Better Wage-Matching Systems and Procedures Would Enhance Food Stamp Program Integrity

RCED-84-112: Published: Sep 11, 1984. Publicly Released: Sep 11, 1984.

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GAO reviewed states' wage-matching activities in the Food Stamp Program to determine whether the Department of Agriculture's (USDA) and states' wage-matching efforts have effectively addressed the benefit overissuance problem. GAO also analyzed the effectiveness of Aid to Families with Dependent Children (AFDC) Program matching operations on a smaller scale.

GAO found that underreporting of beneficiary earnings is the most significant cause of food stamp overissuances, which currently are about $1 billion annually. Although congressional requirements to match wages with external sources can be an effective method for improving the program's integrity, GAO found that wage-matching could be made more effective and efficient through the use of automated procedures, broader program coverage, and effective tolerances in pursuing wage differences. Active federal involvement in guiding and assisting states to improve their matching systems would benefit not only the Food Stamp Program, but also the AFDC Program. Thorough follow-up actions should ensure that appropriate measures are taken to identify and recover overissuances. GAO noted, however, that follow-up action in most of the cases it reviewed was either not taken, incomplete, or inappropriate, and the potential benefits from wage matching were not fully achieved.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: This recommendation should be closed.

    Recommendation: The Secretary of Agriculture should direct the Administrator of the Food and Nutrition Service (FNS) to issue policy guidance to improve the efficiency of states' wage-matching systems for identifying and referring for follow-up specific cases involving potential overpayments. This initiative should: (1) describe the most efficient automated methods for identifying participants who have not reported their total income; (2) require states to obtain and compare earned income information of households for which external wage data is obtained; and (3) establish dollar criteria on the amounts of potential income errors which require local office follow-up.

    Agency Affected: Department of Agriculture

  2. Status: Closed - Implemented

    Comments: USDA installed a computer system, the Income Eligibility Verification System (IEVS), to comply with the Budget Deficit Reduction Act of 1985 requirement for a system capable of matching AFDC, Medicaid, and Food Stamp Program benefits with participant-reported earnings. IEVS will provide the historical earnings data, as recommended by GAO. An accomplishment report is being prepared.

    Recommendation: The Secretary of Agriculture should direct the Administrator, FNS, to modify FNS regulations concerning increased federal participation in states' cost to develop, install new, or upgrade existing computer systems to require that states' systems retain historical data on participant-reported earnings.

    Agency Affected: Department of Agriculture

  3. Status: Closed - Not Implemented

    Comments: USDA intends to continue allowing states' latitude and flexibility in the development of computer technology based on states' capabilities and resources. Consequently, no specific actions will be taken to directly implement this recommendation.

    Recommendation: The Secretary of Agriculture should direct the Administrator, FNS, to work with states which already have computer capability to establish and implement systems to conduct automated comparisons of external and participant-reported wage information for the same calendar period.

    Agency Affected: Department of Agriculture

  4. Status: Closed - Implemented

    Comments: This recommendation should be closed.

    Recommendation: The Secretary of Agriculture should direct the Administrator, FNS, to modify its regulations and establish policy guidance to set forth specific FNS expectations regarding state follow-up actions. The regulations should also require that states and local offices provide appropriate instructions and training to staff performing follow-up activities and that states establish controls for monitoring accuracy, timeliness, and completion of local office follow-up work. FNS should evaluate the adequacy of state follow-up efforts as part of its state-level operations reviews and its validations of states' management evaluation reviews.

    Agency Affected: Department of Agriculture

 

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