Welfare to Work: Current AFDC Program Not Sufficiently Focused on
Employment (Letter Report, 12/19/94, GAO/HEHS-95-28).

In spite of 1988 legislation to transform welfare into a transitional
program designed to help Aid to Families With Dependent Children (AFDC)
program recipients get jobs and avoid long-term dependence, the current
Job Opportunities and Basic Skills (JOBS) training program has not
served a large portion of the AFDC caseload and is not well focused on
employment as the goal.  Of the more than four million parents receiving
AFDC checks each month, JOBS served only about 11 percent in an average
month from fiscal years 1991 to 1993.  Furthermore, program
administrators say that they lack the capacity to provide current JOBS
participants with the services they need.  Teen parents are especially
at risk for long welfare stays because of their low levels of education
and work experience and the young age of their children.  Yet a 1992
review of 16 states found that only 24 percent of teen parents had been
enrolled in JOBS.  In addition, some AFDC recipients have barriers to
employment, such as learning disabilities or emotional problems, and are
difficult or more costly to serve.  GAO found that JOBS programs have
generally not forged the strong links with local employers that may be
important to helping AFDC recipients gain work experience and find jobs.
Many factors hamper the development of these ties to the workplace,
including the JOBS performance measurement system, which holds states
accountable for the number and type of AFDC recipients participating in
JOBS activities but not for the number who land jobs or earn their way
off AFDC.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  HEHS-95-28
     TITLE:  Welfare to Work: Current AFDC Program Not Sufficiently 
             Focused on Employment
      DATE:  12/19/94
   SUBJECT:  Employment or training programs
             Aid to families with dependent children
             State-administered programs
             Welfare services
             Disadvantaged persons
             Single parents
             Public assistance programs
             Child care programs
             Eligibility criteria
             Welfare recipients
IDENTIFIER:  AFDC
             JTPA
             JOBS Program
             Job Opportunities and Basic Skills Training Program
             Job Training Partnership Act Program
             
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Cover
================================================================ COVER


Report to the Chairman, Committee on Finance, U.S.  Senate

December 1994

WELFARE TO WORK - CURRENT AFDC
PROGRAM NOT SUFFICIENTLY FOCUSED
ON EMPLOYMENT

GAO/HEHS-95-28

Welfare to Work


Abbreviations
=============================================================== ABBREV

  AFDC - Aid to Families With Dependent Children
  FSA - Family Support Act of 1988
  HHS - Department of Health and Human Services
  JOBS - Job Opportunities and Basic Skills Training program
  JTPA - Job Training Partnership Act

Letter
=============================================================== LETTER


B-258107

December 19, 1994

The Honorable Daniel Patrick Moynihan
Chairman, Committee on Finance
United States Senate

Dear Mr.  Chairman: 

In recent years, a rapid growth in welfare caseloads, concerns about
program costs and beneficiaries' long-term dependence and
dissatisfaction with current programs have again focused attention on
the nation's welfare system.  A growing consensus exists among the
public, practitioners, politicians, and welfare recipients that the
current Aid to Families with Dependent Children (AFDC) program should
be changed.\1 Members of the 103rd Congress proposed many reforms to
overhaul the welfare system to serve a larger portion of the AFDC
caseload, focus more on getting people jobs, and make AFDC benefits
temporary--in some cases for a period not to exceed 2 years. 

The aims and underlying philosophy of these new proposals reflected
the goals of the Family Support Act of 1988 (FSA).  In this regard,
FSA created the Job Opportunities and Basic Skills Training (JOBS)
program to provide an increasing portion of AFDC recipients with the
education, training, and other services they need to get jobs and
avoid long-term welfare dependence.\2 FSA aimed to use JOBS as the
principal vehicle to transform the culture of both welfare agencies
and recipients, so that they viewed cash benefits as temporary
assistance on the path to employment and not as a permanent
entitlement. 

To assist the 104th Congress in its forthcoming deliberations on
welfare reform, you asked us to assess the progress JOBS has made in
(1) serving an increasingly larger portion of the AFDC caseload,
especially those who are at risk of long welfare stays, and (2)
ensuring that program participants get work and leave AFDC.  To
address your concerns, we combined the preliminary results from
several studies we are conducting at your request with findings from
previously issued GAO reports and other current research.  (App.  I
provides additional detail on the objectives, scope, and methodology
of our ongoing work, and app.  III contains abstracts of previously
issued GAO reports.)


--------------------
\1 AFDC is the key federal welfare program providing cash benefits to
economically needy families.  In fiscal year 1993, AFDC benefits
supported more than 9.5 million children in 5 million families and
cost over $25 billion in federal and state funds. 

\2 JOBS is administered by the states, with the Department of Health
and Human Services (HHS) Administration for Children and Families
responsible for oversight and direction. 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :1

In spite of 1988 legislation to transform welfare into a transitional
program aimed at helping an increasing portion of AFDC recipients get
jobs and avoid long-term dependence, the current JOBS program has not
served a large portion of the AFDC caseload and is not well focused
on employment as the goal.  Of the more than 4 million parents
receiving AFDC checks each month, JOBS served only about 11 percent
in an average month from fiscal years 1991 to 1993.  Furthermore,
program administrators report that they lack the capacity to provide
current JOBS participants with the services and assistance that they
need. 

Although JOBS has made progress in serving those at risk of long
welfare stays, some AFDC recipients who need help to avoid long-term
dependence have not been widely served.  Teen parents are especially
at risk of long welfare stays because of their low levels of
education and work experience and the young age of their children. 
Yet in a 1992 review of 16 states, only 24 percent of teen parents
had been enrolled in JOBS.  In addition, some AFDC recipients have
barriers to employment, such as learning disabilities or emotional
problems, and are difficult or more costly to serve.  For example,
estimates of the proportion of AFDC adult recipients who abuse drugs
or alcohol to the extent that they would need treatment to
participate in JOBS vary from 15 to 28 percent.  In a recent survey
of ours, some state administrators reported a reluctance to serve
such recipients. 

Fiscal year 1993 spending for JOBS totaled $1.1 billion, yet programs
are generally not well focused on recipients' employment as the
ultimate goal.  Our recent nationwide survey of local program
administrators revealed that JOBS programs have generally not forged
the strong links with local employers that may be important to
helping AFDC recipients gain work experience and find jobs.  Many
factors hamper the development of these ties to the workplace,
including the JOBS performance measurement system.  This system holds
states accountable for the number and type of AFDC recipients
participating in JOBS activities but not for the number who get jobs
or earn their way off AFDC.  Thus, programs may focus more on
preparing participants for employment than on getting them jobs.  In
fact, the number of JOBS participants who get jobs or leave AFDC
annually is unknown. 


   BACKGROUND
------------------------------------------------------------ Letter :2

Between 1968 and 1988, the federal government required states to
operate various programs designed to help AFDC recipients get jobs. 
However, these programs were criticized because they served too few
AFDC recipients, focused on the most employable, and did little to
reduce welfare dependence. 

Dissatisfied with the welfare system, the Congress enacted FSA in
1988 to correct previous programs' weaknesses and transform AFDC into
a transitional program.  FSA established the JOBS program to help
welfare recipients get the services they need to get jobs and avoid
long-term welfare dependence.  Through JOBS, states are to (1)
provide a broad range of education, training, and employment-related
activities; (2) increase the number of AFDC recipients participating
in these activities; and (3) target resources to long-term and
potentially long-term recipients.  JOBS also emphasizes helping teen
parents complete their high school education.  In addition, states
are required to provide AFDC recipients with necessary support
services, such as child care and transportation. 

Under JOBS, welfare agencies are to assess the needs and skills of
welfare recipients, provide the services and activities needed to
prepare them for work, and link them with employers when they are
considered ready to work.  To provide these services and activities,
local JOBS programs rely heavily on a wide variety of community
programs, such as Job Training Partnership Act (JTPA) programs, state
or local adult basic education programs, the state employment
service, Head Start, and community colleges. 

States received much flexibility in designing and implementing their
programs.  Most states moved quickly to implement JOBS; by October
1990, 31 had statewide programs.  All had statewide programs by
October 1992.  About $1 billion in federal funds is available per
year for JOBS, and, to obtain these resources, states must commit
matching funds.\3 In fiscal year 1993, federal and state expenditures
totaled $1.1 billion for JOBS. 

