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Revised Ruling Eases Way for Coordination of Welfare Funds

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Washington--The Health and Human Services Department has revised an interpretation of a welfare-reform law provision that state welfare and education officials had argued was impeding interagency coordination in the provision of education and training services to welfare recipients.

A department regulation pubLlished in October 1989 stated that, in order to draw federal matching funds, state funds for the Job Opportunities and Basic Skills Training program must be appropriated directly to the state welfare agency or transferred from another public agency.

Jobs was created under the Family Support Act of 1988 to provide education, training, and other support services to help welfare recipients achieve self-sufficiency.

Because in many cases state legislatures had already appropriated funds for such services to education, training, or other agencies, state officials complained that the ruling was undercutting their efforts to offer jobs services. (See Education Week, Sept. 26, 1990.)

In such cases, h.h.s. officials had suggested, funds from other agencies would have to be physicallyL4transferred to the state welfare Lagency and then redisbursed, a solution state officials said was cumbersome and, in some instances, counter to state law.

In a Dec. 21 memorandum to state welfare agencies, however, h.h.s. outlined a new policy that allows other state or local agencies to contribute funds to jobs programs through a "memorandum of understanding" with the welfare agency. Hhs said it would issue regulations formalizing the policy in the future. The memorandum said h.h.s. would "deem the 'transfer of public funds' requirement to be met" as long as agencies identify the amount of funds the welfare agency may count toward the state's jobs share and ensure that they are for services not otherwise available and are not used to draw federal dollars for programs other than jobs.

Welfare agencies would still maintain authority over how the funds are used, and the h.h.s. advised all agencies involved to maintain and be prepared to provide fis cal records for all jobs expenditures.

The memorandum "provides a structure for accountability, but at the same time allows for the kinds of partnerships we wanted," said Janet Levy, director of the Joining Forces project of the Council of Chief State School Officers. The project promotes collaboration between schools and social agencies in serving at- risk families.

By bogging down the process for pooling agency resources to draw federal jobs dollars, some state offi cials had argued, the earlier h.h.s. policy clashed with the welfare-re form law's goal of promoting interaH gency cooperation.

After "state officials from both the welfare and education communities demonstrated clearly that they were committed to working together to help jobs participants," Ms. Levy said, "the department responded in a very timely way on the merits of the issue."

Jason Turner, director of the h.h.s.'s office of family assistance, said the new policy is "consistent" with the Family Support Act requirement that welfare agencies maintain administrative control over jobs.

"At the same time, it addresses the administrative and technical problems states were having in co ordinating programs," he said.

Pennsylvania, for example, had to put on hold for this year a $2-million ) program designed to offer jobs ser vices to teenage parents because funds could not be transferred from local school districts to the state wel fare agency.

Gary Ledebur, director of commu nity and student services for the state education department, said he is "very pleased" with h.h.s.'s new policy, which he said would allow the state to launch the program next fall.

Deanna Phelps, director of the Maryland Department of Human Resources office that manages "Pro ject Independence," the state welL fare-reform program, said officials there are also "ecstatic" about the change, which she said comes at a time when "the availability of addi tional state dollars to expand the program is really limited."

Ms. Phelps said her department was "a day away" from engineering a complicated funding transfer from another state agency when it reL ceived the memorandum. Not only would the transfer be "an administrative burden we felt was unnecessary," she said, but the new ruling "will enable us to look to oth er state agencies as well as local pro grams to draw additional federal dollars to serve more people."

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