EXECUTIVE SUMMARY

FINAL RULE

TRIBAL TEMPORARY ASSISTANCE FOR NEEDY FAMILIES

PROGRAM (TRIBAL TANF) AND NATIVE EMPLOYMENT

WORKS (NEW) PROGRAM

BACKGROUND

When President Clinton signed the 1996 welfare reform law, the Administration and Congress charted new ground by giving federally recognized Indian tribes, or consortia of such Tribes, authority to operate their own Temporary Assistance for Needy Families (TANF) programs. The final tribal TANF regulations hold tribes accountable for moving families to self-sufficiency while encouraging and supporting flexibility, innovation, and creativity in Tribal programs. The final regulations also implement the Native Employment Works (NEW) program which authorizes funding to former Tribal JOBS grantees, for tribal programs to make work activities available.

Principles Governing the Final Tribal TANF Rule

With the words of Chief Standing Bear in mind and in the spirit of both regulatory reform and the Personal Responsibility and Work Reconciliation Act (PRWORA), the Administration for Children and Families (ACF) has published a final rule that implements key provisions of the Tribal TANF and NEW programs relating to definitions, funding, plan requirements, accountability and data collection and reporting.

This final rule implements the provisions in PRWORA, which for the first time gives Tribes the opportunity to operate their own TANF programs. The TANF statute offers Tribes the choice of whether to operate their own TANF program or to participate in the program operated by the state, a choice that represents a major step forward in Tribal self-governance.

The Tribal TANF final regulations provide Tribes and Tribal consortia with a clear and balanced set of rules for complying with the law’s performance goals. They reflect PRWORA’s focus on moving needy families to work and self-sufficiency, and on ensuring that welfare is a time-limited, transitional experience, not a way of life. The regulations encourage and support flexibility, innovation, and creativity to enable Tribal programs to reach all families and provide supports to working families. They do not dictate to Tribes how to design their TANF programs or spend their funds. At the same time, the regulations hold Tribes accountable for moving families toward self-sufficiency.

Under the changed Federal role regarding welfare reform, there are two circumstances under which ACF has regulated Tribal TANF programs: (1) where Congress has authorized the Secretary to regulate; and (2) where Congress has charged HHS with taking action to ensure that families move from welfare to self-sufficiency (e.g. imposing penalties).

In drafting these rules, we considered nearly 400 comments received following publication of the Notice of Proposed Rulemaking on July 22, 1998. As a result of these comments and the experience of both States and Tribes in implementing their TANF programs, we made a number of changes in the final rules.

The final rules will be published in the Federal Register on February 18, 2000 and will be effective June 17, 2000.

Key Provisions

The following information highlights key aspects of the final Tribal TANF and NEW rules. This summary does not address certain areas where rules merely paraphrase statutory provisions to add clarity and completeness.

• The term "assistance" is important because the major TANF program requirements (e.g., work requirements, time limits, and data reporting) apply only to families receiving assistance.
• In the Tribal TANF final rules, we have adopted the same definition of assistance as developed and included in the Final Rule for the State TANF program. Since the definition of assistance is central to the accountability provisions in the statute, we determined that there should be a single definition of this term in order to insure that key TANF provisions are implemented as intended. Having various definitions of assistance rather than a single, uniform definition would raise questions about the consistency and comparability of TANF data reports, program information, work participation rates, time limits, and application of penalties. It would also make it very difficult to understand whether or how the TANF program is contributing to the movement of needy families to self-sufficiency. The definition does not impede the flexibility of Tribes and States to set eligibility rules or to expend funds on a broad range of benefits and services for needy families. The definition of assistance does not limit the types of allowable benefits or services that State and Tribal TANF programs may provide. Rather, the major effect of the definition is to determine the applicability of key Federal TANF requirements to the benefits that a Tribe or State elects to provide.
• The definition of assistance excludes non-recurrent, short-term benefits designed to deal with individual crisis situations rather than ongoing need. These benefits cannot provide for needs that will extend beyond four months.
• The definition of assistance excludes child care, transportation and supports provided to employed families, Individual Development Account (IDA) benefits, refundable earned income tax credits, work subsidies to employers, and services such as education and training, case management, job search, and counseling.
• The definition of assistance permits Tribes and States to use welfare block grant dollars to help people who have left welfare (defined as payments to cover ongoing basic needs) stay off--or to help families so they do not have to go on welfare in the first place.
• The rule defines Welfare-to-Work (WtW) cash assistance as "assistance" that addresses basic needs and that can be legally converted to cash. If an individual receives WtW cash assistance, that benefit counts against the established time limit on TANF assistance; if the individual receives another type of WtW benefit that is not WtW cash assistance, the WtW benefit does not count against the time limit for TANF assistance.

