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United States Government Accountability Office: 
GAO: 

Report to the Ranking Member, Committee on Homeland Security and 
Governmental Affairs, U.S. Senate: 

July 2012: 

TANF Electronic Benefit Cards: 

Some States Are Restricting Certain TANF Transactions, but Challenges 
Remain: 

GAO-12-535: 

GAO Highlights: 

Highlights of GAO-12-535, a report to the Ranking Member, Committee on 
Homeland Security and Governmental Affairs, U.S. Senate. 

Why GAO Did This Study: 

The TANF block grant program provides federal grants to states for 
various benefits and activities, including cash welfare for needy 
families with children. TANF is overseen at the federal level by HHS, 
and administered by states. Most states disburse TANF cash assistance 
through electronic benefit cards, which can be used to withdraw money 
or make purchases. Media coverage highlighted cases of cardholders 
accessing benefits at casinos and other locations that were considered 
inconsistent with the purpose of TANF. In February 2012, Congress 
passed a law requiring states to prevent certain transactions at 
casinos, liquor stores, and adult-entertainment establishments. Within 
2 years of enactment, the law also requires HHS to oversee states’ 
compliance with these requirements. 

GAO was asked to review the ability of TANF recipients to withdraw 
TANF funds at certain locations inconsistent with the purpose of TANF, 
such as gambling or other establishments. To do so, GAO reviewed 
documentation and interviewed officials from HHS, key industry 
stakeholders, and the top 10 states in TANF basic block grant dollars. 
GAO also assessed the completeness and accuracy of EBT transaction 
data from federal fiscal year 2010 from 4 of the 10 states selected. 
GAO selected these 4 states on the basis of geographical diversity, 
and the results of this data analysis cannot be generalized to other 
states. 

What GAO Found: 

Six of the 10 states reviewed by GAO took steps aimed at preventing 
certain Temporary Assistance for Needy Families (TANF) transactions 
determined to be inconsistent with the purpose of TANF, despite no 
federal requirement to do so at the time. Restrictions are based on 
selected states’ laws, executive orders, and other regulations, and 
generally cover certain locations or certain types of purchases such 
as alcohol. In some cases, states’ restrictions are broader than the 
new federal requirements. These restrictions vary in their degree and 
means of implementation, including widespread disabling of Electronic 
Benefit Transfer (EBT) access at automated teller machines located at 
certain locations across a state, such as at casinos. The other 4 
states had no restrictions because no laws, executive orders, or other 
regulations prohibited certain transactions based on the location of 
the transactions or the nature of the goods or services purchased. 
These states did not implement restrictions due to concerns about cost-
effectiveness or technical limitations, according to state officials. 

Challenges experienced by states in implementing their current 
restrictions could inhibit future restriction efforts, including those 
intended to address new federal requirements. These challenges 
included difficulties with identifying certain locations that could be 
prohibited and limitations in available data. For example, the 
transaction data states receive do not contain information that is 
accurate or detailed enough for them to identify locations that can 
potentially be prohibited or restricted. State officials suggested 
that improvements in the completeness and accuracy of transaction data 
might better enable them to prevent such transactions. In its 
assessment of the EBT transaction data from 4 states, GAO found that 
the data are insufficient for systematic monitoring. To effectively 
conduct systematic monitoring, including the identification of 
locations that could be blocked from TANF access, data should be 
complete and accurate. However, addressing the limitations that GAO 
found in the transaction data-—such as requiring accurate merchant 
category codes for retailers-—could involve significant resources. 
States that prohibit certain types of purchases generally do not have 
ways to track what items recipients buy with their cards, partially 
due to the lack of information in transaction data on specific goods 
or services purchased. States were also challenged in attempting to 
track the spending of cash withdrawn with cards. With no controls on 
how or where individuals spend withdrawn cash, a recipient could 
withdraw money at an authorized location and use it at certain 
locations or for certain purchases restricted by some states. 

As of July 2012, the Department of Health and Human Services (HHS) was 
at the beginning of its rulemaking process and did not yet know what 
form its regulations would take. Until HHS issues regulations or 
provides further guidance as to what policies and practices are 
sufficient to comply with new federal requirements, it is unclear to 
what extent the various restrictions implemented by states would be in 
compliance. States’ restrictions could help inform HHS’s oversight 
efforts, especially any information on the cost-effectiveness and 
success rates for various state restrictions. Restriction methods that 
do not rely on flawed transaction data may be the most practical. 

We provided HHS with a draft of our report for comment. HHS stated 
that our report’s findings and analysis will be helpful as it drafts 
implementing regulations, and it provided technical comments that we 
incorporated, as appropriate. 

What GAO Recommends: 

GAO is not making any recommendations. 

View [hyperlink, http://www.gao.gov/products/GAO-12-535]. For more 
information, contact Gregory D. Kutz at (202) 512-6722 or 
kutzg@gao.gov. 

[End of section] 

Contents: 

Letter: 

Background: 

Some States Are Restricting Certain TANF Transactions, but Face 
Challenges Because of Data Limitations and Other Factors: 

Concluding Observations: 

Agency and State Comments: 

Appendix I: Objectives, Scope, and Methodology: 

Appendix II: Print-Friendly Version of Figure 1: 

Appendix III: Comments from the Department of Health and Human 
Services: 

Appendix IV: GAO Contact and Staff Acknowledgments: 

Table: 

Table 1: Some States Have Taken Steps Aimed at Preventing Unauthorized 
TANF Transactions: 

Figure: 

Figure 1: Some States Have Taken Steps Aimed at Preventing 
Unauthorized TANF Transactions: 

Abbreviations: 

AFDC: Aid to Families with Dependent Children: 

ATM: automated teller machine: 

BIN: bank identification number: 

CDSS: California Department of Social Services: 

DSHS: Washington State Department of Social and Health Services: 

EBT: Electronic Benefit Transfer: 

EPC: electronic payment card: 

FNS: Food and Nutrition Service: 

HHS: Department of Health and Human Services: 

HHSC: Texas Health and Human Services Commission: 

MOE: maintenance of effort: 

OSI: California Office of Systems Integration: 

POS: point-of-sale: 

PRWORA: Personal Responsibility and Work Opportunity Reconciliation 
Act of 1996: 

SNAP: Supplemental Nutrition Assistance Program: 

TANF: Temporary Assistance for Needy Families: 

TIGER: Topologically Integrated Geographic Encoding and Referencing: 

USDA: Department of Agriculture: 

[End of section] 

United States Government Accountability Office: 
Washington, DC 20548: 

July 20, 2012: 

The Honorable Susan M. Collins:
Ranking Member:
Committee on Homeland Security and Governmental Affairs:
United States Senate: 

Dear Senator Collins: 

The Department of Health and Human Services (HHS) oversees states' 
administration of the Temporary Assistance to Needy Families (TANF) 
program to provide cash assistance, childcare, and other services to 
low-income families. Among the program's goals are the promotion of 
job preparation, employment, and marriage among parents of dependent 
children. HHS oversees the program at the federal level and 
distributes $16.5 billion in annual federal block grants to states to 
provide benefits and services to recipients. As a federal block-grant 
program, TANF allows states broad flexibility in designing and 
implementing their programs. To purchase goods and services, TANF 
recipients receive cash assistance, which in most states they can 
access at automated teller machines (ATM), banks, or retailers, using 
Electronic Benefit Transfer (EBT) cards. Cash assistance may be used 
for goods and services, and the amount of cash assistance received can 
vary by state[Footnote 1]. The EBT cards are similar to debit or 
stored-value cards, but do not carry a line of credit, and the 
purchases or withdrawals made with these cards cannot exceed the 
amount of recipients' TANF benefits as determined by each state's TANF 
program. 

Until February 2012, there were no nationwide federal requirements for 
states to take steps aimed at preventing access to TANF cash 
assistance at certain locations. However, media coverage in some 
states highlighted cases of individuals accessing cash or conducting 
transactions at gambling establishments, adult-entertainment 
establishments, and liquor stores that could be considered 
inconsistent with the TANF program. In response, some states took 
steps aimed at implementing certain restrictions that would prevent 
such transactions. In February 2012, Congress passed, as part of the 
Middle Class Tax Relief and Job Creation Act of 2012, the Welfare 
Integrity and Data Improvement Act, which requires all states to 
maintain policies and practices as necessary to prevent TANF 
assistance from being used in any electronic benefit transfer 
transaction in (1) liquor stores; (2) casinos, gambling casinos, or 
gaming establishments; and (3) adult-oriented entertainment 
establishments in which performers disrobe or perform in an unclothed 
state for entertainment.[Footnote 2] States must report to HHS the 
steps they have taken to implement such policies and practices by 
February 22, 2014. 

In this context, you asked us to review the ability of TANF recipients 
to withdraw TANF funds at certain locations inconsistent with the 
purpose of TANF, such as gambling or other establishments. To 
understand this ability better, we reviewed actions selected states 
have taken to prevent unauthorized TANF transactions, and the 
challenges they can face in taking such steps in compliance with new 
federal legislation.[Footnote 3] To perform our work, we reviewed TANF 
laws, regulations, and other documentation and interviewed officials 
from HHS. We also reviewed documentation and interviewed officials 
from the top 10 states in terms of TANF basic block-grant dollars--
California, New York, Michigan, Ohio, Pennsylvania, Illinois, Florida, 
Texas, Massachusetts, and Washington. These 10 states received the 
greatest TANF basic block-grant dollars, and collectively represent 66 
percent of the TANF basic block grants funded in federal fiscal year 
2012. In addition, we interviewed and reviewed documentation from key 
industry stakeholders, including EBT vendors, related to the selected 
states' efforts to prevent unauthorized TANF transactions. 