No national studies have been completed on the impact of JOBS, but
the limited data available suggest that programs can have a positive,
but generally modest, impact.  Recent experimental design
evaluations\4 found that certain JOBS and JOBS-like programs
increased the number of AFDC recipients entering employment, raised
earnings, and reduced welfare rolls.  Some programs succeeded more
than others, but none was able to move most program participants both
into jobs and off AFDC after 3 years.  Under some welfare reform
proposals, many AFDC recipients would be expected to leave AFDC after
2 years.  HHS is currently sponsoring a seven-site national
evaluation designed to determine the effectiveness of different
approaches to operating JOBS.  Early results find variation and
diversity among the seven sites studied and suggest that the
potential for an improved program exists.  However, it is not yet
known whether the approaches identified in the more noteworthy
programs can be implemented nationwide. 

Despite the progress of some programs in implementing JOBS,
additional factors since the 1988 passage of FSA have led to
continued dissatisfaction with the current welfare system.  AFDC
caseloads rose sharply beginning in 1989.  The country also
experienced a recession that heightened competition for scarce
resources in both federal and state budgets.  In addition, the public
perceives AFDC as a growing problem\5 and a permanent entitlement
rather than a route to work.  During his campaign, President Clinton
promised to "end welfare as we know it," a promise the public widely
supported.  Many Congress members and others have also proposed
reforms, and some states have initiated their own reform efforts. 

Most of the congressional reform proposals we reviewed have the basic
principles of FSA and build on JOBS to help parents get jobs and end
dependence.  Most of the proposals aim to require larger portions of
the AFDC population to participate in JOBS.  To accomplish this,
larger proportions of the overall population would be required to
participate over time (in some cases up to 90 percent of those deemed
able to work) or entire segments of the AFDC population, such as
young adults, would be required to participate.  Some proposals would
require participation of mothers with younger children.  Under
current requirements, mothers with children under 3 years old (or 1
year at state option) need not be required to participate in JOBS,
while some reform proposals would lower this age to 6 months or as
low as 3 to 4 months for additional children. 

Many reform proposals would also increase the focus on employment as
the ultimate program goal.  Some would no longer require states to
offer education and training activities.  In addition, some contain
provisions to impose time limits on receipt of AFDC benefits.  If,
after a set time, usually 2 years, AFDC recipients have not found a
job, they would be required to participate in a subsidized work
program.  Some proposals would also limit the time a participant
could spend in the work program. 


--------------------
\3 The federal government shares in the costs of a state's JOBS
program at three different rates.  First, for each state's JOBS
spending up to the amount spent on certain fiscal year 1987
welfare-to-work activities, the federal share is 90 percent.  Second,
for direct costs of providing services and full-time staff, the
federal share is 60 to 80 percent, depending on a state's average per
capita income.  Third, for administrative and support services costs,
other than child care, the federal share is 50 percent. 

\4 See GAIN:  Two Year Impacts in Six Counties, Manpower
Demonstration Research Corporation (New York:  1993); GAIN: 
Benefits, Costs, and Three-Year Impacts of a Welfare-to-Work Program,
Manpower Demonstration Research Corporation (New York:  1994);
Florida's Project Independence:  Program Implementation,
Participation Patterns, and First-Year Impacts, Manpower
Demonstration Research Corporation (New York:  1994). 

\5 Although caseloads and program costs have risen, program costs as
a percent of the nation's gross domestic product and of federal
government expenditures have remained relatively stable since 1985. 


   LIMITED PROGRESS IN SERVING
   MORE AFDC RECIPIENTS
------------------------------------------------------------ Letter :3

While JOBS was designed to make welfare transitional by serving an
increasing portion of AFDC recipients and reaching out to those at
risk of long welfare stays, its progress has been limited.  To date,
JOBS has not served a large share of the AFDC caseload, and program
administrators report that they cannot provide current participants
with all the services and assistance they need.  In addition,
although JOBS has made progress in serving those at risk of long-term
dependence, some AFDC recipients who have barriers to employment have
not been widely served.  Proposals to reform the program will be
challenged to balance increased participation with the need for
additional resources and the need to develop additional capacity over
time. 


      A LARGE SHARE OF THE AFDC
      CASELOAD IS NOT ACTIVE IN
      JOBS
---------------------------------------------------------- Letter :3.1

Under FSA, the Congress took steps to involve an increasing portion
of AFDC recipients in welfare-to-work programs through its new JOBS
program, but the proportion of AFDC recipients active in JOBS has not
been growing.  FSA expanded the base of AFDC recipients required to
participate.  For the first time since AFDC (originally Aid to
Dependent Children) began in 1935, recipients with preschool children
were required to prepare for and accept employment to receive full
benefits.\6 Even with this expanded base, about 56 percent of AFDC
parents in fiscal year 1992 remained exempt from JOBS, most often
because they were caring for a young child. 

In addition, FSA recognized that states may not be able to serve all
who were required to participate at the program's inception.  It
established gradually increasing minimum participation standards that
tried to go beyond counting the participants and ensure satisfactory
participation in JOBS.\7 These minimum participation standards rose
from 7 percent of those required to participate in fiscal year 1991
to 20 percent in fiscal year 1995.\8 According to HHS, almost all
states met the minimum participation standards in fiscal years 1991
through 1993.  However, we concluded in a 1993 report that
participation rate data reporting requirements were complex and
burdensome, and participation rate data did not provide a fair basis
for assessing states' performance because they were not accurate or
comparably derived across states.\9

Due to exemptions, relatively low minimum participation standards,
and AFDC caseload growth, the share of AFDC recipients active in JOBS
remains limited and has not been increasing.  As shown in figure 1,
the numbers of those receiving AFDC and those required to participate
in JOBS have increased from fiscal year 1991 through fiscal year
1993.  Also, the number actually participating in JOBS at any level
of involvement\10 in an average month increased by 5 percent during
this period.  However, the share of AFDC recipients participating at
any level has remained at about 11 percent of the total AFDC caseload
over the same period of time.\11 Although some individual programs
have succeeded in enrolling most of their AFDC recipients who were
required to participate, JOBS programs overall served only about
one-fourth of those required to participate in an average month in
fiscal year 1993. 

   Figure 1:  Average Monthly
   Number of AFDC Recipients,
   Those Required to Participate
   in JOBS, and Those Actually
   Participating (fiscal years
   1991-1993)

   (See figure in printed
   edition.)

\a Defined as any level of involvement or participation in
JOBS-approved activity, including assessment. 

States met the minimum participation standards without committing
enough matching funds to spend all federal moneys available for JOBS. 
As shown in table 1, about 57 percent of the federal allocation for
JOBS was used in 1991, and use increased to 70 percent in 1993. 



                           Table 1
           
             Share of Federal JOBS Funds Used by
               States (fiscal years 1991-1993)

                    (Dollars in millions)

-------------  -------------  -------------  ---------------
Federal            $ 994          $ 993           $ 993
 allocation
Amount used        $ 564          $ 678           $ 698
 by states\a
Percent of          57             68              70
 federal
 allocation
 used
------------------------------------------------------------
Note:  Includes allocations and expenditures for the District of
Columbia, Guam, Puerto Rico, and the Virgin Islands, but excludes
about $7 million in federal dollars allocated each year to Indian
tribes that operate JOBS programs. 

\a Represents federal share of JOBS expenditures recorded by HHS as
of November 30, 1994.  The 1993 amount may change as states continue
to report expenditures. 

Some argue that the states did not fully use available federal funds
because of state fiscal pressures and competing demands for scarce
resources due to the recent economic recession.  While recent data
suggest the states' financial position has improved, even if the
states drew down all available federal funds, this amount would not
be sufficient to serve all AFDC recipients or even all those required
to participate in JOBS.\12 Some experts believe that the welfare
culture will not change until recipients believe they must
participate and accept employment and that this will not occur until
a larger segment of the AFDC population is actually required to
participate. 


--------------------
\6 Subject to the availability of state resources, AFDC recipients
aged 16 through 59 must participate in JOBS unless they are exempt. 
Reasons for exemption include illness or incapacity, working 30 hours
or more per week, attending high school, or caring for children under
3 years of age.  However, teenage parents who have not completed high
school and have children under age 3 are not exempt. 

\7 To measure the participation rate, HHS developed a complicated
formula based on the number of individuals whose combined hours of
participation in JOBS activities average at least 20 hours per week. 
This rate is intended to reflect satisfactory participation rather
than mere assignment to an activity.  A state could meet the
participation rate standards by increasing the hours of those
participating rather than increasing the number of participants.  The
number of participants meeting this standard increased 33 percent
from fiscal year 1991 through fiscal year 1993. 

