Welfare Waivers Implementation: States Work to Change Welfare Culture,
Community Involvement, and Service Delivery (Chapter Report, 07/02/96,
GAO/HEHS-96-105).

Pursuant to a congressional request, GAO reviewed five states' early
experiences with implementing welfare reforms under waivers of federal
law, focusing on the states' approaches in implementing time-limited
benefits, work requirements, and family cap provisions.

GAO found that: (1) the five states made relatively few management or
service delivery changes to implement their family cap provisions; (2)
the states' geographic scope of implementation and work requirements
varied considerably, but time limits for cash benefits were generally 24
months, followed by a longer period of ineligibility for cash
assistance; (3) four states changed their welfare program operations to
implement their time limits and work requirements; (4) the states
encouraged staff and clients to focus on clients' employability by
establishing job placement goals for each office, having clients sign
personal responsibility agreements, basing benefits on how much time
clients spent in work, training, or education activities, increasing
clients' financial incentives as they began working, and applying
sanctions for clients' failure to comply with program requirements; (5)
the states disseminated information to communities and employers to
increase their interest in welfare reforms and formed community advisory
groups, which usually led to better client access to jobs; (6) the
states redesigned their service delivery structures to provide more
intensive support for clients by coordinating services, increasing staff
interaction with clients, and expanding the availability of child care
and transportation for their clients; and (7) the states encountered
some problems in implementing welfare reforms, but they were able to
resolve most of those problems.

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

 REPORTNUM:  HEHS-96-105
     TITLE:  Welfare Waivers Implementation: States Work to Change 
             Welfare Culture, Community Involvement, and Service
             Delivery
      DATE:  07/02/96
   SUBJECT:  Welfare benefits
             Employment or training programs
             Disadvantaged persons
             State-administered programs
             Waivers
             Welfare recipients
             Statutory limitation
             Welfare services
             Eligibility determinations
             Advisory committees
IDENTIFIER:  Aid to Families with Dependent Children Program
             AFDC
             Florida
             Indiana
             Virginia
             Wisconsin
             New Jersey
             Job Opportunities and Basic Skills Training Program
             JOBS Program
             Alachua County (FL)
             Escambia County (FL)
             Marion County (IN)
             Scott County (IN)
             Vigo County (IN)
             Fauquier County (VA)
             Culpeper County (VA)
             Pierce County (WI)
             Fond du Lac (WI)
             Florida Family Transition Program
             Indiana Manpower Placement and Comprehensive Training 
             Program
             New Jersey Family Development Program
             Virginia Independence Program
             Wisconsin Work Not Welfare Program
             Food Stamp Program
             Wisconsin Pay for Performance/Self-Sufficiency First 
             Demonstration Project
             
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Cover
================================================================ COVER


Report to the Chairman, Subcommittee on Human Resources, Committee on
Ways and Means, House of Representatives

July 1996

WELFARE WAIVERS IMPLEMENTATION -
STATES WORK TO CHANGE WELFARE
CULTURE, COMMUNITY INVOLVEMENT,
AND SERVICE DELIVERY

GAO/HEHS-96-105

Implementation of Welfare Waivers

(106603)


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

  AFDC - Aid to Families With Dependent Children program
  HHS - Department of Health and Human Services
  JOBS - Job Opportunities and Basic Skills Training program

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


B-265674

July 2, 1996

The Honorable E.  Clay Shaw
Chairman, Subcommittee on Human Resources
Committee on Ways and Means
House of Representatives

Dear Mr.  Chairman: 

This report, prepared at your request, examines five states' early
experiences implementing welfare reforms under waivers of federal
law.  The report focuses on three key reform provisions: 
time-limited benefits, work requirements, and family caps, which deny
cash benefits for additional children born to families already
receiving Aid to Families With Dependent Children. 

We are sending copies of this report to the Ranking Minority Member
of the House Subcommittee on Human Resources, the Chairmen and
Ranking Minority Members of the House Committee on Ways and Means and
Senate Committee on Finance, the Secretary of Health and Human
Services, the Assistant Secretary for Children and Families, and
other interested parties.  We will also make copies available to
others on request. 

If you or your staff have any questions concerning this report,
please call me at 202-512-7215 or David P.  Bixler, Assistant
Director, at 202-512-7201.  Other GAO contacts and major contributors
to this report are listed in appendix I. 

Sincerely yours,

Mark V.  Nadel
Associate Director,
Income Security Issues


EXECUTIVE SUMMARY
============================================================ Chapter 0


   PURPOSE
---------------------------------------------------------- Chapter 0:1

In the wake of increasing dissatisfaction with the existing welfare
system, the Congress and the administration have been considering
welfare reform changes on a national level.  In the interim, many
states have undertaken far-reaching reforms of varying kinds that are
affecting different portions of their welfare caseloads.  These
changes generally have been undertaken through waivers of various
federal statutory provisions that govern the program most Americans
commonly think of as welfare--Aid to Families With Dependent Children
(AFDC).  For example, states have required AFDC clients to work; set
time limits on benefit receipt; and denied cash benefits for
additional children born to families already receiving AFDC, also
known as a family cap.  In fiscal year 1995, the AFDC program
provided about $22 billion in cash benefits to nearly 14 million
adults and children. 

The Chairman of the House Subcommittee on Human Resources, Committee
on Ways and Means, asked GAO to review some states' early experiences
with implementing these provisions, believing that the information
would be useful to other states as they prepare to face the
challenges of welfare reform.  Specifically, the Chairman requested
GAO to examine the approaches that states took and issues they
encountered in implementing three key provisions:  time-limited
benefits, work requirements, and family caps.  Because the states
that GAO reviewed made relatively few management or service delivery
changes to implement their family cap provisions, this report focuses
principally on the state approaches and issues encountered in
implementing time limits and work requirements. 

To develop information for this report, GAO examined the experiences
of Florida, Indiana, New Jersey, Virginia, and Wisconsin.  The
criteria used to select states included obtaining a range in the
length of time states' approved waivers had been in effect, selecting
some states whose waivers included all three provisions, and avoiding
duplication of existing studies. 


   BACKGROUND
---------------------------------------------------------- Chapter 0:2

AFDC provides benefits to economically needy families with children
who lack support from one or both of their parents because of death,
absence, incapacity, or unemployment.  AFDC is funded with federal
and state dollars.  States are responsible for administering the
program and the U.S.  Department of Health and Human Services (HHS)
has federal oversight responsibility. 

Under section 1115 of the Social Security Act, HHS is authorized to
grant states waivers of statutory requirements governing the AFDC
program.  This authority is intended to give states the flexibility
to test innovations designed to help their programs better meet the
objectives of the act.  Between 1992 and 1995, 31 states were granted
authority to experiment with one or more of the three provisions
discussed in this report.  Twenty-three states received waivers to
experiment with time limits, 24 states for work requirements, and 13
states for family caps. 


   RESULTS IN BRIEF
---------------------------------------------------------- Chapter 0:3

Many states have been making major changes to their welfare programs
through federal waivers.  Four of the five states that GAO
reviewed--Florida, Indiana, Virginia, and Wisconsin, established work
requirements and limited the time that many clients could receive
cash benefits.  To implement these policy changes, these four states
fundamentally changed the operations and management of their welfare
programs.  GAO's analysis identified three major themes on which
these states, in conjunction with their counties, focused their
efforts:  (1) changing their staffs' culture and clients'
expectations, (2) soliciting the involvement of employers and
communities, and (3) redesigning their service delivery structure. 
Another policy change, a family cap, was implemented in Indiana, New
Jersey, Virginia, and Wisconsin with relatively few management or
service delivery changes. 

In efforts to change the focus of their welfare programs, the states
that implemented work requirements and time limits redefined how
staffs and clients interact.  Staffs were encouraged to focus less on
specific obstacles facing clients, such as lack of work experience,
and more on developing a strategy for clients to quickly secure
employment and move off welfare.  The states used various approaches
to increase staffs' focus on helping clients find employment,
including establishing job placement goals for each welfare office. 
In addition, the states sought to prepare clients to take greater
responsibility for moving off welfare through a variety of approaches
such as basing benefit payments on the number of hours clients
participate in work, training, or education activities. 

The states also sought to make greater use of community resources by
soliciting the involvement of employers and community organizations
in their welfare reform programs.  For example, they asked employers
and local officials to participate in community advisory groups,
whose responsibilities generally focused on helping clients obtain
employment.  While the states sometimes had to address misconceptions
about welfare clients in working with these advisory groups, they
generally found that community involvement yielded benefits for
clients, such as better access to jobs. 

Finally, the states worked to redesign their service delivery
structure to provide more intensive support for clients confronted
with work requirements and time-limited benefits.  For example,
counties in Florida and Wisconsin brought together staffs from
various locations to form teams that provide a variety of services at
a single location.  In addition, states sought to expand the
availability of child care and transportation by developing closer
links to existing community resources, such as by working with
churches to provide after-school care. 


   PRINCIPAL FINDINGS
---------------------------------------------------------- Chapter 0:4


      STATES MAKE MAJOR CHANGES TO
      DESIGN OF THEIR WELFARE
      PROGRAMS
-------------------------------------------------------- Chapter 0:4.1

Of the five states GAO reviewed, Indiana and New Jersey implemented
their welfare reforms statewide.  Virginia implemented its family cap
provision statewide and is phasing in its work requirement and time
limit statewide over a 4-year period.  At the time of GAO's site
visits, Florida and Wisconsin were each operating their welfare
reform programs in two counties. 

The work requirements enacted by Florida, Indiana, Virginia, and
Wisconsin vary considerably.  For example, Virginia requires
nonexempt clients to engage in unsubsidized employment, subsidized
employment, or a community work experience within 90 days of signing
personal responsibility agreements.  In Florida, the employability
plans developed with clients specify the education, training, and
work activities they are expected to complete.  The time-limited
benefit provisions in these four states generally limit nonexempt
clients to 24 months of cash benefits, followed by a longer period of
ineligibility for cash assistance.  At the time of GAO's site visits,
however, none of these programs had been under way long enough for
any clients to have reached the end of their time limits. 

With the exception of Florida, each of the states GAO examined had a
family cap provision.  Indiana's provision is typical; it stipulates
that no cash benefit will be provided for a child born more than 10
months after either the start of the new program or the client's
application for AFDC, with certain exceptions. 


      STATES VIEW CHANGING THE
      CULTURE OF THEIR STAFFS AND
      CLIENTS' EXPECTATIONS AS
      CRITICAL TO WELFARE REFORM
-------------------------------------------------------- Chapter 0:4.2

Florida, Indiana, Virginia, and Wisconsin viewed changing the culture
of their welfare office staffs and clients' expectations as critical
to helping clients find jobs before their time-limited benefits
expire.  Traditionally, staffs were trained to focus on assuring
accurate eligibility determinations and benefit payments and
enrolling clients in education, training, and work activities, but
were not always directed to place a strong emphasis on placing
clients in jobs.  Recognizing this, these states adopted varied
approaches to broaden staffs' perception of their roles.  For
example, Indiana established annual job placement goals for each
county and a system to monitor county performance.  Wisconsin trained
staffs to explore with persons applying for AFDC benefits
alternatives to welfare, such as obtaining a job or child support. 
Using this approach, in the first 8 months of the state's welfare
reform program, Wisconsin's pilot counties diverted about one-third
of their applicants from applying for AFDC benefits, according to a
state progress report.  Virginia established a different kind of
diversion program for AFDC applicants, which seeks to divert families
in crisis from long-term dependence by offering them a one-time
payment equivalent to up to 120 days of AFDC benefits. 

