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HRA Adrift

from the magazine

HRA Adrift

Social Spending Without Direction Autumn 1993

Bill Clinton made welfare reform a major campaign issue in 1992, part of
his agenda to “reinvent government.” Candidate Clinton’s book, Putting
People First
, promised to “provide opportunity, demand responsibility,
and end welfare as we know it.” But while Washington has a key role to play,
the most important reforms in social welfare policy will have to take place
at the state and local levels. Nowhere is the issue more pressing than in New
York City. With 3 percent of the nation’s population, the city has 7 percent
of its welfare population, 12 percent of its foster care population, and a
large but unknown percentage of its homeless. Is the city’s Human Resources
Administration (HRA), its principal agency for providing services to the
poor, up to the job? Unfortunately, HRA’s recent performance suggests the
answer is no.

HRA serves 1.5 million New Yorkers and has an annual budget of $7.3
billion, or 22 percent of the city’s total expenditures. With almost thirty
thousand employees, the second-highest payroll among mayoral agencies (after
the Police Department), and a budget larger than those of many countries, the
agency has considerable opportunity to improve the way in which it serves its
clients and to reduce the enormous costs of social services in the city.

A “superagency,” the Human Resources Administration was created by Mayor
John Lindsay in 1966 with the aim of providing services for the poor more
effectively by integrating them into one agency. Its mission is “to plan,
initiate, conduct, supervise, coordinate, review, and evaluate city programs
and activities in the attack on poverty.” While HRA carries out some of its
many tasks fairly efficiently, it has never fulfilled the goal that led to
its creation. Two of HRA’s most important problems over the past four years
have been the almost total dissolution of the staff and departments within
the agency responsible for planning and analyzing programs, and the lack of commitment
to the basic precept of welfare reform—getting clients out of the system
rather than perpetuating their reliance on it.

The effectiveness of an agency like HRA cannot be measured on the basis of
“inputs,” such as how many people are served or how much money is spent.
Rather, the agency must develop ways of gauging “outcomes”—the degree to
which its efforts are actually serving the public purposes they are designed
to advance. David Osborne and Ted Gaebler make the point succinctly in their
book Reinventing Government: “If you don’t measure results, you can’t
tell success from failure.”

Under the Dinkins administration, however, HRA has systematically
dismantled its capacity for strategic planning, evaluation, and rational
program development, created under Mayor Lindsay and maintained during
several succeeding administrations. Not only have the accumulated findings of
past research been ignored, but the organizational structure and staff
required to diagnose systematic problems and to plan, monitor, and evaluate
programs have been disbanded. Early on, faced with the prospect of
retrenchment, HRA decided to cut “auxiliary services” staff, such as policy
analysts, rather than those who directly serve clients. In theory, it was
sacrificing “middle managers” in favor of those who actually give help to the
needy. In reality, providing social services, especially in times of economic
distress, is among the most complex challenges facing government. By cutting
the thirty to fifty analysts (out of a total staff of some thirty thousand)
who comprised the core analytic staff, the agency realized trivial short-term
savings but will incur enormous long-term costs, both financial and social.

One of the many serious consequences is that no one is assessing service
impact and quality control has been seriously undermined in the more than
1,800 HRA contracts with private social-service providers. Through these
contracts, worth about $1.25 billion, HRA provides services ranging from
foster care and day care to job training and attending the homebound. Staff
members in the HRA Child Welfare Administration, for example, had been
attempting to monitor the performance of contract agencies receiving millions
of dollars for services to children. Not only were they pulled off their
audit duties, but they were left idle for months. The staffers were
reassigned when the story was exposed in the press, but the monitoring was
never resumed.

The effectiveness of HRA’s programs has a profound impact on the lives of
poor New Yorkers. While the government cannot eliminate poverty, child abuse,
or homelessness, it could do a great deal to lessen these problems. And the
size of the agency’s caseload has substantial implications for the city’s
budget. Between 1989 and 1992, while many city services were being cut back
in response to a budget crunch, HRA’s annual budget increased by one-third,
or $1.7 billion.

Without HRA’s planning and analytic staff, it is also impossible to know
how its policies affect the size of its caseload. HRA can exert considerable
influence over how many people enter the city’s social-service system, what
happens while they are in the system, and how quickly they get out. In other
words, HRA’s caseload is dynamic. Between 1987 and 1990, for instance, HRA
reduced the daily census of families in homeless shelters from 5,200 to
3,600, not by reducing the number of people coming into the system—indeed, it
went up from 450 to 750 a month between 1986 and 1989—but by speeding their
resettlement into permanent housing.

