Consultants urge Arkansas to consolidate workforce and safety-net programs into single Department of Workforce Services

A team from the Alliance for Opportunity presented an audit to an Arkansas legislative committee recommending the state consolidate workforce and public assistance programs into a single Arkansas Department of Workforce Services, enact integrated eligibility and case-management systems, and adopt a statewide cost-allocation model to redirect administrative dollars toward direct training and services.

"202,000 prime age working adults who are not engaged at the workforce at all," said Rachel Barclay, executive director of the Alliance for Opportunity, citing the study's central finding about Arkansans disconnected from work. She said the consultants also found more than 1,000,000 people enrolled in Medicaid and CHIP and over 10% of the population on SNAP, and that Arkansas ranks among the bottom 10 states for labor-force participation.

The consultants said those high safety-net caseloads coexist with relatively small workforce training budgets. Mason Bishop, a senior fellow with the Alliance for Opportunity, told the committee that Arkansas' WIOA Title I allotment for program year 2024 was about $14.8 million, of which roughly $1.7 million went to direct training. "It's like the tail wagging the dog," Bishop said, arguing local workforce boards administer a small share of the dollars despite being the focal point for service delivery.

Their diagnosis was grounded in site visits to three DHS county offices and three workforce offices, plus virtual interviews with agency leaders. Presenters said frontline caseworkers commonly lack tools to refer clients across programs, sometimes resort to internet searches, and cannot track whether referrals result in enrollment. Those gaps, the team said, create practical barriers when Medicaid work requirements take effect: if individuals are required to meet work rules but cannot access training or supports, they risk losing benefits without reemployment.

To address those shortcomings, the consultants proposed three reform "buckets":

- Consolidated administrative structure: create a single state workforce agency that houses appropriate public-assistance programs and establishes a work-focused culture across systems. The team suggested beginning data collection in 2026 and moving toward an initial implementation date of July 1, 2027.

- Integrated service delivery: reorganize regional service footprints, implement a single eligibility/intake division and a master client index so caseworkers can see who is enrolled across programs, and deploy active case management (the team cited HopeHub as "best in class" and noted it is deployed in 19 counties).

- Integrated finances: develop an approved statewide cost-allocation model (the presenters discussed Utah's random moment time sample approach) to blend funding behind the scenes so staff and locations are funded across streams rather than by program-specific budgets.

Bishop and other presenters cited Utah and more recent examples such as Virginia and Louisiana as models that have consolidated programs or moved parts of their workforce systems into a single agency. Bishop said Utah recorded early savings after consolidation and that, in practice, many savings derive from reduced middle management, fewer duplicate buildings and systems, and blended caseworker funding rather than layoffs of frontline staff.

Committee members pressed presenters on details. When asked about the one-million Medicaid figure, Barclay said it came from the most recent annual fiscal-year report and represented roughly "a little over 700,000 in traditional Medicaid and a little over 300,000 in expansion population." On funding details, Bishop said Wagner-Peyser employment services is more flexible and often used strategically as a front-door or back-stop, depending on eligibility.

Presenters recommended several near-term executive and legislative steps, including pursuing federal waivers and planning-region waivers to enable integration without waiting for legislation, and directing the Governor's Workforce Cabinet to map assets and propose a transition plan. The team said a final written report with fuller analysis and recommendations will be submitted to the committee at the end of the month.

No formal motions or votes were taken during the briefing; lawmakers asked for additional longitudinal data on Utah's outcomes and for the consultants to provide materials to staff. The committee adjourned after the presenters offered closing remarks and an opportunity for further questions.