Tennessee TANF: $221 million in state funds used in place of available federal TANF funding

Anita Wadhwani
Nashville Tennessean

Tennessee has spent $221 million more in state funding than necessary on the Temporary Assistance for Needy Families program since 2013 — rather than using available federal funding, according to the Tennessee Comptroller. 

Instead, the Department of Human Services accumulated $732 million in federal funds intended for poor, working parents. TANF, a federal anti-poverty program, provides cash and other assistance to low-income parents while they find jobs or get an education. 

"We did spend state money when we didn’t need to," Russell Moore, an official with the state comptroller's office, told lawmakers Thursday. 

Danielle Barnes, the commissioner of the Tennessee Department of Human Services Wednesday Dec. 11, 2019, in Nashville, Tenn.

The Tennessean first reported in December that DHS was largely using state money rather than federal dollars to fund a grant program for nonprofits in an effort to spend down its accumulated surplus.

On Thursday lawmakers heard for the first time the extent of the agency's use of state dollars for TANF. 

"I’m still frustrated we are hearing something new in every meeting," said Rep. David Hawk, R-Greeneville. 

Rep. Robin Smith, R-Hixson, pressed DHS chief Danielle Barnes for details on how past funding decisions were made. 

Barnes said neither she nor her staff could answer.

"I’m positive this department has no idea about exactly the reasons why those dollars were spent," Barnes said. 

The response clearly frustrated Smith. 

"I’m not going to support at all any new spending unless I hear in a convincing manner that leadership and the full team is committed to changing the culture that goes back to your predecessor, maybe even that person’s predecessor," Smith said.

"Tennesseans deserve to know that their taxpayer dollars are helping others, whether they are coming from the federal government or our own coffers."

An analysis by the Comptroller also found that Tennessee is spending just 35% of its annual federal grant for TANF - the least of any state in the Southeast. Tennessee receives $191 million each year from the federal government to distribute to qualified, low-income families. 

And while Tennessee spends roughly the same amount of federal money on program's overhead costs — such as salaries and office expenses — it offers one-third of the services provided by those other states. 

The Comptroller analysis also found there is no publicly available way to track or monitor DHS spending on TANF.  Federal data is slow to become available and may not be accurate while state budget reports do not delve into detail, Moore said.

Lawmakers have complained in recent months that the budget document they routinely review did not track the TANF surplus.

Rep. Bryan Terry, R-Murfreesboro, said lawmakers on the specially convened "joint working group to study TANF" have agreed on an initial series of recommendations.

They will recommend a $50 million ceiling on DHS funding for nonprofits participating in a TANF grant program, he said. 

They will also support Barnes' recommendation that $342 million remain in TANF reserves.

The lawmakers are awaiting information from the federal government on whether the $241 million in state funding may be recouped and returned to the state's general fund. 

Any remaining funds from the TANF surplus will be spent  in a "fiscally responsible" manner, Terry said. 

More:Tennessee's program for the working poor: A snapshot of TANF from 1997 to today

Reach Anita Wadhwani at awadhwani@tennessean.com; 615-259-8092 or follow her on Twitter @AnitaWadhwani