Operating TANF: Opportunities and Challenges for Tribes and Tribal Consortia

III. Developing a Sound TANF Plan

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Contents

1. Plan Requirements
2. Defining a Program Tailored to Tribal Needs
3. Negotiating Terms with the State
   1. Determining Tribal AFDC Counts
   2. Obtaining MOE Contributions and Other State Support
4. Determining and Assembling Resources for Planning and Startup

Endnotes

The experiences of grantees in this study indicate that developing a sound TANF plan requires more than meeting statutory requirements and following DHHS rules. The grantees also had to address such key issues as defining the tribal program's objectives and rules, negotiating terms with the state, assembling resources for the planning and start-up phases, and establishing a strong funding base for the program.

A. Plan Requirements

The Act and its implementing regulations require that DHHS review and approve tribal TANF plans.⁽¹⁾ Before submitting a plan, tribes are encouraged to submit a letter of intent to DHHS. After receiving a letter of intent, DHHS requests the necessary 1994 AFDC data from the relevant state (or states). The letter must describe the proposed service area and population, and propose an implementation date. Alternatively, if a tribe has received AFDC data from the state and concurs with its validity, DHHS does not require a letter of intent. Most of the tribes in this study started discussions with the state(s) before submitting their plans to DHHS.

Tribes are given considerable flexibility in shaping their TANF programs. The Act requires that 50 percent of adult participants in state programs engage in work activities as defined by the statute; subject to approval from DHHS, tribes may define work activities more broadly and can set their own adult work participation rates.⁽²⁾ Tribal programs (and states) can set their own time limits for federally funded welfare-related services, including cash benefits, as long as that limit matches the federal 60-month time limit or is shorter.⁽³⁾

Although in some respects tribes have greater flexibility than states, they are in some respects subject to greater federal review and are denied some advantages granted to states. For example:

• DHHS must review and approve tribal TANF plans, but DHHS certifies only that state plans are complete. Although the tribe has flexibility in determining the format of its plan, DHHS requires that the tribal TANF plan include or address 19 issues or components (see Appendix 1). Most of the grantees in the study had difficulty developing a TANF plan that DHHS would accept on first review.
• Funding for tribal TANF plans is based on the amount that the state spent in fiscal year 1994 on AFDC for all American Indians residing in the tribe's designated service area. In contrast, funding for state TANF programs is based on the highest of three possible formula amounts.
• Tribes are ineligible for three sources of additional TANF funding available to states: (1) performance bonuses, (2) an adjustment for high population and low welfare expenditures, and (3) a contingency fund for economic downturns.
• Tribes are ineligible for caseload reduction credits. In contrast, a state's work participation rate is reduced if its caseload falls.

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B. Defining a Program Tailored to Tribal Needs

Tribes decide to operate their own TANF program primarily because they believe they can do a better job of serving their members. The TANF plan provides an opportunity for each tribe to articulate the mission and goals of its TANF program and to design the program accordingly. For example, the Navajo Nation stressed that it created its own TANF plans and policies, instead of adopting those of the state. Site visit respondents indicated that the tribe wanted its TANF program to meet the unique needs and circumstances of the Navajo Nation and people. Similarly, the Port Gamble S'Klallam tribe defined the mission of its TANF program — “to protect children” — and developed rules to support it.

A review of the key TANF plan provisions of the three tribes visited for this study (Table III.1) illustrates how tribes, within the limits allowed by law, tailored their programs to tribal circumstances and cultural values. All three tribes adopted less stringent weekly work participation requirements — in two cases 20 hours, and in one case 24 hours.⁽⁴⁾Each tribe exempted people who provide care for a disabled child or elder, and caregivers older than age 60 (Torres Martinez exempted persons over 55 who provide child care or elder care). Each tribe specified cultural reasons for these provisions, particularly the common practice of several generations of a family living together, with family members caring for each other, as well as the deep respect accorded to tribal elders. Respondents at Torres Martinez reported selecting age 55 for the work exemption because of the low life expectancy of tribal members (average of 62 years). In keeping with its mission, the Port Gamble S'Klallam tribe established participation exemptions for women in their last trimester of pregnancy, for women through 90 days postpartum, and for families who lack child care.

