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entitled 'Supplemental Nutrition Assistance Program: Improved 
Oversight of State Eligibility Expansions Needed' which was released 
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United States Government Accountability Office: 
GAO: 

Report to Congressional Requesters: 

July 2012: 

Supplemental Nutrition Assistance Program: 

Improved Oversight of State Eligibility Expansions Needed: 

[This report was reissued on August 2, 2012 to add an additional addressee] 

GAO-12-670: 

GAO Highlights: 

Highlights of GAO-12-670, a report to congressional requesters. 

Why GAO Did This Study: 

Over the last 10 years, participation in the U.S. Department of 
Agriculture’s (USDA) SNAP, previously known as the Food Stamp Program, 
has more than doubled, and costs have quadrupled. Since 1999, USDA has 
allowed states to expand SNAP eligibility by adopting BBCE policies, 
which make households that receive services funded by Temporary 
Assistance for Needy Families, such as a toll-free number or brochure, 
categorically eligible for SNAP. Under BBCE policies, states are able 
to increase federal SNAP limits on household income and remove limits 
on assets. Although USDA has encouraged states to adopt BBCE to 
improve SNAP access and administration, little is known about the 
effects of these policies. GAO was asked to assess: (1) To what extent 
are households that would otherwise be ineligible for SNAP deemed 
eligible for the program under BBCE? (2) What effect has BBCE had on 
program costs? (3) What are the program integrity implications of 
BBCE? GAO analyzed data from USDA, selected states, and other national 
sources; conducted site visits to 5 states; and interviewed federal, 
state, and local officials, as well as others with knowledge of SNAP. 

What GAO Found: 

In fiscal year 2010, GAO estimates that 2.6 percent (473,000) of 
households that received Supplemental Nutrition Assistance Program 
(SNAP) benefits would not have been eligible for the program without 
broad-based categorical eligibility (BBCE) because their incomes were 
over the federal SNAP eligibility limits. The characteristics of these 
households were generally similar to other SNAP households, although 
they were more likely to work or receive unemployment benefits. BBCE 
removes asset limits in most states, and while reliable data on 
participants’ assets are not available, other data suggest few likely 
had assets over these limits. Although BBCE contributed to recent 
increases in SNAP participation, other factors, notably the recent 
recession, had a greater effect. 

Figure: Estimated Sub-groups of SNAP Households, Fiscal Year 2010: 

[Refer to PDF for image: stacked horizontal bar graph] 

Percentage of all SNAP households 

14.3 percent: lived in states without BBCE and were eligible under 
federal SNAP eligibility limits; 

83.2 percent: lived in states with BBCE and were eligible under 
federal SNAP eligibility limits. 

2.6 percent: lived in states with BBCE and had income over federal 
SNAP eligibility limits. 

Source: GAO analysis of SNAP quality control data. 

[End of figure] 

GAO estimates that BBCE increased SNAP benefit costs, which are borne 
by the federal government, by less than 1 percent in fiscal year 2010. 
In that year, total SNAP benefits provided to households that, without 
BBCE, would not have been eligible for the program because their 
incomes were over the federal SNAP eligibility limits were an 
estimated $38 million monthly or about $460 million for the year. 
These households received an estimated average monthly SNAP benefit of 
$81 compared to $293 for other households. BBCE’s effect on SNAP 
administrative costs, which are shared by the federal and state 
governments, is unclear, in part because of other recent changes that 
affect this spending, such as state budget and staffing reductions in 
the recent recession. 

BBCE has potentially had a negative effect on SNAP program integrity. 
In recent years, the SNAP payment error rate declined to an historic 
low, but evidence suggests the decline is primarily due to changes 
other than BBCE. While BBCE may improve administrative efficiency, 
both national data and discussions with local staff suggest BBCE may 
also be associated with more errors. In addition, BBCE has led to 
unintended consequences for SNAP and related programs. For example, in 
implementing BBCE, some states are designating SNAP applicants as 
categorically eligible without providing them with the service 
required to make this determination. Further, likely because they are 
unaware of recent USDA guidance, some states certify children for free 
school meals when their households are determined eligible for SNAP, 
even though they do not receive SNAP benefits—a result more common in 
states with BBCE. Finally, because of federal guidance on BBCE, rules 
for reporting changes in household circumstances now differ by 
household income level and may leave higher-income households without 
reporting requirements for several months. 

What GAO Recommends: 

GAO recommends that USDA review state procedures for implementing 
BBCE, disseminate guidance to states on certifying SNAP households as 
eligible for school meals, and revisit its guidance on SNAP reporting 
requirements to ensure they address all households. USDA generally 
agreed with GAO’s recommendations. 

View [hyperlink, http://www.gao.gov/products/GAO-12-670]. For more 
information, contact Kay Brown at (202) 512-7215 or brownke@gao.gov. 

[End of section] 

Contents: 

Letter: 

Background: 

While State Eligibility Changes Expanded Participation, the Economy 
Likely Played a Larger Role: 

State Eligibility Changes Increased Benefit Costs Somewhat, but Their 
Effect on Administrative Costs Is Unclear: 

State Eligibility Changes May Negatively Affect Program Integrity: 

Conclusions: 

Recommendations for Executive Action: 

Agency Comments and Our Evaluation: 

Appendix I: Objectives, Scope, and Methodology: 

Appendix II: 2010 Quality Control Data Estimates and 95 Percent 
Confidence Intervals: 

Appendix III: GAO Contacts and Staff Acknowledgments: 

Related GAO Products: 

Tables: 

Table 1: Number of States with Various Income and Asset Limits for 
Programs Used to Confer BBCE, as of May 1, 2012: 

Table 2: Characteristics of Specified Groups of SNAP Households, in 
Fiscal Year 2010: 

Table 3: Estimated Percent of Specified Groups of SNAP Households 
Receiving Deductions and the Estimated Average Amount of the 
Deduction, in Fiscal Year 2010: 

Table 4: SNAP Households That Would Not Have Been Eligible for the 
Program without BBCE because Their Incomes Were over Federal Limits in 
Fiscal Year 2010: 

Table 5: Characteristics of Specified Groups of SNAP Households in 
Fiscal Year 2010: 

Table 6: Benefits Provided to SNAP Households That Would Not Have Been 
Eligible for the Program without BBCE because Their Incomes were over 
Federal Limits in Fiscal Year 2010: 

Table 7: Benefits Received by Specified Groups of SNAP Households in 
Fiscal Year 2010: 

Table 8: Estimated Percent of Specified Groups of SNAP Households 
Receiving Deductions and the Estimated Average Amount of the Deduction 
in Fiscal Year 2010: 

Figures: 

Figure 1: Average Monthly Number of SNAP Participants per Fiscal Year, 
in Millions: 

Figure 2: Total Federal SNAP Costs per Fiscal Year, in Billions: 

Figure 3: How an Applicant's Eligibility Is Determined under Federal 
SNAP Guidance: 

Figure 4: How an Applicant's Eligibility Is Determined under 
Traditional Cash Assistance-Related Categorical Eligibility: 

Figure 5: How an Applicant's Eligibility May Be Determined under BBCE: 

Figure 6: Timeline of State BBCE Policy Implementation, Fiscal Years 
2001-2012: 

Figure 7: SNAP Households That Would Not Have Been Eligible for the 
Program without BBCE because Their Incomes Were over Federal Limits in 
Fiscal Year 2010: 

Figure 8: Trends in SNAP Participation, Unemployment, and Poverty, 
1990-2011: 

Figure 9: Benefits Provided to SNAP Households That Would Not Have 
Been Eligible for the Program without BBCE because Their Incomes Were 
over Federal Limits, Fiscal Year 2010: 

Figure 10: Selected Information on SNAP Benefits and Potentially 
Related Factors, Fiscal Years 2001-2011: 

Figure 11: SNAP Administrative Costs, Fiscal Years 2001-2010: 

Figure 12: Administrative Costs per SNAP Household, Fiscal Years 2001-
2010: 

Figure 13: Examples of How States Confer BBCE for SNAP: 

Abbreviations: 

BBCE: broad-based categorical eligibility: 

FNS: Food and Nutrition Service: 

SNAP: Supplemental Nutrition Assistance Program: 

TANF: Temporary Assistance for Needy Families: 

USDA: U.S. Department of Agriculture: 

[End of section] 

United States Government Accountability Office: 
Washington, DC 20548: 

July 26, 2012: 

The Honorable Frank D. Lucas: 
Chairman: 
The Honorable Collin C. Peterson: 
Ranking Member: 
Committee on Agriculture: 
House of Representatives: 

The Honorable Jeff Sessions: 
Ranking Member: 
Committee on the Budget: 
United States Senate: 

The Honorable Pat Roberts: 
Ranking Member: 
Committee on Agriculture, Nutrition and Forestry: 
United States Senate: 

During fiscal year 2011, the U.S. Department of Agriculture's (USDA) 
Supplemental Nutrition Assistance Program (SNAP), previously known as 
the Food Stamp Program,[Footnote 1] provided food and nutrition 
assistance to almost 45 million individuals each month for a total of 
$71.8 billion in benefits for the year. SNAP is intended to help low-
income individuals and families obtain a better diet by supplementing 
their incomes with benefits to purchase food. Over the last 10 years, 
SNAP participation has more than doubled and costs have quadrupled. 
While some of the recent increases in SNAP participation and costs are 
due to the recession and benefit increases included in the American 
Recovery and Reinvestment Act of 2009 (Recovery Act),[Footnote 2] 
state policy changes intended to improve program access and simplify 
the administration of SNAP may also have had an effect. 

Under federal law, eligibility for SNAP is based primarily on whether 
a household's income and assets fall below certain 
thresholds.[Footnote 3] In addition, low-income households are 
categorically eligible for SNAP if they receive benefits from certain 
other federal programs, such as Temporary Assistance for Needy 
Families (TANF).[Footnote 4] Originally, categorical eligibility was 
designed as a method by which households receiving cash assistance 
benefits were deemed SNAP-eligible. However, since 1999, USDA has 
allowed states to expand categorical eligibility to households 
authorized to receive TANF-funded non-cash services by adopting broad-
based categorical eligibility (BBCE) policies.[Footnote 5] Under BBCE 
policies, states align the SNAP household income and asset limits in 
federal law with the income and asset limits for the relevant TANF-
funded non-cash service. While SNAP eligibility limits therefore 
differ among states that have adopted BBCE policies, the amount of 
assistance eligible households receive is determined using the same 
process for all SNAP applicants. From fiscal year 2006 through fiscal 
year 2012, the number of states with BBCE policies increased from 7 to 
43. 

Although USDA has encouraged states to adopt BBCE to improve SNAP 
access and simplify administration, little is known about the impact 
of BBCE on SNAP. As a result, we were asked to assess: (1) To what 
extent are households that would otherwise be ineligible for SNAP 
deemed eligible for the program under BBCE? (2) What effect has BBCE 
had on program costs? (3) What are the program integrity implications, 
if any, of BBCE? 

As criteria for our review, we examined federal laws affecting SNAP, 
as well as USDA regulations and guidance related to SNAP and 
specifically to BBCE. To answer our research questions, we collected 
and analyzed information through several methods. At the federal 
level, we reviewed USDA's information on states' BBCE policies and 
interviewed department officials. We also reviewed USDA's data on SNAP 
households, program costs, and error rates for the 50 states; 
Washington, D.C.; Guam; and the Virgin Islands. We determined that 
these data were sufficiently reliable for the purposes of this report. 
Because USDA's data lack information on the assets of SNAP households 
deemed eligible under BBCE, which is key to understanding the effects 
of BBCE on participation and benefit costs, we also reviewed 
additional national data sources that provide information on household 
assets, such as the Survey of Consumer Finances, and determined that 
these data were sufficiently reliable for the purposes of this report. 
While these data sources provide estimates of the average amount of 
assets owned by households of different income levels, which can 
therefore be used to approximate the level of assets owned by SNAP 
households, they do not directly provide estimates of SNAP households' 
assets. To gather additional background information on the effects of 
various factors on SNAP participation and costs, we identified and 
reviewed additional studies on SNAP conducted by USDA and several 
research organizations that assess programs for low-income populations. 

To gather information from state and local SNAP administrators on the 
effects of BBCE policies, as well as other simultaneous changes to the 
program, we conducted site visits to 5 states (Arizona, Illinois, 
North Carolina, South Carolina, and Wisconsin) and 18 local SNAP 
offices located in both urban and rural areas in those states. We 
selected these states because they varied in their BBCE adoption 
dates, characteristics of their BBCE policies, and geographic 
locations. States selected also had relatively large SNAP caseloads 
and generally high proportions of their SNAP households deemed 
eligible under BBCE policies. Within each state, we interviewed state 
SNAP administrators, as well as local SNAP administrators from three 
to four local offices. We cannot generalize our findings from the site 
visits beyond the states and localities we visited. In addition to our 
site visits, we also interviewed state SNAP administrators in Idaho 
and Michigan to gather information on the impacts of the asset limits 
that these states added to their BBCE policies in 2011. To gather 
other perspectives about the effects of BBCE on SNAP, we also 
interviewed officials knowledgeable about SNAP from research and 
advocacy organizations that focus on nutrition assistance policy. 

We conducted this performance audit from August 2011 through July 2012 
in accordance with generally accepted government auditing standards. 
Those standards require that we plan and perform the audit to obtain 
sufficient, appropriate evidence to provide a reasonable basis for our 
findings and conclusions based on our audit objectives. We believe 
that the evidence obtained provides a reasonable basis for our 
findings and conclusions based on our audit objectives. See appendices 
I and II for additional information on our objectives, scope, and 
methodology. 

Background: 

SNAP is the largest of the 15 domestic food and nutrition assistance 
programs overseen by USDA's Food and Nutrition Service (FNS). FNS 
jointly administers SNAP with the states. FNS pays the full cost of 
SNAP benefits and pays approximately half of states' administrative 
costs.[Footnote 6] FNS is also responsible for promulgating program 
regulations and ensuring that state officials administer the program 
in compliance with program rules. States administer the program by 
determining whether households meet the program's eligibility 
requirements, calculating monthly benefits for qualified households, 
and issuing benefits to participants. 

Participation and Costs: 

As shown in figures 1 and 2, SNAP participation and costs generally 
increased between fiscal years 2001 and 2011, though the most 
significant increases began in fiscal year 2008. 

