Review of Rising Costs in the Emergency Assistance Program

EXECUTIVE SUMMARY:

From 1991 to 1994 emergency assistance (EA) expenditures claimed by States have increased by about 400 percent, from $153 million to $782 million. Emergency assistance expenditures are expected to reach over $1 billion in 1996. This final audit report points out that States, in order to maximize Federal revenue, have been amending their respective EA programs to obtain funding for services traditionally State funded. These services, predominantly juvenile justice, tuition, foster care, and child welfare, usually address long-term problems. Because the EA legislation and regulations are broad, States are able to shift these costs by lengthening the eligibility periods, defining emergencies to allow the shifting to occur, and setting high income standards for eligibility. Primary recommendations call for the Administration for Children and Families (ACF) to support legislation that would either cap the Federal share of EA expenditures or include the program as part of a block grant, and revise or rescind current ACF policies allowing the shifting of costs to the EA program, especially where such costs have been borne traditionally by the States. The ACF agreed that there is a urgent need to control the rapid escalation of EA expenditures, and agreed to support capping EA expenditures.

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