Tribal programs place more emphasis on removing the barriers to employment than do state TANF programs with a work-first emphasis. The barriers most often targeted include low levels of educational attainment, limited work experience, and abuse of alcohol and other drugs. All the tribal programs counted work toward a high school equivalency degree as a work activity.

Most tribes in the study also recognized the role of traditional tribal activities. They accepted traditional self-employment activities, such as fishing, hunting, gathering, and traditional crafts as legitimate work participation. The Port Gamble S'Klallam tribe counts all traditional activities (for example, harvesting cedar bark, collecting cattails for baskets, and shellfishing) as participation if they are paid, or if the case manager identifies and approves them. The Navajo Nation includes Chapter House projects and cultural activities as acceptable work activities. The tribal programs have adopted this approach largely because employment opportunities are limited. A work-first approach cannot succeed when the number of TANF participants far exceeds the number of available jobs. Respondents noted that many TANF participants have no work experience and that participation in traditional tribal activities can promote a sense of responsibility and develop employment skills.

Because of differences among consortium members, tribal consortia may confront special challenges in designing TANF programs that meet the needs of TANF participants. To the extent that there is variation in the economies and circumstances among tribes in the consortium, the TANF program may require additional flexibility. The Torres Martinez Consortium faces special circumstances in that members of any federally recognized tribe residing in its service area may receive TANF services from the consortium. Furthermore, the consortium's service areas include urban, suburban, and rural areas in Los Angeles and Riverside counties. Study respondents said that on the one hand, it is easier to place TANF recipients in unsubsidized employment in the parts of the Torres Martinez service area where employment opportunities are far greater than in much of Indian country. On the other hand, many TANF recipients who have moved from tribal communities to urban or suburban areas experience "culture shock," finding it difficult to maintain cultural traditions, live apart from friends and family, and adjust to life in an urban or suburban setting. Torres Martinez staff said that TANF recipients who experience culture shock tend to need more post-employment and other types of support to secure and maintain employment. In addition, because its service areas is so large (Los Angeles and Riverside counties), and because its heterogeneous service population (all American Indian and Alaska Natives residing in those counties) is dispersed throughout its service area, recruiting and enrolling TANF participants was especially challenging for the Torres Martinez consortium.

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C. Negotiating Terms with the State

Negotiations between tribes and states over tribal TANF plans are important in their substance and symbolism. Developing the tribal plan requires negotiations with the state (or states, if the reservation crosses state borders) about issues affecting the amount of federal and state funding the tribe will receive, as well as the extent of state support for systems development and training. The approach to these negotiations is important. Tribes in this study noted that it was important to remind state officials about tribal sovereignty (for example, by insisting that negotiations sometimes be conducted on the reservation and by making it clear that tribal councils must approve negotiated agreements). Tribal officials said that symbolic expressions of sovereignty can be important. For example, when negotiations were conducted at the state capital, the Port Gamble tribe brought its own flag to be flown alongside the state flag in Olympia. Some tribal officials suggested that a nonconfrontational approach is best in negotiating with the state. By focusing discussions on the shared goal of moving tribal members/state citizens from welfare to work, negotiations can proceed non-confrontationally.

The most challenging issues in tribal-state negotiations relate to funding. Key issues involved determining the number of tribal members participating in AFDC in 1994 and agreeing on the level of state support provided to the tribal TANF program through maintenance of effort (MOE) funds and other state contributions.

1. Determining Tribal AFDC Counts

The number of tribal members participating in AFDC in 1994 determines the level of federal funding for the tribal TANF grant. The Act requires that the "federal share" of TANF funds for tribal members be transferred from the state(s) to a tribe with an approved TANF plan. For both states and tribes, if the number of TANF participants is greater than the number of AFDC recipients in 1994, the TANF program probably will not have enough funds to provide the needed services. Conversely, if there are fewer TANF participants than the number of 1994 AFDC recipients, the TANF program probably will have more-than-adequate funds. While states have accurate data on their total 1994 AFDC caseloads, few states or tribes have accurate data on the number of 1994 AFDC recipients who were tribal members. The difficulty in arriving at accurate estimates is a significant issue as tribes develop a TANF plan and try to ensure that they will have enough resources to operate the TANF program.

