5 .8 ) B ar rie rs to W or k: C al W O R K s Pa re nt s T im ed -o ut o r S an ct io ne d in F iv e C ou nt ie s 88 N O TE S i C as h: th e fo llo w in g ite m s f or th e re sp on de nt , h er p ar tn er , a nd c hi ld re n: ta ke -h om e m on ey fr om jo bs , i nc om e fr om a b us in es s o r s el f- em pl oy m en t, C al W O R K s g ra nt , p ay m en ts fo r c hi ld su pp or t, a pe ns io n, S SI o r S SD I, so ci al se cu rit y pa ym en ts , r en t p ay m en ts to th e ho us eh ol d, d is ab ili ty p ay , u ne m pl oy m en t c om pe ns at io n, fo st er c ar e fu nd s, an d an y ot he r m on ey in co m e re ce iv ed b y re sp on de nt o r ot he rs in th e ho us eh ol d w ith w ho m sh e sh ar es m on ey . ii N on -c as h: F oo d St am ps , W om en , I nf an ts a nd C hi ld re n N ut rit io n Pr og ra m (W IC ), fr ee o r r ed uc ed p ric e sc ho ol lu nc he s, fr ee o r re du ce d pr ic e sc ho ol b re ak fa st s, tra ns po rta tio n vo uc he rs . iii C ou nt y po ve rty li ne e xp re ss ed a s p er ce nt o f b as ic fa m ily b ud ge t ( C al ifo rn ia B ud ge t P ro je ct ) c on tro ls fo r f am ily si ze a nd co m po si tio n as w el l a s c ou nt y st an da rd o f l iv in g (2 00 6 st at is tic s) *C om pa ris on o f p re va le nc e ra te s. A m er ic a' s S ec on d H ar ve st . ( 20 06 ). H un ge r S tu dy 2 00 6. C H IS (C al ifo rn ia H ea lth In te rv ie w S ur ve y) 2 00 5 su rv ey u nl es s o th er w is e no te d. P op ul at io n re st ric te d to 1 8- 58 y ea r- ol d gr ou p of fe m al es u nl es s o th er w is e no te d. M ea n ag e of C H IS re sp on de nt s t en ds to b e ol de r t ha n m ea n ag e of o ur su rv ey re sp on de nt s ( +1 y ea r fo r S an F ra nc is co a nd S ta ni sl au s c ou nt ie s, +3 y ea rs fo r A la m ed a C ou nt y sa nc tio ne d pa re nt s, +4 y ea rs fo r A la m ed a co un ty sa fe ty -n et ca se s, an d +8 y ea rs fo r S an M at eo C ou nt y) . M ea n ag e fo r C H IS re sp on de nt s i s 2 y ea rs y ou ng er th an fo r S an ta C la ra C ou nt y su rv ey re sp on de nt s. D ep ar tm en t o f H ea lth a nd H um an S er vi ce s, Su bs ta nc e A bu se a nd M en ta l H ea lth S er vi ce s A dm in is tra tio n. (2 00 6) . R es ul ts fr om th e 20 06 N at io na l S ur ve y on D ru g U se a nd H ea lth : N at io na l F in di ng s. Eg ge rs , F re de ric k J. an d A le xa nd er T ha ck er ay [p re pa re d fo r U .S . D ep ar tm en t o f H ou si ng a nd U rb an D ev el op m en t O ff ic e of P ol ic y D ev el op m en t a nd R es ea rc h] . (2 00 7) . N at io na l In st itu te o f M en ta l H ea lth . ( 20 07 ). Th e N at io na l L aw C en te r o n H om el es sn es s a nd P ov er ty . (2 00 4) . CalWORKsChildOnlyStudyReport1 CalWORKsChildOnlyStudyReport2 "

” Department of Social Services: For the CalWORKs and Food Stamp Programs, It Lacks Assessments of Cost\u2011Effectiveness and Misses Opportunities to Improve Counties’ Antifraud Efforts November 2009 Report 2009\u2011101 C A L I F O R N I A S T A T E A U D I T O R The first five copies of each California State Auditor report are free. Additional copies are $3 each, payable by check or money order. You can obtain reports by contacting the Bureau of State Audits at the following address: California State Auditor Bureau of State Audits 555 Capitol Mall, Suite 300 Sacramento, California 95814 916.445.0255 or TTY 916.445.0033 OR This report is also available on the World Wide Web http:\/\/www.bsa.ca.gov The California State Auditor is pleased to announce the availability of an on\u2011line subscription service. For information on how to subscribe, please contact the Information Technology Unit at 916.445.0255, ext. 456, or visit our Web site at www.bsa.ca.gov. Alternate format reports available upon request. Permission is granted to reproduce reports. For questions regarding the contents of this report, please contact Margarita Fern\u00e1ndez, Chief of Public Affairs, at 916.445.0255. CALIFORNIA STATE AUDITOR B u r e a u o f S t a t e A u d i t sDoug CordinerChief Deputy Elaine M. Howle State Auditor 5 5 5 Ca p i t o l M a l l , S u i t e 3 0 0 S a c r a m e n t o, C A 9 5 8 1 4 9 1 6 . 4 4 5 . 0 2 5 5 9 1 6 . 3 2 7 . 0 0 1 9 f a x w w w. b s a . c a . g ov November 3, 2009 2009-101 The Governor of California President pro Tempore of the Senate Speaker of the Assembly State Capitol Sacramento, California 95814 Dear Governor and Legislative Leaders: As requested by the Joint Legislative Audit Committee, the California State Auditor presents its audit report concerning the Department of Social Services’ (Social Services) oversight of counties’ antifraud efforts for the California Work Opportunities and Responsibility to Kids (CalWORKs) program and the federal Supplemental Nutrition Assistance Program, known as the food stamp program in California. This report concludes that neither Social Services nor the six counties we visited have performed any meaningful analysis to determine the cost-effectiveness of counties’ antifraud efforts for the CalWORKs or food stamp programs. Therefore, we developed our own analysis and found that the measurable savings resulting from early fraud detection activities exceed the costs of such efforts for CalWORKs and approach cost neutrality for the food stamp program. Specifically, statewide projections for savings as a result of early detection showed that for every $1 spent on these activities, the State saved $1.35 for CalWORKs and 93 cents for the food stamp program. In contrast, the savings resulting from statewide ongoing investigations are typically not as cost-effective. Our calculations do not include any savings from the fraud that these activities may deter because there is no way to measure deterrence with any certainty. The cost-effectiveness of these anti-fraud efforts varies among the counties, which may be caused, in part, by differing county practices. Furthermore, we found that counties report inaccurate data on their antifraud efforts, but that Social Services has not taken sufficient steps to address this problem and passes this erroneous data to others, including internal decision makers, the federal government, and the Legislature. Social Services is also missing opportunities to improve counties’ antifraud efforts because it has not reviewed 25 of the 58 counties, including Los Angeles, over the past three years. Our review found that counties inconsistently follow up on information that may affect welfare recipients’ eligibility and they have a large backlog of unresolved cases of potential duplicate-aid fraud that the Statewide Fingerprint Imaging System (SFIS) has identified. Social Services also asserts that SFIS deters welfare fraud, yet it has not analyzed the cost-effectiveness of this system. Finally, Social Services has been delayed in taking the necessary steps to allocate $42.1 million in food stamp program overpayments the counties have collected, including $12.5 million the State is entitled to receive. Moreover, because counties currently hold the overpayment collection, the State has not had access to the funds, resulting in an estimated $1.1 million in lost interest earnings to the State. Respectfully submitted, ELAINE M. HOWLE, CPA State Auditor viiCalifornia State Auditor Report 2009-101 November 2009 Contents Summary 1 Introduction 7 Chapter 1 The Cost\u2011Effectiveness of Counties’ Efforts to Combat Fraud Varies, Though the Data for Such Computations Are Questionable 19 Recommendations 36 Chapter 2 The Department of Social Services and the Counties Could Improve Their Ongoing Efforts to Combat Welfare Fraud 37 Recommendations 54 Appendix Methodology for Computing the Cost\u2011Effectiveness of Fraud Investigation Efforts 57 Response to the Audit Department of Social Services 61 California State Auditor’s Comments on the Response From the Department of Social Services 75 1California State Auditor Report 2009-101 November 2009 Summary Results in Brief The Department of Social Services (Social Services) is responsible for managing the California Work Opportunities and Responsibility to Kids (CalWORKs) program and the federal Supplemental Nutrition Assistance Program, known as the food stamp program in the State of California (State). Although these programs serve many who legitimately qualify for assistance, state and federal agencies generally recognize that some fraud exists, and federal law requires that states develop ways to detect fraud within these programs. Although Social Services manages these programs in California, the counties are ultimately responsible for determining the eligibility of those receiving assistance, as well as for detecting and investigating any fraudulent activities related to these programs. Counties divide their investigative efforts into early fraud detection activities (early fraud activities), which detect potential fraud and prevent it from occurring, and ongoing investigations, involving cases in which counties suspect ongoing fraud by persons currently receiving aid. Although they have taken some steps, neither the counties nor Social Services has performed any meaningful analyses to determine the cost\u2011effectiveness of their efforts to detect and deter fraud in the CalWORKs or food stamp programs. Therefore, we developed our own analysis. Our review of the cost\u2011effectiveness of the counties’ investigative efforts found that, using a three\u2011month projection, the measurable savings resulting from early fraud activities exceed the costs of such efforts for CalWORKs and approach cost neutrality for the food stamp program assuming a three\u2011month savings projection. In contrast, again using a three\u2011month savings projection, we found that ongoing investigations typically are not as cost\u2011effective. We measured cost\u2011effectiveness by comparing the savings resulting from efforts to combat fraud in the CalWORKs and food stamp programs (welfare fraud)\u2014including savings resulting from benefit denials, discontinuances, and reductions, as well as from overpayments identified in the course of investigations\u2014to the counties’ costs to perform these investigation activities. Based on an assumption that they would have extended over three months, the statewide projected savings derived from denials, discontinuances, and reductions in aid payments as a result of early detection showed that for every $1 spent on early fraud activities during 2008, the State saved $1.35 for CalWORKs. For the food stamp program, the 2008 return was 93 cents for every $1 spent on early fraud activities. On the other hand, the savings resulting from statewide ongoing investigations based on a three\u2011month projection showed that these efforts were not cost\u2011effective. Although these efforts Audit Highlights . . . Our review of the Department of Social Services’ (Social Services) oversight of counties’ antifraud efforts related to the California Work Opportunities and Responsibility to Kids (CalWORKs) program and the federal Supplemental Nutrition Assistance Program, known as the food stamp program in California, found the following: \u00bb Although they have taken some steps, neither the counties nor Social Services has performed any meaningful analyses to determine the cost-effectiveness of their efforts to detect and deter fraud in the CalWORKs or food stamp programs. \u00bb Our analysis of counties’ investigative efforts found that, using a three-month projection, the measurable savings resulting from early fraud activities exceed the costs for CalWORKs and approach cost neutrality for the food stamp program, assuming a three-month projection of savings. \u00bb Counties’ early fraud efforts are more cost-effective than ongoing investigations. \u00bb Neither Social Services nor the six counties we visited took sufficient steps to ensure the accuracy of the data counties report on their investigation activities. \u00bb Social Services does not ensure that counties consistently follow up on information it provides them that might affect welfare recipients’ eligibility. \u00bb Although Social Services asserts that the Statewide Fingerprint Imaging System (SFIS) deters welfare fraud, it has not assessed the cost-effectiveness of SFIS. California State Auditor Report 2009-101 November 2009 2 Methods for Increasing Management Personnel Salaries Merit salary increase program: Performance\u2011based salary increases funded from a merit compensation pool established annually by the chancellor’s office. Equity (market) increase program: Adjustments designed to address discrepancies in pay, both within and outside the university system, for comparable jobs. Reclassification: Salary increases resulting from changes in administrative classification that reflect changed assignments. likely help deter fraud, there is no way to measure this deterrence with any certainty, and therefore our calculations do not include the amount of any savings from such deterrence. In large part, this difference in the cost\u2011effectiveness of antifraud efforts is due to early fraud activities resulting in a much greater number of denials, discontinuances, and reductions of aid than ongoing investigations produce and to early fraud activities costing less. According to data that Social Services collects, the counties rejected applications for aid, or they reduced or discontinued benefits, for about 34,700 CalWORKs cases, and the counties identified overpayments of $19.6 million out of the approximately $3.1 billion in aid payments made during 2008. Further, the cost of investigating ongoing fraud is higher than the cost of performing early fraud activities due to the level of effort and evidence required for ongoing investigations. The statewide cost of ongoing investigations for CalWORKs during 2008 was $34 million, an amount that was $6 million (21 percent) more than the $28 million cost of early fraud activities. Our review of counties’ antifraud efforts found that the cost\u2011effectiveness of these efforts varied widely among the counties. For example, in 2008 Los Angeles County saved 35 cents for every dollar it spent on early fraud activities related to the food stamp program, while Orange County saved $1.82 for every dollar it spent on these activities. County practices related to early fraud referrals might partially account for the variations in cost\u2011effectiveness to the extent that these factors affect the number of resulting denials, discontinuances, and reductions of benefits. For example, Orange County cases represent only 3 percent of the statewide CalWORKs caseload, while Los Angeles County makes up 30 percent of the State’s CalWORKs caseload; however, Orange County referred nearly as many cases for early fraud activities as did Los Angeles County. During 2008 Orange County referred all applications meeting certain criteria for fraud review, which the county asserted often resulted in detected fraud. We also found that neither Social Services nor the six counties we visited took sufficient steps to ensure the accuracy of investigation activity reports. For example, in response to our review of their investigation activity reports submitted to Social Services, Los Angeles and Alameda counties stated that they have been unknowingly underreporting the outcomes of their investigations. Alameda County identified this problem before our review, while Los Angeles County realized the problem as a result of our inquiry. Because of a previous audit and because of its interactions with the counties, Social Services has known for several years that counties are reporting inaccurate data regarding their activities to combat welfare fraud, yet it has not taken sufficient steps to address this 3California State Auditor Report 2009-101 November 2009 problem. In addition, it uses these erroneous investigation activity reports to report to the federal government and to prepare reports submitted to internal decision makers and the Legislature. Social Services does not ensure that counties consistently follow up on information it provides that can potentially match welfare recipients to data received from various sources that might affect welfare recipients’ eligibility (match lists). One of the primary tools that Social Services distributes to counties are lists of individuals’ names that may match certain criteria that could make the individuals eligible for reduced aid amounts or ineligible for aid. Periodically, Social Services distributes to counties 10 match lists, which are generated by state and federal agencies. For six of the 10 match lists, federal regulations mandate that each aid recipient receive notification that an action will be taken on the information within 45 days. The remaining four match lists are not subject to a mandated deadline for this notification to take place. However, our review found that none of the counties we visited consistently followed up on all the match lists that they needed to complete within the 45\u2011day timeline, and four counties did not follow up consistently on the lists that had no set notification time frame. Such inconsistent efforts undermine the intent of the match lists, which is to provide the counties with actionable information that can prevent fraud or the continuation of fraudulent activity. We also determined that Social Services is missing opportunities to improve the counties’ follow\u2011up efforts on the match lists because it has not reviewed antifraud activities at 25 of the 58 counties during the three\u2011year period from August 2006 to August 2009. Among the counties not reviewed is Los Angeles, which helps to administer approximately 30 percent of the State’s CalWORKs cases and which Social Services last reviewed in 2005, and five small counties that Social Services’ records show have not been visited since 1995. Although Social Services indicates that it has had ongoing communications with Los Angeles County, the communications were limited to follow\u2011up on problems that Social Services observed in 2005 related to backlogs associated with the county’s overpayment collection efforts. These Income and Eligibility Verification System (IEVS) reviews are intended to be part of Social Services’ oversight of counties’ efforts to investigate welfare fraud. According to federal regulations, Social Services is ultimately responsible for processing matches consistently and in a timely manner. Because Social Services has not maintained adequate oversight of the counties, which conduct these efforts on its behalf, Social Services is failing to ensure that it complies with the regulations. The need for the IEVS reviews is evident, particularly because noncompliance was extensive among the counties we visited. California State Auditor Report 2009-101 November 2009 4 Although Social Services asserts that the Statewide Fingerprint Imaging System (SFIS) is an important tool to deter welfare fraud, it has not adequately determined the cost\u2011effectiveness of SFIS because it believes there is no way of measuring the deterrence effect of the system. Since its implementation in 2000, counties have used SFIS to identify a total of 845 instances of fraud, of which 54 cases were identified in 2008. However, counties have a large, ongoing historical backlogs of SFIS results awaiting resolution. Indeed, as of July 31, 2009, the statewide backlog consisted of more than 13,700 unresolved cases that counties had not reviewed for more than 60 days. The backlog ranged from no cases for several counties to more than 3,600 unresolved cases for San Bernardino County. Social Services indicated that it does not follow up on counties’ reviews of SFIS cases because state laws or regulations do not mandate deadlines for such reviews. We contacted the counties we visited, as well as the counties with the highest backlogs, and several stated that they were unaware of the size of their respective backlogs. Most of the counties we contacted indicated that they did not identify fraud by using SFIS, but they indicated that they believe that SFIS is\u2014in concept\u2014a useful fraud deterrent. Regardless, if counties do not review their backlogs of cases, they cannot ascertain whether potential fraud is present within the backlogs. In addition, Social Services has been delayed in taking the necessary steps to allocate $17.2 million to the United States Department of Agriculture (USDA) and to claim its $12.5 million share of the $42.1 million in food stamp program overpayments that the counties have collected. Because counties currently hold these overpayments, neither the federal government nor Social Services have had access to the funds, resulting in an estimated $1.1 million in lost interest earnings to the State on its share of these funds. Moreover, the USDA has expressed long\u2011standing concerns about the accuracy of the information on overpayment collections reported by the counties, which Social Services does not review for this purpose. Lastly, county size, demographics, and county department staffing necessitate different approaches to investigating and prosecuting welfare fraud. In response to workload and staffing issues, counties have developed thresholds below which their district attorneys’ offices will generally not accept cases referred for prosecution. Of the more than 13,200 cases referred for prosecution that were available for counties to pursue during 2008, the counties acted on a total of 5,074, prosecuting 3,164 cases and deciding not to prosecute 1,910. Due to the low number of prosecutions, the counties’ backlog of nearly 6,400 prosecution referrals statewide at the beginning of 2008 had decreased by a mere 12 percent by the end of the year. 5California State Auditor Report 2009-101 November 2009 Recommendations To ensure that all counties consistently gauge the cost\u2011effectiveness of their early fraud and ongoing investigation efforts for the CalWORKs and food stamp programs, Social Services should work with the counties to develop a formula to perform cost\u2011effectiveness analyses using information that the counties currently submit. To make certain that counties receive the greatest benefit from the resources they spend on antifraud efforts related to CalWORKs and food stamp cases, Social Services should do the following: Using the results from the recommended cost\u2011effectiveness analysis, determine why some counties’ efforts to combat welfare fraud are more cost\u2011effective than others. Seek to replicate the most cost\u2011effective practices among all counties. To ensure the accuracy and consistency of the information on welfare fraud activities that counties report and that it subsequently submits to the federal government, the Legislature, and internal users, Social Services should take the following steps: Remind counties that they are responsible for reviewing the accuracy and consistency of the investigation activity reports before submission. Perform more diligent reviews of the counties’ investigation activity reports to verify the accuracy of the information submitted. Provide counties with feedback on how to correct and prevent errors that it detects during these reviews. To ensure that counties are following up consistently on all match lists, Social Services should do the following: Remind counties of their responsibility under state regulations to follow up diligently on all match lists. Further, it should work with counties to determine why poor follow\u2011up exists and then address those factors. Perform IEVS reviews of all counties regularly. Recognizing that the deterrence effect of SFIS is difficult to measure, Social Services should develop a method that allows it to measure the benefits of this system and compare them to the cost of maintaining the system. Social Services should include in California State Auditor Report 2009-101 November 2009 6 its cost calculations the administrative costs that counties incur for using SFIS. Based on its results, Social Services should determine whether the continued use of SFIS is justified. Social Services should continue to work with the USDA and make taking the steps necessary to distribute to the appropriate entities the $42.1 million in food stamp overpayment collections a priority. Social Services should track how counties determine prosecution thresholds and determine the effects of these thresholds on counties’ decisions to investigate potential fraud, with a focus on determining best practices and cost\u2011effective methods. It should then work with counties to implement the consistent use of these cost\u2011effective methods. Agency Comments In its response, Social Services generally agreed with the recommendations and provided additional perspective and information related to our findings. However, Social Services did not always agree with our conclusions. 7California State Auditor Report 2009-101 November 2009 Introduction Background The Department of Social Services (Social Services) is responsible for managing the California Work Opportunities and Responsibility to Kids (CalWORKs) program and the federal Supplemental Nutrition Assistance Program, known as the food stamp program in the State of California (State). These programs provide cash assistance for basic needs and food purchases to families or individuals who meet certain eligibility requirements. Due to the potential for fraud within these programs, federal law requires that states develop ways to detect such fraud. Although Social Services manages the programs in California, the counties, under Social Services’ oversight, are responsible for determining the eligibility of those receiving assistance, as well as for detecting and investigating any fraudulent activities. According to data that Social Services collects, the counties\u2014as a result of their antifraud efforts\u2014rejected applications for aid and reduced or discontinued benefits for about 34,700 CalWORKs cases and 52,800 food stamp cases during 2008. Also known as the welfare\u2011to\u2011work program, CalWORKs is the State’s version of the federal Temporary Assistance to Needy Families (TANF) program. CalWORKs provides cash assistance for living expenses to families with eligible children in the household. Eligibility is based on need according to age, citizenship, deprivation, income, resources, and residency. Unless they are declared exempt for such reasons as permanent or temporary disabilities, adult members of the household must meet work or vocational training requirements to maintain eligibility. In addition, individuals who have been convicted of drug\u2011related felonies are ineligible to receive aid under this program. The amount of cash assistance decreases as family income increases. Adults generally may not receive CalWORKs cash assistance for more than 60 months, while needy children remain eligible until they reach 18 years of age. In 2008 Social Services data shows a monthly average of 480,000 California households participated in CalWORKs, and they received approximately $3.1 billion, with an average monthly household grant of $538. Under the food stamp program, needy families and individuals receive funds that they can use only for food purchases. Families receiving cash assistance under CalWORKs are eligible for the food stamp program. In addition, families and individuals who do not qualify for CalWORKs can receive food stamp benefits based on income, asset, and resource thresholds. In 2008 a monthly California State Auditor Report 2009-101 November 2009 8 average of 961,000 California households received food stamp assistance of approximately $3.3 billion, with an average monthly grant per household of $282. Social Services’ Role and Responsibilities Social Services is the state agency responsible for supervising the administration of the CalWORKs and food stamp programs. Through policy memos and regulations, Social Services provides guidance and oversight to counties, and it also consults with welfare advocates and the County Welfare Directors Association of California, which consists of the directors of welfare departments from the State’s 58 counties. In addition, Social Services reviews annual independent audits submitted to the State by the counties and monitors the counties’ corrective action plans. Social Services also requires counties to submit data related to their antifraud activities each month. In addition to program oversight, Social Services coordinates the counties’ efforts to combat welfare fraud by providing guidance, technical assistance, and information on fraud prevention and detection. Tools Social Services distributes to counties include lists of individuals’ names that potentially could match certain criteria that would cause the individuals’ aid amounts to be reduced or make them ineligible for aid (match lists). Federal law requires the states to help ensure that overpayments do not occur by maintaining a system to screen TANF program applicants and recipients against these lists for initial and ongoing eligibility. This system is known as the Income and Eligibility Verification System (IEVS), and federal law states that all CalWORKs applicants must provide their Social Security number to allow this screening. Although federal law does not require the State to use IEVS for food stamp applicants, state regulations require that all food stamp applicants receive IEVS screening.1 As Table 1 shows, IEVS\u2011related match lists can detect potential changes in recipients’ eligibility by matching welfare case information against databases from the State’s Employment Development Department and Franchise Tax Board and from the federal Internal Revenue Service (IRS) and Social Security Administration to ensure that aid recipients report all income, assets, and resources that may affect eligibility. A match occurs when there is a discrepancy between information reported by the recipient and information in these databases. Within 45 days of receiving the matches, the counties must 1 The eligibility requirements for many food stamp cases are the same as for CalWORKs cases. As a result, many IEVS\u2011related matches for CalWORKs cases also apply to food stamp cases. For example, during 2008 the referrals due to IEVS\u2011related matches for CalWORKs totaled 6,504, while food stamp referrals totaled 6,389. 9California State Auditor Report 2009-101 November 2009 follow up on matches related to recipients in their jurisdictions to determine whether recipients’ eligibility has changed. Social Services also provides the counties with four other types of match lists that identify individuals who might be deceased, incarcerated, or fleeing felons. Although the counties must follow up on these matches, there is no deadline for such follow\u2011up efforts for these reviews. Social Services periodically visits the counties to assess their processing of IEVS and the other match lists. Table 1 Match Lists Used by Counties to Detect Welfare Fraud MATCH LIST TYPE DESCRIPTION Match Lists That Counties Must Follow Up on Within 45 Days of Receipt Payment Verification System Received monthly based on data from the federal Social Security Administration (Social Security) and the State’s Employment Development Department. This list identifies cases in which recipients fail to report federal and state entitlement payments and individuals receiving aid in more than one state. New Hire Registry Received monthly based on data from the Employment Development Department. This list identifies recipients who were recently hired, rehired, or returned to work in California. Integrated Earnings Clearance Fraud Detection Received quarterly based on data from the Employment Development Department. This list identifies cases in which recipients fail to report or underreport employment income and those potentially receiving duplicate aid from different counties in California and the states of Arizona, Nevada, and Oregon. Beneficiary Earnings Exchange Records Received annually for all recipients and monthly for new recipients based on data from the Internal Revenue Service (IRS) and Social Security. This list identifies recipients’ out\u2011of\u2011state employment income, and income from federal, military, and self\u2011employment sources. Franchise Tax Board (FTB) Asset Match Received annually based on data from the FTB. This list identifies recipients’ unreported interest, dividend, and other sources of unearned income received by California entities. IRS Asset Match Received annually based on data from the IRS. This list identifies recipients’ unreported interest, dividends, lottery winnings, and other sources of unearned income reported to the IRS and not included in the FTB match. Match Lists That Counties Must Follow Up on With No Time Restrictions California Youth Authority (CYA) Match* Received monthly based on current data from the California Department of Corrections and Rehabilitation. This list identifies families that are potentially receiving aid for a minor incarcerated in a juvenile detention facility. Fleeing Felon Match Received monthly based on current data from the Department of Justice. This list identifies recipients with outstanding felony arrest warrants. Nationwide Prisoner Match Received monthly based on data from Social Security. This list identifies cases in which an adult incarcerated in a detention facility is receiving aid. Deceased Persons Match Received semiannually based on data from Social Security. This list identifies cases in which deceased individuals are being issued benefits. Source: Department of Social Services’ Income Eligibility and Verification System documentation. * The CYA is now the Division of Juvenile Facilities within the Department of Corrections and Rehabilitation. However, Social Services continues to refer to this match as the California Youth Authority Match. In addition to IEVS, in 2000 Social Services implemented the Statewide Fingerprint Imaging System (SFIS) to help prevent fraud involving duplicate aid. Because SFIS requires a fingerprint image and a photograph for each adult family member in a CalWORKs or food stamp case, Social Services asserts that the system enables California State Auditor Report 2009-101 November 2009 10 it to identify individuals applying for and receiving aid in multiple jurisdictions and individuals using falsified or fraudulently obtained documents to assume multiple identities for the purpose of receiving aid. Social Services spent an estimated $31 million to develop SFIS, and it spends $5 million annually to maintain the system. Social Services recently entered a new, eight\u2011year contract at a total cost of $40 million, for ongoing system maintenance as well as to replace the equipment that counties are using for SFIS. Counties’ Responsibilities County welfare departments determine eligibility and issue CalWORKs and food stamp benefits to residents of their counties. Each county maintains staff dedicated to determining and monitoring eligibility on an ongoing basis. Because state regulations require counties to follow certain guidelines when issuing benefits and monitoring recipient eligibility, the application and eligibility determination process is similar across all counties. However, the counties have a certain amount of flexibility in how they organize their efforts to prevent and detect fraud. Therefore, some variation exists among the counties with respect to when and why cases are referred for investigation. During the application process, counties inform applicants for CalWORKs and food stamps of their rights and responsibilities as recipients of each program. For example, to ensure that their income does not exceed the level established for participation in the programs, recipients must self\u2011report their earnings to the county welfare department on a quarterly basis in order to continue receiving aid. In addition, recipients must inform county welfare departments of any changes in their household composition that may affect eligibility, such as the return of an absent parent or the departure of a child from the home. Applicants are also told that they are required to report truthfully or face charges of perjury as well as being required to pay restitution for funds they received for which they were ineligible, and that they can also be disqualified from receiving aid. State regulations require counties to maintain a special investigation unit to investigate potential welfare fraud and to refer substantiated fraud either for prosecution or for administrative settlement. As the text box shows, welfare fraud can include a variety of allegations. Figure 1 shows the number and location of the special investigation units in various counties. Examples of Welfare Fraud Unreported income: Individuals may fail to disclose income, earned or unearned, that may affect eligibility for aid. Ineligible children: Individuals may attempt to receive benefits for children who are not eligible to receive benefits or who are already receiving benefits on another welfare case. Absent parent in the home: Individuals may claim that a parent who is living in the home is not living there for the purposes of receiving aid. Children not living in the home: Individuals may claim guardianship for children living with other adults or guardians. Source: The Department of Social Services’ and counties’ Web sites. 11California State Auditor Report 2009-101 November 2009 Figure 1 Location and Numbers of Special Investigation Units by County YU BA YOLO VENTURA TUOLUMNE TULARE TRINITY TEHAMA SUTTER ST AN ISL AU S SONOMA SOLANO SISKIYOU SIERRA SHASTA SANTA CRUZ SANTA CLARA SANTA BARBARA SAN MATEO SAN LUIS OBISPO SAN JOAQUIN SAN FRANCISCO SAN DIEGO SAN BERNARDINO SAN BENITO SA CR AM EN TO RIVERSIDE PLUMAS PLACER ORANGE NE VA DA NAPA MONTEREY MONO MODOC MERCED MENDOCINO MARIPOSA MARIN MADERA LOS ANGELES LASSEN LAKE KINGS KERN INYO IMPERIAL HUMBOLDT GLENN FRESNO EL DORADO DEL NORTE CONTRA COSTA COLUSA CA LAV ER AS BUTTE AMA DOR ALPINE ALAMEDA A county welfare department (25) The district attorney’s o\ufffdce (25) Sheri\ufffd’s o\ufffdce (2) A county welfare department and the district attorney’s o\ufffdce (6) Counties with a special investigation unit located within: Source: California Department of Social Services. California State Auditor Report 2009-101 November 2009 12 The actions counties undertake to prevent, detect, investigate, and prosecute welfare fraud are separated into two general categories\u2014early fraud detection and ongoing fraud investigations. Early fraud detection activities (early fraud activities) are those initiated to substantiate the accuracy of information reported by individuals during the process of applying or reapplying for welfare benefits, adding new individuals to an existing welfare case, and determining special needs for welfare recipients. These activities are intended to prevent welfare fraud from occurring. Actions that counties can take on cases include denial, discontinuance, or reduction of aid payments. Counties use various approaches for these efforts, such as requiring that each new welfare applicant receive a visit from an early fraud detection investigator (early fraud investigator), identifying certain case characteristics that generate an automatic referral to early fraud investigators, and relying on the intake staff at the county welfare department to make a referral based on professional judgment. Investigative staff conducting these early fraud activities may or may not be sworn peace officers. State law requires that Social Services pay for all of a county’s early fraud activities with federal and state funds if Social Services approves the county’s early fraud detection program. Ongoing fraud investigations (ongoing investigations), on the other hand, involve cases in which counties suspect fraud by persons who are currently receiving aid. Typical allegations in an ongoing investigation include failure to report the presence of an absent parent in the home, a change in a child’s residence, and failure to report earned or unearned income. Counties are required to refer for welfare fraud investigation any case for which they have reasonable cause to believe that a welfare recipient has intentionally failed to disclose information that affects eligibility and subsequent receipt of benefits. These cases usually entail more complex investigations, and they could result in prosecution. Actions taken on such cases can include reduction of aid payments, denial of aid payments, or identification of overpayments. In all counties, sworn peace officers conduct ongoing investigations. Social Services recommends that counties have one sworn peace officer investigator for every 1,000 active CalWORKs cases. As Table 2 shows, three of the six counties we visited budgeted fewer sworn peace officers than the ratio recommended by Social Services. Counties must report their welfare fraud investigation and prosecution activities to Social Services each month. These reports include, among other activities, the number of early fraud and ongoing investigation referrals counties receive; the number of referrals they accept for further investigation; the number of investigations completed that resulted in denials, discontinuances, or reductions of aid; the number of cases referred for prosecution; and the results of prosecutions completed during the month. In its 13California State Auditor Report 2009-101 November 2009 instructions for the report, Social Services states that it uses the reports to evaluate the effectiveness of fraud prevention and detection programs, evaluate local agencies’ effectiveness in applying fraud prevention and detection policies, and help local agencies plan any needed changes to these efforts. Additionally, Social Services indicated that the reports provide county, state, and federal entities with information needed for budgeting, staffing, program planning, and other purposes. Table 2 Average Monthly CalWORKs and Food Stamp Caseload Compared to the Number of Sworn Peace Officer Investigators for the State and Selected Counties During 2008 ENTITY AVERAGE MONTHLY NUMBER OF HOUSEHOLDS RECEIVING CALWORKS ASSISTANCE PERCENTAGE OF STATE CASES AVERAGE MONTHLY NUMBER OF HOUSEHOLDS RECEIVING FOOD STAMPS PERCENTAGE OF STATE CASES BUDGETED NUMBER OF SWORN PEACE OFFICER INVESTIGATORS* INVESTIGATORS PER 1,000 ACTIVE CALWORKS CASES Alameda 18,684 4 35,828 4 12 0.6 Los Angeles 142,794 30 296,162 31 247 1.7 Orange 16,719 3 36,446 4 51 3.1 Riverside 24,572 5 41,762 4 22 0.9 Sacramento 31,028 6 54,310 6 29 0.9 San Diego 25,762 5 41,409 4 46 1.8 Statewide 480,207 100% 961,495 100% Sources: The Department of Social Services and county welfare departments. * These numbers are based on the budgeted positions for peace officer investigators who worked on various programs, including CalWORKs and food stamp, during fiscal year 2008 09. Scope and Methodology The Joint Legislative Audit Committee (audit committee) asked the Bureau of State Audits (bureau) to review the cost of combating fraud within the county welfare system programs. Specifically, the audit committee asked that the bureau determine the fraud prevention, detection, investigation, and prosecution structure for the CalWORKs and food stamp programs at the state and local levels and the types of early fraud detection or antifraud programs used. Further, the audit committee requested that we identify the number of special investigative units in each county and, for the counties we visited, the number of sworn peace officers employed at the units and where the unit resides in the county. We were also asked to determine how much fraud is referred or prosecuted for the two programs and the criteria used to determine when requests for investigations are referred or prosecuted. California State Auditor Report 2009-101 November 2009 14 Additionally, the audit committee requested that the bureau determine, to the extent possible, the cost\u2011effectiveness of the fraud prevention efforts at the state and county levels, and to review how recovered overpayments are used. Further, we were asked to estimate, to the extent possible, the savings resulting from fraud deterred by counties’ antifraud activities and whether early fraud detection programs are more cost\u2011effective than ongoing investigations and prosecutions. The committee requested that we review how other states structure their antifraud efforts and identify any successes or best practices. Lastly, we were asked to assess Social Services’ justification for continuing to use both the SFIS and IEVS. Our review included six counties: Alameda, Los Angeles, Orange, Riverside, Sacramento, and San Diego. However, we did not include all six counties in all aspects of our review. Our analysis of Orange County was limited to the cost\u2011benefit analysis and structure because after we began our fieldwork, we observed that Orange County was reporting a high level of fraud activity in proportion to its welfare caseload. We did not review the use of CalWORKs recovery incentive funds or determine whether Orange County followed up on match lists as required. To determine the fraud prevention, detection, investigation, and prosecution structure for the CalWORKs and food stamp programs and the criteria counties use to determine when requests for investigations are referred or prosecuted, we interviewed appropriate staff at Social Services as well as staff of welfare departments and district attorneys’ offices from the six counties we visited. We also reviewed applicable laws, regulations, and policies and procedures of Social Services and the counties. To determine the number of special investigative units, as well as their location and the number of sworn peace officers at each unit, we inquired with staff at Social Services and the counties we visited. In addition, we selected a sample of cases from eight of the 10 match lists at five counties to determine whether they were appropriately following up on the information and, when applicable, doing so within specified time frames.2 We could not review the appropriateness of counties’ follow\u2011up efforts for the remaining two lists\u2014the beneficiary earnings exchange records and IRS asset lists\u2014because they contain federal tax information, and federal law expressly limits disclosure of this information. Although federal law allows disclosure of this information to state and county agencies that are responsible for administering the TANF program, it prohibits disclosure to a state audit agency, such as the bureau, except when the audit agency is auditing a state tax agency. Finally, 2 Orange County was not included in this review. 15California State Auditor Report 2009-101 November 2009 to assess Social Services’ justification for continuing to use both SFIS and IEVS, we interviewed appropriate staff at Social Services and reviewed any analyses they prepared. To ascertain how much fraud is referred or prosecuted for the CalWORKs and food stamp programs, we obtained investigation activity reports that counties submit to Social Services. To determine the cost\u2011effectiveness of fraud prevention efforts at selected counties for 2008, we used investigation activity reports that identified the number of cases for which these counties denied, discontinued, or reduced aid due to early fraud activities and ongoing investigations. Counties also identified in these reports the amount of overpayments identified due to fraud. We also used CalWORKs’ Summary Report of Assistance Expenditure, CalWORKs’ Cash Grant Caseload Movement Report, and the food stamp program’s Participation and Benefit Issuance Report that counties submit to Social Services to determine the statewide average monthly aid issued for a case during 2008 for CalWORKs and the food stamp program. We used these average aid figures to determine the monthly amount of aid payments avoided for denied and discontinued cases. Counties are not asked to submit any data to Social Services that identify the amount by which aid to recipients was reduced as a result of their fraud investigation efforts. Because Los Angeles County represents approximately 30 percent of the State’s CalWORKs caseload, we attempted to use its Los Angeles Eligibility Automated Determination, Evaluation, and Reporting (LEADER) system database to determine the average amount by which aid was reduced on a case due to a fraud investigation. In addition, we intended to use the LEADER system to determine the average number of months that Los Angeles County’s CalWORKs recipients had received aid at the time of a benefit reduction or discontinuance that was the result of a fraud investigation. Because an adult recipient can generally receive CalWORKs benefits for a maximum of 60 months, knowing the average number of months these recipients had already received aid for CalWORKs would have allowed us to project more accurately the amount the counties saved through their investigative efforts. However, after we obtained the LEADER database, Los Angeles County staff asserted that due to the limitations of the database and certain policies in that county, it was not feasible to perform these analyses as intended. Los Angeles County staff later identified data sets in the LEADER database that may have allowed us to compute reductions in aid resulting from early fraud and ongoing antifraud efforts. However, because of the uncertainty we had about encountering limitations with the LEADER database’s capabilities and weaknesses we identified in the county’s practices for recording fraud actions California State Auditor Report 2009-101 November 2009 16 taken, we instead used data from the LEADER database to identify the average monthly amount by which aid was reduced on a case regardless of the reason. We also asked the five other counties that we reviewed to provide the average monthly amount by which aid was reduced using the same methodology. Only three counties were able to do so; two counties were close to the amount we calculated, the other county was significantly higher. Because the two counties’ amounts were reasonably close to the amount we calculated using the LEADER system, we used the LEADER database to determine the average monthly amount that counties saved by reducing aid for a case as a result of their investigation efforts to perform our cost\u2011benefit analyses. We describe our methodology for this calculation in the Appendix. The U.S. Government Accountability Office, whose standards we follow, requires us to assess the reliability of computer\u2011processed data. To determine the reliability of the LEADER database, we selected a random sample of records and reviewed the supporting documents, such as the case file and accounting records. We compared the information in the database to supporting documents to determine the accuracy of the information in the database. However, we did not conduct completeness testing because the source documents required for this testing are stored at 31 district offices located throughout Los Angeles County. Because of the weaknesses in the county’s practices for recording fraud actions taken and our decision not to conduct completeness testing, we concluded that the database’s information is of undetermined reliability. To determine the completeness of the data counties report to Social Services, we reviewed any supporting documents available at the six counties we visited for two months in 2006, 2007, and 2008. We compared the information on the supporting documents to the data these counties reported to Social Services for those months to determine whether the figures the counties reported matched the support. To determine the accuracy of the data counties report to Social Services, we selected a sample of cases from those reported to Social Services by the six counties for the selected months and traced them to source documents such as welfare case files or accounting records. We reviewed the source documents to determine whether the counties accurately summarized, among other things, the amount of aid, the aid program, and the disposition resulting from investigative efforts related to the case. Our review found that the six counties could not always support the data they reported. Because of these errors, we concluded that the data counties submit to Social Services on the investigation activity reports are of undetermined reliability. However, because no other data exist regarding the activities of counties to combat welfare fraud, we used the counties’ investigation activity reports in our analysis. 17California State Auditor Report 2009-101 November 2009 To evaluate how counties process the recovered overpayments and how they use CalWORKs recovery incentive funds, we interviewed staff of Social Services and at five of the counties3 we visited and reviewed their policies and procedures. Additionally, to determine whether the counties’ use of the CalWORKs recovery incentive funds was appropriate, we selected a sample of expenditures the counties incurred and for which they received reimbursements from the CalWORKs recovery incentive funds, and we compared the purposes of those expenditures with allowable activities. Based on this testing, we determined that the five counties used the CalWORKs recovery incentive funds appropriately. Further, counties receive CalWORKs and food stamp overpayment collections. Each county is responsible for returning the CalWORKs overpayment recovery funds to the State monthly, but for the food stamp program Social Services is responsible for calculating and distributing the amount of food stamp overpayments to the USDA, the counties, and itself each quarter. Although we observed that CalWORKs overpayments are processed regularly, we performed additional testing because we found that a backlog of food stamp overpayments existed. Thus, we reviewed how Social Services processes these overpayments and the reasons for the backlog. To review how other states structure their antifraud efforts, and to identify best practices and lessons learned, we identified two other states with large welfare caseloads and administrative structures similar to California’s caseload and administrative structure. Of the 10 states with the highest TANF caseloads, only California, New York, and Ohio have counties administer welfare programs as well as investigate and prosecute welfare fraud. However, staff from New York and Ohio indicated that their states have not formally studied and identified best practices. For example, each of New York’s 58 counties develops its own processes for investigating and prosecuting welfare fraud. The New York State program integrity director told us that although the state collects information regarding investigations and prosecutions and uses it to calculate the amount of aid avoided by each county and statewide, it has not performed a cost\u2011effectiveness analysis to determine the most cost\u2011effective practices used by its counties. 