We also obtained EBT card-transaction data from 4 of the 10 selected 
states--California, Florida, New York, and Texas--covering 
transactions from federal fiscal year 2010.[Footnote 4] We selected 
these 4 states on the basis of geographical diversity. The results of 
our analysis of these 4 states' data cannot be generalized to other 
states. Using these data, we assessed the extent to which the data 
would allow the 4 selected states to conduct systematic monitoring to 
identify unauthorized transactions. To do so, we used a generalizable, 
random sample of each of the 4 selected states' EBT transaction data 
[Footnote 5] and compared it to electronic geo-coding information that 
pinpoints places and identifies locations.[Footnote 6] We also 
assessed whether the data would allow the 4 selected states to 
identify individual TANF transactions at certain types of locations by 
conducting keyword searches of merchant names for terms associated 
with casinos, liquor stores, and adult-entertainment establishments. 
We conducted electronic data testing to determine the reliability of 
the California, Florida, New York, and Texas EBT data. For all four 
states, we determined that the EBT data are not sufficiently reliable 
for the purpose of performing systematic monitoring of transactions in 
locations that are inconsistent with the purposes of TANF. However, 
EBT transaction data are sufficiently reliable for the purpose of 
identifying examples of transactions with merchant names that contain 
words associated with casinos, liquor stores, and adult-entertainment 
establishments. A more-detailed description of our scope and 
methodology is provided in appendix I. 

We conducted this performance audit from October 2011 to July 2012 in 
accordance with generally accepted government auditing standards. 
Those standards require that we plan and perform the audit to obtain 
sufficient, appropriate evidence to provide a reasonable basis for our 
findings and conclusions based on our audit objectives. We believe 
that the evidence obtained provides a reasonable basis for our 
findings and conclusions based on our audit objectives. 

Background: 

TANF Funding and Program Goals: 

The Personal Responsibility and Work Opportunity Reconciliation Act of 
1996 (PRWORA)[Footnote 7] significantly changed federal welfare policy 
for low-income families with children, from a program that entitled 
eligible families to monthly cash payments to a capped block grant 
that emphasizes employment and work supports for most adult 
recipients. As part of PRWORA, Congress created the TANF 
program,[Footnote 8] through which HHS provides states about $16.5 
billion each year in block grant funds to implement the program. To 
receive the TANF block grant, each state must also spend at least a 
specified level of its own funds, which is referred to as state 
maintenance of effort (MOE).[Footnote 9] In creating the TANF block 
grant, PRWORA defines four goals for the program: 

1. provide assistance so that children could be cared for in their own 
homes or in the homes of relatives; 

2. end families' dependence on government benefits by promoting job 
preparation, work, and marriage; 

3. prevent and reduce the incidence of out-of-wedlock pregnancies; and: 

4. encourage the formation and maintenance of two-parent families. 

TANF is a flexible funding stream that states can use to provide cash 
assistance and a wide range of services that are "reasonably 
calculated" to further the program's four goals.[Footnote 10] In 
federal fiscal year 2011, states used about 29 percent of their TANF 
funds on basic assistance that included cash assistance for needy 
families,[Footnote 11] and the remaining funds were spent on other 
purposes, such as child care, employment programs, and child welfare 
services.[Footnote 12] Due to the flexibility given to states, TANF 
programs differ substantially by state. States are required to develop 
plans that outline their intended use of funds and report data on 
families receiving assistance. While the federal TANF statute does not 
define "assistance," HHS defines assistance in regulation as cash 
payments, vouchers, and other forms of benefits designed to meet a 
family's "ongoing basic needs," such as food, clothing, shelter, 
utilities, household goods, personal-care items, and general 
incidental expenses.[Footnote 13] 

TANF Cash Assistance Disbursement Methods: 

Traditionally, states disbursed cash assistance benefit payments by 
means of paper check. The EBT program was devised in the 1980s 
originally to meet the needs of the Department of Agriculture's (USDA) 
Food Stamp Program, in which federal benefits were electronically 
disbursed to eligible recipients. These cards are not tied to a 
consumer asset account, and generally the account structures and 
processing requirements differ from other payment cards. EBT cards can 
be used to deliver benefits to banked and unbanked recipients and can 
be used to deliver multiple benefits using a single card. The cost 
savings in the Food Stamp Program (now known as the Supplemental 
Nutrition Assistance Program or SNAP) from using electronic payments 
to distribute benefits prompted states to use EBT cards to also 
distribute TANF benefits electronically, leveraging the existent EBT 
system designed for SNAP. Electronic benefit distribution methods also 
include Electronic Payment Cards (EPC). Some EPC cards are prepaid or 
debit cards that are branded with a MasterCard, American Express, 
Discover, or Visa logo, which allows cardholders to conduct signature-
based transactions anywhere that those brands are accepted as well as 
at ATM and point-of-sale (POS) machines. 

Electronic benefit cards--both EBT and EPC--generally can be used like 
traditional debit or credit cards, in that recipients can use them at 
ATMs to withdraw cash, or at retailers' POS terminals for purchases or 
to receive cash by selecting a cash-back option. However, there are 
some key differences between the electronic benefit card and 
commercial credit cards. The main difference is that electronic 
benefit cards do not carry a credit line, and the purchases or 
withdrawals made with these cards cannot exceed the amount of 
recipients' TANF benefits. With commercial credit cards, cardholders 
borrow to make a purchase and then pay the money back later. 
Electronic benefit cards are more like debit or stored-value cards and 
provide an alternative to cash--each time that a cardholder uses his 
or her electronic benefit card, the money spent or withdrawn is 
deducted from the cardholder's TANF benefits account. 

States consider various factors when implementing EBT or EPC programs, 
including potential financial burden to recipients, such as 
transaction fees at ATMs that charge a surcharge for each transaction; 
recipient characteristics, such as disabilities; implementation costs; 
and fraud and security risks. States also take into account how 
readily recipients can access cash assistance. For example, in some 
rural areas or low-income neighborhoods the only access point for cash 
assistance benefits may be a location such as a grocery store, single 
depository institution, or even a liquor store. Some of the benefits 
to recipients from states choosing EBT or EPC programs include quicker 
disbursement of benefits, the elimination of lost or undelivered paper 
checks, access to benefits without an established bank account, and no 
need to locate check-cashing venues in order to access benefits. 

Recent TANF Legislative Changes: 

Prior to 2012, states were not required under federal law to take 
steps aimed at preventing specific TANF transactions at certain 
locations. However, the Welfare Integrity and Data Improvement Act, 
part of the Middle Class Tax Relief and Job Creation Act of 2012, 
signed into law on February 22, 2012, introduced several changes to 
TANF that can affect recipients' ability to access cash assistance at 
certain locations.[Footnote 14] Specifically, the Act requires that 
each state receiving a TANF block grant maintain policies and 
practices as necessary to prevent TANF assistance from being used in 
any "electronic benefit transfer transaction"[Footnote 15] in: 

* any liquor store;[Footnote 16] 

* any casino, gambling casino, or gaming establishment;[Footnote 17] 
or: 

* any retail establishment that provides adult-oriented entertainment 
in which performers disrobe or perform in an unclothed state for 
entertainment. 

The Act calls for HHS to determine whether states have implemented and 
maintained policies and practices to prevent such transactions, within 
2 years of the Act's enactment. If HHS determines that a state has not 
implemented and maintained these policies and practices, or if a state 
has not reported to HHS on its policies and practices, HHS may reduce 
the state's family assistance grant by an amount equal to 5 percent of 
the state's grant amount for the federal fiscal year following the 2-
year period after enactment and each succeeding federal fiscal year in 
which the state does not demonstrate that it has implemented and 
maintained such policies and practices. However, HHS may reduce the 
amount of this penalty on the basis of the degree of noncompliance of 
the state in question. In addition, the Act specifies that states are 
not responsible for individuals who engage in fraudulent activity to 
circumvent the state's policies and practices, and will not face a 
reduction in their family assistance grant amounts in such cases. 
[Footnote 18] 

The Act also contains requirements for states related to maintaining 
recipients' access to TANF cash assistance. As part of the plan that 
each state is required to submit to HHS,[Footnote 19] states must 
include policies and procedures to ensure that recipients have 
adequate access to their cash assistance. In addition, states must 
ensure that recipients have access to using or withdrawing assistance 
with minimal fees or charges, including an opportunity to access 
assistance with no fees or charges, and that they are provided 
information on applicable fees and surcharges that apply to electronic 
fund transactions involving the assistance, and that such information 
is made publicly available.[Footnote 20] 

HHS issued a request for public comment in April 2012, seeking 
information by June 2012 on: how states deliver TANF assistance to 
beneficiaries, whether states have implemented policies and practices 
to prevent electronic benefit transfer transactions at the locations 
mentioned above, states' experiences with these policies and 
practices, and other similar restrictions states place on TANF 
assistance usage.[Footnote 21] In its notice, HHS identified multiple 
questions for states to answer, including questions on the methods 
states use to track the locations where transactions occur, challenges 
states experienced when implementing any restrictions on transactions 
at certain locations, the initial and ongoing costs of restrictions, 
the effectiveness of restrictions and the factors influencing the 
effectiveness, and any concerns that have been raised about the 
restrictions, among other things. In addition, HHS requested input 
from states' EBT vendors on potential issues that states may face in 
implementing restrictions, including technical issues, cost 
implications, access implications, and mechanisms for addressing 
problems identified. 