The states also sought to promote greater client responsibility for
adopting behaviors that would facilitate their transition from
welfare to work.  For example, Wisconsin set higher expectations for
clients by basing benefit payments on the number of assigned hours of
activity they complete.  States also revised their AFDC rules to make
work more attractive by allowing clients to keep more of their
benefit checks as they began working.  Finally, states strengthened
their sanctions for clients who fail to comply with program
requirements by increasing reductions in clients' benefits,
lengthening sanction periods, or applying sanctions more quickly. 


      STATES SOLICIT GREATER
      INVOLVEMENT OF EMPLOYERS AND
      COMMUNITIES IN REFORMING
      WELFARE
-------------------------------------------------------- Chapter 0:4.3

To take advantage of community resources that could help clients
obtain jobs, states used various approaches to solicit the
involvement of local employers and communities in their welfare
reform programs.  For example, Virginia's state and local welfare
offices held community meetings attended by churches, employers, and
other organizations to explain its program and enlist support.  Each
of the states also established community advisory groups that
included representatives from government, business, and community
organizations.  Indiana obtained an especially widespread level of
community involvement, with over 3,000 citizens and officials
participating in 92 local welfare reform planning councils throughout
the state.  States encountered various challenges working with
community advisory groups, including determining their appropriate
roles, informing members about characteristics of welfare clients and
the welfare system, and recruiting a sufficient number of members. 
However, the states generally found that as they worked to address
these issues, community involvement provided benefits for clients,
such as more job opportunities, and insights on how to deal with
clients' barriers. 


      STATES REDESIGN SERVICE
      DELIVERY TO PROVIDE MORE
      INTENSIVE SUPPORT FOR
      CLIENTS
-------------------------------------------------------- Chapter 0:4.4

To further facilitate implementation of time limits and work
requirements, states also redesigned their service delivery structure
in different ways to provide the more intensive support clients may
need.  Collocation of staffs to enhance communication among job team
members and provide services more efficiently was a key component of
welfare reform implementation in Florida and Wisconsin.  For example,
the two pilot counties in Florida, Alachua and Escambia, sought to
provide "one-stop shopping" for clients by bringing together
eligibility specialists, case managers, employment and training
specialists, health clinic staff, and child support staff.  Although
both Florida counties experienced logistical difficulties moving
staffs to a single location, such as delays in obtaining office space
and equipment, job teams in Florida and Wisconsin report that clients
benefit from the improved communication and service coordination the
teams provide. 

Florida's pilot counties also redesigned their service delivery by
creating a case manager role to coordinate the comprehensive services
that clients may need.  Escambia County eligibility workers assumed
additional responsibilities to serve as case managers; in contrast,
Alachua County made the case manager role distinct from that of
eligibility staff and training and employment staff.  Case managers
in Escambia County experienced a difficult adjustment to their broad
new responsibilities, because as eligibility workers they had focused
on following strict rules and procedures.  On the other hand, case
managers in Alachua County encountered some initial difficulties
determining how their roles differed from those of other staff.  In
both cases, additional training and experience helped reduce these
problems, according to Florida officials. 

By developing closer links to existing community resources, states
also sought to expand the availability of child care and
transportation for their clients.  For example, Fond du Lac County,
Wisconsin, worked with some day care providers to extend their hours
for parents working late shifts.  Scott County, Indiana, recruited
local volunteers to transport clients and Pierce County, Wisconsin,
arranged for a local bank to provide low-interest automobile loans to
clients. 


   RECOMMENDATIONS
---------------------------------------------------------- Chapter 0:5

GAO is not making recommendations in this report. 


   COMMENTS FROM HHS AND STATES
---------------------------------------------------------- Chapter 0:6

GAO obtained comments on a draft of this report from HHS and the five
states whose welfare reform programs are reviewed in the report.  HHS
and the states generally agreed with the report's findings and
provided additional technical information that GAO incorporated in
the report as appropriate. 


INTRODUCTION
============================================================ Chapter 1

Because the existing welfare system has not been successful in
preventing long-term dependency, many states are using federally
approved waivers of statutory requirements to implement their own
welfare reform initiatives.  Concurrently, efforts are under way at
the federal level to reform the nation's welfare system.  Some states
already are experimenting with provisions similar to those included
in recent federal welfare reform proposals, such as time limits on
benefit receipt, work requirements, and a prohibition on payment of
cash assistance for additional children born to families already
receiving welfare--the family cap provision. 


   THE EXISTING WELFARE SYSTEM
---------------------------------------------------------- Chapter 1:1

Aid to Families With Dependent Children (AFDC) provides cash benefits
to economically needy families with children who lack support from
one or both of their parents because of death, absence, incapacity,
or unemployment.  In fiscal year 1995, the average monthly number of
AFDC recipients was about 13.6 million--4.4 million adults and 9.2
million children--and payments to recipients totalled nearly $22
billion.  AFDC is an entitlement program funded with federal and
state dollars, with the federal share determined by a matching
formula related to each state's per capita income.  The U.S. 
Department of Health and Human Services (HHS) has federal oversight
responsibility for the program.  Each state administers and
determines many aspects of its AFDC program within federal
guidelines, including payment amounts, eligibility requirements, and
treatment of income and resources. 

In recent years, policymakers and analysts have expressed growing
discontent with the welfare system, many claiming that the system
fosters dependency.  There have been no limits on the length of time
families may receive benefits, except for recent experiments in some
states that have received federal approval to test time limits.  One
study estimates that about 35 percent of those who ever receive AFDC
will eventually receive benefits for a total of 5 years or more, when
all moves on and off welfare are considered.\1

In addition, some policymakers and analysts believe that the welfare
system should no longer provide cash benefits for additional children
born to AFDC mothers. 

With the Family Support Act of 1988, the Congress created the Job
Opportunities and Basic Skills Training (JOBS) program to transform
AFDC into a transitional program geared toward helping parents become
employed and avoid long-term welfare dependence.  Under JOBS, states
are to (1) provide a broad range of education, training, and
employment-related activities; (2) increase the number of AFDC
clients participating in these activities; (3) target resources to
the hard-to-serve; and (4) provide support services, including child
care and transportation.  The Family Support Act created minimum
requirements for the percentages of AFDC clients participating in
JOBS that states must meet to receive their full share of federal
funding.  The minimum participation requirements rose from 7 percent
of nonexempt AFDC clients\2 in fiscal year 1991 to 20 percent in
fiscal year 1995.  While most states have met the minimum
participation requirements, the number of AFDC clients participating
in JOBS remains limited.  In fiscal year 1994, about 13 percent of
the 4.6 million adults receiving AFDC were active in JOBS activities
each month. 

Our previous work has shown that most JOBS programs nationwide do not
have a strong employment focus.\3 About one-half of the county JOBS
administrators nationwide that we surveyed stated that they do not
work enough with employers to find jobs for participants.  In
addition, although most of the program officials reported that less
than one-half of their job-ready participants had become employed,
the officials reported little use of subsidized employment or
work-experience programs, options available under JOBS.\4 Various
factors were identified that contribute to the lack of a strong
employment focus in some JOBS programs.  For example, the performance
measurement system for JOBS holds states responsible for the number
and type of AFDC clients participating in JOBS activities but not for
the number who get jobs or earn their way off AFDC.  In addition,
county JOBS administrators cited insufficient staff as a major
obstacle to implementing or expanding the use of tools such as
subsidized employment and work-experience programs.  JOBS
administrators also reported that labor market conditions such as
high unemployment and low job growth hindered their efforts to get
jobs for clients. 


--------------------
\1 However, a much larger proportion of those receiving AFDC at a
given point in time--an estimated 76 percent--receive benefits for 5
years or more.  The difference is due to the fact that as longer-term
recipients accumulate on the welfare rolls as time passes, they end
up accounting for a large percentage of recipients on the welfare
rolls at any given point in time.  See Harold Beebout, Jon Jacobson,
and LaDonna Pavetti, The Number and Characteristics of AFDC
Recipients Who Will Be Affected by Policies to Time-Limit AFDC
Benefits (paper presented at the Annual Research Conference of the
Association for Public Policy and Management, Chicago, Oct.  29,
1994). 

\2 AFDC clients 16 through 59 years old are considered nonexempt
unless they are ill or incapacitated, working 30 hours or more per
week, attending high school, or caring for children under 3 years old
(1 year old at state option).  However, teenage parents who have not
completed high school and have children under 3 years old are also
nonexempt. 

\3 See Welfare to Work:  Most AFDC Training Programs Not Emphasizing
Job Placement (GAO/HEHS-95-113, May 19, 1995) and Welfare to Work: 
Current AFDC Program Not Sufficiently Focused on Employment
(GAO/HEHS-95-28, Dec.  19, 1994). 

\4 JOBS programs can provide subsidies to employers to hire AFDC
clients, who then receive a paycheck from their employer.  In a
community work experience, clients work in newly created positions
with an employer serving a public purpose; they are not hired by the
employer, but receive an AFDC benefit check. 


   STATES EXPERIMENT WITH THEIR
   WELFARE PROGRAMS
---------------------------------------------------------- Chapter 1:2

Under section 1115 of the Social Security Act, HHS is authorized to
grant states waivers of certain statutory requirements governing the
AFDC program.  This authority is intended to give states the
flexibility to test innovations designed to help their programs
better meet the objectives of the act.  The conditions of the waivers
require that states have an independent organization rigorously
evaluate the outcomes of their welfare reform projects and that these
projects be cost neutral to the federal government.  HHS assesses
cost neutrality over the life of a project, rather than on a
year-by-year basis, because many projects involve making up-front
investments with the expectation of achieving savings in later years. 

Between 1992 and 1995, 36 states received approval from HHS to
implement one or more projects.  These projects include a wide
variety of provisions, such as those designed to encourage work,
increase parents' responsibility for meeting their children's needs,
and restrict eligibility for benefits.  Thirty-one of these states
were granted federal waivers to experiment with one or more of the
three provisions discussed in this report:  time limits, work
requirements, and family caps.  As shown in table 1.1, 23 states
received waivers to experiment with time limits, 24 states for work
requirements, and 13 states for family caps, according to HHS. 



                         Table 1.1
          
             States Granted Federal Waivers to
               Experiment with Selected AFDC
                    Provisions, 1992-95

                                        Work
State              Time limits  requirements   Family caps
----------------  ------------  ------------  ------------
Arizona                      X             X             X
Arkansas                                                 X
Colorado                     X
Connecticut                  X             X
Delaware                     X             X             X
Florida                      X             X
Georgia                      X             X             X
Hawaii                                     X
Illinois                     X             X             X
Indiana                      X             X             X
Iowa                         X
Maryland                     X                           X
Massachusetts                X             X             X
Michigan                     X             X
Mississippi                                X             X
Missouri                     X             X
Montana                      X             X
Nebraska                     X             X             X
New Jersey                                               X
North Dakota                 X
Ohio                                       X
Oklahoma                     X             X
Oregon                                     X
South Carolina               X             X
South Dakota                 X             X
Vermont                      X             X
Virginia                     X             X             X
Washington                   X
West Virginia                              X
Wisconsin                    X             X             X
Wyoming                                    X
----------------------------------------------------------
Source:  U.S.  Department of Health and Human Services. 


   FEDERAL WELFARE REFORM
   PROPOSALS
---------------------------------------------------------- Chapter 1:3

In recent years, several proposals have been introduced in the
Congress to reform welfare.  President Clinton's proposal, which was
introduced in 1994 but not brought to a vote in the Congress, would
have time-limited cash welfare benefits and provided subsidized jobs
to clients unable to find work on their own.  After the congressional
elections in 1994, the 104th Congress developed its own welfare
reform proposal.  The Personal Responsibility and Work Opportunity
Act of 1995 (H.R.  4), the compromise legislation worked out by House
and Senate conferees, was passed by both houses of the Congress in
December 1995.  The President vetoed the legislation in January 1996,
citing, among other reasons, that it did not provide enough funding
for child care. 