\8 FSA also established separate minimum standards for participation
for principal earners in two-parent families receiving
AFDC-Unemployed Parent benefits, beginning at 40 percent in fiscal
year 1994 and increasing to 75 percent in fiscal year 1997. 

\9 Welfare to Work:  JOBS Participation Rate Data Unreliable for
Assessing States' Performance (GAO/HRD-93-73, May 1993). 

\10 By this we mean regardless of the number of hours they
participate per month. 

\11 During a year's time, a larger share of recipients may
participate in the program, but because HHS maintains its data on an
average monthly basis, it is not possible to get a national count of
the number who actually participate over longer periods of time. 

\12 This analysis was based on each state's fiscal year 1993 rate of
spending per participant. 


      JOBS PROGRAMS REPORT UNMET
      SERVICE NEEDS AMONG CURRENT
      PARTICIPANTS
---------------------------------------------------------- Letter :3.2

While JOBS programs serve only a portion of the AFDC caseload, many
program administrators reported that they could not always provide
those participating with the services they need.  In our mid-1994
survey of a nationally representative sample of county JOBS
administrators, many administrators reported unmet needs in key
program activities, such as basic education and job skills training. 
Administrators often cited transportation problems for participants,
the need for more JOBS staff to serve participants, and, to a lesser
extent, the lack of community resources and child care funding as
reasons they could not meet participants' service needs. 

FSA directed JOBS programs to draw on resources in the community
before spending JOBS funds to pay for services or programs for JOBS
participants.  In many cases, local JOBS administrators reported that
they now must reimburse programs for some or all of the services
provided to JOBS participants. 


      CHILD CARE COSTS CAN LIMIT
      NUMBER SERVED
---------------------------------------------------------- Letter :3.3

Under FSA, the Congress acknowledged the importance of child care to
help welfare recipients get jobs and leave and stay off welfare. 
States are required to provide child care to AFDC recipients
participating in JOBS,\13

if they need it, and a year of transitional child care to recipients
who leave AFDC because of employment.  Federal funds for this child
care are uncapped, and states must provide matching funds to acquire
them.  If a state cannot provide child care, it cannot require the
AFDC recipient to participate in JOBS.  Therefore, a shortage of
state funds for child care can limit the number of AFDC recipients
participating in JOBS. 

Not all JOBS participants receive child care assistance,\14 but
spending for child care assistance has been growing.  In fiscal year
1992, less than 22 percent of JOBS participants received AFDC child
care financial assistance, and federal and state expenditures for
AFDC and transitional child care totaled about $755 million.  From
1991 through 1993, spending for AFDC child care grew faster than
spending for JOBS, as shown in figure 2. 

   Figure 2:  Total Federal and
   State Expenditures for JOBS,
   AFDC Child Care, and
   Transitional Child Care (fiscal
   years 1991-1993)

   (See figure in printed
   edition.)

FSA child care requirements may have an unintended effect on the
availability of child care for the working poor who do not receive
AFDC.  Several funding sources are intended to serve low-income
families in general, but only current or recent AFDC families are
guaranteed child care.  We recently reported that some states have
been shifting resources from poor working families toward entitled
AFDC and JOBS recipients.  This can place working poor families at
greater risk of becoming dependent on welfare.\15


--------------------
\13 FSA guarantees child care to AFDC recipients participating in
JOBS or in other state-approved education and training programs as
well as to employed AFDC recipients. 

\14 Welfare recipients may rely on unpaid informal child care
arrangements.  We are currently studying the utilization of child
care by JOBS participants. 

\15 Child Care:  Working Poor and Welfare Recipients Face Service
Gaps (GAO/HEHS-94-87, May 1994). 


      PROGRAMS SERVING MORE AT
      RISK OF LONG WELFARE STAYS,
      BUT SOME STILL NOT WIDELY
      SERVED
---------------------------------------------------------- Letter :3.4

FSA targeted for assistance certain AFDC recipients who were at risk
of remaining on welfare for long time periods, and states have
generally met the requirements to serve these recipients.  However,
certain recipients who need help to avoid long-term welfare
dependence, such as teenage parents, are not being widely served and
may be more difficult or costly to serve. 


         JOBS PROGRAMS HAVE SERVED
         TARGET GROUP MEMBERS
-------------------------------------------------------- Letter :3.4.1

The Congress recognized that some recipients depend on AFDC for
longer time periods and may need extra help to achieve employment and
self-sufficiency, and it targeted these recipients for JOBS
benefits.\16 While research shows that many of those who use AFDC do
so for relatively short periods of time, most of those enrolled in
AFDC at a point in time are in the midst of what will be a long
period of welfare receipt and receive a large share of the AFDC
benefits.  Some of these families stay on welfare continuously for
long time periods, but many leave AFDC only to return in a few
years.\17

These long-term and cyclical recipients may have barriers to
employment, such as low education and literacy levels and a lack of
skills and work experience.  Many have other, less tangible, barriers
to self-sufficiency, such as low self-esteem, limited life skills, or
low motivation.  These recipients are less likely to find employment
on their own and may require more services to prepare for employment;
therefore, targeting them could result in greater long-term benefits
and savings. 

States have responded positively to JOBS' emphasis on targeting
services to long-term and potential long-term AFDC recipients.  In
1991, we reported that states had shifted their stated priorities
from serving those considered ready for employment to those who
generally have barriers to employment.\18 In fiscal years 1991 and
1992, more than half of JOBS participants were members of the target
groups defined by FSA, and some programs have shown the potential to
succeed with long-term recipients.  However, some JOBS programs have
met the mandates to serve target group members while also serving
mostly volunteers, who may be more motivated or easier to serve than
non-volunteers.  In our 1994 national survey of county JOBS
administrators, about half reported giving priority to recipients who
are highly motivated. 


--------------------
\16 States are required to spend at least 55 percent of their JOBS
program resources on recipients and applicants who have received AFDC
for any 36 of the preceding 60 months; custodial parents under the
age of 24 who (1) have not completed or are not enrolled in high
school or high school equivalency courses or (2) have little or no
work experience in the preceding year; or members of families about
to lose their AFDC eligibility because of the age of the youngest
dependent child.  If states do not meet these requirements, their
federal match is reduced. 

\17 Overview of Entitlement Programs:  1994 Green Book, Committee on
Ways and Means, U.S.  House of Representatives (Washington, D.C.: 
1994), pp.  440-442; and Mark Greenberg's Beyond Stereotypes:  What
State AFDC Studies on Length of Stay Tell Us About Welfare as a "Way
of Life," Center for Law and Social Policy (Washington, D.C.:  1993). 

\18 Welfare to Work:  States Begin JOBS, but Fiscal and Other
Problems May Impede Their Progress (GAO/HRD-91-106, Sept.  1991). 


         TEENS HAVE BEEN UNEVENLY
         SERVED AND PRESENT A
         SPECIAL CHALLENGE
-------------------------------------------------------- Letter :3.4.2

Our recent work lends support for JOBS' special emphasis on teen
parents, but a large majority of this at-risk group is not involved
in welfare-to-work activities.  In two reports issued in May 1994, we
noted that a focus on helping teen mothers avoid long-term welfare
dependence is important because their low levels of education and
work experience and the young age of their children increase the
likelihood of long-term welfare dependence.\19 \, \20 Yet, in a 1992
review of 16 states containing most of the nation's AFDC teen
mothers, we found that, overall, only 24 percent of them had been
enrolled in JOBS.\21

Our work and other recent evaluations highlight that teen mothers are
a heterogeneous group with many complex problems; yet limited
evidence exists about what works to help them gain self-sufficiency. 
In our 1992 review, we found that teen parents who received enriched
services, such as educational alternatives to mainstream public high
school, life skills training, or parenting classes, were more likely
to complete high school or its equivalent than those not provided
such services in the 16 states surveyed.  An Ohio program that
requires AFDC teen mothers to complete high school or its
equivalent,\22 or offers similar types of comprehensive or intensive
services to teen mothers, also had some success in helping teen
parents complete their education, especially teens who had not yet
dropped out of school.\23 However, the extent to which these types of
programs can further help teen parents get jobs and leave AFDC in the
long-run is not yet known.  One recent study of a comprehensive
program designed to help young mothers who have dropped out of high
school had not increased employment, reduced welfare receipt, or
delayed additional pregnancies after 18 months, although these
effects may appear over a longer period of time.\24


--------------------
\19 Families on Welfare:  Teenage Mothers Least Likely to Become
Self-Sufficient (GAO/HEHS-94-115, May 1994). 

