AFDC Recipients Who Are Terminated for Not Submitting a Monthly Eligibility Report May Be Receiving Undetected Overpayments

HRD-83-70: Published: Jul 20, 1983. Publicly Released: Jul 20, 1983.

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GAO reviewed compliance with the intent and specific provisions of the Omnibus Budget Reconciliation Act of 1981 as it applies to the Aid to Families with Dependent Children (AFDC) program.

Title XXIII of the act contains provisions to retarget scarce financial resources by limiting AFDC eligibility and benefits to the truly needy, achieve cost savings through more efficient program administration, and require retrospective budgeting and monthly reporting under the AFDC program. GAO noted that 43 of the 50 States either already have or are in the process of implementing the AFDC monthly reporting requirement combined with a 2-month retrospective budgeting process. While 2 months allows the administering agency time to adjust benefits, the reporting sequence does not provide timely information on basic program eligibility. GAO found that States which utilize 2-month retrospective budgeting systems in conjunction with monthly reporting are susceptible to making undetected overpayments when recipients do not report changes affecting their eligibility and are discontinued from the rolls. Further, GAO found that there is no incentive for an ineligible recipient to submit a monthly report and, by not doing so, there is an opportunity to receive an unwarranted benefit.

Recommendation for Executive Action

  1. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Commissioner of Social Security should assess the magnitude of AFDC overpayments going undetected when recipients are terminated for monthly reporting noncompliance and, if warranted by the results of the assessment, develop a cost effective solution to avoid or minimize the overpayments.

    Agency Affected: Social Security Administration


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