Understanding the Costs of the DOL Welfare-to-Work Grants Program. The Welfare-to-Work Grants Program


The BBA defined WtW programs as a complement to the "work first" programs established under TANF. The WtW initiative was developed to give states and localities additional resources to help the hardest-to-employ segments of the TANF population, including the noncustodial parents of children on TANF, find work. To ensure that grantees used WtW resources as intended, the legislation established detailed spending rules. For example, it required that at least 70 percent of grant funds be spent on individuals who met specific eligibility criteria.(1)

DOL distributed the $3 billion in funding that Congress provided for the WtW program to states and to competitive grantees in stages during 1998 and 1999. Seventy-five percent of the federal WtW funds were allocated to states based on a formula that considered states' share of the national poverty population and TANF caseload. State formula grants were awarded in 1998 and 1999. States had to pass 85 percent of the funding they received to local workforce investment boards (WIBs). WIBs and other groups could also receive separate competitive grants directly from DOL. Competitive grants were awarded in three rounds, announced in May 1998, November 1998, and October 1999.

The organizations that actually served WtW program participants were nevertheless diverse. The BBA and its implementing regulations (20 CFR 645.220) required that services relating to job readiness and job placement, as well as postemployment services, be provided through contracts or vouchers. At the local level, therefore, WtW grantees often solicited competitive bids and awarded subcontracts to several community-based and other provider organizations for WtW service delivery.

WtW programs were thus designed and operated primarily at the local level. Partly because of the grantees' reliance on subcontracting, a diverse mix of programs emphasizing different services and targeting different groups of WtW-eligible individuals was often implemented. This rich variety of WtW approaches was evident both across and within grantee initiatives.

Congress did not intend to provide ongoing support for these interventions. WtW grantees were originally given three years from the date they received their WtW awards (both formula and competitive) to spend their grants. WIBs and other WtW grantees, in turn, passed these same requirements to the providers with whom they subcontracted for WtW services. Ultimately, Congress extended the period over which WtW funds may be used to a total of five years.(2) However, no additional appropriations for WtW have occurred or are planned.

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