WORK

• At the heart of the statute is the expectation that, in exchange for flexibility in designing appropriate TANF programs and services, Tribes and States be held accountable for moving families from welfare to self-sufficiency through work.
• Because the statute requires that the Tribal TANF work requirements take into consideration the economic conditions and resources available to each Tribe, we did not establish across-the-board work participation rates applicable to all tribes. Work participation rates for Tribal TANF programs are established through negotiations between the Department and the Tribe or Tribal consortium. These negotiations take into account the differences among the Tribal economies and resources and Tribes must provide the rationale for proposed work requirements, including how they are consistent with the purposes of TANF and with the economic conditions and resources available to the Tribe.

• Tribes may define key terms, including the activities that count as work within the limits of the statute. Tribes have the overall flexibility to design their own programs in a manner that addresses their unique needs and circumstances.

TIME LIMITS

• In general, States may not use Federal TANF funds to provide assistance to a family if it includes an adult or minor head-of-household or the spouse of a head-of-household who has received assistance for a cumulative total of more than 60 months. There are specific statutory exceptions to this limitation and, at their option, States may provide for shorter time limits. The statute does not contain any specific time limitation applicable to Tribal TANF programs.
• Consistent with the statute authorizing the Secretary to establish for each Tribe appropriate time limits for the receipt of welfare-related services, the regulations provide for a process of negotiation to establish applicable TANF time limits.
• The regulations require that Tribes propose time limits which reflect the intent of Congress that welfare should be temporary and not a way of life. The proposal should also take into consideration those factors that may impact on the length of time that a TANF family might be expected to need in order to find employment and become self-sufficient. To allow for maximum flexibility, we are not requiring that the same time limit apply throughout the Tribal TANF service area. Because economic conditions and the availability and accessibility of services vary, it may be appropriate to establish different time limits by geographic area. If the Tribe proposes to provide assistance for longer than 60 months, it should explain how that time limit was determined and provide a rationale for its determination.
• Under the regulations any month during which a minor who was not the head of the household or married to the head of the household receives assistance does not count against the time limit for that family.
• Under the regulations, Tribal TANF programs have the option to extend assistance beyond the established time limit under established time limit exceptions.

• The regulations make the Family Violence Option (FVO) available for Tribal TANF programs. Tribes electing the FVO must certify that they have established and are enforcing standards and procedures to screen and identify individuals receiving TANF assistance with a history of domestic violence, while maintaining the confidentiality of such individuals and refer such individuals to counseling and supportive services.
• The Family Violence Option also permits States to waive TANF program requirements for a victim of domestic violence if complying with the requirements would make it more difficult for the victim to escape domestic violence or would unfairly penalize the individual.

SERVICE POPULATION/SERVICE AREA

• Tribes have the flexibility to serve all Indian families within the service area or solely the enrolled members of the Tribe. That decision must be indicated in a Tribe's Tribal TANF plan application.
• With regards to service area, the regulations provide that a Tribal TANF service area could include the Tribe's reservation or just a portion of the reservation. It could also include "near reservation areas" which meet Department of Interior (DOI) requirements. For Tribes without land areas, the service area could include all or part of the Tribe's service area as defined by DOI.

