Temporary Assistance For Needy Families (TANF)
In fall 2019, the media reported that Tennessee had accumulated over $700 million of federal money related to the Temporary Assistance for Needy Families (TANF) program. Typically, federal grants have "use it or lose it" provisions where states lose the federal funding they have not spent after a specified period of time (e.g., two years). TANF, however, is unusually flexible in allowing states to keep the grant funding they have not spent forever without limitation. Because Tennessee has spent a small portion of its federal grant in recent years, the unspent funds have carried over each year and built up to the $700+ million balance.
In November 2019, the legislature asked the Comptroller's Office to look into the TANF program and advise on a reasonable amount of federal funds to keep in reserve. To date, we have published two memos on the subject and have reached several conclusions about the program.
$221 million of extra state money spent since 2013
On top of the federal funding received for TANF, Tennessee must spend a minimum amount of state funding each year. If Tennessee had managed its program differently, it could have spent $221 million less state money on TANF over the past six years and still provided the same services. This extra $221 million could have been spent on any state program or priority.
Fewer services for similar administrative costs
Compared proportionately to the other states in the Southeast, Tennessee spends a similar amount of its federal TANF block grant on administrative costs. Because
Tennessee's program is so much smaller than the other states', however, it costs Tennessee about the same amount of money to administer one-third of the program services. In other words, the other states provide three times as much program services with a similar amount of overhead.
No public way to track TANF spending
Currently, there is no publicly available way to monitor the TANF program or spending. The information provided by the federal government is slow to be published and may not be accurate. In addition, neither the state budget nor the state's Annual Comprehensive Financial Report (ACFR) go into enough detail to single out TANF spending.
No legislative approval needed to spend reserve
The executive branch already has the authority to spend almost all of the $700+ million TANF reserve without further approval from the legislature. Language in the appropriations act gives the Department of Finance and Administration the authority to put most of the reserve back into the current budget for the Department of Human Services.
For more detail on these conclusions, plus other information related to TANF, see the two memos published on this topic.