Some States Are Restricting Certain TANF Transactions, but Face 
Challenges Because of Data Limitations and Other Factors: 

Six of the 10 states we reviewed have taken steps to prevent certain 
types of inappropriate TANF transactions--restrictions that in some 
cases are broader than recent federal requirements that require states 
to take steps aimed at preventing transactions in casinos, liquor 
stores, and adult-entertainment establishments. These 6 states faced a 
variety of challenges in identifying inappropriate locations and 
preventing transactions at these locations. At the time these efforts 
were undertaken, there were no federal requirements that required 
states to take steps aimed at restricting such transactions. In 
addition, EBT transaction data from federal fiscal year 2010 from 4 of 
the 10 selected states were generally incomplete or unreliable, and 
were of limited use to the states for systematically identifying or 
monitoring inappropriate locations. While the federal requirements to 
restrict inappropriate transactions now exist, data issues and other 
challenges, if unaddressed, may continue to affect efforts to comply 
with these new requirements. 

Some States Have Attempted to Restrict TANF Transactions: 

Six of the 10 states we selected and reviewed have taken steps to 
prevent certain types of TANF transactions; these actions vary in 
their degree and means of implementation, from widespread disabling of 
EBT access at ATMs in certain locations across a state to, according 
to officials from one state, passing a law without implementing steps 
for enforcing it. The restrictions generally involve prohibiting the 
use of EBT cards at certain locations or prohibiting purchases of 
certain goods or services, or both, as shown in figure 1 below. In 4 
of the 10 selected states, there were no restrictions on TANF 
transactions, as no transactions were unauthorized based on the 
location of the transactions or the nature of the goods or services 
purchased. As mentioned above, before the 2012 enactment of federal 
legislation, states were not required by the federal government to 
maintain or implement policies and practices aimed at preventing TANF 
transactions based on the location of the transactions. Figure 1 
below, an interactive map, provides rollover information (see 
interactive instructions below) that describes the steps that selected 
states have taken aimed at preventing the use of TANF cash assistance 
for certain purchases or in certain locations. (See appendix II for 
the steps taken within each selected state.) 

Figure 1: Some States Have Taken Steps Aimed at Preventing 
Unauthorized TANF Transactions: 

[Refer to PDF for image: Interactive Graphic] 

Some States Have Taken Steps Aimed at Preventing Unauthorized TANF 
Transactions: 

Six of the 10 states we reviewed have taken steps aimed at preventing 
the use of TANF cash assistance for certain purchases or in certain 
locations. Figure 1 below, an interactive map, provides rollover 
information that describes the steps that selected states have taken. 

Instructions: Rollover the selected states for more information or go 
to appendix II. 

Source: GAO (data); Map Resources (map). 

[End of figure] 

Some of the selected states experienced various challenges while 
attempting to prevent certain TANF transactions. Some states' 
restriction activities were impeded by transaction data that did not 
allow them to identify sufficiently or monitor locations that were 
prohibited in their state. In some cases, states have attempted to 
address these challenges through ongoing monitoring and other efforts. 
In addition, some of the selected states' restrictions currently lack 
means of enforcement. For example, some states that prohibit certain 
types of purchases generally do not have ways to track what items 
recipients buy with their cash assistance, partially due to the lack 
of information in transaction data on what items are bought with EBT 
cards. There are also challenges for states in attempting to track 
cash spending. With no controls on how or where individuals spend 
their cash benefits, a recipient could withdraw money at an authorized 
location and then use it at certain locations or for certain purchases 
restricted by some states. 

States with Restrictions: 

California: 

In response to media attention, and a California executive order, 
California's Department of Social Services (CDSS) and its EBT vendor 
took steps to disable TANF access at thousands of ATMs; however, they 
have faced certain technical and legal limitations. In June 2010, the 
Governor of California issued an executive order requiring that CDSS 
prevent TANF recipients from accessing their benefits at ATMs in 
gambling establishments.[Footnote 22] The executive order resulted 
from news reports that revealed that state TANF recipients had 
accessed their benefits at ATMs located in gambling establishments. 
The order stated that benefits are provided to pay for the families' 
basic subsistence needs and not for gambling. From June 2010 to 
December 2010, and pursuant to this executive order, CDSS issued 
notices explaining its intent to expand the number of locations where 
EBT access to TANF cash assistance would be eliminated. This effort 
required disabling EBT access at ATMs in locations that fall under at 
least 14 different prohibited categories (see fig. 1 above). 

Officials from CDSS and the state's Office of Systems Integration 
(OSI) worked with the state's EBT vendor and other parties to identify 
and block these locations from EBT access. For example, CDSS officials 
stated that CDSS approached California's casino commission, requesting 
that it notify CDSS if it found EBT cards being used within licensed 
California casinos. In addition, CDSS officials stated that they 
reached out to the California Office of Alcoholic Beverage Control in 
order to determine, identify, and deactivate liquor stores that were 
not already authorized by the Food and Nutrition Service (FNS), which 
oversees the Supplemental Nutrition Assistance Program (SNAP). To 
identify and block additional locations, CDSS and OSI officials 
manually searched EBT transaction records for business names that 
appeared to belong to one of the prohibited categories. For example, 
OSI searched for terms such as "beer," "wine," "spirit," "tattoo," 
"piercing," and other words that related to the prohibited categories. 
In addition, OSI used lists of tribal casinos and card rooms located 
in the state and corresponding addresses to verify against the EBT 
transaction data. After identifying potential locations to be blocked, 
officials performed Internet searches to attempt to verify the type of 
location. However, California officials noted that the accuracy of 
Internet searches cannot be validated because it is not clear whether 
the information on the Internet is current. For example, when looking 
at satellite photos of streets on the Internet to verify a restricted 
location, the Internet photo may show a vacant building or building 
under construction because the photo could be 1 to 2 years old, 
according to California officials. 

Once officials confirmed that the businesses appeared to belong in one 
of the 14 prohibited categories, then they provided the state's EBT 
vendor with locations that needed to be blocked. The vendor contacted 
the responsible third-party processor to request that the ATMs at 
these locations be disabled from accepting the state's EBT card. To do 
so, the processors deactivated the state's bank identification number 
(BIN) at each terminal. CDSS and OSI provided the state's Department 
of Justice with nonloaded EBT cards so that it could test ATMs at 
gambling establishments to determine whether they are in compliance. 

According to CDSS officials, as of February 2012, EBT access was 
disabled at approximately 6,328 ATMs in California, out of a total of 
approximately 35,400 ATMs in California that have performed EBT 
transactions. However, state officials noted that they experienced 
challenges with identifying locations to block. For example, according 
to state officials, the EBT transaction data contain incomplete or 
inaccurate fields, including key information on the location of 
transactions. California officials said that the EBT transaction data 
sometimes contain misspelled addresses, and do not provide information 
on what type of retailers were involved for each transaction. In 
addition, California officials told us that the address information 
included in the EBT transaction data is sometimes that of retailers' 
corporate offices rather than the location where the transactions 
actually took place. State officials said that there is no code 
available in the EBT transaction data that would allow them to 
identify easily the nature of each retailer.[Footnote 23] While their 
EBT vendor receives merchant category codes for some ATM transactions, 
this information has limitations because a known issue is that some 
ATMs have the same merchant category code that identifies the location 
of the transaction as a financial institution rather than any 
categories associated with the particular nature of the business where 
the transaction occurred. To work around the limitations in the EBT 
transaction data, California officials told us that their staff 
conducted online research to verify whether businesses actually fell 
under one of the state's prohibited categories. However, they said 
that this was a manual, time-intensive process that involved making 
judgments about the nature of retailers, which can be subjective and 
prone to error. According to California officials, some ATMs at liquor 
stores were reactivated because they were initially identified as 
liquor stores not authorized by the U.S. Department of Agriculture's 
Food and Nutrition Service (FNS),[Footnote 24] but others were 
reactivated because the storeowner applied for FNS authorization after 
having the ATM deactivated. In those stores, the ATM was reactivated 
as the new FNS authorization was verified. 

California officials told us that their EBT vendor also conducts 
ongoing monitoring of transaction data to identify terminals blocked 
formerly that then change location or are reactivated, as well as 
transactions at new locations with names that appear to fall under one 
of the state's prohibited categories. State officials also told us 
that the transaction data only allow them to identify locations where 
transactions have already occurred, so they are unable to assess the 
universe of locations that might fall under prohibited categories. For 
example, although they disabled EBT access at thousands of ATMs that 
have performed EBT transactions, as mentioned above, officials said 
that there are likely many more ATMs that exist in the state, but they 
cannot be identified until a transaction takes place there. As a 
result, CDSS is unable to use the EBT transaction data and its 
methodology noted above to identify all ATMs in California locations 
that may fall under the 14 prohibited categories. 

In addition, although CDSS has expressed its intent to disable TANF 
access at POS devices that fall under the 14 categories, officials 
from CDSS and the state's EBT vendor told us that they have been 
unable to disable EBT access at any POS terminals as of March 2012. 
CDSS officials stated that POS terminals will be blocked sometime in 
the future, but they did not know when this would occur because third-
party processors are finding it difficult to block POS terminals as 
opposed to ATMs. For example, according to CDSS's vendor, 
identification numbers for POS terminals are generally not as unique 
as those assigned to ATMs. Specifically, POS terminals located in many 
retailers in California and across the country use the same terminal 
identification numbers as opposed to unique terminal identification 
numbers, which may result in third-party processors accidentally 
blocking POS terminals at locations that were not intended to be 
blocked, including some that are located outside of California. 

