Early Implementation of the Welfare-to-Work Grants Program: Report to Congress. Given the Gradual Funding Rollout, Survey Results Provide a Very Early Snapshot


Before funding reached the local organizations actually delivering WtW services, several processes had to be completed at the federal and state levels.  States had to submit plans for the use of their formula funds and have them approved by DOL.  Some states that received formula funding awards decided to require applications or plans from their PICs before passing on the substate formula funds.  DOL had to solicit competitive grant applications, review them, select grantees, and make awards.

As a result, formula and competitive grant funds are reaching states and local grantees gradually, in stages during 1998 and continuing into 1999 (Table B.2).  About half of the 48 state­level grants were awarded in the first six months of 1998, and half in the latter part of the year.  Competitive grants are being awarded in three rounds; although two rounds of grants were awarded by November 1998, only the grants awarded in May had been announced in time to be included in the first grantee survey.



Grant Type/Timing of Awarda

Number of Grantsb Total Funding to Date
(in Millions)
State Formula Grants 48 $1,034.2
Awarded January­March 1998 12 $222.4
Awarded April­June 1998 14 $245.0
Awarded July­September 1998 21 $532.3
Awarded October 1998 1 $34.5
Competitive Grants 126 $472.0
Awarded May 1998 (Round 1) 51 $199.0
Awarded November 1998 (Round 2) 75 $273.0
Target Date September 1999 (Round 3) -- --
Total Formula and Competitive Grants as of November 1998 174 $1,506.2
Source:  U.S. Department of Labor, Employment and Training Administration.

a Based on date when grant award was announced.

b Includes the 44 states that accepted formula funding, the District of Columbia, Puerto Rico, Guam, and the Virgin Islands.

Survey respondents had thus received their WtW grants at various points during 1998, many only shortly before the survey was conducted (Table B.3).  States had 30 days to obligate their grant funds to substate grantees, but actual fund transfers could take longer.  About 60 percent of substate formula grantees reported receiving their grant notification after mid­year, thus reflecting the anticipated lag between states' receipt of their grants and the distribution of allocations to the local level.  Moreover, in several states that required local plans, many local grantees reported they had not yet received their actual funds (although they had received notification of the funding allocated to their SDA).



Date of Grant Notification

Number of Formula Grants Number of Competitive Grants
January­March 1998 63 0
April­June 1998 86 36
July­September 1998 190 11
October­December 1998 36 2
January­February 1999 1 0
Totala 376 49
Source:  National Evaluation of the Welfare­to­Work Grants Program, First Grantee Survey (November 1998­February 1999). 

a The total number of formula grants shown here is slightly less than the 388 (formula and formula/competitive) in Table B.1 because a few grantees did not report the date of their grant notification.

The scale of resources made available to grantees can be expected to vary widely.  Competitive grant sizes are diverse because applicants propose services that vary in nature and intensity and propose serving different numbers of participants.  Formula grants depend on a formula devised by each state in accordance with guidelines set by the BBA.  Each state's formula must take into account the relative number of people living below the poverty line in each SDA, compared to the poverty population in the state as a whole.  It may also take into account the SDA's relative share of TANF recipients and unemployed individuals.



  Overall Formula Grants Competitive Grants
Average Total Funding per Grantee $2,235,733 $1,898,204 $3,441,700
Distribution of Respondents by Total Funding (Percentages)
$0 to $99,999 1.7 1.3 2.0
$100,000 to $249,999 4.2 4.7 2.0
$250,000 to $499,999 16.5 17.6 8.2
$500,000 to $999,999 27.8 32.0 2.0
$1,000,000 to $2,999,999 33.2 33.9 24.6
$3,000,000 or more 16.6 10.5 61.2
Average Expected Participation 537 464a 854b
Source:  National Evaluation of the Welfare­to­Work Grants Program, First Grantee Survey (November 1998­February 1999).

a Estimate based on expected participation reported by grantees that received formula funds only or formula and discretionary funds.

b Estimate based on expected participation reported by grantees that received competitive funds only.

Grants received to date reflect differences in the funding mechanism for formula and competitive grants (Table B.4).  States are adopting different approaches to distributing formula grant funds.  Some are passing on to substate grantees their full share of the state's allotment, to be spent over a three­year period, but some are distributing funds in increments.  Formula substate grantees reported an average grant received of $1.90 million, but this figure includes some grants intended to support just a year or less of services and others that will be used over the full three years.3  Competitive grantees, in contrast, have received their entire three­year grant.  Round 1 competitive grants received by survey respondents averaged $3.44 million.  Even taking into account the fact that some formula grantees have received only part of their funding, it appears that competitive grantees will operate services for WtW participants on a larger scale.4  Competitive grantees, for example, project serving an average of 854 participants over the full term of their grant, compared to 461 for formula grantees.