3 Orange County was not included in this review. California State Auditor Report 2009-101 November 2009 18 Blank page inserted for reproduction purposes only. 19California State Auditor Report 2009-101 November 2009 Chapter 1 THE COST\u2011EFFECTIVENESS OF COUNTIES’ EFFORTS TO COMBAT FRAUD VARIES, THOUGH THE DATA FOR SUCH COMPUTATIONS ARE QUESTIONABLE Chapter Summary Although they have taken some steps, neither the counties nor the Department of Social Services (Social Services) have conducted meaningful analyses to determine the cost\u2011effectiveness to detect and deter fraud in the California Work Opportunities and Responsibility to Kids (CalWORKs) program and the federal Supplemental Nutrition Assistance Program (food stamp program). As a result, we developed our own analysis, which indicates that the cost\u2011effectiveness of antifraud efforts varies among the counties. Our review of the cost\u2011effectiveness of investigative efforts for the CalWORKs program and the food stamp program, found that the measurable savings attributable to early fraud detection activities (early fraud activities) exceed the costs of such efforts for CalWORKs and approaches cost neutrality for the food stamp program. However, ongoing fraud investigations (ongoing investigations) are typically not as cost\u2011effective as early fraud activities. Using an assumption that the savings would persist for three months, our calculation showed that on a statewide basis, early fraud activities were cost\u2011effective for CalWORKs and nearly cost\u2011neutral for the food stamp program. On the other hand, statewide ongoing investigations were not cost\u2011effective under the three\u2011month projection. This difference is due in large part to the fact that early fraud activities result in a much greater number of denials, discontinuances, and reductions of aid than ongoing investigations produce, and early fraud activities cost less. However, using an assumption that savings would persist for 18 months, we found that ongoing investigations were generally cost\u2011effective. County practices may partially account for variations in cost\u2011effectiveness among the counties, to the extent that these factors affect the number of resulting denials, discontinuances, and reductions. Because there is no way to measure with any certainty the extent to which antifraud efforts act as a deterrent to fraud, our calculations do not include the amount of savings attributable to deterrence. Some counties claimed that they have failed to track and report accurately all of the benefit reductions and discontinuances that result from investigations on the investigation activity report submitted to Social Services. Further, Social Services and the counties have not performed any California State Auditor Report 2009-101 November 2009 20 meaningful analyses to compare the cost of their antifraud efforts to the savings that counties realize from aid payments avoided and overpayments identified. Lastly, we found that neither Social Services nor the six counties we visited take sufficient steps to ensure the accuracy of the counties’ investigation activity reports. Further, our review found the counties’ data to be of undetermined reliability. Social Services has known for several years that the data counties report are not always accurate. Nevertheless, Social Services uses this report, along with other information, to substantiate to the United States Department of Agriculture (USDA) the costs it expects to incur during the next year. It also uses these erroneous investigation activity reports to prepare reports submitted to internal decision makers and the Legislature. However, because no other data exist regarding the activities of counties to combat welfare fraud, we used the investigation activity reports in our analysis. Early Fraud Programs May Not Be Cost\u2011Effective in All Counties, but They Are Generally More Cost\u2011Effective Than Ongoing Investigations Our review of the cost\u2011effectiveness of CalWORKs and food stamp fraud investigation activities during 2008 found that the savings produced by early fraud activities using a three\u2011month projection exceed the costs of such efforts for CalWORKs and are almost cost\u2011neutral for the food stamp program, but that ongoing investigations are typically not as cost\u2011effective. We measured cost\u2011effectiveness by comparing the savings resulting from efforts to combat welfare fraud\u2014including savings resulting from benefit denials, discontinuances, and reductions, as well as overpayments identified in the course of investigations\u2014to the counties’ costs to perform these investigation activities. We considered early fraud and ongoing investigation programs that achieve more than $1 in grant savings and overpayments identified for every $1 spent to be cost\u2011effective.4 The costs in our calculations are based on the staff time directly attributable to these early fraud activities and ongoing investigations and the related administrative costs. Fraud exists when a person knowingly, and with intent to deceive or defraud, makes a false statement or representation to obtain, continue, gain an increase in, or avoid a legitimate reduction in benefits. Failure to disclose facts that could result in a denial, discontinuance, or reduction of benefits, or the acceptance of benefits for which a person knows he or she is not eligible, also constitutes welfare fraud. Counties 4 We discuss our methodology for calculating cost\u2011effectiveness in more detail in the Appendix. We measured cost\u2011effectiveness by comparing the savings resulting from counties’ efforts to combat welfare fraud to their costs to perform these investigation activities. 21California State Auditor Report 2009-101 November 2009 devote resources both to the early detection and prevention of fraud\u2014 early fraud activities\u2014and the investigation of ongoing fraud related to cases currently or previously receiving aid\u2014 ongoing investigations. As we discuss in the Introduction, early fraud activities focus on preventing fraud from occurring and can result in benefit denials, discontinuances, and reductions. Ongoing investigations focus on identifying and prosecuting individuals who at anytime were receiving aid under fraudulent circumstances, and these investigations can result in benefit discontinuances, and reductions as well as the identification of overpayments. Thus, to the extent that recipients would have received aid payments or continued to receive aid payments, these efforts result in savings to counties because fraudulent aid payments are avoided. As we discuss in the Appendix, we projected the savings that counties realize from aid payments avoided as a result of early fraud activities and ongoing investigations over three months and 18 months. Forming the basis of the three\u2011month estimate\u2014our most conservative estimate of the savings\u2014is the fact that recipients of both the CalWORKs and food stamp programs are required to report quarterly any changes in their eligibility, such as increased income or a child leaving the home. We also used an 18\u2011month projection because Social Services asserted that its ongoing analysis of historical eligibility data for CalWORKs recipients indicates that they receive aid for an average of 18 months. Although Social Services also determined that food stamp recipients receive aid for an average of 31 months, we used the shorter period in our analysis to maintain consistency between our cost\u2011effectiveness results for the two aid programs. Early Fraud Activities Are Generally More Cost\u2011Effective Than Ongoing Investigations As depicted in Table 3 on the next page, our savings calculation based on a three\u2011month projection showed that on a statewide basis, early fraud activities performed in 2008 were cost\u2011effective for CalWORKs and nearly cost\u2011neutral for the food stamp program. On the other hand, the 2008 statewide ongoing investigations were not cost\u2011effective using the three\u2011month projection. However, when we projected the savings over 18 months, the 2008 statewide savings due to early fraud activities for both the CalWORKs and food stamp programs were nearly eight times and just over four times greater than their respective costs, and savings from ongoing investigations also exceeded costs for both programs. Early fraud activities focus on preventing fraud from occurring while ongoing investigations focus on identifying and prosecuting individuals who at anytime were receiving aid under fraudulent circumstances. California State Auditor Report 2009-101 November 2009 22 Table 3 2008 Savings Resulting From Early Fraud Activities and Ongoing Investigations for Every $1 That Counties Spend on These Efforts ENTITY THREE-MONTH PROJECTION OF SAVINGS 18-MONTH PROJECTION OF SAVINGS EARLY FRAUD ONGOING INVESTIGATIONS EARLY FRAUD ONGOING INVESTIGATIONS CALWORKS FOOD STAMP CALWORKS FOOD STAMP CALWORKS FOOD STAMP CALWORKS FOOD STAMP Alameda $1.76 $1.74 $0.55 $0.38 $10.53 $10.46 $0.65 $0.73 Los Angeles 0.61 0.35 0.77 0.25 3.66 2.08 0.79 0.29 Orange 2.37 1.82 1.62 0.98 14.19 10.92 9.13 5.53 Riverside 1.25 1.08 0.45 0.95 7.50 6.47 0.47 0.97 Sacramento 0.53 0.52 0.64 0.88 3.15 3.10 1.50 3.29 San Diego 2.60 1.16 1.10 1.87 15.58 6.97 1.30 2.42 Statewide 2008 1.35 0.93 0.88 0.72 8.12 5.58 2.39 2.14 Statewide 2007 1.52 0.85 1.12 0.65 9.09 5.08 2.71 1.89 Statewide 2006 1.25 0.72 0.79 0.60 7.50 4.29 2.35 1.88 Sources: Bureau of State Audits’ analysis based on data that counties submit to the Department of Social Services (Social Services). Note: As we discuss elsewhere in this report, the figures that counties report to Social Services regarding investigation activities are of undetermined reliability. Of the six counties we reviewed, four had early fraud programs that were cost\u2011effective, but only two counties’ ongoing investigations for CalWORKs resulted in greater savings than costs when we used the three\u2011month projection. Because there is no way to measure with any certainty the extent to which antifraud efforts act as a deterrent to fraud, our analysis does not include any savings from fraud deterrence. However, to the extent that the measurable savings and costs in our analysis reflect actual variances in the cost\u2011effectiveness of counties’ efforts to combat fraud, differing policies and practices may account for some of the variation. Counties generally realize greater savings per dollar spent on early fraud activities than on ongoing investigations. This difference is due largely to the fact that according to the data that counties report, early fraud activities generally result in a much greater number of denials, discontinuances, and reductions of aid than ongoing investigations produce, and also because early fraud activities cost less. According to data that Social Services collects, the counties rejected applications for aid, or discontinued or reduced benefits, for about 34,700 CalWORKs cases during 2008 and identified overpayments of about $19.6 million out of the approximately $3.1 billion in aid payments made. However, the statewide cost of ongoing investigations for CalWORKs during 2008 was $34 million, an amount that was $6 million (21 percent) more than the $28 million cost of early fraud activities. As Table 3 shows, when we projected three months of savings, on a statewide basis for 2008 early fraud activities for the CalWORKs program resulted in $1.35 in savings 23California State Auditor Report 2009-101 November 2009 for every dollar spent, while ongoing investigations resulted in only 88 cents per dollar spent. Under the 18\u2011month projection, this disparity increased, with 2008 early fraud activities returning $8.12 per dollar spent, which is more than three times the ongoing investigations’ return of $2.39. Statewide, the cost\u2011effectiveness of early fraud activities and ongoing investigations for CalWORKs were the highest in 2007, but our calculations indicate that for the food stamp program these activities have become more cost\u2011effective over the past three years. Ongoing investigations generally result in fewer discontinuances or reductions of aid because the main purpose of these investigations is to prove suspected fraud that may have occurred in the past and not to determine changes in current eligibility. In contrast, early fraud activities inherently focus on a recipient’s current eligibility. In addition, the backlog of ongoing investigations, which we noted exists at all of the counties we reviewed, introduces a delay between the fraud referral and the actual investigation. Riverside County also stated that the information matching welfare recipients to data about their eligibility (match lists) produces information that is sometimes more than three months old and is even older by the time it is routed and reviewed. These delays decrease the likelihood that an ongoing investigation will uncover facts that affect current eligibility. Further, counties indicated that for the majority of ongoing investigation cases, the recipients are no longer receiving aid when the investigation starts. Because reductions in and discontinuances of current aid do not result from ongoing investigations of closed cases, the only measurable savings for the county result from the identification of any overpayments. In contrast, early fraud activities primarily involve efforts that result in the denial of aid to a welfare applicant who is ineligible, or a reduction in or early discontinuance of aid payments to individuals who are currently receiving aid. As a result, early fraud activities have a higher number of cases for which aid is denied, discontinued, or reduced, and these actions result in lower payments of benefits in the future. In addition, the cost of early fraud activities is generally less than the cost of ongoing investigations due to the level of evidence necessary. Typically, an early fraud activity involves reviewing the available information and interviewing or visiting the recipient to determine whether the eligibility worker’s suspicions are valid. Some counties indicated that they try to complete these types of activities within a relatively short period, resulting in less cost. For example, Orange County noted that its policy is to complete all early fraud activities on a case within 15 business days of receiving the referral, and San Diego County’s goal is to complete early fraud activities within 10 business days. Ongoing investigations generally result in fewer reductions or discontinuances of aid because their main purpose is to prove suspected fraud that may have occurred in the past and not to determine changes in current eligibility. California State Auditor Report 2009-101 November 2009 24 Ongoing investigations, on the other hand, generally require investigators to establish that the recipient intended to commit fraud. Because a possible outcome of these investigations is a felony conviction, there is a greater burden on the investigators to gather the necessary evidence to build a case for prosecution. In addition, some cases can be very complex and might involve coordination among multiple jurisdictions. Los Angeles County, for example, asserted that it investigates some cases that involve organized crime. According to a lieutenant from the Los Angeles County district attorney’s office, organized crime rings involve large groups of individuals who conspire to commit fraud that spans multiple agencies and public assistance programs. Members of an organized crime ring may, for example, use falsified records or other documentation to claim a nonexistent child, a lack of assets, or an absent parent in order to collect CalWORKs, food stamp, and other public assistance benefits. According to the lieutenant, coordinating with the various agencies and counties that administer these benefits to investigate crime rings requires a significant investment of time and other resources. Because of the higher costs of performing investigations and the lower measurable savings they produce, our calculations indicate that ongoing investigations are not as cost\u2011effective as early fraud activities. Cost\u2011Effectiveness Varies Significantly Across Counties The net savings resulting from early fraud activities and ongoing investigations vary widely across the six counties we included in our analysis. In the three\u2011month projection for the six counties, Los Angeles County’s early fraud activities for the food stamp program resulted in the lowest savings, yielding only 35 cents for every dollar it spent. In contrast, Orange County yielded $1.82 in savings for every dollar spent in early fraud activities for the food stamp program. Similarly, in the three\u2011month projection, the cost\u2011effectiveness of the counties’ ongoing investigations related to the food stamp program ranged from as little as 25 cents for every dollar that Los Angeles County spent to $1.87 for every dollar that San Diego County spent. The results show similar variances among counties for the CalWORKs program. Differences in county practices may partially account for variations in the cost\u2011effectiveness of early fraud activities across the counties, to the extent that these practices affect the number of resulting denials, discontinuances, and reductions. Policies that generate a large number of referrals may contribute to greater savings. For example, the net savings for CalWORKs early fraud activities in Orange and San Diego counties significantly exceed the statewide average, as well as the savings of the other four counties we reviewed. Both of these counties Differences in county practices may partially account for variations in the cost\u2011effectiveness of early fraud activities across the counties, to the extent that these practices affect the number of resulting denials, discontinuances, and reductions. 25California State Auditor Report 2009-101 November 2009 reported a disproportionately high number of early fraud referrals for 2008, and both counties had policies in place in 2008 that generated mandatory early fraud referrals. According to San Diego County’s policy, it is mandatory for investigators to perform an early fraud interview for every applicant who either has not received aid in the last 12 months in the county or who has received aid within the last 12 months in the county and has an unresolved fraud suspicion against him or her.5 Until 2009 Orange County mandated early fraud referrals based on certain characteristics, such as applicant households that only listed children as eligible recipients and applicants with welfare fraud sanctions. However, due to significant budget cuts, Orange County discontinued its mandatory referrals as of February 2009. It believes that this change has resulted in a drop of more than 50 percent in early fraud referrals. Both counties indicated that their policies may account for their disproportionately high numbers of early fraud referrals. For example, although Orange and San Diego counties accounted for approximately 3 percent and 5 percent, respectively, of the State’s CalWORKs program caseload in 2008, they accounted for 11 percent and 17 percent, respectively, of all early fraud referrals for CalWORKs and each county also accounted for 4 percent of the State’s food stamp caseload and each county accounted for 11 percent of early fraud referrals for the food stamp program. Table 4 Number of Cases Referred for Early Fraud and the Results of Those Activities in 2008 ENTITY CALWORKS CASES FOOD STAMP CASES REFERRALS ACCEPTED FOR INVESTIGATION CASES DENIED, DISCONTINUED, OR REDUCED AS A RESULT OF INVESTIGATION PERCENTAGE OF REFERRALS RESULTING IN AID DENIED, DISCONTINUED, OR REDUCED REFERRALS ACCEPTED FOR INVESTIGATION CASES DENIED, DISCONTINUED, OR REDUCED AS A RESULT OF INVESTIGATION PERCENTAGE OF REFERRALS RESULTING IN AID DENIED, DISCONTINUED, OR REDUCED Los Angeles 11,832 3,548 30% 19,453 5,778 30% Orange 10,932 4,011 37 16,862 6,250 37 Riverside 23,385 1,699 7 41,137 2,685 7 Sacramento 3,778 1,394 37 3,656 1,353 37 San Diego 16,803 4,284 25 15,970 3,846 24 Statewide 101,065 27,154 27 147,081 40,965 28 Sources: Investigation activity reports that counties submitted to the Department of Social Services (Social Services) during 2008. Note: As we discuss elsewhere in the report, the figures counties report to Social Services are of undetermined reliability. We did not include Alameda County in this table because we learned that it had been reporting certain early fraud actions taken, but not all of the related early fraud referrals for these same actions. Thus, its figures would significantly overstate the percentage of referrals with actions taken on them. 5 San Diego County created Project 100 Percent to confirm and verify statements provided by CalWORKs applicants. This project is intended to be an extension of the initial eligibility determination process. California State Auditor Report 2009-101 November 2009 26 The counties that typically generated the highest measurable net savings in 2008\u2014Orange and San Diego\u2014not only accepted a high number of early fraud referrals but also had a high percentage of benefit denials, discontinuances, or reductions compared to their early fraud referrals. For example, as shown in Table 4, Orange County accepted more than 10,900 CalWORKs early fraud referrals in 2008, representing 11 percent of these referrals statewide. This number is disproportionately high, given that Orange County represented about 3 percent of the CalWORKs caseload in 2008. In addition, 37 percent of these referrals resulted in denial, discontinuance, or reduction of benefits, a rate that is significantly higher than the statewide average of 27 percent. Orange County’s high number of referrals and high rate of results likely account for the county’s $2.37 net savings per $1 spent for CalWORKs using a three\u2011month savings projection, the second highest among the counties we reviewed. In contrast, Riverside County produced a net savings of $1.25 per $1 spent for CalWORKs early fraud activities. Although this county accepted nearly 23,400 CalWORKs early fraud referrals in 2008, representing 23 percent of all referrals accepted in the State, only about 1,700 (7 percent) of these referrals resulted in a change in eligibility. This lower percentage largely accounts for its lower calculated net three\u2011month savings. Among the counties we visited, the two with the highest net savings from their early fraud activities for CalWORKs in 2008 were San Diego and Orange counties. Both counties attribute their success in part to a close working relationship between investigators and eligibility workers, and both house most of their early fraud investigators with the eligibility workers, asserting that doing so allows direct access to investigators so that issues can be resolved quickly. San Diego County also stated that the consistent training provided to eligibility workers has made them more diligent and aware of fraud indicators, thus enabling them to generate a quality, valid referral. Although sworn peace officers conduct early fraud activities in both of these counties, our analysis did not clearly indicate whether or how this practice affects cost\u2011effectiveness. For example, Los Angeles County also uses sworn officers to conduct early fraud activities, yet it produced one of the lowest net savings per dollar spent for CalWORKs early fraud activities among the counties we reviewed. The net savings produced by ongoing investigations also varied widely across the counties, and the savings varied more widely for the 18\u2011month projection than for the three\u2011month projection due to the disparity in the number of benefit reductions and discontinuances that counties reported as a result of these investigations. For the three\u2011month projection, the net savings for San Diego County stated that the consistent training provided to eligibility workers has made them more diligent and aware of fraud indicators, thus enabling them to generate a quality, valid investigation referral. 27California State Auditor Report 2009-101 November 2009 the food stamp program ranged from 25 cents to $1.87 for every dollar spent. For the 18\u2011month projection, the net savings ranged from 29 cents to $5.53 for every dollar spent. When we discussed each county’s results with its special investigation unit managers, Alameda and Los Angeles counties acknowledged that they have been underreporting to Social Services the results from their ongoing investigations. Alameda County stated that this underreporting has occurred because it classified almost all of its ongoing investigative activities as early fraud, and it believes that as much as 30 percent of the previously reported early fraud activities were actually related to ongoing investigations. Similarly, Los Angeles County believes that the actual number of ongoing investigations that produced results exceeds the number that it reported. Because of weaknesses in their reporting practices, neither county could support its assertion of underreporting. We reviewed the data of the counties shown in tables 3 and 4, and we used these data in our analysis even though we found errors in the data that the counties reported and concluded that the data were of undetermined reliability. Unfortunately, no other data exist regarding the activities of counties to combat welfare fraud. In contrast, and as we discussed earlier in this chapter, Riverside County believes that its lower savings from ongoing investigations reflect the fact that few discontinuances and reductions occur because of ongoing investigations. Social Services and the Counties Have Not Determined Whether Their Antifraud Efforts Are Cost\u2011Effective Social Services has not performed any meaningful cost\u2011effectiveness analysis of the counties’ investigation efforts. In its role of supervising the administration of the CalWORKs and food stamp programs by the counties, Social Services should ensure that the counties efficiently deliver services to the public and also that they have effective processes in place to combat welfare fraud. Thus, for Social Services to identify best practices, all counties must consistently determine the cost\u2011effectiveness of their ongoing investigation activities, using a consistent period for measuring the savings. Although Social Services has developed a formula to calculate the savings that counties realize as a result of their antifraud efforts\u2014in terms of fraudulent aid not paid and administrative savings\u2014it does not use this formula to evaluate the cost\u2011effectiveness of counties’ antifraud efforts. The formula uses the data counties report on their investigation activity reports related to denials, discontinuances, and reductions of aid; the average grant amounts; and the average time period over which Social Services assumes that recipients receive Although Social Services has developed a formula to calculate the savings that counties realize as a result of their antifraud efforts, it does not use this formula to evaluate the cost\u2011effectiveness of counties’ antifraud efforts. California State Auditor Report 2009-101 November 2009 28 aid. Additionally, the formula assumes that there will be a reduction in the counties’ workload when recipients are denied aid. Social Services indicated that it created this formula in 2006 to respond to a legislative request, but it could not provide any other examples of the formula’s use. Also, in 2006 Social Services compiled statewide and select county statistics on referrals for early fraud activities and ongoing investigations and any changes in aid resulting from these efforts during fiscal years 1994 95 through 2003 04, and the costs related to early fraud activities and ongoing investigations during fiscal years 1997 98 through 2003 04. These statistics describe the cost savings for early fraud activities and ongoing investigations, but only for fiscal years 2002 03 and 2003 04, reflecting that early fraud activities were more cost\u2011effective than ongoing investigations. Social Services did not present conclusions on the effectiveness of individual counties. This was a promising first step, but to get the most benefit Social Services should continuously compile and analyze these statistics for use in assessing and improving counties’ antifraud efforts. None of the counties we visited have performed a comprehensive analysis to compare the cost of their antifraud efforts to the savings they realize from aid payments avoided and overpayments identified. Some have completed limited studies. San Diego County identified the savings from its Project 100 Percent between 2001 and 2008, but the county did not identify the costs nor did it review the savings resulting from its other antifraud efforts. In 2002 Alameda County identified savings related to its antifraud efforts, using Social Services’ formula. The primary purpose of this analysis was to highlight the savings that its investigations generated. However, the county did not compare these savings with its costs. Los Angeles County asserted that it is not aware of a method by which it can perform a cost\u2011effectiveness analysis, primarily because there is no viable method to determine the benefits or the value of activities that deter fraud. While we agree that measuring the deterrence effect of counties’ efforts is difficult, figures for other measurable savings and costs are readily available, as presented earlier in this chapter. Although the counties we visited believe their efforts to avoid making aid payments to ineligible recipients and stopping fraud are cost\u2011effective, they are making this assertion without having performed a cost\u2011benefit analysis. Further, it is unclear whether the reason for the disparity in results among the counties included in our cost\u2011benefit analysis is because some counties are more cost\u2011effective than others, because the incidence of fraud is greater in some counties, or that the counties differ in their efforts to report accurate data. Without knowing the cost\u2011effectiveness of their practices, the counties and Social Services cannot identify best practices that can be Without knowing the cost\u2011effectiveness of their practices, the counties and Social Services cannot identify best practices that can be adopted by other counties to increase the return on every dollar the State spends combating fraud within the CalWORKs and food stamp programs. 29California State Auditor Report 2009-101 November 2009 adopted by other counties to increase the return on every dollar the State spends combating fraud within the CalWORKs and food stamp programs. On a promising note, a program integrity steering committee (steering committee) was formed to follow up on the results of a 10\u2011year statistical study on fraud prevention and detection activities in the CalWORKs and food stamp programs. Social Services completed this study, based primarily on county\u2011reported information from the investigation activity reports, in 2006. The steering committee, with members from the county welfare directors’ and California district attorneys’ associations, sought to identify cost\u2011effective approaches for improving program integrity in the CalWORKs and food stamp programs. To accomplish this goal, the steering committee surveyed seven counties about their approaches to early and ongoing fraud prevention, detection, and prosecution. From this survey, the steering committee approved recommendations in 2008 for both the counties and Social Services regarding the most promising approaches it found. Among the eight recommendations for the counties were to emphasize using early fraud activities, enable open communication among welfare fraud staff, use experienced prosecutors, report data more consistently, and provide regular training to welfare fraud staff. The 10 recommendations directed to Social Services included establishing a standard method of computing county cost savings, providing counties regular reports to enable them to monitor the cost\u2011effectiveness of their efforts to combat welfare fraud, maintaining a central repository of fraud training ideas, and reviewing the cost\u2011effectiveness of each match list, as well as soliciting feedback from the counties on the lists’ usefulness. Social Services indicated that it is addressing four of the 10 recommendations and is considering how to address the remaining six. Social Services Does Not Ensure That Counties Report Accurate Data on Their Welfare Fraud Investigations Neither Social Services nor the six counties we visited have taken sufficient steps to ensure the accuracy of investigation activity reports. These reports, which counties submit monthly to Social Services, summarize the counties’ investigative efforts and the results of those efforts. Specifically, we found that the information these counties included on the investigation activity report is not always accurate, supported, or reported consistently. Social Services is aware of these problems with the data, but it has not taken steps to improve the accuracy of the counties’ reporting. In addition, it Social Services is aware of the problems with the counties’ data, but it has not taken steps to improve the accuracy of their reporting. California State Auditor Report 2009-101 November 2009 30 uses these erroneous investigation activity reports to populate part of a report it submits to the federal government and to prepare reports submitted to internal decision makers and the Legislature. Problems Exist in the Counties’ Reporting of Investigation Activities Social Services requires counties to submit monthly investigation activity reports to summarize their welfare fraud investigation activities for the CalWORKs and food stamp programs. Some of the activities that they must report each month include the number of fraud cases referred for investigation, the disposition of investigations that were completed, any overpayments identified as a result of completed investigations, the number of investigations referred for prosecution, and the results of prosecutions completed. The USDA requires all states to report summary investigation data on an annual basis. Our review detected numerous errors in the annual investigation activity reports for 2006 through 2008 at the six counties we visited. For example, during our review of Alameda County’s investigation activity reports, we noticed very few cases for which benefits were discontinued or reduced as a result of ongoing investigations. Alameda County indicated that it had been inaccurately reporting these cases as early fraud cases, and it believes that approximately 30 percent of the early fraud cases previously reported were actually related to ongoing investigations. Further, Alameda County noted that its system could not separately identify CalWORKs and food stamp cases, and it reported the same numbers for both programs. Alameda County indicated that it has started to revise the method it uses for preparing future investigation activity reports, but despite having previously reported inaccurate information to Social Services, the county does not plan to revise past reports, asserting it does not have the resources to do so. We also found problems with Los Angeles County’s preparation of its investigation activity report. Los Angeles County consolidates data from several sources to prepare this report. These sources include early fraud reports for the 31 district offices located in the county and ongoing investigation reports from its welfare fraud investigation headquarters. The reports are based on tally sheets prepared by investigation supervisors. However, because the tally sheets do not list specific cases, Los Angeles County could not tell us the case numbers related to the activity totals it reported on the investigation activity report. Although Los Angeles County said that it could re\u2011create the monthly listings, it indicated that the totals would be different due to changes that occurred subsequent to a particular monthly report. Further, Los Angeles County Due to weaknesses in Los Angeles County’s process, we could not verify the accuracy of its investigation activity reports. 31California State Auditor Report 2009-101 November 2009 noted that its staff do not consistently document the results of early fraud investigations. When an investigator concludes an early fraud investigation, he or she completes the top portion of a findings report, indicating whether fraud was detected. Los Angeles County’s procedure is for eligibility workers to complete the bottom portion of the findings report, noting the actions taken based on the investigation; enter these actions into the eligibility system; and return the findings report to the investigator. However, Los Angeles County indicated that in practice, eligibility workers do not always return the findings report, nor do they always enter the actions noted into the eligibility system. Finally, in response to our inquiries, Los Angeles County stated that it has been underreporting the results of ongoing investigations, but because of weaknesses in its reporting practices, it could not provide any data to support its belief. Due to these weaknesses, we could not verify the accuracy of the county’s investigation activity reports. The four other counties’ reports also contained errors, but to a lesser degree. For example, Sacramento County had several errors in its investigation activity reports dating back to August 2006. These errors included submitting some of the prior months’ data in the next month’s report or not reporting all required statistics. Sacramento County discovered these errors before our review started in March 2009, and in August 2009 it resubmitted corrected investigation activity reports to Social Services, which we used in our cost\u2011benefit analysis. Although the county’s corrected reports agreed to supporting case listings, information in the case files did not agree to the case listings in some instances. The other three counties could not support some of the information included in their reports. For example, Orange County’s investigation activity report for January 2008 included reported overpayments totaling approximately $17,200 for CalWORKs cases that were investigated for fraud. However, when asked to identify the related cases, Orange County provided a list of CalWORKs cases with overpayments that totaled $31,900, or more than $14,000 over the amount that it reported. We noted similar problems when we asked Riverside and San Diego counties for the list of cases they reported on their investigation activity reports. Based on our testing, these differences occurred because of a lack of documentation to support all numbers reported or because of clerical errors. Furthermore, the six counties we visited are inconsistently reporting the actions resulting from ongoing investigations, a situation that hinders the ability to compare the counties’ investigation activity reports. Specifically, three counties are reporting the actual actions that eligibility workers took based on the results of the investigations, while two other counties are reporting their investigators’ recommended actions. Until 2008 another county reported California State Auditor Report 2009-101 November 2009 32 both actual actions taken and recommended actions, but now it reports only actual actions taken. The two counties reporting their investigators’ recommended actions informed us that in most but not all instances, the recommendations are the same as the actions that eligibility workers took. The counties we visited generally do little to ensure the accuracy of the investigation activity reports and most of them assign a single staff member to complete and submit these reports. These staff members prepare the reports by consolidating data provided to them from different sources. In the instructions for the investigation activity report, Social Services places the responsibility for ensuring the accuracy and completeness of the reports on the county, and it requires counties to provide contact information for the person who ensured the accuracy of reports before submittal. Most of the counties we visited acknowledged that they perform little to no review of the reports before submitting them to Social Services. Social Services’ Procedures for Reviewing Counties’ Investigation Activity Reports Are Inadequate Compounding the counties’ reporting problems is the fact that Social Services does not perform a sufficient review of the investigation activity reports that counties submit. Social Services subjects these reports to an automated review to ensure that the figures reported are reasonable. This review involves comparing the current month’s report to the report for the prior month to identify changes. If the figures in the current report differ by more than 3 percent to 20 percent from those for the previous month (depending on the size of the county), Social Services will check to see if the county submitted an explanation or if the change is the result of a seasonal variation. Social Services also may contact the counties to verify the reason for the change and, when necessary, request that the county submit a revised report. However, this minimal review is inadequate to detect even the most glaring errors in the data that counties submit. Social Services annually compiles the data reported by counties on their investigation activity reports so that it can prepare a statewide investigation activity report. When creating this report, Social Services does not follow up on discrepancies, such as potential underreporting of activity by counties. For example, Los Angeles County\u2014representing 30 percent of the State’s CalWORKs caseload\u2014is the largest county in the State, with the next largest county having just over 7 percent of the State’s caseload. Given that its caseload is more than four times larger than that of the next largest county, it is reasonable to assume that Los Angeles County would report the highest number of cases Social Services’ minimal review is inadequate to detect even the most glaring errors in the data that counties submit. 33California State Auditor Report 2009-101 November 2009 in most categories on the investigation activity report. However, our review of the fiscal year 2007 08 data found that this did not occur, and some discrepancies existed that Social Services should have scrutinized. For example, although the counties reported reducing benefits on a total of nearly 5,000 cases during fiscal year 2007 08 as a result of ongoing investigations, only 41 of those cases were reported by Los Angeles County, a number that seems quite low considering that the county spent over $23 million on ongoing investigations during 2008\u2014the highest by far among the counties we reviewed. Another large county, Alameda, reported no cases in this category. As we noted previously, both counties told us that they believe they have inadvertently been underreporting the number of cases in this category, but neither could provide support for their assertions. Besides this example, we noted other instances in which the information that Los Angeles and other counties reported appeared inconsistent with the size of their caseloads. We believe that if Social Services obtains these data, it should follow up with the counties on potential reporting discrepancies to determine if the data reported are in error or if the discrepancies are the result of a county’s process that either needs improvement or might be a best practice for other counties. Social Services informed us that it reviews the investigation activity report during periodic Income and Eligibility Verification System reviews, which we discuss in Chapter 2. During these reviews, Social Services indicated that it compares the investigation activity reports with documentation located at the counties and makes any appropriate findings and recommendations, and stated that it routinely finds that counties inaccurately report data. Some of the inconsistencies we noted during our review are possibly due to unclear instructions. Three of the counties we visited told us that they believe the instructions are unclear, and they indicated that when they contacted Social Services for additional clarification, its answers were not always helpful. To address these and other types of concerns, in January 2009 Social Services created an informal workgroup to work on potential revisions to the investigation activity report. The workgroup includes both Social Services’ staff and staff representing 11 counties and has met twice, in January 2009 and February 2009. According to the minutes of the last meeting, the workgroup’s role is to identify information requested on the investigation activity report that needs to be better defined, determine whether any information on the report is no longer needed by Social Services and stakeholders, and ascertain whether any additional information is needed that is not currently requested. As a result of the workgroup’s February 2009 meeting, Social Services and one county developed scenarios for each county participating on the workgroup to use in completing an investigation activity report. By a process of comparing how counties complete reports with Some of the inconsistencies we noted during our review are possibly due to Social Services’ unclear instructions for the investigation activity report. California State Auditor Report 2009-101 November 2009 34 identical information, Social Services expects to identify confusing areas of the investigation activity report. According to Social Services, the workgroup has not met since February 2009 because the participating counties are still responding to the scenarios. However, more frequent meetings would better ensure that the efforts of this workgroup are put to good use to improve the counties’ reporting efforts. We reported similar findings in a report issued in 1995, which found that the investigation activity reports for some counties contained errors and that Social Services did not perform sufficient review of county data to identify potential errors.6 Our prior report also found that Social Services did not provide thorough instructions to help ensure that the investigation activity reports were completed consistently, and that some counties could not provide support for the figures they reported. In a 1995 report, we recommended that Social Services clarify its instructions for completing the investigation activity report, develop an ongoing desk review process of these reports for consistency and reasonableness, and provide timely feedback to the counties when errors are noted. We further recommended that Social Services thoroughly communicate its record retention policy to the counties. It is apparent that Social Services has not adequately addressed the concerns raised in our previous report, as the problems still persist. Moreover, by not promptly addressing these issues, Social Services will continue to relay erroneous information to its management, the Legislature, and the federal government as discussed in the next section. Errors in the Counties’ Investigative Reports Are Passed on to Other Parties Social Services produces various reports based on the questionable information counties submit in their monthly investigation activity reports and provides them to the federal government, internal users, and the Legislature. The federal government requires Social Services to report on welfare fraud investigation activity related to the food stamp program but not CalWORKs. Social Services uses this report, along with other information, to substantiate to the USDA the costs it expects to incur during the next year. The USDA is authorized to reimburse states for up to 50 percent of the administrative costs involved in their operation of the food stamp program. The USDA told us that it uses the investigation activity data as reference information when making these funding decisions. For example, if Social Services tells the USDA that 6 The Bureau of State Audits’ report titled Department of Social Services: Review and Assessment of the Cost\u2011Effectiveness of AFDC Fraud Detection Programs (Report 94023, March 1995). 35California State Auditor Report 2009-101 November 2009 it expects an increase in costs, the USDA said it would refer to the investigation activity information to observe the trend and decide whether the increase requested is justifiable. However, because of the inaccuracies we found, the USDA might be basing the administrative payment for California on information that contains errors. Additionally, the USDA told us that it uses the information for planning reviews, ad hoc studies and reports, and formal reports, and that the information is also a component of the data used to develop budget projections for the United States Congress. However, the federal Department of Health and Human Services, which administers the Temporary Assistance for Needy Families (TANF) program\u2014the source of much of the funding for CalWORKs\u2014does not require or use any of the information included on the investigation activity report, according to a regional TANF program manager. Social Services also uses the investigation activity reports to prepare its internal quarterly fraud investigation activity report, and for other special studies and legislative reports. The quarterly fraud investigation activity report summarizes the monthly investigation activity reports submitted by the counties, including the number and percentage of investigations received, accepted, rejected, and completed, and the results of the completed investigations. Social Services publishes this report on its Web site for the public and other interested parties. Further, Social Services uses the investigation activity report for special studies, such as the 10\u2011year study of welfare fraud trends that it completed in 2006. The intent of the study was to assess trends and identify best practices related to early and ongoing welfare fraud investigations, overpayment collections, and county administrative practices. According to the chief of Social Services’ Emergency Food Assistance and Fraud Bureau, the 10\u2011year study presented no clear trend that would help identify best practices. Social Services’ staff also indicated that Social Services provides members of the Legislature with data on welfare fraud investigations when requested. As a result, of the errors and inconsistencies we found, each of these other reports will also contain errors, which could mislead users of the data. Additionally, the instructions for the investigation activity report indicate that Social Services uses the reports to evaluate the effectiveness of fraud prevention and detection programs, to evaluate the effectiveness of local agencies’ policies, and to plan with local agencies for any needed changes. However, without reliable data from the counties, Social Services and stakeholders in the State’s CalWORKs and food stamp programs cannot make informed decisions to improve the State’s administration of these programs. Because of the inaccuracies we found, the United States Department of Agriculture might be basing the administrative payment for California on erroneous information. California State Auditor Report 2009-101 November 2009 36 Recommendations To ensure that all counties consistently gauge the cost\u2011effectiveness of their early fraud activities and ongoing investigation efforts for the CalWORKs and food stamp programs, Social Services should work with the counties to develop a formula to regularly perform a cost\u2011effectiveness analysis using information that the counties currently submit. To make certain that counties receive the greatest benefit from the resources they spend on antifraud efforts related to CalWORKs and food stamp cases, Social Services should do the following: Using the results from the recommended cost\u2011effectiveness analysis, determine why some counties’ efforts to combat welfare fraud are more cost\u2011effective than others. Seek to replicate the most cost\u2011effective practices among all counties. Continue to address the recommendations of the steering committee and promptly act on the remaining recommendations. To ensure the accuracy and consistency of the information on welfare fraud activities that counties report and that Social Services subsequently reports to the federal government, the Legislature, and internal users, Social Services should take the following steps: Remind counties that they are responsible for reviewing the accuracy and consistency of investigation activity reports before submission. Perform more diligent reviews of the counties’ investigation activity reports to verify the accuracy of the information submitted. Provide counties with feedback on how to correct and prevent errors that it detects during this review. Continue with regular meetings of its workgroup to further its efforts to clarify its instructions for completing the counties’ investigation activity reports. 