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A Review of the Family Independence Act 2004 -- 2006
January 2007

Report (PDF)     Summary (PDF)

The Family Independence Act (FIA) requires the Legislative Audit Council (LAC) to report every two years on the success and effectiveness of the policies and programs created under the act. Specifically, we are to review the three outcome measures required by S.C. Code §43-5-1285 — the number of families and individuals no longer receiving welfare, the number of individuals who have completed education and training, and the number of individuals finding employment. This is our sixth report about the family independence (FI) program and its management by the S.C. Department of Social Services (DSS). Our findings include the following:

  • The number of welfare clients has decreased over the past two years. January 2004 had the highest number of cases for the months in the two-year audit study period. According to DSS statistical reports, the FI caseload fell from 18,343 in January 2004 to 17,575 in December 2005, a decrease of 4.2% over two calendar years.
  • From January 1, 2004 through December 31, 2005, there were 16,333 FI cases closed due to earned income. DSS does not have information on the duration of employment of FI clients who obtain a job. However, DSS data shows that approximately 57% of clients who left the program between January and June 2004 due to employment were still employed one year after they left the FI program.
  • In October 2003, DSS implemented the Participation and Tracking System (PATS) which is used to meet participation and data reporting requirements required under the federal Temporary Assistance to Needy Families (TANF) law. We reviewed a sample of client case files and concluded that the information in PATS was not sufficiently reliable to be used to report on clients’ education and training, or on their employment.
  • In a review of a sample of client files, we found that DSS has allowed clients to use activities such as raising their own children to count towards meeting work requirements. DSS has also not properly documented client work activities to ensure that clients are participating for the required number of hours.
  • TANF was reauthorized by congress in February 2006. New provisions in the law will result in significant changes to DSS’s family independence program. These changes include narrower definitions of work activities, an improved system for verifying clients’ work activities, and changes to the caseload reduction credit. These changes will have a significant impact on South Carolina’s ability to meet required work participation rates for clients. DSS estimates it could cost the state up to $13.5 million in penalties if it does not meet the participation rates.