RETROCESSION OF A TRIBAL TANF PROGRAM

• The regulations recognize that Tribes, like States, voluntarily implement a TANF program for needy families and that there may be circumstances under which a Tribe will withdraw from operation of the TANF program. The regulations provide for Tribal retrocession of the TANF program back to the State.
• Time frames under the retrocession provisions of the regulation are intended to ensure that: (1) there is minimal disruption to families in need of assistance; (2) a Tribe makes an informed decision in determining whether or not to cease operating the Tribal TANF program; and (3) a State is provided adequate notice to ensure continuity of TANF program services.

TANF EXPENDITURES

• Tribes and States have broad flexibility on how to expend Federal TANF funds within statutory limitations.

• By statute, States are subject to separate 15 percent caps on the amount of the Federal and Maintenance of Effort (MOE) funds it may spend on administrative activities. The statute does not set a specific cap on administrative expenditures for Tribal TANF programs.
• Under the regulations, the Department will establish the applicable cap on administrative expenditures for the first year of a Tribal TANF program’s operation based on the Tribe's proposed administrative cost allocation. No Tribal TANF grantee may expend more than 35 percent of its Tribal Family Assistance Grant (TFAG) for administrative costs during this initial year of program operation. No Tribal TANF grantee may expend more than 30 percent of its TFAG for administrative costs during the second year and a Tribal TANF grantee may not expend more than 25 percent of its TANF grant for administrative costs during any subsequent grant period.
• The Department will negotiate limitations on administrative costs up to the specified maximums based on, but not limited to, a Tribe's TANF funding level, economic conditions, resources available to the Tribe, the relationship of the Tribe's administrative cost allocation proposal to the overall purposes of TANF, and a demonstration of the Tribe’s administrative capability.
• As defined in the proposed rule, administrative costs are costs necessary for the proper administration of the TANF program. It includes the cost for general administration and coordination of these programs, including indirect (or overhead) costs. The definition does not include costs associated with providing program services, such as case management, job development, and post-employment supports.
• Information technology and computerization for tracking, data entry and monitoring, including personnel and other costs associated with the automation activities needed for Tribal TANF monitoring, data entry and tracking purposes, are excluded from the administrative cost cap under the regulations.

• Tribes face financial penalties if Federal funds are used in violation of the Act. The single audit conducted under the Single Audit Act, supplemented by other related audits, reviews, and data sources will help identify violations.
• Any use TANF funds in violation of the provisions of the Act, the provisions of 45 CFR Part 92, OMB Circulars A-87 and A-133, or any Federal statutes and regulations applicable to the TANF program, will be considered to be a misuse of funds.
• Misuse of the Tribal TANF grant will be considered to have been intentional under the following conditions: (1) there is supporting documentation, such as Federal guidance or policy instructions, indicating that TANF funds could not be used for that purpose; or (2) after notification that we have determined such use to be improper, the Tribe continues to use the funds in the same or similarly improper manner.
• Tribes may reserve Federal TANF funds for future years. Reserved funds may only be spent on assistance and associated administrative costs.

