The goal of the WtW grants program was to serve the hardest-to-employ TANF recipients and help them obtain employment that could ultimately result in long-term economic independence. Federal rules governing the program specified the following objectives:(5)
- To facilitate the placement of hard-to-employ welfare recipients and certain noncustodial parents into transitional employment opportunities which will lead to lasting unsubsidized employment and self-sufficiency
- To provide a variety of activities, grounded in TANFs work first philosophy, to prepare individuals for, and place them in, lasting unsubsidized employment
- To provide a variety of post-employment and job retention services which will assist the hard-to-employ welfare recipients and certain noncustodial parents to secure lasting unsubsidized employment
- To provide targeted WtW funds to high poverty areas with large numbers of hard-to-employ welfare recipients
In order to address the employment and service needs of its diverse target population, WtW grants could fund a broad range of employment services. Allowable WtW program activities, as specified in section 5001(C)(i) of the BBA, included the following:
- Community service and work experience programs
- Job creation through wage subsidies
- Job readiness, job placement, and post-employment services
- On-the-job training
- Job retention services
- Support services such as substance abuse treatment
Amendments to the BBA passed in 1999 expanded this list of allowable activities to include up to six months of pre-employment vocational education or job training.(6)
Congress authorized $3 billion $1.5 billion each for fiscal years 1998 and 1999 for the WtW grants program and specified how the WtW funds were to be distributed. About 8 percent of the total funds were set aside at the national level for the following: Indian and Native American programs, evaluation activities, and federal-level program administration, such as reporting, performance management, technical assistance, and monitoring. Of the remaining funds, about 75 percent were distributed to states as formula grants and 25 percent were used for competitive grants awarded directly by the Secretary of Labor.(7)
Formula grants totaling about $2 billion were allocated by DOL to states based on their shares of the national poverty population and TANF caseload. States were required to provide one dollar in matching non-federal funds for every two dollars of federal funds provided. They also had to pass at least 85 percent of their formula funds on to local WIBs. They could retain 15 percent of formula funds for WtW projects of their own choice (that is, as discretionary funds).
Competitive grants were awarded directly to local grantees by DOL. These grants could be sought by local WIBs, government entities, or community-based, private, and other organizations. A total of about $860 million was awarded in competitive grants in May 1998, November 1998, and October 1999.
Congress also established eligibility criteria and spending rules for the WtW grants to ensure that the funds were used primarily to help individuals who had specific disadvantages in the labor market. As originally enacted, the BBA required that WtW grantees spend at least 70 percent of their grant funds on long-term TANF recipients, those within a year of reaching a TANF time limit, or noncustodial parents of children in a long-term TANF case. These individuals were required to display two of three specific problems affecting employment prospects: (1) lack of a high school diploma or GED and low reading or math skills, (2) a substance abuse problem, and (3) a poor work history. The remaining funds (no more than 30 percent of the grant) could be spent on people who met less stringent criteria: TANF recipients, or noncustodial parents of children receiving TANF, who had characteristics associated with long-term welfare dependence, such as being a school dropout or a teen parent, or having a poor work history.
As WtW-funded programs were being implemented beginning in 1998, it became clear that the strict eligibility criteria and the 70-30 spending requirement were factors behind low rates of enrollment in local programs (Perez-Johnson and Hershey 1999, Perez-Johnson et al. 2000, Nightingale et al. 2002). In response, Congress modified the WtW legislation in the 1999 amendments to the BBA. While the amendments maintained the requirement that 70 percent of WtW funds be spent on a defined category of participants, they broadened the population in two ways to make it easier for TANF recipients and noncustodial parents to qualify for WtW services in that category:
- TANF recipients qualified simply by being long-term recipients. Rather than requiring the presence of additional barriers to self-sufficiency, such as low skills, substance abuse, or a poor work history, the amendments deemed TANF recipients eligible if they had received assistance for at least 30 months, were within 12 months of reaching a time limit, or had exhausted their TANF benefits due to time limits.
- Noncustodial parents qualified under less restrictive rules. Noncustodial parents were eligible if: (1) they were unemployed, underemployed, or were having difficulty making child support payments; (2) their minor children were receiving or eligible for TANF, received TANF in the past year, or were eligible for or received assistance under the Food Stamp, Supplemental Security Income, Medicaid, or Childrens Health Insurance programs; and (3) they made a commitment to establish paternity, pay child support, and participate in services to improve their prospects for employment and ability to pay child support.
The definition of the 30 percent category was also broadened to include youth who had been in foster care, custodial parents (regardless of TANF status) with incomes below the poverty level, and TANF recipients who faced other barriers to self-sufficiency specified by the local WIB.
The WtW grants program was created as a temporary complement to TANF-funded employment support programs, and grantees were initially expected to spend the funds within three years of their receipt. Because of the early enrollment difficulties, the 1999 amendments to the WtW program extended the funding period to five years. Nevertheless, the loosening of the eligibility criteria had limited effects for two reasons. First, DOL did not issue final rules that reflected the 1999 amendments until January 2001, well into the amended scheduled life of the program (DOL 2001). Second, the changes in eligibility criteria came so late that many local WtW programs were reluctant to revise their intake procedures, agreements with TANF agencies, forms, and reporting systems, opting instead to continue using the original eligibility criteria (Nightingale et al. 2002).
Despite the extension, the administrators of several local programs participating in this evaluation told us in 2003 as they had several years earlier that the short-term grant funding compounded the problems of implementing WtW programs (Nightingale et al. 2003; Nightingale et al. 2002). Some administrators believed that the temporary funding made it more difficult to establish ongoing referral arrangements with TANF and other agencies, which often had networks of permanent programs to which they were accustomed to referring clients. Some also noted that longer-term or permanent funding would have facilitated the development and improvement of their programs.(8)
No additional appropriations for the WtW grants program were made after fiscal year 1999, and on January 23, 2004, Congress rescinded the 1999 WtW state formula funds that remained unexpended.(9) The rescission accelerated the termination of WtW grants to the states, all of which were due to expire during fiscal year 2004. However, to ease the potential negative consequences of this early termination of the FY1999 WtW formula grants, Congress also established a process that allowed active participants in WtW-funded programs to transfer into programs funded under the Workforce Investment Act or other appropriate one-stop services.
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