Benefit and Loan Programs:

Improved Data Sharing Could Enhance Program Integrity

HEHS-00-119: Published: Sep 13, 2000. Publicly Released: Oct 13, 2000.

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Pursuant to a congressional request, GAO provided information on data sharing among federally funded benefit and loan programs, focusing on: (1) the data that selected benefit and loan programs use to verify self-reported, eligibility-related information; (2) whether additional data sharing with federal, state, and local governments, or private entities, could avoid some improper payments; and (3) the legal or other barriers to enhanced data sharing.

GAO noted that: (1) federally funded benefit and loan programs require similar types of information about individuals to correctly determine their eligibility for assistance; (2) such information includes their identity, earned income and unearned income, assets, citizenship status, and household composition; (3) while numerous factors can affect an individual's eligibility for benefits, income is generally one of the most important and most prone to error or inaccurate reporting; (4) some programs obtain information from independent, third-party sources such as federal and state agencies, or private companies such as credit bureaus to verify the accuracy of self-reported data; (5) the three programs GAO reviewed could use enhanced data sharing to make more timely and accurate eligibility determinations; (6) other legal restrictions, as well as management, administrative, and technological challenges, limit the ability of federally funded benefit and loan programs to effectively share information with one another; (7) a number of laws have been enacted over the past 25 years that limit access to sensitive data sources in an effort to protect individual privacy and the confidentiality of sensitive information or to address concerns about taxpayer compliance with tax laws; (8) these statutes include: (a) section 6103 of the Internal Revenue Code (IRC), which governs the disclosure of taxpayer information; (b) provisions in the Social Security Act that restrict access to the Office of Child Support Enforcement's (OCSE) National Directory of New Hires; and the (c) Privacy Act, which balances the government's need to collect and maintain sensitive information about individuals against their right to privacy; (9) providing more federally funded programs access to restricted data sources and the ability to share this information with state and local agencies that administer various benefit and loan programs often requires amending federal laws governing the use of the data; and (10) however, increasing the access to sensitive data for benefit and loan programs can be balanced with the need for personal privacy, confidentiality, and tax compliance.

Matters for Congressional Consideration

  1. Status: Closed - Not Implemented

    Comments: The Privacy Act has not been amended as of February 11, 2004. Congress has not taken any action to date on this recommendation and has no plans to do so.

    Matter: To decrease the burden of initiating and renewing computer matching agreements, Congress may wish to amend the Privacy Act's computer matching requirements by increasing the time limits under which initial matching agreements and renewed agreements may be in force. The appropriate time period through which initial and renewed agreements should be in force is subject to debate. However, existing recommendations from various entities range from doubling the existing limits and renewed agreements, respectively, to 3 years and 2 years, to as long as 5 years for initial agreements and 3 years for renewed agreements.

  2. Status: Closed - Implemented

    Comments: Congress considered how federally funded benefit and loan programs could better obtain and share the data they need given privacy and confidentiality concerns. On November 21, 2003, Rep. Sam Johnson (R-TX) introduced H.R. 3613, the "Student Aid Streamlined Disclosure Act of 2003." This bill proposed amending Section 6103 of the Internal Revenue Code to provide for the disclosure of tax return information for student financial assistance programs. The bill was referred to the Committee on Ways and Means, but no further action has been taken.

    Matter: Congress may wish to consider how to improve the ability of federally funded benefit and loan programs to obtain and share the information they need to make timely and accurate eligibility determinations while protecting personal privacy and the confidentiality of sensitive information. Specifically, Congress may wish to consider amending section 6103(1) of the Internal Revenue Code to authorize the Internal Revenue Service to disclose certain taxpayer data to officers, employees, and contractors or other agents of the Department of Education for purposes of verifying information reported on applications for financial aid. Again, only the minimum amount of information necessary to determine eligibility for cases that are identified in a match would be provided to schools or other entities, subject to agreed upon privacy, data security, and safeguard measures.

  3. Status: Closed - Implemented

    Comments: Congress' passage of the Consolidated Appropriations Act of 2004 (H.R 2673) (P.L. 108-199) addresses this recommendation. Section 217 of the Act provides authority to the Department of Housing and Urban Development (HUD) to access the Office of Child Support Enforcement's National Directory of New Hires for purposes of verifying individuals' eligibility for housing assistance programs administered by HUD.

    Matter: Congress may wish to consider how to improve the ability of federally funded benefit and loan programs to obtain and share the information they need to make timely and accurate eligibility determinations while protecting personal privacy and the confidentiality of sensitive information. Specifically, Congress may wish to consider amending the Social Security Act to allow the Department of Housing and Urban Development (HUD) Public Housing and tenant-based section 8 programs to match applicants and current recipients against OCSE's National Directory of New Hires. To facilitate accurate initial eligibility determinations, HUD would have to be authorized to share the results of a match with the local agencies that administer programs. To maximize privacy and data security protections, HUD could screen the results of such a match to ensure that only data vital to determining eligibility for individuals identified as having reported erroneous information would be made available to state and local program administrators. The local agencies should also be required to demonstrate that adequate privacy and data security measures are in place.

