Problems and Related Costs Associated With Ineligibles in the AFDC Program

HRD-77-6: Published: Oct 21, 1976. Publicly Released: Oct 21, 1976.

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A review of Ohio's procedures for closing Aid to Families with Dependent Children (AFDC) cases and adjusting grant amounts in two counties and at the Department of Public Welfare in Columbus indicated that the counties had problems in promptly transmitting information on closed cases and adjustments.

This resulted in an extra month's AFDC payment and Medicaid coverage to ineligible families and AFDC overpayments and underpayments to eligible families. Changes being made by Ohio to correct the situation, if properly implemented, could save about $5 million annually. The erroneous payments in Ohio and New York City highlight the need for systems to facilitate timely termination and adjustment of AFDC payments. GAO is aware of the problem in Ohio and New York, but other States may have similar problems. The Administrator of the Social and Rehabilitation Service should be instructed by the Secretary of Department of Health, Education, and Welfare (HEW) to determine whether other States have similar problems and, if so, to help those States design and implement effective measures to correct them. The Administrator should also be instructed to assure that the HEW Chicago regional office monitors Ohio's payment system changes to insure that timely terminations and adjustments of AFDC payments and Medicaid eligibility result and that the New York regional office determines whether the problem in New York City can be corrected.

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