\20 Families on Welfare:  Focus on Teenage Mothers Could Enhance
Welfare Reform Efforts (GAO/HEHS-94-112, May 1994). 

\21 Welfare to Work:  States Move Unevenly to Serve Teen Parents in
JOBS (GAO/HRD-93-74, July 1993). 

\22 See LEAP:  Interim Findings on a Welfare Initiative to Improve
School Attendance Among Teenage Parents, Ohio's Learning, Earning,
and Parenting Program, Manpower Demonstration Research Corporation
(New York:  1993). 

\23 See LEAP:  The Educational Effects of LEAP and Enhanced Services
in Cleveland, Manpower Demonstration Research Corporation (New York: 
1994). 

\24 See New Chance:  Interim Findings on a Comprehensive Program for
Disadvantaged Young Mothers and Their Children, Manpower
Demonstration Research Corporation (New York:  1994). 


         PROGRAMS MAY NOT BE
         SERVING OTHER RECIPIENTS
         AT RISK OF LONG-TERM
         WELFARE RECEIPT
-------------------------------------------------------- Letter :3.4.3

Various sources indicate that problems such as substance abuse,
learning disabilities, emotional problems, and domestic violence are
not uncommon among adult welfare recipients.  If left unaddressed,
these problems can interfere with a recipient's ability to get or
keep a job and may result in long-term welfare dependence.  The
extent of these problems is generally unknown, and few accepted
national estimates are available.  For example, recent estimates of
the proportion of adult AFDC recipients who abuse drugs or alcohol to
the extent that they would need treatment to participate in a
JOBS-like program vary from 15 to 28 percent.\25

In 1987, we reported that some past welfare-to-work programs screened
out people thought to be difficult or expensive to serve,\26 and our
recent work suggests that this may still be true.  When we surveyed
51 state administrators in 1994, some reported a reluctance to serve
such recipients.  Over one-fourth acknowledged they intentionally
deferred the hard to serve or selected those who may be easier to
serve.  Administrators said that JOBS regulations do not provide
incentives to serve such recipients, and, when they do serve them, it
takes longer to prepare them for work.  In addition, they cited a
lack of funding and insufficient special services in the community to
meet these participants' special needs. 


--------------------
\25 The two estimates are based on studies done by HHS (15 percent)
and Columbia University's Center on Addiction and Substance Abuse (28
percent).  They both used the National Household Survey on Drug
Abuse, developed by HHS, for their primary source of statistical
information.  The differences in their estimates result from
variations in the criteria they used in defining the threshold of
substance abuse indicative of the need for treatment. 

\26 Work and Welfare:  Current AFDC Work Programs and Implications
for Federal Policy (GAO/HRD-87-34, Jan.  1987). 


      IMPLICATIONS OF ASKING JOBS
      TO SERVE MORE
---------------------------------------------------------- Letter :3.5

Although most welfare reform proposals would require JOBS to serve a
much larger portion of the AFDC caseload, to do so, JOBS programs
would have to overcome challenges concerning program capacity and
recipients' characteristics.  If the number of AFDC recipients
participating in JOBS expanded significantly, the larger group could
have different needs than current JOBS participants and may be harder
or more costly to serve.  Members of the larger group also may be
less willing to participate or have barriers significant enough to
interfere with their ability to participate unless they receive extra
support and services.  In some cases, as with some teen parents, the
research has failed to point clearly to what types of services most
effectively address these complex problems.  In addition, if
assistance is time limited, some recipients may reach the time limit
before they have completed their work preparation activities. 

Program administrators told us that they are concerned about their
capacity to increase dramatically their program size given the
limitations on current capacity and the likelihood that some of the
new recipients may be harder or more costly to serve.  The effect of
requirements to serve more recipients depends, in part, on the
resources provided and the flexibility afforded the states in
designing their programs.  Currently, programs must make difficult
decisions about how best to use their resources.  Some choose to
cover larger segments of the AFDC population by providing few or less
costly services to many recipients, while others emphasize more
intensive and expensive services to a smaller number of people. 
Requirements to serve more recipients without commensurate increases
in funding could result in less assistance per recipient at a time
when programs may be reaching out to their harder to serve, more
costly recipients. 

An adequate supply of community services may not be readily available
to meet the needs of additional participants.  Also, the cost per
participant could rise as programs fully use community resources
available to them at no charge and have to pay for local services. 
Even with additional funds, some administrators questioned whether
they could meet the needs of all participants, given limitations such
as transportation, staff, and community resources. 

Serving more participants can also increase costs and pressures on
service delivery systems associated with JOBS.  More participants
would require additional child care funding at both the state and
federal level to guarantee child care to more recipients.  This in
turn could further reduce child care subsidies for poor working
families, placing them at greater risk of going on or returning to
welfare.  In addition, some proposals require participation of
mothers with children as young as 12 months or even younger for the
next child.  Such changes would increase demand for child care for
infants and toddlers, which can be more expensive and generally is
less available.  Finally, JOBS participants use many services that
are intended for use by the community at large, such as JTPA and
adult basic education.  Significant increases in JOBS participants
could limit access to these services for the non-AFDC working poor. 


   JOBS IS NOT WELL FOCUSED ON
   EMPLOYMENT
------------------------------------------------------------ Letter :4

The current JOBS program is not well focused on the ultimate goal of
employment.  Local programs have not developed the strong links to
employers that may help welfare recipients get jobs.  We believe that
this may be explained, in part, by the current JOBS performance
measurement system.  Because the system is based on participation in
program activities and not on employment outcomes, states have had no
direct incentive to move clients into jobs.  Under proposed reforms,
JOBS will need to focus more on employment.  However, even with an
increased focus on employment, factors external to JOBS may limit the
program's ability to ensure that participants get and keep jobs. 


      MANY PROGRAMS NOT FULLY
      USING AVAILABLE TOOLS TO
      LINK PROGRAM PARTICIPANTS TO
      EMPLOYERS
---------------------------------------------------------- Letter :4.1

Most local JOBS programs nationwide have not forged the strong links
with employers that may help get jobs for their participants. 
Preliminary results of our work indicate that JOBS programs do not
fully use the tools provided under FSA to move JOBS participants into
jobs or provide work opportunities despite some evidence that these
tools can promote employment or create work opportunities.  Factors
both within and beyond the control of JOBS programs hamper the use of
these tools. 

JOBS makes available a range of tools to help welfare recipients get
jobs.  In addition to preparing AFDC recipients for employment
through education and training, JOBS programs are required to help
place job-ready recipients in jobs.\27 While the job ready are
expected to engage in job search activities, JOBS programs must
conduct job development activities, including identifying job
openings, marketing clients to employers, and arranging interviews
for clients.  Also, JOBS allows programs to provide temporary
financial incentives to employers that hire and train JOBS
participants through on-the-job training and work supplementation.\28
And, programs may place participants with governmental and nonprofit
organizations to gain work experience while participants continue to
receive their AFDC grant.  Under work experience programs, employers
are not reimbursed and the participant is not considered a regular
paid employee. 

These workplace-centered tools can make a difference in promoting
employment or creating meaningful work opportunities for welfare
recipients.  Rigorous evaluations of JOBS and similar programs have
identified job development as a potentially important factor in
effective programs.\29 In addition, on-the-job training and work
supplementation, a mechanism that supports on-the-job training, have
been used to move disadvantaged individuals into employment.\30 While
studies have shown that work experience activities do not increase
employment or earnings or reduce welfare receipt, they do provide
welfare recipients with the opportunity to work productively in the
community.\31 These workplace-centered tools can be used by varied
JOBS programs, including ones that focus on immediate job placement
as well as ones that emphasize longer term education and training. 

Although identified as a potentially important tool for moving JOBS
participants into employment, the extent of job development performed
nationally does not meet the needs of current JOBS participants
looking for work.  In mid-1994, almost all of the nation's counties
used job search in their programs, with a median of 10 percent of
their participants involved.  However, almost 60 percent of a
nationally representative sample of county JOBS administrators we
surveyed responded that they could market to employers or arrange
on-site interviews for only some or few of their job-ready
participants.  In addition, about half said they worked only
sometimes or rarely with private-sector employers to identify or
create jobs for participants.  Finally, more than half of the local
administrators reported that, in their opinion, they did not do
enough job development to meet their clients' needs.\32

Workplace-centered activities play a small role in JOBS and involve
very few participants, generally those who are carefully chosen to
attract and maintain the interests of employers.  In mid-1994, about
one-quarter of the nation's counties had JOBS participants in
on-the-job training, and about 8 percent had participants in work
supplementation.  These counties generally placed less than 1 percent
of their JOBS participants in these activities.  While almost all, 91
percent, of the counties enrolled some participants in work
experience, the actual portion of participants involved was small,
with a median of 9 percent, in the counties.  Administrators we spoke
with emphasized the importance of screening and selecting able and
motivated participants to place with employers to recruit employers
and maintain their interest in participating in the programs. 