37California State Auditor Report 2009-101 November 2009 Chapter 2 THE DEPARTMENT OF SOCIAL SERVICES AND THE COUNTIES COULD IMPROVE THEIR ONGOING EFFORTS TO COMBAT WELFARE FRAUD Chapter Summary The Department of Social Services (Social Services) for the State of California (State) does not ensure that counties consistently follow up on lists it provides them that may match the names of welfare recipients to information received from various sources that might affect welfare recipients’ eligibility (match lists). We found that some counties did not follow up consistently on these matches as required by federal law, or the counties could not always demonstrate their follow\u2011up efforts. Further, some counties have noted that certain match lists are not as useful as they could be in their current format; as a result, these counties perform limited or no follow\u2011up on these lists. We also determined that Social Services is missing opportunities to improve the counties’ efforts because it does not visit all counties on a regular basis. For example, Social Services noted that it has not reviewed Los Angeles County’s follow\u2011up efforts on the match lists since 2005. Moreover, although Social Services asserted that the Statewide Fingerprint Imaging System (SFIS) deters fraud that the Income and Eligibility Verification System (IEVS) cannot identify, it has not adequately determined the cost\u2011effectiveness of SFIS. According to Social Services’ data, many counties are not promptly following up on matches generated by SFIS. In addition, Social Services has not taken the necessary steps to claim its share of $42.1 million in aid overpayments that the counties have collected, nor has it released the shares of these funds due to the counties and the United States Department of Agriculture (USDA). Moreover, the USDA has expressed long\u2011standing concerns about the accuracy of the overpayment collection information reported by the counties, which Social Services does not review for accuracy. Lastly, county size, demographics, and county department staffing necessitate different approaches to investigating and prosecuting welfare fraud. In response to workload and staffing issues, counties have developed prosecution thresholds below which the district attorney’s office will generally not accept cases referred for prosecution. Nevertheless, as of January 1, 2008, counties reported a backlog of nearly 6,400 referrals statewide, which had only decreased by 12 percent by the end of the year. Of the 13,200 cases California State Auditor Report 2009-101 November 2009 38 referred for prosecution that were available for counties to work on during 2008, counties acted on 5,074 cases by prosecuting 3,164 cases and deciding not to prosecute 1,910 cases. Social Services Does Not Ensure That Counties Consistently Follow Up on Welfare Fraud Matches Social Services does not ensure that counties consistently follow up on information it provides them that might affect welfare recipients’ eligibility. As we discussed in the Introduction, federal and state regulations require that Social Services use IEVS and establish additional systems to generate lists of potential matches and follow up on those matches to prevent ineligible persons from receiving aid. There are 10 match lists provided by federal and state agencies, including the federal Social Security Administration (Social Security), Internal Revenue Service, and Franchise Tax Board. Social Services distributes the match lists to counties on a periodic basis\u2014monthly, quarterly, semiannually, and annually\u2014for follow\u2011up. Most of these lists are in paper form. For six of the 10 match lists, federal regulations mandate that the State must, within 45 days of receiving the match information, notify the welfare recipient of an intended action\u2014a discontinuance of or reduction in benefits\u2014or indicate that no action is required. In California, Social Services’ regulations require the county welfare departments to conduct this follow\u2011up on behalf of Social Services. For the remaining four match lists there is no mandated time period for review, and each county’s special investigative unit, located in either the welfare department or the district attorney’s office, conducts the follow\u2011up. As Table 5 shows, none of the counties we reviewed consistently followed up on all of the match lists that had to be completed within the 45\u2011day timeline. As we discussed in the Scope and Methodology, we did not review two match lists due to federal restrictions. The imposition of a 45\u2011day time frame to review and respond concerning these match lists implies a need to review them more quickly than match lists without a deadline. However, the results of our testing shows that counties are struggling to consistently do so, which lessens the value of these match lists as a means to detect fraud. For the four match lists without a time requirement, our testing showed that San Diego was fairly consistent in completing the matches in our sample, while the other four counties were not, as shown in Table 6 on page 40. According to Alameda County’s lieutenant of inspectors, he processes parts of all matches when time allows and consistently spends time on only one match list. Among the other three counties, Los Angeles County had no follow\u2011up on two of these four match lists. Los Angeles County 39California State Auditor Report 2009-101 November 2009 indicated that it does not process the nationwide prisoner match list because the matches proved to be unproductive, containing information that was too outdated and voluminous for its limited staff to handle effectively. Additionally, Los Angeles County acknowledged that it has a backlog of fleeing felon match lists dating back to 2007 due to a shortage of investigative staff. These inconsistent efforts undermine the intent of the match lists, which is to provide information to the counties that, if acted on, could affect a recipient’s eligibility or benefit amounts and, if undetected, could lead to fraud. Table 5 Status of Five Counties’ Follow\u2011up Efforts on Match Lists With a 45\u2011Day Time Requirement April 2008 Through March 2009 COUNTY FRANCHISE TAX BOARD ASSET MATCH INTEGRATED EARNINGS CLEARANCE FRAUD DETECTION NEW HIRE REGISTRY PAYMENT VERIFICATION SYSTEM Alameda \uf0fc t t t Los Angeles t t \uf0a1 t Riverside * \uf0fc t t Sacramento \uf0ce \uf0fc t t San Diego \uf0fc \uf0fc t t Source: Bureau of State Audits’ review of matches provided to counties during April 2008 through March 2009. Notes: As discussed in the Scope and Methodology, we did not test whether Orange County followed up on match lists. We could not review the appropriateness of counties’ follow\u2011up efforts for two lists\u2014the Beneficiary Earnings Exchange Records and Internal Revenue Service asset lists\u2014because they contain federal tax information, and federal law expressly limits disclosure of this information. * Because documentation was absent, we could not determine whether the county followed up. \uf0fc= The county completed all of the matches in our sample on time. \uf0a1 = Some matches were completed late. t = Some matches were not completed and\/or some were completed late. \uf0ce= No matches were completed. Counties Assert That the Format of Some Match Lists Could Be Improved According to representatives from the five counties whose match list follow\u2011up we reviewed, the format of some match lists could be improved to make them more efficient to use. For example, San Diego County indicated that the nationwide prisoner match, which Social Security produces, does not yield many positive results because the facilities entering the information report only when an individual is incarcerated and do not remove the information upon California State Auditor Report 2009-101 November 2009 40 release, causing the individual to remain on that match list. Thus, when individuals who were incarcerated in the past apply for or receive aid, their names appear on the nationwide prisoner match list. Consequently, the county is not able to determine whether individuals appearing on the match list have been released from prison within the last month. Therefore, the county follows up only on those individuals whom the list shows were imprisoned during the last 90 days. For a similar reason, Los Angeles County told us that it does not use the nationwide prisoner match list. Table 6 Status of Five Counties’ Follow\u2011Up Efforts on Match Lists Without a 45\u2011Day Time Requirement April 2008 Through March 2009 COUNTY DECEASED PERSONS MATCH CALIFORNIA YOUTH AUTHORITY MATCH FLEEING FELON MATCH NATIONWIDE PRISONER MATCH Alameda * * * * Los Angeles \uf0fc \uf0fc \uf0ce \uf0ce Riverside * \uf0fc t t Sacramento \u2020 \u2020 \uf0fc \u2020 San Diego \uf0fc \uf0fc \uf0fc t Source: Bureau of State Audits’ review of matches provided to counties during April 2008 through March 2009. Note: As discussed in the Scope and Methodology, we did not determine whether Orange County followed up on match lists. * Because documentation was absent, we could not determine whether the county followed up. \u2020 During our fieldwork, Sacramento County indicated that it did not have match lists available for our review. Subsequent to the completion of our fieldwork, Sacramento County informed us that it did have these lists. \uf0fc= The county completed all of the matches in our sample. t = Some matches were not completed. \uf0ce= No matches were completed. In 2003, in response to counties’ concerns, Social Services asked the USDA to revise the nationwide prisoner match list to include prisoners’ release dates. In a letter to the USDA, Social Services indicated that the prisoner release date was the single most important data element because it would allow Social Services to eliminate superfluous information and improve the quality of the data provided to the counties. However, the USDA responded that while Social Security acknowledged the advantage of tailoring reports for specific agencies, such as Social Services, the fact that Social Security handles more than 4,000 prisoner reports makes it infeasible to accommodate individual formatting requests. Social Services indicated that it has not spoken to either federal agency since 2003 about this issue. Although Social Services stated that it 41California State Auditor Report 2009-101 November 2009 has not received any additional formal complaints from counties about this match list, two of the five counties we reviewed believe that the format of the nationwide prisoner match list is not useful and all the counties we reviewed make limited or no use of this list. In an additional example, Sacramento County had concerns with the deceased persons match, noting that the list often contains duplicate or mismatched Social Security numbers. Finally, Riverside County indicated that in 2008 it received more than 4,000 matches for the beneficiary earnings exchange records match list, but only six matches resulted in identified overpayments.7 It determined that many of the matches were duplicates reported in previous months and stated that this review was not an effective use of staff time. Additionally, seven of the 10 match lists are provided to the counties as paper copies, including three that have a required 45\u2011day timeline. Three lists\u2014the payment verification system, new hire registry, and integrated earnings clearance fraud detection match lists\u2014are sent in an electronic format. Social Services indicated that four of the remaining lists are provided to some counties in electronic format depending on the county’s welfare database system. All five counties we visited told us that having all match lists in electronic form would allow them to process matches more efficiently. For example, Sacramento County indicated that the match lists received on paper require additional steps that could be avoided if they were received in electronic data files. Sacramento County believes that receiving all of these lists electronically would enable it to computerize the processing to automatically remove invalid matches and identify workable matches. Similarly, Los Angeles County asserted that processing electronic matches is more efficient than using printed copies for several reasons, such as making matches more readily available to all staff, reducing the number of lost abstracts, conducting demographic match validation, enabling supervisors to control the processing and validation of pending cases, and improving the ability to generate internal reports and reports forwarded to the State. Social Services indicated that it has a long\u2011term intent to modernize its business practices by moving from paper to electronic transmission of match lists. Because of the federal and state mandated follow\u2011up on these lists, much of which must occur within a specified time frame, Social Services should continue to explore ways to provide these reports in an electronic format so that it can help the counties follow up on them more effectively and in a timely manner. 7 We could not review the appropriateness of counties’ follow\u2011up efforts for two lists\u2014the Beneficiary Earnings Exchange Records and Internal Revenue Service asset lists\u2014because they contain federal tax information, and federal law expressly limits disclosure of this information. Although Social Services stated it has not received any recent complaints from counties, two counties we reviewed believe that the format of the nationwide prisoner match list is not useful and all the counties we reviewed make limited or no use of this list. California State Auditor Report 2009-101 November 2009 42 Social Services’ Monitoring of Counties’ Follow\u2011Up Efforts Is Weak Although Social Services has a process in place to monitor the counties’ efforts to follow up on match lists, it is missing opportunities to improve their efforts because it does not visit all counties on a regular basis and does not always enforce recommendations from the reviews that it does perform. In its communication with the counties, Social Services indicated that its periodic IEVS reviews are to determine counties’ compliance with state and federal statutes, assess the effectiveness of specific procedures, and provide counties feedback on any problems observed. However, because it asserts that it lacks resources, Social Services has not been able to review the counties’ efforts on a regular basis. Specifically, it has not reviewed 25 of the 58 counties during the three\u2011year period from August 2006 to August 2009. Among the 25 unreviewed counties is Los Angeles, which represents approximately 30 percent of the statewide California Work Opportunities and Responsibility to Kids (CalWORKs) cases. Social Services’ review log dates back to 1995 and shows that Los Angeles County has not been reviewed since 2005 and that five small counties\u2014Trinity, Modoc, Inyo, Mono, and Alpine\u2014have never been reviewed. Social Services conducted 21 IEVS on\u2011site reviews and three desk reviews in fiscal year 2008 09, but it has scheduled on\u2011site IEVS reviews for only 12 counties in fiscal year 2009 10. This schedule amounts to less than half of the prior year’s IEVS reviews and does not include Los Angeles County or four of the five small counties it has never reviewed. According to the chief of the Emergency Food Assistance and Fraud Bureau, Social Services has not reviewed Los Angeles County’s match procedures, but has reviewed its overpayment collection process. The IEVS reviews are intended to be part of Social Services’ oversight of the counties’ efforts to detect and prevent welfare fraud. Because Social Services is ultimately responsible\u2014according to federal regulations\u2014for processing matches consistently and in a timely way, and because the counties conduct these efforts on its behalf, Social Services is failing to ensure that it is in compliance with these regulations. The need for the IEVS reviews that include a review of match list follow\u2011up is evident, particularly given the extent of noncompliance we found among the five counties listed in tables 5 and 6. We also found that when Social Services does conduct IEVS reviews, it does not always ensure that the counties correct the problems it identifies. Within the past two years, Social Services conducted Social Services’ review log, which represents approximately 30 percent of the statewide CalWORKs cases, shows that Los Angeles County has not been reviewed since 2005 and that five small counties have never been reviewed. 43California State Auditor Report 2009-101 November 2009 IEVS reviews of four counties we reviewed8\u2014all of which are considered large counties\u2014and noted some problems, but to a more limited extent than our review found. For example, Social Services reviewed Riverside County in September 2007 and found that it had a backlog in processing the match list for the Integrated Earnings Clearance Fraud Detection System, and this backlog led to the county’s not performing follow\u2011up on these matches within the required 45\u2011day timeline. To reduce the backlog and bring the county into compliance with the 45\u2011day timeline, Social Services recommended several changes to Riverside County’s procedures. Social Services indicated that it would follow up with the county in six months to verify that the 45\u2011day requirement was being met and that the backlog had been reduced. However, as of September 2009\u2014or nearly two years later\u2014Social Services had not followed up or confirmed that the county had implemented its recommendations. Social Services’ chief of the Emergency Food Assistance and Fraud Bureau stated that the follow\u2011up was missed due to staff turnover. Riverside County asserted that although Social Services did not conduct follow\u2011up, the county rectified the problem by the end of Social Services’ visit. We were able to confirm that for the sample we tested of the county’s follow\u2011up efforts for this match list shown in Table 5 on page 39, that Riverside County completed all follow\u2011up within 45 days. In another instance, Social Services performed a review of San Diego County in February 2009 and found that the county was not following through on the processing of matches from the payment verification system and the new\u2011hire registry. It recommended that the county provide refresher training to all caseworkers in the next 30 days to help them understand the importance of completing these two matches and also that it prepare a plan of action within 30 days. In this instance, Social Services indicated that it contacted San Diego County, which asserted that the training was completed for all staff. Social Services stated that its system for assuring that counties implement any corrective measures it recommends is to review the counties’ written responses and to rely on assertions stating that the counties have made the necessary corrections in their processes. Social Services further indicated that it conducts a thorough review of the corrective action plans during its next review of affected counties. When we tested San Diego County’s follow\u2011up efforts using a sample containing these two match lists that were provided to the county during April 2008 through March 2009, we found that the county did not always complete these matches. 8 As noted in this report’s Scope and Methodology section, although we visited six counties, we did not review Orange County’s efforts to follow up on matches. California State Auditor Report 2009-101 November 2009 44 Social Services Has Not Done a Cost\u2011Benefit Analysis of SFIS Social Services asserts that SFIS identifies duplicate\u2011aid fraud that IEVS does not. Further, Social Services and counties told us that they believe that the awareness of the fingerprint requirement deters individuals from fraudulently applying for aid in multiple counties. Although it believes that SFIS plays an important role in deterring fraud, Social Services has not done a cost\u2011benefit analysis of SFIS because it believes there is no way to measure the deterrence effect of the system. Although federal regulations do not require the use of fingerprint imaging technology, in 2000 Social Services implemented SFIS, which Social Services based on Los Angeles County’s Automated Fingerprint Image Reporting and Match system, in accordance with state law. When justifying the implementation of SFIS, Social Services did not conduct its own study; instead, it used the estimates from an evaluation Los Angeles County performed in 1997 to project statewide savings that would result from SFIS. In this evaluation, the county estimated that the overall net savings related to its Automated Fingerprint Image Reporting and Match system would be between $52.5 million and $64.6 million. Because Los Angeles County’s CalWORKs and food stamp caseload constituted approximately 40 percent of all such cases in the State at that time, Social Services believed that it was reasonable to extrapolate from Los Angeles County to the rest of the State. However, in a report we issued in 2003,9 we expressed concern that Social Services’ methodology of projecting statewide savings using Los Angeles County’s estimated savings was flawed, especially in its assumption that the incidence of duplicate\u2011aid fraud in Los Angeles County was representative of the incidence of this type of fraud statewide. In fact, the 2003 report found that data reported by other counties before the implementation of SFIS did not suggest that duplicate\u2011aid fraud was extensive enough to warrant the cost of SFIS. In that report, we recommended that Social Services fully account for the cost of SFIS by collecting data and tracking administrative costs related to SFIS to measure its cost\u2011effectiveness. Social Services chose not to implement our recommendation because it stated that it includes SFIS as part of the eligibility determination activities to which counties charge time and that reprogramming its system to separate SFIS activities would be too costly. 9 Bureau of State Audits’ report titled Statewide Fingerprint Imaging System: The State Must Weigh Factors Other Than Need and Cost\u2011Effectiveness When Determining Future Funding for the System (Report 2001\u2011015, January 2003). Although asserting the Statewide Fingerprint Imaging System (SFIS) deters fraud, Social Services has not done a cost\u2011benefit analysis of SFIS because it believes there is no way to measure deterrence. 45California State Auditor Report 2009-101 November 2009 Studies that Social Services conducted in 2005 and 2009 have concluded that SFIS identifies fraud that IEVS and other eligibility determination procedures do not. Social Services provided us with a summary of an analysis that it performed in 2005 of 28 welfare applications that were rejected because SFIS identified that the applicants were attempting to receive aid under two separate identities. According to the summary, IEVS did not detect 24 of the 28 fraudulent applications. The summary indicated that IEVS failed to detect these cases because the individuals applying for aid used legitimate names, Social Security numbers, and dates of birth. Social Services concluded that IEVS would detect only cases involving unsophisticated fraud. In early 2009 Social Services compared SFIS to another process, known as file clearance, to determine whether it could replace SFIS. File clearance is a process that counties use to determine whether an applicant for aid has received or is currently receiving CalWORKs, food stamp, or benefits for the Medical Assistance Program (Medi\u2011Cal), and involves checking the State’s Medi\u2011Cal Eligibility Data System. In early 2009 Social Services surveyed the 19 largest counties to ask whether they believe that file clearance could be used in lieu of SFIS to prevent duplicate aid fraud. Ten counties responded to the survey and nine of the 10 counties indicated that both SFIS and file clearance were necessary. Social Services reviewed the matches generated by SFIS between December 2008 and January 2009. Because the majority of these cases occurred in Los Angeles and Sacramento counties, Social Services reviewed 65 cases from these counties and found that only five related to fraud. The remaining cases were not fraudulent; instead, they had experienced administrative errors caused by multiple or incorrect client identification numbers. Both Los Angeles and Sacramento counties indicated that they use SFIS to identify and correct mistakes associated with client identification numbers. As a result of this comparison, Social Services determined that counties see file clearance as an eligibility check and SFIS as a means to verify identification and prevent fraud. Some states, including Texas, Connecticut, Arizona, and New York, use fingerprint imaging systems similar to SFIS to detect duplicate aid fraud. In 1999 Texas completed an evaluation of the deterrent effect of its fingerprint imaging system and projected a savings of between $5.9 million and $11.6 million per year. Although Texas, Connecticut, and New York have not evaluated the ongoing effects and savings from their fingerprint imaging systems, Arizona is required by state law to conduct a yearly cost analysis of its fingerprint imaging program. To do so, Arizona calculates the value of costs avoided as a result of attempts by applicants to receive duplicate aid as identified by its fingerprint imaging system, and it also tracks and calculates the costs avoided for the number of cases Studies that Social Services conducted in 2005 and 2009 have concluded that SFIS identifies fraud that IEVS and other eligibility determination procedures do not. California State Auditor Report 2009-101 November 2009 46 closed because applicants refused to undergo fingerprint imaging. Arizona then compares this total benefit with the annual cost of the contract to operate the system to identify potential savings during the year. In fiscal year 2007 08, Arizona had an annual cost of $874,000 for its fingerprint imaging program; however, this state calculated that it deterred individuals in approximately 2,200 cases of potential fraud, for a projected savings of $10 million, because the individuals refused to be fingerprinted. In addition, Arizona identified 10 cases of duplicate\u2011aid fraud, for a savings of $46,000. When comparing these savings to its contract cost of $874,000, Arizona concluded its net savings was $9.2 million. However, the large and ongoing historical backlog of SFIS results awaiting resolution by county staff raises questions of how counties are using SFIS in deterring fraud. Social Services tracks the number of cases that have generated an unexpected SFIS result\u2014indicating potential duplicate\u2011aid fraud\u2014that have awaited resolution by county staff for more than 60 days. As of July 31, 2009, the statewide backlog was more than 13,700 unresolved cases. The backlog per county ranged from no unresolved cases to almost 3,700. We asked Social Services what actions it takes to ensure that counties are addressing the backlog. Social Services told us that it had previously monitored the backlog and sent backlog reports to the counties. However, according to Social Services, it has discontinued this practice because of staffing and workload issues within Social Services and because of the fact that state law and regulations do not require counties to process the backlog. Social Services also noted that the counties have access to backlog information through SFIS. Table 7 shows backlog information for the six counties we reviewed as well as for those counties with the highest backlogs in the State. We contacted the six counties we reviewed and three additional counties with the highest backlogs\u2014San Bernardino, Tulare, and Santa Clara\u2014to understand how they approach processing SFIS results. Several were not aware of the size of their respective backlogs. Others, when asked why they had not followed up on their backlogs, indicated that staff turnover or increased welfare caseloads may have limited the time available for county staff to follow up on SFIS results. One county indicated that county staff charged with SFIS processing might not have received sufficient training. In addition, Alameda and Orange counties suggested that a large portion of their backlog was likely due to clerical errors rather than potential duplicate\u2011aid fraud. Interestingly, Los Angeles County had just 33 unresolved cases, which it attributes to extensive staff training and the fact that a welfare fraud investigator must clear an unexpected SFIS result before benefits can be approved. San Diego County had reduced its backlog from a high of almost 4,800 to 587 over the previous year, which it Arizona calculates the value of costs avoided as a result of attempts by applicants to receive duplicate aid and the number of cases closed because applicants refused to undergo fingerprint imaging, which it then compares to the annual cost to operate its system. 47California State Auditor Report 2009-101 November 2009 Table 7 Backlog of Unresolved Statewide Fingerprint Imaging System Matches as of July 31, 2009, for Select Counties COUNTY BACKLOG AS OF JULY 31, 2009 San Bernardino 3,686 Alameda 2,597 Tulare 1,266 Santa Clara 1,161 San Diego 587 Orange 511 Riverside 287 Sacramento 189 Los Angeles 33 Subtotal 10,317 All Other Counties 3,399 Statewide Total 13,716 Sources: Aging resolution reports from the Department of Social Services’ Statewide Fingerprint Imaging System. attributed to the efforts of a dedicated staff member. However, San Diego County did not identify any fraud as a result of these efforts, and most of the counties we contacted also indicated that they did not identify any fraud as a result of SFIS. Most of the counties we contacted indicated that, in concept, they believe SFIS is a deterrent to duplicate aid fraud. Nevertheless, if counties do not review the backlog, there is no way to know whether it contains potential fraudulent cases. Despite the size of the backlog, the number of duplicate\u2011aid cases SFIS has detected is fairly low, given its cost. In 2008 Social Services data show that statewide the counties used SFIS to identify 54 cases of duplicate\u2011aid fraud, and they have identified a total of 845 instances of fraud through SFIS since its implementation in 2000. Social Services asserted that SFIS does not identify many cases because it deters people from applying for duplicate aid. It noted that it has not performed a cost\u2011effectiveness analysis because the chief benefit of SFIS is that it keeps people from applying for aid fraudulently, a benefit that it asserts cannot be measured. We acknowledge that fraud deterrence is difficult to measure. However, because the State is spending approximately $5 million per year to maintain SFIS, Social Services has an obligation to justify whether the continued use of SFIS is cost\u2011beneficial to the State. The number of duplicate\u2011aid cases SFIS has detected is fairly low; in 2008 the counties identified 54 cases of duplicate\u2011aid fraud and they have identified a total of 845 instances of fraud through SFIS since its implementation in 2000. California State Auditor Report 2009-101 November 2009 48 Social Services Has Not Taken the Necessary Steps to Claim Its Share of $42.1 Million in Food Stamp Overpayment Collections Since December 2003 counties have collected and deposited into trust funds more than $42.1 million in overpayments recovered from food stamp recipients. However, Social Services has been delayed in taking the steps needed to claim its share of these overpayments or to distribute the shares of these funds due to the administering federal agency, the USDA, and release the share due the counties. Overpayments to food stamp recipients can result from administrative errors by counties or inadvertent errors or fraud by recipients. Once counties identify the errors or fraud, they calculate the amount overpaid to recipients and set up a collection account. Counties collect the overpayments from recipients through various means, including tax refunds intercepted and held by the federal government. However, the counties we reviewed deposited the actual cash they collect in their bank accounts and receive the interest earnings on these collections until Social Services claims its and the federal government’s share. Counties report the collections to Social Services every quarter on a USDA Status of Claims Against Households report (collections report), and Social Services is responsible for calculating the state, federal, and county shares of the overpayments collected. To calculate the respective shares, Social Services must work with the USDA to reconcile funds collected through federal tax refund intercepts, which the USDA retains, with the funds counties have reported to Social Services on the collections report. Once Social Services and the USDA reconcile the total funds collected, Social Services calculates the USDA’s share10 of the total collections, with the remainder of the funds split evenly between the State and the county. To accomplish the distribution, Social Services, with USDA approval, offsets each county’s claim for reimbursement of administrative expenses in the following month by the state and federal share of the collections. Similarly, Social Services gives the federal share to the USDA by reducing its own future claims for food stamp administrative funds by the federal share. Social Services asserted that several problems have delayed its efforts to distribute the $42.1 million in overpayments that have accumulated. According to a manager in Social Services’ federal reporting section, turnover of staff assigned to this task in Social Services has delayed its efforts to reconcile the tax intercepts and county collections for the food stamp program overpayments 10 The federal share is 65 percent for fraud claims and for claims due to inadvertent errors that are offset against a person’s unemployment compensation, and it is 80 percent for all other claims due to inadvertent errors. 49California State Auditor Report 2009-101 November 2009 for the past six years. A USDA financial management specialist and the Social Services manager stated that they began to work on the delayed reconciliations in early 2008; however, the USDA does not expect this process to be completed until September 2010. In August 2009 the USDA directed Social Services to halt the reconciliations so they can coordinate the application of these funds. Another problem is caused by the inaccuracies in the counties’ collection reports. The USDA has a long\u2011standing concern regarding the accuracy of the collection reports submitted by the counties. In March 2003, at the direction of the USDA, Social Services requested that each county welfare administrator certify that the collections report was accurate and properly completed. Subsequently, Social Services notified the counties that in January 2006, the USDA reviewed these monthly collection reports and raised serious concerns about the accuracy of the information reported, due to the inconsistencies among counties in completing the collection reports. In response to the USDA’s concerns, in July 2007, Social Services requested that the 19 largest counties verify the accuracy of the information reported for one quarter\u2014April to June 2007. However, most of these 19 counties were unable to verify the information contained in their reports, according to a June 2008 statewide letter to counties from Social Services. Consequently, Social Services, at the USDA’s direction, required counties to perform additional verification of the reports. This verification included having the reports reviewed by a county or independent auditor and documenting the review. Additionally, Social Services required the counties to make adjustments for any errors detected on their next collection report and to explain the nature of the errors found. Counties had to complete this verification and notify Social Services of the results by August 31, 2008. Even so, the completion of this verification process took until April 2009, when the last county successfully validated its report. Social Services asserted that it plans to incorporate the validation of collection reports into future IEVS reviews, but it has not determined yet how it will accomplish this validation. However, as we noted previously, Social Services is not performing IEVS reviews on a regular basis. Because Social Services has been delayed in addressing this issue, the USDA, counties, and Social Services have not had access to these funds. Social Services records show that of the $42.1 million balance, $17.2 million would go to the USDA, with the remaining $24.9 million split between Social Services and the counties (almost $12.5 million each). Moreover, because the counties place the cash collected in their bank accounts and earn interest on the cash, we estimate that Social Services may have lost approximately $1.1 million in interest during the six\u2011year delay on its share of the Because the counties place the cash collected in their bank accounts and earn interest on the cash, we estimate that Social Services may have lost approximately $1.1 million in interest during the six\u2011year delay for its share of the unclaimed funds. California State Auditor Report 2009-101 November 2009 50 unclaimed funds. Similarly, the USDA also was not able to earn interest on these funds. Given the difficult budgetary issues that all governments are currently facing, it is imperative that Social Services obtain all funds due it and ensure that it and the USDA promptly receive their share of these funds. Because counties are holding the cash collected in their bank accounts, neither Social Services nor USDA have received any of the interest earned on the collections. Investigation and Prosecution Efforts Vary by County County size, demographics, and county department staffing necessitate different approaches to investigating and prosecuting welfare fraud. Counties are required to maintain a special investigation unit with staffing based on the size of their CalWORKs caseload. State regulations recommend that the counties have one sworn investigator for every 1,000 CalWORKs cases they handle, although as shown earlier in Table 2 on page 13, half of the six counties we visited have a higher ratio and half have a lower ratio. Although the counties appear to have similar criteria for investigations, their procedures for conducting investigations and their criteria for prosecution and imposing administrative sanctions vary. As we discuss in the Introduction, the special investigation unit can be located within the county welfare department, the district attorney’s office, or the sheriff ‘s office. The six counties we visited all classify their antifraud efforts as either early fraud activities or ongoing investigations. Although these six counties use sworn peace officers to conduct ongoing investigations, only Riverside and Sacramento counties use investigative staff who are not sworn peace officers to conduct early fraud activities. Riverside County told us that using non\u2011sworn investigative staff to handle early fraud referrals enables sworn investigators to focus on investigating potential ongoing fraud. Sacramento County told us that it uses non\u2011sworn staff to conduct early fraud investigations because these staff are more knowledgeable about eligibility issues and are less expensive than sworn peace officers. In addition, Sacramento County believes that welfare applicants tend to feel more relaxed and cooperative when investigators who are not peace officers conduct home visits. The other four counties we reviewed use sworn investigative staff to conduct all investigations, regardless of the type of referral. To explain why it uses sworn investigators only, Orange County stressed legal advantages, stating that the presence of sworn officers places more emphasis on the client’s need to be truthful and that the officers can testify to hearsay, make arrests, and take immediate action in abuse and neglect situations. 51California State Auditor Report 2009-101 November 2009 California law allows prosecution of welfare fraud as a felony when the potential monetary loss is at least $400. The counties have developed guidelines that set monetary thresholds below which the district attorney generally does not prosecute fraud. These thresholds vary among the counties we visited and can be as high as $10,000, depending on the type of offense. These variances may affect the number of cases referred and successfully prosecuted in each county, which are shown in Table 8. The counties we visited stressed that their thresholds are flexible and indicated that they refer cases for prosecution that fall below the threshold if warranted by the specific characteristics of the case. For example, two counties told us that they would investigate repeat offenders even if the monetary loss was below their prosecution thresholds. Table 8 Prosecution Activities Related to CalWORKs and Food Stamp Cases in 2008 ENTITY BACKLOG OF REFERRALS FOR PROSECUTION NOT ACTED UPON AS OF JANUARY 1, 2008 NEW REFERRALS FOR PROSECUTION RECEIVED DURING 2008 ACTIONS TAKEN ON THE REFERRALS FOR PROSECUTION PROSECUTIONS FILED REFERRALS NOT PROSECUTED PROSECUTIONS FILED AS A PERCENTAGE OF ACTIONS TAKEN COUNTIES’ NET ADJUSTMENTS TO REFERRAL BACKLOG DURING 2008* BACKLOG OF REFERRALS FOR PROSECUTION NOT ACTED UPON AS OF DECEMBER 31, 2008 Alameda 790 76 60 58 2 97% (13) 793 Los Angeles 1,589 811 895 769 126 86 (452) 1,053 Orange 111 175 170 140 30 82 \u2011 116 Riverside 48 351 348 332 16 95 \u2011 51 Sacramento 16 150 147 125 22 85 \u2011 19 San Diego 64 57 62 62 \u2011 100 (7) 66 Statewide 6,381 6,858 5,074 3,164 1,910 62 (2,566) 5,599 Sources: Investigation activity reports submitted by counties for 2008 to the Department of Social Services (Social Services). Note: As we discuss elsewhere in this report, the figures counties reported to Social Services regarding their investigation activities are of undetermined reliability. Because counties are to report referrals for prosecution by program, and many food stamp recipients also receive CalWORKs benefits, these figures double count cases for which recipients receive assistance under both programs. * When counties find that the previous month’s data was inaccurate, they report adjustments in the following month. The data reported by counties statewide show variances in the number of referrals for prosecution of CalWORKs and food stamp fraud and in the outcomes of the prosecutions filed, as shown in Table 8. As of January 1, 2008, there was a statewide backlog of 6,381 referrals, based on data that counties reported to Social Services, and 6,858 new cases were referred for prosecution during 2008. This amounted to 13,239 cases, of which the counties took action on 5,074 cases. Of these cases, the district attorneys chose to prosecute 3,164 (62 percent) and decided not to prosecute the remainder. As a result, the backlog of prosecution referrals decreased by about 12 percent during 2008, with 5,599 referrals for prosecution reported by counties as the backlog on December 31, 2008. California State Auditor Report 2009-101 November 2009 52 Although 62 percent of the actions taken statewide were to file prosecutions, the six counties we reviewed filed prosecutions at a higher rate. Alameda, Riverside, and San Diego counties filed prosecutions for over 90 percent of the cases they acted on during 2008, while the other three counties prosecuted more than 80 percent. Despite these high rates of prosecution, the number of cases remaining in the referral backlog varies significantly by county. Alameda and Los Angeles counties reported high backlogs relative to the other counties we reviewed. Alameda County told us that the referral backlog includes referrals made to the district attorney investigative staff for investigations, and also stated that the two inspectors performing this work handle other public assistance fraud investigations. Such large prosecution backlogs create the risk that, by the time these counties prosecute these cases, the cases may be too old to achieve worthwhile results. Table 9 shows the prosecution outcomes that counties reported for cases during 2008.11 Of the cases referred for prosecution statewide, a successful outcome\u2014a conviction or pleading of charges\u2014was achieved 83 percent of the time. Most of these outcomes were convictions for welfare fraud. In only 12 percent of the prosecutions did the outcome result in a dismissal, indicating that generally once a case is prosecuted it will likely result in a conviction or pleading. Five of the six counties we reviewed were more successful in obtaining convictions or pleadings than the statewide average, with Alameda County recording the lowest success rate in obtaining convictions at 65 percent of its cases. Further, Alameda County, with 33 percent of the cases ending in dismissals, had more than twice the statewide average rate for dismissals, with most of the counties we reviewed ranging from 1 percent to 6 percent of their cases resulting in dismissals. Subsequent to receiving excerpts of our draft report on September 30, 2009, the Alameda County District Attorney’s Office (district attorney), sent us a letter dated October 12, 2009, disputing the number of dismissals that Alameda County’s welfare department reported. The district attorney believes that the number of dismissals should be 36 not 35; that only 23 of the 36 dismissals relate to the CalWORKs and food stamp programs; and that of the 23 dismissals only seven were granted on a motion by the prosecution while the remaining dismissals were the result of the normal operations of the judicial system. The district attorney believes that Alameda County’s reported data is inaccurate. Nevertheless, we display in Table 9 the prosecution data that the county welfare departments, including Alameda County, reported to Social Services in the investigation activity reports. 11 Because of the length of time needed for criminal prosecutions of CalWORKs and food stamp cases, the cases included in Table 8 are not necessarily the same as those included in Table 9. 53California State Auditor Report 2009-101 November 2009 Table 9 Prosecution Outcomes Related to CalWORKs and Food Stamp Fraud Cases During 2008 PROSECUTION CASES CONCLUDED DURING THE YEAR CASES RESULTED IN CONVICTIONS CASES IN WHICH CHARGES WERE PLEADED CASES DISMISSED BY JUDGE CASES DECLINED CASES IN WHICH STATUTES OF LIMITATIONS EXPIRED OTHER* ENTITY AMOUNT PERCENT AMOUNT PERCENT AMOUNT PERCENT AMOUNT PERCENT AMOUNT PERCENT AMOUNT PERCENT Alameda 106 69 65% 0 0% 35 33% 2 2% 0 0% 0 0% Los Angeles 849 747 88 0 0 102 12 0 0 0 0 0 0 Orange 126 53 42 60 48 7 5 0 0 0 0 6 5 Riverside 722 349 48 360 50 4 1 9 1 0 0 0 0 Sacramento 121 113 93 2 2 6 5 0 0 0 0 0 0 San Diego 102 98 96 0 0 4 4 0 0 0 0 0 0 Statewide 5,295 3,278 62 1,090 21 634 12 59 1 16 0 218 4 Sources: Investigation activity reports submitted by counties to the Department of Social Services (Social Services) for 2008. Note: As we discuss elsewhere in this report, the figures that counties report to Social Services regarding their investigation activities are of undetermined reliability. * Other includes such actions as administrative actions, disqualification consent agreements, and acquittals. The results from the counties we reviewed are especially notable when compared to the overall fraud referral caseload that these counties represent. The data suggest that other counties have higher percentages of dismissals and that the counties we reviewed, if their data are accurate, may use best practices that could be of benefit to other counties. As a result, it is in the best interest of Social Services to track these variances, as well as study the counties’ prosecution practices to determine whether other counties could become more effective in their efforts by emulating the successful prosecution practices used elsewhere. Once they are referred for prosecution, CalWORKs and food stamp fraud cases follow a standard process with few variations. If the case is worthy of prosecution as determined by a district attorney, the attorney typically files felony welfare fraud and perjury counts for all individuals involved in the case. Upon partial or full repayment, some district attorneys may reduce the charges to a misdemeanor welfare fraud count and may expunge the defendant’s record of the felony charges. State regulations require counties to conduct administrative disqualification hearings for CalWORKs and food stamp fraud cases for which the facts do not warrant prosecution or cases that have been referred for prosecution and subsequently declined. An impartial administrative law judge conducts these hearings. If the administrative law judge finds that a welfare recipient intentionally committed welfare fraud, the individual is barred California State Auditor Report 2009-101 November 2009 54 from receiving welfare benefits for a specified period of time or permanently, depending on the nature of the violation. Of the counties we reviewed, only Sacramento County extensively used the administrative disqualification hearing process during 2008. Despite the requirement in state regulations, Social Services told us that many counties have stopped using the administrative disqualification hearing process, which it attributes to county investigative staff believing that the administrative disqualification hearing standard of proof is higher than in criminal cases. In addition, Orange County told us that it discontinued the administrative disqualification hearings in July 2004 because it determined that, in the two and half years the program was in operation in the county, the cost outweighed the benefit by $57,000. Orange County also provided us a December 2005 letter from Social Services’ chief administrative law judge indicating that participation in the administrative disqualification hearing process was optional for CalWORKs. Social Services told us that it has convened a workgroup with the State’s presiding administrative law judge to discuss county concerns and clarify the appropriate application of the administrative hearing process. When the workgroup has completed its efforts, Social Services will issue a letter to counties that will explicitly address the administrative disqualification hearing requirements. Recommendations To ensure that counties are consistently following up on all match lists, Social Services should do the following: Remind counties of their responsibility under state regulations to follow up diligently on all match lists. Further, it should work with counties to determine why poor follow\u2011up exists and address those reasons. Revive its efforts to work with counties and federal agencies to address the counties’ concerns about match\u2011list formats and criteria. Perform IEVS reviews of all counties regularly and better enforce the counties’ implementation of its recommendations to correct any findings and verify implementation of the corrective action plans submitted. Recognizing that the deterrence effect is difficult to measure, Social Services should develop a method that allows it to gauge the cost\u2011effectiveness of SFIS. Social Services should include in its efforts to measure cost\u2011effectiveness the administrative cost that counties incur for using SFIS. Based on its results, Social Services should determine whether the continued use of SFIS is justified. Despite a requirement in state regulations, of the counties we reviewed, only Sacramento County extensively used the administrative disqualification hearing process during 2008. 