Food Stamp Program:

Achieving Cost Neutrality in Minnesota's Family Investment Program

RCED-96-54: Published: Feb 12, 1996. Publicly Released: Feb 12, 1996.

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GAO examined the methodologies that Minnesota used for estimating the costs that would have been incurred if it had not implemented the Minnesota Family Investment Program (MFIP), focusing on whether: (1) Minnesota implemented the agreed-upon methodologies; (2) Minnesota reasonably estimated fiscal year (FY) 1994 Food Stamp Program costs; and (3) the Department of Agriculture (USDA) paid Minnesota the same amount for food stamp benefits in FY 1994 than it would have paid in the absence of MFIP.

GAO found that: (1) Minnesota agreed to use two methodologies for estimating food stamp benefit costs that would have been incurred in the absence of MFIP; (2) Minnesota randomly assigned applicant families to either traditional welfare programs or MFIP and estimated the cost of providing MFIP benefits and food stamp benefits in traditional welfare programs; (3) Minnesota excluded all costs unique to MFIP which are paid by the state to achieve cost neutrality; (4) Minnesota used the same methodology to allocate allowable administrative costs among the welfare programs; (5) Minnesota implemented the agreed-upon methodologies and generated reasonable cost estimates for FY 1994, but a data processing problem delayed results for 7 months; and (6) USDA overpaid Minnesota $115,395 in excess food stamp benefits during the first 6 months of MFIP, based on Minnesota's forecasts of what food stamp costs would have been in the absence of MFIP.

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