15 NOVEMBER 00 | Welfare reform has opened the door to innovation at the local level and is transforming a rule-bound bureaucracy into something much more flexible, according to a nine-county report by researchers at the School of Social Welfare.

The report provides the first glimpse into how county social services agencies in the greater Bay Area have implemented the1996 federal Personal Responsibility and Work Opportunity Reconciliation Act.

The news is "very positive, so positive that the big question is: How do we continue this trend?" said Michael Austin, professor of social welfare and staff director of the Bay Area Social Services Consortium, which carried out the study.

"We were worried about what states would do with their newfound authority over welfare, delegated by the federal law. We thought welfare reform might create more problems than it solved, but we have been pleasantly surprised in California," said Austin.

He said that the state's welfare reform legislation (CalWORKS), which followed the federal act, empowered counties to begin reforming the system, and most counties have done exactly that.

The tool they used was incentive funding - new, more flexible money that freed up counties to address complex problems at the local level in such areas as transportation, family supports, job programs and childcare.

"Incentive funding created an environment for change and innovation," said Austin. "As a result, we are seeing a major transformation in the processes and culture of social service agencies."

He said the old welfare system was overly regulated, isolated from communities and focused on determining who was eligible for aid. The new, county-based system is comprised of more open partnerships with community services, many of which use the energies of gifted local leaders.

The report does not, however, directly assess the impact on families and children of welfare reform, which has been cushioned by good economic times.

"We are very concerned about whether welfare recipients are being trapped in entry-level, minimum wage jobs," said Austin. He added that the impact of welfare-to-work reforms on their children is still very unclear.