Further, it is not illegal under California state law for a California 
resident to use his or her EBT card at one of the prohibited 
locations. In fact, California state law still includes a provision 
that specifically protects the rights of individuals to spend their 
cash assistance as they want in California. The California statute 
states, "no person concerned with the administration of a public 
assistance program shall dictate how any recipient shall expend the 
aid granted to him."[Footnote 25] Implementing this statute, CDSS's 
Manual of Policies and Procedures: Eligibility and Assistance 
Standards states "each individual or family has the right to manage 
his/her own affairs; to decide what use of his/her money, including 
the aid payment, will best serve his/her interests."[Footnote 26] Such 
broad treatment, while consistent with California state law, raises 
questions about the extent to which California's current controls will 
help to ensure that cash assistance is being used in a manner 
consistent with the purposes of the TANF program and the new federal 
requirements. Until HHS issues regulations or provides further 
guidance as to what policies and practices are sufficient to comply 
with the new federal requirements, it is unclear whether there is any 
conflict between the new federal law and California's statute. 

Massachusetts: 

Although Massachusetts has made certain TANF transactions illegal, the 
state has not yet finalized plans for enforcing its legal restrictions 
and has not blocked any transactions. Specifically, state TANF 
officials have not yet taken steps aimed at enforcing the legal 
restrictions or monitoring compliance. As of July 2011, Massachusetts 
state law prohibits individuals from using their cash assistance to 
purchase alcohol, tobacco, and lottery tickets.[Footnote 27] 
Individuals who make a purchase in violation of the law are required 
to reimburse the state for the purchase, and are also banned from 
receiving benefits for varying periods, according to state law. 
[Footnote 28] The law also states that individuals or store owners who 
knowingly accept direct cash assistance funds held on EBT cards for 
the purchase of alcoholic beverages, lottery tickets, or tobacco 
products will be fined not more than $500 for the first offense, not 
less than $500 or more than $1,000 for the second offense, and not 
less than $1,000 for the third or subsequent offense.[Footnote 29] 
However, as of July 2012, Massachusetts had not yet finalized plans 
for enforcing the law and had not blocked any transactions. State 
officials told us that they are unable to track or identify the types 
of items or services recipients actually purchase with the TANF cash 
assistance withdrawn using their EBT cards at ATMs or POS terminals. 
For example, according to state officials, EBT transaction data do not 
contain information on what items are purchased using EBT cards. 
According to a Massachusetts official, the state has not yet blocked 
any purchases because it does not have the manual or technological 
processes to do so. 

In December 2011, Massachusetts law also mandated the creation of an 
EBT Commission to study and report on, among other things, the use of 
EBT cards for the purchase of products such as firearms, tobacco, 
lottery tickets, and alcohol.[Footnote 30] The commission was tasked 
with developing recommendations for the state legislature, including 
recommendations on how to prevent the inappropriate use of EBT cards. 
The commission met between February and March 2012 and determined that 
EBT transaction data do not capture information on what items are 
purchased with EBT cards, which makes blocking specific items from 
being purchased with an EBT card impossible technologically. In 
compliance with, and in addition to implementing the new federal law, 
the commission recommended and stated that legislative members of the 
commission will file legislation in Massachusetts that will ban EBT 
transactions at ATMs and POS terminals in liquor stores, casinos and 
gaming establishments, adult-oriented entertainment establishments, 
nail salons, tattoo parlors, firearms dealers, bars/drinking 
establishments, smoke shops, and spas. The commission discussed, but 
did not recommend, implementing further restrictions on recipients' 
use of cash. For example, the commission considered, but chose not to 
recommend, limiting the amount of cash assistance that can be 
withdrawn from ATMs or POS terminals either entirely or to 50 percent 
of each recipient's monthly cash benefit amount. However, the 
commission determined that restricting cash access this way could 
incentivize fraud and trafficking of EBT cards. In addition, the 
commission did not want to cause additional hardship for recipients 
who use their cash assistance appropriately to pay for rent, 
transportation, and other essential costs. Moreover, the commission 
learned that its EBT vendor did not have current functionality to 
restrict each recipient's cash access at ATMs to only 50 percent of 
his or her total monthly benefit amount. 

Michigan: 

Michigan has a procedure in place that prohibits certain uses of TANF 
cash assistance, but does not have a way to track whether recipients 
adhere to state requirements. Beginning in October 2011, Michigan law 
required that TANF recipients' family self-sufficiency plans--which 
families must execute in return for receiving assistance--must include 
a prohibition on using assistance to purchase lottery tickets, 
alcohol, or tobacco, or for gambling, illegal activities or other 
nonessential items.[Footnote 31] If a recipient does not adhere to the 
requirements of his or her family self-sufficiency plan, the state can 
impose penalties based on the number of instances of noncompliance. 
For example, the third instance of noncompliance can result in the 
family being permanently ineligible from receiving program assistance. 
[Footnote 32] In addition to the prohibited items or activities noted 
above, state policy also bars recipients from using cash assistance 
for adult entertainment, massage parlors, spas, tattoo shops, bail 
bond agencies, and cruise ships.[Footnote 33] However, state officials 
told us that they do not have any way to track how recipients spend 
cash withdrawn with EBT cards, and that EBT card data do not include 
information on what purchases recipients make with their cards. 

In addition, in a letter sent to Michigan casinos in 2011, the state 
governor's office expressed its decision to correct flaws in 
Michigan's EBT card program, and tighten the rules for Michigan's EBT 
card use by prohibiting clients from using their EBT card to withdraw 
cash from any ATM machine located in any casino in Michigan, due to 
reports of possible abuse committed by some of Michigan's TANF 
recipients. As a result, state officials said that Michigan casinos 
contacted third-party processors and financial institutions to ask 
that they block the state's BIN at ATMs located in the casinos, 
thereby cutting off EBT access there. State officials told us that 
they later had the state's EBT vendor conduct a query to determine 
whether transactions were still occurring at casinos. The vendor ran 
six separate queries, but identified no EBT transactions at casinos 
after the EBT access was disabled, including one casino where state 
officials said that they had previously identified $87,340 in EBT 
transactions. State officials said that ATMs have not been blocked yet 
at locations other than casinos. In addition, EBT access at POS 
terminals has not yet been disabled at restricted locations, and state 
officials are unaware of EBT access being disabled at POS terminals in 
Michigan casinos. Michigan officials noted that EBT vendors do not 
have a suitable electronic method of disabling the use of EBT cards in 
certain types of businesses, whether at POS devices or at ATMs. 
Michigan officials noted two contributing problems with identifying 
locations and disabling EBT access at certain locations. First, 
identifying the type of location is dependent on the business 
accurately reporting data on the nature of its business, according to 
Michigan officials. Second, although the banking and ATM industries 
are the entities that collect the business type and location data, and 
they have the means to disable access at any location, they have not 
been mandated to assist the states in this effort. 

Pennsylvania: 

Pennsylvania prevents EBT use at state-run liquor stores and obtained 
the cooperation of casinos in disabling EBT access on their premises. 
In addition, since December 2009, it has been illegal under 
Pennsylvania state law to purchase liquor or alcohol with an 
electronic benefits card.[Footnote 34] Under Pennsylvania law, a 
person found to violate knowingly this law shall be guilty of a 
misdemeanor, and, upon conviction, shall be sentenced to pay a fine, 
not exceeding $100, or to undergo imprisonment, not exceeding 6 
months, or both.[Footnote 35] Liquor stores in Pennsylvania are 
operated by the state. According to state officials, these liquor 
stores do not accept the state's EBT card at POS devices, and there 
are no ATMs in these state-run liquor stores. In response to bills 
introduced, but not passed, in the state assembly that would have 
prohibited EBT access at casinos,[Footnote 36] state officials from 
the gaming control commission contacted a third-party processor for 
ATMs at casinos to ask the processor to deactivate the state's bank 
identification number (BIN) from those machines. State officials told 
us that they assessed the effectiveness of the restrictions by sending 
staff members with working EBT cards to three casinos to check in 
person whether the casinos' ATMs accepted EBT cards. Although some of 
the ATMs still accepted EBT cards at first, state officials told us 
that those machines were eventually blocked from accepting further EBT 
transactions. According to Pennsylvania officials, when they conducted 
pilot monitoring of their restrictions, they had to look up retailer 
information on the Internet because the transaction data did not 
contain information that allowed them to determine what type of 
businesses the retailers were. 

Texas: 

As opposed to restricting categories of locations that had previously 
accepted TANF EBT cards, the design of Texas's TANF program places 
limitations on the participation in the state EBT network of retailers 
that derive most of their revenue from alcohol, gambling, adult 
entertainment, and other functions. Since the mid-1990s, Texas has 
required that retailers seeking to participate in the state's EBT 
system must be: (1) authorized by FNS to provide food services to SNAP 
recipients; or (2) a non-FNS authorized retailer that receives no more 
than 10 percent of its gross revenue from entertainment, such as from 
the sale of alcoholic beverages, legalized games of chance, sexually 
oriented materials, coin-operated amusement machines or amusement 
services.[Footnote 37] According to officials with the state's Health 
and Human Services Commission (HHSC), third-party processors are 
responsible for ensuring that retailers comply with these 
requirements. In addition, state officials said that third-party 
processors send them a list of TANF-only retailers,[Footnote 38] which 
HHSC uses to monitor locations that appear to be in noncompliance on 
the basis of the retailers' names. State officials added that they 
implemented a more-rigorous monitoring process in 2011, but were not 
aware of any retailers removed from the EBT program for noncompliance. 