55California State Auditor Report 2009-101 November 2009 To expedite the distribution of the $42.1 million in food stamp overpayment collections to the appropriate entities, Social Services should continue to work with the USDA and make its reconciliation of the backlog of overpayments a priority. Further, it should develop procedures to ensure that it promptly reconciles future overpayments. Additionally, Social Services should continue to monitor the counties’ collection reports to ensure that counties are reporting accurate information. Social Services should track how counties determine prosecution thresholds for welfare fraud cases and determine the effects of these thresholds on counties’ decisions to investigate potential fraud, with a focus on determining best practices and cost\u2011effective methods. It should then work with counties to implement the consistent use of these cost\u2011effective methods. Social Services should either ensure that counties follow state regulations regarding the use of administrative disqualification hearings or pursue changing the regulations. We conducted this review under the authority vested in the California State Auditor by Section 8543 et seq. of the California Government Code and according to generally accepted government auditing standards. We limited our review to those areas specified in the audit scope section of the report. Respectfully submitted, ELAINE M. HOWLE, CPA State Auditor Date: November 3, 2009 Staff: John Baier, CPA, Audit Principal Kris D. Patel Christina Animo Nicholas D. Cline Meghann K. Leonard, MPPA Whitney M. Smith Maya Wallace, MPPA Benjamin Ward, CISA, ACDA Legal: Scott A. Baxter, JD For questions regarding the contents of this report, please contact Margarita Fern\u00e1ndez, Chief of Public Affairs, at 916.445.0255. California State Auditor Report 2009-101 November 2009 56 Blank page inserted for reproduction purposes only. 57California State Auditor Report 2009-101 November 2009 Appendix METHODOLOGY FOR COMPUTING THE COST\u2011EFFECTIVENESS OF FRAUD INVESTIGATION EFFORTS To calculate the cost\u2011effectiveness of both early fraud detection activities and ongoing fraud investigations, which we show in Table 3 on page 22, we applied the following formulas at the statewide level and for the six counties we visited. Specifically, we calculated the measurable costs and savings of these efforts during 2008 with respect to the California Work Opportunities and Responsibility to Kids (CalWORKs) program and the federal Supplemental Nutrition Assistance Program, known as the food stamp program in California. The following methodology describes our formula and sources of information, using our calculation of the cost\u2011effectiveness of Los Angeles County’s early fraud detection activities (early fraud activities) and ongoing investigations for CalWORKs as an illustrative example. Cost\u2011Effectiveness Formulas Early Fraud Activities (Monthly welfare benefits saved as a result of early fraud activities \u00d7 Projected period of savings) \u00f7 Cost of performing early fraud activities = Savings achieved for every $1 spent. Ongoing Investigations [(Monthly welfare benefits saved as a result of ongoing investigations \u00d7 Projected period of savings) + Overpayments identified] \u00f7 Cost of performing ongoing investigations = Savings achieved for every $1 spent. Monthly Welfare Benefits Saved as a Result of Early Fraud Activities and Ongoing Investigations The denial, discontinuance, and reduction of aid payments due to investigative efforts result in a savings to the State of California (State) by avoiding future aid payments for potentially fraudulent activities. Counties submit to the Department of Social Services (Social Services) a monthly report indicating the number of cases for which they denied, discontinued, or reduced aid due to early fraud activities, ongoing investigations, and certain matches identified by the State for the CalWORKs and food stamp California State Auditor Report 2009-101 November 2009 58 programs. Counties also report to Social Services the number of CalWORKs and food stamp cases receiving aid and the total amount of aid, which allowed us to calculate a 2008 statewide average monthly amount of aid per case of $538.40 and $281.97 for the CalWORKs and food stamp programs, respectively. Because the counties avoided the entire aid payment when denying or discontinuing a case, we calculated the savings resulting from these actions by multiplying the number of cases for which aid was denied or discontinued by the average 2008 monthly grant amount. To determine the savings due to reductions in aid, we multiplied the number of cases for which the county reduced aid due to investigative efforts by the 2008 average amount of reductions for all cases\u2014$174.89 for CalWORKs and $65.55 for food stamp programs\u2014in Los Angeles County’s welfare database. The sum of these savings represents the total savings resulting from early fraud activities and ongoing investigations. Three counties provided their average reduction per case during 2008. Two counties’ figures were reasonably comparable to Los Angeles County’s average reductions. However, Orange County told us that it had an average reduction of $422 for CalWORKs and $132 for food stamp programs. If we use Orange County’s reduction amounts, its cost\u2011benefit would be higher. However, even with using Los Angeles County’s reduction amounts, Orange County’s savings are still the highest or second highest among the six counties. Nevertheless, to be consistent, we used Los Angeles County’s average reductions in our computation because it represents the largest caseload in the State for both the CalWORKs and Food Stamp programs. Projected Period of Savings Forming the basis of the three\u2011month estimate\u2014our most conservative estimate of the savings\u2014is the fact that recipients of both the CalWORKs and food stamp programs are required to report quarterly any changes in their eligibility, such as increased income or a child leaving the home. We also used an 18\u2011month projection because Social Services asserted that its ongoing analysis of historical eligibility data for CalWORKs recipients indicates that they receive aid for an average of 18 months. Although Social Services also determined that food stamp recipients receive aid for an average of 31 months, we used the shorter period in our analysis to maintain consistency between our cost\u2011effectiveness results for the two aid programs. 59California State Auditor Report 2009-101 November 2009 Overpayments Identified Through their ongoing investigations, counties identify overpayments to recipients because of welfare fraud. Although counties might identify such overpayments through early fraud activities, they indicated that most, if not all, of the overpayments are identified through ongoing investigations. Therefore, we include any overpayments counties reported as a one\u2011time savings attributable to ongoing investigations. Cost of Performing Early Fraud Activities and Ongoing Investigations The counties’ investigative costs are largely reimbursed with federal and state funds. Counties submit quarterly expense claims to Social Services for reimbursement of administrative costs. These expense claims separately identify the costs of early fraud activities and ongoing investigations for both CalWORKs and food stamp programs, by using different codes. These costs generally include personnel costs and a related share of administrative costs associated with performing early fraud and ongoing investigations. Cost\u2011Effectiveness Calculations for Los Angeles County Los Angeles County reported that during 2008 it denied or discontinued 2,329 CalWORKs cases and reduced aid in 1,219 CalWORKs cases through its early fraud activities. We calculated that these actions resulted in a monthly savings of $1,467,125 for early fraud, using the method described previously for early fraud. Further, Los Angeles County reported that during 2008 it denied or discontinued 13 CalWORKs cases and reduced aid in 21 CalWORKs cases through ongoing investigations. We again calculated the resulting monthly savings to be $10,672, using the method described earlier. In addition, Los Angeles County identified $7,778,234 in CalWORKs aid overpayments during 2008. In its expense claims submitted to Social Services, the county claimed $7,211,996 for costs related to CalWORKs early fraud activities and $10,130,254 for costs related to CalWORKs ongoing investigations. Using the cost\u2011effectiveness formulas noted earlier, we calculated the cost\u2011effectiveness of Los Angeles County’s early fraud activities and ongoing investigations related to CalWORKs cases using the three\u2011month projection as shown on page 60, to arrive at the results included in Table 3 on page 22. California State Auditor Report 2009-101 November 2009 60 Cost\u2011Effectiveness of Early Fraud Activities for CalWORKs According to a Three\u2011Month Projection ($1,467,125 savings \u00d7 3 months) \u00f7 $7,211,996 costs = $0.61 in savings for every $1 spent Cost\u2011Effectiveness of Ongoing Investigations for CalWORKs According to a Three\u2011Month Projection [($10,672 savings \u00d7 3 months) + $7,778,234 overpayments identified] \u00f7 $10,130,254 costs = $0.77 in savings for every $1 spent 61California State Auditor Report 2009-101 November 2009 (Agency response provided as text only.) Department of Social Services 744 P Street Sacramento, CA 95814 October 13, 2009 Ms. Elaine M. Howle* State Auditor 555 Capitol Mall, Suite #300 Sacramento, CA 95814 Dear Ms. Howle: SUBJECT: BUREAU OF STATE AUDITS REPORT: DEPARTMENT OF SOCIAL SERVICES: It Lacks Assessments of Cost Effectiveness and Is Missing Opportunities to Improve Counties’ Antifraud Efforts in the CalWORKS and Food Stamp Programs (Report# 2009-101) The California Department of Social Services (CDSS) appreciates the opportunity to respond to the draft Bureau of State Audits (BSA) report entitled Department of Social Services: It Lacks Assessments of Cost\u2011Effectiveness and Is Missing Opportunities to Improve Counties’ Antifraud Efforts in the CalWORKS and Food Stamp Programs. The enclosed response addresses the CDSS concerns and efforts to implement the recommendations. Further, the CDSS will endeavor to work with the BSA auditors on a cost-effective fraud deterrence methodology. If you have any questions concerning the enclosed CDSS response, please contact me at (916) 657-2598 or Karen Ruiz, Deputy Director, Information Systems Division, at (916) 654-1039. Sincerely, (Signed by: John A. Wagner) JOHN A. WAGNER Director Enclosure * California State Auditor’s comments begin on page 75. California State Auditor Report 2009-101 November 2009 62 CDSS Response to the BSA Draft Report 2009-101 Recommendations for Social Services: Introduction\u2011Background BSA Statement: Federal and state laws require counties to maintain a special investigation unit to investigate potential welfare fraud and refer substantiated fraud either for prosecution or for administrative settlement. Social Services recommends that counties have one sworn peace officer investigator for every 1,000 active CalWORKs cases. Response: Social Services acknowledges that the counties are not consistent in maintaining the required ratio of staff in Special Investigations Units (SIUs). All County Information Notice I-18-09, dated April 7, 2009, was issued to remind the counties that state regulations that (Manual of Policies and Procedures (MPP) Section 20-007.113) require a ratio of one sworn peace officer for every 1000 active CalWORKs cases applies to both the CalWORKs and CalWORKs Stage One Child Care caseloads. It further reminds counties that in 7 CFR 272.4(g), the Food Stamp Program is required to operate a fraud detection unit in areas where 5000 or more households participate in the program. While MPP 20-007.113 does not specifically address the federal regulation, counties also need to consider this workload when determining appropriate staffing levels for their SIUs. Chapter #1 The Cost Effectiveness of Counties’ Efforts to Combat Fraud Varies, Though the Data for Such Computations are Questionable Sub Chapter #4: Social Services and the Counties Have Not Determined Whether Antifraud Efforts Are Cost\u2011Effective BSA Statement: Although Social Services has developed a formula to calculate the savings that counties realize as a result of their antifraud efforts\u2014 in terms of fraudulent aid not paid and administrative savings\u2014Social Services doesn’t use this formula to evaluate the cost effectiveness of counties’ antifraud efforts. Response: In response to a legislative request in 2006, Social Services provided information regarding CalWORKs Fraud Costs and Collections\/Savings for Fiscal Year (FY) 2003-04 (this information was provided to BSA on September 8, 2009). The estimated savings represents avoided grant\/administrative costs associated with early and ongoing fraud activities that resulted in benefit reductions, denials and discontinuances. The estimate assumes that absent the program integrity efforts, cases would have otherwise come on to or stayed on aid for a period of time. The fraud costs represent administrative costs as reported by the counties for activities related to early and ongoing fraud activities as identified by specific CalWORKs Program Codes (description of codes provided to BSA on October 6, 2009). Social Services is in the process of updating this information with FY 2007-08 data and will provide the analysis to the BSA as soon as possible. Other Comment The BSA has developed their own cost effectiveness methodology of comparing the savings resulting from efforts to combat welfare fraud to the counties’ costs to perform investigation activities. Social Services has not had time to fully evaluate the BSA methodology. However, upon preliminary review it appears that the 1 Draft BSA Report 2009-101 1 10\/13\/09 63California State Auditor Report 2009-101 November 2009 CDSS Response to the BSA Draft Report 2009-101 BSA’s conservative estimate of assuming savings for only a three-month period is inappropriate. The average length of stay on the CalWORKs program is approximately 18 months. Although some cases may have been on aid for some number of months prior to the fraud determination (in the case of discontinuances and benefit reductions), it seems reasonable to assume they would have otherwise stayed on for more than just an additional three months. The BSA indicates that their three-month assumption is based on the fact that recipients of both the CalWORKs and food stamp programs are required to report quarterly any changes in their eligibility. However, the information reported on the quarterly report does not necessarily have a direct relationship to the finding of fraud and if something fraudulent was reported it may not be identified immediately (i.e., may be reported for several quarters before action taken). Sub Chapter #7: Social Services’ Procedures for Reviewing Counties’ Investigation Activity Reports Are Inadequate BSA Statement: When creating this report, Social Services does not follow up on discrepancies, such as potential underreporting of activity by counties. For example, Los Angeles County representing 30 percent of the State’s CalWORKs caseload is the largest county in the state, with the next largest county having just over 7 percent of the State’s caseload. Given that its caseload is more than four times larger than that of the next largest county, it is reasonable to assume that Los Angeles County would report the highest number of cases in most categories on the investigation report. However, our review of the fiscal year 2007\u201108 data found that this did not occur . . . . For example, although the counties reported reducing a total of nearly 5,000 cases during fiscal year 2007\u201108 as a result of ongoing investigations, only 41 of those were reported by Los Angeles County, a number that seems quite low considering that the county spent over $23 million on ongoing investigations during 2008 the highest by far among the counties we reviewed. Response: Generalizing an expectation that activity numbers will be relative to caseload counts is an unproven assumption. This is especially true when the measurement is based on a very complex report containing 382 cells, reflecting activity in a program area that historically has large fluctuations depending on applicant and recipient characteristics, county staffing, and changing investigative emphasis within counties. The Los Angeles County example cited by the audit to support the contention is a good example of the difficulties. The 41 cases of benefit reduction the audit mentions were for the ‘non early fraud’ subcategory. When the 3,502 cases in the ‘early fraud’ subcategory are counted, Los Angeles County has the highest number of benefit reductions for the combined subcategories. Social Services is very interested in improving its data review approach, but unfortunately, the audit does not offer specific suggestions in this area beyond the belief that Los Angeles should usually report the highest number in each category. Although Social Services staffing limitations preclude more on site review than that provided by the IEVS reviews, we are open to concrete suggestions for items meriting follow up. 2 4 3 5 Draft BSA Report 2009-101 2 10\/13\/09 California State Auditor Report 2009-101 November 2009 64 CDSS Response to the BSA Draft Report 2009-101 Sub Chapter #8: Errors in the Counties Investigation Reports Are Passed On to Other Parties BSA statement: Further, Social Services uses this report for special studies, such as a 10 year study of welfare fraud trends that it completed in 2006. The intent of the study was to assess trends and identify best practices related to early and ongoing welfare fraud investigations, overpayment collections, and county administrative practices. Response: Social Services did not use the fraud investigation quarterly report for the 10-Year Study because there were several revisions made to the monthly report after the quarterly report was published. Social Services uses current data provided from the monthly reports to reflect the most current information available during that time for special requests. Recommendation #1: To ensure that all counties consistently gauge the cost-effectiveness of their early fraud activities and ongoing investigation efforts for the CalWORKs and food stamp programs, Social Services should work with the counties to develop a formula to perform a cost-effective analysis using information that the counties currently submit. Response: Social Services has been working with its internal stakeholders to develop a formula to evaluate the cost effectiveness of county fraud operations. We hope to have this formula completed soon, as resources permit. Additionally, Social Services has established a workgroup, with county participation, to improve the accuracy of the data collected in the Investigative Activity Report (DPA-266). This data would be used in conducting any cost-effective analysis of the counties’ fraud operations. However, due to limited state and county resources, it may take quite some time to complete this process. Recommendation #2: To ensure that counties are getting the most benefit from the resources they spend on antifraud efforts related to CalWORKs and food stamp cases, Social Services should do the following: Using the results from this cost-effectiveness analysis, determine why some counties’ efforts to combat welfare fraud are more cost-effective than others. Response: Social Services conducted an analysis of the cost-effectiveness of county fraud operations in 2006, when it completed a study of ten years of county data. Currently, the Fraud Bureau needs more resources to continue these efforts. As described above, Social Services believes the focus should be first to ensure the accuracy of the counties’ report data before developing a formula for determining the cost-effectiveness of these operations. Social Services continues to work on this effort, as resources permit. Seek to replicate the most cost-effective practices among all counties. 6 Draft BSA Report 2009-101 3 10\/13\/09 65California State Auditor Report 2009-101 November 2009 CDSS Response to the BSA Draft Report 2009-101 Response: One thing that Social Services learned from its work with the Program Integrity Steering Committee (PISC) is that what might be a best practice in one county may not work in another county for a variety of reasons. Social Services has already shared statewide potential promising approaches that were developed by the PISC Peer Review Team. Continue to work on the recommendations of the steering committee that it is already addressing and more promptly act on the remaining recommendations. Response: Social Services is continuing to work on the remaining five recommendations of the PISC, as resources permit. Recommendation #3: To ensure the accuracy and consistency of the information on welfare fraud activity that counties report and that Social Services is subsequently reports to the federal government, the Legislature, and internal users, Social Services should: Remind counties that they are responsible for reviewing the accuracy and consistency of the investigation activity report before submission. Response: Social Services has established a workgroup to clarify the instructions and data that are to be entered on the DPA-266. The efforts of this workgroup will continue, as state and county resources become available. Once the report has been revised, CDSS will provide technical assistance to the counties on how to complete the report accurately. Perform a more diligent review of the counties’ investigation activity reports to verify the accuracy of the information submitted. Response: Social Services reviews these reports during its IEVS Review process. Inaccuracies in the reports are discussed with county staff during the county review. Provide counties feedback on how to correct and prevent errors that it detects during this review. Response: During county IEVS Reviews, Social Services staff provide county staff directions on how to correct inaccuracies in the DAP-266 report. Continue with its committee’s efforts to clarify instructions to counties for completing the investigation activity report. 7 8 8 Draft BSA Report 2009-101 4 10\/13\/09 California State Auditor Report 2009-101 November 2009 66 CDSS Response to the BSA Draft Report 2009-101 Response: Social Services continues its workgroup efforts. However, the limited state and county resources make the outcome of this workgroup a long-term goal. Chapter #2: The Department of Social Services and the Counties Could Improve Their Ongoing Efforts to Combat Welfare Fraud Subchapter #2: Counties Assert That the Format of Some Match Lists Could Be Improved BSA statement: Additionally, seven of the 10 match lists are provided to the counties as paper copies, including three that have a 45\u2011day timeline. Three lists\u2011the payment verification system, new hire registry, and integrated earning clearance fraud detection match lists are sent in an electronic format. Social Services indicated that four of the remaining lists are provided to some counties in electronic format depending on the county’s welfare database system. All five counties we visited told us that having all match lists in electronic form would allow them to process matches more efficiently. Response: Social Services is moving towards paperless transmission of matches to counties. The Payment Verification System (PVS), Integrated Earnings Clearance Fraud Detection (IFD), and New Hire Registry (NHR) matches, which used to represent the bulk of paper matches sent to counties, are now sent electronically. The PVS match converted to paperless transmission in May 2007, and the IFD and NHR matches started paperless transmission in June 2009. Although Social Services has limited resources, other matches will convert to paperless transmission when feasible. Subchapter #3: Social Services Monitoring of Counties’ Follow\u2011Up Efforts Is Weak BSA statement: Although Social Services has a process in place to monitor the counties’ efforts to follow up on match lists, it is missing opportunities to improve their efforts because it does not visit all counties on a regular basis and does not always enforce recommendations from the reviews it does perform. . . Specifically, it has not reviewed 26 of the 58 counties during the past three years. Response: Social Services has not physically reviewed 23 of the 58 counties in the last three years due to limited staff and resources. However, self-assessment surveys were sent out to all 58 counties in 2006-2007. Social Services received prior approval from FNS to use this alternative review process. In 2008 and 2009, Social Services conducted physical reviews in more counties, and, in just the last year, have added detailed desk audits as an alternative. 9 10 Draft BSA Report 2009-101 5 10\/13\/09 67California State Auditor Report 2009-101 November 2009 CDSS Response to the BSA Draft Report 2009-101 In 2006-2007, Social Services sent self-assessment surveys to all 58 counties and conducted physical IEVS reviews on the following 9 counties: Del Norte Placer Humboldt Shasta Kern Sutter Orange Yolo Yuba In 2007-08, Social Services conducted physical IEVS reviews on 6 counties: Fresno Nevada Orange Riverside Santa Clara Ventura In 2008-09, Social Services conducted IEVS reviews on 27 counties: Napa El Dorado Solano Yuba San Joaquin Ventura Tulare Santa Barbara San Bernardino Marin Sacramento San Diego Merced San Francisco Colusa (Desk Review) Sonoma Del Norte Kern (Desk Review) Lassen (Desk Review) Butte Kings Stanislaus Orange Madera San Mateo Alameda Contra Costa In total, Social Services completed IEVS reviews on 35 counties during the last three years, in addition to quarterly visits to Los Angeles County to follow up on a focused IEVS review of notices of action and collections issues. BSA statement: Among the counties not reviewed is Los Angeles, which represents approximately 30 percent of the State’s California Work Opportunities and Responsibility to Kids (CalWORKs) cases. Response: The 1995 IVES review of Los Angeles County indicated serious problems and backlogs with the Los Angeles Department of Public Social Services (LA-DPSS) processing of overpayments. Based on a review of LA County reports, which indicated a significant decrease in collection activity, Social Services conducted a focused IEVS review in 2007. Since that review, Social Services management and staff have been working and meeting regularly with senior executive and management staff of LA-DPSS to resolve these issues. Since July 2008, Social Services has required a formal quarterly report from LA-DPSS detailing their progress in this endeavor. LA-DPSS has made significant progress: – In early 2008, they had a backlog of 92,752 closed food stamp claims needing resolution. Their most recent quarterly report indicates that 73,120 of these claims have been resolved to date. – In early 2008, they had a backlog of 15,149 open claims that required adequate notices of action be sent out. Their most recent quarterly report indicates 11,618 of these claims have been resolved to date. 11 12 Draft BSA Report 2009-101 6 10\/13\/09 California State Auditor Report 2009-101 November 2009 68 CDSS Response to the BSA Draft Report 2009-101 During the past two years, Social Services staff and management have met with LA-DPSS on seven occasions and will be meeting with them again on October 27, 2009. LA-DPSS has dedicated over 80 of their staff to this effort and have had to train over 4,000 of their staff in the handling of payments to remedy these problems. Both LA-DPSS and Social Services believe that it is more appropriate to resolve these issues before implementing a new full IEVS review. BSA statement: Social Services’ review log dates back to 1995 and shows that . . . five small counties Trinity, Modoc, Inyo, Mono, and Alpine have never been reviewed. Response: With USDA concurrence, Social Services has conducted self-assessment surveys of many smaller counties due to staffing shortages and where it has not been economically feasible to physically travel to perform a site review. Recently, a detailed desk review was completed on Lassen County, and a desk review will soon be completed on Alpine County. The remaining counties\u2014Inyo, Modoc, Mono and Trinity\u2014will be reviewed either in-person or via desk review during FY 2009-10. Subchapter #4: Social Services Has Not Done a Cost\u2011Benefit Analysis of the Statewide Fingerprint Imaging System BSA statement: Although it believes that SFIS plays an important role in deterring fraud, Social Services has not done a cost\u2011benefit analysis of SFIS, because it believes there is no way to measure the deterrence effect of the system. Response: Social Services acknowledges that it has not performed a new cost-benefit analysis of SFIS since it first used Los Angeles County’s AFFIRM data results, but disagrees with the BSA conclusion that such an analysis is necessary to justify the ongoing value of SFIS. BSA acknowledges the difficulty in accurately measuring the deterrence effect of SFIS and notes that, of the five states using systems such as SFIS, only Arizona measures the benefits in strict monetary terms. As noted in the report, Social Services has established the deterrence value of SFIS in 1997 (based on data from Los Angeles’ AFIRM project). Additionally, in 2005, CDSS conducted its own study of the effectiveness of the IEVS system in identifying duplicate aid in comparison to SFIS. Additionally, in 2009, Social Services compared the capability of the county file clearance process in identifying potential duplicate aid to SFIS. In both the 2005 and 2009 studies, Social Services found that SFIS identified fraudulent duplicate aid that was not detected by either IEVS or the file clearance processes. The BSA noted that Arizona reports annual deterrent savings of $10 million. California’s combined CalWORKs (TANF) \/ Food Stamps (SNAP) caseload is three times the size of Arizona’s caseload. Accordingly, it is reasonable to estimate that the deterrent value of California’s SFIS is at least $10 million annually which, when weighed against its current $5 million annual maintenance and operations (M&O) cost, yields at least a $2 savings for each dollar spent. 13 14 15 Draft BSA Report 2009-101 7 10\/13\/09 69California State Auditor Report 2009-101 November 2009 CDSS Response to the BSA Draft Report 2009-101 The $5 million cost applies only to the current fiscal year. The federal government began sharing the project costs on September 1, 2009, with the execution of a new 8-year contract. Therefore, the annual cost to the state during the remaining seven years on the contract will be $4 million. Social Services believes that the studies it has conducted, coupled with the information available from other states, more than justifies the deterrent value of SFIS. Further, Social Services believes it would not be beneficial to spend additional limited state resources to collect and analyze the requisite data for an independent cost-benefit analysis of SFIS. Social Services acknowledges that, in some counties, a significant backlog of SFIS match results await resolution. Social Services will issue an All County Information Notice to remind the counties of their responsibility to complete these matches. Social Services has developed a SFIS Best Practices Handbook that includes guidance to the counties on how to resolve SFIS results and the importance of working the Resolution Queues in a timely manner. The release of the SFIS Best Practices Handbook is pending final review and comment. Along with the SFIS Best Practices Handbook, Social Services will be issuing a County Assessment Report to each county. It provides information on how to improve photo and fingerprint image quality and stresses the importance of processing the resolution queues in a timely manner. Finally, Social Services offers a SFIS training program to counties, which includes training tools and materials that counties can use and web-based training classes. The information can be found at www.sfis.ca.gov\/training_page.html. Counties can enroll in classes directly on the SFIS website. Subchapter #5: Social Services Has Not Taken the Necessary Steps to Claim Its Share of $42.1 Million in Food Stamp Overpayment Collections BSA statement: However, Social Services has not taken the steps needed to claim its share of these overpayments or to distribute the funds due to the administering federal agency, the USDA. Response: Social Services has taken the steps needed to claim its share of these overpayments or to distribute the funds due to the USDA-FNS. Social Services has been working closely with USDA-FNS since March 2008 to complete Tax Offset Program (TOP) reconciliation, and for FNS to provide approval before any offsets can be processed. Social Services has provided all back-up documentation and awaits FNS’ completion of their Letter of Credit (LOC) Adjustment in the Automated Standard Application for Payments (ASAP) before Social Services can process the offsets against the counties. The counties report the collections to Social Services quarterly on a USDA Status of Claims Against Households report (FNS 209). However, counties directly input their collection data into the Statewide Automated Reconciliation System (SARS). SARS automatically calculates the Federal, State, and County 16 17 18 Draft BSA Report 2009-101 8 10\/13\/09 California State Auditor Report 2009-101 November 2009 70 CDSS Response to the BSA Draft Report 2009-101 shares based on the information input into the SARS by the counties. After federal tax refund intercepts are reconciled, Social Services reduces the adjusted total of collections by the amount retained. Additionally, line 24, not the remainder of funds as noted in the report, of the FNS 209 is split evenly between State and County. Social Services is not solely responsible for holding up on the overpayment collection reconciliation. The reconciliation process is a joint effort between USDA and Social Services to reconcile the overpayment collection on a quarterly basis. Due to the staff turnover and lack of process documentation in both Social Services and FNS, the reconciliation from the FY 2003-04 to current FY overpayment collection have not been completed timely since January 2004. The reconciliation process was reinitiated by FNS effective March, 2008. Social Services has been working with FNS since that time. At that time the outstanding overpayment periods were March 2004 quarter through December 2007 quarter. Starting in March 2008, Social Services has reconciled some FY 2006-07 and 2007-08 overpayment collection with FNS. However, due to FNS workload priorities, they have asked Social Services via email to hold on subsequent reconciliations until they have cleared some of the quarter reconciliations that were previously sent from FRU. Social Services has provided FNS with all documents needed to complete the reconciliations. Social Services has to obtain FNS’s approval of the collection amount prior to recouping from the counties. Social Services cannot process the adjustments without USDA approval. Social Services has not delayed addressing this issue, the USDA, counties, and Social Services have not had access to these funds. This is a joint effort with FNS to complete the reconciliations in order for Social Services to process the offsets. However, Social Services was not aware counties have earned interest when they deposited the overpayment collection into their bank accounts until this audit occurred. Per 45 CFR 92.21 and the Cash Management Improvement Act (CMIA), Social Services has authority to require the counties to remit the interest earned to the Federal Agency and the State Agency. Social Services disagrees with the statement that Social Services is solely responsible for holding up on the overpayment collection reconciliation. The reconciliation process is a joint effort between USDA and Social Services to reconcile the overpayment collection on a quarterly basis. Due to the staff turnover and lack of process documentation in both CDSS and FNS, the reconciliation from the FY 2003-04 to current FY overpayment collection have not been completed timely since January 2004. BSA Statement: Social Services has had several problems that delayed its efforts to distribute the $42.1 million in overpayments that have accumulated. Response: The reconciliation process was reinitiated by FNS effective March, 2008. Social Services has been working with FNS since that time. At that time the outstanding overpayment periods were March 2004 quarter through December 2007 quarter. Starting in March 2008, Social Services has reconciled some FY 2006-07 and 2007-08 overpayment collection with FNS. However, due to FNS workload priorities, they have asked Social Services via email to hold on subsequent reconciliations until they have cleared some of the quarter reconciliations that were previously sent from FRU. Social Services has provided FNS with all documents needed to complete the reconciliations. Social Services has to obtain FNS’s approval of the collection amount prior to recouping from the counties. Social Services cannot process the adjustments without USDA approval. 19 18 18 Draft BSA Report 2009-101 9 10\/13\/09 71California State Auditor Report 2009-101 November 2009 CDSS Response to the BSA Draft Report 2009-101 BSA Statement: Because Social Services has delayed addressing this issue, the USDA, counties, and Social Services have not had access to these funds. Response: Social Services disagrees with the statement that Social Services has delayed addressing this issue, the USDA, counties, and Social Services have not had access to these funds. This is a joint effort with FNS to complete the reconciliations in order for Social Services to process the offsets. However, Social Services was not aware counties have earned interest when they deposited the overpayment collection into their bank accounts until this audit incurred. Per 45 CFR 92.21 and the Cash Management Improvement Act (CMIA), Social Services has authority to require the counties to remit the interest earned to the Federal Agency and the State Agency. Subchapter #6: Investigation and Prosecution Efforts Vary by County BSA Statement: Counties are required to maintain a special investigation unit with staffing based on the size of their food stamp and CalWORKs caseload. State regulations recommend the counties to have one sworn investigator for every 1,000 CalWORKs cases it handles. Response: See Social Services’ prior response in the Introduction-Background section. Recommendation #1: To ensure that counties are consistently following up on all match lists, Social Services should: Remind counties of their responsibility under federal and state regulations to diligently follow up on all match lists. Further, it should work with counties to determine why poor follow\u2011up exists and address those reasons. Response: Social Services agrees with this recommendation and will issue an All County Information Notice to remind counties of their obligation. Revive its efforts to work with counties and federal agencies to address the counties’ concerns regarding match list formats and criteria. Response: Social Services will consider this recommendation as resources permit. Perform IEVS reviews of all counties regularly and better enforce the counties’ implementation of its recommendations to correct any findings and verify implementation of the corrective action plans submitted. 18 Draft BSA Report 2009-101 10 10\/13\/09 California State Auditor Report 2009-101 November 2009 72 CDSS Response to the BSA Draft Report 2009-101 Response: Social Services agrees with this recommendation and has redirected staff to fully staff the IEVS Review team. Social Services plans to conduct regular reviews on a three-year cycle with regular follow ups on county corrective actions. Recommendation #2: Recognizing that the deterrence effect is difficult to measure, Social Services should develop a method that allows it to measure the cost\u2011effectiveness of SFIS. Social Services should include in its efforts to measure cost\u2011effectiveness the administrative cost that counties incur for using SFIS. Based on its results, Social Services should determine whether the continued use of SFIS is justified. Response: As BSA describes, it is impossible to accurately measure the deterrence effect of SFIS. As previously stated to BSA, Social Services is at a loss for how to develop a reasonable cost-effectiveness measurement without this critical component. However, a new independent cost-benefit analysis would not be beneficial, for the reasons previously stated in Chapter #2, Subchapter #4. Recommendation #3: To expedite the distribution of the $42.1 million in food stamp overpayment collections to the appropriate entities, Social Services should make its reconciliation of the backlog of overpayments a priority. Further, it should develop procedures to ensure that it promptly reconciles future overpayments. Additionally, Social Services should continue to monitor the counties’ collection reports to ensure that they are reporting accurate information. Response: Social Services has been in regular communication with USDA on developing a process to review the accuracy of the FNS-209 collection report data. With the concurrence of USDA, Social Services staff will be focusing this upcoming year on county FNS-209 validation report issues and corrective action statuses that Social Services and USDA have identified. Recommendation #4: Social Services should track how counties determine prosecution thresholds and determine the effects of these thresholds on counties’ decisions to investigate potential fraud, with a focus on determining best practices and cost\u2011effective methods. It should then work with counties to implement the consistent use of the more effective methods. Response: See Chapter #1, Subchapter 7 and 8 responses. Recommendation #5: Social Services should either ensure that counties follow state regulations regarding the use of administrative disqualification hearings or pursue changing the regulations. 20 13 Draft BSA Report 2009-101 11 10\/13\/09 73California State Auditor Report 2009-101 November 2009 CDSS Response to the BSA Draft Report 2009-101 Response: Social Services has established a workgroup to look at making the administrative disqualification hearing (ADH) process work more smoothly. The efforts of this workgroup continue as both state and county resources permit. Additionally, Social Services is now completing for final departmental review an All County Information Notice that details the county responsibilities for both the Food Stamp and CalWORKs ADH processes. Draft BSA Report 2009-101 12 10\/13\/09 California State Auditor Report 2009-101 November 2009 74 Blank page inserted for reproduction purposes only. 75California State Auditor Report 2009-101 November 2009 Comments CALIFORNIA STATE AUDITOR’S COMMENTS ON THE RESPONSE FROM THE DEPARTMENT OF SOCIAL SERVICES To provide clarity and perspective, we are commenting on the response to our audit from the Department of Social Services (Social Services). The numbers below correspond to the numbers we placed in the margins of Social Services’ response. Our legal counsel believes that Social Services misstates that the state regulation contained in Section 20\u2011007.113 of the Manual of Policies and Procedures requires counties to meet this ratio. The regulation reads A ratio of at least one investigator for every 1,000 California Work Opportunities and Responsibility to Kids (CalWORKs) program cases or major fraction thereof is recommended, which our legal counsel believes should be interpreted as a suggested but not a mandatory ratio. We disagree; we believe using more than one projection period is appropriate to provide differing views on the potential savings. As we describe on page 21, we used the three\u2011month projection as a conservative estimate of the savings, due to the fact that recipients of both the CalWORKs program and the federal Supplemental Nutrition Assistance Program, known as the food stamp program in California, are required to report quarterly any changes in their eligibility, such as increased income or a child leaving the home. These changes, when reported quarterly, should result in prompt changes to aid payments. We also used an 18\u2011month projection based on Social Services’ analysis. It is surprising to us that Social Services now expresses concerns with the three\u2011month projection of savings. Over a two\u2011month period, we met formally with Social Services on five occasions, as well as made numerous telephone and e\u2011mail contacts, to share our methodology and drafts of cost\u2011effectiveness calculations. Despite what we believe was ample time to review our methodology, at no time did Social Services’ staff express this concern. Social Services misses our point. We highlight Los Angeles County’s underreporting of the number of ongoing investigations as an example of a glaring error that Social Services could have readily identified if it had more thoroughly reviewed the county’s data for reasonableness. As we note on page 32, given its size, Los Angeles County reported very few results for its ongoing investigations compared to other counties. We are not suggesting that Los Angeles County should always report high numbers of results in all categories on the investigation activity report. However, it is reasonable for Social Services to question why Los Angeles County reported such low numbers, especially given that its CalWORKs 1 2 3 California State Auditor Report 2009-101 November 2009 76 caseload is more than four times larger than the next largest county and that it spent over $23 million performing ongoing investigations during 2008. In fact, as we note on pages 2 and 31, Los Angeles County acknowledged to us that it significantly underreported the number of ongoing investigations it performed but only realized this problem after we questioned the numbers. Had Social Services better scrutinized its data, it may have discovered this discrepancy. Simple follow\u2011up on such discrepancies would not only assist Social Services in identifying reporting errors, but it would also assist in evaluating the performance of counties’ antifraud efforts. Moreover, as we note on pages 29 and 34, Social Services has long been aware of errors in counties’ reporting, but it continues to compile and pass on this information to stakeholders without subjecting the data to more than a cursory review. Social Services is incorrect in stating that Los Angeles County has the highest number of benefit reductions for the combined [early fraud and ongoing investigations] subcategories. According to Social Services’ compilation of county data for fiscal year 2007 08, Orange County reported 1,361 cases more than Los Angeles County for the total of these two subcategories. Specifically, Los Angeles County reported a total of 3,543 cases with benefits reduced (3,502 cases for early fraud and 41 cases for ongoing investigations), while Orange County reported 4,904 cases for these two subcategories (3,341 and 1,563 cases), or 1,361 cases more. It is disappointing that Social Services believes we did not offer any concrete suggestions for improving its review procedures. We clearly indicate that a more thorough review of counties’ reported data is a starting place. This approach coupled with its knowledge of counties’ practices could dramatically improve the review process. Social Services misunderstood which report we were referring to. Thus, we clarified the text on page 35 to read Further, Social Services uses the investigation activity report for special studies, such as . . . . While we might agree that a certain best practice used by one county may not be suitable for use by all counties, we still believe it would be beneficial for Social Services to identify and share with other counties those practices that have proven to be cost\u2011effective. We do not believe that the periodic Income and Eligibility Verification System (IEVS) reviews are a sufficient process for validating the accuracy of counties’ investigation activity reports without also performing other activities such as following up on obvious discrepancies. We acknowledge on page 33 that Social Services reviews the investigation activity report during the IEVS 4 5 6 7 8 77California State Auditor Report 2009-101 November 2009 reviews, but as we also note on page 42, it has not reviewed 25 of the 58 counties during the past three years. Moreover, it already collects and compiles the counties’ data from the investigation activity reports, and we believe that a more thorough and rigorous review of the compiled county data rather than the minimal review that we describe on page 32 could identify potential county reporting errors. We are uncertain which time period Social Services refers to when it acknowledges having not physically reviewed 23 of the 58 counties in the last three years. The time period we used for our review was the three\u2011year period from August 2006 to August 2009, thus it is likely that our time period is different. To avoid confusion, we clarified the text on page 42 to specifically state the time period we used. We also revised the number of counties that Social Services did not review during this period from 26 to 25 counties. Until its response, Social Services did not inform us of the self\u2011assessment surveys that counties performed during fiscal year 2006 07. However, considering the extent to which we found the counties we reviewed did not appropriately follow up on match lists, we do not have a basis to believe the self\u2011assessments improved counties processing of information matching welfare recipients to data about their eligibility. Social Services asserts it conducted 27 IEVS reviews in fiscal year 2008 09, however the review log it provided us indicates that Alameda, Contra Costa, and Santa Barbara counties were conducted or were to be conducted in fiscal year 2009 10, not 2008 09. The draft audit report we provided Social Services reflected 25 on\u2011site IEVS reviews based on Social Services’ planned review schedule. We revised the text on page 42 to reflect that 21 on\u2011site reviews and three desk reviews were performed in fiscal year 2008 09 based on the review log it provided us. We believe Social Services cited an incorrect year. Social Services’ review log indicates that the last IEVS review of Los Angeles County was performed in 2005, not 2007. We stand by our conclusion that a cost\u2011benefit analysis of the Statewide Fingerprint Imaging System (SFIS) is necessary. With any expenditure of public funds, a cost\u2011benefit analysis is prudent. There are indications that SFIS may not be as beneficial as Social Services asserts, specifically, the large backlog of unresolved cases of potential duplicate aid fraud that have been allowed to languish as well as the relatively small number of instances of duplicate aid fraud that it has identified\u201454 cases in 2008 and 845 since 9 10 11 12 13 California State Auditor Report 2009-101 November 2009 78 its implementation in 2000. Therefore, a cost\u2011benefit analysis is warranted to continue the ongoing expenditure of $5 million for SFIS. As noted on page 44, in our 2003 audit, we concluded that Social Services’ methodology of projecting statewide savings using Los Angeles County’s estimated savings was flawed, especially its assumption that the incidence of duplicate\u2011aid fraud in Los Angeles County was representative of the incidence of this type of fraud statewide. Rather than making a high\u2011level comparison to Arizona’s results, Social Services should review Arizona’s methodology and determine whether parts or all of the methodology would work for California, and if so, what data needs to be collected to conduct such a cost\u2011benefit analysis. Social Services’ distinction between the State and federal share of funding for SFIS is dubious. Whether funding comes from the State or the federal government is irrelevant because when managing state and federal programs, Social Services has a responsibility to ensure that public funds are spent wisely. We are unclear how Social Services believes that the actions it describes more than justifies the deterrent value of SFIS. We saw no indications that Social Services has any data\u2014internal or from other states\u2014of SFIS deterrent value. We acknowledge on page 45 that Social Services has performed limited studies on SFIS, which indicate that SFIS identifies fraud, which other systems do not, but these studies did not analyze the costs compared to the benefits SFIS provides or measure deterrence. Social Services mischaracterizes our report. We do not attribute the reasons for the delay entirely to Social Services. Rather, as we state on page 49, a United States Department of Agriculture (USDA) financial management specialist and the Social Services manager indicated that they began to work on the delayed reconciliations in early 2008. Further, we acknowledge that in August 2009 the USDA directed Social Services to halt the reconciliations so they can coordinate the application of these funds and take other actions. Social Services incorrectly implies we miscalculated the amount of the remaining funds to distribute. On page 49, we identify that the remaining $24.9 million is split between Social Services and the counties. When reporting this figure, we did not use the federal report that Social Services refers to, rather, we used the amounts Social Services identified on a worksheet it provided to us. 14 15 16 17 18 19 79California State Auditor Report 2009-101 November 2009 Social Services misquotes our report. We do not say that it is impossible to measure the deterrence effect of SFIS. Rather, we state that the deterrence effect is difficult to measure. In fact, as we state on pages 45 and 46, Arizona developed a method to calculate the projected deterrence effect of its fingerprint imaging system. 20 California State Auditor Report 2009-101 November 2009 80 cc: Members of the Legislature Office of the Lieutenant Governor Milton Marks Commission on California State Government Organization and Economy Department of Finance Attorney General State Controller State Treasurer Legislative Analyst Senate Office of Research California Research Bureau Capitol Press Cover Public Letter Contents Summary Introduction Table 1 Figure 1 Table 2 Chapter 1 Table 3 Table 4 Recommendations Chapter 2 Table 5 Table 6 Table 7 Table 8 Table 9 Recommendations Appendix Agency Reponse\u2014Department of Social Services California State Auditor’s Comments on the Response From the Department of Social Services ”