Figure 1: Average Monthly Number of SNAP Participants per Fiscal Year, 
in Millions: 

[Refer to PDF for image: line graph] 

Fiscal year: 2001; 
Average monthly number of SNAP participants: 17.3 million. 

Fiscal year: 2002; 
Average monthly number of SNAP participants: 19.1 million. 

Fiscal year: 2003; 
Average monthly number of SNAP participants: 21.3 million. 

Fiscal year: 2004; 
Average monthly number of SNAP participants: 23.9 million. 

Fiscal year: 2005; 
Average monthly number of SNAP participants: 25.7 million. 

Fiscal year: 2006; 
Average monthly number of SNAP participants: 26.7 million. 

Fiscal year: 2007; 
Average monthly number of SNAP participants: 26.3 million. 

Fiscal year: 2008; 
Average monthly number of SNAP participants: 28.2 million. 

Fiscal year: 2009; 
Average monthly number of SNAP participants: 33.5 million. 

Fiscal year: 2010; 
Average monthly number of SNAP participants: 40.3 million. 

Fiscal year: 2011; 
Average monthly number of SNAP participants: 44.7 million. 

Source: GAO analysis of USDA data on SNAP participants. 

[End of figure] 

Figure 2: Total Federal SNAP Costs per Fiscal Year, in Billions: 

[Refer to PDF for image: stacked line graph] 

Total federal SNAP costs: 

Fiscal year: 2001; 
Benefits: $15.5 billion; 
Other costs[A]: $2.2 billion. 

Fiscal year: 2002; 
Benefits: $18.3 billion; 
Other costs[A]: $2.4 billion. 

Fiscal year: 2003; 
Benefits: $21.4 billion; 
Other costs[A]: $2.4 billion. 

Fiscal year: 2004; 
Benefits: $24.6 billion; 
Other costs[A]: $2.5 billion. 

Fiscal year: 2005; 
Benefits: $28.6 billion; 
Other costs[A]: $2.5 billion. 

Fiscal year: 2006; 
Benefits: $30.2 billion; 
Other costs[A]: $2.7 billion. 

Fiscal year: 2007; 
Benefits: $30.4 billion; 
Other costs[A]: $2.8 billion. 

Fiscal year: 2008; 
Benefits: $34.6 billion; 
Other costs[A]: $3 billion. 

Fiscal year: 2009; 
Benefits: $50.4 billion; 
Other costs[A]: $3.3 billion. 

Fiscal year: 2010; 
Benefits: $64.7 billion; 
Other costs[A]: $3.6 billion. 

Fiscal year: 2011; 
Benefits: $71.8 billion; 
Other costs[A]: $3.5 billion. 

Source: GAO analysis of USDA data on SNAP costs. 

Note: "Other Costs" include the federal share of SNAP administrative 
costs and employment and training programs, as well as other federal 
costs (e.g., benefit and retailer redemption and monitoring, payment 
accuracy, electronic benefit transfer systems, program evaluation and 
modernization, program access, health and nutrition pilot projects). 

[End of figure] 

According to FNS, the growth in SNAP participation in recent years is 
likely attributable to the economic recession, outreach efforts, and 
modifications to program policy. Because households must be low-income 
to receive SNAP benefits, participation and costs typically increase 
during economic downturns as more people become eligible and apply. 
Although the recent recession officially lasted from December 2007 
through June 2009, since then, unemployment has remained above average 
levels and SNAP participation has continued to grow. Further, because 
federal law identifies SNAP's main purpose as "raising levels of 
nutrition among low-income households,"[Footnote 7] one of the key 
performance measures for the program is the rate of participation 
among eligible households. As a result, for years, FNS has encouraged 
states to undertake outreach efforts and adopt various modifications 
to program policy to increase participation among the eligible 
population and increase program efficiency. Although the participation 
rate varies by state, ranging from an estimated 53 percent in 
California to 100 percent in Maine in fiscal year 2009, the national 
rate has been about 70 percent in recent years.[Footnote 8] 

Determination of Eligibility: 

Under federal law and regulations, eligibility for SNAP is based 
primarily on a household's income and assets.[Footnote 9] A household 
generally includes everyone who lives together and purchases and 
prepares meals together.[Footnote 10] To determine a household's 
eligibility, a caseworker must first determine the household's gross 
income, which cannot exceed 130 percent of the federal poverty 
guidelines,[Footnote 11] and its net income, which cannot exceed 100 
percent of the guidelines (or $18,530 annually for a family of three 
living in the continental United States in fiscal year 2012).[Footnote 
12] Net income is determined by taking into account certain exclusions 
and deductions, for example, expenses for dependent care, utilities, 
and housing.[Footnote 13] In addition, a caseworker must determine a 
household's assets under various requirements. For example, a 
household's liquid assets, such as those in a bank account, currently 
cannot exceed $2,000 or, for households with an elderly or disabled 
member, $3,250.[Footnote 14] However, certain assets are not counted 
for SNAP, such as a home, the surrounding lot, and most retirement 
plans and educational savings accounts.[Footnote 15] While there are 
also federal SNAP provisions that limit the value of vehicles an 
applicant can own and still be eligible for the program,[Footnote 16] 
all states have opted to modify those rules, and most exclude the 
value of all household vehicles. (See figure 3 for a general depiction 
of the eligibility determination process under federal SNAP rules.) 

Figure 3: How an Applicant's Eligibility Is Determined under Federal 
SNAP Guidance: 

[Refer to PDF for image: illustration] 

Federal rules: 

For SNAP, caseworkers assess applicant's: 

1. Gross income: less than or equal to 130% federal poverty 
guidelines; ($2,008 per month for a 3-person household); 

1a. Net income: less than or equal to 100% federal poverty guidelines 
($1,545 per month for a 3-person household); 

2. Assets: For example, those in bank accounts less than or equal to 
$2,000 (for most households). 

Must pass all SNAP tests to be eligible for SNAP. 

Source: GAO analysis of USDA guidance and SNAP income eligibility 
standards for fiscal year 2012. 

[End of figure] 

Federal law also allows certain households to be deemed categorically 
eligible for SNAP.[Footnote 17] Under statute, households receiving 
monthly cash assistance from certain programs--including TANF, SSI, 
and state or local general assistance programs--are categorically 
eligible for SNAP. According to USDA, categorical eligibility can 
increase program access and reduce administrative burden, as states 
assess a household's eligibility once for the cash assistance program 
rather than twice for both the cash assistance program and SNAP. (See 
figure 4 for a general depiction of the eligibility determination 
process under traditional cash assistance-related categorical 
eligibility.) 

Figure 4: How an Applicant's Eligibility Is Determined under 
Traditional Cash Assistance-Related Categorical Eligibility: 

[Refer to PDF for image: illustration] 

Traditional categorical eligibility rules: 

For cash assistance, caseworkers assess applicant's: 

1. Income: Limits depend on cash assistance program's rules; 

2. Assets: Limits depend on cash assistance program's rules. 

Must pass all relevant tests to be eligible for cash: 

SNAP application: Eligible. 

Source: GAO analysis of USDA guidance. 

[End of figure] 

In response to welfare reforms under the Personal Responsibility and 
Work Opportunity Reconciliation Act of 1996,[Footnote 18] USDA advised 
states that households authorized to receive non-cash services--such 
as case management services, transportation subsidies, or child care 
subsidies--from a program funded with TANF dollars could also be 
deemed categorically eligible.[Footnote 19] In order for a state to 
fund a non-cash service with TANF dollars, the service generally must 
further one of TANF's purposes, which include the promotion of job 
preparation, work, and marriage, and the reduction of out-of-wedlock 
births. [Footnote 20] As set out in SNAP regulations, households in 
which members are authorized to receive non-cash services primarily 
funded with TANF are categorically eligible, and states also have the 
option of extending categorical eligibility to households receiving 
services that are less than 50 percent TANF-funded, with FNS approval 
required in certain cases.[Footnote 21] SNAP regulations also direct 
that the TANF-funded non-cash services used to confer categorical 
eligibility be available only to households with incomes equal to or 
below 200 percent of the federal poverty guidelines. 

As a result of this expansion of categorical eligibility, states have 
adopted a variety of policies to deem households that receive non-cash 
services from TANF-funded programs eligible for SNAP. FNS separates 
these types of policies into two groups--broad-based and narrow. 
According to FNS, BBCE policies make most, if not all, households that 
apply for SNAP categorically eligible because they receive a TANF-
funded non-cash service, such as an informational brochure or toll-
free number. (See figure 5 for a general depiction of the eligibility 
determination process under BBCE.) In contrast, narrow categorical 
eligibility policies require households to be enrolled in certain TANF-
funded programs, such as employment assistance, or receiving child 
care or transportation assistance, in order to be categorically 
eligible for SNAP. 

Figure 5: How an Applicant's Eligibility May Be Determined under BBCE: 

[Refer to PDF for image: illustration] 

BBCE rules: 

Applicant receives brochure. 
 
For SNAP, caseworkers assess applicant's: 

1. Gross income: less than or equal to 130% federal poverty 
guidelines; ($2,008 per month for a 3-person household); 

1a. Net income: not applicable; 

2. Assets: not applicable. 
 
Must pass 1 income test to be eligible for SNAP. 

Source: GAO analysis of USDA guidance and SNAP income eligibility 
standards for fiscal year 2012. 

Note: This figure depicts the general process for determining a 
household's SNAP eligibility in a state with a BBCE policy that 
removes the federal SNAP asset limit and does not include a net income 
limit. Not all states have such a policy. 

[End of figure] 

Although FNS issued guidance in 1999 and regulations in 2000 
explaining how states could adopt BBCE policies,[Footnote 22] 
relatively few states implemented them early on. Between fiscal years 
2001 and 2006, 7 states adopted these policies. However, when the 
recent economic downturn began, and households applying for SNAP began 
to increase greatly, FNS encouraged states to adopt these policies to 
streamline eligibility processes and ease workload (see figure 6). 

Figure 6: Timeline of State BBCE Policy Implementation, Fiscal Years 
2001-2012: 

[Refer to PDF for image: vertical bar graph] 

Fiscal year of BBCE implementation, by state: 

2001: Delaware; Maryland; Oregon. 

2002: Michigan; North Dakota; Texas. 

2003: none. 

2004: Wisconsin. 

@005: none. 

2006: none. 

2007: Arizona; Minnesota. 

2008: Georgia; Massachusetts. 

2009: California; Connecticut; Guam; Idaho; Montana; Nevada; New 
Hampshire; New York; Ohio; Oklahoma; Pennsylvania; Rhode Island; South 
Carolina; Vermont; Virgin Islands; Washington; West Virginia. 

2010: Alabama; District of Columbia; Florida; Illinois; Kentucky; 
Louisiana; Maine; Mississippi; New Jersey; New Mexico; North Carolina. 

2011: Colorado; Hawaii; Iowa. 

2012: Nebraska. 

Source: USDA data on state implementation of BBCE policies. 

[End of figure] 

According to FNS, as of May 1, 2012, 43 states--including Washington, 
D.C., Guam, and the Virgin Islands--had BBCE policies.[Footnote 23] 
These policies differ in terms of the income and asset limits used to 
determine eligibility, as shown in table 1. For example, 24 states' 
BBCE policies increase the federal gross income limit for SNAP and 
remove the asset limit while 2 states' BBCE policies retain the 
federal gross income limit and increase the federal asset limit. 

Table 1: Number of States with Various Income and Asset Limits for 
Programs Used to Confer BBCE, as of May 1, 2012: 

Federal SNAP gross income limit equal to 130 percent of the federal 
poverty guidelines: 
Higher asset limit than federal SNAP limits: 2; 
No asset limit: 14[A]. 

Higher gross income limit (160-200 percent of the federal poverty 
guidelines): 
Higher asset limit than federal SNAP limits: 3; 
No asset limit: 24. 

Source: GAO analysis of USDA data on states' BBCE policies. 

[A] Nine of these states increased the federal gross income limit to 
200 percent of the federal poverty guidelines, but only for households 
with elderly or disabled members. 

[End of table] 

Determination of Benefits: 

After eligibility is established, benefits are determined based on 
each household's monthly net income, with greater benefits provided to 
those with less income. SNAP expects each eligible household to spend 
30 percent of its own resources on food, and therefore, each 
household's monthly SNAP benefit is determined by subtracting 30 
percent of its monthly net income from the maximum SNAP benefit for 
the relevant household size.[Footnote 24] All eligible one-and two-
person households are guaranteed a minimum benefit, which is $16 for 
households in the continental United States in fiscal year 
2012.[Footnote 25] However, households with three or more members do 
not receive a minimum benefit. Under federal income eligibility 
limits, a household with three or more members will typically be 
determined eligible for a SNAP benefit greater than $0. However, 
because some states' BBCE policies raise the SNAP income limits, under 
these policies, such households are more likely to be deemed eligible 
for $0 in benefits. 

Certification and Reporting Requirements: 

SNAP households are certified eligible for SNAP for periods ranging 
from 1 to 24 months, which vary based on state policy choices. 
Generally, the length of the certification period depends on household 
circumstances, but only households in which all members are elderly or 
disabled can be certified for up to 24 months under federal 
regulations.[Footnote 26] Once the certification period ends, 
households reapply for benefits, at which time eligibility and benefit 
levels are redetermined. 

Between certification periods, households generally must report 
changes in their circumstances--such as household composition, income, 
and expenses--that may affect their eligibility or benefit amounts. 
[Footnote 27] Since early 2001, states have had the option of 
requiring households to report changes only when their incomes rise 
above 130 percent of the federal poverty guidelines, rather than 
reporting changes at regular intervals or within 10 days of 
occurrence, as was required in the past.[Footnote 28] According to 
FNS, as of November 2010, all states except California and Wyoming use 
this simplified reporting for some or all SNAP households. 

Quality Control System: 

FNS and the states share responsibility for implementing an extensive 
quality control system used to measure the accuracy of SNAP 
eligibility and benefits and from which state and national error rates 
are determined.[Footnote 29] Under FNS's quality control system, the 
states calculate their payment errors annually by drawing a 
statistical sample to determine whether participating households are 
eligible and received the correct benefit amount. Because SNAP 
considers many factors in determining each household's benefit amount, 
any of these factors can result in a payment error. For example, 
incorrect calculations of earned income or unearned income and 
inaccurate accounting of the number of household members may cause 
payment errors. The state's payment error rate is based on the sample 
and determined by dividing the dollars paid in error by the total SNAP 
benefits issued. Once the payment error rates are determined, FNS is 
required to compare each state's performance with the national payment 
error rate and impose financial penalties or provide financial 
incentives according to legal specifications. 

