Schedule of funding requirements Individual loans. Total requirements.. Purpose and scope One out of every three rural families has a cash income of less than $3,000 per year. Loans are made to help these families increase their incomes. Loans may be for the purchases of farm equipment; the purchase of livestock and land; farm improvement; the financing of farm cooperatives. In towns of less than 2,500, loans are made to finance small businesses not related to agriculture. To qualify, a nonfarm applicant must show that his income is not equal to his basic family requirements; that other credit is not available; that the service or product involved is not adequately supplied by others in the area. The maximum family loan is $2,500. Loans generally are secured by a promissory note and a loan agreement. The maximum term is 15 years; the interest rate is 4% percent on the unpaid principal. Loans to cooperatives may be for 30 years. Each loan is followed up with assistance and counsel. Program and performance for fiscal year 1965 A total of some $18,750,000 was loaned to some 11,000 rural families during fiscal year 1965. This is an increase over budget estimates of $6,250,000 in money loaned and 4,000 in families served. The number of applications has been increasing rapidly. During May, over 3,700 applications were received, about a third of them for nonfarm projects. Some $1,038,000 was loaned to some 82 cooperatives in the 1965 fiscal year. These cooperatives serve about 2,000 low-income rural families. The first four cooperative loans, made in the first 3 months of the program, total $102,000. One was to a group of 45 dairy farmers in Wisconsin to rebuild a processing plant destroyed by fire. Another was to nine peanut farmers in Florida, to buy weedkilling and crop-dusting equipment. The third was to 100 Mississippi truck farmers, to establish a farmers' market. The fourth was to 125 Arkansas cotton farmers, to replace a seed storage house which had burned down. Since the initial 4 loans, an additional 78 cooperative loans were approved to similar groups throughout the country by June 30, 1965. Program for fiscal year 1966 Because of the rapid acceleration of loan applications, it is estimated that 15,500 rural family loans could be made in fiscal year 1966, totaling $28 million. The potential number of loans to cooperatives in fiscal year 1966 is estimated at 350, totaling $5 million. This would assist approximately 8,750 families, or about 43,500 people. Individual loans JUSTIFICATION OF ESTIMATES Under the original estimate for fiscal year 1965 for this program it was thought that about 7,000 families-35,000 people would be assisted with loans totaling $12,500,000. However, due to the large number of applications, this estimate has been scaled upward to 11,000 family loans, totaling $18,750,000. This will benefit approximately 55,000 people and represents a loan increase of $6,250,000. The unobligated balance at the end of the fiscal year 1965, is approximately $4,270,000. This balance is primarily due to the late start in the program, and the fact that there was not enough time to process the loan applications received through June 30, 1965. Farm and nonfarm family loans in fiscal year 1965 averaged about $1,800. A projection of these figures for fiscal year 1966 shows that 15,500 farm family loans could be made, totaling $28 million. Cooperative loans This program is running behind the estimates because of the planning and organization involved in a cooperative loan. For fiscal year 1965, $1,038,000 was allocated for approximately 82 loans to cooperatives assisting about 2,000 low income rural families approximately 10,000 people. Through June 30, 347 applications had been received. By the end of the fiscal year, 82 applications had been processed, aggregating $1,038,000. In 1966, $737,000 in loans have already been processed. For fiscal year 1966, the estimate of $5 million—an increase of $4,070,000-would provide for about 350 loans to cooperative associa tions assisting about 8,750 farm families-approximately 43,500 people. Program direction The President's budget provided program direction funds of $1.5 million for fiscal year 1965. As the program grew beyond first estimates, $250,000 was added and all but about $20,000 was used. This provided the FHA with 250 full-time permanent and 50 temporary loan employees at the end of fiscal year 1965. To provide for the rapid expansion of the loan program, FHA stepped up recruitment and training and assigned many of its better supervisory employees to this program on a temporary basis. This included at times up to 325 permanent full-time and 50 temporary employees. This represented over 30 man-years of effort per month during the accelerated loan period, tapering down to the fiscal year 1966 level by June 30, 1965. For fiscal year 1966 a total of $2 million in program direction funds is requested. This will permit maintenance of the end-of-theyear permanent staff level of 250 through fiscal year 1966. ACTIVITY 5. WORK EXPERIENCE PROGRAM 1965 actual__. 