” How the Safety Net is Failing Americans and How to Fix it Battered by the Storm Embargoed until Monday, December 7, 2009, 12:01am December 2009 A Study by the Institute for Policy Studies, the Center for Community Change, Jobs with Justice, and Legal Momentum Co-Authors: Deepak Bhargava, Timothy Casey, John Cavanagh, Karen Dolan, Peter Edelman, Barbara Ehrenreich, Sarita Gupta, Dedrick Muhammad, Diana Pearce, Steve Savner, and Kevin Shih. Special Thanks: This study was made possible by a generous grant from Max Palevsky, whose passion for the arts and social change has supported many endeavors for a better world. Acknowledgements: The authors would like to thank Dean Baker for his assistance on the unemployment sections, Chuck Collins for his assistance on Chapter 3, Sarah Anderson and Jen Doak for careful editing assistance, Tom Lewandowski for assistance on the boxes, Danilo Pelletiere for his assistance on the housing section, Deborah Wein- stein of the Coalition on Human Needs for her analysis of the Recovery Act, as well as Tamar Abrams, Germonique Ulmer, and Erin Smith for their leadership on communications. Research Assistance: Ariadne Anisimova Report Layout: Erik Leaver Cover Design: Nate Kerksick For additional copies of this report, see: www.ips-dc.org \u00a9 2009 Institute for Policy Studies, Center for Community Change, Legal Momentum, and Jobs with Justice Table of Contents Key Findings ……………………………………………………………………………………………………. 1 Introduction ……………………………………………………………………………………………………. 3 Chapter 1: The Economic Crisis and Expanding Hardship …………………………………….. 4 The Unemployment Crisis ……………………………………………………………………………4 Rising Poverty …………………………………………………………………………………………….5 Rising Foreclosures, Doubling Up, and Homelessness ……………………………………….7 A Recession for Whites is a Depression for African Americans, Latinos, and Single Mothers and Children …………………………………………………………………..9 Conclusion ……………………………………………………………………………………………….12 Chapter 2: The Social Safety Net in the Economic Crisis ………………………………………. 13 The Safety Net in America Today …………………………………………………………………13 Unemployment Insurance …………………………………………………………………………..14 Temporary Assistance to Needy Families (TANF) …………………………………………..17 Food Stamps\/Supplemental Nutrition Assistance Program (SNAP) ……………………20 Housing Programs, Renters and the Foreclosure Crisis …………………………………….22 Child Care Programs ………………………………………………………………………………….23 Conclusion ……………………………………………………………………………………………….24 Chapter 3: An Emergency Relief Package …………………………………………………………… 25 Federal Investments to Spur Job Creation and Ensure Needed Services Are Available ………………………………………………………………………………………………26 Expansion of programs that provide income or income equivalents to help people better weather the storm …………………………………………………………………………27 How to Pay for the Emergency Relief Measures ……………………………………………..30 Chapter 4: Principles for a More Effective Approach to End Poverty ………………………. 32 Endnotes ……………………………………………………………………………………………………….. 34 Key Findings 1 Key Findings 1. The Economic Crisis is Still Spreading for Millions: Unemployment: October’s 10.2 percent official unemployment level is expected to keep rising into 2010, and levels of long- term unemployment, underemployment, and discouraged former workers are reach- ing historic levels. Poverty and Hunger: Improved (but still low) poverty measures reveal that in 2008, nearly 50 million Americans were poor, including nearly one in five children, and these numbers are expected to rise further in 2009 and 2010. Likewise, hunger ( peo- ple with inadequate access to food ) affects more than 50 million Americans, including almost one in four children. Housing: The burst housing bubble of 2008 has resulted in a current rate of rough- ly 150,000 home foreclosures a month, a trend which is slated to continue into next year and beyond. This will affect 10 percent of homeowners by 2012. Race and Gender: Statistics show that what is an economic recession for Whites is an economic depression for African Americans, Latinos, single mothers, and children. 2. The Social Safety Net, Eroded Over the Past 30 Years, has Failed Millions of Poor People: The Recovery Act: The February 2009 Recovery Act is providing hundreds of bil- lions of dollars to safety net programs and has helped save lives, but tens of millions of Americans are still jobless and precariously housed or homeless. Unemployment Insurance: Roughly 57 percent of unemployed people are receiving unemployment compensation; for those re- ceiving benefits, amounts are less than half of wages, and many are losing work-related health benefits. Temporary Assistance for Needy Families (TANF): The percentage of poor children receiving temporary assistance under the main federal welfare program has fallen from 62 percent in 1995 to 22 percent in 2008. TANF benefits in 2008 averaged only 29 percent of the money needed to reach the official poverty line. Food Stamps: The federal food stamp program is the safety net program that has responded most to rising needs, with the number of families receiving benefits Battered by the Storm 2 jumping from 13 million households in June 2008 to 16 million households in June 2009. Yet, the average benefit is less than $300 per month per household. Child Care: Even while labor force par- ticipation of mothers has increased, the supply of affordable child care has lagged far behind, creating a significant barrier to employment for many, especially single mothers. 3. Americans Need an Emergency Relief Package Immediately A $400 billion emergency relief package could create 1 million new jobs, cover the huge fiscal deficits of states and localities, and cover major shortfalls in safety net programs: o Jobs: A public jobs program of $40 bil- lion can create 1 million jobs. o State and Local Fiscal Deficits: Up to $270 billion will be needed in 2010 to cover state and local deficits, which could sustain vital funding for critical safety net programs, and could save the jobs of mil- lions more workers. o Safety Net: Just over $100 billion for the expansion of programs that provide in- come or income equivalents to help people better weather the storm: Temporary As- sistance to Needy Families (TANF), Un- employment Insurance, and Food Stamps; and new policies to address the housing foreclosure crisis. Most economists agree that such job cre- ation and safety net spending are vital in a crisis like this, even without new revenues. One of the report’s authors details how the $400 billion package could be funded by tax shifts to close offshore tax havens, curb- ing speculative stock trades, and raising the top marginal rate to the levels that preceded the most recent Bush tax cuts. 4. Americans Need A Long- Term Strategy to Create an Effective Safety Net and Eliminate Poverty We need a longer-term strategy to end the scourge of poverty in our nation and to help all people achieve a living income, without regard to race, reli- gion, or gender. Such a strategy would include raising the income of current workers and recipients of public benefits, establishing a robust and effective safety net, investing in the future of our children, and creating safe and healthy communities for all people. Introduction 3 Introduction T he Great Recession of 2008-09 has bat- tered the livelihoods, homes, and security of American families. Just as Hurricane Katrina exposed the weakness of our nation’s physical safety in- frastructure, this economic storm has exposed the weak- ness of our nation’s social safety net. Seventy-five years ago, New Deal programs cre- ated in response to the Great Depression laid a broad foundation for economic protection. Programs such as Social Security, unemployment insurance, and Aid to Families with Dependent Children served as a buffer when jobs and income were scarce. In addition, the Works Progress Administration and Civilian Conserva- tion Corps provided jobs to millions. The Great Society programs of the 1960s expanded this infrastructure with Medicare and Medicaid. More recent decades saw the creation of food stamps, the Earned Income Tax Credit, and the Child Tax Credit. However, over the past 30 years, these pro- grams have been seriously eroded, in part as the result of inflation, but also by neglect and, some would say, even by design. As this report documents, the current reces- sion has only widened the already gaping holes in our social safety infrastructure. While some have declared the recession over, pointing to the bull market and overall economic growth, this report documents how the economic storm is raging on in homes, tent cities, and shelters across the country. It then looks at how the American Recovery and Reinvestment Act (ARRA) of 2009 has performed thus far. In the last two chapters, we offer immediate policy solutions, followed by an outline of long-term measures based on universal principles of equality and social justice. We believe these practical and affordable remedies are necessary to confront the greatest econom- ic storm in a generation and to build the 21st century safety net needed to weather future storms. Battered by the Storm 4 Chapter 1: The Economic Crisis and Expanding Hardship A fter the Dow climbed above 10,000 in Octo- ber, many pundits declared the worst of the economic crisis over. America is back on its feet, they crowed. This may be true for some on Wall Street, but it’s most certainly not true for tens of millions of Ameri- cans who have lost their jobs, plunged from the middle class into poverty, or been failed by our rickety social safety infrastructure. The crisis endures. It is deep, it is measurable, and it affects all of us. In this section, we look at the state of unem- ployment, poverty, and housing in America, highlight- ing the effects on already economically vulnerable populations\u2014African-Americans, Latinos and female heads of households. The Unemployment Crisis As the stock market has rebounded, the num- ber of people without jobs has continued to grow. And while the unemployment rate typically falls quickly fol- lowing a recession, this is not likely to be the case with this downturn. In October 2009, earlier than predicted, the unemployment rate went into double digits, hitting 10.2 percent.1 The Congressional Budget Office has projected that this rate will average 10.2 percent in 2010 and decline only slightly to 9.1 percent in 2011. By 2012, unemployment is expected to still be as high as 7.2 percent, almost three full percentage points above pre-recession levels.2 Not only are more people unemployed, they are staying unemployed longer than in past recessions. The high rate of long-term unemployment (those who are unemployed for six months or more) reveals the depths of the crisis. While there has been a 36 percent increase in jobless workers since December 2008, long- term unemployment is up 110 percent over the same time period.3 This means that the number of jobless workers experiencing long-term unemployment has increased at three times the unemployment rate.4 Alto- gether, nearly 5.5 million Americans, or 35.6 percent of all jobless workers, have been out of a job for six months or more.5 The crisis has been particularly brutal in the industrial heartland, once a middle class stronghold. The Congressional Budget Office reported in 2004 that manufacturing jobs nationwide, at 14 million, were the lowest in over 50 years.6 In the current recession, another two million of these relatively high-paying jobs have been slashed. In one chilling sign of the hollowing out of U.S. industry, two former manufacturing hubs in Michigan have recently joined the ranks of the top 10 poorest communities in the country.7 The official unemployment numbers do not ac- curately represent the impact of today’s recession, since they do not include the millions of Americans that are underemployed or have given up looking for a job. The Economic Crisis 5 Underemployment refers to the following two kinds of working conditions: 1) when high-skilled workers are employed in low-wage jobs that do not require their level of expertise, and 2) when people who would like to work full-time are forced to work part-time. As people experience unpaid furloughs and cutbacks in hours, the number of underemployed has risen to 11 million.8 This makes the combined total of underemployed and unemployed 27.4 million workers, or 17.5 percent of the workforce.9 And job cutbacks and losses are not distributed evenly. As Lawrence Mishel, president of the Economic Policy Institute, points out, blue-collar unemployment is rising three times as fast as white-collar unemployment.10 Latinos and African Americans are being hit harder than the general population. Since the recession began in December 2007 unemployment among Lati- nos, who are heavily employed in the housing industry, has jumped the most, by 6.9 percentage points, to 13.1 percent. African-American unemployment has risen nearly as much, by 6.8 percentage points to 15.7 per- cent. Among whites, the same rate has increased by 5.1 percentage points to 9.5 percent.11 While women over- all have a lower official unemployment rate than men, women who are full-time caregivers are not counted as unemployed, even if lack of childcare is the reason they are not looking for work. Together with men who have given up looking for work, there has been a decrease in the proportion of adults in the workforce of 5.8 percent, or 13.8 million fewer people in the workforce. Rising Poverty An all too common cultural view in the United States is that the poor are a small, permanent sector of the population, made up predominantly of African Americans, Latinos and single mothers who are lazy, promiscuous, or drug-addicted. In reality, poverty is widespread: It affects all races, two-parent and single- parent families, and the employed as well as unem- ployed. Children are the hardest-hit. According to Washington University Professor Mark Rank, rather than a condition of the undeserving poor, poverty in America is a state into and out of which a majority of the population will move [over their lifetimes]. 12 The current crisis has opened many eyes to this sad reality. Recent Census Bureau data show that nearly 40 million people, or 13.2 percent of the population, were living in poverty in 2008, the highest level in over a decade (the income threshold for a family of four was $22,050).13 Real median household income declined 3.6 percent between 2007 and 2008 to $50,303, the largest single-year decline on record and the lowest amount in real dollars since 1997.14 In percentage terms, people of color and chil- dren are suffering the most. The poverty rate was 24.7 percent for African Americans and 23.2 percent for La- tinos.15 As of 2008, 19 percent of all children under 18 lived in poverty. While children only represent a quarter of the U.S. population, they represent 35 percent of those living in poverty. The economic crisis of the past year has made things much worse. The overall national child poverty rate is expected to increase to 25 percent by the end of 2009, and the rate for African-American children is expected to exceed a shocking 50 percent.16 The picture will only look gloomier as more recent data become available. The Economic Policy Institute has projected that the overall poverty rate will Battered by the Storm 6 Box 1: There are No Jobs Robin Needham, Kendallville, Indiana: My husband lost his job in March and has been laid off since. We’ve had a hard row we’ve been hoeing. Jobs are just not out there, and we’ve got an unemployment system that seems to be broken. We’re surviving basically on unemployment right now. . I’m looking for a job, my husband is looking for a job, and there’s just no jobs out there. We’ve both gone to temporary services and signed up, and we haven’t got- ten any jobs because we want fulltime work and we want to stay in the general area because gas is so high. So, my husband signed up for unemployment and it took a long to get it rolling, and that’s what we are living on right now. But it’s hard. We were both foundry workers. When I had my children, I quit to stay home and raise my kids. My husband worked at Dalton for over 18 years until they closed. . My kids are doing okay. . They are both teenagers. They both couldn’t find jobs this summer, which was kind of discouraging for them. They thought they’d be able to walk into some kind of part-time job. They are both good kids, they get straight As. And we tell them, this is just how it is. They are also active in the Unemployed and Anxiously Employed Workers Initiative, and they campaigned on the campaign trail for all the politicians that came up. So they are learning at our knee to fight for what rights they have and keep it going. They’ve stood in line with us in the unemployment offices and they see how the system is really broken, and how long you really have to wait, and if you leave early how you’re out of luck. They saw one lady there with her kids, her little girl had to go to the restroom and there wasn’t a restroom she could use there. So, she left to go next door to use the restroom at the bank. . When she came back they said, we called your number, we’re sorry; come back the next day. And this woman, she can’t afford child care right now because she is unemployed. And I remember my kids thinking this is really sad, because the lady just dissolved into tears. You wait in long lines, they give you an 800 number. . It never gets answered at the state level and if you email them that doesn’t get answered either, so, it’s hard. This interview was conducted by The Unemployed and Anxiously Employed Workers’ Initiative in September 2009. The Economic Crisis 7 likely increase by 1.5 percentage points in 2009 and by an additional 0.4 percentage points in 2010, for a total increase of 2.6 percentage points from 2007 2010. For children, the poverty rate will likely increase 8.6 per- centage points from 2007 to 2010, to 26.6 percent in 2010. For African Americans, the poverty rate will likely increase by 7.3 percentage points from 2007 2010. By 2010, EPI projects that nearly one-third of all African Americans living in the United States will be living in poverty. However, given that the Census Bureau’s meth- odology for measuring poverty has not been updated for 40 years, even these numbers seriously underestimate the number of people lacking adequate income.17 The Census Bureau itself acknowledges as much by report- ing two numbers, the official rate as well as an alterna- tive measure recommended by the National Academy of Sciences (NAS) that uses only slightly higher poverty thresholds. This NAS measure estimates that there are about 51 million Americans in poverty, 11 million more than the official count.18 If a more realistic, geo- graphically specific measure of the minimum cost of living were used, such as the Self-Sufficiency Standard (created by Diana Pearce and calculated at the Center for Women’s Welfare at the University of Washington), then the number of people with inadequate income to meet basic needs, including work-related costs, health care and taxes, would substantially increase to two or more times the official count.19 There is an urgent need to develop new official federal poverty measures that are based on more realistic and adequate thresholds than the current outdated measure. The U.S. Department of Agriculture provides another important poverty indicator by monitoring \”food insecurity,\” meaning that at some time during the year, a household has had difficulty providing enough food for all members due to a lack of resources. The USDA recently reported that in 2008, nearly 50 million people\u2014including almost one in four children\u2014had inadequate access to food.20 The number was the highest since the agency began studying the issue in 1995. Not only is the number of people struggling to get enough food increasing, but according to the group Feeding America, the number of middle-class working families seeking food assistance is also rapidly growing.21 Rising Foreclosures, Doubling Up, and Homelessness This Great Recession is perhaps most associated with the bursting of the housing bubble. Unfortunately, the crisis is not over. The current rate of almost 150,000 foreclosures a month is virtually certain to continue, driven by the painful mix of falling house prices and high unemployment. The Center for Responsible Lending estimates that 2.4 million homes will fall into foreclosure in 2009 and that by 2012, this number will have increased to 9 million, over 10 per- cent of the country’s owner-occupied homes.22 When the pace of foreclosures eventually tapers off, the main reason will be that many of the currently troubled hom- eowners will have already lost their homes. The impact of foreclosure goes far beyond the owners of these homes. Neighboring houses often decrease in value, shrinking what is most Americans’ main source of wealth. Renters, and particularly rent- ers who are people of color, are also being caught up in the crisis. Foreclosed rental units are concentrated in Battered by the Storm 8 Box 2: To Get Sick in America Without Insurance is Suicidal Vera Jan Sizemore worked as a registered nurse in Cleveland, Ohio until she experienced three severe strokes. She was not able to receive medical care after her insurance company determined that she had a pre-existing condition that didn’t qualify her for care. Due to the actions taken by the insurance company, Jan depended on her former husband who was a truck driver and a union member, through which he had health care for himself and his family. In July 1999, Jan woke up after taking a nap with paralysis on her left side that involved both her arm and leg. Her husband rushed her to the emergency room, where a battery test diagnosed her with a right cerebral stroke. . Two years after this, Jan and her husband divorced. Due to the divorce, Jan was dropped from coverage and told that she’d have to pay $700 a month to maintain coverage. This wasn’t a feasible option for Jan and she tried to get medical coverage privately. Her efforts were fruitless, as she was either repeatedly turned down due to her pre-existing stroke condition or asked to pay enormous premiums. So Jan opted to go to discounted clinics and satellite hospital programs, paying for her hypertension medication with donations from family and friends. On November 19, 2007, Jan began experiencing difficulty writing, swallowing, standing and talking. She was rushed to the emergency room and remained in intensive care for four days, only to leave with a total discharge bill of $6,000. She was denied Social Security for eight months and only got it after eight months of threats to the Social Security Administration of a congressional investigation. She was awarded Social Security and could afford to purchase her medicine, but because she didn’t qualify for Medicaid, she spent an average of $900 a month on medicine. After some time, Jan became violently sick. In the hospital, she was moved from floor to floor and dismissed by doctors and staff. One day, a resident doctor determined Jan needed a CAT scan, which determined that she needed emergency surgery. After the surgery Jan was in a coma for two weeks and could barely see for two and a half months. She left the hospital with a $30,000 bill and living expenses that skyrock- eted to a level she could no longer manage. She is currently in foreclosure, jobless and uninsured. Jan says that to get sick in America without insurance is financially suicidal. After 30 years of working to help care for others, it is horrific to see how Jan was treated by the occupation she once worked for. This story was written by the staff of Jobs with Justice after interviews with Jan. The Economic Crisis 9 low-income, minority neighborhoods, where predatory lending, falling home prices, and rising unemployment are also concentrated. The National Low Income Hous- ing Coalition estimates 40 percent of families facing eviction because of foreclosure are renters (with some areas having an even higher percentage of renters).23 President Obama signed legislation in May 2009 that guarantees 90-day notice before a family can be evicted, and protects leases (with limitations) and Section 8 sub- sidies. However, many renters face eviction when their housing changes ownership. Adding to the problem is the fact that foreclosed properties often remain empty for long periods of time, creating housing shortages and crowding in the rental market. The recession is pushing many poor families to move in with relatives or friends.24 Though this may be an effective strategy to forestall homelessness, at least temporarily, it also results in the disappearance of these poor families, for the now larger (and often overcrowded) doubled-up households often technically rise above the artificially low federal poverty line, and thus are not counted as poor. One study found that when looked at separately, about one-third of doubled- up families were poor, but when they doubled up, only one-fifth were poor.25 Finally, the most invisible of the poor, the homeless, are also increasing. Official poverty counts exclude the homeless, ironically, because these numbers are based on household surveys. According to the Na- tional Law Center on Homelessness and Poverty, as of 2007 approximately 3.5 million people (1.3 million of them children) were likely to experience homelessness in a given year.26 The number is estimated to be higher today because of the recession. The National Law Cen- ter on Homelessness and Poverty reports that state and local homeless advocacy groups are seeing a 61 percent rise in homelessness since the foreclosure crisis began in 2007.27 A Recession for Whites is a Depression for African Americans, Latinos, and Single Mothers and Children As a general rule, the least advantaged get hit hardest in a downturn. This pattern is holding in the current economic crisis. As mentioned above, unem- ployment rates for Latinos and African Americans are substantially higher and have risen faster than those for whites. Among younger workers the gaps are even greater, with 41.3 percent of African-American teenag- ers unemployed, compared to 25.3 percent of whites in their age group.28 Co-authors Barbara Ehrenreich and Dedrick Muhammad point out in a recent New York Times article that: In fact, you could say that for African Americans the recession is over. It occurred from 2000 to 2007, as black employment decreased by 2.4 percent and incomes declined by 2.9 percent. During those seven years, one-third of black children lived in poverty and black unemployment\u2014even among college gradu- ates\u2014consistently ran at about twice the level of white unemployment. That was the black recession. What’s happening now is more like a depression. 29 Ehrenreich and Muhammad point out that the most dramatic as- pect of this crisis is the collapse of the African-American middle class. Battered by the Storm 10 Box 3: For Whites, a Recession; for African Americans, a Depression [Y]ou could say that for African Americans the recession is over. It occurred from 2000 to 2007, as black employ- ment decreased by 2.4 percent and incomes declined by 2.9 percent. During those seven years, one-third of black children lived in poverty, and black unemployment\u2014even among college graduates\u2014consistently ran at about twice the level of white unemployment. That was the black recession. What’s happening now is more like a depression. Nauvata and James, a middle- aged African-American couple living in Prince George’s County, Md., who asked that their last name not be published, had never recovered from the first recession of the ’00s when the second one came along. In 2003, Nauvata was laid off from a $25-an-hour administrative job at Aetna, and in 2007 she wound up in a $10.50-an- hour job at a car rental company. James has had a steady union job as a building equipment operator, but the two couldn’t earn enough to save themselves from predatory lending schemes. They were paying off a $524 dining set bought on credit from the furniture store Levitz when it went out of busi- ness, and their debt swelled inexplicably as it was sold from one creditor to another. The couple ultimately spent a total of $3,800 to both pay it off and hire a lawyer to clear their credit rating. But to do this they had to refinance their home \u2014 not once, but with a series of mortgage lenders. Now they face foreclosure. Nauvata, who is 47, has since seen her blood pressure soar, and James, 56, has developed heart palpitations. There is no middle class anymore, he told us, just a top and a bottom. Excerpted from Barbara Ehrenreich and Dedrick Muhammad, The Destruction of the Black Middle Class, New York Times, August 4, 2009. The Economic Crisis 11 About one in three live in neighborhoods which are facing a major problem with fore- closures; and One-third of older African Americans and nearly 40 percent of older Latinos are post- poning or forgoing needed medical and dental care;. With the higher overall level of female labor force participation, women of all types of background (but particularly single mothers) are increasingly vulner- able to economic downturns. Women who are heads of households have an unemployment rate of 12.9 percent, compared to 5.9 percent for married women.31 Among families headed by single mothers, 37 percent were poor in 2008, and the Economic Policy Institute estimates A recent study by the AARP reports that al- though older Americans (those aged 45 and over) as a whole have suffered economically during this recession, the effects have been even more devastating for older African Americans and Latinos.30 What the study calls ethnic boomers and elders have a job loss rate that is 50 percent higher, and more than twice as many are finding it harder to pay for food, heating and other es- sential human needs in this recession compared to older Whites. The findings also showed that in this demo- graphic of older African Americans and Latinos: More than one in four are having trouble paying medical bills; More than one-quarter are having trouble paying their rent or mortgage; Chart 1: Underemployment by Race 5 10 15 20 25 30 Dec 2007 March 2008 June 2008 Sept 2008 Dec 2008 March 2009 June 2009 Sept 2009 Hispanic: 25.9% Black: 24.0% White: 15.0% Source: EPI analysis of Current Population Survey, data are seasonally adjusted. Battered by the Storm 12 that because of rising unemployment, this figure could climb to 45 percent for 2009.32 The Joint Economic Committee of the U.S. Congress reports that as of May 2009, the reces- sion had cost nearly one million single mothers their jobs. The report further explained that among single mothers, African Americans and Latinas are most ad- versely affected. Job loss undercuts single mothers’ abil- ity to afford health insurance for themselves and their children. As of last spring, at least 121,000 children had lost health insurance as a result of rising unemployment in woman-maintained households over the previous year.33 Conclusion What do these alarming trends mean in real terms for American families? They mean that more and more Americans are forced to choose between food and rent, between medicine and shelter, between staying together and being forced to live separately in shelters or doubled-up living situations. The already-poor, the near-poor and the middle class are now increasingly unable to achieve adequate nutrition, maintain good health, receive a good education, and keep a roof over their heads. For a growing number of us, the idea of be- ing able to care for one’s family, raise happy and healthy children, and contribute productively to society is fast becoming an unattainable dream. The Social Safety Net 13 Chapter 2: The Social Safety Net in the Economic Crisis W hat is the safety net that Americans fall back on when they face their own personal or family crisis, and how is it serving those Americans most in need during this economic crisis? The Safety Net in America Today An imperfect but relatively broad foundation for a safety net was laid 75 years ago, in the midst of this worst economic crisis of the past century: the Great De- pression. A strong labor movement, alongside thousands of citizen organizations that came together to fight for basic rights and standards, pressed the administration of Franklin Delano Roosevelt for a broad new set of gov- ernment programs. After widespread social upheaval, the Roosevelt administration passed through Congress a set of New Deal programs that included Social Se- curity, Unemployment Insurance, and AFDC (Aid to Families with Dependent Children).34 Three decades later, in the midst of the civil rights movement and movements to combat poverty, subsequent programs such as Medicare,35 Medicaid,36 and food stamps were added, substantially strengthening the net. Despite several decades of legislative rollbacks and neglect, a variety of federal and state administered social safety net programs are still available to millions of needy families in the United States. Some safety net programs such as Medicare, Social Security, and Un- employment Insurance are social insurance programs rather than anti-poverty programs per se. These are also entitlement programs; all who apply and are eligible are entitled to receive these benefits. The anti-hunger food stamp program now known as Supplemental Nutrition Assistance Program (SNAP) is also an en- titlement program, but because it is means-tested, it is limited to those whose income (and assets) fall below program eligibility income limits. Other programs are means-tested, but not entitlements, being subject to budget allocations at the federal and\/or state level, such as Temporary Assistance to Needy Families (TANF) and housing vouchers. In these programs, even if people qualify, the number receiving benefits is limited by gen- eral budget allocations. This is especially an issue when government budgets, particularly state budgets, are strained by falling revenues. Finally, there are tax credits which, if refundable, go to people at all income levels, but are generally targeted to low income earners and their families, such as the Earned Income Tax Credit. Even before this recession, our safety net pro- grams provided uneven protections against poverty. A recent study by the Center on Budget and Policy Pri- orities found that in 2005 (the latest year for which this data is available), the aggregate of safety net programs cut the number of Americans living in poverty by 44 percent from what it would have been had the programs not existed.37 However, the same report also found that these programs’ effectiveness had eroded over the previ- ous decade, so that a smaller percentage of children (76 percent in 2005 as compared to 88 percent in 1995) and jobless workers (60 percent as compared to 70 percent Battered by the Storm 14 in 1995) were protected from falling into deep poverty, defined as half or less of the household poverty line.38 In the current crisis, some programs have been more responsive than others, and eligibility, benefits, and anti-poverty effects vary enormously from state to state, and even within states. One step in the right direc- tion for meeting some of the challenges came in Febru- ary 2009, when the U.S. Congress passed the American Recovery and Reinvestment Act. Roughly a third of this $787 billion bill went into tax cuts and roughly a third is going toward job creation. The remaining third is going toward safety net programs.39 In the paragraphs that follow, we examine five major safety net programs: Unemployment Insurance (UI), Temporary Assistance to Needy Families (TANF), Supplemental Nutrition Assistance Program (SNAP) (formerly known as Food Stamps), housing and child care. In each case, we look at both the state and federal programs, as these two are inevitably intertwined. And in each case, we find variations on three main themes: The ability of these programs to respond 1. to rapidly expanding need has been inad- equate, some much more so than others, reflecting a combination of built-in struc- tural flaws at the federal level and local variation in policies and implementation. The states came into this recession with 2. widely varying flexibility, fiscally and programmatically, to meet the crisis, but overall it was inadequate and uneven even before the economic downturn began. State budget crises have led to plummeting 3. revenues and rising costs in most states, straining the already weak safety net, particularly in states hardest hit by the recession. Chapter Three of this study proposes federal re- forms that can be enacted quickly and cost-efficiently to provide immediate-term fixes for some of the problems we raise here. Some challenges are longer-term and are addressed in Chapter Four, which spells out our prin- ciples for a real safety net and for significantly reversing the negative trends we examine here in Chapter Two. Unemployment Insurance The unemployment insurance (UI) program was established in 1935 to serve two primary objectives: to temporarily replace a portion of earnings for workers who become unemployed through no fault of their own, and to help stabilize the economy during recessions by providing an infusion of consumer dollars into the economy. States design their own programs, within the guidelines of federal law, and determine who is eligible to receive state UI benefits and how much they receive. UI benefits typically can be received for a maximum of 26 weeks. On average, UI benefits for those who do qualify replace about 47 percent of wages.40 In order to tackle the current economic crisis, the Recovery Act included financial incentives for states to broaden eligibility to include more of the unem- ployed. Forty billion dollars was allocated for the next two years from the federal government to increase ben- efits provided by unemployment insurance programs. The Social Safety Net 15 The additional funding increased the unemployment benefits (regular and extended) by $25 per week.41 Also, the Recovery Act extended the deadline for eligibility for the federal Temporary Emergency Un- employment Compensation to December 31, 2009.42 It provides incentive payments to states that include more people to their unemployment insurance programs, such as those seeking part-time work and those who leave work for compelling family reasons.43 As of June 2009, 25 states had enacted unemployment insurance reforms that qualify for incentive funding, while a doz- en states are still actively debating measures to enact the required reforms to qualify for Recovery Act funding.44 Four states (Virginia, Texas, Alabama, and Florida) have declined to take advantage of these resources because Box 4: Catch 22 Kristen and Joe Parente [are] Delaware residents who had always imagined that people turned to the govern- ment for help only if they didn’t want to work. Their troubles began well before the recession, when Joe, a fourth-generation pipe-fitter, sustained a back injury that left him unfit for even light lifting. He fell into depression for several months, then rallied to ace a state-sponsored retraining course in computer repairs \u00aconly to find those skills no longer in demand. The obvious fallback was disability benefits, but it became a Catch-22 when Joe applied, because he was told he could not qualify without presenting a recent MRI scan. This would cost $800 $900, which the Parentes do not have, nor has Joe, unlike the rest of the family, been able to qualify for Medicaid. When Joe and Kristen married as teenagers, the plan had been for Kristen to stay home with the children. But with Joe out of action and three children to support by the middle of this decade, Kristen went to work as a waitress, ending up, in 2008, in a pretty fancy place on the water. Then the recession struck and in January she was laid off. Like most laid-off people, she failed to meet the fiendishly complex and sometimes arbitrary eligibility require- ments for unemployment benefits. Their car started falling apart. So in early February, the Parentes turned to the desperate citizen’s last resort\u2014Temporary Assistance for Needy Families. Still often called welfare, the program does not offer cash support to stay-at-home parents, unlike its predecessor, Aid to Families with Dependent Children. Rather, it provides supplemental income for working parents, based on the sunny assumption that there would always be plenty of jobs for those enterprising enough to get them. Battered by the Storm 16 unemployment rates above 8.5 percent. However, due apparently to a glitch in the law, Congress still must renew the existing federally paid extensions before they run out on December 31, 2009 or the new extensions cannot go into effect.46 The National Employment Law Project warns that unless this action is taken, almost half a million people will not receive extensions in Janu- After Kristen applied, nothing happened for six weeks\u2014no money, no phone calls returned. Not until March did the Parentes begin to receive food stamps and some cash assistance. Meanwhile they were finding out why some recipients have taken to calling the assistance program Torture and Abuse of Needy Families. From the start, the experience has been humiliating, Kristen said. The caseworkers treat you like a bum. [T]hey act like every dollar you get is coming out of their own paychecks. [The] Parentes discovered that they were each expected to apply for 40 jobs a week, even though no money was offered for gas, tolls, or babysitting. In addition, Kristen had to drive 35 miles a day to attend job readiness classes, which she said were a joke. With no jobs to be found, Kristen was required to work as a volunteer at a community agency. In exchange for $475 a month plus food stamps, the family submits to various forms of monitoring to keep them on the straight and narrow. One result is that Kristen lives in constant terror of doing something that would cause the program to report her to Child Protective Services. She worries that the state will remove her children automatically if program workers discover that her 5-year-old son shares a bedroom with his sisters. No one, of course, is offering to subsidize a larger apartment in the name of child protection. [The] Parentes’ landlord has just informed them that they’ll have to go, because he’s decided to sell the building, and they don’t have money for a security deposit on a new apartment. I thought we were good for six months here, Kristen told me, but every time I let down my guard I just get slammed again. Excerpted from Barbara Ehrenreich, A Homespun Safety Net, New York Times, July 11, 2009. of the required policy expansions tied to the federal dollars.45 In November 2009, Congress approved a fur- ther extension of up to 14 additional weeks to Americans in every state, with an extra six weeks of jobless benefits for those workers in states with average, three-month The Social Safety Net 17 federal guidelines, each state sets its own TANF eligibil- ity and benefit amount rules. TANF is supposed to be the nation’s last line of defense against family poverty. Yet the program falls far short of achieving any such antipoverty goal because it provides inadequate levels of assistance and reaches only a minority of eligible families. These problems have sig- nificantly worsened since TANF replaced AFDC. By 2008, the number of children receiving TANF had fallen to only 22 percent of the number of poor children, down from 62 percent under AFDC in 1995.51 Eligibility criteria in some states is set at sub- poverty levels, making many poor children ineligible, and barriers to access have blocked many poor children who are eligible from actually getting assistance.52 The percentage of eligible families receiving benefits has de- clined precipitously under TANF, falling from 84 per- cent in AFDC’s last full year in 1995 to 40 percent in 2005, the most recent year for which the federal govern- ment has provided estimates of the number of families eligible for but not receiving TANF.53 TANF benefit levels are grossly inadequate for the families the program does reach, and have been eroded by inflation or only minimally increased in most states since 1996. In July 2008, TANF benefit amounts were far below the official poverty guideline in every state. The median was 29 percent of the official poverty rate, while the lowest was 12 percent and the highest was 50 percent.54 Further, TANF, as part of the sweeping welfare reform bill called the Personal Responsibility and Work Opportunity Act of 1996, increased the demonization ary 2010. An additional 581,000 workers will see their federal jobless benefits end in that same month.47 With most states being severely hit by the crisis, the money allocated in the Recovery Act is not enough. Seven states have borrowed more than $2 billion from the U.S. Treasury Department to cover their UI systems, and experts project that up to 20 states might need federal loans by the end of 2009 to cover trust-fund losses.48 However, even with the additional funds, there are fundamental problems with UI that have inhibited it from serving those in need. Before the crisis, only 37 percent of unem- ployed persons were receiving UI benefits in 2007, down from the peak of 75 percent in 1975.49 During periods of high unemployment, the maximum period of receipt has often been extended for an additional 13 or more weeks. During the current recession, the federal government has passed legislation extending eligibility between 20 and 53 weeks, depending on state circum- stances. However, even with the extensions, more than a half million unemployed have exhausted their eligibility period without finding work. Still, as of October 2009, roughly 57 percent of unemployed people are receiving unemployment compensation.50 Temporary Assistance to Needy Families (TANF) The national social assistance program for families with children, Temporary Assistance to Needy Families (TANF) was created in 1996 to replace Aid to Families with Dependent Children (AFDC) and to end welfare as we know it. Federal and state governments jointly fund the program. Subject only to very broad Battered by the Storm 18 and criminalization of low-income people. It made benefits temporary, created difficult work requirements, and promoted marriage as a solution to poverty. Unlike its predecessor AFDC, TANF denied benefits to legal immigrants until they had been living in the U.S. for at least five years (except refugees and certain other very small categories).55 Welfare reform also ended the federal entitlement to welfare benefits and allowed the states to design their own programs. Some states adopted dra- conian approaches, imposing even shorter time limits than the federal guidelines or restricting access by im- posing other barriers, such as barring aid to those with drug-related convictions.56 Some went even further by requiring drug-testing and fingerprinting, sanctioning recipients for failure to comply with strict work require- ments, and refusing to provide aid to children born into families already receiving welfare benefits.57 As poverty experts Frances Fox Piven and Bar- bara Ehrenreich explain, in their zeal to save the poor from their supposed sins of laziness, irresponsibility, and promiscuity, the reformers entirely overlooked the role of welfare as a safety net for working mothers TANF has just one aim: to push the poor into the job market to become ‘self-sufficient.’ Whatever sense this made in the boom years when welfare reform was devised, it makes none now. 58 Even given these serious flaws, TANF could be an important piece of the safety net for female-headed households, since single mothers experience an excep- tionally high poverty rate of over 35 percent.59 About 90 percent of parents receiving TANF are single mothers.60 However, eligibility and benefits vary widely from state to state, regardless of need. So women and children are Chart 2: Percentage of Eligibile Families Participating in AFDC\/TANF Source: U.S. Department of Health and Human Services, Indicators of Welfare Dependence, 2008; and, Center on Budget and Policy Priori- ties, Welfare Reform\/TANF: By the Numbers. See: http:\/\/www.cbpp.org\/research\/index.cfm?fa=topic&id=42 The Social Safety Net 19 helped more or less simply because of where they live rather than because of level of need. For instance, in 2008, monthly benefits are as low as $170 in Missis- sippi and as high as $723 in California.61 TANF participation has continued to decline during the recession relative to the number of poor and potentially eligible families. Overall, in 2008 the number of poor children was more than four times the number of children receiving TANF, and the number of extremely poor children (family income less than half the poverty line) was almost twice the number of chil- dren receiving TANF. Though food stamp participation increased 16 percent from December 2007 to December 2008,62 TANF participation increased only 3.8 percent, rising from 4,014,265 recipients in December 2007 to 4,168,746 in December 2008.63 Under the Recovery Act, the federal govern- ment allocated $5 billion over the next two years for a new fund (the Emergency Contingency Fund) to help states meet the rising need for TANF benefits.64 Accord- ing to the Center on Budget and Policy Priorities, these funds have permitted some states to expand their casel- oads by over a third, while others have done much less. And in a few states, caseloads are still decreasing.65 With the fundamental problems in the TANF program, there are millions of families with children living in extreme poverty in the United States. Many are experiencing hunger, eviction, utility disconnection, homelessness and other deprivations. TANF’s punitive rules tying benefits to strict work and other requirements during this period of high unemployment contribute to its shockingly inadequate response to the recession. Box 5: Lillian Lillian is the single mother of a nine-year-old boy and had been employed as a domestic worker in New York City. When her employer laid her off in December 2008, Lillian tried in vain to access Unemployment Insurance, discovering the devastating reality that domestic workers here on B1 and B2 visas aren’t eligible either for labor protections or social safety net programs. Lillian consequently lost her apartment and had to live in a difficult situation with relatives who could not house her young son. Their collective economic situation is such that Lillian has gone days without food and she has little access to transportation. Her young son’s father, though a less- than-desirable custodian, has temporarily taken in the child. Her son calls her every day in tears begging for her to find a home so that the two of them can be together again. This story was collected by Domestic Workers United in New York. . See: www.domesticworkersunited.org. Battered by the Storm 20 Food Stamps\/Supplemental Nutrition Assistance Program (SNAP) Participation rates of individuals and families in the Supplemental Nutrition Assistance Program (SNAP), formerly known as the Federal Food Stamp Program, are a sensitive and direct measure of increas- ing economic stress. In this recession, there has been a sharp increase in SNAP participation rates, a trend that will likely continue as the jobless rate goes up and income levels go down.66 SNAP is a federal program administered by the states that covers almost all people who satisfy its financial eligibility requirements. Unlike TANF and UI, eligibility rules and benefit levels are generally uni- form across the nation. Financial eligibility is generally limited to households whose net income is less than the official poverty line, currently at $1,526 monthly for a family of three. For a family of four, the gross monthly income must be $2,389 or less, and their food stamp allotment can be as much as $668 per month.67 The current average SNAP benefit per household is about $294 per month. Chart 3: TANF Recipients Fall as Poverty Rises * The 2008 poverty guideline for a family of four is $21,200. For more info on the Federal Poverty Line available at: http:\/\/aspe.hhs.gov\/ poverty\/figures-fed-reg.shtml Source: Housing and Household Economic Statistics Division, U.S. Census Bureau, Table 2. Poverty Status of People by Family Relation- ship, Race, and Hispanic Origin: 1959 to 2008. See http:\/\/www.census.gov\/hhes\/www\/poverty\/histpov\/perindex.html; Administration for Children and Families, US. Department of Health and Human Services, Data and Reports: TANF Caseload Data. See: http:\/\/www.acf. hhs.gov\/programs\/ofa\/data-reports\/index.htm N um be r o f I nd iv id ua ls (in M ill io ns ) The Social Safety Net 21 is a needs-based safety-net program in which participa- tion should rise when unemployment and poverty rise. In fact, SNAP participation has increased substantially since the recession began, rising 16 per- cent from 12,313,466 recipients in December 2007 to 14,284,017 in December 2008.69 The 16 percent SNAP participation increase was more than four times the 3.8 percent TANF participation increase, with the number of TANF recipients (both children and adults) increasing from 4,014,265 in December 2007 to only 4,168,746 in December 2008.70 Food stamps participation has generally re- sponded well to the increased need arising from in- creased unemployment. In August 2009, 36.5 million Americans (16.5 million households) received SNAP benefits, a one- third increase in participation since the recession began in December 2007.68 One in eight Americans is now receiving food stamps, an all-time high. Compare SNAP’s performance with TANF’s non-responsiveness to the recession. SNAP, like TANF, Box 6: Unemployment Insurance for the Few My name is Susan Aarup. I am 40 years old, have a disability, and reside in Chicago, Illinois. I have been unemployed for seven months and I’m currently looking for work. Prior to becoming unemployed I worked at the Mayor’s Office for People with Disabilities. I have three masters’ degrees and was working for the city of Chicago for 11 years. I was laid off by the city in March of 2009 because the position I held lost federal dollars at the time of the federal bailout. My coworker was able to keep her position because she had six more months of seniority and did not have a disability. My income was cut in half as result of city layoffs. I am constantly looking for work while I am receiving unemployment benefits. I check in with the unemployment office on a weekly basis in order to keep receiving checks. The unemployment office that I deal with had never dealt with anyone who had a disability. Consequently, I had to educate them about why it is important for people with disabilities to work and why they want to work. The first week I applied, a staff person at the unemployment office told me I should collect my social security check and go home. This person did not mean to demean me; she said this due to ignorance and misperceptions about disability and my ability to work. I believe this is the dominant myth about employment for people with disabilities. I believe employment is a human right and every- one should have a right to sustainable, gainful employment regardless of disability or any other reason. Susan’s story was collected by staff of the South Austin Coalition and Chicago Jobs with Justice. Battered by the Storm 22 Housing Programs, Renters and the Foreclosure Crisis Unlike SNAP, housing assistance programs are not entitlements. The benefits are dependent on avail- able funding, and only one in four eligible households receive any kind of housing assistance.75 For almost three decades, there has been an erosion of housing assistance programs, even as housing costs have risen much faster than income. Compounding this problem is the increased risk to renters from rising rents and homelessness risk due to foreclosures. At the beginning of 2009, The Center on Bud- get and Policy Priorities reported that more families with children were homeless due to the recession. They further reported that the housing market crisis was add- ing to the risk of increased homelessness. Foreclosures have created more renting families and have driven up rents in many areas, making housing less affordable.76 At least 32 percent of American households were renting in 2008, and these numbers are rising. The National Low Income Housing Coalition estimates that 40 percent of the families that face eviction due to foreclosure are renters.77 Nationally, the number of renters is expected to increase, as will demand for lower home-rental rates.78 Meeting the needs of renters and protecting