While State Eligibility Changes Expanded Participation, the Economy 
Likely Played a Larger Role: 

More Became Eligible but Impact of Changes Likely Limited: 

In fiscal year 2010, an estimated 2.6 percent[Footnote 30] 
(approximately 473,000) of all households receiving SNAP benefits 
nationwide would not have been eligible for the program without BBCE 
because their incomes were greater than the income limits defined in 
federal law.[Footnote 31][Footnote 32] However, over half of the 
states did not have BBCE policies that increased SNAP income limits 
above the federal limits in fiscal year 2010. In the 24 states whose 
BBCE policies raised household income limits above the federal limits 
in that year, around 4.8 percent of SNAP households had incomes over 
those limits (see figure 7). Those households eligible solely because 
of BBCE generally had incomes that were modestly higher than the 
federal limits. On average, their total monthly income was an 
estimated $1,965, which is about 150 percent of the federal poverty 
guidelines,[Footnote 33] whereas the federal income limit for SNAP is 
130 percent of the guidelines. 

Figure 7: SNAP Households That Would Not Have Been Eligible for the 
Program without BBCE because Their Incomes Were over Federal Limits, 
in Fiscal Year 2010: 

[Refer to PDF for image: 2 pie-charts] 

All SNAP households (18,369,000): 
2.6% (473,000). 

SNAP households in the 24 states with BBCE policies that raised the 
gross income limit (8,424,000): 
4.8% (406,000). 

Source: GAO analysis of USDA's SNAP quality control data. 

Note: For the 95 percent confidence intervals for these estimates, see 
appendix II, table 4. 

[End of figure] 

Households eligible under BBCE with incomes over the federal limits 
had characteristics that were generally similar to all other SNAP 
households; however, they were more likely to be working or receiving 
unemployment benefits (see table 2). About half of these households 
included a child, as was the case for all other SNAP households, and a 
similar proportion of each group of households included a single 
female head of household. While a generally similar proportion of both 
groups of households were elderly recipients of Social Security 
benefits, the average monthly amount of Social Security benefits 
received by households that would have failed the federal income tests 
was substantially higher. In two of the local offices we visited, 
staff noted that BBCE may have increased the number of elderly 
applicants since the policy change enabled some who were previously 
ineligible because of their Social Security earnings to become 
eligible for SNAP. Also, although both groups had the same proportion 
of households with unearned income, a higher percentage of households 
with incomes above the federal limits had members who worked or who 
received Unemployment Insurance benefits. Further, the average monthly 
amount they received in Unemployment Insurance was considerably higher 
than that received by all other SNAP households. 

Table 2: Characteristics of Specified Groups of SNAP Households, in 
Fiscal Year 2010: 

Total number of SNAP households; 
SNAP households with incomes over federal income limits: 473,381; 
All other SNAP households: 17,895,847. 

Percentage of households with at least one child; 
SNAP households with incomes over federal income limits: 56.3%; 
All other SNAP households: 48.5%. 

Percentage of households with a single female as the head; 
SNAP households with incomes over federal income limits: 30.7%; 
All other SNAP households: 25.8%. 

Percentage of households with at least one member receiving Social 
Security benefits; 
SNAP households with incomes over federal income limits: 27.8%; 
All other SNAP households: 21.2%. 

Average amount of Social Security benefits received; 
SNAP households with incomes over federal income limits: $340; 
All other SNAP households: $155. 

Percentage of households with at least one member with unearned income; 
SNAP households with incomes over federal income limits: 60.0%; 
All other SNAP households: 60.3%. 

Percentage of households with at least one member with earned income; 
SNAP households with incomes over federal income limits: 65.9%; 
All other SNAP households: 29.0%. 

Percentage of households with at least one member receiving 
Unemployment Insurance benefits; 
SNAP households with incomes over federal income limits: 18.6%; 
All other SNAP households: 6.4%. 

Average amount of Unemployment Insurance benefits received; 
SNAP households with incomes over federal income limits: $223; 
All other SNAP households: $55. 

Source: GAO analysis of USDA's SNAP quality control data. 

Note: The average amount of Social Security and Unemployment Insurance 
benefits received was calculated for all households in each group, 
rather than only for households that received these benefits. For the 
95 percent confidence intervals for these estimates, see appendix II, 
table 5. 

[End of table] 

Available data suggest few households that qualified for SNAP under 
BBCE likely had assets that would have exceeded federal asset limits. 
In fiscal year 2010, 37 states had removed the federal asset limit, 
which was $2,000 for most households,[Footnote 34] as part of their 
BBCE policies. Because asset information was therefore not collected 
from SNAP applicants in these states, USDA's data on SNAP households 
cannot be used to estimate the number or share of participating 
households with assets over the federal limits. However, other 
national data sources suggest the number is relatively small. For 
example, a national survey that gathered information on families' 
assets in 2010 found that an estimated 24 percent of families in the 
bottom income quintile did not have a checking, savings, or other 
financial transaction account.[Footnote 35] Among the estimated 76 
percent of this group that had such an account, the median balance was 
an estimated $700. This survey also found that while a greater 
proportion of families in the second lowest income quintile had such 
an account in 2010 (91 percent), their median account balance was an 
estimated $1,500. For the most part, SNAP households deemed eligible 
under BBCE--households with incomes under 200 percent of the federal 
poverty guidelines--fall within the two lowest income quintiles. 
[Footnote 36] A 2007 survey of families with children found that those 
with incomes between 100 and 199 percent of the federal poverty 
guidelines held median liquid assets of around $300.[Footnote 37] For 
those with incomes below 100 percent of the guidelines, the median 
amount was estimated to be zero. 

Available state-level data, as well as information shared by state and 
local officials during our site visits, also suggest the value of 
assets held by SNAP households is low. For example, according to state 
officials in Idaho and Michigan, both states initially removed the 
federal asset limits as part of their BBCE policies but reinstated an 
asset limit of $5,000 during 2011. Officials indicated that the new 
limits had a very small impact on overall caseloads. For example, 
during the 9 months following Idaho's reinstatement, approximately 850 
new applicants and existing recipients seeking recertification were 
denied benefits because their assets exceeded the asset limit. This 
represented less than a 1 percent reduction in the total number of 
SNAP households in that state during that period.[Footnote 38] 
Similarly, during the month following Michigan's reinstatement of the 
asset limit, about 1 percent of the state's existing SNAP cases were 
closed due to assets.[Footnote 39] Further, during our site visits, 
caseworkers in all of the offices we visited said they believe the 
value of assets held by SNAP households is usually very low or $0. 
Several caseworkers said that while they may have served SNAP 
applicants that held assets greater than the federal limits, they 
believe such instances are rare. Many caseworkers noted it is common 
to hear from applicants that they have exhausted a significant portion 
of their available assets before applying for SNAP. 

Economic Downturn a Major Cause of Recent Trends: 

While implementation of BBCE by many states has enabled more 
households to receive SNAP, the nation's recent economic downturn has 
likely played a larger role in the increases in participation during 
the past decade. As shown in figure 8, increases and decreases in SNAP 
participation often coincide with similar changes in unemployment and 
poverty. A 2002 USDA study found that during past economic recessions, 
a 1 percentage-point increase in the national unemployment rate has 
been associated with an increase in the number of SNAP participants of 
1 to 3 million.[Footnote 40] This relationship also existed during the 
most recent economic recession of 2007-2009,[Footnote 41] which was 
marked by a steep rise in the nation's unemployment rate and an 
increase in the proportion of families living in poverty. Between 
fiscal years 2007 and 2010, the number of SNAP participants rose by 
around 14 million (or approximately 54 percent), while the 
unemployment rate increased by 5 percentage points. This relationship 
was also noted by staff administering SNAP in all 18 local offices we 
visited who cited the economic downturn, and related unemployment, as 
the primary cause of the increases in SNAP participation in their 
localities. 

Figure 8: Trends in SNAP Participation, Unemployment, and Poverty, 
1990-2011: 

[Refer to PDF for image: multiple line graph] 

Year: 1990; 
SNAP participants: 20.4 million; 
Unemployed people: 6.6 million; 
People in poverty: 33.6 million. 

Year: 1991; 
SNAP participants: 23.0 million; 
Unemployed people: 8.7 million; 
People in poverty: 35.7 million. 

Year: 1992; 
SNAP participants: 25.8 million; 
Unemployed people: 10.0 million; 
People in poverty: 38 million. 

Year: 1993; 
SNAP participants: 27.6 million; 
Unemployed people: 9.1 million; 
People in poverty: 39.3 million. 

Year: 1994; 
SNAP participants: 28.0 million; 
Unemployed people: 7.9 million; 
People in poverty: 38.1 million. 

Year: 1995; 
SNAP participants: 27.0 million; 
Unemployed people: 7.4 million; 
People in poverty: 36.4 million. 

Year: 1996; 
SNAP participants: 25.9 million; 
Unemployed people: 7.1 million; 
People in poverty: 36.5 million. 

Year: 1997; 
SNAP participants: 23.1 million; 
Unemployed people: 6.8 million; 
People in poverty: 35.6 million. 

Year: 1998; 
SNAP participants: 20.0 million; 
Unemployed people: 6.2 million; 
People in poverty: 34.5 million. 

Year: 1999; 
SNAP participants: 18.1 million; 
Unemployed people: 6.0 million; 
People in poverty: 32.8 million. 

Year: 2000; 
SNAP participants: 17.1 million; 
Unemployed people: 5.7 million; 
People in poverty: 31.6 million. 

Year: 2001; 
SNAP participants: 17.3 million; 
Unemployed people: 6.5 million; 
People in poverty: 32.9 million. 

Year: 2002; 
SNAP participants: 19.0 million; 
Unemployed people: 8.4 million; 
People in poverty: 34.6 million. 

Year: 2003; 
SNAP participants: 20.8 million; 
Unemployed people: 9.3 million; 
People in poverty: 35.9 million. 

Year: 2004; 
SNAP participants: 23.3 million; 
Unemployed people: 8.3 million; 
People in poverty: 37 million. 

Year: 2005; 
SNAP participants: 24.8 million; 
Unemployed people: 7.5 million; 
People in poverty: 37 million. 

Year: 2006; 
SNAP participants: 25.5 million; 
Unemployed people: 7.0 million; 
People in poverty: 36.5 million. 

Year: 2007; 
SNAP participants: 25.8 million; 
Unemployed people: 7.0 million; 
People in poverty: 37.3 million. 

Year: 2008; 
SNAP participants: 27.6 million; 
Unemployed people: 8.6 million; 
People in poverty: 39.8 million. 

Year: 2009; 
SNAP participants: 32.9 million; 
Unemployed people: 14.7 million; 
People in poverty: 43.6 million. 

Year: 2010; 
SNAP participants: 39.8 million; 
Unemployed people: 14.5 million; 
People in poverty: 46.2 million. 

Year: 2011; 
SNAP participants: 44.7 million; 
Unemployed people: 14.0 million. 

Source: U.S. Census data on people in poverty, USD data on SNAP 
participants, and Bureau of Labor Statistics data on unemployed people. 

Note: Numbers of people in poverty are based on data for March of the 
following year (except the 2010 figure is based on June 2010 data). 
Numbers of SNAP participants are based on the average monthly value 
for the fiscal year. Unemployed people are based on data as of June of 
that year. 

[End of figure] 

Federal changes to SNAP, as well as those initiated by individual 
states, and a shift in public perception of the program, have also 
likely contributed to increases in participation during the past 
decade. For example, the Recovery Act implemented a 13.6 percent 
increase in maximum monthly SNAP benefits,[Footnote 42] which likely 
made participation in the program more attractive to eligible 
households. In addition, the simplified reporting option, which most 
states have implemented since it became available in 2001, has been 
linked to increased participation, likely because it reduces the 
administrative burden for SNAP households and lengthens certification 
periods. Further, USDA expenditures targeted to state and community 
outreach efforts, as well as relaxed limits on vehicle ownership, have 
been linked to increased SNAP participation. During our site visits, 
officials noted that the Recovery Act's suspension of the 3-month time 
limit for able-bodied adults without dependents also caused a 
noticeable increase in SNAP participants.[Footnote 43] In addition, 
individual states have implemented program changes that may have 
increased participation, such as taking steps to make it easier to 
apply for SNAP. For example, staff in most of the states we visited 
cited implementation of online applications and phone interviews, 
instead of in-person interviews, as improving access to SNAP and 
shifting the public's perception of the program. Some local 
caseworkers noted that being able to apply without going to a public 
assistance office lowers the stigma associated with receipt of 
government assistance. These changes may also be encouraging 
participation among specific age groups, as local caseworkers across 
several states we visited described an increasing trend of single 
people aged 22 applying as their own SNAP households.[Footnote 44] 
Several studies have examined the impact of various changes on SNAP 
participation, though it is difficult to measure the precise impact of 
any single change.[Footnote 45] 

Other studies, our own analysis of USDA data, and information we 
obtained during our site visits indicate the impact of BBCE on SNAP 
participation is likely small, and the extent to which the policy 
directly encouraged eligible households to participate is uncertain. 
While several studies have concluded that BBCE policies have 
contributed to increases in SNAP participation,[Footnote 46] they 
yield inconclusive results concerning the magnitude of the impact. Our 
own analysis of changes in SNAP participation in the 17 states that 
adopted BBCE policies during fiscal year 2009 revealed those states 
had a slightly larger increase in participation between fiscal years 
2008 and 2010 than states without BBCE. However, because of the many 
other factors influencing SNAP participation during these years, we 
cannot attribute this increase entirely to BBCE. State officials and 
local caseworkers in the five states we visited were also uncertain of 
BBCE's effect on SNAP participation. According to those we spoke to, 
BBCE had a noticeable, but relatively small, effect on SNAP 
participation, and local staff in all 18 of the offices we visited 
said BBCE's impact on SNAP participation was considerably less than 
that caused by the economic downturn. Those in one office said they 
had been alerted by their state office to prepare for a significant 
spike in applications once the BBCE policy went into effect, but the 
subsequent increase was considerably less than expected. Others noted 
that the participation increases they noticed after BBCE 
implementation may also have been due to some other simultaneous 
cause, such as seasonal increases. 