This difficulty stems from the fact that overall state counts of 1994 AFDC recipients may be accurate, but information about their characteristics is often incomplete. For example, identification of an AFDC recipient's race/ethnicity tends to be unreliable because state program staff often made these determinations based on informal observation. New Mexico was the only state in the study sample that maintained records of AFDC recipients by tribal affiliation. The other states had only rough estimates of the number of tribal members receiving AFDC in 1994.

Most states, lacking complete data, developed estimates for tribal AFDC counts. These estimates were based on such factors as the zip code of the AFDC recipient and census data on the racial/ethnic percentages in a zip code or in a larger area that contained the zip code. Some states, such as Minnesota and Wisconsin, could match AFDC recipients with membership lists the tribes provided. Staff in the Welfare-to-Work division of the California Department of Social Services' Office of Tribal Government Affairs developed a methodology for estimating the number of Native American AFDC recipients in 1994 based on census data, poverty rates, and AFDC take-up rates.

Many tribes developed their own estimates because they felt state estimates were low. Four of the 10 tribes in this study considered state or county AFDC estimates but adopted their own instead. Two of the 10 initially disputed the state estimates, but eventually accepted them. Only one tribe in the study indicated it agreed with the state estimates from the start. Tribal estimates of their members' 1994 participation in AFDC usually exceeded the states' estimates. The tribes that offered counterestimates based their numbers on tribal records of members who participated in low-income programs such as Special Supplemental Nutritional Program for Women and Infant Children (WIC), BIA cash assistance, other social service programs and, in some cases, interviews of tribal members who participated in such programs. Tribal leaders suggested the following explanations for the perceived underestimates developed by states:

• State staff frequently misidentified the race/ethnicity of AFDC recipients, judging American Indians and Alaska Natives to be white, Asian, or Hispanic.
• States had an incentive to generate conservative or low estimates of tribal AFDC participants. Each tribal member counted as receiving AFDC in 1994 represents one case or unit of federal TANF funding to be transferred from the state to the tribe. If one tribe has a large population, or if more than one tribe is in the state, a significant amount of federal TANF funds may be transferred to the tribe(s).⁽⁵⁾

Conversely, some tribal and state staff interviewed in the study observed that tribes have an incentive to maximize the count/estimate of tribal members receiving AFDC in 1994. Several tribal informants said that a tribal TANF program cannot succeed if the number of members eligible for and requesting TANF services exceeds the number receiving AFDC in 1994 and the associated funding. These informants said that while most states have far fewer TANF recipients than 1994 AFDC recipients, many tribes have not shared this experience. Most reservation economies did not share in the significant economic growth many states experienced during the 1990s. The informants concluded that tribes should be aggressive in negotiating the 1994 estimates with states.

When they had different estimates, the tribe and state usually negotiated to reach agreement on a figure. For one tribe (Red Cliff), this involved comparing the tribe's enrollment list with the state's list of people who received AFDC in 1994. The Port Gamble tribe asked its social services agencies to compile a list of tribal members who may have been receiving AFDC in 1994 and asked the state to check the tribe's list against the state's records. In negotiation, the tribe argued that government programs have typically undercounted Native Americans, urging an upward adjustment. DHHS provided informal mediation and assistance in some tribal-state negotiations. For example, DHHS staff met with Arizona officials and with the White Mountain Apache tribal TANF program and the tribal council. Tribal officials credited DHHS with helping the tribe and state reach a mutually satisfactory agreement. Tribal officials said that, without the transfer of additional federal funding from the state as a result of negotiations, the tribe would have been forced to retrocede the operation of the TANF program back to Arizona.

2. Obtaining MOE Contributions and Other State Support

When federal TANF funds are transferred from a state to a tribal TANF program, the state's MOE requirement is reduced by a corresponding amount.⁽⁶⁾ States may (but are not required to) transfer to a tribal program the MOE amounts that the state formerly expended in providing TANF services to participants the tribal program now serves.

