Wolf admin ending non-profit clothing grants in favor of cash, raising GOP concerns

Nonprofit groups and legislative Republicans say they aren’t happy with a plan to provide job-seekers on public assistance with $150 in cash to buy professional clothing.

Gov. Tom Wolf’s administration, who proposed the change as part of a broad cost-saving measure to get welfare recipients into careers, argues that switching to direct cash payments instead of nonprofit grants will save taxpayer money.

But service-providers say the change will instead remove a stable funding source for their work. 

And Republicans, who oversaw last year’s elimination of a different cash-based welfare program, are balking at expanding any cash benefits, citing accountability concerns.

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At issue is a $2.2 million program that pays for new professional clothing for Temporary Assistance for Needy Families recipients in 38 counties who are looking for work. 

The dollar amount at stake is small compared to the state’s total human services funding — just about 1 one-hundredth of 1 percent of the $14.4 billion the state annually spends on child welfare, mental health and disability services and low-income assistance.

The program, PA WorkWear, issues contracts to service providers, for such nonprofits as Dress for Success, that provide low income people, domestic violence victims or returning citizens for free. Such service providers are active in 38 counties.

Speaking to House lawmakers during a Wednesday budget hearing, state Human Services Department Secretary Teresa Miller said the current system is “flawed,” and should be abandoned. 

Since the program was authorized in 2009, its costs have increased by 50 percent, despite a nearly 68 percent decrease in the people it serves, according to data provided by DHS. About 4,100 people received work clothes in 2019, at an average cost of $546 per person.

“I can’t defend how we’re paying more and serving fewer,” Miller said at a budget hearing Wednesday.

In the 29 Pennsylvania counties without a nonprofit, the administration’s plan is already in use.  

Known as a special allowance, 150 people used state cash payments in 2019 to purchase $13,637 worth of professional garb. That’s at a cost of almost $91 per-person.

Individuals who use the cash grants must complete an itemized estimate of clothing to be purchased, receive approval from a case worker, and provide a receipt. Without documentation, the state docks the TANF recipient’s monthly disbursement, according to DHS.

These regulations have been in place since 2009, when an audit of the special allowance program discovered revealed “lax oversight” and an “environment that encourages potential fraud and abuse.”

Clothes that level the playing field

But the average price doesn’t even begin to cover the services that are rendered, Sheri Cole, executive director of Philadelphia-based Career Wardrobe, said.

Career Wardrobe serves Philadelphia, Delaware, Bucks, Montgomery, Chester and Berks counties. About 4,000 people a year receive everything from suits to scrubs to steel-toed boots through the program, Cole said. About half of those clients are referrals through PA WorkWear.

The DHS cash payment is just a fraction of the value Career Wardrobe visitors receive, Cole added. 

They provide three outfits to job seekers: one for an interview and two to get through the first pay period in a new gig. The retail price for what WorkWear clients receive for free can range from $750 to $1,000, Cole said.

This allows “clients to compete and look just like everybody else who’s walking in the door,” she added.

The clothing is on top of some training in professional soft skills such as interviewing, time management and networking.

Moving to a cash grant system, Cole said, would put the onus on individuals to put together a professional outfit instead of a guided tour of working life at Career Wardrobe.

And the financial consequences of the change could be big for the nonprofit, she added.

The nonprofit received $828,851 in state contracts in 2018, about a third of Career Wardrobes revenue, according to the most recent tax document on their website. The rest comes from individual, charitable, and corporate donations.

If the state makes the switch to cash, Career Wardrobe would likely close in Berks and Montgomery counties, Cole said.

“To lose this program would mean we wouldn’t be able to sustain the same staffing without an reimbursement,” she said. “We would not be able to serve this population.”

Finding accountability

The Department of Human Services informed WorkWear vendors that it will end the contracts in June. But through the state budget, the skeptical, Republican-controlled General Assembly could get final say.

Republicans, who have controlled the state House and Senate most of the last decade, have made stamping out waste, fraud and abuse of the state’s welfare system a top priority.

In 2019, the General Assembly eliminated a program that provided $205 a month to domestic violence victims, people suffering from addiction, and people living with disabilities. Republicans cited accountability concerns, passing it over fiery Democratic push back.

Republicans once again raised that concern at a House Appropriations Committee hearing Wednesday.

“You want people to move forward. I’m all in favor of the soft skills and having people become independent,” Rep. Rosemary Brown, R-Monroe, said. “But when you hand cash to people, the accountability measures have not been there in the past.”

Some lawmakers suggested that the state pay providers like Career Wardrobe a per-person rate, and encourage more referrals to the program, to save dollars.

Cole said a per-client fee does not incentivize the best quality service, but was open to reforms of the system.

In a letter from 14 different WorkWear providers from January, they suggested that the department judge the program by the number of referrals, not the number of clients served with new clothes.

Barriers to child care or transportation could keep a low-income job seeker from entering the program, Cole said. But each referral still reflected a need for clothing that could be met with better coordination between the nonprofits and a DHS case manager.

Budget hearings ended Thursday. Now, lawmakers and the administration will commence private meetings to hammer out what will, and will not, be added to the state’s fiscal blueprint. 

Wolf has proposed a $36 billion spending plan for fiscal 2020-21. The deadline to pass a new budget is June 30.