State Eligibility Changes Increased Benefit Costs Somewhat, but Their 
Effect on Administrative Costs Is Unclear: 

Benefit Costs Increased Less Than 1 Percent: 

Although SNAP households that had incomes over the federal limits made 
up an estimated 2.6 percent of the SNAP caseload in fiscal year 2010, 
this group received an estimated 0.7 percent[Footnote 47] of all SNAP 
benefits. These benefits totaled an estimated $38.3 million a month, 
or approximately $460 million annually.[Footnote 48] In the group of 
states that increased the federal SNAP gross income limit with their 
BBCE policies, benefits provided to households that had incomes over 
the federal limits were an estimated 1.5 percent of all SNAP benefits 
(see figure 9). Due to data limitations, these estimates represent 
minimums, as they do not include benefits provided to SNAP households 
deemed eligible under BBCE with assets over the federal SNAP asset 
limits.[Footnote 49] 

Figure 9: Benefits Provided to SNAP Households That Would Not Have 
Been Eligible for the Program without BBCE because Their Incomes Were 
over Federal Limits, per Month in Fiscal Year 2010: 

[Refer to PDF for image: 2 pie-charts] 

All SNAP benefits ($5,273,900,000: 
0.7% ($38,300,000). 

SNAP benefits in the 24 states with BBCE policies that raised the 
gross income limit ($2,308,600,000): 
1.5% ($34,000,000). 

Source: GAO analysis of USDA's SNAP quality control data. 

Note: For the 95 percent confidence intervals for these estimates, see 
appendix II, table 6. 

[End of figure] 

Because SNAP benefits are calculated based on income and expenses, and 
provide greater benefits to those with fewer means, those with incomes 
over the federal limits tend to be eligible for fewer benefits. On 
average, these households received an estimated $81 average monthly 
SNAP benefit in fiscal year 2010 compared to an estimated $293 average 
monthly benefit received by all other SNAP households in that 
year.[Footnote 50] These households also disproportionately received 
the minimum benefit of $16. An estimated 44 percent of these 
households received the minimum benefit compared to 3 percent of all 
other households. Households eligible solely because of BBCE had 
higher average deductions in certain categories--including dependent 
care and child support expenses--than other households in fiscal year 
2010 (see table 3), and deductions increase monthly SNAP benefits. 
However, in general, the higher incomes of households eligible solely 
because of BBCE seem to have had a greater impact on their SNAP 
benefits than their deductions, given the relatively low average 
benefits they received. 

Table 3: Estimated Percent of Specified Groups of SNAP Households 
Receiving Deductions and the Estimated Average Amount of the 
Deduction, in Fiscal Year 2010: 

Deduction: Child support expenses; 
Percentage of SNAP households with incomes over the federal limits 
receiving deduction (average amount): 6.7% ($20); 
Percentage of all other SNAP households receiving deduction (average 
amount): 1.9% ($4). 

Deduction: Dependent care; 
Percentage of SNAP households with incomes over the federal limits 
receiving deduction (average amount): 14.3% ($50); 
Percentage of all other SNAP households receiving deduction (average 
amount): 3.5% ($8). 

Deduction: Earned income; 
Percentage of SNAP households with incomes over the federal limits 
receiving deduction (average amount): 65.9% ($243); 
Percentage of all other SNAP households receiving deduction (average 
amount): 28.9% ($57). 

Deduction: Medical; 
Percentage of SNAP households with incomes over the federal limits 
receiving deduction (average amount): 13.0% ($19); 
Percentage of all other SNAP households receiving deduction (average 
amount): 3.5% ($5). 

Deduction: Excess shelter; 
Percentage of SNAP households with incomes over the federal limits 
receiving deduction (average amount): 72.2% ($220); 
Percentage of all other SNAP households receiving deduction (average 
amount): 70.5% ($265). 

Source: GAO analysis of USDA's SNAP quality control data. 

Note: The average amount of the deduction was calculated for all 
households in each group, rather than only for households that 
received the deduction. All percentage and numerical estimates in this 
table are significantly different at the 95 percent confidence level 
except for the estimated percentage of each group receiving the excess 
shelter deduction. See appendix II, table 8 for the 95 percent 
confidence intervals for these estimates. 

[End of table] 

Both the cost of total SNAP benefits and the average benefit per 
household increased over the last decade while many states were 
implementing BBCE; however, other factors likely had a greater effect 
on benefit costs (see figure 10). The annual adjustment made to the 
Thrifty Food Plan--which is the basis for the maximum SNAP benefit 
amounts, as well as changes in the economy, demographics, and policies 
affecting deductions, outreach, and eligibility can all affect total 
spending on SNAP benefits. In recent years, the recession drove 
increased benefit costs, both by changing household circumstances and 
by increasing the benefit cost per household. For example, because 
household benefits are primarily determined based on each household's 
monthly income, increases in the poverty and unemployment rates likely 
correlate with increases in the average benefit provided to 
households. In addition, as previously noted, the Recovery Act 
implemented a 13.6 percent increase in the maximum monthly SNAP 
benefit per household. During our site visits, some officials cited 
these changes as key factors that impacted household benefits in 
recent years. Officials we spoke to also noted that the slow economic 
recovery has led to SNAP households remaining on the program for 
longer time periods than before the recession, which can lead to 
increases in total benefit costs. 

Figure 10: Selected Information on SNAP Benefits and Potentially 
Related Factors, 2001-2011: 

[Refer to PDF for image: 3 line graphs] 

Year: 2001; 
Total SNAP benefits: $15.55 billion. 

Year: 2002; 
Total SNAP benefits: $18.26 billion. 

Year: 2003; 
Total SNAP benefits: $21.4 billion. 

Year: 2004; 
Total SNAP benefits: $24.62 billion. 

Year: 2005; 
Total SNAP benefits: $28.57 billion. 

Year: 2006; 
Total SNAP benefits: $30.19 billion. 

Year: 2007; 
Total SNAP benefits: $30.37 billion. 

Year: 2008; 
Total SNAP benefits: $34.61 billion. 

Year: 2009; 
Total SNAP benefits: $50.36 billion. 

Year: 2010; 
Total SNAP benefits: $64.7 billion. 

Year: 2011; 
Total SNAP benefits: $71.81 billion. 

[End of graph] 

Year: 2001; 
Average monthly benefit per household: $174; 
Maximum benefit (3 person household: $341. 

Year: 2002; 
Average monthly benefit per household: $186; 
Maximum benefit (3 person household: $356. 

Year: 2003; 
Average monthly benefit per household: $195; 
Maximum benefit (3 person household: $366. 

Year: 2004; 
Average monthly benefit per household: $198; 
Maximum benefit (3 person household: $371. 

Year: 2005; 
Average monthly benefit per household: $213; 
Maximum benefit (3 person household: $393. 

Year: 2006; 
Average monthly benefit per household: $214; 
Maximum benefit (3 person household: $399. 

Year: 2007; 
Average monthly benefit per household: $215; 
Maximum benefit (3 person household: $408. 

Year: 2008; 
Average monthly benefit per household: $227; 
Maximum benefit (3 person household: $426. 

Year: 2009; 
Average monthly benefit per household: $276; 
Maximum benefit (3 person household: $526. 

Year: 2010; 
Average monthly benefit per household: $290; 
Maximum benefit (3 person household: $526. 

Year: 2011; 
Average monthly benefit per household: $284; 
Maximum benefit (3 person household: $526. 

[End of graph] 

Year: 2001; 
Households receiving the maximum benefit: 22.2%; 
Unemployment rate: 4.5%; 
Poverty rate: 11.7%. 

Year: 2002; 
Households receiving the maximum benefit: 24.4%; 
Unemployment rate: 5.8%; 
Poverty rate: 12.1%. 

Year: 2003; 
Households receiving the maximum benefit: 25.9%; 
Unemployment rate: 6.3%; 
Poverty rate: 12.5%. 

Year: 2004; 
Households receiving the maximum benefit: 30.6%; 
Unemployment rate: 5.6%; 
Poverty rate: 12.7%. 

Year: 2005; 
Households receiving the maximum benefit: 30.9%; 
Unemployment rate: 5%; 
Poverty rate: 12.6%. 

Year: 2006; 
Households receiving the maximum benefit: 32.1%; 
Unemployment rate: 4.6%; 
Poverty rate: 12.3%. 

Year: 2007; 
Households receiving the maximum benefit: 31.9%; 
Unemployment rate: 4.6%; 
Poverty rate: 12.5%. 

Year: 2008; 
Households receiving the maximum benefit: 33.3%; 
Unemployment rate: 5.6%; 
Poverty rate: 13.2%. 

Year: 2009; 
Households receiving the maximum benefit: 37.4%; 
Unemployment rate: 9.5%; 
Poverty rate: 14.3%. 

Year: 2010; 
Households receiving the maximum benefit: 40%; 
Unemployment rate: 9.4%; 
Poverty rate: 15.1%. 

Year: 2011; 
Unemployment rate: 9.1%. 

Source: GAO analysis of USDA data on SNAP benefits and households, 
Bureau of Labor Statistics data on the unemployment rate (in June of 
each year), and U.S. Census data on the Poverty rate. 

[End of figure] 

Because many factors impact SNAP benefit costs, the full extent of 
BBCE's impact is unclear, though evidence suggests other factors 
played a more important role in recent years. Although BBCE may impact 
SNAP benefit costs because the policy both expands who is eligible for 
the program and streamlines the process for receiving benefits, state 
and local officials we met with consistently indicated that they did 
not think BBCE had a significant impact on benefits. Further, our 
analysis of SNAP household data suggests factors beyond BBCE typically 
have a greater impact on benefits. For example, in our review of SNAP 
benefits in the group of 17 states that implemented BBCE during fiscal 
year 2009, we found that the average monthly benefit per household 
significantly increased in all of these states between fiscal years 
2008 and 2010. However, for most of these states, the increases were 
likely primarily related to the increase in maximum benefits 
implemented under the Recovery Act, as we found no significant 
differences in the two factors used to determine benefit amounts--net 
income and household size--for those years.[Footnote 51] 

Administrative Costs Affected by Many Factors: 

Many factors affect SNAP administrative costs, and state BBCE policies 
are one factor that may help reduce such costs. Studies have shown 
that factors ranging from a state's economy and demographic 
characteristics to its SNAP policies, administrative processes, staff 
salaries, and the use of technology all impact state administrative 
spending to varying degrees. As we previously reported, because 
categorical eligibility policies simplify the eligibility 
determination process by creating consistency in income and resource 
limits across programs, these policies can save resources, improve 
productivity, and help staff focus more time on performing essential 
program activities.[Footnote 52] During our site visits, staff in many 
of the local offices we visited stated that, before BBCE was 
implemented, verifying assets often took a considerable amount of 
time, and state officials added that it could be costly, as banks 
sometimes charge SNAP offices a fee to provide account documentation. 
As a result, staff in almost all of the local offices we visited said 
BBCE's removal of the SNAP asset limit helped streamline case 
processing, and some noted that streamlining occurred both because 
SNAP households did not have to provide documentation of assets and 
caseworkers did not need to verify asset information. 

Consistent with annual increases in SNAP participation and benefit 
costs between fiscal years 2001 and 2010, SNAP administrative costs 
generally increased annually during this period, though at a lower 
rate. Certification costs--a sub-set of SNAP administrative costs that 
include the cost of staff determination of household eligibility for 
benefits--also generally increased over this period (see figure 11). 
Cost increases in recent years are likely directly related to the 
$690.5 million in extra federal funding for SNAP administrative costs 
provided to states through the Recovery Act and the Department of 
Defense Appropriations Act, 2010, in response to the national economic 
recession.[Footnote 53] However, despite this additional federal 
funding, because administrative costs increased at a lower rate than 
SNAP participation, administrative costs per SNAP household declined 
during this period (see figure 12). 

Figure 11: SNAP Administrative Costs, Fiscal Years 2001-2010: 

[Refer to PDF for image: line graph] 

Fiscal year: 2001; 
Total administrative costs: $4.71 billion; 
Total certification costs: $2.7 billion. 

Fiscal year: 2002; 
Total administrative costs: $4.97 billion; 
Total certification costs: $2.92 billion. 

Fiscal year: 2003; 
Total administrative costs: $5.05 billion; 
Total certification costs: $2.95 billion. 

Fiscal year: 2004; 
Total administrative costs: $5.18 billion; 
Total certification costs: $3.03 billion. 

Fiscal year: 2005; 
Total administrative costs: $5.21 billion; 
Total certification costs: $3.03 billion. 

Fiscal year: 2006; 
Total administrative costs: $5.59 billion; 
Total certification costs: $3.31 billion. 

Fiscal year: 2007; 
Total administrative costs: $5.8 billion; 
Total certification costs: $3.41 billion. 

Fiscal year: 2008; 
Total administrative costs: $6.23 billion; 
Total certification costs: $3.69 billion. 

Fiscal year: 2009; 
Total administrative costs: $6.77 billion; 
Total certification costs: $3.91 billion. 

Fiscal year: 2010; 
Total administrative costs: $7.22 billion; 
Total certification costs: $4.07 billion. 

Source: GAO analysis of USDA data on SNAP administrative costs. 

Note: These data include administrative costs paid by both federal and 
state governments. 

[End of figure] 

Figure 12: Administrative Costs per SNAP Household, Fiscal Years 2001-
2010: 

[Refer to PDF for image: line graph] 

Fiscal year: 2001; 
Average administrative costs per household per month: $50.88; 
Average certification costs per household per month: $28.85. 

Fiscal year: 2002; 
Average administrative costs per household per month: $49.26; 
Average certification costs per household per month: $27.49. 

Fiscal year: 2003; 
Average administrative costs per household per month: $46.58; 
Average certification costs per household per month: $25.55. 

Fiscal year: 2004; 
Average administrative costs per household per month: $44.14; 
Average certification costs per household per month: $24.54. 

Fiscal year: 2005; 
Average administrative costs per household per month: $41.7; 
Average certification costs per household per month: $23.41. 

Fiscal year: 2006; 
Average administrative costs per household per month: $42.45; 
Average certification costs per household per month: $24.21. 

Fiscal year: 2007; 
Average administrative costs per household per month: $43.79; 
Average certification costs per household per month: $24.78. 

Fiscal year: 2008; 
Average administrative costs per household per month: $44.24; 
Average certification costs per household per month: $25.5. 

Fiscal year: 2009; 
Average administrative costs per household per month: $39.6; 
Average certification costs per household per month: $22.69. 