• The statute specifies four TANF penalties that can be imposed on Tribes. The four penalties that apply to Tribes are as follows:
• a penalty of the amount by which a Tribe's grant was used in violation of part IV-A of the Act, as determined by findings from a single audit;
• a penalty of five percent of the TANF grant as a result of audit findings which show that the Tribe intended to violate a provision of the Act;
• a penalty in the amount of the outstanding loan plus interest owed on the outstanding amount for failure to repay a Federal loan; and
• a penalty for failure to satisfy the minimum work participation rates.
• To ensure Tribal accountability, the regulations have narrowly defined the limited circumstances under which Tribes may demonstrate reasonable cause or receive penalty reductions.
• Within 60 days of receiving notice that it is facing a penalty, a Tribe may respond that it has reasonable cause for failing to meet a requirement and/or by providing a corrective compliance plan. A penalty will not be assessed against a Tribal TANF grantee if we determine that it had reasonable cause for its failure. The general factors a Tribe may use to claim reasonable cause are:
• Natural disasters, extreme weather conditions, and other calamities (e.g., hurricanes, earthquakes, fire, and economic disasters) whose disruptive impact was so significant that the Tribe failed to meet a requirement;
• Formally issued Federal guidance which provided incorrect information resulting in the Tribe's failure, or (prior to the effective date of these regulations) guidance that was issued after a Tribe implemented the requirements of the Act based on a different, but reasonable, interpretation of the Act;
• Isolated, non-recurring problems of minimal impact that are not indicative of a systemic problem; or
• Significant increases in the unemployment rate in the Tribal TANF service area and changes in the TANF caseload size during the fiscal year being reported.
• The statute provides that prior to imposing a penalty against a Tribe, the Tribe must be given an opportunity to enter into a corrective compliance plan. The regulation requires the corrective compliance plan to identify the action steps, outcomes, and time frames which the Tribe believes will fully and adequately correct the violation. Each plan will be reviewed on a case-by-case basis, and acceptance of the plan will be guided by the extent to which the Tribe's plan will lead to correction of the situation leading to the penalty.

TRIBAL TANF DATA COLLECTION AND REPORTING

• The data reporting requirements in the final regulations maintain accountability and collect data in critical program areas. Most of the information required under the rules is required by section 411(a) of the Act. The regulations also require reporting of some additional data elements necessary to ensure accountability under the penalty provisions as well as to meet other statutory obligations, such as the annual report to Congress required under the Act.
• Except where necessary, the Tribal TANF data collection and reporting requirements are identical to the State TANF data collection and reporting requirements.

• Each Tribe must collect monthly and file quarterly data on individuals and families as follows:
• Disaggregated data collection and reporting requirements in this part apply to families receiving assistance and families no longer receiving assistance under the Tribal TANF program; and
• Aggregated data collection and reporting requirements in this part apply to families receiving, families applying for, and families no longer receiving assistance under the Tribal TANF program.

• Each Tribe must file quarterly expenditure data on the Tribe's use of Tribal Family Assistance Grant (TFAG) funds, any Tribal fund expenditures that are being substituted for TFAG funds withheld due to a penalty and any State contributions. The report must be submitted on a form prescribed by ACF.

DIFFERENCES BETWEEN STATE AND TRIBAL DATA

• There are several differences between the data reporting and collection requirements for States and Tribal grantees, as follows:
• Tribal TANF grantees have no requirement comparable to a State's MOE requirement. Thus, all MOE reports and MOE data items collected from States are not required of Tribal grantees.
• Since the contingency fund, incentive, and bonus provisions of the statute are not applicable to Tribal TANF programs, data to be used for these items will not be required from Tribal grantees.
• There are a few technical differences in the coding structure used for the data reporting, e.g., Tribal grantees have a special code that will be used to identify them during data analysis, and codes which identify a TANF case or recipient for MOE purposes has been noted as not being applicable to Tribal grantees.

NATIVE EMPLOYMENT WORKS (NEW)

• Indian Tribes, including Alaska Native Organizations, which operated a Tribal JOBS Program in FY 1995 are eligible for NEW Program grants.
• NEW grants will be awarded to eligible Tribal grantees for each FY from 1997 thru FY 2002 in an amount equal to the amount of the Tribal JOBS grant received in FY 1994.
• Public Law 102-477 Tribes may operate NEW programs if the Tribe is otherwise eligible.
• The regulations provide that eligible Tribes may form consortiums for the purpose of operating NEW programs. Tribal consortia must submit copies of resolutions from each Tribe indicating its membership in the consortium and authorizing the consortium to act on its behalf in regard to administering a NEW Program. If an Alaska Native organization forms a consortium, submission of the required resolution from the governing board of the organization is sufficient to satisfy this requirement. The regulations provide procedures that apply in the event a consortium breaks up.

