Welfare Reform

The welfare reform emphasis on "work first" has prompted a significant rethinking of how best to get welfare clients into jobs. It is still too early to tell what the most efficient and effective model is. For example, all five states GAO visited -- Arizona, Massachusetts, Michigan, Ohio, and Wisconsin -- were continuing to modify the structure of their workforce development and welfare systems to adapt to the new environment created by welfare reform. Some states, however, are making significant changes to their structure approaches to serving Temporary Assistance for Needy Families (TANF) clients. For example, Wisconsin has an integrated workforce development and welfare system at both the state and local levels to provide employment and training assistance to TANF clients. Nationwide, states largely provide these services through two different structures. In 14 states, TANF clients receive employment and training services primarily through centers dedicated to serving only welfare clients; 17 states primarily use their local workforce development structure to deliver these services; and the remaining states use a combination of approaches. In GAO's visits to the five states it found similar results. The five states all provide employment and training services centered on getting TANF clients into the workforce as quickly as possible. Training focuses more on job readiness than on acquiring new vocational skills, in some cases using unpaid work experience or community work to teach job-readiness skills. The TANF block grant, rather than workforce development programs, is the principal source of funding for employment and training assistance to TANF clients.

GAO noted that: (1) it is too early to tell what the most efficient and effective model is--all five states GAO visited were continuing to modify the structure of their workforce development and welfare systems to adapt to the new environment created by welfare reform; (2) some states are making significant changes, however, to their structural approaches to serving the TANF clients; (3) nationwide, states largely provide these services through two different structures; (4) in 14 states, TANF clients receive employment and training services primarily through centers dedicated to serving only welfare clients; 17 states primarily use their local workforce development structures to deliver these services; and the remaining states use a combination of approaches; (5) the fives states GAO visited all provide employment and training services centered on getting TANF clients into the workforce as quickly as possible; (6) training focuses more on job readiness than on acquiring new vocational skills, in some cases using unpaid work experience or community service work to teach job-readiness skills; (7) despite the similarity in types of services available in the five states, the approach used to deliver these services varies; (8) two states tailor the initial services to meet individual client needs, and two states provide the same initial services to all clients without regard to clients' needs; (9) services in the fifth state, Ohio, differ in approach from county to county; (10) the TANF block grant, rather than workforce development programs, is the principal source of funding for employment and training assistance to TANF clients; (11) even where the workforce development system is providing services to the state's TANF clients, it is doing so with TANF funds; (12) according to state officials, this funding pattern results from the fact that TANF funds are plentiful and flexible, whereas workforce development funds are limited; and (13) welfare's hard-to-employ clients may be assisted by a new 2-year, $3 billion welfare-to-work grant program administered through workforce development systems, but at the time of GAO's fieldwork, the four states that applied for these grants were just beginning to implement their programs.