Fiscal year: 2010; 
Average administrative costs per household per month: $33.5; 
Average certification costs per household per month: $18.52. 

Source: GAO analysis of Y+USDA data on SNAP administrative costs and 
households. 

Note: These data include administrative costs paid by both federal and 
state governments. 

[End of figure] 

While many states implemented BBCE during this period, the largest 
decreases in these costs occurred in recent years when the economic 
recession was also a factor. Specifically, during the recent 
recession, states faced budgetary constraints to funding SNAP 
administrative expenditures. Because states pay for approximately half 
of these expenditures, when state tax revenues decrease during 
recessions, state balanced budget requirements and other constraints 
affect state and local governments' ability to provide services at the 
same time that demand for services increases.[Footnote 54] In our site 
visits to five states, officials frequently noted how overwhelmed 
local SNAP caseworkers have been with the increased workload during 
the recent recession. They noted that workload increases have been 
driven by increases in SNAP participation and the amount of time 
households remain on the program, as well as budget constraints that 
hinder their offices' ability to hire additional staff. Across the 
seven local offices we visited in states that adopted BBCE during the 
recent recession, staff noted that while BBCE helped streamline the 
processing of individual cases, these improvements were offset by the 
increased workload. However, some staff indicated they believe 
reinstating the federal SNAP asset test that was removed under BBCE 
would make their workload unmanageable. 

In addition to the recession, other changes that states have made to 
simplify and ease program administration during the last decade make 
it difficult to determine BBCE's full impact on administrative costs. 
For example, state and local officials frequently cited the 
implementation of reduced reporting requirements under the simplified 
reporting option, the conversion of case files from paper to 
electronic formats, the implementation of online SNAP applications, 
and increased use of phone interviews as changes that also helped to 
ease staff workloads. Officials in one state we visited noted that 
while these changes may have helped to reduce administrative 
expenditures over time, some, like BBCE, may have resulted in 
increased spending in the short-term due to the need for training and 
modifications to computer systems. Further, while most state SNAP 
officials we met with during our site visits felt that BBCE likely 
decreased administrative expenditures to some extent, they did not 
know the policy's actual impact because of other changes. 

State Eligibility Changes May Negatively Affect Program Integrity: 

Payment Errors May Be Negatively Affected: 

In recent years, the SNAP payment error rate declined to an historic 
low while multiple program changes occurred, including BBCE, but 
evidence suggests that factors other than BBCE may have played a 
larger role in the decline. Between fiscal years 2000 and 2010, USDA 
reported that the national payment error rate--the percentage of SNAP 
benefits paid in error, including underpayments and overpayments--fell 
from 8.91 percent to 3.81 percent as the number of states with BBCE 
policies increased from 0 to 39.[Footnote 55] Because most states' 
BBCE policies eliminated the need to confirm that SNAP household 
assets fall below certain limits, BBCE effectively removed the 
potential for asset-related errors in these states. However, USDA data 
indicate that most errors have been caused by factors other than 
assets in recent years. In fact, fewer than 4 percent of all error 
cases nationally have been caused by asset errors since 2000.[Footnote 
56] Therefore, it is likely that other factors had a greater impact on 
error rates during this time. For example, the number of states 
adopting the simplified reporting option for at least some SNAP 
households increased during this period. Because this option 
eliminates substantial paperwork requirements for participants and 
states, and reduces the number of times income is verified, states 
experience fewer related errors. In addition, states we visited 
reported that they had also made other changes during this period to 
help lower their error rates, such as incorporating the use of 
technology with new case management models or digital files. 

Further, both our analysis of USDA data and our discussions with SNAP 
staff suggest that BBCE may, in fact, contribute to more payment 
errors. Although BBCE has been promoted by USDA as a possible means to 
reduce errors, we found that a greater percentage of SNAP households 
eligible under BBCE that had incomes over the federal limits had 
payment errors than other households (17.2 percent compared to 6.7 
percent) in fiscal year 2010.[Footnote 57] This may be related to the 
fact that these households were significantly more likely to have 
earned income, and income is a frequent cause of SNAP payment errors. 
In addition, while most states' BBCE policies removed a potential 
source of error by eliminating asset limits, SNAP caseworkers we spoke 
with told us that a reduction in the level of verification they 
perform may actually increase the potential for errors as well as 
fraud. For example, staff in two states reported that removing asset 
verification under BBCE has reduced their ability to investigate other 
applicant information for possible inconsistencies. Specifically, 
while asset verification often took considerable time to perform, they 
noted that previously reviewing bank accounts gave them the ability to 
identify regular deposits that may be income to ensure those were 
reported by the applicant. Beyond changes due to BBCE, caseworkers in 
several states we visited suggested there has been a cultural shift 
towards an overall reduction in the level of verification and 
investigation they perform, in part because of the increased 
participation and workload related to the recent recession. They 
expressed concern about maintaining a balance between providing 
assistance to those who need it and ensuring program integrity, noting 
they worry about losing access to information to help ensure integrity. 

Limited Oversight May Contribute to Unintended Consequences: 

While federal rules provide states with considerable flexibility in 
designing their BBCE policies, gaps in federal oversight may 
contribute to some unintended consequences for SNAP and related 
programs' integrity. We found unintended consequences relating to 
three key areas: 

* provision of a TANF-funded service,[Footnote 58] 

* direct certification for free school meals, and: 

* requirements for categorically eligible households to report changes 
(in household circumstances). 

TANF-Funded Service Not Consistently Provided: 

Our visits to states suggest that SNAP applicants are not consistently 
receiving the TANF-funded information required to confer categorical 
eligibility and that the extent to which this information is TANF-
funded is unclear. According to USDA, BBCE policies make most 
households that apply for SNAP categorically eligible because they 
receive a TANF-funded service, such as an informational brochure or 
toll-free number, as long as the household's income is within the 
state's specified income limit (see figure 13).[Footnote 59] However, 
in one state we visited, some local SNAP caseworkers told us they did 
not consistently provide the guide to services brochure to all 
applicants. In another, staff said that at the applicant's request, 
and/or if caseworkers think there is a need, they will provide 
referrals to services. In a third state we visited, applicants were 
directed on the SNAP application to call a toll-free number to receive 
an informational brochure on services; however, we were unsuccessful 
in obtaining this brochure after repeated (5) attempts to call the 
number listed. Further, according to USDA, states must use TANF funds 
to pay for either the document households receive or the services 
mentioned in the document. If states use TANF funds to cover at least 
50 percent of the cost, they do not need to obtain USDA approval of 
their BBCE policies. While SNAP officials in three of the states we 
visited confirmed that the documents used to confer categorical 
eligibility are partially TANF-funded, they did not know the exact 
percentage of TANF dollars used to fund them. 

Figure 13: Examples of How States Confer BBCE for SNAP: 

[Refer to PDF for image: list] 

Massachusetts: 
A Non-Public Assistance food stamp household which consists of adults 
between the ages of 19 and 59 is subject to the food stamp gross and 
net income tests and is no longer subject to an asset test. Receipt of 
the Help for Those in Need: A Resources Brochure confers a TANF 
Program service. 

Nevada: 
All SNAP applicant households receiving the revised "This is Your 
Copy" page from the back of the application are categorically eligible 
for benefits. There will be no resource or gross/net income tests 
applied to these households. This page was revised to contain the 
following information about services available from the Nevada Public 
Health Foundation (NPHF). 

Utilizing TANF funds, DWSS through the Nevada Public Health Foundation 
(NPHF), has developed a class to target pregnant and parenting 
teens.... 

Washington: 
Basic Food Assistance Units with countable income up to 200% of the 
federal poverty guidelines are eligible to use the department's Online 
CSO website. This website provides information about our programs as 
well as referrals to resources in the community. This web-based 
information and referral service is partly funded with TANF and TANF 
Maintenance Of Effort funds. Because of this funding, we use this 
service to make Assistance Units categorically eligible for Basic Food 
if they have countable income at or under 200%. Clients are notified 
and authorized to receive this service through a text block on their 
approval letter for Basic Food. 

Source: Commonwealth of Massachusetts, Executive Office of Health and 
Human Services, Department of Transitional Assistance, Field 
Operations Memo 2008-27, "Maximized Categorical Eligibility for NPA 
Food Stamp Households," (May 30, 2008); State of Nevada, Department of 
Human Resources, Welfare Division, Policy Transmittal, "SNAP 
Categorical Eligibility -Receipt of TANF Benefit" (March 9, 2009); and 
Washington State Department of Social and Health Services, Eligibility 
A-Z Manual, "Categorical Eligibility for Basic Food," (revised 
February 28, 2012). 

Note: We did not conduct site visits to these 3 states, and we did not 
conduct an independent legal analysis to verify this information. 

[End of figure] 

Gaps in USDA's oversight of states' procedures for implementing BBCE 
may contribute to the inconsistencies we found in providing qualified 
applicants with the TANF-funded information or service that confers 
BBCE. While USDA has issued guidance over the past 3 years in response 
to various state questions about BBCE, the agency's documentation 
requirements for states that adopt it are limited. According to agency 
guidance, while states must document that a household was determined 
categorically eligible, USDA does not require states to document that 
the TANF-funded service was received by applicants. As a result, in a 
state where a document, such as a brochure, is used to confer 
eligibility, the state does not have to verify that it has provided 
the document to applicants as part of the eligibility determination 
process. In addition, headquarters and regional USDA officials told us 
the agency does not request documentation from states on the extent of 
TANF funding used, even though that information is necessary to 
determine whether a BBCE policy would require agency approval. Agency 
officials added that the burden is on the states to let USDA know if 
approval is needed. Agency officials also told us that while they 
provide technical assistance to states, as needed, on the development 
of their BBCE policies and collect summary information on states' BBCE 
provisions, they do not approve state BBCE policies. 

Inappropriate Certification for Free School Meals: 

Because states have flexibility to decide how to treat SNAP households 
deemed eligible for $0 in benefits--an outcome more likely under BBCE-
-some children have been inappropriately certified for free school 
meals, including in two states we visited. Under SNAP, states have 
been allowed to decide whether to deny eligibility to households who 
qualify for $0 in benefits or whether to certify these households SNAP-
eligible without benefits. For school meals programs, statute 
indicates states must certify children in households that receive SNAP 
benefits eligible for free school meals--a process called direct 
certification that is designed to ease administrative burden when 
certifying children for multiple assistance programs with similar 
eligibility criteria.[Footnote 60] Many states rely on data matches 
between their SNAP program and district-level school data to identify 
children eligible for direct certification, and beginning in school 
year 2012-2013, all states are expected to do so. However, because a 
state can certify families receiving $0 in SNAP benefits as eligible 
in its SNAP data system, it can directly certify children in such 
families for free school meals, even though they do not receive SNAP 
benefits.[Footnote 61] This practice occurred in two states we 
visited. SNAP officials in one state told us the state adopted BBCE, 
in part, to potentially enable more children to become eligible for 
free school meals. Local caseworkers in that state similarly said that 
they believe parents apply for SNAP specifically because they know 
their child/children are eligible for free school lunch even if they 
are deemed eligible for $0 in SNAP benefits. 

In recognition of this practice, in 2011, USDA issued guidance for 
states through its regional offices reiterating that children in 
households receiving $0 in benefits are not categorically eligible for 
free school meals and therefore should not be directly certified; 
however, officials in the states we visited were unaware of this 
guidance. In its October 2011 memorandum, USDA further suggested that 
state SNAP agencies work with their school meal agency counterparts to 
ensure that children from $0 benefit SNAP households are excluded from 
direct certification as soon as possible. According to USDA, school 
meal agencies were to be in compliance with this guidance by July 1, 
2012.[Footnote 62] Agency officials in USDA's regional offices 
representing the states we visited told us they routinely transmit 
guidance and policy changes to states from the national office. This 
guidance was also made available on USDA's Web site. However, in June 
2012, we followed up with the two states we visited that had been 
directly certifying children from $0 benefit SNAP households, and 
state officials indicated the practice was still occurring, as they 
were not aware of this guidance from USDA. 

Direct certification of children in categorically eligible SNAP 
households creates another unintended consequence--one of effectively 
increasing the income eligibility limit for free school meals for some 
children. While the federal gross income-eligibility limit for SNAP 
aligns with that of the school meals programs--providing free meal 
benefits to children in households at or below 130 percent of the 
federal poverty guidelines[Footnote 63]--the programs no longer align 
in states with BBCE policies that have raised the SNAP gross income 
limit. In the 27 states with BBCE gross income limits between 160 and 
200 percent of the federal poverty guidelines, children in 
categorically eligible households may receive free school meals when, 
under traditional federal rules, they would not qualify for free meal 
assistance.[Footnote 64] In short, through their BBCE policies, some 
states have effectively increased the income eligibility limits for 
two key federal nutrition assistance programs. 

Inequities in Reporting Requirements: 

In states that have adopted BBCE, requirements for reporting changes 
in household income or household size can vary, resulting in unequal 
treatment of households. Under simplified reporting rules adopted by 
nearly all states,[Footnote 65] households are required to report 
changes in income between scheduled reporting periods only if income 
exceeds the federal SNAP gross income limit--130 percent of the 
federal poverty guidelines. Because of BBCE, however, 27 states have, 
in effect, changed their SNAP gross income limit to levels greater 
than 130 percent. USDA issued SNAP guidance on change reporting 
requirements clarifying that, in states with simplified reporting, 
categorically eligible households with gross incomes over 130 percent 
of the federal poverty guidelines at the time of certification have no 
federal SNAP reporting requirements until they recertify or file a 
periodic report.[Footnote 66] While guidance further indicates that 
states may choose to require these households to report when their 
gross income exceeds the income limit of the TANF program that confers 
categorical eligibility, they are not required to do so. Two states we 
visited do not require households with incomes above 130 percent of 
the poverty guidelines to report changes in income between reporting 
periods. This results in lower-income SNAP households having a greater 
reporting burden than higher income SNAP households in order to retain 
their benefits. 

While USDA has issued guidance to states in this area, its guidance 
relies on TANF reporting requirements that do not exist. USDA 
officials told us that TANF rules require categorically eligible SNAP 
households to report to TANF when their incomes exceed the income 
limit of the TANF service used to confer BBCE. However, because BBCE 
households are often authorized to receive a TANF-funded service 
through a brochure or toll-free telephone number given to them by a 
SNAP office, they may not be aware of any related TANF reporting 
requirements. Further, as we have previously reported, state TANF 
agencies are not required to collect data on many recipients of TANF-
funded services, which include BBCE households.[Footnote 67] 
Accordingly, a state TANF agency would not seek information on these 
households' income changes in order to share that information with the 
SNAP agency. 