Since September 1997, a Texas state statute has required that 
recipients use TANF benefits to purchase only goods and services 
necessary and essential to the welfare of the family, such as food, 
clothing, housing, utilities, child care, transportation, and 
medicine, medical supplies, or equipment not covered by Medicaid. 
[Footnote 39] State officials told us that they are unable to track 
how recipients spend their cash assistance. However, they said that if 
they receive information through social workers, neighbors of 
recipients, a hotline, or other sources regarding TANF recipients 
misusing their TANF benefits, they could assign a protective payee to 
TANF recipients who display misuse of their TANF benefits.[Footnote 
40] According to state officials, in May 2012, 84 active TANF cases 
were assigned a protective payee. In addition, TANF recipients are not 
able to access their benefits at ATMs in Texas, as the state's EBT 
cards are not accepted at ATMs there. 

Washington: 

Washington has implemented a system in which retailers are responsible 
for blocking unauthorized TANF transactions, and will soon employ 
monitoring efforts to determine the effectiveness of its actions. As 
of January 1, 2012, businesses falling under one of Washington's nine 
prohibited categories (see fig. 1 above) are required by Washington 
law to disable the ability of ATM and POS machines located on their 
premises to accept the state's EBT card.[Footnote 41] State-licensed 
taverns, nightclubs, beer/wine specialty stores, bail bond agencies, 
gambling establishments, and tattoo, body piercing, or body-art shops 
can have their state business licenses suspended by various state 
regulatory agencies if it is determined that they are not in 
compliance with this Washington law.[Footnote 42] For example, the 
Washington State Liquor Control Board is required to suspend the 
licenses of taverns, beer/wine stores, and nightclubs if they are not 
in compliance. However, because there are no specific statewide 
licensing requirements for Washington adult-entertainment 
establishments or establishments where individuals under the age of 18 
are not permitted, it is unclear what penalties might apply to those 
businesses. According to one official from Washington State Department 
of Social and Health Services (DSHS), DSHS will rely on businesses to 
ensure that third-party processors have deactivated the state's BIN 
from relevant machines in the restricted locations, and businesses 
will be held accountable if DSHS finds that the third-party processors 
have failed to perform these deactivations. However, one DSHS official 
stated that DSHS was able to work with the state's tribal casinos, EBT 
vendor, liquor control board, and gaming commission to disable EBT 
access at ATMs in casinos and liquor stores.[Footnote 43] To do so, 
according to DSHS officials, the state's EBT vendor contacted tribal 
casinos and commercial bingo establishments to identify the relevant 
third-party processors and ATM owners, and then asked them to 
deactivate the state's BIN from their machines. 

Although Washington law requires that certain retailers disable TANF 
EBT access at ATMs and POS devices on their premises, a state official 
said that in order to implement the EBT restrictions, the owners of 
ATMs and POS terminals must manually disable the state's BIN at the 
ATMs and POS machines. However, DSHS officials clarified that it is 
possible for larger businesses to perform this remotely. According to 
officials from DSHS, some retailers may not be aware of the new state 
law, especially small "mom and pop" retailers. DSHS has coordinated 
with state licensing agencies to educate licensees about the new 
requirements affecting them, according to officials from DSHS. 
However, according to one DSHS official, there are ways to circumvent 
the state's laws, such as businesses reactivating the state's BIN or 
changing the location of an ATM after the business obtained or renewed 
its license. 

One official from DSHS also said that the department monitors EBT 
transaction data to test whether certain retailers are complying with 
the requirement to disable EBT access on their premises. However, 
according to one official, although the EBT transaction data may have 
address information of a business that may match the address of an ATM 
transaction, this does not necessarily mean that the ATM is located 
physically on the business's premises. DSHS officials said that they 
are still considering, but have not yet decided whether to use 
undercover investigators with loaded EBT cards to test on-site whether 
retailers are in compliance. 

State officials also said that in the past they faced challenges in 
identifying and classifying locations pursuant to some definitions of 
prohibited locations. For example, DSHS officials said that the 
state's gaming regulations classified a certain game as gambling, in 
which children use a claw to try to win toys, candy, or other prizes. 
According to state officials, the regulations were changed so that 
they would not classify these types of games as gambling. In addition, 
state officials told us that adult-entertainment establishments are 
not regulated by the state, which may complicate the monitoring of 
these retailers' compliance with state law due to the uncertainty 
about what agencies are actually responsible for these specific 
retailers. For example, one DSHS official told us that DSHS contacted 
local law enforcement to ask what adult-entertainment establishments 
are located in their jurisdictions, in an attempt to identify 
establishments that should disable their EBT access. 

Washington state law allows TANF recipients to use their TANF cash 
assistance to pay for a reasonable amount of basic living expenses, 
such as shelter, food, transportation, clothing, household 
maintenance, personal hygiene, employment or school related items, or 
other necessary incidentals and items. However, state law prohibits 
individuals from using their EBT cards or TANF cash assistance for 
gambling activities or to purchase lottery tickets, tobacco, 
cigarettes, horse racing, or for the purpose of participating in or 
purchasing any activities located in nightclubs, adult-entertainment 
venues, establishments where persons under the age of 18 are not 
permitted, contract liquor stores, bail bond agencies, beer/wine 
stores, taverns, gambling establishments, or a licensed tattoo, body 
piercing, or body art shop (see fig. 1 above).[Footnote 44] 
Individuals who violate this provision can be fined, forfeit future 
cash assistance, or after more than one violation be assigned a 
protective payee.[Footnote 45] Under state regulations, violators can 
also be required to provide proof that the cash assistance is being 
used for the benefit of the children in the household.[Footnote 46] 
DSHS officials also said that they are unable to restrict specific 
types of purchases. Rather, they would need to either completely 
disable the state's BIN at affected POS devices or allow everything to 
be purchased with an EBT card. As a result, DSHS officials told us 
that they rely on the honor system and hope that retailers will stop 
individuals from using their EBT cards to purchase prohibited items. 
One DSHS official told us that it is difficult to track how 
individuals spend the cash withdrawn with their EBT cards. However, 
DSHS officials stated that if in the course of working with a TANF 
client the case managers find that the family is consistently in 
financial crisis and cannot adequately explain why, the case managers 
might assume the client is not expending the benefits appropriately or 
wisely. According to DSHS officials, in those instances, the case 
managers will delve deeper and talk with the clients to determine if 
they are using their benefits correctly by meeting the basic needs of 
the clients' families and assist the clients with understanding how 
the TANF benefits should be used. If these issues continue, the case 
managers may suggest or require that a protective payee be assigned. 

States without Restrictions: 

Four of our 10 selected states--Florida, Illinois, New York, and Ohio--
do not have any restrictions aimed at preventing certain TANF 
transactions. This is because they have no state laws, executive 
orders, or other regulations that prohibit certain TANF transactions 
on the basis of the location of the transaction or the nature of the 
goods or services purchased. In addition, these states did not 
implement restrictions due to concerns about cost effectiveness or 
technical limitations, according to state officials. As mentioned 
above, before the recent passage of the Welfare Integrity and Data 
Improvement Act, as part of the Middle Class Tax Relief and Job 
Creation Act of 2012, states were not required to maintain or 
implement policies or practices aimed at preventing certain TANF 
transactions in certain locations. TANF was designed to provide states 
with great flexibility in determining how to run their own programs. 
Although states are required to implement policies and practices aimed 
at preventing certain TANF transactions in certain locations by 
February 22, 2014, there is currently no nationwide restriction on how 
TANF recipients can spend their TANF cash assistance. Because of these 
factors, these 4 states have not attempted to block or prohibit 
certain TANF transactions at certain locations or to prohibit the 
purchase of certain goods and services, unlike the other 6 states 
discussed above. 

Other additional factors also influenced these states' decisions not 
to restrict certain TANF transactions. For example, officials in 
Florida and New York told us that they reviewed the number of EBT 
transactions conducted at certain locations--casinos and liquor stores 
in Florida; bingo halls, casinos, and off-track betting sites in New 
York--and compared that number to the total number of EBT 
transactions. They found that only a small percentage of transactions 
took place at these locations.[Footnote 47] Therefore, officials in 
these states determined that it would not be cost-effective to 
implement restrictions aimed at preventing a relatively small number 
of transactions. 

New York officials did note later that liquor stores in New York are 
precluded from having ATMs. In addition, New York officials noted that 
they received voluntary cooperation, over the last several years, from 
merchants and ATM providers to prevent TANF transactions initiated 
with the New York EBT card in select gambling establishments located 
in New York and other states serviced by these merchants and ATM 
providers. New York officials stated that merchants have accomplished 
this by identifying TANF transactions initiated at ATMs in select 
gambling establishments and declining such transactions that are 
associated with New York's BIN for EBT transactions. New York 
officials noted this methodology as one possible cost-effective way to 
prevent electronic transactions with TANF funds at certain locations 
because it would entail that the merchants direct their third-party 
processor to block the states' EBT cards' BINs from being able to 
complete an ATM or POS transaction in certain establishments. 
According to New York officials, third-party processors can add and 
block BINs regularly through software updates. According to New York 
officials, this can be done as part of the service third-party 
processors provide to business establishments through their service 
agreements, which could be performed at no extra cost to the business 
establishments. 

Illinois officials told us that their current EBT contract did not 
include the capability to block certain locations from EBT access. 
Although Illinois officials said that their state had no restrictions 
in place to block certain TANF transactions, they said that state 
casinos voluntarily disabled EBT access at ATMs on their premises--
this is similar to the voluntary efforts by casinos in Michigan and 
Pennsylvania. Ohio is unique among our 10 selected states in that it 
uses EPC cards to distribute TANF cash assistance rather than EBT 
cards. State officials told us that they chose to use EPC cards 
because of the increased accessibility they provide to recipients. 
Because federal financial-privacy laws generally prevent the state 
from receiving data on individual EPC transactions, unless a specified 
exception exists,[Footnote 48] state officials said that they are 
unable to monitor or restrict the use of EPC cards at certain 
locations. 

