State leaders still won’t fix scandalous welfare program that serves few poor families

by Anna Wolfe, Mississippi Today
February 17, 2023

Now that Mississippi’s welfare department isn’t hemorrhaging federal grant funds as a result of widespread mismanagement and political corruption, it has over $100 million to spare.

But the agency, Mississippi Department of Human Services, won’t say what it’s going to do with the money; whether it’s going to try to reach more needy families; or how it’s going to finally start tracking outcomes of the program.

In the three years following arrests in the largest public fraud scandal in state history, the agency led by Gov. Tate Reeves has never released a full accounting of its current welfare expenditures. There isn’t even a list of organizations receiving the funding on the agency’s website, nor are its subgrant agreements available online.

And lawmakers, in their seventh week of the Legislative session, haven’t taken one action to address the logjam. Instead, they’ve killed at least 11 bills aimed at improving the administration of the agency and its funds, as well as at least five amendments offered to do the same on the floors of both chambers.

All the bills filed to address these problems were killed by Republican committee chairs without debate, and all the amendments were introduced by Democrats and voted down by Republicans, primarily along party lines.

“(Mississippi Department of Human Services) has certainly not held up to its mission or its responsibility to those who need it the most,” said Rep. Omeria Scott, D-Jones, who offered an amendment to the MDHS appropriations bill on Wednesday to make increases to the agency’s budget, which Republicans reduced. “I do hate that through the general bills process that there was no legislation for a board, or no legislation for any of these audits that are in this appropriations bill, that we got any reports or any demands or anything like that. That has not been before us, and I imagine won’t be before us, but let me say to you that there are areas over there in Human Services that need some escalation.”

While Republican leadership says it has cleaned up fraud within the agency, that doesn’t mean the welfare program, called Temporary Assistance for Needy Families, is reaching the needy or helping people enter the workforce. In fact, during the height of the scandal, the state was using more of its TANF funds to help more poor Mississippians than it is today.

In 2022, a monthly average of 246 adults and 2,265 children benefited from the welfare check — no more than $260 for a family of three (a rate that was raised in 2021 for the first time since 1999). Mississippi is consistently among the most impoverished states in the nation with 1-in-5 of its residents living below the poverty line. The assistance is reaching about 4% of the more than half-a-million Mississippians living in poverty.

Meanwhile, the state continues to rack up tens of millions in welfare funds. By October of 2021, more than a year ago, Mississippi’s TANF program had amassed $97.9 million in unobligated funds. While the agency hasn’t released data showing how they spent the money within the last year, all indications are that the number of unspent TANF funds has only grown, especially since the state didn’t issue a single new TANF subgrant in 2022.

In October, MDHS Director Bob Anderson hesitated to say how his agency might spend the money, or whether it would use the funds to, for example, increase the number of child care vouchers it is able to provide to low-income families.

“Understand, people have a lot of other plans for that money as well,” Anderson said.

MDHS has refused to answer Mississippi Today’s questions about which people and what plans.

The sections of the TANF program that have received most public attention are:

• Cash assistance — the money that goes out directly to families who qualify for the welfare check
• Subgrants — the money that goes to organizations to provide TANF-related services, such as after school programs, parenting classes and workforce training

But these currently account for less than half of the state’s annual federal TANF grant.

And according to the state’s checkbook, the state spends millions of TANF funds each year on items outside of cash assistance or TANF subgrants — such as IT contracts, a contract with the company who conducts drug testing of welfare applicants, interagency transfers to the state auditor’s office or payments to the attorneys crafting the civil case against NFL legend Brett Favre and others. There has not been a public accounting of these purchases, nor have they been discussed in audits, legislative hearings or among lawmakers publicly.

Each year, the state also transfers a large chunk of TANF funds, the amount unknown to the public, to Mississippi Child Protection Services, the embattled state agency responsible for investigating child abuse and neglect and overseeing foster care across the state. The financial maneuver is preventing the state from taking advantage of unprecedented federal matching funds offered under the 2018 Family First Prevention Services Act to help families stay intact.

Aside from the scandalous stories about politicians and famous athletes funneling TANF money to their pet projects during former Gov. Phil Bryant’s administration, the welfare program itself is as forgotten and ignored as it was before the arrests.

Lawmakers passed a bill in 2021 to place law enforcement officers within MDHS’s Fraud Investigation Unit and a bill in 2022 to require that employees of the unit report civil or criminal violations to the state auditor’s office.

Neither of these changed how the agency runs its TANF grant or introduced any accountability for the agency to spend the money effectively.

In 2021, the first full year after the scandal was revealed, Mississippi spent just $35.6 million of the $86.5 million it receives in federal funds each year, according to federal reports released in December. The reports are typically outdated by about a year.

To put that into perspective: In 2018, Mississippi spent about $113 million in federal TANF funds (including some unspent funds from years before). If $50 million of that went to fraudulent or unallowed purchases, that leaves $63 million that Mississippi spent legally that year, including to organizations similar to those providing services today.

In 2018, at the height of the fraud scandal, the state pumped $7.3 million directly to families, whereas it only gave $3.5 million in cash assistance in 2021. Either way you slice it, Mississippi’s welfare department was using more TANF money to help more poor Mississippians during the years of Bryant’s appointed former MDHS Director John Davis, who is likely going to prison, than the agency is today under Reeves and Anderson.

