Federal Programs with a Financial Eligibility Component

GAO-06-292R: Published: Dec 14, 2005. Publicly Released: Dec 14, 2005.

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Each year, federal benefit programs make billions of dollars of improper payments, in some cases, due to inaccurate personal and financial information provided by applicants. For federal agencies administering those programs, getting reliable personal and financial information is vital for making good decisions about whether an individual or business is eligible for federal benefits. As one of the largest repositories of personal and financial information in the United States, IRS has a number of data-sharing relationships with federal agencies to help verify applicant-provided information. This letter conveys information Congress requested as a part of work we conducted on verifying financial information at federal agencies, including the IRS. As agreed, we (1) compiled a listing of federal benefit programs with a financial eligibility component and (2) described documentation requirements to qualify for these programs.

We found 74 federal benefit programs that met our criteria. The financial obligations for fiscal year 2003 varied by financial assistance type with approximately $16 billion in grants, approximately $158 billion in loans, approximately $62 billion in direct payments, and approximately $3 billion in insurance. More than half of these programs were offered by the U.S. Department of Agriculture (USDA). Federal benefit programs varied in the level of documentation required to support financial eligibility. Most required applicants or beneficiaries to provide financial information on an application plus additional supporting documentation. They generally allowed discretion in the type of supporting documentation applicants or beneficiaries could provide such as financial statements, payroll documents, and/or tax documents according to the eligibility requirements reported in the CFDA. One agency, the Small Business Administration (SBA), required applicants to complete an IRS form requesting that tax information be sent directly to the agency in addition to providing other financial documentation. Of the 74 programs with a financial eligibility component, USDA accounted for the most with 38 programs or 51 percent, and the U.S. Department of Housing and Urban Development (HUD) offered the second largest number with 9 programs or 12 percent. Fiscal year 2003 obligations for the programs ranged from about $1 million to $69 billion. In addition to completing an application, a majority of programs allowed applicants to provide financial documents and/or information provided at their discretion; some programs required applicants to provide specified documents and/or information; and a few programs required applicants to fill out an IRS form in addition to other documents in some cases.

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