• The statute provides that each eligible Tribe shall receive a grant in an amount equal to the amount received by the Tribe in FY 1994 under section 482(i) of the Act (as in effect during FY 1994).
• Tribal NEW grantees are not required to match NEW grant funds.
• Under the regulations, NEW Program funds provided for a fiscal year must be obligated no later than the last day of the end of the fiscal year for which they are awarded. Carry forward of an unobligated balance of NEW funds is not permitted.
• A Tribe must liquidate all obligations incurred under the NEW Program grant awards not later than one year after the end of the obligation period.
• The regulations require that expenditures be reported consistent with the requirements of 45 CFR 92.41. NEW Program funds and activities are subject to the audit requirement of the Single Audit Act. A NEW Program grantee must comply with all laws, regulations, and Departmental policies that govern submission of financial reports by recipients of Federal grants.
• Improper expenditure claims under this program are subject to disallowance and if a grantee disagrees with the Agency's decision to disallow funds, the grantee may follow the appeal procedures at 45 CFR Part 16.

• Eligible Tribes will, according to the statute, determine their service population and are not required to serve TANF recipients. However, the overwhelming majority have indicated that work activities and services will be provided for TANF clients within available resources. Generally, NEW funding is not adequate to serve all tribal TANF recipients.

• The purpose of the NEW grant is to provide work activities to such populations and service area(s) as the Tribe specifies.
• By not narrowly defining work activities in the regulations, we are providing Tribes flexibility to design their programs to address their unique needs and populations.
• Allowable activities include job market assessments, job creation and economic development activities. Supportive and job retention services may be provided under the NEW program.

• To apply for and conduct a NEW Program, a Tribe must submit a plan to ACF. The plan must identify the agency responsible for administering the NEW Program and include a description of the following:
• Population to be served;
• Service area;
• Client services;
• Work activities to be provided;
• Supportive and job retention services to be provided;
• Anticipated program outcomes and the measures the Tribe will use to determine them; and
• Coordination activities conducted and expected to be conducted with other programs and agencies.
• The regulations require that the NEW plan describe how the Tribe will deliver work activities and services.
• The regulations give Tribes the flexibility to submit their NEW plan in whatever format the Tribe deems appropriate.

• If a Tribe makes substantial changes in its NEW Program plan or operations, it must submit an amendment for the changed section(s) of the plan. The regulations define a substantial change as a change in the agency administering the NEW Program, a change in the designated service area and/or population, a change in work activities provided or a change in performance standards.
• A NEW plan amendment must be submitted to us no later than 45 days prior to the proposed implementation date.

• Serving State TANF recipients will require close coordination between the State and Tribal agencies. NEW program administrators must be aware of the following procedures and policies: TANF work requirements, time limits, client case information, change in client status, policies regarding exclusions, and data reporting requirements.
• The regulations allow Tribes and States to negotiate what NEW work activities may be counted in participation rate determinations. Coordination is also required with any other State or Tribal agency whose programs impact the service population of the NEW program.
• The regulations require that NEW program work activities and supportive services not be duplicative of any other activity or service provided by a State or Tribe.

• The regulations require an annual activity report and financial expenditure report of all NEW grantees.
• Under the regulations, there are special data collection and reporting requirements for Public Law 102-477 Tribes that consolidate a NEW Program with other programs. There is a single reporting system for all programs operated by a Tribe under Public Law 102-477. This system includes a program report, consisting of a narrative report, a statistical form, and a financial report. The program report is required annually and submitted to the Bureau of Indian Affairs (BIA), as the lead Federal agency and shared with the Department of Health and Human Services (DHHS) and the Department of Labor (DOL). The financial report is submitted on a SF-269A to BIA.