H.R.  4 would have ended the individual entitlement to benefits and
the payment of federal matching funds to states.  Instead, each state
would have received a block grant to provide temporary assistance for
needy families.  These block grants would have provided states fixed
annual federal allocations and increased their flexibility in
operating their programs.  H.R.  4 would have limited families'
lifetime receipt of benefits to 60 months (whether or not
consecutive), but allowed states to provide hardship exceptions in
limited cases.  In addition, the legislation would have required
parents to engage in work after 24 months of receiving assistance
(whether or not consecutive) or earlier, if a state determined that
the parent was ready to engage in work.  Furthermore, the
legislation's family cap provision would have banned the provision of
cash assistance for additional children born to families already
receiving welfare, unless states decided not to adopt such a
provision. 

Negotiations for a compromise agreement on welfare reform have
continued among congressional leaders, the President, and state
governors.  In May 1996, the Personal Responsibility and Work
Opportunity Act of 1996, a revised version of H.R.  4, was introduced
in the Congress.  As introduced, the proposal includes time-limited
benefit and work requirement provisions similar to those in H.R.  4,
but not a family cap provision.  The administration's revised welfare
reform proposal, the Work First and Personal Responsibility Act of
1996, was introduced in the Congress in June 1996. 


   OBJECTIVES, SCOPE, AND
   METHODOLOGY
---------------------------------------------------------- Chapter 1:4

The Chairman of the House Subcommittee on Human Resources, Committee
on Ways and Means, asked us to review states' early experiences with
implementing welfare reforms under federal waivers, believing that
this information would be useful to other states as they prepare to
face the challenges of welfare reform.  Specifically, the Chairman
requested that we examine the approaches that states took and issues
they encountered in implementing three key provisions:  time limits,
work requirements, and family caps.  Because the states that we
reviewed made relatively few management or service delivery changes
to implement their family cap provisions, this report focuses
principally on approaches states used and issues they encountered in
implementing time limits and work requirements. 

To accomplish our objectives, we reviewed the implementation
experiences of Florida, Indiana, New Jersey, Virginia, and Wisconsin. 
The criteria we used to select states included obtaining a range in
the length of time states' approved waivers had been in effect,
selecting some states whose waivers included all three provisions,
and avoiding duplication of existing studies.  We met with state
program officials, county program administrators, and caseworkers in
Florida, Indiana, Virginia, and Wisconsin using a semistructured
interview guide that we developed.  Our site visits included
interviews with officials in the following counties:  Alachua and
Escambia (Florida); Marion, Scott, and Vigo (Indiana); Fauquier and
Culpeper (Virginia); and Pierce and Fond du Lac (Wisconsin).  We
contacted New Jersey state officials by telephone to obtain
information on the state's implementation experiences.  In addition,
we examined the terms and conditions of the states' approved waivers
and other written materials about their welfare reform programs. 
This report does not examine the outcomes of the states' welfare
reform programs, such as cost implications and effects on caseloads,
because sufficient data are not yet available. 

We conducted our work between July 1995 and May 1996 in accordance
with generally accepted government auditing standards. 


STATES MAKE MAJOR CHANGES TO
DESIGN OF THEIR WELFARE PROGRAMS
============================================================ Chapter 2

The five states we reviewed made major changes to the design of their
welfare programs through waivers of federal statutory requirements. 
These changes include provisions that require some clients to work,
set time limits on cash assistance, and prohibit the payment of cash
benefits for additional children born to families already receiving
AFDC.  The five states' welfare reform programs vary in such features
as the length of time they have been under way, their geographic
scope of implementation, and the content of their provisions.  States
implemented their family cap provisions with relatively few
management or service delivery changes, but made more substantial
changes in implementing their work requirement and time-limited
provisions, as discussed in the following chapters. 


   OVERVIEW OF FIVE STATES'
   WELFARE REFORM PROVISIONS
---------------------------------------------------------- Chapter 2:1

Table 2.1 provides an overview of the five states' time-limited
benefit, work requirement, and family cap provisions.  New Jersey's
program, which has a family cap provision but no time limits or work
requirements, has been under way the longest, since October 1992. 
The programs in Florida, Indiana, Virginia, and Wisconsin have time
limits and work requirements, and all but Florida's have family caps. 
Among these four states, Florida's program has been under way for the
longest time (since Feb.  1994) and Virginia's the shortest (since
July 1995). 



                                    Table 2.1
                     
                       Key Waiver Provisions of the States
                                     Reviewed

Program and
geographic scope    Time-limited
(start date)        benefits            Work requirements   Family cap
------------------  ------------------  ------------------  --------------------
Florida
--------------------------------------------------------------------------------
Family Transition   Most nonexempt      Employability       None
Program--2          clients limited to  plans developed
counties\a (2/94)   24 months of cash   with clients
                    benefits in a 60-   specify the
                    month period; some  education,
                    to 36 months in a   training, and work
                    72-month period     activities they
                                        are expected to
                                        complete


Indiana
--------------------------------------------------------------------------------
Indiana Manpower    Clients assessed    Clients granted an  No cash benefit for
Placement and       to be training-or   exemption from the  a child born more
Comprehensive       job-ready, limited  36-month period of  than 10 months after
Training Program    to 24 months of     ineligibility       program start date
(IMPACT)--          cash benefits       following the 24-   or date of
statewide (5/95)    followed by 36-     month time limit    application for
                    month period of     will be expected    AFDC, with
                    ineligibility       to participate in   exceptions
                                        a community work
                                        experience program
                                        and in job search


New Jersey
--------------------------------------------------------------------------------
Family Development  None                None                No cash benefit for
Program--                                                   a child born 10
statewide (10/92)                                           months or more after
                                                            program start date
                                                            or date of
                                                            application for
                                                            AFDC, with
                                                            exceptions


Virginia
--------------------------------------------------------------------------------
Virginia            Nonexempt clients   Nonexempt clients   No cash benefit for
Independence        limited to 24       are required to     a child born or
Program--           months of cash      participate in      adopted more than 10
eligibility         benefits in a 60-   work activities     months after the
provisions          month period        within 90 days of   later of (1) month
implemented                             signing personal    of first AFDC
statewide; work                         responsibility      payment, (2) program
requirements and                        agreements          start date, or (3)
time limits being                                           date of family cap
phased in                                                   notice, with
statewide over 4                                            exceptions
years (7/95)


Wisconsin
--------------------------------------------------------------------------------
Work Not Welfare-   Nonexempt clients   After the first     No cash benefit for
-2 counties (1/     limited to 24       month of            a child born more
95)                 months of cash      eligibility,        than 10 months after
                    benefits in a 48-   clients must earn   initial receipt of
                    month period,       their benefits      AFDC, with
                    followed by 36-     through education,  exceptions
                    month period of     training, or work
                    ineligibility       activities; after
                                        12 months, they
                                        must engage in
                                        work activities
--------------------------------------------------------------------------------
Note:  In addition to the programs cited here, Virginia and Wisconsin
have implemented other welfare reform programs authorized through
federal waivers. 

\a Since our site visit, Florida implemented the Family Transition
Program in six additional counties. 

Source:  Terms and conditions of the states' approved waivers and
information obtained from officials in these states. 


   WELFARE REFORMS IMPLEMENTED ON
   DIFFERENT GEOGRAPHIC SCOPES
---------------------------------------------------------- Chapter 2:2

The geographic scope of states' implementation of their welfare
reforms ranged from statewide to selected counties.  Indiana and New
Jersey implemented their welfare reform programs statewide.  Indiana
had an AFDC caseload of about 56,000 and New Jersey about 120,000 in
September 1995.  Virginia implemented its family cap and other new
eligibility provisions statewide in 1995 and is phasing in its work
requirement and time limit statewide over a 4-year period.  The state
began by implementing the full welfare reform program in five rural
counties.  We visited two of these counties, Culpeper and Fauquier,
whose AFDC caseloads totaled about 400 at the time of our review. 
Virginia implemented its program in 19 counties and six cities within
the first year of operation, which represented about 23 percent of
the state's AFDC caseload.  Florida and Wisconsin were each operating
their programs in two counties when we made our site visits.  In
Florida, Alachua County had an AFDC caseload of about 4,000 and
Escambia County about 5,900, which combined represented about 4
percent of Florida's total caseload.  Wisconsin's program operated in
Fond du Lac and Pierce Counties, which had a combined AFDC caseload
of about 500 at the time of our site visits--approximately 1 percent
of the state's caseload. 


   STATES' WORK REQUIREMENT AND
   TIME LIMIT PROVISIONS VARY
---------------------------------------------------------- Chapter 2:3

The work requirements of the states' welfare reform programs differ
with regard to the time by which clients must begin engaging in work
and what counts as a work activity.  Virginia requires clients to
engage in work within 90 days of signing personal responsibility
agreements, Wisconsin after clients have been in the welfare reform
program 12 months, and Indiana after they are granted an extension to
the time limit on benefits.  In Florida, the timing of work
requirements depends on the terms of the employability plan developed
for each client.  The states also differ about which activities will
satisfy their work requirements.  For example, work activities that
meet Virginia's requirement include unsubsidized employment,
subsidized employment, and community work experience.  In contrast,
Indiana's work requirement specifies that clients must participate in
a community work experience. 

None of the programs in the states with time limits had been under
way long enough for any clients to have reached the limits when we
conducted our site visits.  The programs' time limit provisions
stipulate that in certain situations clients who reach the limits may
continue to receive public assistance.  In Florida, clients who have
participated but reached the end of their time limits without having
been able to obtain or hold a job will be provided an opportunity to
work in a subsidized job.  Indiana, Virginia, and Wisconsin permit
extensions of their time limits in limited circumstances.  For
example, clients in Wisconsin would be eligible for an extension if
the local labor market precludes a reasonable job opportunity, they
are unable to work because of disability or incapacity, or they need
to care for a disabled dependent. 


   FAMILY CAP PROVISIONS
   IMPLEMENTED WITH RELATIVELY FEW
   MANAGEMENT OR SERVICE DELIVERY
   CHANGES
---------------------------------------------------------- Chapter 2:4

The family cap provisions enacted by Indiana, New Jersey, Virginia,
and Wisconsin generally stipulate that no cash benefits will be
provided for children born more than 10 months after the program
start date or the date of a family's application for or initial
receipt of AFDC.  These four states implemented their family cap
provisions with relatively few management or service delivery
changes.  Staffs in these states informed clients about their family
cap provisions through mailed notices, personal responsibility
agreements, or face-to-face meetings.  To further emphasize the
significance of this provision to clients, Wisconsin also trained
staffs to discuss with clients the impact that an additional child
would have on their budgets and ability to work. 

In implementing their family cap provisions, Indiana and Wisconsin
also sought to increase clients' access to family planning services. 
Indiana approached this by contracting with health maintenance
organizations to provide family planning services to AFDC clients
under the state's new Medicaid program.  Wisconsin, which instituted
a family cap provision in its Work Not Welfare counties on January 1,
1995, and statewide a year later, budgeted funds for county grants to
provide family planning education to clients. 

Only one of the four states we reviewed identified any issues
associated with implementing the family cap.  New Jersey encountered
an issue with regard to the treatment of income from other sources,
such as child support payments, received on behalf of children
subject to the family cap.  Under federal rules, states collect child
support payments for AFDC families.  Families receive the first $50
of child support collected each month and the state retains a portion
of the remainder, which is based on its share of AFDC benefit
payments.  Since children subject to the family cap do not receive
AFDC benefits, state officials in New Jersey believe that the family
should receive the entire child support payment made on behalf of
these children.  However, New Jersey has received conflicting
information from officials within HHS about the appropriate treatment
of child support payments for these children, according to state
officials.  New Jersey officials have requested clarification from
HHS on this issue. 