Conclusions: 

In response to the recent economic downturn and prolonged recovery, 
the Supplemental Nutrition Assistance Program has grown to provide 
unprecedented numbers of low-income households with benefits for food 
assistance. While the substantial increases in SNAP participation led 
to concerns that the large number of states adopting BBCE policies in 
recent years may have been a driver of those increases, these policies 
have had only a modest impact on program participation. Further, SNAP 
generally continues to serve households with the same types of 
characteristics it always has, and is intended to. 

As federal and state governments face mounting fiscal pressures and 
confront limited resources, ensuring the integrity of SNAP and other 
programs spending public dollars is critical. While USDA touted BBCE 
as a way to improve program integrity and administrative efficiency, 
state adoption of BBCE has created unintended consequences that may 
weaken both SNAP and related programs' integrity and introduce 
inequities. First, because gaps exist in USDA's review of states' 
procedures for implementing BBCE, some states are deeming households 
eligible under BBCE without following the required steps to do so. In 
addition, it is not known whether states are following the funding 
requirements associated with these policies. Second, because USDA's 
guidance clarifying children's eligibility for free school meals when 
their families receive $0 in SNAP benefits--an outcome likely more 
common because of BBCE--has not reached all states, school meal 
programs are vulnerable to overpayments and abuse. Finally, USDA's 
guidance on SNAP reporting requirements has resulted in lower-income 
households eligible under federal SNAP rules having to do more to 
retain their benefits than higher-income SNAP households eligible 
solely because of states' BBCE policies. 

While these unintended consequences of BBCE on SNAP program integrity 
are potentially significant, they may also be easily addressed by 
those overseeing and administering the program. At a time when the 
economy has left more in need of assistance, SNAP continues to help 
low-income households obtain adequate nutrition. As a result, any 
changes to BBCE should carefully weigh the potential benefits and 
costs, which at this time include the increased burden on state and 
local staff who are already stretched thin as a result of decreased 
budgets and staff resources. 

Recommendations for Executive Action: 

To improve SNAP program integrity and oversight, we are recommending 
that the Secretary of Agriculture require FNS to take several actions: 

* Review state procedures for implementing BBCE, specifically those in 
place for providing the relevant TANF-funded service to all SNAP 
applicants deemed eligible under BBCE, as well as ensuring the 
relevant service is funded with TANF dollars. 

* Disseminate the agency's October 2011 guidance clarifying that 
children in households certified as eligible for $0 in SNAP benefits 
should not be directly certified to receive free school meals directly 
to state agencies administering SNAP. 

* Revisit agency guidance on change reporting requirements to ensure 
that all households, including those deemed eligible under BBCE with 
incomes above the federal gross income limit, are treated equitably. 

Agency Comments and Our Evaluation: 

We provided a draft of this report to USDA for review and comment. On 
July 16, 2012, the Associate Administrator for SNAP and other FNS 
officials provided us with the agency's oral comments. Officials 
stated that they were in general agreement with the findings and 
recommendations presented in the report and offered technical comments 
that we have incorporated as appropriate. Officials also discussed the 
positive impacts BBCE has had on SNAP, including state administrative 
relief and cost savings, and emphasized our finding that BBCE policies 
have generally not changed the characteristics of SNAP households. As 
a result, the program continues to serve those it is intended to. 
Officials also noted their agreement with our conclusion that BBCE's 
benefits should be considered when assessing changes to these 
policies. Concerning our finding on the percentage of SNAP households 
with incomes over the federal limits that had payment errors, 
officials noted that these households may be more likely to have 
benefit errors than other SNAP households because they have greater 
earned income and deductions--factors that have been found to increase 
the likelihood of errors. We agree, and our findings on the 
characteristics of this sub-group of households support that 
conclusion. Further, officials suggested that the total amount of 
benefit dollars provided in error to this sub-group of households is 
likely relatively small because the average monthly benefit provided 
to these households is much smaller than the average benefit provided 
to all other SNAP households. Because of this, officials believe that 
errors in these households impact the overall SNAP payment error rate 
to a small extent, which is supported by the fact that the program's 
error rate has been relatively constant in recent years while the 
number of states with BBCE has increased. While we agree that it is 
likely that the total amount of benefit dollars provided in error to 
this sub-group of households is relatively small, we did not develop 
such an estimate during our analysis of the SNAP quality control data. 

As agreed with your offices, unless you publicly announce the contents 
of this report earlier, we plan no further distribution of it until 30 
days from the report date. At that time, we will send copies of this 
report to the appropriate congressional committees, the Secretary of 
Agriculture, and other interested parties. In addition, this report 
will be available at no charge on GAO's website at [hyperlink, 
http://www.gao.gov]. 

If you or your staff have any questions concerning this report, please 
contact me at (202) 512-7215 or brownke@gao.gov. Contact points for 
our Offices of Congressional Relations and Public Affairs may be found 
on the last page of this report. GAO staff who made key contributions 
to this report are listed in appendix III. 

Signed by: 

Kay E. Brown: 
Director, Education, Workforce, and Income Security Issues: 

[End of section] 

Appendix I: Objectives, Scope, and Methodology: 

U.S. Department of Agriculture (USDA) Data Analysis: 

Quality Control Data: 

To determine the prevalence and characteristics of households deemed 
eligible under states' broad-based categorical eligibility (BBCE) 
policies that had incomes over the federal Supplemental Nutrition 
Assistance Program (SNAP) eligibility limits in fiscal years 2008 and 
2010, we analyzed the Food and Nutrition Service's (FNS) quality 
control (QC) system data of active SNAP cases.[Footnote 68] Per 
federal SNAP requirements, state officials draw monthly random samples 
of SNAP cases and review them to determine the extent to which 
households received benefits to which they were entitled. FNS 
officials in its regional offices and headquarters perform a secondary 
review of a sub-set of each state's sample of cases. The weighted 
analyses of the QC data produce nationally representative results. 

To identify which households were deemed eligible under BBCE, and the 
sub-set of BBCE households that had incomes over the federal SNAP 
eligibility limits, we took several steps. First, we identified which 
states had BBCE policies in place in fiscal years 2008 and 2010 using 
an FNS compilation of BBCE policy implementation dates. Based on our 
discussions with FNS officials, Mathematica Policy Research, Inc. 
staff,[Footnote 69] and state and local staff we spoke to during our 
five site visits, we assumed that once BBCE was enacted by a state, it 
was used as the default SNAP eligibility policy. Therefore, in states 
with BBCE policies in the fiscal year analyzed, we considered BBCE 
households to be those denoted in the QC data as categorically 
eligible in which all members did not receive cash assistance from 
another means-tested program. From this group, we determined the sub-
set of BBCE households that had incomes over the federal SNAP 
eligibility limits. 

We obtained the QC data directly from the QC database, which is made 
available to the public via Mathematica Policy Research, Inc.'s Web 
site. To analyze the data, we reviewed the technical user's manual for 
both the 2008 and 2010 QC public release data sets and evaluated the 
sampling methodology used to produce the data. We also reviewed the 
documentation for the internal review and coding process that FNS 
follows to prepare the QC data. Further, we checked the variables used 
in our analysis for out-of-range values or outliers. To produce 
weighted frequencies, weighted percents, and weighted dollar estimates 
for QC variables at the state and national level, we used the 
household weight variable provided in the public release QC data set. 
Because the records in the SNAP QC data are from a random sample, data 
analysis results are weighted estimates for a population of eligible 
households and thus are subject to sampling errors associated with 
samples of this size and type. The QC sample is only one of a large 
number of samples that states might have drawn. As each sample could 
have provided different estimates, we expressed our confidence in the 
precision of our QC data estimates as a 95 percent confidence interval 
(e.g., plus or minus 10 percentage points). To produce 95 percent 
confidence intervals around our weighted estimates, we used a 
statistical software package and an appropriate variance estimation 
method suitable for the sample design of the QC data. (Appendix II 
provides the estimates and 95 percent confidence intervals for the 
data we present in the body of this report.) 

Through our analysis of the QC data, a review of the technical 
documentation, and interviews with FNS officials and Mathematica 
statisticians, we determined that the QC public release data were 
sufficiently reliable for the purposes of our audit. 

In addition to conducting our own analysis of the QC data, we reviewed 
national-level data on SNAP payment error rates--the percentage of 
SNAP benefits paid in error--available from FNS for fiscal years 2000 
to 2010. We also reviewed the primary sources of payment errors from 
2000-2010 to help identify the extent to which payment errors were 
attributable to assets or another source. 

Other SNAP Data: 

In addition to the QC data, we reviewed other data on SNAP 
participation and costs from USDA. Specifically, we analyzed data on 
average monthly SNAP participation in recent years obtained from USDA 
reports. In addition, we obtained data on total benefit costs and the 
average monthly SNAP benefits per household from USDA's Web site and 
the annual SNAP State Activity Reports for fiscal years 2001-2011, as 
well as data on the proportion of households receiving the maximum 
SNAP benefit from the annual Characteristics of SNAP Households 
reports for fiscal years 2001-2010. To assess administrative costs, we 
obtained data on federal and state outlays and obligations for fiscal 
years 2001-2010 from USDA's National Data Bank. These data are 
annually reported by states on the Standard Form 269 in specific cost 
categories designated by USDA. In addition, we obtained data on state 
expenditures of the federal Recovery Act funds provided for state 
administrative expenses in fiscal years 2009 and 2010, as well as the 
related funds provided through the Department of Defense 
Appropriations Act, 2010. 

Site Visits: 

To better understand the effects of state BBCE policies on SNAP, as 
well as other factors impacting SNAP, we conducted site visits to 5 
states and 18 local offices responsible for administering SNAP in 
those states, during January and February 2012. The states and 
localities we visited were Arizona--Maricopa, Pima, and Pinal 
counties; Illinois--Cook and Lake counties; North Carolina--Cabarrus, 
Gaston, Lincoln, and Mecklenburg counties; South Carolina--Greenville, 
Laurens, and Pickens counties; and Wisconsin--Kenosha, Milwaukee, and 
Racine counties. We selected these states because they varied in their 
BBCE adoption dates, in the characteristics of their BBCE policies, 
and in their geographic locations. States selected also had relatively 
large SNAP caseloads and generally high proportions of their SNAP 
households deemed eligible under BBCE policies. 

In each state, we interviewed state officials responsible for 
administering SNAP, as well as local SNAP administrators and 
caseworkers at three or four local offices. The local offices we 
visited ranged from urban to rural areas. During the interviews we 
collected information about the state's BBCE policy and its 
application. In addition, we collected information about recent trends 
in SNAP participation, benefit amounts, administrative workload, and 
program errors, as well as BBCE's impact on each. We also collected 
information on other economic and non-economic factors that have 
impacted SNAP. Also, at each local office we observed the office's 
general process for serving SNAP applicants, including the forms, 
documents, and technological systems used, and we gathered information 
on how BBCE was applied during the process. Lastly, we conducted 
interviews with federal officials at the USDA regional office 
associated with each state in order to discuss their role in the 
oversight of SNAP. We cannot generalize our findings beyond the states 
and localities we visited. 

[End of section] 

Appendix II: Quality Control Data Estimates and 95 Percent Confidence 
Intervals: 

Table 4: SNAP Households That Would Not Have Been Eligible for the 
Program without BBCE because Their Incomes Were over Federal Limits, 
in Fiscal Year 2010: 

SNAP households deemed eligible under BBCE with incomes over federal 
limits as a percentage of all SNAP households; 
Estimate: 2.6%; 
95 percent confidence interval: 2.4% - 2.8%. 

SNAP households deemed eligible under BBCE with incomes over federal 
limits; 
Estimate: 473,381; 
95 percent confidence interval: 438,088 - 508,675. 

All SNAP households; 
Estimate: 18,369,228; 
95 percent confidence interval: 18,332,348 - 18,406,108. 

SNAP households deemed eligible under BBCE with incomes over federal 
limits as a percentage of SNAP households in states with BBCE policies 
that increased the gross income limit; 
Estimate: 4.8%; 
95 percent confidence interval: 4.4% - 5.2%. 

SNAP households deemed eligible under BBCE with incomes over federal 
limits in states with BBCE policies that increased the gross income 
limit; 
Estimate: 405,927; 
95 percent confidence interval: 374,464 - 437,390. 

All SNAP households in states with BBCE policies that increased the 
gross income limit; 
Estimate: 8,423,615; 
95 percent confidence interval: 8,398,837 - 8,448,393. 

Average total income of SNAP households deemed eligible under BBCE 
with incomes over federal limits; 
Estimate: $1,965; 
95 percent confidence interval: $1,919 - $2,010. 

Average total income of SNAP households deemed eligible under BBCE 
with incomes over federal limits as a percentage of the federal 
poverty guidelines; 
Estimate: 151%; 
95 percent confidence interval: 149% - 153%. 

Source: GAO analysis of USDA's SNAP quality control data. 

[End of table] 

Table 5: Characteristics of Specified Groups of SNAP Households, in 
Fiscal Year 2010: 

SNAP households with at least one child as a percentage of SNAP 
households deemed eligible under BBCE with incomes over federal limits; 
Estimate: 56.3%; 
95 percent confidence interval: 52.5% - 60.1%; 
SNAP households with at least one child as a percentage of all other 
SNAP households; 
Estimate: 48.5%; 
95 percent confidence interval: 47.9% - 49.1%. 

SNAP households with a single female as the head as a percentage of 
SNAP households deemed eligible under BBCE with incomes over federal 
limits; 
Estimate: 30.7%; 
95 percent confidence interval: 27.2% - 34.2%; 
SNAP households with a single female as the head as a percentage of 
all other SNAP households; 
Estimate: 25.8%; 
95 percent confidence interval: 25.3% - 26.3%. 

SNAP households with at least one member receiving Social Security 
benefits as a percentage of SNAP households deemed eligible under BBCE 
with incomes over federal limits; 
Estimate: 27.8%; 
95 percent confidence interval: 24.3% - 31.4%; 
SNAP households with at least one member receiving Social Security 
benefits as a percentage of all other SNAP households; 
Estimate: 21.2%; 
95 percent confidence interval: 20.8% - 21.7%. 

