Effect of the Department of Labor's Resource Allocation Formula on Efforts To Place Food Stamp Recipients in Jobs

CED-79-79: Published: Aug 15, 1979. Publicly Released: Aug 15, 1979.

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GAO provided a supplement to its report on work requirements for food stamp recipients. GAO studied the likely impact of the Department of Labor's (DOL) current resource allocation formula on efforts by State employment service agencies to place food stamp recipients in jobs. DOL has used the resource allocation formula to distribute Federal funds to State employment agencies based on their relative funding needs and day-to-day performance. A new allocation system is being developed for use starting in fiscal year 1980.

Both the Departments of Agriculture and Labor agree that the reported job placement rate for food stamp recipients is low, but they differ on the reasons for the low rate and, not unexpectedly, the need for and ability of Agriculture to substantially increase its funding for the work requirements program. DOL has allocated about one-third of the $1 billion in Federal funds provided to State employment service agencies annually. The formula's effect on State agencies' efforts to place food stamp recipients in jobs is not clear. However, several factors including no explicit incentive for placing these recipients could discourage such efforts. DOL gets $28 million a year from the Department of Agriculture for food stamp registration activities, but the services these funds are to cover are not clearly defined.

Recommendation for Executive Action

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Director of the Office of Management and Budget should take the lead in completing an agreement between the Departments of Labor and Agriculture for effectively administering the food stamp work requirements. The agreement should include specific descriptions of the services that are unique to food stamp recipients and are to be paid for by the funds Agriculture transfers to DOL and that the amount to be transferred be based on the estimated cost of such services.

    Agency Affected:

 

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