While the family cap provision did not pose major implementation
challenges for these states, the important issue of what effect the
provision might have remains unsettled.  An analysis by the evaluator
of New Jersey's welfare reform program found no statistically
significant difference between the birth rates of AFDC mothers who
were subject to the family cap in New Jersey and those who were not. 
However, the evaluator noted that this finding should be regarded as
preliminary because the analysis was based on limited data.\5 New
Jersey officials noted that, while there has been no statistically
significant difference in birth rates between the experimental and
control groups, there was a 12-percent decrease in births for both
groups. 


--------------------
\5 Michael J.  Camasso, The State University of New Jersey:  Rutgers,
Letter to Rudolf Myers, New Jersey Department of Human Services (New
Brunswick, N.J.:  June 14, 1995).  For a discussion of this analysis
and some of the data issues, see the presentations by Michael
Camasso, Rudolph Myers, and Peter Rossi in Addressing Illegitimacy: 
Welfare Reform Options for Congress, a conference held in Washington,
D.C., on Sept.  11, 1995, by the American Enterprise Institute for
Public Policy Research. 


STATES VIEW CHANGING STAFFS'
CULTURE AND CLIENTS' EXPECTATIONS
AS CRITICAL TO WELFARE REFORM
============================================================ Chapter 3

Florida, Indiana, Virginia, and Wisconsin made fundamental changes to
the operations and management of their welfare programs to implement
time limits on benefit receipt and work requirements.  These states
viewed changing the culture of welfare office staffs and the
expectations of welfare clients as critical to their welfare reform
efforts.  Time limits and work requirements increase the importance
of helping clients obtain employment quickly, which often was not a
priority for staffs or clients under the traditional welfare program. 
These states used various approaches to increase staffs' focus on
helping clients obtain jobs and motivate clients to take greater
responsibility for moving off welfare. 


   INCREASING STAFFS' FOCUS ON
   CLIENTS' EMPLOYABILITY
---------------------------------------------------------- Chapter 3:1

Traditionally, staffs have been trained to focus on assuring accurate
eligibility determinations and benefit payments and enrolling clients
in education, training, and work activities.  However, they have not
always been directed to place a strong emphasis on placing clients in
jobs.\6 To facilitate implementing their new work requirements and
time limits, the states we reviewed are using diverse approaches to
concentrate more of their staffs' energies on helping clients obtain
employment.  These approaches include setting job placement goals,
working to reduce staffs' preoccupation with clients' barriers to
self-sufficiency, and having staffs explore options other than
welfare with persons applying for benefits. 


--------------------
\6 See GAO/HEHS-95-113, May 19, 1995. 


      ESTABLISHING JOB PLACEMENT
      GOALS AND MONITORING
      PERFORMANCE
-------------------------------------------------------- Chapter 3:1.1

To help welfare staffs understand its new emphasis on moving clients
into work quickly, Indiana established performance measures linked to
the state's welfare reform objectives.  Before introducing its reform
program, the state's JOBS program was oriented to educating and
training welfare clients for better-paying jobs--a human capital
investment approach.  To signal the shift in emphasis of its welfare
reform program, staffs were instructed to follow Indiana's new Work
First philosophy:  to make getting a job the first priority for
clients, supplemented by education and training.  The state developed
a script for staffs to use at the initial eligibility meeting with
applicants; the script is designed to focus the meeting on job
placement and assistance rather than entry into the welfare system. 

Indiana established annual job placement goals for each county office
to help motivate staffs to follow the Work First philosophy. 
Counties report monthly to the state on their performance in meeting
their job placement goals, and county directors' annual performance
evaluations are based in part on their job placement performance. 
For the first 10 months of the state's 1996 fiscal year, 88 of
Indiana's 92 counties were meeting their annual job placement goals,
according to state officials.  To reinforce job placement goals, some
counties set monthly goals for the number of clients staffs should
refer to contractors for job placement.  A year earlier, Indiana had
prepared for the welfare reform program by adopting performance-based
contracts for job placement contractors.  Program managers told us
that the job placement goals have helped focus staffs on clients'
employment and generated healthy competition among staffs and
counties. 

Working to meet the job placement goals generated some early
implementation issues in Marion County, which includes the state's
largest city, Indianapolis.  Local job placement contractors voiced
concerns that they were not receiving a sufficient number of client
referrals, according to the county program director.  The county
identified two sources of this problem.  First, many clients who were
referred did not show up for their scheduled orientations with the
contractors, who would work only with those clients who did appear. 
To address this problem, the state changed the wording of its
contracts with job placement contractors to specify that they were
expected to work with all referred clients, including those who
failed to attend their orientations.  In addition, the county had
clerical staff call clients to remind them of their scheduled
orientations.  Second, staff encountered difficulties in developing
an initial pool of clients to refer to job placement contractors. 
Typically, a 20- to 40-day period elapsed before staff could assign
clients assessed to be job-ready to any program activities, including
job placement.  This delay arose because clients assessed to be
job-ready are subject to time-limited benefits and are provided an
opportunity to appeal their assessment.  The county sought to
increase the number of referrals to job placement contractors through
such measures as referring clients who had not yet been assessed. 


      REDUCING STAFFS' FOCUS ON
      CLIENTS' BARRIERS
-------------------------------------------------------- Chapter 3:1.2

Wisconsin and Florida faced a challenge implementing their reform
programs, because some staff were so preoccupied with first
addressing clients' barriers to self-sufficiency that they were not
devoting enough effort to quickly placing clients in jobs.  Job
placement is of greater importance in a time-limited benefit
environment than under the traditional AFDC program.  These states
sought to shift their staffs' focus to looking at the positive
qualities of their clients rather than the reasons clients could not
work, such as their lack of self-esteem or work experience.  One
county in Wisconsin worked to change staff culture through the
persistent efforts of local managers, and Florida responded by
revising the focus of the activity plans staff develop for clients. 

The director of the welfare office in Fond du Lac County, Wisconsin,
told us that he had devoted much of his implementation efforts to
encouraging staff to stop focusing on clients' barriers to
self-sufficiency and instead focus on their positive characteristics
and employability.  He explained that the traditional AFDC program
had a procedural focus--staff helped clients complete paperwork to
establish and maintain benefit eligibility.  However, to implement
Wisconsin's welfare reform program, staff were encouraged to empower
their clients to become self-sufficient.  The director illustrated
the shift in focus that has occurred by citing an example of how
staff treat Hmong clients,\7 a population that faces psychological,
language, and other barriers.  Before Wisconsin's welfare reform
program, these clients typically were placed in English-as-a-
second-language classes and not assigned to work activities. 
However, since the reform program began, Fond du Lac County managers
have encouraged staff to find ways to place Hmong clients in jobs. 
Staff responded by hiring Hmong job coaches to temporarily accompany
these clients to work and help them handle any problems that arise,
such as communicating with others on the job.  Other ways that the
county approached the language issue were to place many of the Hmong
in production jobs that do not require English language skills or in
companies with bilingual staff. 

Florida worked to change staffs' culture by revising the focus of the
activity plans staffs develop for clients in the welfare reform
program.  Initially, staffs developed two plans for each client:  (1)
a self-sufficiency plan establishing measures to address various
barriers clients faced, such as inadequate shelter, lack of child
care, or substance abuse and (2) an employability plan specifying
activities designed to result in employment.  The self-sufficiency
plan, however, tended to cause some staff to focus too much on
clients' barriers and why clients were unable to engage in work
activities, according to Florida's welfare reform administrator. 
When clients met with staff to complete their employability plan,
about 10 to 14 days after development of the self-sufficiency plan,
staff and clients tended to focus on the barriers to employment
identified in the self-sufficiency plan.  Staff were attempting to
first address all the barriers clients faced and then help them find
employment, instead of initially focusing on how to move them quickly
into employment.  In response, Florida combined the employability and
self-sufficiency plans into a single plan that makes clients'
employability the first order of business for staffs. 


--------------------
\7 The Hmong are refugees from Laos. 


      HAVING STAFFS EXPLORE
      OPTIONS OTHER THAN WELFARE
      WITH APPLICANTS
-------------------------------------------------------- Chapter 3:1.3

Wisconsin helped staffs change the way they think about assisting
clients by training them to explore options other than welfare with
persons applying for AFDC benefits.  Before the state's work
requirements and time-limited benefit reforms, staffs automatically
processed applicants to determine their eligibility for benefits. 
Under the reforms, staffs are instructed to help clients determine
whether applying for benefits is the most appropriate choice.  Staffs
encourage applicants to consider the advantages of not starting the
24-month time clock for AFDC benefits and explore other options that
might enable them to support their families.  These options may
include obtaining a job or increasing hours at their current job,
obtaining child support, or taking advantage of other resources, such
as housing assistance or food stamps.  Staffs also assist applicants
who decide to pursue options other than AFDC by providing various
services, such as suggesting job possibilities and making referrals
to specialists who can help them obtain child support.  In an early
study, Wisconsin reported that Fond du Lac County and Pierce County
diverted about one-third of the applicants--over 300 families--from
applying for AFDC benefits in the first 8 months of the state's
welfare reform program.  About 45 percent of diverted applicants
indicated that they would try to support their families through
obtaining child support, obtaining a job, moving in with others who
could help support them, or other means.\8

Virginia's welfare reform program includes a diversion program that
is quite different from the one in Wisconsin.  To help divert
individuals from long-term public assistance, welfare office staffs
in Virginia examine with each AFDC applicant the reasons he or she is
applying for assistance.  Families who are in crisis but are
otherwise self-sufficient are offered a one-time payment, equivalent
to up to 120 days of AFDC benefits, made directly to a provider for
services such as housing or transportation.  Families that receive a
diversion payment are ineligible for AFDC benefits for 160 days.  In
the first 9 months of Virginia's welfare reform program, 261 cases
received diversion payments; in about two-thirds of these cases, the
payments were used for housing or utilities, according to state data. 


--------------------
\8 Of the remaining applicants who were diverted, 15 percent moved
out of state or out of the pilot counties; 15 percent wanted to avoid
the work and training requirements after considering their family
needs, such as a full-time college student who did not want to be
away from the family additional hours; and 25 percent did not
indicate a reason for not following through with their applications
for AFDC.  See Division of Economic Support, Wisconsin Department of
Health and Social Services, Work Not Welfare:  Progress Report,
January-August 1995 (Madison, Wis.:  Dec.  1995). 


   PREPARING CLIENTS TO ASSUME
   GREATER RESPONSIBILITY
---------------------------------------------------------- Chapter 3:2

While the states we reviewed devoted considerable effort to
increasing staffs' focus on clients' employability, they also worked
to change clients' expectations about welfare.  For example, an
Indiana official told us that a key challenge for the state was to
learn how to break the entitlement mentality--a view that public
assistance is a guaranteed benefit.  With time limits ending the
guarantee of benefits, the states believed that they needed to find
ways to help all clients realize that finding a job was in their best
interest.  The states used various approaches to encourage greater
client responsibility for moving off welfare, including setting
higher expectations, expanding financial incentives to work and save
money, and strengthening sanctions for dealing with noncompliant
clients. 


      ENCOURAGING CLIENTS THROUGH
      SETTING HIGHER EXPECTATIONS
-------------------------------------------------------- Chapter 3:2.1

Clients in the states' welfare reform programs are being asked to
take greater responsibility for their lives through working, managing
money, and meeting their families' needs.  States have used several
approaches to establish higher expectations, such as requiring
clients to sign personal responsibility agreements and changing the
way benefits are paid. 