Insufficient staff, certain federal requirements, labor market
conditions, and overall federal program design hamper use or
expansion of these tools.  County JOBS administrators reported that
they want to implement or expand the use of these tools in their JOBS
programs but most often cited an insufficient number of staff to
develop and administer these activities as a major hindrance to their
initiation or expansion.  Many administrators also noted that a
federal requirement restricting work supplementation slots to
employers' newly created positions limits their abilities to recruit
employers.\33 In addition, at least 40 percent of the administrators
believed current labor market conditions were a moderate or major
hindrance.  In 1993, unemployment rates reached 8 percent or more in
one-third of the nation's counties; employment growth was 1.5 percent
or less in half of the nation's counties and negative in one-third of
the counties.  We also believe that the limited focus on employment
in JOBS as currently administered at the federal level does not
promote implementing these activities.  Because program
administrators can meet all federal program requirements without
redirecting scarce resources to job development, on-the-job training,
work supplementation, or work experience, they have little incentive
to do so. 

HHS officials we interviewed at headquarters and in the 10 regional
offices noted the limited use of job development and other tools
available to help participants get jobs or provide work
opportunities.  Some believed that JOBS programs often placed a lower
priority on job development activities than on meeting participation
requirements.  To encourage job development, HHS has provided
workshops and training.  It has also provided on-site technical
assistance at 10 sites across the country and plans to provide such
assistance at 4 more sites.  In addition, HHS officials noted that
activities such as on-the-job training, work supplementation, and
work experience are difficult to develop and administer.  HHS has
periodically provided guidance on the use of these tools and
maintains a databank on promising JOBS practices that includes
information on them.  However, decisions on emphasizing job
development and the other activities are left up to the states. 


--------------------
\27 Programs may have varying criteria on when a participant is
considered job ready.  However, when a program considers a client
ready to work according to its criteria, it should take steps to help
this participant secure a job. 

\28 In on-the-job training programs, JOBS programs may use JOBS funds
to reimburse the training and supervision costs of an employer who
hires a JOBS client.  Under a work supplementation program, all or
part of the AFDC grant is diverted to an employer to cover part of
the cost of wages for a JOBS participant for up to 9 months. 

\29 See GAIN:  Two Year Impacts in Six Counties; GAIN:  Benefits,
Costs, and Three-Year Impacts of a Welfare-to-Work Program; Duane E. 
Leigh, "Did FIP Increase the Self-Sufficiency of Welfare Recipients
in Washington State?  Evidence From the FIS Data Set," Institute for
Research on Poverty, University of Wisconsin-Madison, Discussion
Paper no.  1012-93 (Madison, Wisc.:  1993). 

\30 Carol Romero, JTPA Programs and Adult Women on Welfare:  Using
Training to Raise AFDC Recipients Above Poverty, National Commission
for Employment Policy (Washington, D.C.:  March 1994); Laurie J. 
Bassie and Orley Ashenfelter, "The Effect of Direct Job Creation and
Training Programs on Low-Skilled Workers," Fighting Poverty:  What
Works and What Doesn't, ed.  Danzinger and Weinberg, Harvard
University (Cambridge, Mass.:  1986). 

\31 A review of several work experience programs in the 1980s showed
that the work performed for governmental and nonprofit organizations
generally provided benefits to taxpayers that outweighed program
costs.  Also, both participants and their worksite supervisors
reported that the work was meaningful.  See Unpaid Work Experience
for Welfare Recipients:  Findings and Lessons, Manpower Demonstration
Research Corporation (New York:  1993). 

\32 To determine the extent of job development performed, we asked
JOBS administrators about all job development activities performed on
behalf of JOBS participants, including those activities conducted by
paid contractors and those performed on a nonreimbursable basis. 
While welfare agencies took the lead in performing job development,
others involved included JTPA agencies, state employment services,
community-based organizations, and other education and training
providers. 

\33 This restriction is designed to protect existing employees from
being displaced by work supplementation participants.  It also
applies to work experience. 


      STATE JOBS PROGRAMS ARE HELD
      ACCOUNTABLE FOR
      PARTICIPATION, NOT
      EMPLOYMENT
---------------------------------------------------------- Letter :4.2

The performance measurement system for JOBS provides little incentive
for states to focus on moving clients into jobs.  As mandated by the
FSA, states are held accountable for the number and type of
participants enrolled in activities, such as education and training. 
States can lose a portion of their federal funding if they fail to
meet participation standards.  As a result, JOBS programs may focus
more on getting clients into program activities than off AFDC and
into jobs. 

FSA specified minimum program participation standards and required
the Secretary of HHS to develop and submit recommendations for
outcome-related JOBS performance standards to the Congress by October
1993.  This requirement was amended in late October of this year to
require HHS--instead of developing performance standards at this
time--to develop criteria for such standards no later than October 1,
1994.  HHS submitted a report on the problems identified in
developing a performance measurement system and a detailed plan and
schedule for developing outcome-based measures and standards to the
Congress on September 30, 1994.  In its report, HHS stated that it
plans to finalize performance measures for JOBS by October 1, 1996,
and standards by October 1, 1998.  HHS officials said they have
proceeded cautiously in developing outcome-related performance
standards, in part due to concerns that (1) setting certain standards
might result in unintended program decisions, such as focusing on the
most job-ready individuals to generate more favorable outcomes, and
(2) outcome measures are not consistently related to program
effectiveness.  However, HHS officials said they are pursuing an
outcome-focused performance measurement system in the context of
welfare reform legislation and as a separate initiative. 

HHS currently focuses its JOBS data collection on measures of
participation, rather than outcomes.  HHS collects information on the
numbers of program participants, expenditures on target group
members, and the activities in which individuals are participating on
a monthly basis.  While HHS collects some outcome-related data, it
does not track the total number of individual JOBS participants who
get jobs or leave AFDC.  In addition, HHS does not gather data on the
extent to which JOBS program participants retain the jobs they get,
the extent to which clients who leave AFDC for work return to the
rolls, and whether teen parents are completing high school and
subsequently getting jobs. 

As HHS recognizes, establishing outcome standards for JOBS that
motivate states to get more participants employed, without creating
unintended negative program effects, will be difficult and must be
approached carefully.  However, even without establishing standards,
data gathered on the outcomes of JOBS participants can help monitor
the progress of participants and assess the status of program
operations.  Today, little nationwide outcome data are gathered,
although many states have been independently collecting these data. 
In a 1994 GAO survey, the majority of state JOBS administrators told
us they believe HHS has not sufficiently shifted the program's focus
to outcome-based performance measurement. 


      WEAK WORKPLACE LINKS HAVE
      IMPLICATIONS FOR REFORM
---------------------------------------------------------- Letter :4.3

The current system's limited focus on employment and its weak
workplace links raise important issues for reform.  Although strong
links to employers appear to be important elements in the more
noteworthy JOBS programs, many factors impede these links.  Expanding
JOBS as it currently operates will not guarantee improved links with
the workplace; JOBS must better focus its efforts on employment. 

In addition, these weak links to the workplace pose challenges for
proposed reforms requiring those unable to find work after a set time
limit to enter subsidized work programs.  As evidenced by the minimal
use of existing workplace-centered activities, the infrastructure to
support these extensive work programs is limited.  Time and resources
would be needed to carefully develop these programs, which could
divert program attention away from helping JOBS participants develop
their skills and find employment before they reach their time limit. 
Moreover, existing programs appear to place the better prepared
participants in workplace-centered activities to recruit and maintain
employer interest.  Under reform proposals, these activities often
may be offered as a last resort for those who have not yet found
employment.  Programs will need to ensure that these participants are
adequately prepared for work since employer interest and cooperation
will be crucial under reform. 