Recommendations for Executive Action

  1. Status: Closed - Not Implemented

    Comments: The Public Assistance Reporting Information System (PARIS) helps participating states identify individuals who may be receiving Temporary Assistance for Needy Families (TANF), Food Stamp, or Medicaid benefits in more than one state. However, PARIS is not capable of tracking TANF time limits or program disqualifications across states. The Administration for Children and Families, which oversees PARIS, does not intend to expand or upgrade the system at this time to facilitate these objectives, and has no plans for future action.

    Recommendation: The Secretary of Health and Human Services should facilitate the development of a system for tracking duplicate benefit receipt, program disqualifications, and recipient time limits across states in the Temporary Assistance for Needy Families program. The Secretary should also coordinate with other federal departments that oversee major public assistance programs, such as Food Stamps, to ensure the compatibility and cost-effectiveness of such a system.

    Agency Affected: Department of Health and Human Services

  2. Status: Closed - Implemented

    Comments: HUD and HHS identified a cost-effective, efficient strategy to increase the accuracy of eligibility decisions for individuals seeking housing assistance by giving HUD access to HHS's automated National Directory of New Hires (NDNH), which is overseen by HHS' Office of Child Support Enforcement (OCSE). Toward that end, Congress enacted the Consolidated Appropriations Act of 2004 (P.L. 108-199), which amended the Social Security Act to give HUD access to the NDNH to verify individuals eligibility in housing programs administered by HUD. This law also granted HUD the authority to share NDNH information with local housing agencies. Under this arrangement, HUD will coordinate with OCSE to share and compare data that can help ensure that only eligible individuals receive housing assistance.

    Recommendation: The Secretaries of Housing and Urban Development (HUD) and Health and Human Services (HHS) should develop a strategy for obtaining access to automated data from financial institutions, determine the most cost-effective, efficient method for obtaining such data, and report to Congress on any legislation that would be needed to implement this strategy. HUD and HHS should also coordinate with the Social Security Administration and OCSE to determine what strategies are the most effective for obtaining this information.

    Agency Affected: Congress

  3. Status: Closed - Implemented

    Comments: HUD and HHS identified a cost-effective, efficient strategy to increase the accuracy of eligibility decisions for individuals seeking housing assistance by giving HUD access to HHS's automated National Directory of New Hires (NDNH), which is overseen by HHS' Office of Child Support Enforcement (OCSE). Toward that end, Congress enacted the Consolidated Appropriations Act of 2004 (P.L. 108-199), which amended the Social Security Act to give HUD access to the NDNH to verify individuals eligibility in housing programs administered by HUD. This law also granted HUD the authority to share NDNH information with local housing agencies. Under this arrangement, HUD will coordinate with OCSE to share and compare data that can help ensure that only eligible individuals receive housing assistance.

    Recommendation: The Secretaries of Housing and Urban Development (HUD) and Health and Human Services (HHS) should develop a strategy for obtaining access to automated data from financial institutions, determine the most cost-effective, efficient method for obtaining such data, and report to Congress on any legislation that would be needed to implement this strategy. HUD and HHS should also coordinate with the Social Security Administration and OCSE to determine what strategies are the most effective for obtaining this information.

    Agency Affected: Department of Housing and Urban Development

  4. Status: Closed - Implemented

    Comments: OMB has developed a new Presidential Management Agenda for the new administration, one part of which is a discussion on financial accountability that includes support for data sharing as one tool for federal program managers. OMB is also part of an e-government task force that is working on a strategy to make government more efficient. One part of such a strategy is to include more intensive use of data sharing. In addition, several documents demonstrate OMB's actions in response to GAO's recommendation: (1) Memorandum M-01-01: Guidance for Inter-Agency Sharing of Personal Data--Protecting Personal Privacy; (2) United States Budget FY 2002: Improving Government Performance/Reducing Erroneous Payments to Beneficiaries and Other Recipients of Government Funds; and (3) OMB Circular No. A-11, Section 57--Information on Erroneous Payments.

    Recommendation: To facilitate more efficient data sharing and help federal agencies that administer benefit and loan programs to control their payments, Office of Management and Budget (OMB) should lead an effort that involves key departments and agencies to develop an overall strategy for improving data sharing operations across all benefit and loan programs. Such a strategy should include actions for further defining the problems agencies encounter in sharing data, developing appropriate management strategies to address these problems, and overseeing progress. OMB could draw on the resources and expertise of the Chief Information Officers Council and other related organizations to coordinate the appropriate officials and federal agencies to achieve this objective.

    Agency Affected: Department of Health and Human Services

 

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