All the tribes in the study sample asked the state for MOE funds, but responses from the states varied, probably because of variation across states in policy, priorities, and the availability of funds. California and Nebraska provide 100 percent of the MOE monies to tribes; Washington provides 84 percent (plus additional enhancement and incentive funds); Arizona and Utah provide 80 percent; and Alaska provides 50 percent, but only to four of the eligible tribes/consortia in the state.⁽⁷⁾ Minnesota provides 40 percent, and New Mexico and Wisconsin give the tribes no MOE funds (Table III.2).

Some tribal officials maintain that tribal members have "dual citizenship" because they are both residents of the state and members of a sovereign tribe. They maintain that being a member of an Indian tribe does not eliminate any of the rights available to state residents. The tribal officials conclude that a state that fails to transfer the full complement of MOE funds to a tribe or tribes is unfairly denying tribal TANF participants benefits provided to other state residents.

Tribes also have successfully negotiated for additional funding, technical assistance, and TANF-related services from the states. For example, Arizona and New Mexico appropriated $4 million and $1 million, respectively, to help tribes plan and implement TANF programs. Minnesota donated computer equipment to the participating tribe, Mille Lacs. All the states working with tribal grantees in this study helped them, to some degree, plan, implement, and operate the TANF program. At least 5 of the 10 tribes in this study relied on states to operate all or a part of their TANF program during a transition period. For example, both the Hopi tribe and the White Mountain Apache tribe contracted with Arizona to operate the TANF program using the tribe's plan. After a transitional period, the Navajo Nation contracted with Arizona and New Mexico to continue to provide TANF services for existing TANF participants while the tribe provided services to new tribal participants. Each of these contracts between tribal TANF grantees and a state or states was for a fixed period (for example, 1 year, 18 months), and all three contracts were extended by mutual agreement of the tribes and states. Some states permitted tribal TANF programs to use the state TANF informatioystems (Arizona, Minnesota, New Mexico, Wisconsin), issue TANF benefit checks for tribal programs (Arizona, Wisconsin), or coordinate the enrollment of tribal TANF recipients in the Medicaid or food stamp programs (Minnesota, Washington, Wisconsin). Most states provided valuable training and technical assistance to tribal grantees in the study.

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D. Determining and Assembling Resources for Planning and Startup

Even with help from the federal and some state governments, most of the tribes and tribal consortia in this study found funding the development of a sound TANF plan to be a challenge. It was especially difficult for the tribal grantees to estimate the resources needed to implement and operate the TANF program. While states and DHHS provided valuable technical assistance to help tribes and consortia develop their TANF plans, the Act does not provide funding for planning prior to the approval of a tribal plan by DHHS and the subsequent grant award. Grantees in the study developed TANF plans using funding from a variety of other sources.

Many grantees in the study worked with state staff in developing their TANF plan. State staff provided information and guidance about staffing levels, facilities, and equipment needed to operate the program, as well as policy and procedure manuals and other documentation. DTS staff carefully reviewed each tribe's TANF plan and provided feedback. When necessary, it required the tribe to revise aspects of the plan that were impractical, incomplete, or not in compliance with the Act or DHHS regulations.

A common difficulty for tribes was the development, operation, and maintenance of information systems to support TANF operations. Such systems (including hardware and software) support enrollment of program participants and help tribes track and report services provided and participant activities. Extensive staff recruitment and training are needed, because few tribal members have experience in TANF programs. Unlike states, tribes did not receive funding to develop welfare information systems.⁽⁸⁾ Compounding the lack of experience and resources is the fact that the scale of many tribes and their TANF population is too small to justify developing expensive information systems and the associated staff training needed to develop, maintain, and operate them.