      FACTORS EXTERNAL TO JOBS MAY
      LIMIT ITS SUCCESS
---------------------------------------------------------- Letter :4.4

If JOBS can serve more participants and focus more on employment, the
number of participants getting jobs and leaving welfare could
increase; however, these efforts are unlikely to end the need for
welfare due to factors outside the control of JOBS programs.  A
recent evaluation of one of the most noteworthy programs evaluated to
date--one that serves a large portion of its local AFDC recipients
and has a strong focus on employment--found that, after 3 years, 23
percent of the participants were both working and off AFDC.\34 JOBS
program results to date may be due, in part, to conditions external
to JOBS.  These may include the lack of available jobs in some
locations, the volatility of the low-wage labor market, the lack of
strong financial incentives to seek and keep employment, and a lack
of health care coverage, child care, or transportation.  In addition,
for those who find jobs, their earnings may often be too low to allow
them to leave welfare permanently and escape poverty. 


--------------------
\34 See a discussion of the program in Riverside, California, in
James Riccio's and others' GAIN:  Benefits, Costs, and Three-Year
Impacts of a Welfare-to-Work Program.  For program impact, this 23
percent should be compared to about 18 percent of the control group
who were both working and off AFDC after 3 years.  The control group
comprises those who were not enrolled in the program but were free to
seek out community services on their own. 


   CONCLUSIONS
------------------------------------------------------------ Letter :5

It will be difficult for JOBS to serve significantly larger numbers
of AFDC recipients and help them gain employment and leave AFDC,
given current conditions.  Although the challenge of serving
recipients with multiple barriers to employment, combined with
limitations caused by factors outside the program, suggest that JOBS
alone will not end the need for welfare, JOBS has shown promise in
helping some AFDC recipients get jobs and leave welfare. 

Our work addresses a number of issues that will confront the Congress
as it considers reforming welfare and asking more of JOBS.  We are
not making recommendations at this time but will be addressing each
of these issues in more depth as we complete our ongoing work.  The
issues include

the small portion of the AFDC caseload currently served under JOBS
and the current limits on programs' ability to provide needed
services;

the unknown number of AFDC recipients who have multiple barriers to
employment, are at risk of long welfare stays, and may not be widely
served under the current program;

JOBS' underutilization of the tools available to link participants to
employers and the lack of a basic foundation for building subsidized
work programs; and

JOBS' lack of a performance measurement system that encourages states
to focus on employment as the ultimate program goal. 


   AGENCY COMMENTS
------------------------------------------------------------ Letter :6

In commenting on a draft of this report, HHS disagreed with our
conclusion that JOBS programs are generally not well focused on
employment.  While we agree with HHS that programs may choose many
routes, including education and training, to help participants obtain
employment, JOBS programs are required to take steps to help
participants find jobs when they are considered ready for work.  Yet,
as noted in the report, a majority of JOBS program administrators
nationwide stated that they do not do enough to help these
participants find jobs.  We believe that efforts to place
participants in jobs are as important as efforts to prepare them for
work.  In addition, we believe it is important to point out that
JOBS' current performance measurement system is not focused on job
placement. 

HHS also believed we did not include sufficient information on the
progress it and the states had made in implementing JOBS and that the
report tone was too negative.  We disagree.  Our report clearly
recognizes that states and HHS have made some progress in
implementing JOBS and that some programs have achieved noteworthy
results.  We also recognize that programs have made progress in
serving those at risk of long welfare stays and that JOBS holds
potential as a means to help AFDC recipients get jobs and leave AFDC. 
However, while some progress has been made, we believe that the
issues we identified in the report are common among JOBS programs
nationwide and are ones that the Congress will confront as it
considers welfare reform.  These issues include the small portion of
the AFDC caseload served, the lack of focus on employment as the
goal, and the challenge of serving the hard to serve. 

HHS also raised other concerns (also see app.  II) and provided
technical comments that we have addressed in the text of the report
as appropriate. 


---------------------------------------------------------- Letter :6.1

Our work was conducted from April 1993 to November 1994 in accordance
with generally accepted government auditing standards. 

We are sending copies of this report to the Chairman, Subcommittee on
Human Resources, House Committee on Ways and Means; Secretary of
Health and Human Services; and other interested parties.  Copies will
also be made available to others on request.  If you have any
questions concerning this report or need additional information,
please call me on (202) 512-7215.  Kay Brown, Gale Harris, and
Stephen Secrist contributed to this report. 

Sincerely yours,

Jane L.  Ross
Director,
Income Security Issues


OBJECTIVES, SCOPE, AND METHODOLOGY
OF ONGOING WORK
=========================================================== Appendix I

Our objectives for this report were to assess the progress that
states and HHS have made in (1) serving more AFDC recipients in JOBS
and (2) using JOBS to help AFDC recipients get jobs and end
dependence.  We also sought to assess the implications of that
progress for welfare reform proposals.  To accomplish our objectives,
we relied on previously released GAO reports, other published
research on the JOBS program, and the preliminary results of four
ongoing studies on JOBS implementation.  In all four studies, we have
collected most of the data and are analyzing results.  Specifically,
these evaluations address program capacity, hard-to-serve AFDC
families, states' efforts to move JOBS participants to employment,
and JOBS outcomes.  We will issue reports for these studies when
completed. 


   JOBS CAPACITY ISSUES
--------------------------------------------------------- Appendix I:1

To address the concern that states' limited fiscal capacities and
other factors constrain the expansion of education, training, and
supportive services under JOBS, we are examining four key questions: 
(1) Who is, and is not, being served under the JOBS program; and what
is the range of education, training and support services they are
receiving?  (2) What are the constraints and barriers to expanding
the JOBS program?  (3) What are possible strategies for overcoming
these barriers?  (4) What are the implications of these findings for
the design of a time-limited welfare system? 


      METHODOLOGY
------------------------------------------------------- Appendix I:1.1

To answer the question about who is currently being served and who is
not and the range of services participants are receiving, we are
analyzing national data from HHS on JOBS participants and AFDC
recipients for fiscal year 1992, including the JOBS participant
database and the AFDC quality control file.  We are also analyzing
the 1992 Current Population Survey.  In addition, we conducted
computer-aided telephone interviews of a nationally representative
stratified sample of county and local JOBS programs to identify the
extent of current capacity constraints.  We held discussions with
four small groups of county-level program officials to identify
constraints on various JOBS expansion scenarios and strategies for
expanding the JOBS program.  We identified implications for a
time-limited welfare system through discussions with these small
groups and our own analysis. 


   HARD-TO-SERVE FAMILIES
--------------------------------------------------------- Appendix I:2

Some AFDC recipients have personal, family, or situational problems
that can interfere with their attendance in JOBS activities or
employment.  To determine the extent of these problems and whether
these hard-to-serve families are receiving services, we addressed the
following questions:  (1) Who are the hard to serve and what portion
of AFDC recipients do they represent?  (2) To what extent are they
referred to and receiving social services?  (3) What factors
discourage states from serving more of them?  (4) What approaches are
effective in meeting their needs?  (5) What is the implication for
this group of time-limited benefits under welfare reform? 


      METHODOLOGY
------------------------------------------------------- Appendix I:2.1

To determine the size, characteristics, and needs of hard-to-serve
families, we surveyed state JOBS administrators on the difficulty of
identifying the hard to serve and the likelihood that referrals are
made; programmatic and situational factors that discourage states
from serving them; and the effect welfare reform proposals may have
in helping the hard to serve become self-sufficient.  We also
interviewed program officials and experts, analyzed federal and state
data, researched the literature to identify state and local programs
using various service strategies for the hard to serve, and visited
selected sites. 


   MOVING TO WORK-BASED WELFARE
--------------------------------------------------------- Appendix I:3

JOBS provides state and local welfare agencies several tools to find
and create employment opportunities for AFDC recipients participating
in JOBS.  These include job development and placement, work
experience, on-the-job training, and work supplementation or grant
diversion.  To learn about states' experiences in using these tools
and provide information on proposed reforms, we addressed these
questions:  (1) To what extent are states using private-sector job
development and placement, subsidized employment, and work experience
for welfare participants?  (2) What are the barriers to expanding
such efforts?  (3) How might these barriers be overcome?  (4) What
are the implications of these findings for the design of a
time-limited AFDC program? 


      METHODOLOGY
------------------------------------------------------- Appendix I:3.1

To answer these questions, we surveyed a nationally representative
stratified random sample of county JOBS administrators.  For
additional information on strategies, barriers, and implications for
reform, we spoke with program administrators at HHS and the
Department of Labor, welfare experts, union officials, and welfare
advocates.  We also visited sites using job development, employer
subsidies, and work programs.  In addition, we collected AFDC and
economic data to describe selected aspects of the sampled counties
and to understand the implications of our findings for welfare
reform. 


