Better Management Information Can Be Obtained From the Quality Control System Used in the Aid to Families With Dependent Children Program

HRD-80-80: Published: Jul 18, 1980. Publicly Released: Aug 18, 1980.

Additional Materials:

Contact:

Joseph F. Delfico
(202) 512-7215
contact@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

Over $900 million paid to poor families under the Aid to Families with Dependent Children program was paid in error during 1978. This estimate includes overpayments to eligible families and payments to ineligible families and is based on data reported by the quality control system. The quality control system was established to improve the program's administration by identifying errors and developing corrective actions to eliminate them. The system is also the basis for fiscal sanctions against States for erroneous payments in excess of error tolerance levels. There is a congressional conference directive for sanctions based on quality control error rates. Fiscal sanctions create an adversary relationship between the Federal Government and the States at a time when a cooperative effort is needed to reduce errors. Using the quality control system as the basis for sanctions limits the system's value as a means for improving payment processes. Because a high error rate will result in sanctions, there is an incentive to identify fewer errors. To be most effective, the quality control system should identify as many errors as possible giving management more information to develop corrective action plans. Among the weaknesses noted in the program were: both State and Federal quality control reviews differ from State to State and Federal region to region reviews; some case reviews include extensive verification of eligibility and grant amount factors, while others rely heavily on statements by recipients; the agency has recognized the differences between quality control reviews but has not determined how this affects the identification of incorrect payments; agency regional offices do not follow consistent procedures, and the agency has no assessment system for its regional offices' quality control functions; the quality control program does not provide for reporting incorrect payments of less than $5 or those caused by changes in circumstances that occur during the payment review month or the month before; the system provides for reporting only one error cause per case even if there are several; and quality control data were not being adequately analyzed at either the State or Federal level.

Efforts to sanction high error in States based on quality control error rates should be discontinued. Instead of sanctioning States, the Federal Government should provide more assistance in error reduction efforts. The Appropriations Committees should play a role in discontinuing this effort. Although the Aid to Families with Dependent Children quality control system has led to improvements in the program, the system itself needs improvement. The agency needs to make sure that all States make adequate efforts to determine the correctness of program payments and that its regions make their reviews of State quality control cases uniformly. The agency's planned changes in its quality control procedures manual, if properly implemented, should help correct these problems so that reviews can be made on a comparable basis. The agency's current monitoring of State and Federal quality control performance also needs improvement. If the quality control system reported and compiled incorrect payments of less than $5, those occurring because of changes during the administrative period, and secondary errors, the managers would have additional useful information for developing corrective actions to reduce incorrect payments. There is insufficient analyses to identify the specific causes of errors. States need time to make the necessary analyses, and the agency needs to place more emphasis on data analysis.

Matters for Congressional Consideration

  1. Status: Closed - Not Implemented

    Comments: Rather than retracting the Michel Amendment, Congress reinforced it in the Tax Equity Act (P.L. 97-248, September 3, 1982) by limiting Federal financial participation in erroneous assistance payments that do not exceed 4 percent in 1983 and 3 percent in 1984 and future years. This recommendation should be dropped.

    Matter: The House and Senate Appropriations Committees should retract the conference committee directive for Federal fiscal sanctions against the States based on the Aid to Families with Dependent Children quality control error rates.

  2. Status: Closed - Not Implemented

    Comments: Rather than retracting the Michel Amendment, Congress reinforced it in the Tax Equity Act (P.L. 97-248, September 3, 1982) by limiting Federal financial participation in erroneous assistance payments that do not exceed 4 percent in 1983 and 3 percent in 1984 and future years. This recommendation should be dropped.

    Matter: The House and Senate Appropriations Committees should retract the conference committee directive for Federal fiscal sanctions against the States based on the Aid to Families with Dependent Children quality control error rates.

Recommendations for Executive Action

  1. Status: Closed - Not Implemented

    Comments: HHS does not plan to change the Federal regulations to require reporting of incorrect payments less than $5 for overpayment cases or those occurring due to administrative period changes. This would change the definition of payment errors and preclude establishing whether States have met legislatively mandated error rates. Accordingly, this recommendation should be dropped.

    Recommendation: The Secretary of HHS should change the Federal regulations to require reporting of incorrect payments of less than $5 and those occurring because of changes during the administrative period.

    Agency Affected: Department of Health and Human Services

  2. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Secretary of HHS should require the Commissioner of the Social Security Administration to perform more analysis and special studies of quality control data to identify appropriate corrective actions for assisting States in their error reduction efforts.

    Agency Affected: Department of Health and Human Services

  3. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Secretary of HHS should require States to report all causes of incorrect payments detected during the quality control review process.

    Agency Affected: Department of Health and Human Services

  4. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Secretary of HHS should increase regional monitoring and periodic assessments of State quality control operations as well as HHS monitoring of its regional quality control operations.

    Agency Affected: Department of Health and Human Services

  5. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Secretary of Health and Human Services (HHS) should assess regional quality control procedures to ensure adequacy and consistency and establish guidelines for reviews of State quality control cases by the Health and Human Services regional offices, including criteria for making home visits to recipients and third-party verifications.

    Agency Affected: Senate Committee on Appropriations

  6. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Secretary of HHS should encourage the States to perform more detailed analyses of the quality control data to: (1) identify the specific causes of errors; and (2) provide management with better information for developing appropriate corrective actions. GAO recognizes that States are currently required to review two quality control samples per year and, therefore, have difficulty making resources available to perform data analysis. If the directive for sanctions is retracted by the Appropriations Committees, HHS should consider revising the sampling requirements to one per year so that States can then devote existing resources to making needed analyses to ascertain the causes of errors.

    Agency Affected: Department of Health and Human Services

 

Explore the full database of GAO's Open Recommendations »

Sep 15, 2016

Sep 7, 2016

Jul 8, 2016

Mar 14, 2016

Mar 10, 2016

Feb 23, 2016

Nov 9, 2015

Sep 16, 2015

Jun 15, 2015

Jun 3, 2015

Looking for more? Browse all our products here