Average amount of Social Security benefits received by SNAP households 
deemed eligible under BBCE with incomes over federal limits; 
Estimate: $340; 
95 percent confidence interval: $293 - $388; 
Average amount of Social Security benefits received by all other SNAP 
households; 
Estimate: $155; 
95 percent confidence interval: $151 - $159. 

SNAP households with at least one member with unearned income as a 
percentage of SNAP households deemed eligible under BBCE with incomes 
over federal limits; 
Estimate: 60.0%; 
95 percent confidence interval: 56.3% - 63.7%; 
SNAP households with at least one member with unearned income as a 
percentage of all other SNAP households; 
Estimate: 60.3%; 
95 percent confidence interval: 59.7% - 60.9%. 

SNAP households with at least one member with earned income as a 
percentage of SNAP households deemed eligible under BBCE with incomes 
over federal limits; 
Estimate: 65.9%; 
95 percent confidence interval: 62.2% - 69.5%; 
SNAP households with at least one member with earned income as a 
percentage of all other SNAP households; 
Estimate: 29.0%; 
95 percent confidence interval: 28.4% - 29.5%. 

SNAP households with at least one member receiving Unemployment 
Insurance benefits as a percentage of SNAP households deemed eligible 
under BBCE with incomes over federal limits; 
Estimate: 18.6%; 
95 percent confidence interval: 15.6% - 21.6%; 
SNAP households with at least one member receiving Unemployment 
Insurance benefits as a percentage of all other SNAP households; 
Estimate: 6.4%; 
95 percent confidence interval: 6.1% - 6.7%. 

Average amount of Unemployment Insurance benefits received by SNAP 
households deemed eligible under BBCE with incomes over federal limits; 
Estimate: $223; 
95 percent confidence interval: $185 - $262; 
Average amount of Unemployment Insurance benefits received by all 
other SNAP households; 
Estimate: $55; 
95 percent confidence interval: $52 - $58. 

Source: GAO analysis of USDA's SNAP quality control data. 

[End of table] 

Table 6: Benefits Provided to SNAP Households That Would Not Have Been 
Eligible for the Program without BBCE because Their Incomes were over 
Federal Limits, per Month in Fiscal Year 2010: 

SNAP benefits provided to households deemed eligible under BBCE with 
incomes over federal limits as a percentage of all SNAP benefits; 
Estimate: 0.7%; 
95 percent confidence interval: 0.6% - 0.8%. 

SNAP benefits provided to households deemed eligible under BBCE with 
incomes over federal limits; 
Estimate: $38,333,145; 
95 percent confidence interval: 33,972,894 - 42,693,395. 

Total amount of benefits provided to all SNAP households; 
Estimate: $5,273,937,192; 
95 percent confidence interval: 5,227,633,694; 
5,320,240,691. 

SNAP benefits provided to households deemed eligible under BBCE with 
incomes over federal limits as a percentage of all SNAP benefits in 
states with BBCE policies that increased the gross income limit; 
Estimate: 1.5%; 
95 percent confidence interval: 1.3% - 1.6%. 

SNAP benefits provided to households deemed eligible under BBCE with 
incomes over federal limits in states with BBCE policies that 
increased the gross income limit; 
Estimate: $33,987,767; 
95 percent confidence interval: $30,127,143 - $37,848,392. 

Total amount of benefits provided to all SNAP households in states 
with BBCE policies that increased the gross income limit; 
Estimate: $2,308,594,258; 
95 percent confidence interval: $2,277,254,048 - $2,339,934,469. 

Source: GAO analysis of USDA's SNAP quality control data. 

[End of table] 

Table 7: Benefits Received by Specified Groups of SNAP Households, in 
Fiscal Year 2010: 

Average monthly SNAP benefit received by SNAP households deemed 
eligible under BBCE with incomes over federal limits; 
Estimate: $81; 
95 Percent Confidence Interval: $74 - $88; 
Average monthly SNAP benefit received by all other SNAP households; 
Estimate: $293; 
95 Percent Confidence Interval: $290 - 295. 

SNAP households receiving the minimum benefit as a percentage of SNAP 
households deemed eligible under BBCE with incomes over federal limits; 
Estimate: 44.3%; 
95 Percent Confidence Interval: 40.3% - 48.1%; 
SNAP households receiving the minimum benefit as a percentage of all 
other SNAP households; 
Estimate: 2.7%; 
95 Percent Confidence Interval: 2.5% - 2.9%. 

Source: GAO analysis of USDA's SNAP quality control data. 

[End of table] 

Table 8: Estimated Percent of Specified Groups of SNAP Households 
Receiving Deductions and the Estimated Average Amount of the Deduction 
in Fiscal Year 2010: 

SNAP households receiving child support deduction as a percentage of 
SNAP households deemed eligible under BBCE with incomes over federal 
limits; 
Estimate: 6.7%; 
95 Percent Confidence Interval: 4.6% - 8.9%; 
SNAP households receiving child support deduction as a percentage of 
all other SNAP households; 
Estimate: 1.9%; 
95 Percent Confidence Interval: 1.7% - 2.0%. 

Average amount of child support deduction received by SNAP households 
deemed eligible under BBCE with incomes over federal limits; 
Estimate: $20; 
95 Percent Confidence Interval: $13 - $27; 
Average amount of child support deduction received by all other SNAP 
households; 
Estimate: $4; 
95 Percent Confidence Interval: $4 - $5. 

SNAP households receiving dependent care deduction as a percentage of 
SNAP households deemed eligible under BBCE with incomes over federal 
limits; 
Estimate: 14.3%; 
95 Percent Confidence Interval: 11.6% - 17.0%; 
SNAP households receiving dependent care deduction as a percentage of 
all other SNAP households; 
Estimate: 3.5%; 
95 Percent Confidence Interval: 3.3% - 3.7%. 

Average amount of dependent care deduction received by SNAP households 
deemed eligible under BBCE with incomes over federal limits; 
Estimate: $50; 
95 Percent Confidence Interval: $37 - $62; 
Average amount of dependent care deduction received by all other SNAP 
households; 
Estimate: $8; 
95 Percent Confidence Interval: $7 - $8. 

SNAP households receiving earned income deduction as a percentage of 
SNAP households deemed eligible under BBCE with incomes over federal 
limits; 
Estimate: 65.9%; 
95 Percent Confidence Interval: 62.2% - 69.5%; 
SNAP households receiving earned income deduction as a percentage of 
all other SNAP households; 
Estimate: 28.9%; 
95 Percent Confidence Interval: 28.4% - 29.5%. 

Average amount of earned income deduction received by SNAP households 
deemed eligible under BBCE with incomes over federal limits; 
Estimate: $243; 
95 Percent Confidence Interval: $227 - $260; 
Average amount of earned income deduction received by all other SNAP 
households; 
Estimate: $57; 
95 Percent Confidence Interval: $56 - $59. 

SNAP households receiving medical deduction as a percentage of SNAP 
households deemed eligible under BBCE with incomes over federal limits; 
Estimate: 13.0%; 
95 Percent Confidence Interval: 10.3% - 15.8%; 
SNAP households receiving medical deduction as a percentage of all 
other SNAP households; 
Estimate: 3.5%; 
95 Percent Confidence Interval: 3.3% - 3.8%. 

Average amount of medical deduction received by SNAP households deemed 
eligible under BBCE with incomes over federal limits; 
Estimate: $19; 
95 Percent Confidence Interval: $14 - $25; 
Average amount of medical deduction received by all other SNAP 
households; 
Estimate: $5; 
95 Percent Confidence Interval: $5 - $6. 

SNAP households receiving excess shelter deduction as a percentage of 
SNAP households deemed eligible under BBCE with incomes over federal 
limits; 
Estimate: 72.2%; 
95 Percent Confidence Interval: 68.7% - 75.6%; 
SNAP households receiving excess shelter deduction as a percentage of 
all other SNAP households; 
Estimate: 70.5%; 
95 Percent Confidence Interval: 70.0% - 71.1%. 

Average amount of excess shelter deduction received by SNAP households 
deemed eligible under BBCE with incomes over federal limits; 
$220; 
95 Percent Confidence Interval: $205 - $235; 
Average amount of excess shelter deduction received by all other SNAP 
households; 
Estimate: $265; 
95 Percent Confidence Interval: $263 - $268. 

Source: GAO analysis of USDA's SNAP quality control data. 

[End of table] 

[End of section] 

Appendix III: GAO Contacts and Staff Acknowledgments: 

GAO Contact: 

Kay E. Brown, (202) 512-7215 or brownke@gao.gov: 

Staff Acknowledgments: 

Kathy Larin (Assistant Director), Rachel Frisk (Analyst-in-Charge), 
Avani Locke, and David Perkins made significant contributions to all 
aspects of this report. Also contributing to this report were Carl 
Barden, Marquita Campbell, Susannah Compton, Heather Dunahoo, Greg 
Kutz, Jean McSween, Mimi Nguyen, Susan Offutt, Rhiannon Patterson, 
Kathy Peyman, Almeta Spencer, Craig Winslow, and Jill Yost. 

[End of section] 

Related GAO Products: 

State and Local Governments: Knowledge of Past Recessions Can Inform 
Future Federal Fiscal Assistance. [hyperlink, 
http://www.gao.gov/products/GAO-11-401]. Washington, D.C.: March 31, 
2011. 

Temporary Assistance for Needy Families: Implications of Caseload and 
Program Changes for Families and Program Monitoring. [hyperlink, 
http://www.gao.gov/products/GAO-10-815T]. Washington, D.C.: September 
21, 2010. 

Supplemental Nutrition Assistance Program: Payment Errors and 
Trafficking Have Declined, but Challenges Remain. [hyperlink, 
http://www.gao.gov/products/GAO-10-956T]. Washington, D.C.: July 28, 
2010. 

Domestic Food Assistance: Complex System Benefits Millions, but 
Additional Efforts Could Address Potential Inefficiency and Overlap 
among Smaller Programs. [hyperlink, 
http://www.gao.gov/products/GAO-10-346]. Washington, D.C.: April 15, 
2010. 

Food Stamp Program: FNS Could Improve Guidance and Monitoring to Help 
Ensure Appropriate Use of Noncash Categorical Eligibility. [hyperlink, 
http://www.gao.gov/products/GAO-07-465]. Washington, D.C.: March 28, 
2007. 

Human Service Programs: Demonstration Projects Could Identify Ways to 
Simplify Policies and Facilitate Technology Enhancements to Reduce 
Administrative Costs. [hyperlink, 
http://www.gao.gov/products/GAO-06-942]. Washington, D.C.: September 
19, 2006. 

Food Stamp Program: States Have Made Progress Reducing Payment Errors, 
and Further Challenges Remain. [hyperlink, 
http://www.gao.gov/products/GAO-05-245]. Washington, D.C.: May 5, 2005. 

Food Stamp Program: Farm Bill Options Ease Administrative Burden, but 
Opportunities Exist to Streamline Participant Reporting Rules among 
Programs. [hyperlink, http://www.gao.gov/products/GAO-04-916]. 
Washington, D.C.: September 16, 2004. 

Food Stamp Program: Steps Have Been Taken to Increase Participation of 
Working Families, but Better Tracking of Efforts Is Needed. 
[hyperlink, http://www.gao.gov/products/GAO-04-346]. Washington, D.C.: 
March 5, 2004. 

Food Stamp Program: States' Use of Options and Waivers to Improve 
Program Administration and Promote Access. [hyperlink, 
http://www.gao.gov/products/GAO-02-409]. Washington, D.C.: February 
22, 2002. 

Means-Tested Programs: Determining Financial Eligibility Is Cumbersome 
and Can Be Simplified. [hyperlink, 
http://www.gao.gov/products/GAO-02-58]. Washington, D.C.: November 2, 
2001. 

Food Stamp Program: States Seek to Reduce Payment Errors and Program 
Complexity. [hyperlink, http://www.gao.gov/products/GAO-01-272]. 
Washington, D.C.: January 19, 2001. 

[End of section] 

Footnotes: 

[1] SNAP was given its present name in 2008. Food, Conservation, and 
Energy Act of 2008, Pub. L. No. 110-346, § 4002(a), 122 Stat. 1651, 
1853. 

[2] Pub. L. No. 111-5, § 101(a) and (e), 123 Stat. 115, 120. 

[3] 7 U.S.C. § 2014(a). 

[4] In addition, households in which all members receive Supplemental 
Security Income (SSI) or benefits from state or local general 
assistance programs are categorically eligible for SNAP. 7 U.S.C. § 
2014(a). 

[5] Letter to Regional Administrators-All Regions, "FSP-Categorical 
Eligibility," signed by the Deputy Administrator of the Food Stamp 
Program, Food and Nutrition Service, USDA. July 14, 1999. 

[6] Generally, FNS reimburses states for 50 percent of most types of 
SNAP administrative costs. However, some types of administrative costs 
are reimbursed at higher rates, such as some costs related to 
employment and training services and computer system development. 
Further, in response to SNAP participation increases during the recent 
economic downturn, the American Recovery and Reinvestment Act of 2009 
and the Department of Defense Appropriations Act, 2010 made $290.5 
million and $400 million, respectively, available to states for SNAP 
administrative costs in fiscal years 2009-2011. Pub. L. No. 111-5, § 
101(c), 123 Stat. 115, 120 and Pub. L. No. 111-118, § 1002(a), 123 
Stat. 3409, 3468-69. 

[7] 7 U.S.C. § 2011. 

[8] To estimate the program's participation rate, the number of SNAP 
participants in each state, according to administrative data, is 
divided by the estimated number of eligible persons. To estimate the 
number eligible, USDA applies SNAP federal eligibility rules to 
household data in the U.S. Census Bureau's Current Population Survey. 
This approach does not take into account households potentially 
eligible for SNAP in states with BBCE policies that modify the federal 
eligibility rules. If these households were included, many states' 
participation rate estimates would likely be lower. 

[9] 7 U.S.C. § 2014. 

[10] 7 U.S.C. § 2012(n). There are specific exceptions to the 
definition of a household. For example, husbands, wives, and most 
children under age 22 that live together are included in the same 
household, even if they purchase and prepare meals separately. 

[11] 7 U.S.C. § 2014(c)(2). The federal poverty guidelines are updated 
periodically in the Federal Register by the Secretary of Health and 
Human Services. 42 U.S.C. § 9902(2) and (4). 

