Purpose

To determine if the Office of Temporary and Disability Assistance (Office) adequately monitors wage subsidies to ensure payments are used as intended and whether program contractors accurately report performance outcomes, including the extent to which the overall goal of permanent, unsubsidized employment is achieved. This audit’s scope period covers April 1, 2011 through November 18, 2015.

Background

The federal Temporary Assistance for Needy Families (TANF) program provides assistance and work opportunities to needy families by granting states the federal funds and flexibility to develop and implement their own welfare programs. The TANF block grant program requires New York State to engage individuals in countable work activities. Federal funds are provided to the State to support the Wage Subsidy Program (WSP) and Transitional Employment (TE) program. For State fiscal years 2011 through 2014, federal funding provided $3.8 million for WSP/TE programs.

The Office is responsible for administering WSP/TE programs and has contracted with eligible public or private not-for-profit organizations (contractors) to implement them. Contractors work with third parties (e.g., local businesses) to employ eligible individuals or may act as the employer themselves. Each contract establishes employment goals to be met during the contract period. In the WSP, contractors place public assistance recipients and other low-income individuals with employment barriers into wage-paying jobs, and reimburse employers for costs (i.e., cost of the wages and fringe benefits paid to participants during the subsidized employment period). In the TE program, contractors place individuals in time-limited wage-paying jobs. Participants learn the customs and routines of work, acquire work skills, and establish an employment record that improves their competitiveness in private sector employment. The TE position is temporary and serves only as a vehicle to finding permanent employment.

The Office also makes performance-based payments to WSP/TE contractors when participants achieve certain employment milestones. Contractors receive reimbursement based on performance data they report on voucher claims, which they are required to submit quarterly.

Key Findings

• The Office provided adequate support and guidance to contractors to assist them in reporting WSP/TE performance outcomes and preparing vouchers for wage subsidies and achieving milestones.
• The Office’s system for tracking and monitoring milestones and goal attainment is outdated. As a result, it is not as efficient or effective as it could be in monitoring contractors to ensure they accurately report performance outcomes and that program funds are used as intended.
• The Office’s requirements for documentation are not sufficient to ensure that contractors are only being reimbursed for milestones and goals they have actually attained. Our review of records on 205 program participants found contractors were erroneously paid at least $14,000 for milestones that participants did not actually reach. Also, we could not entirely verify milestones for one-third of the cases we reviewed.

Key Recommendations

• Develop a system to more easily and readily store, access, and analyze complete WSP information.
• Require contractors to maintain supporting documentation, including payroll records, time sheets, paystubs, or canceled checks, to support program milestones, goal achievement, and wage subsidies.

Other Related Audit/Report of Interest

Office of Temporary and Disability Assistance: Oversight of Homeless Shelters (2015-S-23)