         REQUIRING CLIENTS TO SIGN
         PERSONAL RESPONSIBILITY
         AGREEMENTS
------------------------------------------------------ Chapter 3:2.1.1

Florida, Indiana, Virginia, and Wisconsin require clients in their
welfare reform programs to sign personal responsibility agreements
that specify the responsibilities clients must assume in exchange for
receiving public assistance (see fig.  3.1).  The responsibility to
participate in program activities designed to culminate in employment
is one of the major expectations set by these agreements.  For
example, Indiana's agreement stipulates that public assistance is
intended to be temporary, not a way of life, and that becoming
self-sufficient through work is expected to be the personal goal of
clients.  More than 39,000 clients in Indiana had signed a personal
responsibility agreement as of the end of April 1996, and about 3,100
clients were sanctioned for failure to sign an agreement, according
to Indiana officials. 

   Figure 3.1:  Personal
   Responsibility Agreements

   (See figure in printed
   edition.)



(See figure in printed edition.)

The personal responsibility agreements also establish expectations of
greater family responsibility for clients.  For example, Florida's
agreement requires clients with school-age children to have a
conference each grading period with school officials--unless there is
a good reason for not doing so--and have preschool children
immunized.  In Indiana and Virginia, minor parents are required to
live with their parents or in some other setting supervised by an
adult and also attend school. 


         CHANGING THE WAY BENEFITS
         ARE PAID
------------------------------------------------------ Chapter 3:2.1.2

Wisconsin set higher expectations for clients by establishing a
benefit payment system designed to more closely resemble the world of
a day's pay for a day's work.  Clients in Wisconsin's welfare reform
program earn their benefits by participating in education, training,
or work activities for an assigned number of hours per week.  If they
fail to complete the assigned number of hours without having a good
reason, their benefits are proportionately reduced.  For example, if
a client assigned to participate 40 hours completes only 30 hours,
the client's benefits are reduced the equivalent of 10 hours times
the minimum wage.\9 In contrast, a client who fails to participate in
JOBS activities under Wisconsin's traditional AFDC program is subject
to a fixed benefit reduction equal to only the client's portion of
the family's AFDC benefit.  During the last 5 months of 1995, an
average of 57 cases each month in Wisconsin's welfare reform program
had their benefits reduced because of failure to complete assigned
hours of activity without good cause, based on state data. 

In addition, Wisconsin "cashed-out" food stamp benefits.  AFDC
clients eligible for food stamps do not receive the standard coupons,
but instead have the value of their food stamps included in their
AFDC benefit checks.\10 This places greater responsibility on clients
to determine how best to meet their families' needs.  To help assure
that benefits are used as effectively as possible to provide adequate
food for their families, clients are required to participate in 12
hours of family nutrition education.\11


--------------------
\9 Under this formula, clients who do not complete any hours of
assigned activities could have their benefits reduced to nothing. 

\10 Food stamp benefits are thus also subject to reduction if clients
who are not exempt from Food Stamp program employment and training
requirements do not complete their assigned hours of activity. 
However, the food stamp portion of a client's benefit may not be
reduced below $10. 

\11 Wisconsin established a similar pay-for-performance system for
AFDC clients statewide in its Pay for Performance/Self-Sufficiency
First demonstration project, implemented on March 1, 1996. 


      MOTIVATING CLIENTS BY
      INCREASING FINANCIAL
      INCENTIVES
-------------------------------------------------------- Chapter 3:2.2

Setting higher expectations for clients may have limited
effectiveness in ending welfare dependency if they do not perceive
that they will be better off working.  The states we reviewed
increased financial incentives by revising the provisions that
regulate the treatment of clients' earned income and assets because
they did not believe these provisions provided sufficient incentive
to clients to work or save money. 

Florida, Indiana, Virginia, and Wisconsin modified their provisions
relating to the treatment of earned income to permit clients to keep
more of their AFDC benefits or retain them for longer periods of time
while working.  Under federal law, clients' benefits are reduced and
eventually terminated as their earned income increases.  However,
clients who obtain employment are eligible to have some of their
earned income disregarded in calculating their AFDC benefits.  As
shown in table 3.1, Florida and Virginia increased the amount of
earned income that can be disregarded.  Indiana modified its
provision to provide that clients' benefits would be calculated at
the time of their entry into employment and would remain at that
level even if their earnings increased, subject to certain limits.\12
To help clients make a more stable transition to the workforce,
Florida, Virginia, and Wisconsin extended the length of time that
their income disregards would be available.  This change responds to
concerns that families may experience a significant decline in their
standard of living when benefits are reduced or discontinued after
existing federal income disregards expire. 



                         Table 3.1
          
            States Revised AFDC Rules on Income
           Disregards, Asset Limits, and Vehicle
                        Asset Limits

                                           Asset
                                          limits   Vehicle
                                      (excluding     asset
Program     Income disregards          vehicles)    limits
----------  ------------------------  ----------  --------
Current federal AFDC law
----------------------------------------------------------
            $90 of earned income           1,000     1,500
             disregarded monthly; in
             addition, $30 of earned
             income and 1/3 of
             remainder disregarded
             for first 4 months, and
             $30 of earned income
             disregarded for next 8
             months

Florida
----------------------------------------------------------
Family      $200 of earned income         $5,000  $8,150\a
 Transition  and 50 percent of
 Program     remainder disregarded
             each month with no time
             limit other than
             overall time limit on
             benefits

Indiana
----------------------------------------------------------
Indiana     Clients' benefits              1,500        No
 Manpower    calculated at time of                  change
 Placement   entry into employment
 and         and frozen at that
 Comprehen   level until their time
 sive        limits end or their
 Training    monthly family incomes
 Program     equal or exceed federal
             poverty guidelines

Virginia
----------------------------------------------------------
Virginia    All earned income              5,000     7,500
 Independe   disregarded for up to
 nce         24 months if earnings
 Program     plus AFDC benefits are
             equal to or less than
             federal poverty
             guidelines

Wisconsin
----------------------------------------------------------
Work Not    $90 of earned income              No        No
 Welfare     disregarded monthly; in    change\b  change\c
             addition, $30 of earned
             income and 1/6 of
             remainder disregarded
             each month with no time
             limit other than
             overall time limit on
             benefits
----------------------------------------------------------
\a Florida's waiver permits the state to increase this amount
annually. 

\b Some clients in Wisconsin's Work Not Welfare program are part of
an experimental group in a statewide Special Resource Account
demonstration project that allows clients to set aside up to $10,000
for the purpose of educational advancement or improving
employability. 

\c Some clients in Wisconsin's Work Not Welfare program are part of
an experimental group in a statewide Vehicle Asset Limit
demonstration project that allows clients to have vehicle assets of
up to $2,500. 

Source:  Waiver terms and conditions of the states' welfare reform
programs and federal statutory provisions. 

As shown in table 3.1, Florida, Indiana, and Virginia modified their
asset limits or vehicle asset limits.  Higher asset limits enable
clients to save money that can be used to deal with situations that
might otherwise undermine their transition off welfare, such as a
vehicle breakdown.  By permitting clients to own more valuable cars,
higher vehicle asset limits may enable them to obtain more reliable
sources of transportation to work. 

Virginia's provisions constitute an especially broad expansion of
work incentives for clients.  The state disregards all earned income
for up to 24 months as long as earnings plus AFDC benefits are equal
to or less than federal poverty guidelines.  Moreover, families
receiving AFDC can establish savings accounts of up to $5,000 and own
motor vehicles with a fair market value of up to $7,500.  In the view
of state officials, increasing financial incentives to clients who
get jobs is a critical change that will help ensure the long-term
success of the state's welfare reform initiative.  Virginia officials
believe that disincentives to work were intrinsic in previous
programs because AFDC benefits were immediately reduced or the case
closed when clients became employed.  In its welfare reform program,
the state allows clients to use lower-paying jobs as stepping-stones
to self-sufficiency through the increased amount of disregarded
income combined with the increased allowable amounts of savings and
vehicle assets. 


--------------------
\12 Indiana also freezes the amounts of food stamp benefits for the
first 6 months AFDC clients are employed. 


      STRENGTHENING SANCTIONS TO
      ENCOURAGE CLIENT COMPLIANCE
-------------------------------------------------------- Chapter 3:2.3

Expanding financial incentives for clients to work and save may
encourage some clients to comply with program requirements.  Under
federal law, states can sanction clients who fail to participate in
JOBS activities without good cause by reducing their AFDC benefits. 
The sanction reduces only the adult's portion of the AFDC benefit,
not the portion designated for children.  The first sanction lasts
until the client agrees to participate, the second for a minimum of 3
months, and the third for at least 6 months.  All the states we
reviewed determined that they needed stronger measures to deal
effectively with clients who fail to meet their participation
requirements.  As discussed below, they strengthened their sanctions
in various ways, such as including food stamp benefits in the
sanctions, increasing the size of the benefit reduction, applying
sanctions more quickly, increasing the length of sanction periods,
and requiring clients to demonstrate compliance before sanctions
would be lifted.\13

Wisconsin strengthened its sanctions by adding clients' food stamps
to the value of their AFDC benefit checks and basing the amount of
these checks on the number of hours of activity clients complete. 
This change responds to a frequently voiced criticism of traditional
AFDC sanctions--namely, that they have little effect on some clients
because their food stamp benefits, which are partly based on the
clients' household income, are increased to compensate for much of
the reduction in their AFDC cash benefits. 

Virginia increased the size of the benefit reduction and made it
easier to apply sanctions more quickly in its welfare reform program. 
For the first sanction, a family's entire AFDC benefit is terminated
for 1 month or until the client complies, whichever is longer.  A
family's entire benefit is terminated a minimum of 2 months for the
second sanction and a minimum of 3 months for the third and
subsequent sanctions.\14 In addition, clients can be sanctioned more
quickly because Virginia eliminated its conciliation process.  This
process had provided noncompliant clients an opportunity to avoid
receiving a sanction by demonstrating compliance or indicating that
they intended to comply.  The state eliminated the conciliation
process because it found the process administratively burdensome and
considered the sanction to be too far removed from the act of
noncompliance to affect clients' behavior.\15

Indiana increased the length of sanction periods and imposes
sanctions more frequently in its welfare reform program.  The first
sanction now applies for a minimum of 2 months, the second for at
least 12 months, and the third for a minimum of 36 months, regardless
of when the clients rectify the noncompliance.  In addition, Indiana
does not allow individuals to apply for AFDC for 90 days after
voluntarily quitting employment.  The number of AFDC clients
sanctioned in the first 5 months of program implementation was about
150 percent higher than the number sanctioned the previous year for
the same months.  Concerned about the increase in the number of
sanctions, the director of Indiana's Division of Family and Children
told us that he was considering hiring a consultant to determine the
reasons for clients' noncompliance and recommend ways to increase
their program participation. 

Florida strengthened its sanctions in response to complaints by staff
about clients who game the system.  In some cases, clients would
delay responding to notices of noncompliance until the last possible
day and avoid receiving a sanction by saying that they would agree to
comply, even though they did not always follow through on this
agreement.  Florida now requires clients who are not meeting their
participation requirements to demonstrate compliance for up to 10
days to avoid having sanctions imposed.  In addition, the state
reduced the conciliation period from 21 days to 10 days. 


--------------------
\13 Many of these changes required waivers of federal statutory
requirements. 

\14 The months in which a family's benefits are terminated are
counted as part of the 24 months allowed for receipt of cash
benefits. 

\15 Clients retain the right to appeal sanctions and receive a fair
hearing. 


STATES SOLICIT EMPLOYER AND
COMMUNITY INVOLVEMENT IN REFORMING
WELFARE
============================================================ Chapter 4

As a result of instituting time-limited, employment-focused welfare
reforms, the states we reviewed had to determine how to move clients
more quickly into employment and off welfare.  In response, the
states sought to forge stronger links with employers and community
organizations to take advantage of resources, such as job
opportunities and child care, that these groups could provide.  While
the states had used these resources to some extent in the past, they
made a more systematic effort to solicit employer and community
involvement in their welfare reforms by publicizing their welfare
reform programs, establishing various types of community advisory
groups, and working to improve their ability to enlist employers'
support in finding jobs for clients. 