[12] 7 U.S.C. § 2014(c)(1). Households that include an elderly or 
disabled member do not have to meet the gross income limit but must 
meet the net income limit. SNAP defines elderly members of a household 
as those aged 60 and older. 7 U.S.C. § 2012(j)(1). 

[13] 7 U.S.C. § 2014(d) and (e). Exclusions include, for example, 
educational loans, veteran's educational benefits, and income earned 
by minor children. 

[14] 7 U.S.C. § 2014(g)(1). 

[15] 7 U.S.C. § 2014(g)(2)-(7). 

[16] 7 U.S.C. § 2014(g)(2)(C). 

[17] 7 U.S.C. § 2014(a). 

[18] Pub. L. No.104-193, 110 Stat. 2105. 

[19] This includes federal TANF dollars and state dollars counted as 
maintenance-of-effort for TANF. 7 C.F.R. § 273.2(j)(2)(ii) (2012). 

[20] 42 U.S.C. § 601(a) and 604. 

[21] 7 C.F.R. § 273.2(j)(2)(i)-(iii) (2012). 

[22] 65 Fed. Reg. 70,134, 70,160 and 70,198 (Nov. 21, 2000). Although 
promulgated in 2000, none of its provisions became effective prior to 
January 20, 2001. 

[23] For this report, we reviewed information on SNAP in the 50 
states; Washington, D.C.; Guam; and the Virgin Islands. We use 
"states" throughout the report to refer to this group. 

[24] 7 U.S.C. § 2017(a) If a household has zero net income (that is, 
its deductable expenses equal or exceed its gross income), it receives 
the maximum SNAP benefit based on household size. Maximum benefits are 
based on USDA's Thrifty Food Plan, which is an estimate of how much it 
costs to buy food to prepare nutritious, low-cost meals for a 
household. The Thrifty Food Plan estimate is changed every year to 
keep pace with food prices. 

[25] 7 U.S.C. § 2017(a). The minimum benefit for eligible one-and two-
person households in Alaska, Hawaii, Guam, and the Virgin Islands 
ranges from $19-$30 in fiscal year 2012. 

[26] 7 C.F.R. § 273.2(f)(1) (2012). The state must have at least one 
contact with these households every 12 months. 

[27] 7 C.F.R. § 273.12(a) (2012). 

[28] 7 C.F.R. § 273.12(a)(1)(vii) (2012) and 65 Fed. Reg. 70,134, 
70,143 and 70,208 (Nov. 21, 2000) (effective Jan. 20, 2001). 

[29] The SNAP error rate is calculated for the entire program, as well 
as every state, and is a combination of overpayments to those who are 
eligible for smaller benefits, overpayments to those who are not 
eligible for any benefit, and underpayments to those who do not get as 
much as they should. 

[30] The 95 percent confidence interval for the 2.6 percent estimate 
is (2.4, 2.8). For the 95 percent confidence intervals for all 
estimates in this paragraph, see appendix II, table 4. 

[31] For more information about our analysis, see appendix I. As 
previously noted, household eligibility is determined by local staff 
administering SNAP, and the accuracy of those determinations is 
assessed by state and federal reviewers. We did not independently 
determine households' eligibility. 

[32] In April 2012, the Congressional Budget Office (CBO) released a 
report on SNAP that estimates a 4.3 percent annual reduction in SNAP 
participants over the 2013-2022 period if federal SNAP income and 
asset limits were applied to all categorically eligible households. 
However, CBO's methodology for producing its estimates differs from 
our methodology in several ways. For example, although CBO indicates 
its estimates reflect changes to BBCE, the Office's estimates include 
both participants deemed eligible under BBCE policies, as well as 
those deemed eligible under narrow non-cash categorical eligibility 
policies. In addition, CBO estimates include assumptions about the 
share of these households that exceed federal asset limits. 

[33] In fiscal year 2010, 150 percent of the federal poverty 
guidelines equaled $1,821 monthly for a 2-person household and $2,289 
monthly for a 3-person household. We estimate that households with 
incomes over the federal limits in fiscal year 2010 had, on average, 
2.2 members. 

[34] As previously noted, federal SNAP asset limits are $2,000 for 
most households and $3,250 for households with an elderly or disabled 
member. 

[35] Federal Reserve Board, 2010 Survey of Consumer Finances. 
Transaction accounts include checking, savings, and money market 
deposit accounts; money market mutual funds, and call or cash accounts 
at brokerages. 

[36] According to U.S. Census Current Population Survey data, as of 
March 2010, families with incomes of an estimated $27,379 or less were 
in the bottom income quintile, and those with estimated incomes from 
$27,380 to $48,705 were in the second lowest income quintile, in 2010 
dollars. 

[37] University of Michigan, Institute for Social Research, 2007 Panel 
Study of Income Dynamics. In this survey, liquid assets are defined as 
immediately available assets that can be easily converted to cash. 
These include, for example, the value of checking and savings 
accounts, as well as stocks, bonds, and cash-value of life insurance. 
Further, note that families with no liquid assets are included in this 
analysis. 

[38] For the 9 full months after reinstatement, the average monthly 
SNAP caseload in Idaho was approximately 101,000 households. 

[39] However, according to Michigan officials, this figure includes 
both cases closed because they had assets over the $5,000 limit, as 
well as those closed because they had vehicles worth more than the 
$15,000 limit that the state simultaneously established. Also, since 
both Idaho and Michigan's new $5,000 asset limits are higher than the 
federal SNAP asset limits, it is likely that these estimates are lower 
than they would be if the states had reinstated the federal asset 
limits. 

[40] Kenneth Hanson and Craig Gunderson, How Unemployment Affects the 
Food Stamp Program, USDA Economic Research Service, FANRR-26-7 
(Washington, D.C.: September 2002). GAO and others have also noted the 
relationship between unemployment and SNAP. See GAO, Domestic Food 
Assistance: Complex System Benefits Millions, but Additional Efforts 
Could Address Potential Inefficiency and Overlap among Smaller 
Programs, [hyperlink, http://www.gao.gov/products/GAO-10-346] 
(Washington, D.C.: April 15, 2010); and James Mabli and Carolina 
Ferrerosa, Supplemental Nutrition Assistance Program Caseload Trends 
and Changes in Measures of Unemployment, Labor Underutilization, and 
Program Policy from 2000 to 2008 (Cambridge, MA: Mathematica Policy 
Research, Inc., October 18, 2010). 

[41] According to the National Bureau of Economic Research, the U.S. 
economy was in recession from December 2007 to June 2009. 

[42] § 101(a), 123 Stat. 120. 

[43] § 101(e), 123 Stat. 121. The Recovery Act eliminated the SNAP 
time limit for these adults without dependents during the period April 
1, 2009, through September 30, 2010, but most states have since 
received waivers to continue the time limit suspension through fiscal 
year 2013. 

[44] At age 22, a SNAP applicant can be declared a separate household, 
even if living with friends or family. 7 C.F.R. § 273.1(b)(ii). 
Caseworkers noted that they have seen some people apply for SNAP on 
their 22ND birthdays, and they believe that online information about 
program rules, as well as online applications, may be affecting this 
trend. 

[45] Caroline Ratcliffe, Signe-Mary McKernan, and Kenneth Finegold, 
The Effect of State Food Stamp and TANF Policies on Food Stamp Program 
Participation (Washington, D.C.: The Urban Institute, March 2007); 
James Mabli, Emily Sama Martin, and Laura Castner, Effects of Economic 
Conditions and Program Policy on State Food Stamp Program Caseloads, 
2000 to 2006 (Washington, D.C.: Mathematica Policy Research, Inc., 
August 2009); and Jacob Alex Klerman and Caroline Danielson, 
Determinants of the Food Stamp Program Caseload (Washington, D.C.: 
RAND, January 2009). 

[46] Jacob Alex Klerman and Caroline Danielson, "The Transformation of 
the Supplemental Nutrition Assistance Program," Journal of Policy 
Analysis and Management, vol. 30, no. 4, (2011); Janna Johnson, The 
Dynamics of SNAP Participation and the Increase in SNAP Caseloads 
during the Recovery of 2003-2007 (Madison, WI: Institute for Research 
on Poverty, November 30, 2011); Mabli, Martin, and Castner, Effects of 
Economic Conditions and Program Policy on State Food Stamp Caseloads, 
2000 to 2006; and Ratcliffe, McKernan, and Finegold, The Effect of 
State Food Stamp and TANF Policies on Food Stamp Program Participation. 

[47] The 95 percent confidence interval for the 0.7 percent estimate 
is (0.6, 0.8). For the 95 percent confidence intervals for all 
estimates in this paragraph, see appendix II, tables 4 and 6. For more 
information about our analysis, see appendix I. 

[48] In April 2012, CBO released a report on SNAP that estimates $1.2 
billion as the average annual savings in spending over the 2013-2022 
period if federal SNAP income and asset limits were applied to all 
categorically eligible households. CBO considers this estimate to be 
equivalent to a 1.6 percent annual savings for SNAP. However, CBO's 
methodology for producing its estimates differs from our methodology 
in several ways. For example, although CBO indicates its estimates 
reflect changes to BBCE, the Office's estimates include both benefits 
provided to households deemed eligible under BBCE policies, as well as 
benefits provided to households deemed eligible under narrow non-cash 
categorical eligibility policies. In addition, CBO estimates include 
assumptions about the share of these households that exceed federal 
asset limits and the benefits they receive. 

[49] The national SNAP household data that we used for our analysis 
does not include reliable information on assets owned by households 
deemed eligible under BBCE. As a result, our estimates represent 
minimums that do not include benefits provided to households who had 
assets over the federal SNAP asset limits. 

[50] For the 95 percent confidence intervals for all estimates in this 
paragraph, see appendix II, tables 7 and 8. 

[51] We found no differences in these two factors in 13 states. 
However, when comparing SNAP household characteristics for fiscal 
years 2008 and 2010, we found significant increases in SNAP 
households' average net income in 3 states that implemented BBCE in 
fiscal year 2009. In these states, average net income increases appear 
to be related to higher net incomes in households deemed eligible 
under BBCE. One state also had a significant decrease in household 
size. 

[52] See GAO, Human Service Programs: Demonstration Projects Could 
Identify Ways to Simplify Policies and Facilitate Technology 
Enhancements to Reduce Administrative Costs, [hyperlink, 
http://www.gao.gov/products/GAO-06-942] (Washington, D.C.: Sept. 19, 
2006). 

[53] Although the federal government generally funds half of states' 
administrative costs for SNAP, this additional funding was provided to 
the states without a requirement that they match it with their own 
funds. 

[54] Although the most recent national recession affected states to 
different degrees, in part depending on their tax structures and 
economic characteristics, state and local governments generally 
experienced more severe and long-lasting declines in revenue during 
this recession when compared to past recessions. For more information 
on the effect of recessions on state and local governments, see GAO, 
State and Local Governments: Knowledge of Past Recessions Can Inform 
Future Federal Fiscal Assistance, [hyperlink, 
http://www.gao.gov/products/GAO-11-401] (Washington, D.C.: Mar. 31, 
2011). 

[55] The 95 percent confidence interval for the 8.91 percent estimate 
is (8.56, 9.26) and the 95 percent confidence interval for the 
3.81percent estimate is (3.61, 4.01). 

[56] Income-related errors have consistently been the largest 
contributor to payment errors, representing 49 to 55 percent of all 
errors since 2000. 

[57] The 95 percent confidence interval for the 17.2 percent estimate 
is (14.3, 20.2), and the 95 percent confidence interval for the 6.7 
percent estimate is (6.4, 7.0). These estimates differ from the SNAP 
payment error rate, as the error rate measures benefit dollars 
provided in error rather than the percentage of SNAP households with 
errors. 

[58] For this report, we use "TANF-funded service" to refer to a TANF-
funded non-cash benefit or service that can be used by states to 
confer BBCE, per USDA guidance. Per federal regulations, states may 
grant categorical eligibility to any household authorized to receive a 
TANF-funded benefit or service. 7 C.F.R. § 273.2(j)(2)(ii) and (iii) 
(2012). 

[59] Applicants may be granted categorical eligibility solely through 
receipt of such a document, regardless of whether or not they access 
or receive additional services. 

[60] 42 U.S.C. § 1758(b)(4). School districts have been required to 
directly certify SNAP recipients since school year 2008-2009. 
According to USDA, once a child is directly certified for free school 
meals, eligibility lasts the entire school year regardless of a change 
in family circumstances. Households may voluntarily report a change in 
family circumstances; however, because of the year-long duration of 
eligibility, households are not required to report changes in their 
categorical eligibility status. 

[61] This may also impact other programs. For example, some school 
districts that receive federal funds under Title I, Part A of the 
Elementary and Secondary Education Act of 1965 (20 U.S.C. § 6301-6339) 
use the number of children eligible for free and reduced-price meals 
in each of their schools as a proxy measure of school poverty in order 
to appropriately distribute those funds to their schools. 

[62] Letter to Program Directors-All Regions, "National School Lunch 
Program and Direct Certification with SNAP," signed by the Director of 
the Program Development Division, FNS, USDA. October 25, 2011. The 
practical result is that direct certification of students from 
families eligible for SNAP but entitled to $0 benefit should not 
continue in the 2012-13 school year. 

[63] 42 U.S.C. § 1758(b)(1)(A). 

[64] Under school meals rules, children in families with gross 
household incomes between 130 and 185 percent of the federal poverty 
guidelines, while not eligible for free meals, are eligible to receive 
reduced price meals. 42 U.S.C. § 1758(b)(1)(A). 

[65] As of November 2010, all states, except California and Wyoming, 
used simplified reporting for at least some SNAP households. 

[66] One of the recent documents that provides this guidance is the 
Memo to Regional Directors, "Categorical Eligibility Questions and 
Answers," signed by the Director of the Program Development Division, 
FNS, USDA. January 26, 2010. 

[67] GAO, Temporary Assistance for Needy Families: Implications of 
Caseload and Program Changes for Families and Program Monitoring, 
[hyperlink, http://www.gao.gov/products/GAO-10-815T] (Washington, 
D.C.: Sept. 21, 2010). 

[68] We reviewed information on SNAP in the 50 states; Washington, 
D.C.; Guam; and the Virgin Islands. We use "states" throughout the 
report to refer to this group. 

[69] FNS contracts with Mathematica Policy Research, Inc. to maintain 
the SNAP QC data. 

[End of section] 

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