Last Updated August 2023
Summary: Expenditures that qualify as MOE include state and local government spending or third-party spending that benefits members of needy families and meets one of TANF’s four purposes. Examples of qualifying third-party expenditures include spending by food banks or domestic violence shelters on TANF-eligible families. Third-party MOE also can include in-kind contributions, such as volunteer hours or employer-provided supervision and training for people in subsidized jobs. While a number of states have reported third-party MOE in order to boost MOE to obtain caseload reduction credits or a portion of the TANF Contingency Fund, not all third-party spending is excess MOE spending; some states claim third-party expenditures toward their minimum MOE obligations.
Goal: Advocates should aim to reign in Third-party MOE spending that counts toward a state’s basic MOE requirement and redirect those dollars towards providing cash assistance to families. They should be also on the lookout for new Third-party MOE spending, as this may indicate a cut in other TANF MOE spending areas that the state is trying to back fill in order to avoid any consequences of reduced MOE. It is very important to distinguish Third-Party MOE that is used to meet a state’s minimum MOE obligation and Third-Party MOE that is in excess of a state’s MOE minimum requirement. If a state is using Third-Party MOE to meet its basic obligation, that means a state has withdrawn state funds that it previously spent to assist families with low incomes. Third Party MOE in excess of state’s minimum MOE obligation can be used to help states meet positive strategic policy goals, for example, obtaining additional funding through the Contingency Fund or operating a work program that focuses on helping parents to achieve their personal and family goals. It is important to note that non-profits often benefit from states’ Third-Party MOE practices and may oppose any efforts to eliminate the use of Third-Party MOE.
Key Resources and Data:
Unfortunately, the most recent report available on Third Party MOE was done in 2016. Still, the report provides a starting point to identify whether your state has a history of using Third Party MOE to meet their basic MOE obligation: GAO-16-315, TEMPORARY ASSISTANCE FOR NEEDY FAMILIES: Update on States Counting Third-Party Expenditures toward Maintenance of Effort Requirements. Most states that claim Third Party MOE have been doing so for a number of years.
The financial data that states report to HHS do not identify what reported spending arises from third-party MOE. The ACF-204 forms that states are required to submit to OFA or state budget documents may provide some helpful information. (You can request the ACF-204 directly from your state or from CBBP Income Security or CLASP staff.) Advocates were able to find that Georgia was counting third party MOE from food banks under Basic Assistance (further distorting how little the state spends on cash) by looking at the state’s 204. Although you cannot identify whether your state is claiming Third Party MOE from the annual TANF Expenditure that states report to OFA on the ACF-196R form, you can use that data to determine whether the state is spending excess MOE. That data can be found in Table C.3 (Analysis of State MOE Spending) in the annual TANF expenditure data tables State TANF Data and Reports | The Administration for Children and Families (hhs.gov). The combination of the data from the ACF-204 and the ACF-196R provides the best data publicly available for piecing together information on a state’s MOE spending. Most states that