   MEETINGS AND PROMOTIONAL
   MATERIALS USED TO INFORM
   COMMUNITIES ABOUT WELFARE
   REFORMS
---------------------------------------------------------- Chapter 4:1

One approach states used to generate community interest and
involvement was to disseminate information about the objectives and
key features of their welfare reform programs.  Providing such
information helps educate communities about the roles they can play
to assist reform efforts and the benefits they may achieve from
welfare reform. 


      HOLDING COMMUNITY MEETINGS
-------------------------------------------------------- Chapter 4:1.1

Virginia's Department of Social Services held a statewide summit,
hosted by the governor, to bring together employers, churches, and
employment and training organizations to explain the state's welfare
reform program.  In addition, the department has helped various
localities hold community involvement meetings.  At a community
meeting in Fauquier County, county officials identified areas in
which community organizations could assist the program, such as by
helping provide child care and transportation for clients.  Florida's
two welfare reform pilot counties each established a speakers'
bureau.  County officials have made presentations about the program
to civic and fraternal organizations, social service agencies, and
churches.  In Wisconsin, each pilot county hosted a community
training event, sponsored by the state, to introduce the welfare
reform program to residents, businesses, and service agencies. 
Pierce County, Wisconsin, combined its community training with a job
fair to bring job seekers together with employers.  Indiana officials
have held numerous speaking engagements with organizations throughout
the state to discuss Indiana's welfare reform program. 


      DEVELOPING PROMOTIONAL
      MATERIALS
-------------------------------------------------------- Chapter 4:1.2

States and counties developed various materials to help publicize
their welfare reforms, such as videotapes, brochures, and posters. 
For example, as shown in figure 4.1, Virginia developed different
versions of a videotape for employers, churches and nonprofit
organizations, and clients.  The employer version notes that to
ensure success the state had to reform welfare by involving the whole
community.  Alachua County, Florida, developed a brochure targeted to
businesses and public agencies that explained how its welfare reform
program could help employers reduce their labor costs and improve
their bottom lines.  The brochure emphasizes the program's ability to
provide qualified applicants to meet employers' specific needs and
cites the financial incentives available to employers for hiring
program clients.\16

   Figure 4.1:  Examples of
   Welfare Reform Promotional
   Materials

   (See figure in printed
   edition.)



(See figure in printed edition.)


--------------------
\16 For example, the brochure notes that employers who hire clients
for on-the-job training can be reimbursed up to 50 percent of the
wages paid during training and those who hire clients to fill newly
created positions can be reimbursed a portion of clients' wages. 


   INSTITUTIONALIZING COMMUNITY
   INVOLVEMENT CAN BE DIFFICULT
   BUT BENEFICIAL
---------------------------------------------------------- Chapter 4:2

Each of the states we reviewed sought to take advantage of community
resources by establishing advisory groups that included
representatives from business, government, and community
organizations.  As depicted in table 4.1, the responsibilities of
these groups generally focused on helping clients obtain employment. 
Indiana obtained an especially widespread level of community
involvement, with over 3,000 citizens and officials participating on
92 local welfare reform planning councils throughout the state. 
States encountered various challenges working with community advisory
groups, including determining their appropriate roles, informing
members about the characteristics of welfare clients and the welfare
system, and recruiting a sufficient number of members.  However, the
states generally found that, as they worked to address these
challenges, community involvement provided significant benefits for
the clients in their welfare reform programs, such as better access
to jobs. 



                               Table 4.1
                
                  States Established Various Types of
                   Community Advisory Groups to Help
                       Implement Welfare Reforms

Type and location of advisory
groups                              Responsibilities
----------------------------------  ----------------------------------
Florida
----------------------------------------------------------------------
Community review panels in pilot    Review cases of clients not
counties                            complying with program
                                    requirements and sufficiency of
                                    services provided to them

Enterprise development task force   Develop opportunities for clients
in Alachua County                   to start their own businesses and
                                    help identify and expand training
                                    and job opportunities for clients


Indiana
----------------------------------------------------------------------
Local planning council in each      Identify scope of AFDC clients'
county statewide                    needs and existing community
                                    resources, recommend programs and
                                    resources to assist in providing
                                    services to clients, and compile
                                    list of public service work
                                    opportunities

Welfare-to-work task force in       Help address clients' barriers,
Scott County                        such as difficulties obtaining
                                    transportation and child care


Virginia
----------------------------------------------------------------------
State advisory commission on        Recommend ways to generate jobs
welfare reform                      for clients and evaluate
                                    incentives designed to promote
                                    business participation in welfare
                                    reform

State welfare reform work groups    Explore innovative ways to address
                                    implementation issues, involve the
                                    community in implementation, and
                                    work to create a local seamless
                                    design by involving all staff

Local community advisory groups     Help develop and implement local
                                    plans for welfare reform


Wisconsin
----------------------------------------------------------------------
Community steering committee in     Obtain job and training sites for
pilot counties                      clients; foster clients'
                                    entrepreneurial efforts; serve as
                                    mentors for clients; ensure that
                                    training and education programs
                                    are relevant to community business
                                    needs; coordinate a Children's
                                    Services Network that helps
                                    provide services, such as health
                                    care and food, to children whose
                                    parents lose cash benefits; and
                                    identify child care and shelter
                                    resources and expand child care
                                    availability
----------------------------------------------------------------------
Source:  Written materials on the states' welfare reform programs,
supplemented by information from state and local officials. 


      DETERMINING APPROPRIATE
      ROLES FOR ADVISORY GROUPS
-------------------------------------------------------- Chapter 4:2.1

One challenge some states experienced working with community advisory
groups was helping them determine their appropriate roles.  For
example, the enterprise development task force in Alachua County,
Florida,\17 encountered some uncertainty about its role.  As set out
in program legislation, the task force was to develop opportunities
that emphasize enterprise development for clients.  However, the
legislative language does not elaborate what this role entails.  In
addition, program staff working with the task force expressed
reservations about limiting the role of the task force to helping
clients start their own businesses.  For example, staff voiced
concerns about whether clients would be willing to assume the risks
involved in starting a business and be able to obtain bank financing. 
In light of the more pressing need at the time to develop a range of
training and job opportunities for clients in the program, staff
proposed that the role of the task force be broadened to include
these activities.  Members of the task force agreed and subsequently
focused much of their efforts on these activities.  However, they
have expressed interest in working to develop entrepreneurial
opportunities for clients and have invited speakers to address this
topic at recent task force meetings. 


--------------------
\17 Members of the task force include representatives from private
sector employers and the Job Service Employer Council. 


      INFORMING COMMUNITY MEMBERS
      ABOUT WELFARE CLIENTS AND
      THE WELFARE SYSTEM
-------------------------------------------------------- Chapter 4:2.2

Another challenge states encountered in working with community
advisory groups was informing members about the characteristics of
welfare clients and the welfare system.  For example, counties in
Indiana and Wisconsin faced issues such as addressing members'
misconceptions of welfare clients and members' requests for client
data that were difficult to satisfy. 


         SCOTT COUNTY, INDIANA
------------------------------------------------------ Chapter 4:2.2.1

The mayor of Scottsburg, Indiana, established a welfare-to-work task
force to assist the welfare office in Scott County with implementing
the state's reform program.\18 A welfare office representative who
served on the task force told us that the biggest challenge working
with the task force was informing members about the welfare system
and changing their perceptions of clients.  Task force members
requested that the welfare office survey clients to find out about
barriers clients face as well as their attitudes toward welfare.  The
county welfare director told us that the results of the survey showed
that clients wanted to work and generated enthusiasm among task force
members for supporting the program. 

The community task force has been instrumental in helping obtain job
opportunities for clients, according to the county welfare director. 
For example, the task force sponsored a meeting for representatives
of some of the area's large manufacturers.  Former AFDC clients who
had obtained jobs told their success stories and attendees were
encouraged to provide current AFDC clients opportunities for
employment.  Subsequently, some of these manufacturers hired program
clients (and in some cases waived their General Equivalency Diploma
requirement to enable clients to qualify for employment) and allowed
the welfare office to begin handing out their employment
applications. 


--------------------
\18 Members of the task force include the mayor, county welfare
director, personnel managers of local companies, child care experts,
a welfare office case manager, and members of the local Private
Industry Council. 


         FOND DU LAC COUNTY,
         WISCONSIN
------------------------------------------------------ Chapter 4:2.2.2

Educating members of the community steering committee in Fond du Lac
County, Wisconsin,\19 about welfare clients proved to be a
challenging experience for both the committee members and the county
welfare office.  Some committee members initially knew very little
about the welfare system and were unaware that resources such as
child care assistance and the JOBS program already existed, according
to the director of the county Department of Social Services. 
Committee members wanted to obtain baseline data on the welfare
reform program and determine, for example, how many clients would
require training, jobs, and child care.  Members told us, however,
that the county director often responded to their requests by saying
the data were not available, taking a long time to provide the data,
or providing data in a different format than requested.  Committee
members had difficulty understanding the obstacles the county
director faced in meeting their requests for data.  For example, the
county director told us that obtaining data from the state's
automated welfare system was difficult because the state was
modifying the system to accommodate the welfare reform program. 

As committee members continued working with the county director, and
learned more about program clients and the welfare system, working
relations improved dramatically.  The committee formed several
subcommittees and enlisted additional community members to assist
with its work.  The chairman of the steering committee, who is the
executive director of a local business, became a strong advocate for
the program.  As a result of the improved working relations, local
employers are much more likely to hire AFDC clients than they were
before Wisconsin's welfare reform program began, according to the
county director. 


--------------------
\19 The committee consists of representatives of business,
government, and educational organizations. 


      RECRUITING SUFFICIENT
      COMMUNITY VOLUNTEERS
-------------------------------------------------------- Chapter 4:2.3

Florida's experience with community review panels illustrates the
substantial administrative effort that may be required to coordinate
community involvement.  These panels were created by Florida's
welfare reform legislation to serve as independent entities to
evaluate the sufficiency of the welfare department's delivery of
services to clients and the cases of clients who have not complied
with program requirements.  State law requires that each panel
consist of seven members and include a member of the local health and
human services board, a member of the private industry council, a
client or former client in the welfare reform program, two members of
the local business community, one member of the education community,
and one member-at-large.  Review panels typically meet for 4 to 5
days each month.  Escambia County encountered difficulties recruiting
enough community members to ensure a quorum for panel meetings.  The
county had recruited a pool of 67 members for the review panel at
each of its two program sites, but still encountered problems
obtaining the required mix of panelists. 

Despite these administrative difficulties, Florida state and county
officials reported that the panels are very beneficial.  The panels
bring a third-party perspective to the evaluation of clients that in
some cases differs from the perspective of program staff.  For
example, the panels have identified barriers and issues that were not
identified in clients' self-sufficiency or employability plans, and
also served as a resource for career counseling.  In addition to
helping document client noncompliance, the panels help create
informed citizens who can serve as advocates for welfare reform,
according to Florida's welfare reform administrator. 


   STATES INCREASE EFFORTS TO WORK
   WITH EMPLOYERS TO OBTAIN JOBS
   FOR CLIENTS
---------------------------------------------------------- Chapter 4:3

As we reported previously, JOBS programs nationwide generally had not
forged the strong links with local employers that can be important to
helping AFDC clients gain work experience and find jobs.\20 In
contrast, the welfare reform programs in the states we reviewed were
placing a strong emphasis on working with employers to help clients
obtain jobs.  As discussed earlier in this chapter, one approach
states used to generate employer involvement was through establishing
community advisory groups.  In addition, the states used various
approaches to increase their effectiveness working with employers,
such as expanding incentives for employers to hire clients,
responding to job openings from employers more quickly, and providing
employers with job-ready clients. 