their housing is critical to a well-functioning safety net. In order to curb the blow caused by the cur- rent economic crisis, President Obama has allocated $1.5 billion in ARRA to the Homelessness Prevention and Rapid Re-Housing Program (HPRP) within the Housing and Urban Development agency (HUD).79 SNAP has responded quickly in all states to the rising need. TANF has been responsive or somewhat responsive in less than half of the states.71 Congress allocated $54 billion for the program in 2009, $15 billion more than in 2008, because of the growing number of people meeting the eligibility requirements for the program. The recent increase in SNAP participation is a direct indication of the rising poverty during this recession. The official poverty rate is calculated only once a year, and by itself is a lagging in- dication of economic distress. But the increase in SNAP participation means that more families are meeting the eligibility standard of falling below 130 percent of the poverty line.72 The Recovery Act temporarily increased the maximum food stamp benefit, referred to as the \”allot- ment,\” by about 13 percent. However, even with this increase, the food stamp allotment, currently $526 a month for a family of three, is less than what most Americans spend to achieve a nutritious diet. And be- cause the maximum benefit is reduced by 30 cents for each dollar of income net of deductions, generally only households who are very poor or who have very high shelter expenses receive the full allotment. Under the Recovery Act, $20 billion is allocated for the next four years to increase SNAP benefits by 13.6 percent.73 An additional $295 million in administration funds is also provided to states to handle rising casel- oads, and $5 million in administrative funding for the Food Distribution Program on Indian Reservations.74 The Social Safety Net 23 voucher holders. However, these protections expire in 2012.80 Child Care Programs As demand has increased, fueled by TANF roll declines, increased workforce participation by mothers of young children, and falling real wages, the child care assistance system has fallen further and further behind in meeting the need. With welfare reform mandating recipients en- ter the workforce, child care funding was expanded two ways, through an increase in the Child Care Develop- This program is designed to provide financial assistance and services to prevent individuals and families from becoming homeless. However, this is a short-term pro- gram, and there are major concerns about what will happen to the housing safety net when funding runs out in three years. Also, in May 2009, Congress passed the Help- ing Families Save Their Homes Act, which provides renters whose landlords have lost their properties to foreclosure the right to stay in the home for 90 days after the foreclosure or through the term of their lease unless the property is sold to someone who will occupy the home. Similar protections are provided to housing Box 7: Additional Safety Net Programs Other safety net components are not fully examined in this report. For instance, Social Security, a New Deal program established in 1935, has proven effective at lifting millions of people out of poverty, primarily the elderly. Health insurance programs such as Medicare, Medicaid and the State Children’s Health Program (SCHIP) have also been invaluable for poor Americans. Since the benefits of Social Security have been widely noted, it will not be discussed in this study. Likewise, health care reform is in the midst of a major congressional overhaul at the time of publication of this report, and will not be examined here. Two more programs worth mentioning are the Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC). The EITC helps low-wage workers by reducing the taxes they must pay on their earnings. Data shows that in 2005, the EITC lifted five million people out of poverty, 2.6 million of them children.84 The CTC offers low-income working families a partially refundable federal income tax credit of up to $1,000 per child under the age of 17. The Recovery Act expanded this program temporarily to cover 2.9 million more children (for a total of about 13 million) in 2009 and 2010.85 The Recovery Act also added the Working Families Tax Credit, which is a refundable credit of $400 for single and $800 for married couple families. Battered by the Storm 24 Conclusion The holes in the safety net are numerous and wide. The Recovery Act is helping some, but it is inad- equate and temporary. At a time of skyrocketing job- lessness, millions of unemployed workers are not receiv- ing Unemployment Insurance because of overly strict eligibility criteria and inadequate coverage periods. At best, these workers may be able turn to food stamps and TANF for assistance. However, food stamps are limited to those who meet artificially low poverty thresholds and helps recipients pay for food, not for rent, utilities, clothing or other basic needs. While TANF in theory provides aid for all basic needs, it covers only unem- ployed parents\u2014but only if they are extremely poor, and only for a minority of the extremely poor families who are theoretically eligible. Housing assistance reaches a fraction of those in need, and lack of access to affordable child care is another obstacle to employment. ment Block Grant (CCDBG), and through allowing TANF monies to be spent on child care, either directly or through transfer to CCDBG. Nevertheless, only about one in seven eligible families received childcare assistance in 2000, and less today.81 At the same time, even as need is rising, federal dollars have been decreasing. CCDBG funding peaked in 2002 at $5.8 billion (in 2009 dollars), falling to just over $5 billion in FY 2009. By 2009, only nine states had reimbursement rates for childcare providers at the federally recommended level, less than half the number in 2001.82 In short, as TANF rolls have continued to fall, and more families have their one parent or both parents in the workforce, the childcare assistance for low-wage families has eroded rather than increased to meet the need. With the passage of the Recovery Act in Febru- ary 2009, based on early reports through August 2009, the Recovery Act’s childcare monies are being used mainly to maintain the current system (e.g., avoid cuts, reduce waiting lists), as well as make improvements in the quality of care. At the same time, falling state rev- enues have led states to reduce income eligibility limits (e.g., in Ohio, from 200 percent to 150 percent of FPL), increase copayment requirements, reduce reim- bursement rates to providers, and\/or institute\/expand waiting lists.83 In addition, in states that have reversed the trend and begun expanding TANF rolls to meet rising need levels, childcare subsidies funded by TANF are being reduced, reflecting the inflexibility of frozen TANF grant amounts. An Emergency Relief Package 25 Chapter 3: An Emergency Relief Package Rebuilding the American Economy from the Bottom Up T his chapter looks at both the urgency of the crisis and the failings of the safety net that we have laid out in the first two chapters, and it offers an emergency relief package to offer short-term remedies to the tens of millions of Americans who are suffering. It recommends a job creation package and other specific proposals to shore up the various parts of the safety net, which would cost just over $400 bil- lion in 2010. It then lays out a plan to pay for these expenditures. The breakdown of the Emergency Relief Pack- age that we propose is seen in Chart 4: share of the benefits of economic expansion. In addi- tion to stagnating or declining wages, we now face high levels of unemployment for years to come, along with a significant decline in Americans’ number one source of wealth\u2014homeownership. Both the long-term growth of inequality and the devastation resulting from the Great Recession demand action. In the short run, extended periods of unem- ployment exact a heavy price that goes far beyond the loss of income. The price involves psychological harm, health impacts, family disruption, and much longer- term impacts on job prospects, particularly for younger workers. Ultimately, job growth in the private sector is needed for most jobless workers. But absent current demand, the public sector must pick up the slack in three ways: Direct public investment in job creation 1. that preserves and expands the range of goods and services that are appropri- ately the function of public agencies at all levels. Fiscal relief for state and local governments 2. to combat public sector job losses and pre- serve vital public services. Income support, not only to help people 3. better weather the storm, but also to in- crease demand and help fuel needed job growth in the private sector. Chart 4: Proposed Emergency Relief Package Public jobs program $40 billion State fiscal relief $170 billion Local government fiscal relief $100 billion Unemployment Insurance $60 billion COBRA $20 billion TANF $16.5 billion Food Stamps $0.5 billion Total $407 billion An emergency relief package must address the trend that for decades, middle-class and poor Ameri- cans have seen their share of income decrease while the rich have gotten richer. Since the 1970s, the link between wages and productivity has also been severed, with American workers no longer receiving their fair Battered by the Storm 26 Federal Investments to Spur Job Creation and Ensure Needed Services Are Available Public Jobs Program Price tag: $40 billion We need a new program to create at least one million jobs at the municipal and neighborhood level, and put both recently- and long-term unemployed work- ers back to work in jobs that pay living wages, provide benefits, and create stronger, more vibrant communities across the United States. A jobs program would provide resources to local governments to quickly create jobs with the government, nonprofits, and potentially small businesses that provide public services, and should be authorized for several years. If one million workers were paid $35,000 per year, this program would cost $35 bil- lion; two million jobs could be created for $70 billion. Public works projects would create immediate employment opportunities for employment for com- munity residents, the unemployed, and the underem- ployed. These jobs would offer prevailing wages consis- tent with what workers regularly receive for the same work, benefits, and support services. Rapidly reducing unemployment will help stabilize families and commu- nities immediately. However, the program would also be designed to have a lasting impact on both the com- munity and the individual. Jobs would be designed to develop participants’ skills and open pathways to future employment. Jobs must also be inclusive of people with varying skill levels and work histories, opening up op- portunities in the labor market to workers who have been denied past opportunities for good jobs. Projects would address the deterioration in public services and infrastructure that resulted from long-term neglect in neighborhoods across the country, and change the trajectory of the economy\u2014visibly and tangibly, locally and nationally. For example, jobs would be created to: improve the environment, promote public health services, upgrade roads and other construction projects, provide education and child care, and engage out-of-school youth. All jobs should be subject to strict rules and aggressive enforcement to guard against the displacement of currently employed workers. state and local Fiscal relieF Price tag: for states\u2014$170 billion for local governments\u2014at least $100 billion We need additional fiscal relief for state and lo- cal government. At the state level alone, budget deficits on the order of $170 billion are projected for 2010. No precise estimates are yet available for the projected level of local government budget deficits, but the total is ex- pected to be at least $100 billion in 2010. Further relief is needed immediately, and will be needed for several years. Fiscal relief will help to stabilize and restore cur- rent job losses and furloughs, while at the same time maintaining vital public services and programs, such as child care, many of which are needed now more than ever. The Recovery Act principally relied upon two strategies to accomplish this goal: increased federal sup- An Emergency Relief Package 27 port for the Medicaid program and the State Fiscal Sta- bilization Fund (which provides support for state and local government spending on education) and a small portion of more flexible funds for states. Both of these should be extended beyond their current expiration in 2010 and 2011. But in addition to these extensions, we need a new state-based revenue-sharing program that em- phasizes local governments. It should be enacted and implemented immediately and authorized for fiscal year 2011 at a minimum. These funds should be flexible and designed to allow state and local officials to stabilize their budgets, their services, and their workforces. Expansion of programs that provide income or income equivalents to help people better weather the storm unemPloyment insurance and cobra beneFits Price tag: Unemployment Insurance\u2014$60 billion COBRA\u2014$20 billion As the number of chronically unemployed workers grows, federal support for UI benefits for these long-term unemployed workers is critically important. In early 2009, as part of the Recovery Act, Congress modified the Emergency Unemployment Compensa- tion program to provide federal funding for the entire cost of 33 weeks of additional benefits (beyond the stan- dard 26 weeks available in every state) for unemployed workers. In addition, the Recovery Act provided fed- eral funding for an additional $25 per week for every worker receiving unemployment benefits. Both of these initiatives will expire at the end of 2009. It is critically important that both of these initiatives be extended for at least another one or two years. COBRA health insurance is a program that allows workers who have been laid off to continue to receive, at their own expense, health insurance coverage they had while employed. The COBRA premiums are 102 percent of the group health rate that is charged to the employer. COBRA insurance is available for 18 months (and longer for disabled individuals). In recognition of the fact that COBRA premiums are not affordable for many workers, Congress included in the Recovery Act a provision which provides a subsidy of 65 percent of COBRA premium costs for up to nine months. This COBRA subsidy provision expires at the end of 2009. Congress should extend this subsidy program until at least another 1-2 years. tanF and Food stamPs (snaP) Price tag: $17 billion For TANF: $16.5 billion (this would double the current basic bloc grant.) For food stamps: $0.5 billion (Resources are needed to help with outreach and admin- istration costs so that millions of eligible but unenrolled people can be enrolled in SNAP.) Millions of unemployed workers do not qualify for unemployment insurance and, for these workers, the need for income support is critical. The two main programs that provide help to those with little or no in- come are TANF, which provides cash assistance, and the Battered by the Storm 28 Supplemental Nutrition Assistance Program (SNAP), which provides food stamps. The Recovery Act made several key improve- ments in SNAP. First, and most importantly, benefits were increased by 13.6 percent for all eligible house- holds. In addition, the Act suspended the three-month time limit on benefits faced by many unemployed work- ers without children. It also provided additional funding for Indian reservation food assistance and for increased administrative costs associated with these programs. As the projected period of high unemployment has grown, and the limits of other income support pro- grams have become more obvious, additional increases in benefits should be made available immediately. Additional administrative funds also should be made available so that eligible families can access the program more easily. TANF funds can be used for a range of pur- poses, including cash assistance and subsidized employ- ment. The Recovery Act made an additional $5 billion available for states to receive up to 80 percent federal funding for cash assistance, subsidized employment op- portunities, or payments to families to help them meet one-time emergency needs. However, even with the availability of these added resources, too few families are being helped by their state’s TANF program. The TANF program is scheduled for reauthori- zation in 2010, and one of the lessons of the recession is that the program is not structured to meet the needs of families who lose all or a substantial part of their income due to unemployment. Time limits, unduly restrictive work requirements, disincentives that exist for states to provide cash assistance, and the limited availability of additional federal funding during periods of high un- employment are all issues that need to be addressed to make the program more effective in helping families, particularly during periods of high unemployment. However, it’s uncertain whether Congress will actually act in 2010 (it is possible that reauthorization may not occur until 2011 or later). But since so many families are desperately in need, Congress should act immediately to allocate substantial additional funds available for state TANF programs. These funds would not require further state spending, provided they are used for the limited purposes of cash assistance, creat- ing subsidized jobs, sustaining current TANF-funded child care, or emergency payments. In addition, Con- gress should act immediately to temporarily suspend federal work requirements that unduly restrict state discretion and time limits. To the extent that states have resources for education and training activities and for child care so that parents receiving benefits can improve their skills, those services should be made available. But overly restrictive mandates in this area, and time limits on the receipt of cash assistance, simply do not make sense given the high levels of unemployment, and the need for funds to be focused on cash assistance to help families weather the current crisis. Foreclosure relieF Price tag: No new money A new loan program could use TARP funds already allocated for foreclosure prevention. (The Phila- delphia Unemployment Project suggests designating An Emergency Relief Package 29 $10 billion for loans to unemployed homeowners to allow them to pay mortgages, from the TARP funds already allocated for foreclosure prevention.) This report has also offered analysis of the housing crisis for both homeowners and renters. A seri- ous emergency reform package should include action to address the housing crisis. This is a large field, and we offer only two ideas, one on foreclosure relief and one on renters’ relief. A series of programs put forward over the past two years, designed to foster loan modifications, have made little impact on the foreclosure problem. When mortgage servicers handle the somewhat complicated job of redoing mortgages, homeowners and housing counselors often face horrendous delays, exasperating phone systems, lost paperwork, and frustration, while resolving far fewer mortgage defaults than originally anticipated. Large-scale loan modifications was not the job servicers signed on for, and they are not doing it very well. While they are getting up to speed, tens of thousands will lose their homes. Moreover, modifying mortgages for the unemployed can be ineffective if their income is insufficient to pay even reduced modified loans. Many servicers won’t offer loan modifications to the jobless. The Philadelphia Unemployment Project and the Save Our Homes Coalition have developed a pro- posal for a new loan program that would use TARP funds already allocated for foreclosure prevention to directly cure mortgage defaults for the unemployed. As the economy recovers, most jobless workers will get back to work and will be able to resume their mortgage payments. The loans would cure arrears and provide continuing assistance until the homeowners gets back to work, or for 24 36 months. Such a program could be run much more ef- ficiently than the time-consuming loan modification program. If a homeowner indicated that he or she were unemployed, they would provide verification of their unemployment compensation to the servicer and au- tomatically be approved for a loan that would pay any mortgage above 31 percent of their family income (the target amount in Making Home Affordable modifica- tions). Loans would be repayable with interest but in- terest would not accrue, nor would repayments begin until the homeowner’s income was sufficient to allow payment based on a formula to be developed. Such a loan plan would cut through much of the disarray of the current loan modification program, thus streamlin- ing approvals and slowing the numbers of foreclosed properties on the market.86 right to rent Price tag: No new money. Congress would merely need to approve a temporary change of rules governing the foreclosure process. Dean Baker, a prominent economist from the Center for Economic Policy and Research, has been ar- guing for another solution to the foreclosure crisis that involves the giving homeowners the right to rent their home rather than to lose it to foreclosures.. In recogni- tion of the emergency situation created by the hous- ing bubble and its collapse, Congress could approve a temporary change of the rules governing the foreclosure process. This change would give homeowners facing foreclosure the right to stay in their home paying the market rent for a substantial period of time. Battered by the Storm 30 This change would have two effects. First, it would immediately give housing security to the millions of families facing foreclosure. If they like the house, neighborhood, and schools, they would have the option to remain there for a substantial period of time. Also by keeping homes occupied, this rule change can help to prevent the blight of foreclosures that has depressed property values in many areas. Vacant homes are often not maintained and can become havens for drug use and crime. The other effect of a right to rent rule would be that it would give lenders substantially more incen- tive to modify a mortgage. Under the rule, the lender could still carry through with the foreclosure process and take possession of the house. The lender would also be free to resell the property, but the former homeowner would still have the option to remain as a tenant paying the market rent for the period specified in the law. Since a house that comes with a renter attached is much less valuable to the bank, foreclosure would be a much less attractive option. Therefore lenders would have more incentive to try to work out a modification plan that allowed the homeowner to remain in their house as an owner.87 How to Pay for the Emergency Relief Measures88 A considerable number of economists argue that the Recovery Act has been vital to prevent deeper crisis, and has saved or created a large number of jobs. Many of these economists believe that further govern- ment spending is vital, even if no new revenues are raised to pay for the expenditures. Other economists argue for fiscal responsibility, namely that any new spending should come with designated revenues to cover the costs. The price tag on the Emergency Relief Package for 2010 proposed in this report is roughly $400 billion, about half the amount authorized under the February 2009 Recovery Act. The Institute for Policy Studies has identified a package of practical and politically viable policies that could raise the revenues we need. These policies, taken together, would: Collect over $400 billion in revenue from those with the greatest capacity to pay; Discourage financial speculation; Srengthen the overall economy; and, Introduce greater transparency, fairness, and simplicity to the tax code. These proposals are offered to stimulate the debate over sources of revenues for the vital government programs that will be needed in the months and years to come. immediately reverse tax breaks For households with annual incomes over $250,000: $43 billion Per year. President Obama, in his campaign, called for reversing the 2001 and 2003 Bush tax cuts for house- holds with incomes over $250,000.89 This would raise the top income tax rate from 35 percent to 39.6 percent, and increase the tax rate on capital gains and dividends An Emergency Relief Package 31 from 15 percent to 20 percent. Many high-income households, polling shows, voted for Obama because they believed his policies will help restore our economic stability. These households see higher taxes on high in- comes as the fiscal medicine our nation needs to take.90 tax Financial transactions: $100-150 billion Per year. A modest tax on every transaction that involves the buying and selling of stock and other financial products\u2014for instance, a penny on every $4 traded\u2014 would both generate substantial revenue and dampen rapid turnover of stocks and speculation. The United Kingdom already imposes a tax on stock transactions.91 eliminate tax PreFerence For caPital gains and divi- dends: $80 billion Per year. Current law subjects most dividend and capital gains income\u2014the income that flows overwhelmingly to wealthier Americans\u2014to a 15 percent tax rate. The tax on wage and salary income, by contrast, can run up to 35 percent. With carefully structured rate reform, we can end this preferential treatment and at the same time encourage average families to engage in long-term investing.92 create an additional toP tax bracket For higher in- comes: $60-70 billion Per year. High-income Americans currently face a top tax rate that runs less than half the top rate, in effect, imposed in the half-century before 1981. We propose a 50 percent rate on incomes over $2 million\u2014which would generate an additional $60 billion a year. end overseas tax havens: $100 billion Per year. Individual American taxpayers are now annu- ally evading between $40 and $70 billion in U.S. taxes through offshore tax dodges.93 U.S. corporations use similar offshore schemes to evade another $30 billion per year. The Stop Tax Haven Abuse Act (S. 681) would curtail these activities and generate $100 billion from wealthy individuals and corporations that have been failing to pay their fair share of the nation’s tax bill.94 Battered by the Storm 32 Chapter 4: Principles for a More Effective Approach to End Poverty There is a pressing need for a longer-term strat- egy to end the scourge of poverty in our nation and help all of our people achieve a living income. While it is beyond the scope of this report to delve into the full details, such a strategy would include raising the income of current workers and recipients of public ben- efits, investing in the future of our children, and creat- ing safe and healthy communities for people wherever they live. It would also include full attention to ending all discrimination that leads to disparities in income based on people’s race, national origin or ethnicity, gen- der, disability, sexual orientation, or any other status or characteristic. Here are the principles that should guide pub- lic and private action beginning now and continuing beyond the current economic crisis. Fiscal and monetary policies aimed at achieving full employment, both domesti- cally and globally; Minimum wage indexed to half the level of the average wage and removal of all legal barriers to union organizing; Affordable quality health coverage for all; Child care assistance to all who need it; Increased access to affordable housing and the ability of people to rent or purchase decent housing; Postsecondary education assistance for all who can benefit from it; A social safety net that offers a decent measure of assistance to all who need help, including income supplementation for low- wage workers, robust food and nutrition programs, support for families with chil- dren, further reform of the unemployment insurance system, and appropriate income and services for disabled people; Sufficient investment in the education and development of all children, beginning with prenatal to pre-kindergarten care, reform- ing elementary and secondary education to change it from a K-12 system to a P-14 sys- tem, and offering multiple pathways neces- sary to get all young people successfully to adulthood with the maximum education and training they can achieve; Attention to the place-based aspects of pov- erty, both urban and rural, with particular emphasis on the continuing segregation of the inner city and the growing confluence of poverty and racial and ethnic segregation in inner-ring suburbs; Child welfare, juvenile justice, and criminal justice systems designed to minimize the number of children and youth incarcerated or institutionalized, and end the racial and Principles for a More Effective Approach 33 other disparities that are characteristic of those processes; Immigration reform that provides a path to citizenship to everyone in the United States and ends the current hypocrisy that looks the other way while employers hire undocu- mented workers and then exploit and mis- treat them with little worry of being called to account for their illegal actions; Guaranteed provision to all lower-income people of the full range of services they need, including mental health, drug and alcohol treatment, domestic violence, and legal aid; and Full enforcement of all anti-discrimination laws at all levels of government. This report has focused not only on immediate actions to respond to the current national emergency, but also on essential public policy especially at the national level. Ending poverty and achieving a living income for all are not just public policy issues, but also require community and individual responsibility, with public and private hands extended to help people help themselves in a multiplicity of ways. Battered by the Storm 34 1. Bureau of Labor Statistics. November 6, 2009 news release. See: http:\/\/www.bls.gov\/news.release\/pdf\/empsit.pdf 2. Doug Elmendorf, The Budget and Economic Outlook, Presentation to the National Economists Club, Congressional Budget Office, September 2009. See: http:\/\/www.cbo.gov\/doc. cfm?index=10624&zzz=39633. See also: http:\/\/www.cbo.gov\/doc. cfm?index=10521 3. National Employment Law Project, Long-Term Unemployment Surges Even as Job Loss Slows. October 2, 2009. See: http:\/\/ www.nelp.org\/page\/-\/UI\/September.Jobs.Statement.pdf?nocdn=1 4. National Employment Law Project, Long-Term Unemployment Surges Even as Job Loss Slows. October 2, 2009. See: http:\/\/ www.nelp.org\/page\/-\/UI\/September.Jobs.Statement.pdf?nocdn=1 5. National Employment Law Project, Long-Term Unemployment Surges Even as Job Loss Slows. October 2, 2009. See: http:\/\/ www.nelp.org\/page\/-\/UI\/September.Jobs.Statement.pdf?nocdn=1 6. Congressional Budget Office What Accounts for the Decline In Manufacturing Employment? 2004. See: http:\/\/www.cbo.gov\/ doc.cfm?index=5078&type=0 7. Joshua Zumbrun, America’s 10 Poorest Cities, Forbes, October 19, 2009. See: http:\/\/abcnews.go.com\/Business\/PersonalFinance\/ americas-10-poorest-cities\/Story?id=8826345&page=1 8. Heidi Schierholz, \”At 10.2%, October’s unemployment is a wake- up call,\” Economic Policy Institute. See: http:\/\/www.epi.org\/ analysis_and_opinion\/entry\/at_10.2_octobers_unemployment_ is_a_wake-up_call\/ 9. Heidi Schierholz, \”At 10.2%, October’s unemployment is a wake- up call,\” Economic Policy Institute. 10. Economic Policy Institute, Economy Track. See: http:\/\/ economytrack.org\/ 11. Dedrick Muhammad, Institute for Policy Studies analysis of Bureau of Labor Statistics, Labor Force Statistics from the Endnotes Current Population Survey: Unemployment Rate White. See: http:\/\/data.bls.gov\/PDQ\/servlet\/SurveyOutputServlet;jsessionid=a 230fc7bb30c60497b36 12. Mark Rank, One Nation, Underprivileged: Why American Poverty Affects us All, Oxford: Oxford University Press, 2005. p. 179. 13. U.S. Census Bureau, U.S. Census Bureau: State and County QuickFacts. See: http:\/\/quickfacts.census.gov\/qfd\/states\/00.000. html, and http:\/\/aspe.hhs.gov\/poverty\/09poverty.shtml. The chart also gives the poverty line for other size families. 14. DeNavas-Walt, Carmen, Bernadette D. Proctor, and Jessica C. Smith, U.S. Census Bureau, Income, Poverty, and Health Insurance Coverage in the United States: 2008. See: http:\/\/www. census.gov\/prod\/2009pubs\/p60-236.pdf 15. US Census Bureau, \”Income, Poverty, and Health Insurance Coverage in The United States: 2008,\” Table 4, pg. 14. See: http:\/\/www.census.gov\/prod\/2009pubs\/p60-236.pdf 16. Lawrence Mishel, \”Sounding the Alarm,\” Economic Policy Institute. See: http:\/\/www.epi-data.org\/docs\/alarm\/swf\/index.html 17. Fertility & Family Statistics Branch, Housing and Household Economic Statistics Division, U.S. Census Bureau, Current Population Survey (CPS) Definitions and Explanations: Poverty Definition. See: http:\/\/www.census.gov\/population\/www\/cps\/ cpsdef.html 18. House of Household Economic Statistics Division, U.S. Census Bureau, Alternative Poverty Estimates Based on National Academy of Sciences Recommendations, by Geographic and Inflationary Adjustments. See: http:\/\/www.census.gov\/hhes\/www\/povmeas\/ web_tab1_2007_2008%20NAS%20measures%20comp.xls 19. The Self-Sufficiency Standard calculates how much money an adult needs to meet basic needs at a minimally adequate level, and varies geographically by county or sub-county and by family size and composition. See: http:\/\/www.selfsufficiencystandard.org. Endnotes 35 20. Mark Nord, Margaret Andrews and Steven Carlson, Household Food Security in the United States, 2008, United States Department of Agriculture, Nov. 2009. See: http:\/\/www. washingtonpost.com\/wp-srv\/nation\/documents\/usda_report_ household_food_security_2008.pdf?sid=ST2009111601621 21. New USDA Statistics Highlight Growing Hunger Crisis in the United States: 2007 Study Fails to Reflect Current Economic Crisis, Feeding America, November 17, 2008. See: http:\/\/ feedingamerica.org\/newsroom\/press-release-archive\/usda-hunger- statistics.aspx?print=1 22. Dr. Raul Hinojosa Ojeda, The Continuing Home Foreclosure Tsunami, William C. Velasquez Institute. See: http:\/\/www.wcvi. org\/data\/pub\/WCVI_Publication_Homeownership102309.pdf 23. Danilo Pelletiere, Renters in Foreclosure: Defining the Problem, Identifying the Solutions. Washington, D.C. 2008: National Low Income Housing Coalition. See: http:\/\/www.nlihc.org\/doc\/ renters-in-foreclosure.pdf 24. Greg T. Spielberg, After the Foreclosure: Downsizing and Doubling Up, Business Week, July 17, 2009. See: http:\/\/www. businessweek.com\/print\/bwdaily\/dnflash\/content\/jul2009\/ db20090717_930614.htm 25. Diana Pearce, \”Living on the Edge: Doubled-Up Families in America,\” unpublished paper, Women and Poverty Project, 1994. 26. The National Law Center on Homelessness and Poverty, Housing Factsheet. See: http:\/\/www.nlchp.org\/program.cfm?prog=5 27. National Law Center on Homelessness and Poverty, Indicators of Increasing Homelessness Due to the Foreclosure and Economic Crises. See: http:\/\/www.nlchp.org\/content\/pubs\/Foreclosure_ Effects_on_Homelessness1.pdf 28. Bureau of Labor Statistics, \”Household Data Seasonally Adjusted: Employment status of the civilian noninstitutional population by race, sex, age, and Hispanic or Latino ethnicity, seasonally adjusted.\” See: http:\/\/www.bls.gov\/web\/cpseea4.pdf 29. Barbara Ehrenreich and Dedrick Muhammad, The Recession’s Racial Divide, The New York Times, September 12, 2009. See: http:\/\/www.nytimes.com\/2009\/09\/13\/opinion\/13ehrenreich.html 30. Gerard Rainville, AARP Closer Look Baseline Survey: September 30, 2009, American Association of Retired Persons, September 2009. See: http:\/\/www.aarp.org\/research\/surveys\/money\/econ\/ trends\/articles\/closer_look_baseline.html 31. Bureau of Labor Statistics News Release USDL-09-1331, The Employment Situation October 2009, at Table A-7, available at http:\/\/stats.bls.gov\/news.release\/pdf\/empsit.pdf 32. Heidi Shierholz, New 2008 poverty, income data reveal only tip of the recession iceberg, Economic Policy Institute, September 10, 2009. See: http:\/\/www.epi.org\/publications\/entry\/income_ picture_20090910\/ 33. Joint Economic Committee, U.S. Congress, Report Update: Comprehensive Health Insurance Reform: An Essential Prescription for Women. See: http:\/\/jec.senate.gov\/index. cfm?FuseAction=Reports.Reports&ContentRecord_id=efb1d290- 5056-8059-7656-1205b6b933c1&Region_id=&Issue_id= 34. Martin Kelly, Top 10 New Deal Programs: Significant New Deal Programs to Combat the Great Depression, About.com. See: http:\/\/americanhistory.about.com\/od\/greatdepression\/tp\/ new_deal_programs.htm 35. Medicare is a social insurance program administered by the United States government, providing health insurance coverage to people who are aged 65 and over, or who meet other special criteria. Medicare operates as a single-payer health care system, part of the Social Security Act of 1965 passed by Congress and signed into law by President Lyndon B. Johnson. 36. Medicaid was created on July 30, 1965, through Title XIX of the Social Security Act. Each state administers its own Medicaid program while the federal Centers for Medicare and Medicaid Services (CMS) monitors the state-run programs and establishes requirements for service delivery, quality, funding, and eligibility standards. 37. Arloc Sherman, Safety Net Effective at Fighting Poverty But Has Weakened for the Very Poorest, Center on Budget and Policy Priorities, July 6, 2009. See: http:\/\/www.cbpp.org\/cms\/index. cfm?fa=view&id=2859 Battered by the Storm 36 38. Those considered in deep poverty in the U.S. have half or less of the yearly income of those at the poverty line. In 2005 half the poverty line for a family of three was $7,788; for a family of four it was $9,985. 39. Kaiser Commission on Medicaid Facts: Medicaid and the Uninsured, March 2009. See: http:\/\/www.kff.org\/medicaid\/ upload\/7872.pdf 40. Center on Budget and Policy Priorities, \”Policy Basics: Introduction to Unemployment Insurance,\” November 10, 2003. See: http:\/\/www.cbpp.org\/cms\/index.cfm?fa=view&id=1330 41. Center on Budget and Policy Priorities, American Recovery and Reinvestment Act of 2009: State-By-State Estimates of Key Provisions Affecting Low- and Moderate-Income Individuals February 25, 2009. See: http:\/\/www.cbpp.org\/cms\/index. cfm?fa=view&id=2355 42. Center on Budget and Policy Priorities, American Recovery and Reinvestment Act of 2009: State-By-State Estimates of Key Provisions Affecting Low- and Moderate-Income Individuals, February 25, 2009. See: http:\/\/www.cbpp.org\/cms\/index. cfm?fa=view&id=2355; and Coalition on Human Needs, \”The American Recovery and Reinvestment Act: Provisions that Promote Shared Recovery,\” February 17, 2009. See: http:\/\/chn. org\/pdf\/2009\/ConfEconRecoveryChart21709.pdf 43. Coalition on Human Needs, \”The American Recovery and Reinvestment Act: Provisions that Promote Shared Recovery,\” February 17, 2009. See: http:\/\/chn.org\/pdf\/2009\/ ConfEconRecoveryChart21709.pdf 44. National Employment Law Project, Federal Stimulus Funding Produces Unprecedented Wave of State Unemployment Insurance Reforms, June 16, 2009. See: http:\/\/www.nelp.org\/page\/-\/UI\/ UIMA.Roundup.June.09.pdf?nocdn=1 45. National Employment Law Project, Federal Stimulus Funding Produces Unprecedented Wave of State Unemployment Insurance Reforms, June 16, 2009. See: http:\/\/www.nelp.org\/page\/-\/UI\/ UIMA.Roundup.June.09.pdf?nocdn=1 46. Erik Ekholm, New York Times, Nov 16, 2009. See: http:\/\/www. nytimes.com\/2009\/11\/19\/us\/19unemploy.html?_r=1 47. Ibid. 48. Shelley Waters Boots and Karin Martinson, A Modern Safety Net, The American Prospect, September 17, 2009. See: http:\/\/ www.prospect.org\/cs\/articles?article=a_modern_safety_net 49. Steven A. Vandner and Thomas Stengle, \”Unemployment Insurance: Measuring Who Receives It\”, Monthly Labor Review (July 1997), Vol. 120, Issue 7, p. 15-24. See: http:\/\/www.bls.gov\/ opub\/mlr\/1997\/07\/art2full.pdf 50. According to NELP in October 2009: \”In total, an unprecedented nearly nine million jobless workers are receiving some form of unemployment benefits\u2014including regular state benefits, or federal benefits under the Emergency Unemployment Compensation extension or the federal Extended Benefits program.\” See: \”Unemployment Rate Jumps Past 10% Plateau\” http:\/\/www.nelp.org\/page\/-\/UI\/PR.Oct09.Jobs.pdf?nocdn=1. The same publication reports that total number officially unemployed in October was 15.7 million. Hence, roughly 57 percent of the unemployed are now receiving benefits. 51. The HHS TANF caseload report indicates that average monthly number of children receiving TANF in 2008 was 3.06 million. The Census Bureau indicates that there were 14.07 million poor children in 2008. Hence 3.06 million\/14.07= 21.7 percent. The report is available at: http:\/\/www.acf.hhs.gov\/programs\/ofa\/data- reports\/caseload\/2008\/2008_fycy_recipient_tanssp.htm 52. Figures as calculated by Legal Momentum from data reported by the Census Bureau and by the U.S. Department of Health and Human Services (HHS). For more detailed information, see Legal Momentum, The Bitter Fruit Of Welfare Reform: A Sharp Drop In The Percentage Of Eligible Women And Children Receiving Welfare (June 2009), available at: http:\/\/www.legalmomentum. org\/assets\/pdfs\/lm-tanf-bitter-fruit.pdf 53. Testimony: LaDonna Pavetti, Director of Welfare Reform and Income Support, on the Safety Net’s Response to the Recession- Before the House Subcommittee on Income Security and Family Support. Center on Budget and Policy Priorities, October 8, Endnotes 37 2009. See: http:\/\/www.cbpp.org\/cms\/index.cfm?fa=view&id=2945 54. Figures as calculated by Legal Momentum, based on Census Bureau data and TANF benefit level data collected by the Center on Budget and Policy Priorities. For more detailed information, see Legal Momentum, Meager and Diminishing Welfare Benefits Perpetuate Widespread Material Hardship for Poor Women and Children (July 2009). Available at: http:\/\/www.legalmomentum. org\/assets\/pdfs\/tanf-meager-benefits.pdf 55. See: http:\/\/www.legalmomentum.org\/assets\/pdfs\/lm-tanf-reform- agenda.pdf 56. Women of Color Resource Center, To Punish the Poor: Criminalizing Trends in the Welfare System p. 8. See: http:\/\/ www.coloredgirls.org\/downloads\/working_03.pdf 57. Women of Color Resource Center, To Punish the Poor: Criminalizing Trends in the Welfare System p. 10. See: http:\/\/ www.coloredgirls.org\/downloads\/working_03.pdf 58. Barbara Ehrenreich and Frances Fox Piven, Without a Safety Net, Mother Jones 27 no3 34-41, May\/June 2002. 59. See Legal Momentum at: http:\/\/www.legalmomentum.org\/assets\/ pdfs\/lm-tanf-bitter-fruit.pdf 60. See Legal Momentum at: http:\/\/www.legalmomentum.org\/assets\/ pdfs\/lm-tanf-bitter-fruit.pdf 61. Liz Schott and Zachary Levinson, TANF Benefits are Low and Have Not Kept Pace With Inflation, Center on Budget and Policy Priorities, November 24, 2008. See: http:\/\/www.cbpp.org\/ pdf\/11-24-08tanf.pdf 62. Figures as calculated by Legal Momentum from USDA data available at: http:\/\/www.fns.usda.gov\/pd\/snapmain.htm 63. Figures as calculated by Legal Momentum from HHS data available at: http:\/\/www.acf.hhs.gov\/programs\/ofa\/data-reports\/ index.htm 64. Testimony: LaDonna Pavetti, Director of Welfare Reform and Income Support, on the Safety Net’s Response to the Recession- Before the House Subcommittee on Income Security and Family Support. October 8, 2009. http:\/\/www.cbpp.org\/cms\/index. cfm?fa=view&id=2945 65. Testimony: LaDonna Pavetti, Director of Welfare Reform and Income Support, on the Safety Net’s Response to the Recession- Before the House Subcommittee on Income Security and Family Support. October 8, 2009. http:\/\/www.cbpp.org\/cms\/index. cfm?fa=view&id=2945 66. Nadwa Mossaad, U.S. Food Stamp Enrollment Rises, Population Reference Bureau, October 2009. See: http:\/\/www.prb. org\/Articles\/2009\/usfoodstampenrollment.aspx 67. Nadwa Mossaad, U.S. Food Stamp Enrollment Rises, Population Reference Bureau, October 2009. See: http:\/\/www.prb. org\/Articles\/2009\/usfoodstampenrollment.aspx 68. See: http:\/\/www.fns.usda.gov\/pd\/34SNAPmonthly.htm 69. Figures as calculated by Legal Momentum from USDA data available at http:\/\/www.fns.usda.gov\/pd\/snapmain.htm. 70. Figures as calculated by Legal Momentum from HHS data available at http:\/\/www.acf.hhs.gov\/programs\/ofa\/data-reports\/ index.htm. 71. Testimony: LaDonna Pavetti, Director of Welfare Reform and Income Support, on the Safety Net’s Response to the Recession- Before the House Subcommittee on Income Security and Family Support. Center on Budget and Policy Priorities, October 8, 2009. See: http:\/\/www.cbpp.org\/cms\/index.cfm?fa=view&id=2945 72. Nadwa Mossaad, U.S. Food Stamp Enrollment Rises, Population Reference Bureau, October 2009. See: http:\/\/www.prb. org\/Articles\/2009\/usfoodstampenrollment.aspx 73. Kenneth Hanson and Elise Golan, Effects of Changes in Food Stamp Expenditures Across the U.S. Economy, USDA, Economic Research Service, August 2002. Mark Zandi, The Economic Impact of the American Recovery and Reinvestment Act, January 21, 2009. 74. Coalition on Human Needs, \”The American Recovery and Reinvestment Act: Provisions that Promote Shared Recovery,\” February 17, 2009. See: http:\/\/chn.org\/pdf\/2009\/ ConfEconRecoveryChart21709.pdf 75. Center on Budget and Policy Priorities, Introduction to the Housing Voucher Program, May 15, 2009. See: http:\/\/www.cbpp. Battered by the Storm 38 org\/cms\/index.cfm?fa=view&id=2817 76. Center on Budget and Policy Priorities, The Number of Homeless Families Climbing Due to Recession. See: http:\/\/www. cbpp.org\/cms\/index.cfm?fa=view&id=2228 77. See: http:\/\/www.nlihc.org\/doc\/NLIHC%20Renters%20 Briefing%202_20_2009.pdf 78. Ibid. 79. National Alliance to End Homelessness, Homelessness Prevention & Rapid Re-Housing Program. See: http:\/\/www. endhomelessness.org\/section\/prevention 80. National Low Income Housing Coalition http:\/\/www.nlihc.org\/ detail\/article.cfm?article_id=6140&id=48 81. Jennifer Mezey, Mark Greenberg and Rachel Schumacher, The Vast Majority of Federally-Eligible Children Did Not Receive Child Care Assistance in FY 2000, Center for Law and Social Policy, revised in October 2, 2002. See: http:\/\/www.clasp.org\/ admin\/site\/publications_states\/files\/0065.pdf 82. Karen Schulman and Helen Blank, State Child Care Assistance Policies 2009: Most States Hold the Line, But Some Lose Ground in Hard Times, National Women’s Law Center, September 2009. See: http:\/\/www.nwlc.org\/pdf\/ nwlcstatechildcareassistancepolicies2009.pdf 83. Karen Schulman and Helen Blank, State Child Care Assistance Policies 2009: Most States Hold the Line, But Some Lose Ground in Hard Times, National Women’s Law Center, September 2009. See: http:\/\/www.nwlc.org\/pdf\/ nwlcstatechildcareassistancepolicies2009.pdf 84. Center on Budget and Policy Priorities, available at: http:\/\/www. cbpp.org\/cms\/?fa=view&id=2505 85. Center on Budget and Policy Priorities, Arloc Sherman, Recovery Agreement Temporarily Expands Child Tax Credit , http:\/\/www. cbpp.org\/cms\/index.cfm?fa=view&id=2547 86. Another Take on Solving the Foreclosure Crisis: Loans to Jobless Homeowners, http:\/\/www.philaup.org\/pdf\/2009_1120_crisis_ loans.pdf. 87. The preceding four paragraphs were substantially drawn from: http:\/\/www.counterpunch.org\/baker07282009.html 88. The proposals put forward in this section have been drafted by Chuck Collins and the Inequality and Common Good Project of the Institute for Policy Studies. For more information, see http:\/\/ www.ips-dc.org. 89. Robert Frank, \”Why Wait to Repeal Tax Cuts for the Rich?\” The New York Times, December 7, 2008. http:\/\/www.nytimes. com\/2008\/12\/07\/business\/07view.html?_r=1&scp=2&sq=Robert percent20Frank&st=cse. In January 2008, the Tax Policy Center estimated retaining the top rate cuts for incomes over $250,000 would cost $43 billion in revenue in 2009 and $45 billion in 2010. 90. Mark Penn, \”Most affluent voters key to Obama sweep,\” Politico, Nov. 11, 2008. http:\/\/www.politico.com\/news\/ stories\/1108\/15471.html 91. See Dean Baker, The Benefits of a Financial Transaction Tax, Center for Economic and Policy Research, December 2008. http:\/\/ www.cepr.net\/index.php\/publications\/reports\/the-benefits-of-a- financial-transactions-tax\/ Also see: Robert Pollin, Dean Baker, and Marc Schaberg, \”Securities Transaction Taxes for U.S. Financial Markets,\” Eastern Economic Journal, Vol. 29, No. 4, Fall 2003. 92. Citizens for Tax Justice, Capital Gains and Dividends Tax Cuts Offer Almost No Benefit to Middle-Income Americans and Add to the Nation’s Fiscal Problems, May 13, 2008. http:\/\/www.ctj. org\/pdf\/capgainsdivtaxcuts.pdf 93. See, e.g., Joseph Guttentag and Reuven Avi-Yonah, \”Closing the International Tax Gap,\” in Max B. Sawicky, ed., Bridging the Tax Gap: Addressing the Crisis in Federal Tax Administration (2006), as noted in the U.S. Senate Permanent Subcommittee on Investigations, Staff Report on \”Dividend Tax Abuse: How Offshore Entities Dodge Taxes on U.S. Stock Dividends,\” September 11, 2008. See: http:\/\/levin.senate.gov\/newsroom\/suppo rting\/2008\/091108DividendTaxAbuse.pdf 94. Permanent Subcommittee on Investigations, Senate Committee on Homeland Security and Government Affairs, August 2006 http:\/\/ levin.senate.gov\/senate\/investigations\/index.html About the Authors Deepak Bhargava is executive director of the Center for Community Change, and is one of the nation’s foremost leaders on grassroots community organizing for social justice, pushing the idea that public policy change is a key lever to improve poor people’s lives. Timothy Casey is a Senior Staff Attorney at Legal Momentum, the Women’s Legal Defense and Education Fund, and a national expert on federal social assistance programs such as Temporary Assistance to Needy Families (TANF). John Cavanagh is director of the Institute for Policy Studies and co-author of 12 books on the economy. Karen Dolan is a fellow at the Institute for Policy Studies, specializing in linking grassroots activists to policymakers in the area of economic justice. Peter Edelman, a former official in the Clinton administration, is a lawyer, policymaker, and law professor at the Georgetown University Law Center, specializing in the fields of poverty, welfare, juvenile justice, and constitutional law. Barbara Ehrenreich is a widely read blogger and essayist, and the bestselling author of nearly 20 books, including: Bright-sided: How the Relentless Promotion of Positive Thinking Has Undermined America. Sarita Gupta is executive director of Jobs with Justice, a national network of more than 40 local coalitions of labor, community, student, and faith organizations, working together to build a broader global movement for economic and social justice. Dedrick Muhammad is a research associate for the Program on Inequality and the Common Good at the Institute for Policy Studies, focusing on the domestic racial wealth divide. Diana Pearce, best known for having coined the phrase \”the feminization of poverty\” and creator of the self-suffi- ciency standard, is a senior lecturer and director of the Center for Women’s Welfare at the University of Washington School of Social Work. Steve Savner is director of Public Policy at the Center for Community Change, leading the Center’s policy and legislative activities. Kevin Shih is an intern at the Institute for Policy Studies, focusing on economic inequality. ”