1966 estimate__ Increase.. INTRODUCTION $111,988, 000 150, 000, 000 38, 012, 000 This activity provides work and training programs for unemployed parents of dependent children and for other needy persons in order to prepare them for regular employment and hence to enable them to become self-supporting. The Welfare Administration of the Department of Health, Education, and Welfare administers the program. The objective is "to stimulate the adoption of programs to help unemployed fathers and other needy persons to secure and retain employment or to attain or retain capability for self-support or personal independence." About 88,700 persons and their 276,700 dependents will be assisted with the 1965 funds, while about 109,300 persons and 327.900 dependents will be enrolled on projects funded in fiscal year 1966. The unemployed parents and other needy persons who are the objective of the work experience program usually have a long history of social, cultural, educational, and work habit deficiencies; most have a spotty employment record. Nearly two out of three low-income families are headed by persons who have no more than a grammar school education. Not only are these persons uneducated, but they lack training and work experience. Plans include an evaluation of the person's education, work history, work skills, intelligence, and ability to benefit from specific work experience and training. A combination of a comprehensive program provides the basis for the kind of individual-by-individual approach to people's problems which is necessary to help the most disadvantaged segment of our population to attain or retain their ability to compete effectively in the modern labor market. Special emphasis is placed upon training which will instill good work habits and attitudes, sometimes grouped under the heading "Morale." Without possessing good work habits and attitudes, a worker may not be able to secure and hold a job in spite of having employable skills. Emphasis is placed on the acquisition of basic skills necessary to find and hold a steady job and receive training that is directly related to the maintenance of old or the development of new skills. This is accomplished through work experience available on projects carried out by local, county, or State public institutions, agencies, and departments. Some examples of work experience available are: attendants and orderlies in public institutions and sanitariums, nurses' aids, teachers' aids, homemakers (in social services), child care center aids, clerks and stenographers, as well as for various service trade jobs. Program and performance for fiscal year 1965 All States received information and Federal guidelines for development of work experience projects. One of the objectives of the guidelines was to make sure that work experience participants did not displace regularly employed workers or supply services in competition with regular channels. Projects approved during the fiscal year 1965 achieved the original estimate for improving the employability of 88,700 persons, most of whom are unemployed parents with dependent children receiving public assistance. About 276,700 persons, most of them children, are in the families of the project participants. The sum of $111,493,000 was committed during fiscal year 1965 to support 164 work experience and training projects in 43 States, the District of Columbia, Puerto Rico, and the Virgin Islands. Preliminary reports from existing projects give evidence of the effectiveness of a project in raising employability to the point that project participants find employment. For example, the Fulton County, Ga., Project Uplift that has been in operation only a short time reported on the status of 43 men and women whose participation in the training aspect of the project came to an end on June 7. Eighteen men subsequently secured gainful employment and their average monthly salary was about $255 with the range reaching from a low of $200 to $403 a month. Eleven women also found employment, their average wage being $193 with a low of about $180 and a high of $265. Fourteen of the men and women went into constructive work experience, such as food service, maintenance, and nursing home activities. Program for fiscal year 1966 The money requested for fiscal year 1966 will provide training for about 109,300 men and women with some 327,900 dependents. This will be an increase of 20,600 trainees over fiscal year 1965. For 1966 there will be a continuation of the fiscal year 1965 work emphasis in the development and operation of projects designed to help unemployed parents with dependent children and other needy persons to secure and retain employment or to attain or retain capability for self-support. As the program develops during fiscal year 1966, more attention will be placed upon developing projects for helping needy older persons who are interested in employment, particularly for part-time, seasonal, or recurring temporary jobs. Special attention will also be directed in support of the President's beautification program. Beautification is already being carried out as part of several work experience and training projects. Due to limited State and local funds, a few States do not pay 100 percent of the amount determined as needed by recipients for food, shelter, clothing, and other necessities of life. Beginning with new projects approved in fiscal year 1966, 100 percent of full need, based on the States own assistance standards, will be met for enrollees in work experience projects. In fiscal year 1965, it was decided not to disapprove projects solely because assistance was not being met in full for enrollees. Most States, however, are meeting need in full under projects approved in fiscal year 1965. JUSTIFICATION OF ESTIMATES Program operations (grants to States) The fiscal year 1966 request for the work experience program is $148,900,000, $37,407,000 more in grants to States than the fiscal year 1965 estimate of $111,493,000. Most fiscal year 1965 projects are expected to be continued, with an increase of about 23 percent in the number of persons receiving