The Act does not provide federal funds for development of TANF plans, but the grantees in the study got some in-kind support from related federal programs and drew for their core planning efforts on a variety of tribal and state resources. Some grantees reported obtaining useful information, data, and insights from staff working in related federally funded programs such as WtW, Native Employment Works (NEW), and the Workforce Investment Act (WIA). Some states (Arizona, Minnesota, New Mexico, and Wisconsin) provided funds, in addition to technical assistance, to help tribes plan their TANF programs. Each of the 10 tribal grantees in the study reported that in their TANF planning they expended some of their own general funds, generated by tribal enterprises and taxation. Tribal officials said that using their general funds for TANF planning represented a difficult choice, since they face many competing pressures to fund efforts pertaining to tribal employment, economic development, and other programs.

Once past the planning stage, tribal grantees can also face difficult choices and tradeoffs in deciding how to fund start-up and administrative costs. In this case, federal funds can be used. Federal regulations permit tribal grantees a higher ceiling on administrative costs than is set for state programs. In recognition of the resources needed by many tribes for implementing and operating TANF, tribal grantees can allocate up to 35 percent of TANF funds to administrative overhead costs, compared to a maximum of 12 percent for states (45 CFR 286.50).⁽⁹⁾ However, the closer a tribe comes to using funds for administrative costs up to this ceiling, the more it reduces the total amount available in the grant for TANF benefits. This trade-off is especially difficult when the number of persons eligible for TANF in the grantee's service area exceeds the number of tribal members who received AFDC in 1994, and resources for benefit payments are constrained from the start.

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Endnotes

1.  When the data in this study were collected, the Division of Tribal Services (DTS), Office of Community Services, in the DHHS Administration for Children and Families oversaw the approval process. DTS was responsible for working with tribal governments and, where appropriate, with state and federal agencies on PRWORA and related legislation. As of November 2002, the tribal TANF program has been administered by the Division of Tribal TANF Management, Office of Family Assistance, Administration for Children and Families (ACF) in DHHS.

2.  Initially, the minimum work participation rate was 25 percent (for fiscal year 1997). The rate increased each year, reaching 50 percent in fiscal year 2002. Work activities include unsubsidized employment, subsidized private- or public-sector employment, work experience, on-the-job training, community service programs, vocational training, job skills training directly related to employment, study to obtain a GED, and child care for a person participating in a public-service program.

3.  There is an important exception (applicable to tribal and state TANF programs) to the 60-month lifetime limit for receipt of cash benefits under TANF. The months of assistance received by an adult while residing in Indian country (including Alaska Native villages) are not counted towards the 60-month limit when the not-employed rate exceeds 50 percent, in accordance with 42 U.S.C. 608(7)(D).

4.  State TANF weekly work requirements as of October 1999 were 29 hours a week in New Mexico, 32 hours in California, 35 in Arizona, and up to 40 in Washington and Utah (requirements vary) (Center for Law and Social Policy State Policy Documentation Project [www.spdp.org]).

5.  Although states had an incentive to estimate the number of 1994 tribal AFDC participants conservatively, some state officials acknowledged that it was in the state's interest, once a tribal TANF program was established, to be thorough in their transfer of American Indian and Alaska Native recipients on reservations to tribal TANF programs, because such recipients are among the most difficult to move from welfare to work. By transferring tribal TANF recipients to tribal programs, the state would be better able to meet the goals, objectives, and timetables in its own TANF plan.

6.  To receive a TANF block grant, each state must meet an MOE requirement — a specified minimum of its own funds. A state must sustain 75 to 80 percent of its fiscal-year 1994 level of spending on AFDC.

7.  The Tlingit and Haida reported little assistance, and a sense of opposition, from Alaska, with respect to the consortium's effort to take over the TANF program. However, when it became apparent that the tribal program would fail (and be retroceded to the state) without state MOE funds, the state appropriated 50 percent of the MOE funds to the tribe.

8.  The federal government reimbursed states (but not tribes) up to 90 percent of the costs of planning, implementing, and operating information systems to support welfare programs. Between 1984 and 1992, the federal government provided states more than $500 million annually for automated AFDC systems (GAO/HEHS-00-48, 2000).

9.  The maximum allowable overhead for tribal grantees decreases to 30 percent the second grant year, and 25 percent the third and succeeding years.

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