Privatization in Practice: Case Studies of Contracting for TANF Case Management. Coordination Challenges Created by Privatization


The study sites vary in how successfully the public and private agencies manage this coordination. In some sites, such as Delaware, both public and private agency staff viewed the collaboration between the two types of agencies to work well. In other sites  most notably Palm Beach County and Lower Rio Grande Valley  some public and private agency staff reported coordination difficulties.

Coordinating Eligibility Determination for TANF and Other Assistance Programs. In Palm Beach County and Wisconsin, private agency staff determine TANF eligibility while, as required by law, public agency staff determine food stamp and Medicaid eligibility. This division of eligibility determination responsibilities has caused problems in Palm Beach County, but less so in Wisconsin. This difference is mainly because the responsibilities of the public and private agencies are much more interdependent in Palm Beach County. Opinions about the desirability of the integration of eligibility determination functions across programs also differed between the two sites.

In Palm Beach County, the split in eligibility determination between TANF and other assistance programs was viewed as a constant source of confusion and conflict for both the private and public agency line staff. Private agency staff are responsible for collecting information and documentation needed to establish eligibility for TANF, food stamps, and Medicaid, but they are responsible for determining eligibility for TANF only. Food stamp and Medicaid eligibility is determined by a state worker from the Department of Children and Families, using the information collected by the private agency staff. The state workers complained that information or documentation necessary to determine food stamp and Medicaid eligibility was frequently missing. This lengthened the time the state worker needs to spend with the client. And, as information collected by the state worker must be shared with the contractor before any action is taken, missing information may also delay the clients eligibility determination. Both state and private agency staff in Palm Beach County expressed the view that it would be more efficient in their system for one agency to determine eligibility for all three programs.

In contrast, in Wisconsin the division of eligibility determination functions between contractor and county staff seems to pose less of a problem. The private agencies are not responsible for collecting information and documentation for food stamp and Medicaid eligibility determination, although information they collect for TANF eligibility is available to the county workers via the management information system (MIS). And it is the clients rather than the contractors responsibility to provide information to the county. In contrast to Palm Beach County, neither public agency nor contractor staff in Wisconsin viewed the integration of eligibility functions across programs as necessarily desirable. Splitting the eligibility determination functions by program was viewed as a way to avoid staff having to learn the complicated eligibility rules for three programs in addition to providing intensive case management.

Aligning the Goals of the Public and Private Agencies. Due to the differences in their roles and responsibilities, public and private agencies involved in the provision of TANF services may have different goals. This is especially true in those sites where a public agency conducts eligibility determination and other case processing functions and private agencies conduct employment-related TANF case management. Public agencies charged with case processing functions are judged on accuracy and close attention to program rules. The private agencies in the study focus more on assessing client goals, needs, and barriers to self-sufficiency, and are judged more on client outcomes, such as placement and retention rates. Although these two goals are not inconsistent, staff may pay more attention to tasks that affect the attainment of their agencys specific goals.

Lack of prompt and accurate information sharing about clients is the most frequently cited example of how line staff focusing on the goals of their own agency can affect the performance of line staff in another agency.

  • In San Diego County, contractor case managers said that county staff do not always promptly inform them when clients quit or lose their jobs. This affects how quickly they can provide re-employment assistance in order to meet the programs retention goals.
  • Public agency staff in Delaware noted that contractor staff sometimes entered data on clients hours of participation in work activities into a shared data system incorrectly. This affected the public welfare agencys ability to determine clients monthly TANF benefits.
  • In Wisconsin, county staff complained that contractor case managers do not always inform them promptly of changes in their clients work hours or earnings, which can affect their food stamp and Medicaid benefits and inflate quality control error rates.

Recommendations for sanctions can be another source of conflict. In Lower Rio Grande Valley, public agency staff considered contractor staff sometimes too quick to initiate sanctions without checking carefully enough that the client was not exempt from the work requirements. Correcting these mistakes placed a significant burden on the public agency staff.

Ensuring a Seamless Delivery of Clients Between Agencies. When TANF services are provided by more than one agency there is the potential for clients to "fall through the cracks" when referred to another agency. To guard against this, Palm Beach County requires that the contractor accompany the client to the public agency worker. In other sites, such as Delaware, the referral to a contractor is done automatically via the MIS. In addition, when clients have a choice of providers, as in Hennepin County, it is important that the public agency staff have sufficient information about differences among contractors so they can assist clients in choosing the most appropriate providers.

Promoting Good Working Relationships Between Staff at Different Agencies. In several sites, there were clear tensions between public and private agency staff. Some of these tensions resulted from differences in agency goals, as discussed above. Other tensions arose from differences in pay between public and private agency staff  private agency staff sometimes were paid more and often received more of their compensation in cash bonuses. Differences in work rules  such as the hours worked and the dress code  and differences in the general culture and mission of the agency also contributed to tensions. In Palm Beach County and Wisconsin, these differences exacerbated resentments public agency staff already felt about private agency staff "taking over" functions they had previously performed.

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