work training experience. In fiscal year 1966 nearly 109,300 men and women will receive training with some 327,900 dependents. This will be an increase of 20,600 participants over fiscal year 1965. Three groups have been identified for participation in demonstration grants for expanding opportunities for constructive work experience and other needed training. Federal expenditures will be made for the following groups: (I) The extension of work experience and training programs to families now receiving AFDC because of unemployment, or the improvement of the training component in States with community work and training projects under AFDC, (II) the extension of AFDC (because of unemployment) and work experience and training programs to more families and for the provision of assistance, work experience, and training to other needy persons, and (III) the provision of work experience and other needed training for AFDC mothers. The estimated number of participants and fund requirements for fiscal years 1965 and 1966 for the three groups is as follows: Estimated average monthly number of family heads and other needy persons in demonstration projects for work experience and training for an average of 9 months, and obligations of Federal funds, fiscal years 1965 and 1966 The types of expenses to be incurred for demonstration grants for expanding opportunities in constructive work experience and other needed training include (1) meeting the full amount of need as determined by the individual State's assistance standard, (2) basic costs for public assistance, (3) additional living expenses, and (4) work and training costs. The costs for each component are the same for 1966 as for 1965 except for the cost of meeting need in full. It was assumed that need would be met in full for all of the participants in 1966 compared with 80 percent of the participants in 1965. Program direction The request for fiscal year 1966 is $1,100,000 and 89 positions to administer the program. This represents an increase of $605,000 and 28 positions over the fiscal year 1965 obligation of $495,000 and 61 positions. This provides for fullyear costs in 1966 of 61 positions authorized for a portion of fiscal year 1965 and 28 new positions. Twenty additional positions are needed in fiscal year 1966 to handle the increased volume of project proposals, to work with States on developing improved programs, including project content, to intensify program evaluation work, and to strengthen reports and prepare needed, meaningful information on the program. An estimated 150 of the 164 projects approved in fiscal year 1965 will be audited in 1966. The average audit time per project is estimated to be 80 man-hours. This will require eight professional positions (estimated to be employed about three quarters of fiscal year 1966 ) to handle the overall workload of 12,000 man-hours. The adult basic education program provides instruction for individuals 18 years of age and older whose inability to read and write the English language constitutes a substantial impairment of their ability to get or retain employment commensurate with their real ability. These programs are designed to help eliminate this inability and increase their opportunity for more productive and profitable employment. Matching grants help (1) pay the costs of local instruction programs, (2) finance pilot projects aimed at improving teaching materials and methods, and (3) improve technical services provided by State educational agencies. The program is administered by the Office of Education in the Department of Health, Education, and Welfare. The purpose of the adult basic education program is to teach thousands of illiterate adults to read and write, so they can more adequately support themselves and their families. Federal matching funds provide 90 percent of the costs of State projects in fiscal years 1965 and 1966. While learning to read, the participants will be taught incidentally about work discipline, shopping values, health habits, homemaking, family and community relations, and good citizenship. There are 11 million people in the United States, 18 or older, who have completed less than five grades of school. There are 60 million who have not graduated from high school. Grants to States are made on the basis of the relative number of adults in each State who have completed not more than five grades of school or have not achieved an equivalent level of education. The minimum amount allotted to each State shall be $50,000. Program and performance for fiscal year 1965 As of June 30, a total of 40 States and territories with an anticipated program level of about $16 million received letters of approval of their State plans, including 25 with conditional approval and 15 with final approval. In addition to these 40, 5 other States had submitted formal State plans by the end of the fiscal year. Many problems which held back initial progress in this program were resolved during fiscal year 1965, including the publication of the rules and regulations and of a "Guide for the Development of a State Plan"; settling of many of the problems growing out of the complex Federal-State relationships; and resolution of procedures for complying with the Civil Rights Act. By June 30, 1965, 15 States had final approval by the Commissioner and funding authorization. Of this number, 14 States requested payment in fiscal year 1965 and had received a total of $4,168,836. Out of the $18,612,000 available to the States and territories, therefore, $14,443,164 was carried over for use in fiscal year 1966. 53-596-65-43 |