It is impossible to manage such dynamic caseloads effectively without a
strong analytic capability. Policy-makers must be able to track, interpret,
and project trends, and to evaluate the results of innovations in their
programs. Four years ago, HRA had a highly trained and experienced central
policy and program development staff, which supplied top decision-makers with
a steady flow of studies, analyses, and well-documented plans that helped
manage and even reduce caseloads. Ironically, they also helped the agency
make and defend its claim for resources in the city budget process. Today,
only a skeleton crew remains. Similarly, most policy analysts within the
operating departments of HRA have been fired, or their work ignored.

The Dinkins administration has made substantial changes in HRA policy,
particularly involving HRA’s two largest departments, Child Welfare and
Income Maintenance (welfare). Because HRA’s analytic capacity has been
gutted, it is impossible to evaluate these changes fully. But from the limited
data that are available, one can get a picture of what is wrong at HRA.

Child Welfare

HRA has made Child Welfare its primary area of focus during the Dinkins
administration. Its efforts have concentrated on “preventive” services,
especially the Family Preservation Program. The notion behind the program,
announced with considerable fanfare but little planning, was that by offering
intensive counseling and other services in an effort to keep troubled
families together, the agency would be able to reduce foster care and other
services for children. Assuming that intensive services work, they are still
very expensive, so their potential for cost-effectiveness depends on the
agency’s ability to predict correctly which families are at greatest risk of
dissolution. HRA has no independently validated criteria for targeting those
intensive services.

While HRA has promised that “outcome measures” would finally appear in the
September 1993 Mayor’s Management Report, the only information now available
concerns the number of families being served. In 1989, HRA staff and its
contract agencies were providing 30,128 families with preventive services,
while in 1992, such services had been reduced by almost 10 percent, to 27,594
families. In 1992, only 91 families were receiving help through the Family
Preservation Program, and only 174 families were to be in the program in
fiscal 1993.

The effectiveness of preventive services either in avoiding the need for
foster care or in substantially helping troubled families is questionable.
HRA has never conducted an evaluation of its $40 million investment in
preventive programs. Information about even such basic matters as the nature
and length of services is strictly anecdotal. The agency has abolished its
quality control unit, and the position of assistant deputy commissioner for
policy and planning within Child Welfare has been vacant or staffed by an “acting”
official for most of the past four years.

HRA’s preventive-services centerpiece, Family Preservation, has been
systematically evaluated in Illinois and elsewhere. It has shown no impact in
reducing foster care. And in New York, the number of children in foster care
increased from 34,881 in June 1989 to a high of 49,814 in 1991. As late as
September 1992, HRA projected a foster care caseload of 55,898 for fiscal
1993. There is some evidence, however, that the caseload has finally
stabilized. It is probably more than coincidental that the crack epidemic
that fueled the rise in caseloads during the 1980s has also leveled off.

The increase in the foster care caseload is largely due to the creation
and rapid expansion of the kinship foster care program, which was nonexistent
in 1986 and now enrolls more than 21,000 children, or about 40 percent of the
total foster care caseload. Kinship foster care was designed with the good
intention of keeping families together by placing children of abusive or
neglectful parents with close relatives such as grandparents or adult
siblings. It has been heartily embraced by HRA and most child advocate groups
as a more humane alternative to traditional foster care. Unfortunately, the
program is also subject to abuse. Because relatives in the kinship foster
care system receive substantially higher benefits than if they were on
welfare, poor families have an incentive to enter the system even if foster
care is not really needed. Foster care payments start at about $580 per month
per child and can go as high as $1,100 per month, while welfare pays about
$180 per month plus Food Stamps.

Kinship foster care thereby risks undercutting the primary goal of foster
care—either to reunite children with their birth parents or to ensure a
speedy permanent adoption. By encouraging the formation of families headed by
a relative who is not a child’s parent, kinship foster care may well end up
driving the mother from the home as welfare did the father. In fact, the
average time children spend in foster care has increased by one-third, from
2.1 years to 3.25 years. But because of HRA’s inability to gather or analyze
information about these programs, we have no way of knowing for sure what the
results of kinship foster care have been, apart from anecdotes of systemic
abuse and the alarming increase in the length of time children stay in foster
care.