   JOBS OUTCOMES
--------------------------------------------------------- Appendix I:4

To learn about JOBS outcomes, we addressed the following questions: 
(1) What outcome data exist on the number of JOBS participants who
are finding employment and leaving welfare?  (2) To what extent are
HHS and the states monitoring JOBS program outcomes and using
performance standards?  (3) What issues should be considered in
establishing an effective national JOBS performance monitoring
system? 


      METHODOLOGY
------------------------------------------------------- Appendix I:4.1

To assess overall program objectives, operating philosophies, and
performance monitoring practices, we surveyed the JOBS program
directors in the 50 states.  We analyzed data on client outcomes that
the states report to HHS as well as outcome data reported on the
questionnaire.  We discussed with HHS officials their approach to
JOBS performance monitoring and issues related to establishing
national performance standards for JOBS.  We also consulted other
experts about the latter. 




(See figure in printed edition.)Appendix II
COMMENTS FROM THE DEPARTMENT OF
HEALTH AND HUMAN SERVICES
=========================================================== Appendix I



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)


ABSTRACTS OF RELATED GAO PRODUCTS
========================================================= Appendix III

Child Care:  Current System Could Undermine Goals of Welfare Reform
(GAO/T-HEHS-94-238, Sept.  20, 1994). 

Although almost 10 million children are on welfare today, the
existing welfare system requires few of their parents to be in school
or training.  Welfare reform proposals, however, would require many
more welfare recipients to participate in education or training as
well as require them to find work after 2 years.  Should such
proposals be enacted, many more welfare parents will need child care
subsidies.  Yet only a small fraction of eligible parents have
received child care subsidies.  Furthermore, the fragmented nature of
the child care funding streams, with entitlements to some client
categories, time limits on others, and activity limits on others,
produces unintended gaps in services.  This limits the ability of
low-income families to become self-sufficient.  Finally, as states
deplete funds for welfare clients, they often turn to funds earmarked
for the child care needs of the working poor, putting the working
poor at greater risk of welfare dependency.  For all of these
reasons, GAO believes that welfare reform's goal of economic
independence for the poor could be undermined if the problems in the
child care subsidy system are not adequately addressed. 

JOBS and JTPA:  Tracking Spending, Outcomes, and Program Performance
(GAO/HEHS-94-177, July 15, 1994). 

This report provides information on JOBS and JTPA, which Congress is
considering consolidating.  Together, the two programs account for
about 60 percent of the federal employment and training funds for the
nation's poor.  Although JOBS is limited to welfare recipients, JTPA
serves other economically disadvantaged persons as well.  In
examining the interrelationship between the two programs, GAO
discusses how funds are spent and reported for education, job
training, support services, and program administration.  In addition,
GAO examines the outcome-focused data that are collected and
performance standards for the two programs. 

Welfare to Work:  JOBS Automated Systems Do Not Focus on Program's
Employment Objective (GAO/AIMD-94-44, June 8, 1994). 

JOBS is intended to help people avoid long-term welfare dependence by
providing the education, training, work experiences, and services
needed to obtain jobs.  Although additional effort will be needed by
HHS and the states to correct lingering data problems and incorporate
further automation, the states have made progress developing computer
systems to support the JOBS program.  These systems, however, are
narrowly focused on tracking program participants and collecting and
reporting data to HHS, missing the greater opportunity that the
systems could offer.  Despite the millions of dollars in welfare
costs that could be saved by moving people off welfare and into jobs,
HHS failed to determine how information technology could best be
applied to help achieve this objective. 

Families on Welfare:  Sharp Rise in Never-Married Women Reflects
Societal Trend (GAO/HEHS-94-92, May 31, 1994). 

From 1976 to 1992, the proportion of single women receiving welfare
who had never been married more than doubled, rising from 21 percent
to 52 percent.  This change parallels a broader societal trend among
all single mothers.  Women receiving welfare in 1992 were also more
likely to have a high school diploma and to have fewer children. 
These demographic changes among single women receiving welfare
mirrored similar trends among all single mothers.  However, single
women on welfare in 1992 were poorer than in 1976, even though they
worked in about the same proportions.  Total family incomes dropped
due to a decline in the real value of earnings and welfare benefits. 
The dramatic growth in the number of never-married women receiving
welfare has important policy implications.  Not only have
never-married women and their families driven welfare caseloads to
record levels, these families also affect other programs.  For
example, child support is hard to obtain for never-married women, who
are less likely to have child support orders.  Moreover, because the
growth in never-married women receiving welfare reflects broader
societal trends, it is unclear what impact welfare reform may have on
the growth in the number and proportion of never-married women
receiving welfare. 

Families on Welfare:  Teenage Mothers Least Likely to Become
Self-Sufficient (GAO/HEHS-94-115, May 31, 1994). 

Women who gave birth as teenagers make up nearly half the welfare
caseload--a sizable group.  GAO found that this group of women is
less likely to have high school diplomas and more likely to have
larger families.  Both these characteristics increase the likelihood
of this group's being among the poorest welfare recipients.  Even
though they work in the same proportions as other women receiving
welfare, they earn less and are more likely to have total family
income below 50 percent of the poverty line.  Given these
differences, teenage mothers may have the hardest time earning their
way off welfare and becoming self-sufficient.  As the Congress
debates welfare reform, it may need to explore ways to discourage
young mothers from becoming welfare dependent and encourage those who
do to become more self-sufficient. 

Families on Welfare:  Focus on Teenage Mothers Could Enhance Welfare
Reform Efforts (GAO/HEHS-94-112, May 31, 1994). 

Welfare families headed by women who have either less than a high
school education, little recent work experience, or children younger
than age 6 are less likely to get off welfare quickly than are other
families.  These characteristics are especially prevalent among
teenage mothers receiving welfare.  Moreover, teenage mothers have
long-term implications for the welfare system.  Together, current and
former teenage mothers make up a large percentage of the welfare
caseload, totaling nearly 42 percent of all single women on welfare
in 1992.  And they are among the poorest welfare recipients--more
than half of women who gave birth as teenagers had total family
incomes below 50 percent of the poverty line in 1992. 

Child Care:  Working Poor and Welfare Recipients Face Service Gaps
(GAO/HEHS-94-87, May 13, 1994). 

In response to the growing number of working mothers with young
children, the Congress created four new child care programs for
low-income families.  These programs received more than $1.5 billion
in federal funding in fiscal year 1992.  Although states are making
strides toward coordination of federally funded child care services,
some federal requirements, coupled with resource constraints, are
creating gaps in delivering these services to the poor.  Specific
service gaps stem from program differences in (1) categories of
clients who can be served, (2) limits on the type of employment that
clients can undertake without compromising their benefits, (3) limits
on the amount of income clients can earn without losing their
eligibility, and (4) limits on the time during which clients can
receive child care subsidies.  Despite congressional expectations
that the block grant, the largest of the four programs, would
motivate states to boost direct support to working poor families
needing child care, the existing fragmented system of subsidized
child care appears to provide little incentive for states to do so. 
In an environment of finite resources, when the child care programs
for welfare and recent welfare recipients are entitlements, there is
pressure to serve these groups while equally needy working poor
families may go unaided.  Moreover, each of the four programs
unintentionally divides the poor into categories that fail to
recognize the similarity of their economic plight and child care
needs.  State officials believe that they could better deliver child
care that supports self-sufficiency if greater consistency existed
across programs and if they had greater flexibility in spending their
federal child care funds. 

Multiple Employment and Training Programs:  Major Overhaul Is Needed
(GAO/T-HEHS-94-109, Mar.  3, 1994). 

By GAO's count, at least 154 programs run by 14 federal agencies
provide $25 billion in employment training assistance to jobless
people.  Although well intended, these programs, when taken
collectively, tend to confuse and frustrate their clients and
administrators, hamper the delivery of services to those in need, and
potentially duplicate efforts and accrue unnecessary costs.  In
addition, some programs lack basic training and monitoring systems
needed to ensure efficient and effective service.  Past efforts to
fix the system have fallen short.  As a result, more programs evolve
every year, and the problems inherent in the system loom even larger. 
GAO testified that a major structural overhaul and consolidation of
employment training programs is needed.  The goal should be a
customer-driven employment system guided by four principles: 
simplicity, tailored services, administrative efficiency, and
accountability.  The administration's draft proposal to consolidate
programs serving dislocated workers seems to be a step in the right
direction; however, this consolidation needs to be part of a larger
restructuring of employment training programs.  GAO also has some
questions about the proposal's implementation. 