States May Face Challenges in Implementing Restrictions: 

States may face challenges in implementing future restrictions on TANF 
transactions. As mentioned above, the Welfare Integrity and Data 
Improvement Act, part of the Middle Class Tax Relief and Job Creation 
Act of 2012, will require states to prevent TANF electronic benefit 
transactions at certain locations.[Footnote 49] In addition, the law 
requires that HHS determine whether states have implemented and 
maintained such policies and practices for preventing these 
transactions. At the time of this report's issuance, HHS was at the 
beginning of its rulemaking process and it did not yet know what form 
its final regulations would take. As such, it was too early to 
determine what states will need to do in order to comply with the new 
federal requirements. Officials from multiple states told us that the 
federal requirements are expected to help states ensure that cash 
assistance is used in a manner reflecting the purpose of TANF. 
However, some officials cited challenges that they might face in 
attempting to prevent certain TANF transactions in order to meet the 
potential requirements of the law. These challenges were primarily 
focused on difficulties with identifying locations that could be 
blocked from EBT access and limitations in available data. For 
example, according to officials from multiple states, the transaction 
data they receive do not contain information that is accurate or 
detailed enough for them to identify locations that could potentially 
be prohibited or restricted. If transaction data are inaccurate or 
lack enough information about the business nature of specific 
retailers, states' efforts to prevent certain TANF transactions may be 
impeded. State officials suggested that improvements in the quality of 
EBT transaction data might better enable them to prevent such 
transactions. For example, state officials suggested that prevention 
efforts would be aided by more-accurate and complete address 
information for transactions, or requiring merchant category codes to 
be included in the data. In addition, officials from multiple states 
suggested that businesses or third-party processors should be 
responsible for ensuring that EBT access is disabled at certain 
locations, rather than states. 

We found that EBT transaction data from four states--California, 
Florida, New York, and Texas--contained incomplete or inaccurate 
information for the address of the location where the transaction 
occurred, which limits the data's usefulness for systematic 
monitoring.[Footnote 50] To conduct systematic monitoring effectively, 
including the identification of locations that can be blocked from EBT 
access, data should be complete and accurate. In the California and 
Florida data, the address information was sufficiently complete; 
however, it was not sufficiently accurate. We estimate that the 
reported addresses of the locations where the transactions occurred 
could be linked to standardized addresses for less than 21 percent and 
14 percent of the transactions, respectively.[Footnote 51] This means 
that the states could not rely on the majority of the transaction 
records for accurately identifying a true location and would therefore 
need to verify manually that the reported addresses for the 
transactions matched to a real location, which would increase the time 
and labor required as part of this process. The New York EBT data 
contained complete address information for approximately 71 percent of 
the transactions, of which we estimate that up to 34.2 percent could 
be linked to standardized addresses.[Footnote 52] 

Texas address information was complete for approximately 30 percent of 
the transactions,[Footnote 53] although we estimate that as many as 
70.4 percent of those addresses could be linked to standardized 
addresses. Without sufficiently complete and accurate information for 
the address where an EBT transaction occurred, states are unable to 
systematically monitor or block EBT access. To the extent that the 
information is available, states could use EBT data to identify 
individual transactions that may have occurred at certain locations on 
the basis of the name of the merchant at the location where the 
transaction occurred. We found that the merchant name was available 
for approximately 19 million transactions--45 percent of the 
transactions we examined--as low as 30 percent in Texas and as high as 
90 percent in Florida. 

Officials from multiple states and representatives from states' EBT 
vendors expressed concerns about the EBT data. For example, according 
to one vendor, address information in the data--which is self-reported 
by ATM or POS device owners or operators, and is transmitted by third-
party processors--is not always correct, and the ATM addresses listed 
in the data sometimes do not reflect where transactions actually took 
place. In addition, state officials and representatives from states' 
EBT vendors stated that the ATM transaction data maintained by vendors 
all list the same merchant category code that provides no information 
about the type of retailer where the ATM machines are located. 
According to state and vendor officials, the inaccuracies and 
insufficiencies in the EBT transaction data are due to gaps in data 
reporting and the nature of the EBT system's infrastructure. According 
to representatives from one EBT vendor, third-party processors do not 
always verify the information contained in transaction data, which 
diminishes the quality of the data that they submit to the EBT 
vendors. According to some state and vendor officials, the EBT 
transaction data are not used generally for only identifying where 
TANF transactions might occur. 

The EBT program was devised in the 1980s to originally meet the needs 
of the USDA's Food Stamp Program, in which federal benefits would be 
disbursed electronically to eligible recipients, with states later 
adding their TANF programs to EBT cards. Some state officials and 
vendor representatives noted that the specifications governing the 
extent of the EBT data captured as part of an EBT transaction do not 
require all transaction information on each EBT transaction.[Footnote 
54] For example, according to state officials from Texas, some data 
elements, such as merchant names, could be useful for monitoring where 
TANF benefits are accessed, but they are not required under those 
specifications. The accuracy of the data is also affected by self-
reporting. For example, although it is intended that the transactions 
follow these specifications, key industry players, such as third-party 
processors, do not follow these specifications consistently, according 
to California officials. Moreover, because transactions can go through 
multiple entities, including third-party processors, the transaction 
data can change and may not always be transmitted accurately to the 
vendor, according to California officials. 

As mentioned above, Ohio is unique among our selected 10 states in 
disbursing TANF cash assistance through EPC cards rather than EBT 
cards. Regarding potential future restrictions, Ohio officials told us 
that they are unsure how they will be able to restrict TANF 
transactions, and will need to work with their vendor that operates 
their EPC state card to determine the feasibility of performing these 
restrictions. However, according to one vendor, given that EPC cards 
are branded by major financial institutions--such as Visa and 
MasterCard--and operate on these institutions' commercial 
infrastructure, these institutions could disable POS access for EPC 
cards by using merchant category codes that retailers are required to 
submit as part of the transaction data in order to participate in the 
institutions' networks. This type of blocking is not possible, 
however, with ATMs that accept EPC cards, according to representatives 
from one vendor. However, vendor representatives told us that ATM data 
for EPC transactions, similar to EBT card data, contain only one 
merchant category code for all terminals, identifying the location of 
the transaction as a financial institution. Also similar to EBT card 
data, EPC card data do not contain detailed information on items 
purchased with the EPC cards. 

Concluding Observations: 

The purpose of TANF is to help needy families achieve self-
sufficiency. Providing TANF benefits by means of electronic benefit 
cards helps the banked and unbanked TANF recipients, gives TANF 
recipients an alternate to cash, and allows states to use existing 
infrastructures. However, any misuse of TANF funds not only deprives 
low-income families of needed assistance, but also diminishes public 
trust in both the integrity of the program and the federal government. 
Before Congress passed the Welfare Integrity and Data Improvement Act, 
as part of the Middle Class Tax Relief and Job Creation Act of 2012, 
some states acted independently to implement restrictions on certain 
TANF transactions. As a result, their approach to enacting 
restrictions varies significantly. However, until HHS issues 
regulations or provides further guidance as to what policies and 
practices are sufficient to comply with the new federal requirements, 
it is unclear to what extent the various restrictions implemented by 
states would be in compliance. The experience of these states--
especially any information related to the cost-effectiveness and 
success rates for various restrictions--could be beneficial for HHS to 
consider as it works toward determining what policies and practices 
are sufficient to comply with the new federal law. As we heard from 
officials in multiple states, preventing unauthorized transactions can 
be time-intensive and is impaired by flaws in available transaction 
data and other challenges. Addressing the limitations we found in 
transaction data that impede the identification and monitoring of 
certain locations could require significant resources. Therefore, 
restriction methods that do not rely on flawed transaction data may be 
the most practical, such as Washington state's requirement for 
businesses to independently disable EBT access or risk losing or not 
obtaining their state licenses to operate. 

Agency and State Comments: 

We provided a draft of this report to HHS for comment. In its written 
comments, reproduced in appendix III, HHS noted that our report 
highlights many of the challenges and issues states and others face in 
issuing the TANF requirements that Congress enacted in February 2012. 
In addition, HHS stated that our report's findings and analysis will 
be helpful as HHS drafts implementing regulations relevant to these 
TANF requirements. HHS also provided technical comments that we 
incorporated, as appropriate. 

In May 2012, we also provided the 10 selected states with an 
opportunity to comment on our draft findings relevant to their 
specific TANF programs. In May 2012, 7 of the 10 selected states 
provided us with technical comments by e-mail, and we incorporated 
their technical comments as appropriate. Three states, Illinois, 
Massachusetts, and Pennsylvania, had no comments. 

As agreed with your office, unless you publicly announce the contents 
of this report earlier, we plan no further distribution until 7 days 
from the report date. At that time, we will send copies to other 
interested congressional committees and the Secretary of Health and 
Human Services. In addition, the report will be available at no charge 
on the GAO website at [hyperlink, http://www.gao.gov]. 

If you or your staff have any questions about this report, please 
contact me at (202) 512-6722 or kutzg@gao.gov. Contact points for our 
Offices of Congressional Relations and Public Affairs may be found on 
the last page of this report. GAO staff who made key contributions to 
this report are listed in appendix IV. 