--------------------
\20 GAO/HEHS-95-113, May 19, 1995, and GAO/HEHS-95-28, Dec.  19,
1994. 


      EXPANDING EMPLOYER
      INCENTIVES
-------------------------------------------------------- Chapter 4:3.1

Some states expanded the incentives that can be provided to employers
to hire program clients.  For example, one provision of Virginia's
welfare reform program authorizes the payment of the cash value of
clients' AFDC and food stamp benefits to employers for up to 6 months
in exchange for their providing clients with jobs.  This provision,
called the Full Employment Program, is targeted to clients eligible
for both AFDC and food stamps who are unable to find unsubsidized
employment.  Instead of receiving AFDC and food stamps, these clients
receive wages paid by their employers.  Under the terms of Florida's
welfare reform program, the state is authorized to pay employers who
hire hard-to-place clients an amount equal to 70 percent of what the
clients would have received in AFDC benefits for up to 1 year. 
Hard-to-place clients include AFDC recipients who, in the preceding
year, have been unable to hold any job for at least 3 months or have
held more than two jobs.  Indiana expanded incentives to employers by
extending to up to 24 months the period in which the cash value of
clients' AFDC benefits can be diverted to employers who hire them. 


      RESPONDING TO JOB OPENINGS
      MORE QUICKLY
-------------------------------------------------------- Chapter 4:3.2

Another approach to help staffs work more effectively with employers
is to provide them with the capacity to respond quickly to employers'
needs.  Fond du Lac County, Wisconsin, developed the means to
dramatically decrease the amount of time it took to respond to
employers who notified county staff that they had job openings. 
Matching clients to job openings had involved a time-consuming
process of manually reviewing case files to determine which clients
had appropriate skills for specific job openings.  A member of the
community steering committee recommended that the county attempt to
replicate the ability of private employment agencies to respond
within an hour to job requests.  The county obtained a software
program that enables staff to capture information on client skills
and job interests in a database so that they can respond within half
a day to employers with a list of potential client matches. 


      PROVIDING EMPLOYERS WITH
      JOB-READY CLIENTS
-------------------------------------------------------- Chapter 4:3.3

Wisconsin state officials told us that the community steering
committees helped educate the welfare agencies about some of the
primary qualities local employers sought in employees, such as
reliability and the ability to follow instructions.  The steering
committees maintained that the welfare agencies should not spend a
lot of time training clients in specific job skills, but leave this
to employers.  Fond du Lac County, Wisconsin, provides a 2-week
workshop to help prepare clients for seeking employment.  The
workshop covers subjects such as motivation, budgeting, stress
management, nutrition, and parenting. 

In the initial months of program implementation, Culpeper County,
Virginia, was sending employers its most job-ready clients--those who
had received some job-readiness training through the JOBS program. 
However, county officials expressed a concern that new clients may
encounter difficulties obtaining and keeping jobs when they are
required to engage in a job search without having received some prior
job-readiness preparation.  With the help of the local Chamber of
Commerce, Culpeper County developed a job-readiness class covering
topics such as motivation, job-keeping skills, and money management. 


SERVICE DELIVERY REDESIGNED TO
PROVIDE MORE INTENSIVE SUPPORT FOR
CLIENTS
============================================================ Chapter 5

To help implement time limits and move clients quickly into work, the
states we reviewed also redesigned their service delivery structure. 
They believed that their clients needed more intensive support and
coordinated services than were being provided under their previous
AFDC program.  The approaches states used to redesign their service
delivery included creating a new staff role to improve service
coordination, bringing job team members together at a single
location, increasing staff interaction with clients, and developing
closer links to community resources to expand the availability of
child care and transportation. 


   CASE MANAGER ROLE CREATED TO
   COORDINATE SERVICES
---------------------------------------------------------- Chapter 5:1

To prepare clients to become self-sufficient before the end of the
time limit, Florida changed its service delivery by creating a case
manager role.  Case managers are responsible for coordinating and
brokering a comprehensive set of services clients might need to
become employed before their time limit expires.  The two Florida
counties we visited chose different approaches in assigning these
responsibilities and faced different implementation issues.  Escambia
County assigned case manager responsibilities to its eligibility
staff, whereas Alachua County created case manager positions distinct
from those of eligibility and JOBS staff. 


      ELIGIBILITY STAFF ASSUME
      CASE MANAGEMENT
      RESPONSIBILITIES
-------------------------------------------------------- Chapter 5:1.1

Escambia County expanded the roles of its existing staff to include
both eligibility and case management responsibilities.  As
eligibility workers, their responsibilities included determining
eligibility for AFDC and calculating benefit amounts.  Now their role
also includes case management activities such as overseeing client
activities and coordinating support services. 

Staff performing the combined role of eligibility worker and case
manager have experienced difficulties adjusting to their new roles. 
One Florida administrator told us it has been difficult to get new
case managers to use their judgment and be creative, because as
eligibility workers they focused on following strict rules and
procedures.  Staff who before believed that they had little
discretion in their jobs experienced a difficult adjustment to the
new expectations that they would now make decisions that could
significantly influence clients' lives.  As a consequence, the
program experienced some staff turnover.  To help them adjust to
their expanded role, Escambia County provides case management
training.  A local college conducts an on-site program for case
managers during their lunch hour several days a week.  In addition,
the American Public Welfare Association conducted a training course
for case management supervisors. 

Another difficulty staff experienced performing in this combined role
was trying to manage their workloads.  Despite reductions in the
number of cases these staff worked with, determining eligibility
under new program rules was so time consuming they did not have
enough time to perform their new case management responsibilities,
which included conducting home visits, facilitating client staffing,
and processing noncompliant cases for review by a community panel. 
For example, their computer system was not able to accommodate new
income disregards, so staff had to calculate benefit amounts by hand. 
The staff told us that, while they recognized the importance of
providing intensive case management services to clients facing a time
limit, eligibility determination took up most of their time.  To
reduce the staffs' stress level and workload, the county limited the
number of clients entering the reform program. 


      NEW CASE MANAGER POSITIONS
      CREATED
-------------------------------------------------------- Chapter 5:1.2

In contrast to Escambia County, Alachua County maintained existing
eligibility determination and JOBS staff roles and added new case
manager positions.  The county kept the case manager role separate,
believing that mandatory elements of eligibility would take too much
time and not leave enough time to provide important case management
services to clients. 

The new case manager positions generated some confusion about staff
roles.  JOBS staff and case managers initially were not clear about
their roles and in some instances their responsibilities seemed to
overlap.  Traditionally, JOBS staff were responsible for placing
clients in education and training programs and arranging support
services clients needed, such as mental health counseling and housing
assistance.  Now, case managers are working intensively with clients
to arrange these support services.  JOBS staff told us that while it
was difficult to give up part of their traditional role, this has
allowed them to devote more time to other responsibilities, such as
monitoring clients' program activities. 


   COLLOCATED CASE MANAGEMENT
   TEAMS ESTABLISHED TO IMPROVE
   SERVICES TO CLIENTS
---------------------------------------------------------- Chapter 5:2

Collocation of staffs is a key component of welfare reform
implementation in Florida and Wisconsin.  These states brought a
variety of staffs together at one location and formed case management
teams to help quickly provide a comprehensive set of services that
clients might need to obtain employment before they reach the end of
their time limits.  While both counties in Florida experienced some
logistical problems locating staffs at a single office, staffs in
both states reported that collocation enabled them to better serve
clients.  Indiana has directed local welfare offices to take
advantage of opportunities for collocation as current leases expire. 


      VARIETY OF SERVICES PROVIDED
      AT A SINGLE LOCATION
-------------------------------------------------------- Chapter 5:2.1

Florida's pilot counties each brought together a variety of services
at a single location to provide efficient, one-stop shopping for
clients.  Alachua County established a core team of staff who work
most directly with clients and a larger team whose members provide
other support services as needed.  The core team, coordinated by a
case manager, also includes an eligibility worker who determines
eligibility and benefit amounts and an employment and training
specialist who coordinates all education, training, and employment
activities.  Core team members' offices are clustered together.  They
interact frequently, both informally and formally, at regularly
scheduled meetings to help ensure clients receive the comprehensive
set of services they need to become employed before their time limits
expire.  Members of the larger team located on-site with the core
team include child support enforcement analysts, community health
nurses, and child care specialists.  Escambia County, the other
Florida county we visited, provides additional support for its
clients with mental health and substance abuse counselors on-site. 

Like Florida, Wisconsin also collocated staffs to create case
management teams.  During the early planning stages of its
demonstration, Pierce County decided to collocate all staffs working
with clients.  Before the collocation, case managers and eligibility
staff were located in cities that are about 15 miles apart.  In
addition to the case manager and eligibility worker, other members of
the case management team who are collocated at the Pierce County Jobs
Center include job employment and training case managers, child
welfare staff, and representatives from a local technical college. 
Clients are commonly included at case management team meetings when
their cases are discussed.  Social workers are also assigned to case
management teams to help meet the needs of more difficult-to-place
clients, such as those requiring counseling services.  The social
workers assess barriers to these clients' employment, provide
counseling services, and link them to the resources they need to
become employed. 

Indiana has adopted a policy that local public assistance offices are
to collocate with workforce and job placement agencies, as well as
other social service agencies, as current leases expire.  The policy
is intended to help facilitate a coordinated approach to job
placement and self-sufficiency attainment for clients. 


      COLLOCATING STAFFS CREATES
      SOME LOGISTICAL ISSUES
-------------------------------------------------------- Chapter 5:2.2

The experiences of both Florida counties highlight the importance of
allowing adequate time for planning and implementation tasks so that
all components are in place when clients enter the program.  Given
the new time limits on benefit receipt, delays caused by start-up
problems can have a significant impact on clients.  Escambia County
began enrolling clients 3 months after it was selected as a pilot
county and experienced problems with the short time frame because
workers' office space was not ready when the program officially
began--leases for office space had not been signed and office
equipment had not been obtained.  In Alachua County, the
establishment of an on-site health clinic was delayed until the
physical space could be renovated and needed equipment installed.  In
addition, collocating JOBS staff with eligibility staff in both
counties required a contract between two state departments that was
not finalized until 5 months after the program began.  As a result of
the delay, some of the employment and training services provided by
JOBS staff were not in place until about 10 months after the program
began. 


      COLLOCATED TEAMS REPORTED
      IMPROVED COMMUNICATION,
      TEAMWORK, AND SERVICE
      DELIVERY
-------------------------------------------------------- Chapter 5:2.3

Staffs on collocated case management teams in Florida and Wisconsin
reported better communication and teamwork and more efficient
services provided to clients.  Staffs told us that the more frequent
interaction between team members yields quicker service for clients,
better knowledge of clients' barriers, and a greater knowledge of
services available to assist clients.  These staffs told us that
collocation has made it much easier to coordinate services for
clients.  Before collocation, clients sometimes received different
directions from JOBS and eligibility staff about which activities
they should perform.  Now, periodic meetings are held to discuss
cases and coordinate services among team members. 

Case management teams in Florida and Wisconsin told us that clients
also benefit from the collocated team approach because services are
more efficiently delivered.  For example, before collocation, time
was often lost when clients were sent notices to go to several
different locations for appointments with service providers.  With
collocation, clients can meet with several members of their
management team on the same day and sometimes at the same time to
resolve issues quickly.  Teams also told us that clients are more
likely to use certain services when they are available at the welfare
office.  According to case managers in Alachua County, having a
mental health counselor on-site is beneficial because clients may be
willing to talk to a counselor but would not go to a mental health
center because of the stigma attached.  Collocating a health clinic
at the welfare office made it easier for clients because
transportation between different locations is time consuming and not
easily available to some clients. 