Child Care Quality:  States' Difficulties Enforcing Standards
Confront Welfare Reform Plans (GAO/T-HEHS-94-99, Feb.  11, 1994). 

GAO questions the safety of child care being offered nationwide, both
in terms of the physical environment--everything from working smoke
detectors to properly stored food--and background checks for child
care workers.  Although the states are responsible for setting and
enforcing quality standards, they are being challenged by the surge
in demand for child care as well as by shrinking budgets.  GAO found
that 17 states did not conduct criminal background checks on child
care center providers, and 21 states did not conduct checks of family
day care providers.  Although the Congress recently passed
legislation to remedy this situation, it is too soon to know how much
it will help.  Welfare reform may also test states' ability to
protect children.  Recent proposals requiring welfare recipients to
participate in training programs and find work within 2 years may
increase the demand for child care, potentially further straining
state enforcement resources. 

Self-Sufficiency:  Opportunities and Disincentives on the Road to
Economic Independence (GAO/HRD-93-23, Aug.  6, 1993). 

The Family Self-Sufficiency Program, a partnership between the
federal government and local public housing authorities, promotes
local strategies to help poor families achieve economic independence
and self-sufficiency.  This report (1) examines how housing and
social services policies affect beneficiaries when they land a job
and increase their income and (2) analyzes the extent to which the
law creates disincentives to upward income mobility.  GAO concludes
that training and supported work programs have successfully increased
the earning of the economically disadvantaged who participate in
them, but on average the earnings increases are not enough for a
family to break free from all housing and public assistance programs. 

Welfare to Work:  States Move Unevenly to Serve Teen Parents in JOBS
(GAO/HRD-93-74, Jul.  7, 1993). 

JOBS can be used to help teen parents receiving welfare--even those
considered hardest to serve--complete their high school education. 
In the 16 states GAO reviewed, about 24 percent of the teen parents
receiving welfare had been enrolled in JOBS.  The share of teen
parents enrolled in each of these states, however, differed
substantially, anywhere from 7 to 53 percent.  Although the states
varied in important ways that affected teen parents' enrollment, this
finding is not unexpected in a program such as JOBS, which is a
financial and programmatic partnership between the federal and state
governments.  GAO cannot yet draw any firm conclusions about the
effectiveness of JOBS in helping these young mothers.  The numbers
served are relatively small and not enough is known about the impact
of JOBS on reducing welfare dependence among teen parents and their
families.  Moreover, JOBS is a relatively new program that has been
operating in an environment of mounting fiscal distress and competing
demands on state budgets.  However, as state programs evolve, the
economy recovers, and states choose to target more funds to JOBS,
states may have greater capacity to enroll teen parents and
strengthen the education and support services tailored to their
needs.  Because some teen parents have been improperly excluded from
JOBS and states may be missing opportunities to enroll teen parents
before they become welfare cases, GAO believes that steps should be
taken to ensure that all teen parents are properly identified and
told of the requirements for participating in JOBS. 

Welfare to Work:  JOBS Participation Rate Data Unreliable for
Assessing States' Performance (GAO/HRD-93-73, May 5, 1993). 

To encourage state JOBS programs to serve more welfare recipients,
the Congress mandated minimum participation rates that states must
meet each year.  States failing to meet or exceed the annual rates
can lose millions of dollars in federal JOBS funds.  GAO found that
HHS is locating millions of dollars in federal JOBS funds on the
basis of inaccurate state-reported participation rate data.  These
data are not comparably derived across states and should not be
relied on when comparing states' performance.  Much of the inaccuracy
in these data is attributed to states' difficulties in collecting and
processing all the required data and misinterpretation of JOBS
regulations and HHS instructions.  As minimum annual participation
rates rise, it will become even more important that these issues are
resolved.  GAO believes that unless HHS simplifies its participation
rate reporting requirements and increases its oversight of states'
processes, states will continue to report noncomparable and
inaccurate data. 

Welfare to Work:  States Serve Least Job-Ready While Meeting JOBS
Participation Rates (GAO/HRD-93-2, Nov.  12, 1992). 

Concerns have arisen that JOBS participation rate requirements may be
discouraging states from serving the least job-ready welfare
recipients, including educating and training them.  GAO discovered,
however, that these concerns are unsupported by data that states
reported to HHS during fiscal year 1991.  All but one state met the 7
percent participation rate for fiscal year 1991, and all spent at
least 55 percent of their JOBS budgets on target group members.  Of
those welfare recipients serviced by states participating in JOBS
during this period, 62 percent were target group members.  These
target group members were most often placed in education and training
activities, with no more than 12 percent placed in job search
activities.  In addition, one in three target placements, compared
with one in four nontarget placements, was in secondary and remedial
educational

Welfare to Work:  Implementation and Evaluation of Transitional
Benefits Need HHS Action (GAO/HRD-92-118, Sept.  29, 1992). 

Under the FSA, families trying to work their way off welfare can
receive up to 12 months of child care and medical assistance. 
Insufficient data prevent GAO from fully analyzing the issue of
transitional benefits, including factors affecting their use and how
long families receive such benefits.  GAO concludes that evaluating
transitional benefits will prove complex and challenging.  Unless HHS
renews its evaluation planning and data collection efforts, HHS will
probably be unable to report to the Congress next year on the impact
of transitional Medicaid on welfare dependency.  In addition, the
evaluation of transitional child care will be in jeopardy unless a
strategy and schedule for completing it are developed.  The number of
families receiving transitional benefits grew during the first 15
months of the program.  Yet many state policies, despite federal
notification requirements, do not require that families be told about
benefits when they become ineligible for welfare.  Some state
policies also prohibit families from applying for benefits
retroactively within the 12-month eligibility period.  Until these
state policies are reviewed and brought into compliance with federal
requirements, families in these states will be at greater risk of
being uninformed about and have limited access to transitional
benefits. 

Welfare to Work:  States Begin JOBS, but Fiscal and Other Problems
May Impede Their Progress (GAO/HRD-91-106, Sept.  27, 1991). 

States have made significant progress establishing their JOBS
programs, but are experiencing difficulties that could reduce the
program's potential and slow states' progress in helping people avoid
long-term welfare dependence.  All states had programs in place by
the mandated implementation date of October 1990, and 31 were
operating statewide in October 1990, 2 years earlier than the
legislative requirement for programs to be operating statewide.  In
addition, most states are moving in new directions indicated by the
Congress, such as making education and training important program
components and targeting services to those with employment barriers. 
However, in their first year of implementing JOBS, states have
reported experiencing, or expecting to experience, some difficulties,
including shortages of such services as basic/remedial education and
transportation.  HHS has provided, and continues to provide, states
with technical assistance to help them with their difficulties. 
However, service and funding shortages and poor economic conditions
could decrease states' abilities to operate

Mother-Only Families:  Low Earnings Will Keep Many Children in
Poverty (GAO/HRD-91-62, Apr.  2, 1991). 

In 1987 slightly over 60 percent of the children below the poverty
line lived in families headed by the mother alone.  This report (1)
provides an empirical estimate of the magnitude of the problems
mother-only families face in escaping from poverty and (2) examines
federal policies that could help them.  GAO found that many single
mothers will remain at or near the poverty line despite their holding
full-time jobs.  Low earnings, vulnerability to layoffs, lack of
important fringe benefits like health insurance, and relatively high
expenses for child care are some hurdles these women face.  These
problems also challenge the federal programs that seek to reduce the
number of children living in poverty.  GAO found that 1990
legislation that expanded the earned income tax credit and child care
subsidies could increase the percentage of poor families that get
along without welfare.  Nevertheless, if poor women do not obtain
better job skills to increase their earnings, many will probably have
to depend on public assistance and other income supplements to live
above the poverty line.  The AFDC program, food stamps, and child
support payments are especially important income supplements. 

Work and Welfare:  Current AFDC Programs and Implications for Federal
Policy (GAO/HRD-87-34, Jan.  29, 1987). 

After analyzing numerous pre-JOBS work programs, GAO found that the
variety of work program options gave states the flexibility to tailor
their programs to local needs, but multiple legislative
authorizations resulted in a patchwork of administrative
responsibilities and a lack of overall program direction.  To serve
more participants, programs spread their limited funds thinly,
providing inexpensive services, such as job search assistance, and
paying for few support services.  Yet, the programs GAO examined
served only a minority of adult AFDC recipients in 1985, excluding
any with young children or severe barriers to employment. 
Evaluations of the work programs have shown modest positive effects
on the employment and earnings of participants.  But wages were often
insufficient to move participants off welfare. 

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