” Understanding Two Categories of TANF Spending: \”Other\” and Authorized Under Prior Law\” Final Report September 30, 2009 Michelle K. Derr Tara Anderson LaDonna Pavetti Elizabeth Scott Contract Number: 233-02-0086 MPR Reference Number: 6421-500 Submitted to: Department of Health and Human Services Administration for Children and Families Office of Planning Research and Evaluation 370 L’Enfant Promenade, SW Aerospace 7 West Washington, DC 20447 Project Officer: Timothy Baker Submitted by: Mathematica Policy Research, Inc. 600 Maryland Avenue, S.W. Suite 550 Washington, DC 20024-2512 Telephone: (202) 484-9220 Facsimile: (202) 863-1763 Project Director: Michelle K. Derr Understanding Two Categories of TANF Spending: \”Other\” and Authorized Under Prior Law\” Final Report September 30, 2009 Michelle K. Derr Tara Anderson LaDonna Pavetti Elizabeth Scott ACKNOWLEDGEMENTS We wish to thank many people for their important contributions to this report. Our thanks go to the regional administrators and program\/fiscal specialists from the Administration for Children and Families (ACF) who responded to our requests for information. We also wish to thank state program administrators and fiscal specialists who sent us Temporary Assistance for Needy Families (TANF) spending data and allowed us to visit them on site. This report benefitted from the ongoing support and guidance of the Office of Planning, Research, and Evaluation (OPRE) of the U.S Department of Health and Human Services. The OPRE project officer, Timothy Baker, provided invaluable support and feedback throughout the study. We also acknowledge Mark Fucello for his ongoing guidance as well as Nancye Campbell for her thoughtful comments on the draft report. From the Office of Financial Assistance, Ryan Martin was instrumental in connecting us with ACF regional administrators and giving us access to the most recent spending data available within ACF. He and Peter Germanis also provided thoughtful feedback on the study design and final report. Ann McCormick from the Office of the Assistant Secretary for Planning and Evaluation reviewed data collection tools and participated in several study meetings. She and Reuben Snipper reviewed the draft report for this study, providing many insightful suggestions. We also thank Elizabeth Lower-Basch and Rutledge Houston from CLASP, who provided critical guidance on understanding the nuances of TANF spending and assisted us in classifying state expenditures. At Mathematica Policy Research, Gretchen Kirby’s careful review of the draft report contributed greatly to the quality of this final version. Alfreda Holmes provided ongoing and consistent administrative support. ii CONTENTS EXECUTIVE SUMMARY ………………………………………………………………………. vii I PROJECT BACKGROUND AND DESIGN …………………………………………………….1 A. TANF Block Grant Changed Public Welfare Funding Structure ……………………….. 1 B. Federal Reporting Process Tracks States’ Quarterly Spending of TANF Funds…… 2 C. Type of Expenditures in AUPL and Other Categories Largely Unknown …………… 4 D. Objectives and Design of the Evaluation ……………………………………………………. 6 1. Study Objectives ……………………………………………………………………………. 6 2. Data Sources …………………………………………………………………………………. 6 a. State and Federal Spending Reports ……………………………………………. 6 b. ACF Regional Administrators and Staff ………………………………………… 7 c. State Agency Websites and Online Reports…………………………………… 7 d. In-depth Site Visits and Telephone Calls with Select States ……………… 7 3. Data Coding and Analysis………………………………………………………………… 8 II SPENDING IN OTHER AND AUTHORIZED UNDER PRIOR LAW CATEGORIES ……10 A. Ten States Account for Most of the TANF Funds in Other and AUPL ……………… 10 B. Spending Areas Capture How Funds Are Used in Other and AUPL ………………… 11 C. States Typically Use Funds Reported as Other and AUPL for Multiple Purposes …………………………………………………………………………………………… 13 D. Spending Groups Give Insight Into States’ Funding Priorities ………………………. 16 1. TANF Funds in Other and AUPL Mostly Allocated to Support Child Welfare Activities………………………………………………………………………….. 16 2. Personal Supports Address TANF Families’ Complex Service Needs……….. 19 3. Emergency Assistance to Meet the Basic Needs of Vulnerable Families …… 20 4. Education and Prevention Programs Help At-Risk Youth and Teen Mothers Avoid Negative Outcomes ………………………………………………….. 21 5. Other Spending Areas Used to Support TANF Purposes……………………….. 23 III RECOMMENDATIONS FOR FEDERAL AND STATE TANF ADMINISTRATORS ……25 A. Instituting Federal Changes ………………………………………………………………….. 25 1. Add Categories to Existing Federal Reporting Form ……………………………. 25 2. Clarify the Types of Reported Expenditures in Existing Categories ………… 26 3. Consider Redefining Some Existing Spending Categories …………………….. 27 4. Explore Options for Capturing Large Allocations Made to Counties……….. 27 5. Reevaluate the Process for Reporting TANF Expenditures, Adjustments, and Corrections …………………………………………………………………………… 28 iii Contents (continued) III (continued) B. Suggestions for State Level Changes ………………………………………………………. 28 1. Improve Coordination Between Program and Fiscal Staff ……………………… 28 2. Revisit Reporting Tools and Resources Available to Counties ……………….. 29 C. Conclusion ………………………………………………………………………………………… 29 REFERENCES …………………………………………………………………………………….31 APPENDIX: STATES’ USE OF FEDERAL TANF FUNDS REPORTED IN OTHER AND AUPL ………………………………………………………………………A.1 iv TABLES ES.1. Type of State Expenditure Data Available for the Analysis of Other and AUPL Spending ………………………………………………………………………………………… viii ES.2 Spending Groups Included in Other and AUPL………………………………………………… ix I.1 TANF ACF-196 Reporting Categories for Assistance and Nonassistance Expenditures …………………………………………………………………………………………….. 3 I.2 Total Federal TANF Funds Available and Expenditures for FY 2006 (Includes FY 2006 and Prior Year Federal TANF Funds) ……………………………………… 4 I.3 Percent and Amount of Expenditures in Other and AUPL As Compared to Total TANF Block Grant (Includes FY 2006 and Prior Year Federal TANF Funds) ……………………………………………………………………………………………………… 5 I.4 Type of State Expenditure Data Available for the Analysis of Other and AUPL ……………………………………………………………………………………………………….. 9 II.1 States Reporting the Greatest Amount of Federal TANF Funds (in dollars) in Other and AUPL ……………………………………………………………………………………. 10 II.2 States Reporting 50 Percent or More of Federal TANF Nonassistance Expenditures in Other and AUPL …………………………………………………………………. 11 II.3 Spending Groups Included in Other and AUPL……………………………………………….. 14 II.4 Number of States That Report Mental Health or Addiction Services or Both with Federal TANF Funds Reported in Other or AUPL………………………………………. 20 A.1 States’ Use of Federal TANF Funds Reported in Other and AUPL Categories……………………………………………………………………………………………… A.1 A.2 Spending Areas that Account for the Greatest Percentage of Federal TANF Funds Reported in Other and AUPL …………………………………………………………….. A.2 A.3. States’ Use of Federal TANF Funds Reported in Other and AUPL for FY 2006 …………………………………………………………………………………………………….. A.3 v FIGURES ES.I States’ Use of TANF Funds for Other and AUPL Spending (based on dollar amounts from 28 states) …………………………………………………………………………….. x II.1 Number of Spending Groups Reported by States (N=47) …………………………………. 14 II.2 States’ Use of Federal TANF Funds in Other and AUPL (Based on dollar amounts from 28 states) …………………………………………………………………………… 15 II.3 Types of Child Welfare Activities Funded in Other and AUPL…………………………….. 17 II.4 Types of Emergency Assistance Funded with Other and AUPL ………………………….. 21 vi Mathematica Policy Research EXECUTIVE SUMMARY The Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996 brought about sweeping changes in the funding structure for the nation’s cash assistance program. Among these changes was the transformation of Aid to Families with Dependent Children (AFDC) to the Temporary Assistance for Needy Families (TANF) program, rooted in an effort to shift power from the federal government to states. To encourage autonomy and innovation, a mandate was included in the federal welfare reform legislation to provide TANF block grant funds to the states, allowing greater program flexibility in spending and other decisions. Now, more than a decade after the passage of the landmark legislation, little is known about how a noteworthy portion\u2014roughly 15 percent\u2014of these TANF funds is used. The purpose of this study, conducted by Mathematica Policy Research on behalf of the Office of Planning, Research, and Evaluation, Administration for Children and Families (ACF), is to understand how states are spending federal TANF funds reported as Other and Authorized Under Prior Law (AUPL) on the ACF-196 federal reporting form and, based on findings and feedback from states, to provide recommendations for improving federal reporting. Based on the definitions in the instructions for completing the ACF-196 form, we chose to focus on three categories: Assistance AUPL. These expenditures were previously authorized under AFDC and cover expenses for services such as juvenile justice or state foster care. Nonassistance AUPL. These expenditures were previously authorized under AFDC but do not fulfill the purposes of TANF and do not meet the federal definition of assistance. Nonassistance other (line 6). These expenditures do not meet the definition of assistance and do not fit into any of the 13 prescribed categories under line 6. Other expenditures must fulfill at least one of the four purposes of TANF (provide assistance for needy families; promote job preparation, work, and marriage; prevent and reduce out-of-wedlock pregnancies; and encourage the formation and maintenance of two- parent families). Data Sources For this analysis, we relied on the following data sources: State and federal spending reports from FY 2006 and 2007 ACF regional administrators and staff State agency websites and online reports In-depth site visits and telephone calls with select states Altogether, this study included TANF spending data for 47 states. Based on spending reports from these states, our analysis captured 98 percent of the overall spending in the target categories. vii Mathematica Policy Research Table ES.1. Type of State Expenditure Data Available for the Analysis of Other and AUPL Spending Data Collection Status Number of States Spending areas and dollar amounts (FY 2006 or FY 2007) 28a Spending areas only 13 No spending reported as Other or AUPL 6b Spending information not available 4c a Includes Washington, DC. b States that did not report any funds in Other or AUPL in FY 2006 include Delaware, Hawaii, Maine, Nebraska, Utah, and Vermont. c We do not have TANF spending data from Kansas, Kentucky, Missouri, and Wyoming. Use of Federal TANF Funds for Other and AUPL Expenses In our analysis of state spending data for FY 2006, we found that TANF funds reported under Other and AUPL were used to support diverse activities across 17 spending areas. In coding the data, we identified 15 discrete areas that reveal how these TANF funds were used; spending reported in 2 additional areas\u2014miscellaneous and unspecified funds (monies allocated to counties or localities)\u2014was more ambiguous. Below, we summarize our primary findings on state spending in the target categories. States typically used federal TANF funds reported as Other and AUPL for multiple purposes. To analyze the distribution of spending, we assigned spending areas to five groups\u2014child welfare, personal supports, emergency assistance, education and prevention programs, and miscellaneous. To identify states’ spending priorities, we looked at the proportion of spending in each of the five groups. Of the 47 states for which we gathered information, 28 provided data on spending areas and dollar amounts. The remaining states only provided information on spending areas. Based on the dollar amounts across the 28 states, we found that child welfare accounts for roughly half of the total amount reported. Other spending areas include education and prevention programs (14 percent), emergency assistance (11 percent), personal supports (11 percent), and miscellaneous (10 percent). viii Mathematica Policy Research Table ES.2 Spending Groups Included in Other and AUPL Education and Prevention Programs N = 19 Child Welfare N = 31 Personal Supports N = 24 Emergency Assistance N = 20 Miscellaneous N = 33 Child welfare (e.g., in-home services\/family preservation, child protective services, foster care\/kinship care, adoption services) Mental health and addiction services Health\/disabilities services Domestic violence services Emergency assistance (e.g., housing, energy, food, clothing, transportation) Education and youth programs Teen pregnancy prevention Early childhood care and education TANF program expenses Special populations Employment services and work supports for low-income populations Funds to Faith-Based and community organizations (FBCOs) Marriage\/parenting initiatives Child support Adult\/postsecondary education Note: States may report spending in more than one area within a spending group. However, in these cases, the group is counted only once. TANF funds for Other and AUPL spending were mostly allocated to child welfare activities. Thirty-one of the states indicated that they used funds for child welfare services. Excluding the unspecified funds spending area, child welfare accounts for 54 percent of Other and AUPL spending among the states that provided spending data. Across the states, child welfare funds were used to support four areas: in-home services\/family preservation, child protective services, foster care\/kinship care, and adoption services. Personal supports were used to address TANF families’ complex service needs. TANF recipients and other low-income families often face personal and family challenges such as physical and mental health conditions, domestic abuse, drug and alcohol addictions, and hidden disabilities that interfere with steady employment. States used TANF funds reported in the target categories to address these issues. Twenty-four states reported spending TANF funds for personal supports, including services for mental health\/substance abuse, physical health\/disabilities, and domestic violence. ix Figure ES.I States’ Use of TANF Funds for Other and AUPL Spendinga (based on dollar amounts from 28 states) Child welfare 54% Education and prevention programs 14% Personal supports 11% Emergency assistance 11% Miscellaneous 10% Mathematica Policy Research Source: ACF-196 addenda and state expenditure reports for FY 2006 and FY 2007. a Excludes federal TANF expenditures allocated to local counties, which accounts for roughly one-third of the overall expenditures. These expenditures likely reflect state spending patterns. (Does not include state MOE funds.) Emergency assistance was used to address the basic needs of vulnerable families. In addition to needing work-related supports such as child care and transportation, TANF recipients often require basic supports to stabilize the family. Roughly half (n = 20) of the states included in this study used TANF funds to provide emergency assistance. Of the states that used funds for emergency assistance, most allocated funds to pay for housing-related needs as well as energy, food, clothing, and transportation. While we have limited information across states, it appears that some states provided services specifically for TANF recipients while others expanded eligibility to low-income working families at risk for becoming TANF eligible. Education and prevention programs were used to help at-risk youth and teen mothers avoid negative outcomes. Teen pregnancy, gang involvement, high school dropout, and criminal activity\/incarceration among low-income youth create societal and economic challenges for states. States used federal TANF funds to support education and youth programs (13 states), teen pregnancy\/prevention programs (8 states), and early childhood care and education services (8 states). x Mathematica Policy Research Miscellaneous spending was used to support various TANF purposes. We identified various other ways in which states used TANF funds reported in Other and AUPL. In most cases, these spending areas reach beyond the TANF population to include funding for services to other low-income individuals and families. The seven spending areas grouped under miscellaneous include TANF program expenses (such as research and program management compliance), services to special populations (such as American Indians, adult and youth offenders, and refugees), employment services and work supports for low-income job seekers, discretionary funds to FBCOs, marriage and parenting initiatives, child support, and adult\/postsecondary education. Recommendations for Federal and State TANF Administrators While the implementation of TANF represents a shift from the federal government to the states in deciding how funds are spent, both entities continue to work in partnership to monitor and track progress. In this report, we recommend strategies to strengthen the reporting tools and processes, particularly for states that use TANF funds for various purposes and across populations. The suggestions focus on improving the accuracy and consistency of reporting and decreasing the amount of federal TANF funds reported under Other and AUPL. We divide these into two categories\u2014changes at the federal level and changes at the state level. Federal-Level Changes Add categories to existing federal reporting form Clarify the types of allowed expenditures in existing categories Consider redefining some spending categories Explore options for capturing large allocations made to counties Reevaluate the process for reporting TANF expenditures, adjustments, and corrections State-Level Changes Improve coordination between program and fiscal staff Revisit reporting tools and resources available to counties Conclusion Taking advantage of the flexibility a block grant provides, states have used their TANF funds to address many unmet needs that are consistent with the purposes of TANF. At the time the TANF block grant was created, it was impossible for ACF to anticipate all the ways in which states might spend their TANF block grant funds. When states did not find a category in which to record their expenditures or when a program crossed multiple categories, they often recorded their expenditures in Other and, to a lesser extent, Authorized Under Prior Law. This study provides new information that ACF can use to refine existing spending categories, provide better guidance to states and possibly create a few new spending categories to reduce the amount of spending that is reported in these two categories. This, in turn, should lead to a more detailed and accurate accounting of how TANF block grants are spent. xi Mathematica Policy Research While this study sheds light on the amount and types of spending in the Other and AUPL categories, it is important to note that there are additional equally important reporting issues that makes it difficult to analyze and assess spending over time. First, it states’ ability to make adjustments and corrections across years makes it very complicated to track spending over time and to make comparisons across states. In addition, states can transfer funds from TANF to two other block grants, the Social Services Block Grant and the Child Care and Development Block Grant, but are not required to provide any additional information on how these funds are spent. This limits further what is known about how TANF funds are used and which families are benefitting from them. These and other issues related to how TANF block grants are used may surface during TANF reauthorization next year. These issues were beyond the scope of this project, however, they are likely to be important components of any discussion focused on increasing our understanding of how TANF block grant funds are used and assessing their effectiveness. xii Mathematica Policy Research I. PROJECT BACKGROUND AND DESIGN The Personal Responsibility Work Opportunity Reconciliation Act (PRWORA) of 1996 brought about sweeping changes in the funding structure for the nation’s cash assistance program. The transformation from Aid to Families with Dependent Children (AFDC) to the Temporary Assistance for Needy Families (TANF) program was rooted in an effort to devolve power from the federal government to states. To encourage autonomy and innovation, included in the federal welfare reform legislation was a mandate to block grant federal TANF funds to the states allowing greater program flexibility including spending strategies. Now, more than a decade after the passage of the landmark legislation, little is known about how a noteworthy portion, roughly 15 percent, of these TANF funds is used. The purpose of this study, conducted by Mathematica Policy Research, Inc., on behalf of the Administration for Children and Families (ACF), Office of Planning and Evaluation (OPRE), is to understand how states are spending federal TANF funds reported as Other and Authorized Under Prior Law (AUPL) on the ACF-196 federal reporting form and, based on study findings and feedback from states, to provide recommendations for improving federal reporting. In this report, we describe the different ways in which federal TANF funds in these two categories are being used. This chapter provides an introduction to federal block grants and the federal reporting process and describes our study design and approach to data collection and analysis. In Chapter II, we describe in detail the primary spending areas and groups including a look at how the majority of funds are used. Finally, Chapter III includes strategies that may be adopted by federal and state TANF agencies to improve the accuracy and consistency of state spending data. A. TANF Block Grant Changed Public Welfare Funding Structure The block grant to states created under the PRWORA replaced the AFDC program with a markedly different funding structure. Under the old program, the federal government matched state expenditures and funds were primarily spent to provide cash assistance payments and administer the AFDC program. With the TANF program, states receive a federal allotment and are required to contribute a maintenance of effort (MOE) allocation, which was set at 80 percent (or 75 percent if the state fails to meet the federal work requirement) of the total amount of the block grant. The block grant brought about two primary changes. Block grants provided states with a fixed level of funding that was not dependent on the number of cash assistance recipients. Block grants stabilized the federal allocation made to states, which meant that they receive roughly the same amount of federal TANF funds each year regardless of their TANF caseload size. Prior to PRWORA, state and federal expenditures fluctuated in response to the economic upswings and recessions, which in turn, influenced the AFDC caseloads. Block grants give states the same level of funding and provide some certainty of their yearly allotment (Weaver 2002). Block grants provided greater flexibility in how federal TANF funds may be spent. Block grants offered states considerable flexibility to invest TANF funds in other areas as long as they could demonstrate that the funds were used to meet at least one of the program’s four purposes: (1) provide assistance for needy families; (2) promote job 1 Mathematica Policy Research preparation, work, and marriage to help stem dependence of needy parents; (3) prevent and reduce out-of-wedlock pregnancies; and (4) encourage the formation and maintenance of two-parent families. States are encouraged to use these funds in innovative ways to achieve the critical goals laid out in the TANF statute (Administration for Children and Families 2009). Initially, block grants provided more TANF funding than needed to cover program-related expenses. Since the total block grant amount was determined based on the expenditures in 1994, when AFDC caseloads were high, the initial amount of the block grant exceeded the amount required to operate the TANF program in the early years following its creation (Lower-Basch and Greenberg 2009, US General Accounting Office 1998). In addition, the implementation of PRWORA coincided with an economic boom that provided an opportunity for TANF recipients to leave welfare for work. As a result, most states experienced substantial TANF caseload declines, which left a greater proportion of excess federal TANF funds available than under AFDC. Most states allocated the excess funds to support other social service programs such as child welfare, education, and emergency assistance for low-income families. B. Federal Reporting Process Tracks States’ Quarterly Spending of TANF Funds As a condition of the block grant, states are required to submit quarterly reports to ACF’s Office of Family Assistance summarizing the amount and purposes for which TANF and state MOE funds were spent during each three month reporting period. This reporting form and process, created with the initial implementation of PRWORA, was intended to provide accountability within the flexible block grant structure and ensure that states use their funds to support one of the four purposes of TANF as stated above. The ACF-196 federal reporting form, due 45 days after the end of the reporting quarter, is a one-page summary of expenditures. The form requires reporting of four primary types of expenditures: (1) federal TANF expenditures, (2) MOE state expenditures in TANF, (3) MOE expenditures in separate state programs, and (4) federal contingency fund expenditures. Federal TANF expenditures are reported in two primary categories\u2014assistance and nonassistance, which are lines 5 and 6 respectively on the ACF-196 federal reporting form (see Table I.1). Assistance includes cash, payments, or vouchers designed to meet on-going, basic needs. In fiscal year (FY) 2006, federal TANF assistance expenditures were roughly $6 billion, or 44 percent of the total amount of TANF expenditures (see Table I.2). The ACF-196 federal reporting form includes four subcategories of assistance: basic assistance, child care, transportation and other supportive services, and assistance authorized under prior law. Federal TANF nonassistance includes those expenditures that do not meet the definition of assistance. Third category includes expenditures such as work-related activities; administrative expenditures; and nonrecurring, short- term benefits to deal with immediate, work-related needs (e.g., lump sum diversion payments). Federal TANF nonassistance expenditures accounted for the other 56 percent of the total expenditures on TANF or $7.6 billion. States may report their expenditures in 13 designated categories. 2 Assistance Expenditures (Line 5) Basic assistance (line 5a) Child care (for those not employed)a (line 5b) Transportation and other supportive services (for those not employed)b (line 5c) Authorized under prior law (line 5d) Nonassistance Expenditures (Line 6) Work related activities\/expenses (e.g., work subsidies, education and training) (line 6a) Child carec (line 6b) Transportationd (line 6c) Individual Development Accounts (line 6d) Refundable Earned Income Tax Credits (line 6e) Other refundable EITC (line 6f) Non-recurrent short te rm benefits (line 6g) Prevention of ou t-of-wedlock pregnancies (line 6h) Two-parent family formation and maintenance (line 6i) Administration (line 6j)e Systems (line 6k) Authorized under prior law (line 6l) Other (line 6m) Table I.1 TANF ACF-196 Reporting Categories for Assistance and Nonassistance Expenditures Mathematica Policy Research Source: ACF-196 federal reporting form. aChild care assistance expenditures for families that are not employed but need child care to participate in other work activities including job search, community service, education or training, or for respite purposes. bTransportation or other supportive services that meet the definition of assistance including expenditures for families that are not employed but need supportive services to participate in other work activities. cChild care provided to employed families related to work or job retention and advancement activities that do not meet the definition of assistance. dTransportation activities that do not meet the definition of assistance. eStates may report up to 15 percent of their total TANF funds in the Administration category (line 6j). 3 Total federal block grant 20.5 100 Total transferred to child care development fund 1.9 9 Total transferred to social services block grant 974 million 5 Available for TANF 17.6 86 Total Expenditures on TANF 13.5b 66 Expenditures on assistance 5.9 44c Authorized under prior law 563 million 9 Expenditures on nonassistance 7.6 56c Authorized under prior law 750 million 10 Other 1.8 23 Unliquidated obligations 1.9b 9 Unobligated balance 2.2b 11 Total Dollar Amount (in billions of dollars unless specified otherwise) Total Federal Funds and Expenditures Percent Table I.2 Total Federal TANF Funds Available and Expenditures for FY 2006 (Includes FY 2006 and Prior Year Federal TANF Funds)a Mathematica Policy Research Source: U.S. Department of Health and Human Services, ACF, FY 2006 TANF Financial Data. Downloaded on April 17, 2009 at www.acf.hhs.gov\/programs\/ofs\/data\/2006\/ tableA_spending_2006.html. aIncludes federal TANF funds only. Does not include state MOE expenditures. bThese categories total the amount of the Available for TANF line, which includes: (1) the total expenditures on TANF, (2) unliquidated obligations, and (3) unobligated balance. The percentage of funds Available for TANF combined with total funds transferred to the Child Care Development Fund and Social Services Block Grant are equal to the total amount of federal funds. cReflects percentage of total TANF expenditures on assistance and nonassistance. C. Type of Expenditures in AUPL and Other Categories Largely Unknown Nearly all of the categories included on the ACF-196 include descriptions about which expenditures should be reported within each category. However, three categories, one in assistance and two in nonassistance, serve as catchalls on the form\u2014 AUPL, nonassistance AUPL, and nonassistance other. Prior to this study, little was known about how the federal TANF funds reported in these categories were spent. Assistance AUPL (line 5d). Even though block grants provide greater flexibility to states in defining how they spend TANF funds, some expenditures that were allowed pre-PRWORA are not included in one of the four purposes of TANF. These expenditures were previously authorized under AFDC and cover expenses for activities such as juvenile justice or state foster care payments. In FY 2006, these AUPL expenditures accounted for $563 million, roughly nine percent of the assistance expenditures (Table I.2) and four percent of the total TANF expenditures. Assistance AUPL accounts for roughly three percent of the total federal TANF block grant. Nonassistance AUPL (line 6l). Expenditures that were previously authorized under AFDC that meet at least one of the four TANF purposes and do not meet the federal 4 www.acf.hhs.gov\/programs\/ofs\/data\/2006 Mathematica Policy Research definition of assistance are to be reported as nonassistance AUPL. In FY 2006, nonassistance AUPL accounted for roughly $750 million or 10 percent of the total amount of nonassistance expenditures. This category accounted for about six percent of the total TANF expenditures and four percent of the total federal TANF block grant. Nonassistance Other (line 6m). Expenditures that do not meet the definition of assistance, meet at least one of the four TANF purposes, and do not fit into one of the 13 prescribed categories under line 6 are included in the category of Other. In FY 2006, total expenditures reported as nonassistance Other was roughly $1.8 billion or 23 percent of the total federal TANF nonassistance expenditures. This category represented 13 percent of the total TANF expenditures and nine percent of all federal TANF block grant funds. The amount of expenditures for these three categories is significant, totaling roughly $3.1 billion. This figure represents nearly a quarter (23 percent) of total TANF expenditures and 15 percent of all federal TANF dollars. Excluding the TANF funds allocated to the Child Care Development Fund1 and Social Services Block Grant2, these categories represent 18 percent of the available TANF funds (includes unliquidated and unobligated funds). Nonassistance Other, the category with the least amount of information about how these funds may be spent, is more than the AUPL (assistance and nonassistance) categories combined. Table I.3 Percent and Amount of Expenditures in Other and AUPL As Compared to Total TANF Block Grant (Includes FY 2006 and Prior Year Federal TANF Funds)a Assistance AUPL Nonassistance AUPL Total of Three Categories Other Percent of Total Federal Block Grant 3 4 9 15 Percent of Total TANF Expenditures (excludes CCDF and SSBG funds) 4 6 13 23 Total Amount 563 million 750 million 1.8 billion 3.1 billion Source: U.S. Department of Health and Human Services, ACF, FY 2006 TANF Financial Data. Downloaded on April 17, 2009 at www.acf.hhs.gov\/programs\/ofs\/data\/2006\/ tableA_spending_2006.html. a Includes federal TANF funds only. Does not include state MOE expenditures. 1 The Child Care and Development Fund (CCDF) is specifically devoted to child care services and quality. It allows low-income parents and parents receiving Temporary Assistance for Needy Families (TANF) to work or to participate in the educational or training programs they need in order to work. Funds may also be used to serve children in protective services. In addition, a portion of CCDF funds must be used to enhance child care quality and availability. 2 Social Services Block Grant (SSBG) funds are designed to allow states to provide a range of social services to individuals based on the needs within local communities. Funds may be used to promote economic self-sufficiency, prevent child maltreatment, and provide supports to reduce the need for institutional care, among other goals. 5 www.acf.hhs.gov\/programs\/ofs\/data\/2006 Mathematica Policy Research D. Objectives and Design of the Evaluation Even though block grants have been in place for more than a decade, little is known about how funds in the categories of Other and AUPL have been spent. Relying primarily on existing state spending data, this study aims to document how states have used federal TANF funds reported in these target categories. 1. Study Objectives The primary objectives for this study are to provide the following: Clarification of how federal TANF funds in Other and AUPL are spent. How do states use these funds? What spending areas are reported most often? Which spending areas account for the greatest proportion of the overall TANF funds reported in the target categories? Guidance for the future. What changes can be recommended concerning redefining of expenditure categories (especially Other and AUPL) so that data can be accounted for in a way that would be more informative from a program and policy perspective? Of interest to policymakers, program administrators, and researchers is not only how these funds have been spent but also whether they are being used to support the purposes of TANF. The information provided in this report could also be used to document the service areas that may be affected as the value of the block grant diminishes with inflation and as states are required to shift funds to cover the cost of basic assistance and TANF program operations as caseloads rise during this economic downturn. Finally, this study offers federal program staff considerations for improving the accuracy and efficiency of reporting federal TANF funds. 2. Data Sources We collected existing TANF spending data and state reports from a variety of sources including ACF-196 Federal Report Addenda, ACF-204 MOE Reports, ACF regional office staff, and individual states. Although we reviewed information from FY 2005 FY 2007 in developing the spending areas captured by the target categories, we selected FY 2006 for our analysis because that information provided the most complete picture of how funds reported in Other and AUPL were spent. In looking at a number of states where information for both FY 2006 and FY 2007 was available, we determined that there was minimal variation in the type and magnitude of expenditures reported in the target categories from one year to the next; therefore, in cases where FY 2006 information was not available (seven states), we substituted information from FY 2007. a. State and Federal Spending Reports We used two primary spending reports for this analysis: ACF-204 Federal Report on State MOE Programs for FY 2005 and FY 2006. Each quarter states submit a report (ACF-204) that contains descriptions of the major services associated with each program for which a state claims MOE expenditures. This report gave us some indication of how states use their MOE funds and that, in turn, gave us an idea of the types of expenditures we might see in the target categories. We gathered FY 2005 MOE reports from the ACF website and the ACF central office provided reports 6 Mathematica Policy Research for FY 2006. Looking across the two years allowed us to track the consistency of reporting and document any significant changes in TANF spending amounts or types of programs\/services supported by funds reported in the target categories interest. We used these reports to develop a template of potential spending areas to analyze the ACF-196 addenda and other state spending data. ACF-196 Federal Report Addenda for FY 2006 and FY 2007. We used information from ACF-196 addenda from fiscal years 2006 and 2007 to develop a list of spending areas captured by Other and AUPL and classify state expenditures in those target categories. According to the ACF-196 instructions, states are required to file an addendum that describes the activities associated with expenditures reported on lines 6c (transportation), and 6m (Other); though, many states included information to identify costs associated with lines 5d (assistance AUPL) and 6l (nonassistance AUPL). The addenda included varying degrees of detail; 28 states provided program names or descriptions and the associated cost, while 13 reported only the types of services included in the category without breaking down the expenditures. b. ACF Regional Administrators and Staff We contacted ACF regional administrators and staff who helped us gather more information about states’ spending in Other and AUPL and they provided us with additional spending documentation such as addenda to the ACF-196 that were not readily available as well as state budget reports. At least four regions had fiscal specialists designed to monitor the spending data from their states; smaller regions relied on existing program staff. In the larger regions, we gathered information from both the fiscal and program staff. For example, we visited ACF Region II (responsible for ACF programs in New York, New Jersey, Puerto Rico, and the Virgin Islands) and met with both fiscal and program staff to get a better picture of spending in New York, which reports the second highest amount of funds in the target categories. Regional specialists also provided us with direct contacts in their states. For example, the ACF fiscal specialist from Region IX (responsible for Arizona, California, Hawaii, Guam, and Nevada) directly connected us with the state fiscal specialist in California. c. State Agency Websites and Online Reports We obtained program descriptions from state agency websites. In cases where a state listed only the name of a program on the ACF-196 addenda rather than a complete description, we searched the state agency website to gather more information about the program to help in categorizing the use of funds (e.g., target population, types of services provided, funding sources). d. In-depth Site Visits and Telephone Calls with Select States After reviewing information available from ACF-196 addenda, regional offices, and state agency websites, we selected states to visit or telephone to gather additional information. We selected states whose expenditures account for a high proportion of the overall spending in the target categories or states for which we had incomplete information from other sources. We conducted an in-depth site visit to one state and contacted four others by telephone. We spoke with state fiscal specialists who then sent us detailed spreadsheets indicating how the funds 7 Mathematica Policy Research reported in the target categories were spent. We also spoke with TANF program administrators and program specialists to learn more about their approach to reporting and to solicit their recommendations for improving the process. 3. Data Coding and Analysis In order to classify the expenditures that states reported in Other and AUPL, we developed a list of potential spending areas based on a review of state financial information. We first examined the ACF-196 financial forms and the accompanying state MOE narrative reports in order to identify the types of services supported with TANF funds. Based on this information, we drafted a preliminary template of spending areas encompassed under Other and AUPL. This review also gave us a sense of the magnitude of expenditures in various areas, helping us to further refine the spending areas. For example, we observed a large proportion of funds supporting services related to child welfare, so we created several distinct subcategories such as family preservation and child protective services in order to capture a greater level of detail. In developing the spending areas, we consulted with policy experts and researchers from other organizations who provided suggestions for revising the list based on their knowledge of TANF services and spending. We compiled the information from the ACF-196 addenda into a template for each state and the District of Columbia or 51 templates (worksheets) total. Each line item from the addenda was assigned to one spending area that best reflected how the money was spent. For example, if a large youth after-school program included a teen pregnancy prevention workshop, help with homework, and gang prevention activities, we assigned the line item spending to youth programs rather than teen pregnancy\/ prevention programs or education (elementary\/secondary). Based on these data, we determined the number of states reporting expenditures in each area and then identified states that expended the greatest amount of funds. We compiled program descriptions reported in the addenda and state TANF plans in order to better explain the range of services provided in each spending area. Our analysis captured 98 percent of the overall spending in the target categories. In all, this study included state TANF spending data for 47 states. We do not have data for four states\u2014 Kansas, Kentucky, Mississippi, and Wyoming. Combined, these states account for less than two percent of the total spending in the target categories. Six states did not report any expenditures in Other or AUPL. Table I.4 summarizes the availability of state data. 8 Mathematica Policy Research Table I.4 Type of St ate Expenditure Data Available for the Analysis of Other and AUPL Data Collection Status Number of States Spending areas and dollar amounts (FY 2006 or FY 2007) 28a Spending areas only 13 No spending reported in Other or AUPL 6b Spending information not available 4c aIncludes Washington, DC. bStates that in FY 2006, did not report any funds in Other or AUPL include: DE, HI, ME, NE, UT, VT. cWe do not have TANF spending data from the following states: KS, KY, MS, WY. 9 Mathematica Policy Research II. SPENDING IN OTHER AND AUTHORIZED UNDER PRIOR LAW CATEGORIES Block grants gave states the authority to expand the range of services available to TANF recipients and other low-income populations. To a large extent, expenditures reported in Other and AUPL reveal the types and amount of flexibility states have used under block grants. In this chapter, we describe how states use TANF funds reported in Other and AUPL. By analyzing spending data from states that reported dollar amounts, we also determine which groups account for the greatest proportion of the overall spending in Other and AUPL. A. Ten States Account for Most of the TANF Funds in Other and AUPL Based on our analysis of FY 2006 data submitted to the ACF, we found that a relatively small number of states account for a large proportion of the overall spending in the categories of Other and AUPL (see Table II.1). Using spending information to determine which states contributed most to the spending in these categories, we determined that ten states account for more than three- fourths of the overall spending in Other and AUPL. Four states, New York, California, Michigan, and Texas, represent slightly more than half (51 percent) of the total funds in Other and AUPL. Table II.1 States Reporting the Greatest Amount of Federal TANF Funds (in dollars) in Other and AUPLa Nonassistance Reported as Other (in millions) Nonassistance Reported as AUPL (in millions) Assistance Reported as AUPL (in millions) Total for All Categories (in millions) Percent of Total Spending in Other and AUPL New York 248.7 17.3 303.4 569.4 18.3 California 266.8 0 223.3 490.1 15.8 Michiganb 123.2 149.3 0 272.5 8.8 Texas 148.9 43.3 51.5 243.6 7.9 Illinois 59.6 167.8 0 227.4 7.3 Georgia 97.1 109.8 0 207.0 6.7 Florida 160.3 0 12.5 172.8 5.6 Connecticut 86.4 14.2 2.8 103.4 3.3 Ohio 135.8 0 0 135.8 4.4 Pennsylvania 0 95.7 0 95.7 3.1 Total TANF funds for 10 States 1.3 billion 597.5 593.4 2.5 billion 81.2 Total TANF funds for all states 1.8 billion 750 563.1 3.1 billion Source: U.S. Department of Health and Human Services, ACF, FY 2006 TANF Financial Data, downloaded on April 17, 2009, at www.acf.hhs.gov\/programs\/ofs\/data\/2006\/ tableA_spending_2006.html. a Includes federal TANF funds only. Does not include state MOE expenditures. bMichigan reported negative expenditures (-$78,287,770) in the category of Assistance AUPL in FY 2006. For the purpose of reporting, we assumed no expenditures in this category. 10 www.acf.hhs.gov\/programs\/ofs\/data\/2006 Table II.2 States Reporting 50 Percent or More of Federal TANF Nonassistance Expenditures in Other and AUPLa Mathematica Policy Research Of the states that receive a smaller amount of federal TANF funds, some report a large proportion of their nonassistance spending in Other and AUPL (see Table II.2). For example, based on FY 2006 figures, South Carolina reported 89 percent of their nonassistance spending in these two categories, and Missouri, Colorado, and Indiana each reported roughly 70 percent of their nonassistance funds in these two categories. Oregon reported about two-thirds of their nonassistance funds in Other and AUPL. While these states contribute to a small proportion of the overall federal TANF funds in Other and AUPL, findings from this study still provide valuable information describing how funds are spent within these smaller states. Total Nonassistance Expenditures (in millions) Nonassistance Reported as Other (in millions) Nonassistance Reported as AUPL (in millions) Total Nonassistance Expenditures in Other and AUPL (in millions) Percent of Total Nonassistance Spending in Other and AUPL South Carolina 53.2 47.4 0 47.4 89.0 Indiana 93.0 69.8 0 69.8 75.0 Missouri 120.2 87.9 0 87.9 73.2 Colorado 63.4 44.0 1.3 45.2 71.4 Oregon 78.0 52.0 0 52.0 66.7 Georgia 323.2 97.2 109.9 207.0 64.0 Idaho 16.8 4.9 5.2 10.1 60.2 Oklahoma 40.3 23.8 0 23.8 58.9 Michigan 518.1 123.2 149.3 272.5 52.6 Alabama 32.1 16.9 0 16.9 52.5 Texas 366.8 148.9 43.3 192.2 52.4 Iowa 67.8 14.9 19.5 34.3 50.7 Source: U.S. Department of Health and Human Services, ACF, FY 2006 TANF Financial Data, downloaded on April 17, 2009, at www.acf.hhs.gov\/programs\/ofs\/data\/2006\/ tableA_spending_2006.html. aIncludes federal TANF funds only. Does not include state MOE expenditures. B. Spending Areas Capture How Funds Are Used in Other and AUPL Our analysis of state spending data for FY 2006 found that TANF funds reported in Other and AUPL are used to support a range of activities. We identified 17 spending areas that capture how states are using these funds (see Box II.1). In coding the data, we identified 15 discrete areas that reveal how these TANF funds are used; spending reported in two additional areas are more ambiguous. One spending area we called miscellaneous. This area includes spending that did not fit into any of the areas we identified such as support for a statutory rape awareness program, earned 11 www.acf.hhs.gov\/programs\/ofs\/data\/2006 12 Mathematica Policy Research income tax credit outreach, and supports to grandparents raising their grandchildren. In addition, some of the spending included states that provided descriptions that were too vague to classify into an existing spending area, for example, community and economic development. Box II.1. Description of Spending Areas Child Welfare (n=31). In-home services\/family preservation, child protective services, foster care\/kinship care, and adoption services. TANF Program Expenses (n=21). Transitional employment services and supports, electronic benefits issuance, home-visiting programs for long-term welfare recipients, program management compliance, and research on TANF clients approaching welfare time limit. Emergency Assistance (n=20). Housing-related needs, energy, food and nutrition, clothing, and transportation. Domestic Violence Services (n=14). Information and referral services, short-term emergency shelter for those leaving an abusive relationship, case management, 24-hour hotline, and transitional supportive housing. Mental Health and Addiction Services (n=13). Evaluation and assessment services, individual and group counseling, maintenance of the provider network, management of the service delivery system, demonstration projects, and residential services for women with dependent children who completed a treatment program. Education and Youth Programs (n=13). After-school or other school-based programs designed to improve the life skills and educational attainment and reduce rates of criminal involvement of low-income children including TANF recipients. Also includes elementary or secondary programs and services such as full-day kindergarten for TANF families\/children, adult basic education, social work services in elementary schools, mentoring and tutoring programs designed to improve school attendance and outcomes for children. Health\/Disability Services (n=12). Outreach to children for immunization and those who are HIV-positive, operation of a poison control center, disability assessment and evaluation, vocational rehabilitation services, family service planning for physical and developmental disabilities, respite centers for those with intellectual disabilities, and funding to support nonmedical needs of disabled children to allow them to remain in the home. Special Populations (n=10). Programs and services targeted to populations such as American Indians, adult and youth offenders, military personnel, and refugees. Teen Pregnancy\/Prevention Programs (n=8). Family-planning and home-visiting services and parenting education for new teen parents. Early Childhood Care and Education (n=8). Head Start, pre-K, and other school readiness programs. Employment Services and Work Supports for Low-Income Populations (n=7). Programs and services for low-income families such as work experience, employment and skills training, and employment-based work supports (e.g., transportation services and purchase of tools, uniforms, or work clothes). Discretionary Funds to Faith-Based and Community Organizations (FBCO) (n=7). Expenditures to organizations that serve low-income families and vulnerable populations such as Arab Community Center for Economic and Social Services grants (immigration services), Community Services Block Grant programs, and United Community Ministry. Marriage and Parenting Initiatives (n=6). Life-skills education, peer-group instruction, and parenting workshops. Child Support (n=4). Mostly child support supplemental payment and non-IV D services. Limited information about how these funds were used. Adult\/Postsecondary Education (n=3). Scholarship programs, tuition payments, college tutoring services, and adult basic education programs. Unspecified Funds (n=3). Expenditures primarily allocated to local counties. Additional Expenditures (n=9). Support for a statutory rape awareness program, earned income tax credit outreach, and grandparents raising their grandchildren. Note: The n represents the number of states that report this type of expenditure in Other or AUPL. Mathematica Policy Research The second spending area we called unspecified funds. This area includes monies allocated to counties or localities. A few states allocated TANF funds reported in the target categories to counties or regions where local administrators determined how these funds were spent. Two of these states, New York and California, are county-administered states that gave a majority of the funds to the local counties and did not describe how these funds were used. Michigan is state administered, but gave a substantial amount of TANF funds to local counties where they might be used to tailor programs and services to reflect the needs of TANF recipients in their respective communities. While only a few states did not have readily available spending information for counties and localities, they comprise a large proportion (roughly a third) of the overall funds in the target categories. For example, in New York 72 percent of the total funds reported in Other and AUPL represent allocations to counties and California allocated 79 percent in this way. Michigan allocated nearly half of the funds reported in the target categories to the counties to provide supported employment and employment-based supportive services. Understanding how these funds were used would require additional data collection at the county level. For the purpose of this study, we assumed that county spending patterns, especially New York and California, would likely reflect the same patterns for the rest of the states. As a result, we excluded the spending area unspecified funds from the denominator when calculating which spending groups account for the greatest proportion of total spending in the target categories. Excluding this group provides some sense of how federal TANF funds in Other and AUPL are spent by states across known spending groups as well as how large counties in county-administered states might spend these funds. The categories that we examined reflected very different spending patterns. Compared to the category Other, AUPL (assistance and nonassistance) included a more narrow range of expenditures. Of the states that provided AUPL funding details, most indicated that these were allocated for child welfare purposes (see Appendix A, Table A.1). A few states used funds for emergency assistance for needy families, others used funds for special populations such as youth corrections, or allocated funds to local counties. In contrast, the category of Other included spending in all 17 spending areas and, in most states, included detailed information about how the funds were used. C. States Typically Use Funds Reported as Other and AUPL for Multiple Purposes To analyze the distribution of spending we assigned spending areas to five different groups (see Table II.3). Examining spending in the context of these groups provides greater clarity in analyzing and understanding the state spending data. The groups are child welfare, personal supports, emergency assistance, education and prevention programs, and miscellaneous, which is a group that captures the remaining spending areas. For example, 31 states reported using funds in Other and AUPL for child welfare purposes such as in-home services or family preservation programs, child protective services, foster care or kinship care, and\/or adoption services. Personal supports such as mental health and addiction services, health and disabilities services, and services to address domestic abuse were reported by 24 states. Twenty states used TANF funds in Other and AUPL for emergency assistance. Education and youth programs, teen pregnancy prevention, and early childhood care and education comprise a broad group called, Education and prevention programs. Nineteen states reported spending funds for these purposes. 