Mississippi Department of Human Services previously told the public that it is allocating about $69 million of its TANF funds each year — $4.1 million on cash assistance, $34.5 million on subgrants to organizations and $30 million to plug budget holes at the Mississippi Department of Child Protection Services.

But it has not made documentation of these expenditures available to the public. Also, these figures are not clearly reflected in federal reports. In 2021, for example, the state only reported spending $15 million in TANF funds on “child welfare” – the only spending category that would appear to correspond with the CPS transfers.

The agency would not explain the reason for the discrepancies in the federal reporting, other than to say that it’s possible not all of the money that the state obligated was actually used. The department has also repeatedly failed to explain which purchases fall under which categories in the federal reports.

The state is allowed to use grant funds from one year to another for a period of three years. So funds being spent today could technically be coming from the state’s 2021 TANF grant. That, and the fact that some subgrants span more than one year, during which the subgrantee can draw the funds at their leisure, have perpetually created a foggy picture of the program.

The only documentation of TANF expenditures that MDHS appears to have made public, at the request of Mississippi Today, is a list of subgrantees to whom the state awards a fraction of the funds. This information does not appear on the agency’s website, nor in its annual report.

In mid-2020, the department provided to Mississippi Today a spreadsheet of TANF purchases that included, in addition to payments to subgrantees, expenditures for things like tech support or hotels for employee training. In October, Mississippi Today extracted and analyzed all purchases labeled under the TANF program from the state’s accounting database from 2015 to 2022, all of which Mississippi Today made publicly available, but the expenditures didn’t add up to nearly the amount the state reported spending to the federal government. Transfers from MDHS to CPS also do not appear on the state’s accounting database.

The department began the most recent Request for Proposals — a competitive bid process — for TANF subgrants in June of 2022. But due to staff changes within MDHS’s Division of Workforce Development and Partnership Management, a spokesperson said, the agency has not made an award.

“Once we have a finalized plan we will make a public announcement,” MDHS Chief Communication Officer Mark Jones offered in response to questions about the agency’s plan for the TANF program moving forward.

Even with the grants most recently awarded in 2021, it’s unclear what all of the organizations are accomplishing or how the programs align with a vision to reduce poverty. The current grants cover parenting initiatives ($8.1 million), after school programs ($13.7 million), and workforce development ($14.9 million). The subgrant agreements aren’t even available on Mississippi’s transparency website.

The largest award was a $6.9 million parenting initiative grant to Mississippi Children’s Home Society, or Canopy Solutions, a children’s behavioral health services provider, including a residential psychiatric facility. Canopy has been a TANF subgrantee for years and works within the foster care system to prevent family separations. Canopy also recently launched a specialized nonprofit school for students with learning differences in Ridgeland, essentially replacing the recently shuttered New Summit School by hiring its employees and recruiting its students.

New Summit closed after its founder Nancy New was charged within the welfare scandal. New was funneling TANF money to New Summit, a for-profit school, and also running a separate scam to defraud the Mississippi Department of Education, she admitted in her 2022 guilty pleas.

Other current TANF subgrantees include the Mississippi Alliance of Boys and Girls Clubs ($5.3 million), Save the Children Federation ($2.4 million), YMCA Metro Jackson ($1 million), and Juanita Sims Doty Foundation ($1 million) for afterschool programs; and Institutions of Higher Learning ($2.4 million), Mississippi Department of Employment Security ($1.5 million), South Delta Planning and Development District ($2.1 million), Southern MS Planning and Development District Gulfport ($3.6 million), Three Rivers Planning & Development District ($4.7 million) for workforce training.

Since welfare reform in the late 1990s, state leaders, workforce specialists, industry experts and advocates have met, studied, and discussed ad nauseam the barriers they’ve identified for families escaping poverty – chief among them child care, transportation and workforce training that aligns with market needs. The concept of TANF when Congress created it was to move people into the workforce, hopefully ending the reliance on government assistance.

Mississippi could be transferring up to 30% of its TANF funding to supplement the Child Care Development Block Grant, which provides child care vouchers to low-income working parents. The program has always served just a small fraction of low-income children needing child care across the state.

While legislation is not required for MDHS to make this transfer – since it has done so in the past, according to federal reports – the current Legislature has killed bills and amendments to compel MDHS to use TANF funds this way. And the agency refuses to answer questions about whether it will or, if not, why it won’t. The agency has, however, complained that without a budget supplement, 12,000 kids may be kicked off the voucher.

“From the beginning of the (TANF) program, there have been thoughts like, ‘We need to figure out a way to provide daycare. We need to figure out a way to provide transportation and that will help get a large number of people back into the workforce,’ which is said to be the aim of all these reforms,” Senate Public Health Committee Chair Hob Bryan, D-Amory, said during a floor debate on several TANF-related amendments last week. “And it is extremely frustrating that we have money that could be used for additional vouchers for childcare, so that there would be someone to care for children when their parent is at work and we’re not taking advantage of that. And yet we complain about people not working.”

This article first appeared on Mississippi Today and is republished here under a Creative Commons license.