A few other data are available regarding HRA’s Child Welfare services, and
they are not encouraging. It is true that within recent months foster care
enrollment has dipped a little. But the evidence suggests this trend reflects
not a decline in need, but a decline in the quality of Child Welfare’s
protective services. Between June 1991 and April 1993, the number of
caseworkers dropped from 1,152 to 745, despite an increase of almost 20
percent in the number of highrisk cases reported to HRA between 1989 and
1992. Correspondingly, the two standard measures of caseworker activity both
went up unconscionably. The number of new cases per caseworker went up from
5.6 to 7 per month (specialists place the appropriate number at between 4 and
6), and the average caseworker’s load increased from 16.3 to 22.3 cases (the
standard is between 12 and 18). Thus, caseworkers were trying to handle a
greater number of more difficult cases, while HRA argued with city budget
officials about why more than three hundred authorized caseworker positions
went unfilled.

As a result of the decline in the number of caseworkers, the number of
cases in which sufficient evidence was gathered to require the full-scale
investigation that must precede the placement of children in foster care went
down by 25 percent. During this time, the number of Family Court petitions
filed by HRA attorneys—the precursor to a finding of abuse or neglect—dropped
a dramatic 40 percent, from 11,173 to 6,873, perhaps because of backlogs
brought on by staff attorney vacancies.

Given the greatly reduced number of cases coming into the system, the
number of children in foster care should be substantially below what it is
now, even taking into account the longer periods of time children are in
foster care. Could it be that substantially more parents are voluntarily
placing children in foster care because they want to take advantage of the
kinship foster care reimbursement rates? Again, the only evidence available
is anecdotal. The agency no longer has the staff to study and explain these
results, but that does not stop HRA from claiming an “increased impact of the
Family Preservation Program.”

Welfare Reform

In the early 1970s, almost one-third of the welfare recipients in New York
City were legally ineligible for benefits. Later in that decade, significant
strides were made in enforcing eligibility requirements. By the early 1980s,
the proportion of those on the rolls who should not have been was reduced to
around 5 percent. Accordingly, the welfare caseload shrank from about 1
million to about 800,000, even in the face of a recession.

Today, for the first time since 1976, the welfare caseload exceeds a
million; it is at the highest level in history. The dramatic increase is
clearly tied to the national recession. Since 1989, the nation’s welfare
caseload has risen by about 27 percent, roughly the same as New York City’s.

The lack of analytic information coming out of HRA makes it difficult to
determine whether other factors are significantly driving the numbers upward.
(HRA has not provided extensive information about welfare and poverty levels
since June 1989, when it last issued its widely respected analysis of New
York City economic and social data, entitled Dependency.) Based on
available information, however, there do not appear to have been any
significant changes in the way the system is processing applicants and
determining welfare eligibility. Rejection rates for those seeking benefits
have remained constant over the past four years, and error rates—the number
of people on the rolls who should not be there or are getting the wrong
benefits—are basically unchanged (5.7 percent in fiscal 1989 and 5.5 percent
in fiscal 1992). The average length of time a client spends on welfare also
affects caseload increases, but HRA no longer provides systematic information
about this.

While HRA has held a steady course in maintaining eligibility
requirements, it has not succeeded in getting people off the rolls and into
jobs. Historically, the city’s employment and training efforts on behalf of
welfare recipients have been relatively ineffective. In part, this was
because responsibility for employment efforts has been divided between HRA,
the state Department of Labor, and the city Department of Employment, leaving
no single agency accountable. A more fundamental problem, however, has been
the city’s lack of commitment to sound programming that would make employment
and training real alternatives to welfare.

In 1988, Congress passed the Family Support Act, providing the city with a
new opportunity to fashion a strategy aimed at making welfare a way station
to employment rather than an end in itself. The act gave states financial
incentives to place clients in jobs or training programs, and the city
initially responded. By the end of 1988 the city had developed a
comprehensive plan to refashion the welfare system around the mutual
obligations of the welfare client and the government: the client had the
obligation to do whatever she could to improve her employability, and the
government had the obligation to help the client do this. But the effort at
systemic reform ended with the election of Mayor Dinkins, and the city is
back to business as usual.

Currently, HRA’s primary concern is with meeting federal and state
requirements for placing clients in job training, not with ensuring that
those clients find and retain employment over the long term. Thus, HRA churns
clients around in the system; hundreds of thousands are interviewed to assess
their eligibility for and interest in employment, but the process typically
goes nowhere.

While HRA makes modest efforts at encouraging clients to search for jobs,
the agency much prefers training and remedial education. So do the
clients—quite rationally, as anyone who has ever looked for a job will
understand. In fiscal 1992, 39,020 recipients of Aid to Families with
Dependent Children (AFDC) were enrolled in training (although individuals
enrolled in more than one program were counted multiple times), and 22,141
more clients were participating in some other employment-related activity,
usually job search or work experience of some kind. But training and remedial
education are notoriously weak reeds on which to base an employment strategy.
The quality of the programs is often poor, and most participants go from
training program to training program without ever graduating to a job.