Sincerely yours, 

Signed by: 

Gregory D. Kutz: 
Director, Forensic Audits and Investigative Service: 

[End of section] 

Appendix I: Objectives, Scope, and Methodology: 

Our objective was to determine the extent to which selected states 
have taken action to prevent unauthorized Temporary Assistance for 
Needy Families (TANF) transactions. To conduct our work, we reviewed 
TANF laws, regulations, and other documentation--including the Welfare 
Integrity and Data Improvement Act, part of the Middle Class Tax 
Relief and Job Creation Act of 2012, which introduced new state 
requirements for preventing certain TANF transactions--and interviewed 
officials from Health and Human Services (HHS). From each selected 
state, we reviewed information related to its laws, policies, 
practices, and other factors affecting its TANF program. In addition, 
we interviewed and reviewed documentation from several key industry 
stakeholders related to states' efforts to prevent unauthorized TANF 
transactions. We also interviewed officials from the top 10 states in 
terms of TANF basic block-grant dollars--California, New York, 
Michigan, Ohio, Pennsylvania, Illinois, Florida, Texas, Massachusetts, 
and Washington. Together, these 10 states represent a total of 66 
percent of TANF basic block-grant funds.[Footnote 55] The industry 
stakeholders included: JP Morgan Chase and Affiliated Computer 
Services, the two largest vendors providing TANF electronic benefit 
card services to the states; the Electronic Funds Transfer 
Association, an industry trade association that conducts work related 
to electronic benefit card services for government agencies at the 
federal and state level; the National Conference of State 
Legislatures, a bipartisan organization that provides research and 
other services to state legislators and their staff; and the American 
Public Human Services Association, a bipartisan, nonprofit 
organization representing appointed state and local health and human-
services agency commissioners. We obtained electronic benefit card 
transaction data from 4 of the 10 selected states--California, 
Florida, New York, and Texas--covering transactions from federal 
fiscal year 2010.[Footnote 56] We selected these 4 states based on 
geographical diversity. The results of our analysis of these 4 states' 
data cannot be generalized to other states.[Footnote 57] Using these 
data, we assessed the extent to which the data would allow the 4 
selected states to conduct systematic monitoring of TANF transactions. 
Such monitoring might include an assessment of the prevalence of 
transactions at certain locations. 

To do so, we used a generalizable, random sample of each of the 4 
selected states' Electronic Benefit Transfer (EBT) transaction data 
and compared it to electronic geo-coding information that pinpoints 
places and identifies locations.[Footnote 58] Subsequent visual 
inspection and manual cleaning of obvious address errors in the EBT 
data only resulted in a small portion of corrected location addresses. 
We also assessed whether the data would allow states to identify 
individual TANF transactions at certain types of locations. To do so, 
we conducted keyword searches of merchant names for terms that are 
potentially associated with casinos, liquor stores, and adult-
entertainment establishments. We performed data checks to determine 
the reliability of the California, Florida, New York, and Texas EBT 
data for the purposes of our engagement. For all four states, we 
determined that the EBT data are not sufficiently reliable for the 
purpose of performing systematic monitoring, as the selected states' 
data contained incomplete or inaccurate information for the addresses 
of the locations where the transactions occurred. Given the 
combination of both completeness and accuracy issues in the 4 selected 
states, we also determined most of the data in the 4 selected states 
could not match to address location information that would allow for 
suitable comparisons to other potential data sources. However, we 
determined that the transaction data would support keyword searches of 
merchant names for terms that are associated potentially with casinos, 
liquor stores, and adult-entertainment establishments, for records 
that contain merchant names. We conducted this performance audit from 
October 2012 to July 2012, in accordance with generally accepted 
government auditing standards. Those standards require that we plan 
and perform the audit to obtain sufficient, appropriate evidence to 
provide a reasonable basis for our findings and conclusions based on 
our audit objectives. We believe that the evidence obtained provides a 
reasonable basis for our findings and conclusions based on our audit 
objectives. 

[End of section] 

Appendix II: Print-Friendly Version of Figure 1: 

The table below includes figure 1's (see above) rollover information 
and describes the steps that 6 of the 10 states we reviewed have taken 
that are aimed at preventing the use Temporary Assistance for Needy 
Families (TANF) cash assistance for certain purchases or in certain 
locations. 

Table 1: Some States Have Taken Steps Aimed at Preventing Unauthorized 
TANF Transactions: 

State: California; 
Steps taken: 
* EBT access disabled at ATMs in California businesses, including: 
- Casinos; 
- Adult-entertainment businesses; 
- Bail-bond locations; 
- Night clubs/saloons/taverns; 
- Bingo halls; 
- Race tracks; 
- Gun/ammunition stores; 
- Cruise ships; 
- Psychic readers; 
- Smoking shops; 
- Cannabis shops; 
- Tattoo/piercing shops; 
- Spa/massage salons; 
- Liquor stores not authorized by the Food and Nutrition Service (FNS). 

State: Massachusetts; 
Steps taken: 
* TANF recipients in Massachusetts are prohibited by state law from 
using cash assistance to purchase: 
- Alcohol; 
- Tobacco; 
- Lottery tickets; 
* Merchants in Massachusetts are prohibited by state law from 
knowingly accepting EBT cards for the purchase of: 
- Alcoholic beverages; 
- Tobacco products; 
- Lottery tickets. 

State: Michigan; 
Steps taken: 
* TANF recipients in Michigan are prohibited by state law and policies 
from using their TANF cash assistance for: 
- Lottery tickets; 
- Alcohol; 
- Tobacco; 
- Gambling; 
- Illegal activities, including purchasing illegal drugs; 
- Adult entertainment; 
- Massage parlors; 
- Spas; 
- Tattoo shops; 
- Bail-bond agencies; 
- Cruise ships; 
- Nonessential items, including items not necessary to sustain the 
household; 
* EBT access disabled at ATMs in Michigan casinos. 

State: Pennsylvania; 
Steps taken: 
* No ATMs exist in Pennsylvania-run liquor stores[A]; 
* Pennsylvania liquor stores do not accept Pennsylvania's EBT card at 
POS terminals; 
* EBT access disabled at ATMs in licensed casinos in Pennsylvania; 
* By Pennsylvania law, TANF cash assistance shall be diminished by 
amounts that a Pennsylvania TANF recipient obtains by cashing a TANF 
cash assistance check at a Pennsylvania gambling casino, racetrack, 
bingo hall or other establishment which derives more than 50 percent 
of its gross revenue from gambling; 
* TANF recipients are prohibited from using their EBT card to purchase 
liquor or alcohol. 

State: Washington; 
Steps taken: 
* Washington merchants are required by state law to disable ATMs and 
POS terminals located in their: 
- Casinos; 
- Liquor stores; 
- Taverns; 
- Nightclubs; 
- Bail-bond agencies; 
- Body-art shops; 
- Race tracks; 
- Adult-entertainment venues; 
- Establishments where persons under the age of 18 are not permitted; 
* Washington TANF recipients are prohibited by state law from using 
TANF cash assistance for: 
- Gambling; 
- Amusement games; 
- Raffling; 
- Horse racing; 
- Lottery tickets; 
- Cigarettes; 
- Tobacco products; 
- Body piercings; 
- Beer; 
- Wine; 
- Adult-entertainment materials; 
- Bail bonds. 

State: Texas; 
Steps taken: 
* TANF recipients in Texas are not able to access their TANF cash 
assistance at ATMs[B]; 
* Retailers participating in the Texas EBT program must be either FNS-
authorized or nonfood retailers that receive no more than 10 percent 
of their gross revenue from entertainment, such as from the sale of: 
- Alcoholic beverages; 
- Legalized games of chance; 
- Sexually oriented materials; 
- Coin-operated amusement machines or amusement services; 
* TANF recipients in Texas can only use their TANF cash assistance for 
goods and services necessary and essential to the welfare of the 
family; 

[A] Liquor stores in Pennsylvania are operated by the state. 

[B] TANF recipients in Texas can use their EBT cards to make purchases 
of approved items or take out cash at participating retailers' POS 
devices. 

Source: GAO. 

[End of table] 

[End of section] 

Appendix III: Comments from the Department of Health and Human 
Services: 

Department of Health & Human Services: 
Office of The Secretary: 
Assistant Secretary for Legislation: 
Washington, DC 20201: 

June 27, 2012: 

Greg Kutz, Director: 
Forensic Audits and Investigative Service: 
U.S. Government Accountability Office: 
441 G Street NW: 
Washington, DC 20548: 

Dear Mr. Kutz: 

Attached are comments on the U.S. Government Accountability Office's 
(GAO) report entitled: "TANF-Electronic Benefit Cards: Some States Are 
Restricting Certain TANF Transactions, but Challenges Remain" (GAO-12-
535). 

The Department appreciates the opportunity to review this draft 
section of the report prior to publication. 

Sincerely, 

Signed by: 

Jim R. Esquea: 
Assistant Secretary for Legislation: 

Attachment: 

[End of letter] 

General Comments Of The Department Of Health And Human Services (HHS) 
On The Government Accountability Office's (GAO) Draft Report Entitled, 
"TANF Electronic Benefit Cards: Some States Are Restricting Certain 
TANF Transactions, But Challenges Remain" (GAO-12-535): 

The Department appreciates the opportunity to comment on this draft 
report. 

HHS appreciates the information and analysis provided in GAO's review 
of the experiences of ten states relating to restricting electronic 
benefits transactions in certain locations or for certain purposes. As 
the report explains, Congress has directed states to develop and 
maintain policies and practices to prevent Temporary Assistance for 
Needy Families (TANF) cash assistance from being used in any 
electronic benefit transfer transaction in liquor stores; casinos, 
gambling casinos or gaming establishments; or any retail establishment 
which provides adult-oriented entertainment in which performers 
disrobe or perform in an unclothed state for entertainment. As the 
report also notes, HHS has solicited comments from states, businesses, 
consumer advocates, and any other interested persons so that HHS can 
draw from the states' experiences as HHS drafts regulations to 
implement the statutory provision. 

