on CHILDREN €22 FAMILIES ‘STOLEnfnt Promenade, SW, Washington, DC 20447 waw.acthhe gor May 28, 2015 Mr. Reggie Bicha Executive Director Colorado Department of Human Services 1575 Sherman Street, 8th Floor Denver, CO 80203-1714 Dear Mr. Bich ‘This lene informs you that Colorado met neither its overall nor two-parent TANF pertcpation tate fr fiscal year (FY) 2012. After applying your state's caseload reduction cedis of 149 percent and 14.9 percent to the required participation rates of50 percent overall and 90 percent for two-parent families, the FY 2012 adjusted target rates for your state became 35.1 percent and 75.1 percent, respectively. Colorado achieved an overall ate of 23.8 percent and a two-parent participation rate of 20.1 percent. These shortfalls mean that the sate is subject to «penalty. ‘As you strive to improve your work participation rate in the future and improve TANF «employment outcomes, we encourage you to consider increasing your state's investment in ‘work-related activities for TANF participants. Based on financial data you reported to us, your state spent 1.5 percent of TANF and maintenance-of-effort (MOE) funds in FY 2012 on work- related activities. Some strategies to explore might include subsidized ermployment and career pathways training in high-demand occupations. The Office of Family Assistance team sands ready to work with you to provide technical asistance on these and other promising practices. Caseload Reduction Credit, ‘We calculate caseload reduction credits for the overall and two-parent rates using the percentage point decline in state's average monthly assistance caseload between the base year, FY 2005, and the comparison year (the fiscal year that immediately precedes the year to which the credit ‘pplics), minus any caseload reduction resulting from changes in state or federal eligibility requirements. Ifthe net impact of eligibility changes is postive (Le, caused the caseload to ‘increase, it has no bearing on the caseload reduction eredit. In determining the comparison-year caseload, a state may request credit in accordance with 45 CER 261.43(b). Under that provision, a state that is investing state MOE funds in excess of the required 80 pereent or 75 percent basic MOE amount may reduce its comparison-year caseload by the mumber of cases funded with this excess MOE, as calculated by a formula in the regulation at 45 CFR 261.43(6)(2).Page 3 ~Mr. Reygle Bicha We consider thee factors in determining the severity of the state's failure: the degree to which the state missed the adjusted target; how many more individuals it has engaged in work over the prior year; and how many rates and how many successive years the state has failed. Far the first factor, we reduce the penalty proportionally forthe state’s level of achievement above the 50- percent threshold. For the second factor, we calculate an adjustment factor that rewards the state {or engaging a: least 15 percent mor individuals in work than it engaged the prior yea. We multiply those factors by the base penalty (reduced for failing only the two-parent rate if appropriate). Forth last factor, we then multiply that reduction by a percentage based on the numberof rates failed and number of consecutive year of failure. A state that fils only one rate in its first yearof failure receives 100 percent ofthe severity reduction. Jf the state fils both rates in the first year or one rte inthe second successive year, it receives 50 percent ofthis reduction. Ifthe state fils both rats in the second successive year of failure, it receives 25, percent ofthis reduction. A siat tat i in its third or greater successive year of failure will not receive any recuction forthe severity ofthe failure, ‘Accordingly, the penalty amount for Colorado is $4,761,984, Here are our calculations using an Bie gmonlace Sut nfomaton GaeTR RECN sed Trg Ras Acie | Allied FAG] Tot =n] as ase 50% Threshold | in Work, FYI1_| in Work, FVI2 | Factor |(dueto years of failure, # of rates filed) ‘Reduction Above | Number Engaged [Number Engaged] Adjustment | Percentage of Redurtion Available | 36.0% 2,232 2,035 00 50%. Penalty Calculations Base Penalty ‘Reduction for Step | Amount” | Toeshold Tests | gi ratare_[Penslty Amount Trboth ests met, myogenic: | Subs rand|* Tess0%twestld| nse rebcan, | reese ie eaten] * ASS. Te recess’ | ‘june tc | “esta Touliweit |pscmag:ctseery| ‘seen failure reduction, and | reduced penalty | rola ca Result_| $4,761,984 _| Test yes Test no ERE "The parcipation rate achieved has ben adjusted wo remove eases wth fede recognized good ease domestic. violence waivers of work, pursuant 045 CFR 261 100K?)Page 5~Mr. Reggie Bicha Please submit a dispute of our finding of penalty liability, any claim for a reasonable cause exception, and/or a corrective compliance plan, or a request under 45 CFR 261.51(¢), including any supportive documentation, within 60 days to: Ms. Kisha Russell ‘TANF Regional Program Manager ‘Administration for Children and Families 999 18th Suet South Terrace, Suite 499 Denver, CO 80202 {Ifyou have questions about the information in this leter or need assistance in developing your response, please coniact Ms. Kisha Russell, the TANF Program Manager for Region 8 Sincerely, Abaiteh Nisha Patel Director Office of Family Assistance ‘cc: The Honorable Jchn Hickenlooper, Governor