HRA takes the paternalistic view that AFDC recipients need a lot of
assistance and support—especially remedial education, training, and day
care—before they can function in the labor market. Low-wage jobs are looked
down on as a “dead end.” And there is a heavy emphasis on assessment for
readiness to work, with the process built around finding reasons to exclude
clients rather than figuring out how to overcome such obstacles and include
them. The result is often that those who could find work on their own get the
most institutional attention and probably are delayed from actually getting
jobs. At the same time, those who could benefit most from concerted prodding
and encouragement are left by the wayside. All women on welfare with children
over three are required by federal law to participate in employment and
training activities. But HRA has effectively made such participation
voluntary.

In this area, too, HRA no longer conducts a systematic analysis of its
efforts. But it is possible to get a rough idea of HRA’s performance in
fostering employment by looking at the available data. In fiscal 1993, HRA
projects that its efforts will result in about 9,800 AFDC recipients, or
about 2.4 percent of the total AFDC caseload, getting jobs. This performance
can be compared with those of several counties where sophisticated research
has shown that effective employment and training initiatives can make a
significant difference in reducing welfare costs and increasing employment
among welfare recipients. In 1991, Riverside County, California, with an AFDC
caseload of about 28,000 and an unemployment rate of 9.8 percent, reported
7,751 job placements, or about 28 percent of the total caseload. In the same
year, San Diego County reported placing about 9 percent of its clients in
jobs. And in Kent County (Grand Rapids), Michigan, which had a caseload of
8,181 in June 1991, 1,774 clients, or 21 percent, found employment.

There is a sufficient body of knowledge about what works that HRA could
build a more effective employment program if it had the will and the planning
capacity to do so. A modestly effective program in New York City should be
able to place between thirty thousand and forty thousand AFDC recipients a year,
or about 10 percent of the caseload, into jobs, instead of the pathetic 2.4
percent the city currently achieves.

Given HRA’s disappointing record on welfare reform and the historical
reluctance of the city’s powerful public employee unions to countenance
public-service jobs for welfare recipients, it is hard to envision how
President Clinton’s expressed idea—two years on welfare and out—could work in
New York City. A cynic might postulate that HRA’s response will be to spend
two years assessing the employment potential of its clients and then put
their children into kinship foster care.

Flying Blind

There has been no shortage of plans for reforming HRA. Since the agency’s
founding, as many as 15 different commissions and study groups have come up
with various reorganization schemes, based on one of two alternatives:
breaking HRA into multiple agencies, each with a single purpose, or
decentralizing the agency and providing services at the neighborhood level.

Several single-purpose agencies have already been created. The departments
of Employment, Juvenile Justice, Aging, and Homeless Services were all
formerly part of HRA. This approach ignores the reason the city created a “superagency”
in the first place: to integrate the planning and provision of social services.
The new Department of Homeless Services, for example, will have to coordinate
its efforts with those of HRA, which determines income eligibility for
welfare, and the city’s housing agencies, which are responsible for placing
the homeless in permanent housing. The only immediate value of creating a new
agency would seem to be political. Accountability will be suspended for about
a year while the new agency gets organized, and after that it will be another
year before measurable accomplishments can be expected.

The idea of decentralization hearkens back to the original structure of
HRA, which supervised “community corporations” in each of 28 poor
neighborhoods. These corporations, however, got caught up in the politics of
poverty and in romantic notions about “empowering” the poor; they died a
painful death in the 1970s amid charges of profiteering and ineffectiveness.
The idea that decentralization is the key to effective service had become
policy before a more fundamental question was answered: What are the needs of
HRA’s clients?

Addressing such basic questions remains crucial today. HRA’s failure to
develop and implement rational and effective policies on foster care and
welfare is largely the result of its failure to plan and analyze its programs
effectively. Designing and carrying out effective social-service policies
would be a challenge even for an organization blessed with state-of-the-art
strategic planning and management capacity. At HRA, however, the staff and
systems capable of carrying out this mission have atrophied from abuse and
neglect. The pattern is analogous to a jumbo jet pilot, flying in stormy
weather, who responds to a fuel shortage by turning off the radar to save
gasoline.

Good intentions are not enough to meet the demands of HRA’s complex and
dynamic caseload, to move the city into the mainstream of reducing rather
than maintaining dependency, and to monitor and assess what does and does not
work. HRA needs to build upon existing knowledge and develop a competent and
creative analytic staff—in effect a guidance system—that can help the agency
serve the poor more effectively and credibly demonstrate whether its efforts
are successful. At the moment, HRA is flying blind.

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