The report highlights the many challenges and issues that are faced in 
any effort to implement such a requirement. GAO's information and 
analysis will be helpful as HHS drafts its implementing regulations. 

[End of section] 

Appendix IV: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Gregory D. Kutz, (202) 512-6722 or kutzg@gao.gov: 

Staff Acknowledgments: 

In addition to the contact named above, Cindy Brown Barnes, Assistant 
Director; Erika Axelson, Assistant Director; Christopher W. Backley; 
Melinda Cordero; Justin Fisher; Katherine Forsyth; Gale Harris; Olivia 
Lopez; Grant Mallie; Flavio J. Martinez; Maria McMullen; James Murphy; 
Anna Maria Ortiz; Robert C. Rodgers; Rebecca Shea; and Timothy Walker 
made key contributions to this report. 

[End of section] 

Footnotes: 

[1] TANF cash benefits are set by states. In July 2010, the maximum 
monthly benefit for a family of three ranged from $923 in Alaska to 
$170 in Mississippi. Benefits in all states represent a fraction of 
poverty-level income. In the median jurisdiction (Kansas), the maximum 
monthly benefit was $429 for a family of three. 

[2] Pub. L. No. 112-96, § 4004, 126 Stat. 156, 197 - 198. 

[3] For the purposes of this report, we consider "unauthorized" to 
mean all TANF transactions that are prohibited under state laws, 
regulations, policies, or other actions. 

[4] October 1, 2009, to September 30, 2010. 

[5] The random samples can only generalize about each state using each 
state's sample, not about other states and not nationally. For 
example, the Texas sample tells us something general about the Texas 
EBT data as a whole, but cannot tell us anything about the California 
data or all EBT transaction data nationally. 

[6] We compared EBT transaction addresses to U.S. Census Bureau's 
Topologically Integrated Geographic Encoding and Referencing (TIGER) 
standard addresses. 

[7] Pub. L. No. 104-193, 110 Stat. 2105. 

[8] TANF replaced the Aid to Families with Dependent Children (AFDC) 
program. Id. § 103(a)(1), 110 Stat. 2105, 2112. 

[9] 42 U.S.C. § 609(a)(7); 45 C.F.R. §§ 263.1 - 263.9. To meet the MOE 
requirement, each state must generally spend 75 or 80 percent of what 
it spent in fiscal year 1994 on welfare-related programs, including 
AFDC, Job Opportunities and Basic Skills Training, Emergency 
Assistance, and AFDC-related child-care programs. 

[10] 42 U.S.C. § 604(a). 

[11] Throughout this report, we refer to families receiving TANF cash 
assistance, for ease of reporting. However, this is a simplification 
of PRWORA, which actually refers to families receiving "assistance." 
42 U.S.C. § 603. 

[12] States may use TANF funds to support a variety of child welfare 
services, such as screening for child abuse and neglect, case-
management activities, and cash assistance and services for relative 
caregivers. 

[13] 45 C.F.R. § 260.31. 

[14] Pub. L. No. 112-96, § 4004, 126 Stat. 156, 197 - 198. 

[15] The Act defines electronic benefit transfer transaction as "the 
use of a credit or debit card service, automated teller machine, point-
of-sale terminal, or access to an online system for the withdrawal of 
funds or the processing of a payment for merchandise or a service." 
Id. § 4004(a), 126 Stat. 197. 

[16] The Act defines liquor store as "any retail establishment which 
sells exclusively or primarily intoxicating liquor. Such term does not 
include a grocery store which sells both intoxicating liquor and 
groceries including staple foods (within the meaning of section 3(r) 
of the Food and Nutrition Act of 2008 (7 U.S.C. 2012(r)))." Id. 

[17] The Act states that the terms casino, gambling casino, and gaming 
establishment do not include "(I) a grocery store which sells 
groceries including such staple foods and which also offers, or is 
located within the same building or complex as, casino, gambling, or 
gaming activities; or (II) any other establishment that offers casino, 
gambling, or gaming activities incidental to the principal purpose of 
the business." Id. 

[18] Id., § 4004(b), 126 Stat. 197 - 198. 

[19] 42 U.S.C. § 602(a). 

[20] Pub. L. No. 112-96, § 4004(c), 126 Stat. 156, 198. 

[21] 77 Fed. Reg. 24667 (Apr. 25, 2012). 

[22] Cal. Exec. Ord. S-09-10 (June 24, 2010). 

[23] As discussed below, we identified limitations in the accuracy and 
completeness of the transaction data from four states. In addition, 
officials from multiple states expressed concerns about the data 
similar to our findings and the views of California officials. 

[24] Any retailer that would like to allow its customers to use their 
federal food benefits from the Supplemental Nutrition Assistance 
Program (SNAP) must be authorized by FNS to participate in SNAP. 
According to FNS, the only form of SNAP benefit issuance is the EBT 
card. EBT allows the retailer, such as a liquor store, to accept SNAP 
payment for food using the EBT card. 

[25] Cal. Welf. & Inst. Code § 10501. 

[26] Cal. Dep't. Soc. Serv. Manual Pol'y. & Proc. § 44-301. 

[27] Mass. Gen. Laws ch. 18, § 5I. 

[28] Id. 

[29] Mass. Gen. Laws ch. 18, § 5J. 

[30] 2011 Mass. Acts ch. 219. 

[31] Mich. Comp. Laws § 400.57e. 

[32] Mich. Comp. Laws § 400.57g. 

[33] Michigan Bridges Eligibility Manual (BPB 2011-023) §§ 228, 230A, 
and 515. 

[34] 62 Pa. Cons. Stat. § 484. 

[35] 62 Pa. Cons. Stat. § 483. 

[36] Pa. S.B. 975 (2011) and Pa. H.B. 1254 (2011). 

[37] 1 Tex. Admin. Code §§ 372.1701 - 1702. 

[38] According to HHSC officials, TANF-only retailers are those 
retailers that have the ability to redeem TANF benefits in Texas, but 
are not authorized by FNS to redeem SNAP benefits. 

[39] Tex. Hum. Res. Code § 31.0355(a). Subsequent state regulations 
expanded the list of permissible purchases to include furniture, 
laundry, household supplies, and recreation. See 1 Tex. Admin. Code § 
372.1509(b). 

[40] Texas state regulations define a TANF protective payee as "a 
person whom HHSC selects to receive and manage benefits for the 
certified group instead of the caretaker. HHSC may designate a 
protective payee whenever HHSC determines that the caretaker has 
failed to comply with one or more program requirements." See 1 Tex. 
Admin. Code §§ 372.2(17) and 372.905(a). 

[41] Wash. Rev. Code § 74.08.580(2). 

[42] Wash. Rev. Code §§ 66.24.013, 18.185.056, 9.46.410, and 
18.300.095. 

[43] By June 1, 2012, all state-run liquor stores were closed, and 
sale and distribution of liquor in the state was privatized. See Wash. 
Initiative Measure No. 1183 (Nov. 8, 2011). 

[44] Wash. Rev. Code § 74.08.580(1). 

[45] Wash. Rev. Code § 74.08.580(5). Washington state regulation 
defines a protective payee as "a person or an employee of an agency 
who manages client cash benefits to provide for basic needs--housing, 
utilities, clothing, child care, and food." See Wash. Admin. Code § 
388-460-0020(1). 

[46] Wash. Admin. Code § 388-412-0046(1)(e)(ii). 

[47] We did not independently verify the results of these reviews. 

[48] 12 U.S.C. § 3402. 

[49] As stated above, states will be required to have in place 
policies and practices as necessary to prevent such transactions 
within 2 years of the Act's enactment. Pub. L. No. 112-96, § 4004(b), 
126 Stat. 156, 197-198. 

[50] As mentioned above, we assessed EBT data from these four states 
containing transactions made from October 1, 2009, through September 
30, 2010. 

[51] As mentioned above, we compared EBT transaction addresses to U.S. 
Census Bureau TIGER standard addresses. Estimates include a margin of 
error of no more than 3.3 percent for California and 2.8 percent for 
Florida at the 95 percent confidence level. 

[52] Estimate includes a margin of error of no more than 4.1 percent 
at the 95 percent confidence level. 

[53] Estimate includes a margin of error of no more than 4.2 percent 
at the 95 percent confidence level. 

[54] These state officials and vendor representatives said that EBT 
transactions follow ISO 8583, which is the International Standard 
designed as an interface specification enabling messages relating to 
financial transactions to be exchanged between systems adopting a 
variety of application specifications. 

[55] California represents 22.6 percent of total national TANF basic 
block grant dollars; New York, 14.8 percent; Michigan, 4.7 percent; 
Ohio, 4.4 percent; Pennsylvania, 4.4 percent; Illinois, 3.5 percent; 
Florida, 3.4 percent; Texas, 2.9 percent; Massachusetts, 2.8 percent; 
and Washington, 2.5 percent in fiscal year 2012. 

[56] October 1, 2009, to September 30, 2010. 

[57] The random samples can only generalize about each state using 
each state's sample, not about other states and not nationally. For 
example, the Texas sample tells us something general about the Texas 
EBT data as a whole, but cannot tell us anything about the California 
data or all U.S. data. 

[58] We compared EBT transaction addresses to U.S. Census Bureau's 
Topologically Integrated Geographic Encoding and Referencing (TIGER) 
standard addresses. 

[End of section] 

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