   STATES INCREASED STAFFS'
   INTERACTION WITH CLIENTS
---------------------------------------------------------- Chapter 5:3

Aware of the more serious consequence of clients "falling through the
cracks" under time-limited benefit receipt, the states we visited
increased the frequency of staffs' contact with clients.  For
example, Fauquier County, Virginia, redesigned its assessment process
to quickly obtain more detailed information about clients.  At the
start of the assessment process, staff in Fauquier County visit
clients in their homes.  Staff believe that home visits are an
efficient way for them to get critical information that they would
not be able to get otherwise about the services clients need to be
able to work.  For example, while it was not an objective of the home
visits, staff found some families in need of child protection
services.  The home visits help staff assess a client's
job-readiness, current support system, and the kind of community in
which the client lives. 

Before implementing its welfare reform program, Fond du Lac County,
Wisconsin, learned how critical it is to monitor and provide support
to clients once they enter a training program.  After learning that a
business in town needed welders, the county contracted with a local
high school to provide a 3- to 4-week welding course for clients. 
However, county staff underestimated the amount of monitoring needed
and did not find out soon enough that some clients did not show up
for the course.  Now, case managers do a great deal more monitoring
of clients.  For example, case managers receive daily attendance
reports from the local technical college and follow up with absent
clients. 

Concerned about former clients who may lose employment and cycle back
onto AFDC, some of the states we visited increased the services
provided to clients after they begin working.  Florida established a
Bootstrap training program for clients who no longer qualify for cash
assistance due to employment.  The program allows these clients to
participate in JOBS education and training activities to provide them
the opportunity for job advancement.  Vigo County, Indiana, monitors
clients 2 weeks after job placement and then monthly for 6 months. 
At the request of the community steering committee, staff in Fond du
Lac County, Wisconsin, formally follow up with clients and employers
90 days after employment begins. 


   ESTABLISHING NECESSARY SUPPORT
   SERVICES
---------------------------------------------------------- Chapter 5:4

In addition to increasing interactions with clients, states worked to
provide clients with the support services they needed to become
employed.  Two issues the states frequently encountered as more
clients participated in program activities and became employed were
the increased demand for child care and transportation.  States
worked to increase the availability of these services by using their
own resources in new ways and developing closer links to existing
community resources. 


      STATES USE PROGRAM RESOURCES
      AND WORK WITH COMMUNITY
      GROUPS TO MEET CHILD CARE
      NEEDS
-------------------------------------------------------- Chapter 5:4.1

As states expand their work requirements, more AFDC clients will have
to find child care to work or participate in program activities.  Our
prior work has shown that in some states, the supply of certain kinds
of child care is limited, such as infant care, part-time care, and
care during nonstandard work hours.\21 The states we reviewed worked
to expand the availability of different kinds of child care by using
program resources and developing closer links to community
organizations. 

In Culpepper County, Virginia, the need for infant care exceeded the
capacity of the only infant care center, and clients were being
placed on a waiting list.  To address this shortage, the county is
using state funds to create a new infant care center.  In Wisconsin,
Pierce County is considering developing a child care cooperative
where clients can exchange child care services with one another. 

States are also reaching out to community groups to increase the
supply of child care for their clients.  One of the biggest child
care issues states faced in implementing their reform programs was
finding after-hours care for clients working late shifts.  The
community steering committee in Fond du Lac County, Wisconsin, worked
with local day care providers to extend their hours for parents
working late shifts.  States are also reaching out to local churches
to increase the supply of child care.  For example, staff in Marion
County, Indiana, arranged for churches to pick clients' children up
from school and provide after-school care.  Virginia is working with
volunteers from churches and nonprofit organizations to wrap around
existing child day care operations and increase the hours of service
available. 


--------------------
\21 Welfare to Work:  Child Care Assistance Limited; Welfare Reform
May Expand Needs (GAO/HEHS-95-220, Sept.  21, 1995). 


      STATES DEVELOP CREATIVE
      SOLUTIONS TO TRANSPORTATION
      ISSUES
-------------------------------------------------------- Chapter 5:4.2

The welfare reform programs in the states we reviewed also addressed
the issue of providing transportation for working clients.  Finding
transportation was most difficult in rural areas where there was no
public transportation; however, urban areas also experienced
transportation difficulties.  For example, in some urban areas,
public transportation was not available close to employers or was not
available to clients working late shifts. 

States developed creative solutions to these transportation issues. 
For example, Virginia is using county and city school buses to
transport clients to community work experience sites.  The state also
allows welfare agencies to purchase surplus state and county vehicles
for clients to lease, purchase, or use to travel to work.  The
welfare reform programs in Virginia and Wisconsin will pay for some
clients' car repairs and provide gas subsidies.  In addition, some
clients in Fond du Lac County are allowed to provide transportation
services to other clients as part of their work experience
activities. 

Some states are also working with employers and their communities to
provide transportation for clients.  For example, Marion County,
Indiana, worked with its public transportation system and local
employers to get bus stops near large employers' offices and to have
bus service available for clients completing late shifts.  In
addition, Pierce County arranged for a local bank to provide
low-interest loans for clients to purchase cars. 

Some counties have found community volunteers to provide
transportation for clients.  Scott County, Indiana, worked with
employers on its community task force to develop a volunteer
transportation program.  They handpicked volunteers, selecting
retired persons they considered reliable and good role models.  These
volunteers drive clients to and from work and also serve as mentors
to clients.  Fond du Lac County, Wisconsin, also established a
community volunteer transportation service.  The service is managed
by the County Volunteer Coordinator and staffed by volunteer drivers
using county vans or their own vehicles.  Staff request rides for
clients needing transportation to and from appointments, training,
and work. 


CONCLUDING OBSERVATIONS AND
COMMENTS FROM HHS AND STATES
============================================================ Chapter 6

Because the existing welfare system has not been successful in
preventing long-term dependency, some states are making profound
changes to the structure and operation of their welfare systems. 
Much can be learned from the experiences of the states we reviewed. 
To implement time limits and work requirements, these states
fundamentally changed the way they do business.  They focused their
efforts on changing staffs' culture and clients' expectations,
seeking greater involvement from their communities, and redesigning
their service delivery structures.  To date, however, most of their
changes have been implemented on a relatively small scale, within a
few counties or small metropolitan areas.  Thus, it is uncertain what
additional implementation and operational issues these and other
states could encounter as they move to implement welfare reform
statewide or in larger metropolitan areas.  For example, obtaining a
sufficient number of jobs for clients or developing new sources of
child care could prove to be more challenging for welfare reforms
implemented on a larger scale. 

It is too early to determine what effect the welfare reforms in the
states we reviewed might have on moving people into employment and
off welfare.  State and local officials point to preliminary data
that suggest that their program changes may be making a difference in
the size of their caseloads.  For example, over a 14-month period,
the two Wisconsin pilot counties' combined caseloads decreased by
over 40 percent since beginning the Work Not Welfare program. 
Between January 1, 1995, and December 31, 1995, Indiana experienced a
22-percent decrease in its statewide AFDC caseload, which state
officials attribute to the implementation of Indiana's Work First
philosophy.  However, it is unclear whether these declines are
directly attributable to the programs or to other factors, such as a
strong economy, low unemployment rates, or in the case of Wisconsin,
other welfare changes within the state.  Because the programs in the
states we reviewed are relatively new, no formal evaluations
examining the effect of the reforms have been completed to date.  At
the time of our review, none of the programs had been operating long
enough for recipients to reach the time limits. 


   COMMENTS FROM HHS AND STATES
---------------------------------------------------------- Chapter 6:1

We obtained comments on a draft of this report from HHS and the five
states whose welfare reform programs are reviewed in the report.  HHS
and the states generally agreed with the report's findings but
indicated various places in the report where they believed additional
information would be useful.  We incorporated their comments in the
report as appropriate. 


GAO CONTACTS AND STAFF
ACKNOWLEDGMENTS
=========================================================== Appendix I

GAO CONTACTS

David P.  Bixler, Assistant Director, (202) 512-7201
Andrew Sherrill, Evaluator-in-Charge, (202) 512-7252

ACKNOWLEDGMENTS

In addition to those named above, the following persons also made
important contributions to this report:  Margaret Boeckmann, Senior
Social Science Analyst; Karen Brown, Evaluator; Deborah A.  Moberly,
Evaluator; and Tara Watson, Intern. 


BIBLIOGRAPHY
============================================================ Chapter 1

Beebout, Harold, and others.  The Number and Characteristics of AFDC
Recipients Who Will Be Affected by Policies to Time-Limit AFDC
Benefits.  Paper presented at the Annual Research Conference of the
Association for Public Policy and Management, Chicago, Oct.  29,
1994. 

Bloom, Dan.  The Family Transition Program:  An Early Implementation
Report on Florida's Time-Limited Welfare Initiative.  New York: 
Manpower Demonstration Research Corporation, Aug.  1995. 

Bloom, Dan, and David Butler.  Implementing Time-Limited Welfare: 
Early Experiences in Three States.  New York:  Manpower Demonstration
Research Corporation, Nov.  1995. 

Camasso, Michael, and others.  "New Jersey's Evaluation," in
Addressing Illegitimacy:  Welfare Reform Options for Congress.  A
conference held in Washington, D.C., on Sept.  11, 1995, by the
American Enterprise Institute for Public Policy Research. 

Division of Economic Support, Wisconsin Department of Health and
Social Services.  Work Not Welfare:  Progress Report, January-August
1995.  Madison, Wis.:  Dec.  1995. 

Myers, Rudolf.  "New Jersey's `Family Cap,'" in Addressing
Illegitimacy:  Welfare Reform Options for Congress.  A conference
held in Washington, D.C., on Sept.  11, 1995, by the American
Enterprise Institute for Public Policy Research. 

Pavetti, LaDonna A., and Amy-Ellen Duke.  Learning from Ongoing
Welfare Reform Demonstration Projects:  Lessons From Five State
Initiatives.  Washington, D.C.:  The Urban Institute, Aug.  1995. 

Rossi, Peter.  "What the New Jersey Results Mean and Do Not Mean," in
Addressing Illegitimacy:  Welfare Reform Options for Congress.  A
conference held in Washington, D.C., on Sept.  11, 1995, by the
American Enterprise Institute for Public Policy Research. 

Sawhill, Isabel V., ed.  Welfare Reform:  An Analysis of the Issues. 
Washington, D.C.:  The Urban Institute, June 1995. 

U.S.  General Accounting Office.  Welfare to Work:  Most AFDC
Training Programs Not Emphasizing Job Placement (GAO/HEHS-95-113). 
Washington, D.C.:  May 19, 1995. 

_____.  Welfare to Work:  Child Care Assistance Limited; Welfare
Reform May Expand Needs (GAO/HEHS-95-220).  Washington, D.C.:  Sept. 
21, 1995. 

_____.  Welfare to Work:  Current AFDC Program Not Sufficiently
Focused on Employment (GAO/HEHS-95-28).  Washington, D.C.:  Dec.  19,
1994. 



RELATED GAO PRODUCTS
============================================================ Chapter 2

Welfare to Work:  Approaches That Help Teenage Mothers Complete High
School (GAO/HEHS/PEMD-95-202, Sept.  29, 1995). 

Welfare to Work:  State Programs Have Tested Some of the Proposed
Reforms (GAO/PEMD-95-26, July 14, 1995). 

Welfare to Work:  Participants' Characteristics and Services Provided
in JOBS (GAO/HEHS-95-93, May 2, 1995). 

Welfare to Work:  Measuring Outcomes for JOBS Participants
(GAO/HEHS-95-86, Apr.  17, 1995). 

Child Care:  Child Care Subsidies Increase Likelihood That Low-Income
Mothers Will Work (GAO/HEHS-95-20, Dec.  30, 1994). 

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

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

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

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

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

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

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


*** End of document. ***