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Welfares New Burden: Feds Tie Down States with Data Reporting Requirements

The 1996 Welfare Reform Act has increased the fiscal flexibility of states, but at a heavy price.

The regulation seems harmless. When states report to the U.S. Department of Health and Human Services (HHS) on families receiving benefits under the Temporary Assistance for Needy Families (TANF) program, they must collect information on individuals in the household, including those not receiving assistance.

The only problem, according to the American Public Welfare Association (APWA), is that the regulation exceeds the authority of the TANF law as it was written by Congress; it forces states to maintain two definitions of family -- one for TANF reporting purposes and one for state needs -- and it significantly expands the data collection burden for states.

This example is just one of many that could turn the TANF portion of welfare reform into a quagmire of data collection and reporting for state governments. That quagmire includes 178 proposed data categories that are far more complex to gather and report than originally estimated by the U.S. Office of Management and Budget (OMB).

The impact of welfare reform's proposed reporting requirements has been heard loudly at the APWA. "We have been in close touch with our members on all aspects of welfare reform, and I have to say the data reporting requirements are among the most troubling for our members," said Linda Wolf, APWA's acting director. "We're not against collecting information, but it's the type of information [HHS requires] and the multiple requirements that have us all perplexed."

FLEXIBILITY AT A PRICE

Welfare reform was presented to the states as one of the great gifts of devolution. Welfare would no longer be a single, national program where one size fits all. Rather, the federal government would allow states to provide welfare as they best see fit. By turning welfare into a block grant program, the feds gave the states significant fiscal flexibility.

But flexibility came at a price. The new law requires states to collect and report information in sufficient detail, so that HHS can understand who is being served by the states in TANF and compare progress and results in transferring families from welfare to work. The data must be reported to HHS on a quarterly basis and in an electronic format.

These reporting requirements come amongst a host of regulations that will sorely test computer systems and the information management capabilities of state welfare agencies. Under welfare reform, states will be required to track every case across time, prohibit noncitizens and criminals from receiving welfare, verify school attendance of teen-age mothers and calculate work participation rates [Government Technology, November 1997].

Last year, HHS' Administration for Children and Families indicated that states would be required to report on 68 data element categories. Those categories have ballooned to 178 under the proposed regulations issued last November.

When the first quarterly reporting period fell due last fall, it became clear that a big problem existed for reporting just the current data elements. First, the software supplied by HHS to the states for capturing and transferring program information didn't function properly, according to a report issued by the Rockefeller Institute. "Most of the states found that the software did not work," wrote Terrence Maxwell, executive director of the New York State Forum for Information Resource Executives, "and the states themselves are struggling to collect and compile the disaggregate case information that the quarterly reports required."

Ten states failed to file welfare reports with HHS at the deadline last November, according to agency spokesman, Michael Kharfen. "We did encounter some glitches with the software, but they have been corrected," he said. What did concern HHS was the quality of the information submitted by the states. "Some of the states submitted data that was unreadable," mentioned Kharfen, "but the first time you do something like this, you're going to have some ups and downs. We now know where the gaps are and what needs to be resolved. Soon, data reporting will be routine."

STATES CAN'T TANF

The problem, according to states, isn't with the software but with the burden the proposed new requirements impose on the states. "States are concerned about the magnitude of the reporting requirements," explained Wolf. She referred to an OMB study that estimated the reporting burden mandated by the proposed rules would take about 33 minutes per case to gather the necessary data. But states have been telling APWA their estimates show the burden will be 5 times to 20 times greater than OMB's estimate.

Roy Haupt confirmed what APWA is telling the feds. Haupt is the chief of research and planning for Vermont's Department of Social Welfare. He noted the new reporting requirements are far more complex than the state's existing computer system currently captures and more than his small staff can handle. As a result, "the new requirements will impose a burden 10 times greater than what it was under AFDC [Aid to Families with Dependent Children]," said Haupt.

Besides the time burden, APWA has identified several other problems:

* The proposed requirements exceed the TANF statute. APWA, the National Governors' Association and the National Conference of State Legislatures point out that many of the reporting requirements are not required under the TANF statute, nor are they necessary for effective program management and implementation.

* Many of the data elements are new or different. OMB appears to assume that information gathering systems are already in place in every state and that the proposed volume and data elements are essentially similar to present requirements. In fact, states would have to make major changes to their computer systems and beef up staff training to gather and report many of the proposed elements.

* States face new burdens in obtaining the data. The proposed rules present new difficulties in obtaining data that states did not face under AFDC. For example, states would have to pursue data on closed cases, noncustodial parents and new applicants as well as gather information on expenditures, such as educational assistance, that welfare clients presently don't keep.

* Reporting data by sampling is unrealistic under the new regulations. HHS will allow states to report data based on sampling, but the proposed rules mandate a sample size of 3,000 active cases and 800 closed cases. These numbers far exceed the sample method used by states for reporting their AFDC caseloads.

* The New definition of "family" expands the state data collection burden. The feds want states to report on individuals living in households who are not affected by the work participation and time-limit requirements. States say this new definition of a welfare family exceeds the authority of the TANF law and has no justification.

COPING WITH THE INEVITABLE

To cope with these new burdens, states will have to increasingly rely on computers to do the job, but it won't be cheap. One midsized state was told by a vendor that it will cost $1.5 million to incorporate the new data elements in its computer system. Overall cost estimates put the bill for new and upgraded welfare systems at $1 billion nationwide.

Spending that kind of money on reporting data to the feds will divert scarce resources from the development of integrated welfare systems, which states badly need, analysts believe. "It is understandable that federal policy-makers and managers might need large amounts of detailed data, since they, like their state counterparts, need to monitor the factors which affect state performance," Maxwell wrote in his report, Rewiring the Human Service System. "Federal needs, however, place structural burdens on states and constrain local flexibility, thereby affecting the state's ability to decrease administrative overhead."
States would like to see this financial burden reduced through federal/state partnerships. One suggestion calls for greatly increasing the scope and level of federal technical assistance to the states. Others suggested that the feds ease the certification process for state welfare information systems.

Another option is to streamline the reporting requirements. APWA believes many of the reporting requirements could be reduced yet yield the same information. For example, the feds want reports on any disability benefits that TANF participants may receive. Right now, states must answer "yes" or "no" to a long list of questions. A simpler, less burdensome approach would be to simply list the types of benefits the participant actually receives.

Another solution would be to give states more flexibility in how they use the sampling option for reporting data. Some states believe it would be more feasible to report some of the data by sampling and the rest by actual numbers, but HHS won't allow this approach.

DATA vs. INFORMATION

In states like Vermont, there's a delicate balance between automation and manpower when it comes to running a welfare program. Years of belt-tightening and investments in technology allowed the state to cost-effectively deliver needed human services to thousands of poor people -- many of them children. Burdensome reporting requirements could upset the balance.

As far as the proposed TANF reporting requirements are concerned, Vermont's Haupt "just wants the feds to acknowledge that some of the requirements are too burdensome." According to APWA's Wolf, Haupt's sentiments are shared by other APWA members. Across the board, states look at the requirements and see themselves spending an inordinate amount of time collecting information on data that may have curiosity value but is irrelevant to running a welfare program.

"Fundamentally, one of the questions we are all struggling with is to understand that data is not information," said Wolf. "We should be asking: 'What is the information we need?' before we start talking about 'What are the data elements we want to collect?'"

April Table of Contents


With more than 20 years of experience covering state and local government, Tod previously was the editor of Public CIO, e.Republic’s award-winning publication for information technology executives in the public sector. He is now a senior editor for Government Technology and a columnist at Governing magazine.
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