13 Mathematica Policy Research Table II.3 Spending Groups Included in Other and AUPLa Education and Prevention Programs N=19 Child Welfare N=31 Personal Supports N=24 Emergency Assistance N=20 Miscellaneous N=33 Child welfare (e.g., In-home services\/family preservation, Child protective services, Foster care\/kinship care, Adoption services) Mental health and addiction services Health\/disabilities services Domestic violence services Emergency assistance (e.g., Housing, Energy, Food and nutrition, Clothing, Transportation) Education and youth programs Teen pregnancy prevention Early childhood care and education TANF program expenses Special populations Employment services for low-income populations Funds to FBCOs Marriage\/parenting programs Child support Adult\/postsecondary education Note: States may report spending in more than one area within a spending group. However, in these cases, the group is counted only once. aBased on federal TANF expenditures. Does not include state MOE funds. The multiple and diverse spending areas identified in the target categories suggests that states use the flexibility created under block grants to tailor spending to meet local needs. We found that 27 states used funds in areas represented by three or more of the spending groups (see Figure II.1). Forty-three states used funds in more than one spending group or did not report spending in Other or AUPL at all. Two states, New York and Illinois, and the District of Columbia supported activities across all five spending groups. Figure II.1 Number of Spending Groups Reported by States (N=47) One group n=4 Two groups n=10 Three or more groups n=27 None in Other or AUPL n=6 Source: ACF-196 addenda and state expenditure reports for FY 2006 and FY2007. 14 Mathematica Policy Research To identify states’ primary spending priorities, we looked at the proportion of spending in each of the five groups. Of the 47 states for which we gathered information, 28 of them have spending areas and dollar amounts. In the remaining states, we have spending areas only. Figure II.2 and Appendix A, Table A.2 is based on the 28 states for which we have dollar amounts. The proportion of spending is based on a denominator of 28 states. For this analysis, we also excluded allocations made to local counties, assuming that states’ spending might reflect county spending patterns.3 Based on the dollar amounts across the 28 states, we found that child welfare accounts for roughly half of the total amount reported. Emergency assistance and personal supports both account for an equal proportion of the total spending, about 11 percent. Education and prevention programs appear to be another important area supported by TANF funds, accounting for about 14 percent of the total spending in the target categories. The remaining ten percent of TANF funds in the target categories are used for the following miscellaneous spending areas: TANF program expenses, special populations (e.g., tribal programs, adult and youth corrections), employment services for low- income job seekers, discretionary funds to FBCOs, marriage and parenting programs, adult\/postsecondary education, and child support collection\/pass through. Figure II.2 States’ Use of Federal TANF Funds in Other and AUPLa (Based on dollar amounts from 28 states) Child welfare 54% Education and prevention programs 14% Personal supports 11% Emergency assistance 11% Miscellaneous 10% Source: ACF-196 addenda and state expenditure reports for FY 2006 and FY2007. a Excludes federal TANF expenditures allocated to local counties, which accounts for roughly one-third of the overall expenditures. These expenditures likely reflect state spending patterns. (Does not include state MOE funds.) 3 The proportion of spending excludes the unspecified county expenditures since we do not know how these funds were spent. Unspecified county allocations account for more than a third (36 percent) of the overall spending amounts. 15 Mathematica Policy Research D. Spending Groups Give Insight Into States’ Funding Priorities The five spending groups identified in this study provide some indication as to how states prioritize spending for TANF recipients and low-income populations. In the rest of this chapter we describe in greater detail how these funds are used within each spending group, revealing the diverse investments that states have made to support a variety of programs and services for low-income parents and their children. Most appear to supplement or expand existing programs and services where TANF funds are comingled with other funding sources. 1. TANF Funds in Other and AUPL Mostly Allocated to Support Child Welfare Activities The overlap in families who are receiving TANF or are TANF eligible and those served by the child welfare system is well documented. Child welfare systems are designed to protect children against maltreatment defined as, death, serious physical or emotional harm, sexual abuse or exploitation; or an act or failure to act which presents an imminent risk of serious harm, inflicted by a parent or caregiver (U.S. Children’s Bureau 2009). One study found that more than half of all children in foster care came from welfare-eligible homes and that between 70 and 90 percent of families receiving in-home services through a child welfare agency also receive TANF (Geen 2002). Other researchers have documented the strong relationship between child welfare and poverty (Geen et al. 2001, Berrick et al. 2006, Wells and Guo 2001). The emotional stress of unemployment and poverty and\/or the physical lack of resources available to a parent to care for their children put low-income families at-risk for child welfare involvement. Along with the overlap in families served by both systems, since the implementation of PRWORA, studies have documented that child welfare agencies have relied on TANF funding to administer and provide child welfare services. A recent study indicated that in FY 2006, TANF funds accounted for roughly 19 percent of all federal funding used to support child welfare services (DeVooght et al. 2008). This figure reflects a 135 percent increase in the use of TANF funds for child welfare services between FY 1998 and 2000 and another jump of 25 percent between 2000 and 2002 (Scarcella et al. 2006). By 2004, all 50 states reportedly spent $2.4 billion in TANF funds on child welfare activities, a figure that does not include funds transferred to the SSBG. During the same year, researchers estimate that roughly $539 million in TANF funds allocated to SSBG were used for child welfare services. This study documented that the majority of the funds reported in Other and AUPL in FY 2006 were used for child welfare activities. Thirty-one of the states in this study indicated that they used funds for these purposes. Excluding the unspecified funds spending area, in the states where we have spending data, child welfare accounts for more than half (54 percent) of the funds reported in Other and AUPL. As an example, Florida allocated approximately $134 million in TANF funds for child welfare purposes, or 75 percent of the $173 million they reported in the target categories. Georgia spent about $164 million on child welfare, a figure that represents about 85 percent of the $207 million they reported. Across the states, funds in child welfare services were used to support four primary areas: (1) in-home services\/family preservation, (2) child protective services, (3) foster care\/kinship care, and (4) adoption services (see Figure II.3). 16 Figure II.3 Types of Child Welfare Activities Funded in Other and AUPLa 19 16 13 4 1 6 0 5 10 15 20 In\u2010Home Services\/Family Preservation Child Protective Services Foster Care\/Kinship Care Adoption Services Court Appointed Services Unspecified N um be r o f S ta te s Mathematica Policy Research Source: ACF-196 addenda and state expenditure reports for FY 2006 and FY2007. aBased on federal TANF expenditures. a. In-home Services\/Family Preservation In-home or family preservation services are designed to ensure the ongoing safety of children who have been abused or neglected, but who may remain in the home with regular supervision while their parents or caregivers receive services to improve their capacity to effectively parent. These services may also include family-strengthening initiatives for those who are at risk for child welfare involvement. Of the 31 states that used funds for child welfare purposes, 19 states invested TANF funds in these services (see Figure II.3). In most states, funds were directly allocated to the child welfare system to provide assessments, case management, and supportive services. Other states have created home visiting programs intended to prevent child maltreatment. For example, the Healthy Families Florida initiative is an evidence-based home visiting program created to prevent child abuse and neglect among high-risk populations by providing parenting skills, education on child growth and development, child screenings for disabilities, and stress management, among other services. In 2006, this initiative was supported with about $6.5 million in TANF funds. Indiana operates a similar program called Healthy Families Indiana (see Box II.2). The Arkansas Department of Human Services contracted with the State Department of Health to provide home visiting services to TANF recipients who had their case closed for reasons other than employment, such as noncompliance or expiration of their TANF time limit, to determine if parents have adequate resources to care for their children. 17 Mathematica Policy Research Box II.2. Healthy Families Indiana: Voluntary Home Visiting Program Partially Supported with TANF Funds Healthy Families Indiana (HFI) is a statewide, voluntary home visitation initiative for new parents with children between 0 and 5 years of age who are at-risk for child welfare involvement and poor childhood outcomes. Program goals include prevention of low birth weight and child maltreatment; increased parenting skills; healthy pregnancy practices; and the use of social systems. Assessments are conducted either prenatally or at the time of birth. Based on the assessment, the family support worker (FSW) may begin interacting with the family in their home, visiting at least once a week for up to one year. The FSW helps to establish support systems, teaches problem-solving skills, enhances positive parent-child interaction, offers information, and education and referrals to community resources. Once a family is in the program, they can receive services for up to five years. Services are reportedly voluntary; intensive; and designed to support families with multiple and persistent economic, physical, and emotional challenges. Home visits focus on parenting skills, child development, child health, and other aspects of family functioning. Healthy Families Indiana collaborates with other local organizations to leverage and coordinate resources. b. Child Protective Services Child protective services (CPS) is the entryway to the child welfare system. CPS is responsible for investigating reports of child maltreatment and, based on state laws and policies, making decisions about how to proceed with a case. Federal TANF funds are used in 16 states to provide such CPS services as maintaining hotlines, investigating services\/reports, case management, providing supports to encourage timely judicial procedures, and other related services. c. Foster Care\/Kinship Care Each year, about 500,000 children come into foster or kinship care due to child abuse or neglect (U.S. Children’s Bureau 2009). Children may be placed with relatives who are willing and eligible to care for them. If not, the state finds a foster care placement for the child until they are able to find a permanent and safe home either with their parent(s) or an adoptive parent. Young adults in foster care, in some states until age 23, may receive independent living services to help with their transition to adulthood. Thirteen states spend TANF funds on these services such as recruitment and training of foster care families, kinship care assessments, parent education, preparation for judicial determinations, and personal and family counseling. d. Adoption Services The number of foster care children waiting to be placed in an adoptive home each year far exceeds the number of those adopted. In 2007, roughly 51,000 children were adopted while another 130,000 were waiting for a permanent adoptive placement (U.S. Children’s Bureau 2009). Adoption services are critical for recruiting and approving potential adoptive parents, matching the child to a proper placement, and providing ongoing support once the adoption is final to ensure that it is not disrupted. Four states (13 percent) use TANF funds to provide adoptive services such as home study assessments, parent training, judicial determinations, and post adoption case management. One state uses TANF funds to create a statewide adoption exchange accessible to all authorized, licensed child-placing agencies across the state to match children to parents approved to adopt. 18 Mathematica Policy Research 2. Personal Supports Address TANF Families’ Complex Service Needs TANF recipients and other low-income families often face personal and family challenges such as physical and mental health conditions, domestic abuse, drug and alcohol addictions, and hidden disabilities that interfere with steady employment. Recognizing that many TANF recipients face personal and family challenges that interfere with work, states are using TANF funds reported in the target categories to address these issues. Collectively, these three areas were reported by 24 states: Mental health\/substance abuse services. Thirteen states used TANF funds reported in the target categories to provide mental health and addiction services to adults and children (see Table II.4). Expenditures included evaluation and assessment services, individual and group counseling, maintenance of the provider network, management of the service delivery system, demonstration projects, and residential services for pregnant women and women with dependent children who have completed a substance abuse treatment program. One state, for example, provided basic life skills, parenting classes, vocational and education counseling, and job placement services to low-income women who completed a drug treatment program. Another state created an alcohol and drug treatment and mentoring program for families with dependent children whose incomes are less than 200 percent of the federal poverty level (FPL). Of the 13 states using funds for this purpose, 5 provided only addiction services and 5 provided both mental health and addiction services. One state funded only mental health services and 2 states did not specify. Expenditures in this area accounted for three percent of the overall TANF funds reported in the target categories. Physical health\/disabilities. Health and disability services, reported by 12 states, is a broad category that primarily includes nonmedical expenditures. States reported health expenditures such as immunization outreach, operation of a communication center for poison control, and outreach for children who are HIV-positive. One state included state-funded medical services but did not elaborate on what types of services were included. Disability services focused primarily on supports for work and daily living such as disabilities assessment and evaluation, vocational rehabilitation services, family service planning for physical and developmental disabilities, respite centers for those with intellectual disabilities, and funding to support nonmedical needs of disabled children to allow them to remain in the home. Domestic violence services. While 14 states used TANF funds to support services to address domestic violence, the total amount of funds accounted for less than three percent of overall spending in the target categories (see Appendix A, Table 2). Expenditures in this area include information and referral services, intensive supports such as short-term emergency shelter for those leaving an abusive relationship, case management, a 24-hour hotline, and transitional supportive housing. 19 Table II.4 Number of States That Report Mental Health or Addiction Services or Both with Federal TANF Funds Reported in Other or AUPL Mathematica Policy Research Type of Services Number of States Mental health services only 1 Addiction services only 5 Both mental health and addiction services 5 Unspecified 2 Total 13 Source: ACF-196 addenda and state expenditure reports for FY 2006 and FY2007. 3. Emergency Assistance to Meet the Basic Needs of Vulnerable Families In addition to needing work-related supports such as child care and transportation, TANF recipients often require basic supports to stabilize the family. The ACF-196 federal reporting form includes a category where states are required to report funding allocated for child care (lines 5b and 6b) and transportation (lines 5c and 6c) but does not have a category for basic emergency assistance funding. As a result, expenditures on things such as housing, energy, food and nutrition, and clothing assistance are reported in Other and AUPL. Roughly half (n=20) of the states included in this study used TANF funds to provide supports other than transportation and child care. Emergency assistance accounts for about 11 percent of the total amount of TANF spending reported in the target categories, which is equal to personal supports and second to child welfare (see Figure II.2). Of the states that used funds for emergency assistance, most allocated funds to pay for housing- related needs (see Figure II.4) as well as energy, food and nutrition, clothing, and transportation. Five of the states did not specify the type of emergency assistance provided. While we have limited information across states, it appears that some provided services specifically for TANF recipients while others expanded eligibility to those who were TANF eligible or low-income working families at risk for becoming TANF eligible (designated percentage of the FPL). For example, Michigan provides emergency housing and shelter services to low-income families who are facing a crisis due to factors beyond their control. Such assistance includes relocation services, home ownership and home repair assistance, and utility restoration or shut-off prevention. New York uses TANF funds to provide supportive housing to encourage stability and employability for families and young adults who were homeless, currently at risk for homelessness, or TANF recipients who are at risk for exceeding the TANF time limit. 20 Figure II.4 Types of Emergency Assistance Funded with Other and AUPLa 11 5 5 3 1 5 0 2 4 6 8 10 12 Housing Energy Food and Nutrition Clothing Transportation Unspecified N um be r o f S ta te s Mathematica Policy Research Source: ACF-196 addenda and state expenditure reports for FY 2006 and FY2007. aBased on federal TANF expenditures. 4. Education and Prevention Programs Help At-Risk Youth and Teen Mothers Avoid Negative Outcomes Teen pregnancy, gang involvement, dropping out of high school, and criminal activity\/incarceration among low-income youth have created societal and economic challenges for states. Studies have documented that teen mothers are more likely than other teens to drop out of school, remain unmarried and become single parents, and to live in poverty and rely on public assistance (Terry-Humen, et al. 2005). In addition, controlling for maternal background characteristics, children born to mothers aged 17 and younger score lower on cognitive, behavioral, communication, emotional well-being, and physical well-being measures than the children born to older mothers. Also plaguing America’s youth is the increasing high school dropout rate, particularly among students of color and those living in cities. Nationally, roughly 70 percent of youth finish high school with their diploma; completion rates are even lower for African American (55.3 percent) and Hispanic (57.8 percent) students as compared to youth who are white (77.6 percent) (Swanson 2009). The high school completion rate for students living in cities (60.9 percent) is also substantially lower than for those living in suburban areas (75.3 percent). Finally, many low-income youth are at risk for criminal involvement. In 2006, youth delinquency and criminal activities resulted in roughly 2.2 million arrests (Snyder 2008). During the same year, on any given day nearly 93,000 juvenile offenders were incarcerated, serving time for a convicted crime. These negative outcomes have long lasting implications for children as they transition into adulthood. To address some of these pressing challenges facing today’s youth, states have used TANF funds to support programs to prevent these outcomes. States have invested TANF funds in education and prevention programs. Education and Youth Programs. Education and youth programs, reported by 13 states (Appendix A, Table 1), included mostly after-school or other school-based programs designed to improve the life skills, educational attainment, and the likelihood of achieving successful outcomes of low-income children, including TANF recipients 21 Mathematica Policy Research (Box II.3). One state developed a full-day kindergarten program for children of TANF recipients, while another used TANF funding to expand school social work services in elementary schools to help at-risk children improve their academic performance. Other services included mentoring and tutoring activities and programs designed to improve school attendance. In some cases, these funds supported either stand-alone programs or helped expand existing services through local organizations. Many of the stand-alone programs offer preventative services to help youth avoid gang involvement, drug or alcohol use, and criminal activity by providing healthy alternatives and opportunities. Teen Pregnancy\/Prevention Programs. Teen pregnancy and prevention programs, reported by eight states, mostly consisted of family-planning and home-visiting services and parent education for new teen parents. Massachusetts offers home visiting services to first-time teen mothers with the goal of reducing the likelihood of subsequent teen pregnancies. Services include parenting education and support, health education, infant\/child developmental screening, referral service coordination, and education and career counseling. Nevada’s STARS (Supporting Teens Achieving Real-Life Success) program offers voluntary parenting workshops for pregnant and parenting teens. The Texas Alternatives to Abortion program provides counseling and referrals to supportive services for women with unintended pregnancies. Early Childhood Care and Education. Eight states used TANF funds primarily to support Head Start, pre-K, and other school readiness programs, which we labeled as early childhood care and education. These services may be provided in participants’ homes or in a community center\/school. Box II.3. Education and Prevention Programs for At-Risk Youth The following programs are fully funded or partly funded with TANF funds reported in Other and AUPL: In Indiana, Mitch’s Kids, operated by the Indiana Alliance of Boys and Girls Clubs, provides education and youth development services to TANF-eligible and other low-income children (up to 250 percent of the FPL) ages 5 through 13. The program is designed to help children increase their academic achievement, provide structured supervision while the TANF parent works or participates in work activities, and offers children career guidance through field trips and career-related speakers or presentations. Texas Communities in Schools program provides tutoring, drug prevention activities, services to teen parents, gang and youth violence prevention activities, after-school activities, career assistance, and work experience opportunities for low-income children. The curriculum includes a variety of topics including peer pressure, self-esteem, anger management, health, hygiene, and decision-making. To encourage parental involvement, CIS offers parenting classes, conducts home visits, and provides interactive parent and child activities. In Wisconsin, TANF funds are used to operate a Gang Outreach Program operated by local Boys & Girls Clubs of America scattered throughout the state. The objectives of the program are to improve the social, academic and employment skills of low income (up to 200 percent of the FPL) and TANF-eligible youth between the ages of 5 and 18. Teen REACH (Responsibility, Education, Achievement, Caring, and Hope) in Illinois is an after-school program for at-risk youth between the ages of 6 and 17. Services offered through the program include academic enrichment, recreation activities, positive adult mentoring, and life skills education. The program also emphasizes parent involvement. 22 Mathematica Policy Research 5. Other Spending Areas Used to Support TANF Purposes We identified a variety of other ways in which states have used TANF funds reported in Other and AUPL. These spending areas mostly reflect the flexibility states have used to tailor programs and services based on state and local needs. In most cases, these spending areas reach beyond the TANF population to include funding for low-income individuals and families. It appears that these funds have been used to supplement existing programs and increase program eligibility or expand existing or create new services not previously available. These seven additional spending areas grouped under miscellaneous are described below. TANF Program Expenses. Twenty-one states reported some spending on TANF- related program expenses, which includes expenses for administering or supporting TANF-related programs (Appendix A, Table 1). Examples of such expenditures include transitional employment services and supports, electronic benefits issuance, home- visiting programs for long-term welfare recipients, program management compliance, and research on TANF clients approaching their time limit. Some of these expenses may be expenditures that could have been recorded under existing categories on the ACF-196 federal reporting form. Special Populations. We grouped together various programs and services targeted to special populations such as American Indians, adult and youth offenders, military personnel, and refugees. Ten states use TANF funds reported in the target categories to support these populations. Of these states, half supported adult and youth offender populations by creating residential and nonresidential community-based services for youth offenders or therapeutic services and alternative-to-incarceration programs for adults. A few states have used TANF funds to support tribal TANF programs and one state provided refugee and resettlement services. Employment Services and Work Supports for Low-Income Job Seekers. Seven states reported spending on employment services and work supports. It appears that some of this spending included services for TANF and non-TANF populations. Examples include work experience, employment and skills training, and employment- based work supports (for example, transportation services and purchase of tools, uniforms, or work clothes). Discretionary Funds to FBCOs. Seven states provided TANF funds to faith-based and community organizations to serve low-income families and vulnerable populations. Most of these funds were delivered as lump sums with limited descriptions of the types of services provided. For example, one state allocated nearly $3 million to local community action agencies to provide services to low-income families to help increase their self-sufficiency. Other organizations that received TANF funding included the Arab Community Center for Economic and Social Services grants for immigration services, SSBG programs, and United Community Ministry. Marriage and Parenting Initiatives. We found that six states used TANF funds to support marriage and fatherhood initiatives. Some of these initiatives incorporated life- skills education, peer-group instruction, and parenting workshops. Child Support. Four states indicated TANF funds were used for child support purposes but they typically did not specify exactly how these funds were used. Two states cited child support supplemental payment and non-IV D services but did not elaborate. 23 Mathematica Policy Research Adult\/Postsecondary Education. Three states provided funding for postsecondary education, which mostly included scholarship programs, tuition payments, and college tutoring services. One state used funds to expand adult basic education classes. 24 Mathematica Policy Research III. RECOMMENDATIONS FOR FEDERAL AND STATE TANF ADMINISTRATORS While the implementation of the TANF program represents a shift in primary decision-making about how funds are spent from the federal government to the states, both entities continue to work in partnership to monitor and track progress. The federal reporting process is standardized across states. However, the complexity of the process within each state is influenced by factors such as how states use these funds, when and how expenditures are reported, and the amount and types of resources available for monitoring and reporting TANF expenditures. Adding to this is the extent to which states allocate TANF funds to local counties where county administrators decide how to use funds. States with more complex expenditures are often required to make judgments about how to classify expenditures while other states may have a more simple reporting process. In this chapter, we explore possible solutions or strategies for strengthening the reporting tools and process, particularly for states that use TANF funds for a variety of purposes and across populations. The suggestions focus primarily on improving the accuracy and consistency of reporting and decreasing the amount of federal TANF funds reported in Other and AUPL. We divide these into two categories\u2014changes at the federal level and those targeted at states. A. Instituting Federal Changes Since the implementation of PRWORA, few changes have been made to the ACF-196 federal reporting form. While modifying the existing reporting process may provide greater detail about states’ spending, the tradeoff is that it may create additional work for states, and at least in the short- term, federal staff. Still, this study represents an opportunity for the OFA to examine the federal reporting form and guidance available to states. In this section, we describe four primary changes that may provide greater specificity about the federal TANF funds reported in Other and AUPL: (1) adding categories to the federal reporting form, (2) clarifying the types of expenditures that belong in existing categories, (3) redefining existing categories, (4) exploring options for capturing large allocations made to counties that are reported as Other, and (5) reexamining the process for reporting TANF spending. 1. Add Categories to Existing Federal Reporting Form This study found that states make considerable investments in programs and services not represented by existing categories on the ACF-196 form. The challenge is defining categories that are narrow enough to provide meaningful information about how funds are spent but broad enough so that the category captures a sizeable proportion of the overall expenditures. Otherwise, adding the category would have little effect on the overall expenditures reported in Other and AUPL. We recommend adding at least two categories to the federal reporting form\u2014child welfare and emergency assistance. Both categories would capture a sizeable proportion of federal TANF funds reported in the target categories and provide more specificity about how these funds are used. The other spending groups discussed in Chapter II, personal supports and education and prevention services, might also be considered. However, these groups would require considerable guidance for states to fully understand the types of expenditures that might be reported in these categories. Another category that federal administrators may consider is block grants\/discretionary funds to counties. While the number of states reporting funds in this category would be small, it would capture a sizeable proportion of the federal TANF funds reported in Other and AUPL. However, the change in category alone would provide little additional information. To be more meaningful, 25 Mathematica Policy Research states that allocate large amounts of funding to the local counties may be required to provide more information to the state and federal government about how these funds are used. 2. Clarify the Types of Reported Expenditures in Existing Categories In some states, the accounting process may not map well on to the ACF-196 reporting form and, as a result, might create challenges for capturing expenditures. First, a given program or service may include services that do not fully meet the existing definition of the category, in which case state fiscal staff decide how to report those expenditures. For example, a state or locality might offer a work program that includes a range of personal supports such as intensive case management, life skills coaching, mental health counseling, mentoring, and other items to improve the participants’ ability to organize their lives and work. Some of the program expenditures would likely fit into the category Work Related Activities\/Expenses (line 6a), but others would not. Rather than break down each expenditure, some state fiscal specialists appear to report all expenditures in Other while some might report them on line 6a. Second, some programs and services include low-income families more broadly, including TANF recipients. We found that seven states provided employment services to those who are income eligible and used the funds for programs and services that target both TANF and non-TANF populations. Since these do not clearly delineate TANF from non-TANF program participants, some states report all of the funds in Other. We recommend three changes that might help capture a greater proportion of the funds in existing categories. While these changes would not necessarily eliminate some of the ambiguity in the nature of reporting, they would likely provide greater consistency in how states classify funds. Additional and more accessible written guidance on existing categories. State fiscal staff indicated that more guidance about how to classify expenditures would be useful to them when completing the ACF-196 form. They mostly requested additional examples of what might be included within each of the categories. Federal administrators may consider inserting electronic guidance links into the online version of the form that includes detailed examples of the types of expenditures that may be reported within a given category or offer other readily accessible documents online. Having more readily available guidance may increase the accuracy of reporting and encourage staff to periodically re-evaluate where they report expenditures. Centralize technical assistance resources available to states. Federal administrators may consider expanding existing central office resources available to states to assist with classifying expenditures. Four regions have a designated fiscal specialist where states within that region may request verbal guidance for federal reporting. In other regions, states may rely on program specialists for guidance. Designating an ACF central office staff to clarify any fiscal reporting questions would create consistency in the guidance provided to states and provide a needed resource for some states. In addition, the technical assistance may be tailored to the state. For this to be effective, federal administrators must also inform states of the resources available to them. Offer regular training for new and existing state fiscal staff. Federal staff may consider creating quarterly training telephone conference meetings or on-line forums where state fiscal staff may request clarification about classifying expenditures. Reporting of TANF spending is largely a subjective experience, particularly when the expenditures do not clearly fit into an existing category on the ACF-196 form. One potential idea is to organize quarterly conference calls or webinars with the ACF central office staff to 26 Mathematica Policy Research clarify any questions regarding reporting of TANF expenditures. These calls may be used as training for states with new staff, a refresher course for existing staff, or as a venue for answering specific spending-related questions. States may submit questions prior to the call so that federal staff have adequate time to prepare a through and accurate response. 3. Consider Redefining Some Existing Spending Categories Some of the existing categories on the federal reporting form may be revisited to determine if redefining the category would improve the accuracy of federal reporting. One category in particular, TANF Administrative Expenditures, would likely be a good candidate. We found that 21 states reported funds that appear to be used to administer the TANF program in the category of Other, although, the proportion of funds is relatively small (less than two percent of funds in the target categories). Reporting some of these funds in Other may be an attempt by states to avoid meeting up against the 15 percent administrative cap, which is included in the PRWORA legislation. Initially, states’ administrative expenditures fell below the 15 percent of the total amount of federal TANF funds. However, as the relative value of the block grant has declined and inflation has driven up administrative costs associated with staffing (e.g., salaries, benefit packages) and operations, these administrative expenditures likely represent a greater proportion of the overall TANF expenditures. While recalibrating the administrative cap would require a legislative mandate, federal program administrators may reconsider what is included under administrative expenses. One TANF program administrator suggested creating a separate category for the cost of completing eligibility determinations. Another option is to encourage states to report some administrative expenditures, such as case management, in existing categories other than TANF administrative expenditures. While this would remove only a small portion of the federal TANF funds from the Other category, it may improve the accuracy of reporting. 4. Explore Options for Capturing Large Allocations Made to Counties Two states with the highest expenditures in the target categories, California and New York, allocate a large proportion of funds to local counties where county administrators determine how these funds may be used. Both states report these large allocations as Other on the ACF-196 form rather than drilling down to obtain an exact dollar amount. As a result, funds that could be reported into existing categories may be reported as Other. Based on our analysis of 28 states, these expenditures, that are largely undefined, account for about a third of the overall funds in Other and AUPL. Further discussion within ACF may include how federal program administrators and staff could capture more information about these expenditures without increasing the workload for state fiscal staff. One option is to create a checklist of existing expenditures, based on findings from this study, where states may quickly identify how the funds reported in that category were used. To simplify the reporting process, states would simply identify the spending areas on the checklist rather than account for the amount of funding in each area. The checklist would provide more information about how federal TANF funds reported in Other and AUPL are used, and yet, require minimal effort by the counties and states. States that allocate funds to local counties could collect this completed checklist from each county administrator, and include the total number of counties reporting within each of the spending areas or just indicate which spending areas were represented. This checklist could be provided in electronic and written form and may be used in addition to the 27 Mathematica Policy Research narratives included on the ACF-196. While this wouldn’t reduce the amount of funds reported in Other and AUPL, it would provide more detail about how these funds are used. 5. Reevaluate the Process for Reporting TANF Expenditures, Adjustments, and Corrections While the recommended federal changes may encourage progress toward improving the accuracy and consistency of the reporting process, the information generated by this process is still limited. For example, states may amend their spending report for any previous year, in some cases, resulting in a negative expenditure during a given year. It also creates challenges in reporting exact expenditure amounts over time as the amounts may change at any time. Unless changes are made to the way expenditures, adjustments, and corrections are reported, the expenditure data are of limited value for policy analysis purposes. In its current form, the usefulness of the ACF-196 is limited to ensuring that the expenditures are properly tracked by grant year. ACF may consider assembling a task force of federal, regional, and state fiscal specialists to provide detailed recommendations for submitting reporting, amendments, and corrections within and across years. One possibility is to report actual expenditures for that year rather than the funds allocated. Another consideration may be establishing a deadline for corrections and amendments made on the ACF-196 for spending in previous years. Recommendations should create some parameters for amendments and corrections while preserving the flexibility allowed to states under the block grant. B. Suggestions for State Level Changes In addition to federal-level changes in the reporting forms and supports available to states, states may be encouraged to adopt practices to improve the quality and consistency of federal reporting. We recommend two changes: (1) improve the coordination between program and fiscal staff when completing the federal reporting form and, (2) for states that allocate funds to counties, consider changes in the reporting tools and resources provided to counties. 1. Improve Coordination Between Program and Fiscal Staff According to anecdotal information, communication between state program and fiscal staff reportedly improves the accuracy and consistency of states’ accounting of federal TANF funds. And yet, we found that in most cases, fiscal staff made judgments about how to classify expenditures independently, with little or no input from program staff. For example, in one state, the program manager completed the ACF-196 form as a result of a fiscal specialist leaving the position shortly before the report was due. The program staffer said that becoming involved with the reporting made her more aware of how TANF funds were being reported and based on that experience, she revised how some funds were being reported and developed some rough training guidelines for the new state fiscal specialist. Some states commented that good communication between program and fiscal staff helps improve reporting accuracy. Program staff typically provide fiscal staff with detailed information about how funds within a TANF program or service are used. This information helps fiscal staff make more informed decisions about what to report in existing categories as well as in Other and AUPL. Otherwise, fiscal staff decide how to classify expenditures based on the information available to them from the line item expenditure reports. Regional staff might also encourage state program 28 Mathematica Policy Research and fiscal staff to jointly complete the ACF-196 at least annually, to ensure they are in agreement about how funds should be classified. The primary goal is to encourage both fiscal and program staff to be involved with the categorization decisions. 2. Revisit Reporting Tools and Resources Available to Counties In county administered states where federal TANF funds are allocated to local counties, the quality of the state data hinges on the accuracy of county reporters. States may consider providing additional guidance to local counties for federal reporting. They may also provide counties with the electronic reporting tools that allow fiscal staff to easily and accurately synthesize county data for federal reporting. State TANF administrators may consider statewide trainings for county fiscal staff and\/or ongoing technical assistance telephone calls or webinars to improve the quality and consistency of categorization. Require counties to describe how funds used in Other and AUPL are used. While it appears that some states that allocate funds to counties use the same defined categories on the ACF-196 reporting form, a detailed description of what is included in Other and AUPL is not required. To require this information would improve the amount of information available about how counties spend their funds. States may consider a narrative format or a simple checklist of spending areas or both. Provide additional guidance to counties. States that allocate funds to local counties may consider providing additional written guidance to fiscal and program staff. They might also consider designating a fiscal person at the state office who is available to answer questions. Increasing the communication to counties about how to classify funds in existing categories will likely improve the consistency and accuracy of state reporting. C. Conclusion Taking advantage of the flexibility a block grant provides, states have used their TANF funds to address many unmet needs that are consistent with the purposes of TANF. At the time the TANF block grant was created, it was impossible for ACF to anticipate all the ways in which states might spend their TANF block grant funds. When states did not find a category in which to record their expenditures or when a program crossed multiple categories, they often recorded their expenditures in Other and, to a lesser extent, Authorized Under Prior Law. This study provides new information that ACF can use to refine existing spending categories, provide better guidance to states and possibly create a few new spending categories to reduce the amount of spending that is reported in these two categories. This, in turn, should lead to a more detailed and accurate accounting of how TANF block grants are spent. While this study sheds light on the amount and types of spending in the Other and AUPL categories, it is important to note that there are additional equally important reporting issues that makes it difficult to analyze and assess spending over time. First, it states’ ability to make adjustments and corrections across years makes it very complicated to track spending over time and to make comparisons across states. In addition, states can transfer funds from TANF to two other block grants, the Social Services Block Grant and the Child Care and Development Block Grant, but are not required to provide any additional information on how these funds are spent. This limits further what is known about how TANF funds are used and which families are benefitting from them. These and other issues related to how TANF block grants are used may surface during TANF 29 Mathematica Policy Research reauthorization next year. These issues were beyond the scope of this project, however, they are likely to be important components of any discussion focused on increasing our understanding of how TANF block grant funds are used and assessing their effectiveness. 30 Mathematica Policy Research REFERENCES Administration for Children and Families, Office of Family Assistance. Temporary Assistance for Needy Families: Funding Guide. Available at [www.acf.hhs.gov\/programs\/ofa\/resources\/ funding_guide.htm]. Accessed on June 8, 2009. Berrick, J.D., L. Frame, J. Langs, and L. Varchol. Working Together for Children and Families: Where TANF and Child Welfare Meet. Journal of Policy Practice, vol. 5 no. 2\/3, 2006, pp. 27- 42. DeVooght, K., T. Allen, and R. Geen. Federal, State, and Local Spending to Address Child Abuse and Neglect in SFY 2006. Washington, DC: Child Trends, December 2008. Geen, Rob. Shoring Up the Child Welfare-TANF Link. Washington, DC: The Urban Institute, June 2002. Geen, R., L. Fender, J. Leos-Urbel, and T. Markowitz. Welfare Reform’s Effect on Child Welfare Caseloads. Washington, DC: The Urban Institute, February 2001. Lower-Basch, E., and M.H. Greenberg. Single Mothers in the Era of Welfare Reform. In The Gloves-Off Economy: Workplace Standards at the Bottom of America’s Labor Market, edited by A. Bernhardt, H. Boushey, L. Dresser, and C. Tilly. Champaign, IL: Labor and Employment Relations Association, 2009. Scarcella, C.A., R. Bess, E.H. Zielewski, and R. Geen. The Cost of Protecting Vulnerable Children V: Understanding State Variation in Child Welfare Financing. Washington, DC: The Urban Institute, May 2006. Snyder, Howard N. Juvenile Arrests 2006. Washington, DC: U.S. Department of Justice, Office of Juvenile Justice and Delinquency Prevention, November 2008. Swanson, Christopher B. Closing the Graduation Gap: Educational and Economic Conditions in America’s Largest Cities. Bethesda, MD: Editorial Projects in Education, 2009. Terry-Humen, E., Manlove, J., and K. Moore. Playing catch-up: How the children of teen mothers fare. Washington, DC: National Campaign to Prevent Teen Pregnancy, January 2005. U.S. Children’s Bureau, Administration for Children and Families. Federal Child Abuse Prevention and Treatment Act. Available at [www.acf.hhs.gov\/programs\/cb\/laws_policies\/ cblaws\/capta\/index.htm]. Accessed on June 8, 2009. U.S. Children’s Bureau, Administration for Children and Families. Adoption and Foster Care Statistics, 2006. Available at [www.acf.hhs.gov\/programs\/cb\/stats_research\/index.htm]. Accessed on June 8, 2009. U.S. General Accounting Office. Welfare Reform: Early Fiscal Effects of the TANF Block Grant. Washington, DC: United States General Accounting Office, August 1998. 31 www.acf.hhs.gov\/programs\/cb\/stats_research\/index.htm www.acf.hhs.gov\/programs\/cb\/laws_policies www.acf.hhs.gov\/programs\/ofa\/resources Mathematica Policy Research Weaver, Kent. The Structure of the TANF Block Grant. Washington, DC: Brookings Institute, April 2002. Wells, Kathleen, and Shenyang Guo. Impact of Welfare Reform on Foster Care and Child Welfare in Cuyahoga County, Ohio. Cleveland, OH: Case Western Reserve University, Mandel School of Applied Social Sciences, 2001. 32 Mathematica Policy Research APPENDIX STATES’ USE OF FEDERAL TANF FUNDS REPORTED IN OTHER AND AUPL A.1 Mathematica Policy Research Table A.1 States’ Use of Federal TANF Funds Reported in Other and AUPL Categories Spending Areas Child welfare Number of States Reporting in Either Category (n=41) 31 Number of States Reporting in Other (n=41) 26 Number of States Reporting in AUPL (n=41) Assistance Nonassistance 3 10 TANF program expenses 21 20 0 1 Emergency assistance (e.g., housing, energy, clothing assistance) 20 19 1 2 Domestic violence services 14 14 0 0 Mental health and addiction services 13 13 0 0 Education and youth programs 13 13 0 0 Health\/disabilities services 12 12 0 0 Special populations (e.g., corrections, juvenile justice, veterans assistance, tribal payments) 10 8 0 2 Teen pregnancy\/prevention programs 8 8 0 0 Early childhood care and education 8 8 0 0 Employment services and work supports for low-income populations 7 7 0 0 Discretionary funds to faith-based and community organizations 7 7 0 0 Marriage and parenting initiatives 6 6 0 0 Child support 4 4 0 0 Adult\/postsecondary education 3 3 0 0 Unspecified funds (mostly allocated to counties\/localities)a 3 3 2 1 Additional expenditures 9 9 0 0 Source: ACF-196 addenda and state expenditure reports for FY 2006 and FY 2007. Note: Six states do not report spending in any category\u2014DE, HI, ME, NE, UT, VT. No spending information is available from four states\u2014 KS, KY, M S, WY. a Unspecified funds is primarily expenditures allocated to local counties. For these states, we do not have data describing how these funds were spent. Table A.2 Spending Areas that Account for the Greatest Percentage of Federal TANF Funds Reported in Other and AUPLa A.2 Child welfare 53.64 TANF program expenses 2.48 Emergency assistance (e.g., housing, energy, clothing assistance) 11.42 Domestic violence services 2.46 Mental health and addiction services 3.11 Education and youth programs 9.58 Health\/disabilities services 5.04 Special populations (e.g., corrections, juvenile justice, veterans assistance, tribal payments) 6.26 Teen pregnancy\/prevention programs 2.80 Early childhood care and education 1.90 Employment services and work supports for low- income populations .50 Discretionary funds to community organizations .28 Marriage and parenting initiatives .12 Child support .03 Adult\/postsecondary education .37 Mathematica Policy Research Percentage of Funds Reported in All Categoriesb (n=28) Spending Areas Source: ACF-196 addenda and state expenditure reports for FY 2006 and FY2007. aDoes not include Unspecified Funds and Additional Expendentitures spending areas, which accounted for roughly $870 million and 1.2 million, respectively. bTotal amount of funds reported in Other and AUPL was roughly $1.5 billion. (Does not include Unspecified Funds and Miscellaneous spending areas). A.3 Alabama X X Alaska X Arizona X X X X Arkansas X X California X X X X Colorado X X Connecticut X X X Delawarea District of Columbia X X X X X Florida X X X X Georgia Hawaiia X X X X X Idaho X X X Illinois X X X X X Indiana X X X X X Iowa X X Kansasb Kentuckyb Louisiana X X Mainea Maryland Massachusetts X X X X Michigan Minnesota X X X X X X Mississippib Missouri X X Montana X X X Nebraskaa Nevada X X X X X New Hampshire New Jersey New Mexico X X X X X X X X New York X X X X X North Carolina X X X X North Dakota X X X Ohio X X X X X Oklahoma X X X Oregon Pennsylvania Rhode Island X X X X X X X X X South Carolina X X X South Dakota X X X Tennessee X X Texas X X X X Utaha Vermonta Virginia Washington West Virginia Wisconsin X X X X X X X X X Wyomingb Mathematica Policy Research Table A.3. States’ Use of Federal TANF Funds Reported in Other and AUPL for FY 2006 Education and Prevention Programs Personal Supports Emergency Assistance States Child Welfare Miscellaneous Total 31 24 20 19 33 Source: ACF-196 addenda and state expenditure reports for FY 2006 and FY2007. www.mathematica-mpr.com Improving public well-being by conduc ting high-quality, objective research and surveys Princeton, NJ \u25a0 Ann Arbor, MI \u25a0 Cambridge, MA \u25a0 Chicago, IL \u25a0 Oakland, CA \u25a0 Washington, DC http:www.mathematica-mpr.com ”