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Highlights

Minimizing improper payments is important given the dollar magnitude of the Temporary Assistance for Needy Families (TANF) and Child Care and Development Fund (CCDF) programs--about $34 billion in federal and state funds expended annually. These block grants support millions of low-income families with cash assistance, child care, and other services aimed at reducing their dependence on the government. At the federal level, the Department of Health and Human Services (HHS) oversees TANF and CCDF. Within states, many public and private entities administer these programs and share responsibility for financial integrity. GAO looked at (1) what selected states have done to manage improper payments in TANF and CCDF and (2) what HHS has done to assess risk and assist states in managing improper payments in these programs. To address these questions, GAO judgmentally selected states that varied in geographic location and program size. GAO used a survey to collect consistent information from 11 states and visited 5 states.

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Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Health and Human Services To better assist states in managing improper payments in the TANF and CCDF programs and comply with the Improper Payments Act, the Secretary of Health and Human Services should direct the Assistant Secretary of Administration for Children and Families (ACF) to develop mechanisms to gather information on a recurring basis from all states on their internal control systems for measuring and minimizing improper payments.
Closed - Implemented
In response to our recommendation, officials within the Department of Health and Human Services'(HHS) Administration for Children and Families (ACF) have completed actions to develop mechanisms for gathering information on a recurring basis from states on their internal control systems for measuring and minimizing improper payments in the CCDF program. Specifically, ACF officials developed a tool that states can use to assess their internal controls for the CCDF program. The tool is intended to provide a systematic method for reviewing and documenting the adequacy of a State's internal control system. The results of the assessment are intended to provide a framework for ongoing technical assistance from ACF with the states regarding their internal controls over the CCDF program. Pilot testing of the tool was completed in 2006 and a final report on the results of the testing was made available May 2007. Among other things, the report documented the benefits to the state and federal government of using the tool and recommended that the tool could be used for other programs which could include the TANF program. Officials also took action to gather information for the TANF program by surveying states in 2006 to collect information on their activities to manage and reduce TANF improper payments. The results of the survey were made available at the end of September 2006. The results included information on internal controls that the states use in managing improper payments such as written policies and procedures. This information should help HHS/ACF better determine the effectiveness of existing controls and if any additional controls are needed for reducing TANF improper payments.
Department of Health and Human Services To better assist states in managing improper payments in the TANF and CCDF programs and comply with the Improper Payments Act, the Secretary of Health and Human Services should direct the Assistant Secretary of ACF to follow through on efforts to identify practices that states think are effective in minimizing improper payments and facilitate sharing of these with other states.
Closed - Implemented
Officials within the Department of Health and Human Services'(HHS) Administration for Children and Families (ACF) have completed actions to identify practices that states think are effective in minimizing improper payments for the TANF and CCDF programs and facilitated sharing of the practices with other states. Specifically, HHS/ACF officials administered surveys to state officials responsible for the TANF and CCDF programs and in response to the surveys, 24 states voluntarily provided information on the methods they use for identifying and minimizing improper payments. HHS compiled the TANF survey results and created a website to serve as a repository to facilitate sharing these practices with other states. The TANF results were made available by the end of September 2006. Similarly, the results of the CCDF survey were compiled and the final report of the results was dated May 2007 and made available on the ACF website. This effort has provided HHS with valuable information to determine the extent to which states' controls are sufficient to protect the TANF and CCDF programs from significant levels of improper payments and should help HHS determine if any additional controls are needed for reducing TANF improper payments.
Department of Health and Human Services To better assist states in managing improper payments in the TANF and CCDF programs and comply with the Improper Payments Act, the Secretary of Health and Human Services should direct the Assistant Secretary of ACF to where appropriate, partner with states to assess the cost-effectiveness of selected practices.
Closed - Implemented
Officials within the Department of Health and Human Services'(HHS) Administration for Children and Families (ACF) have completed actions to partner with states to assess the cost-effectiveness of selected practices used by states to minimize improper payments. The survey sent to state officials responsible for the CCDF program to gather information on practices used to address improper payments, included guidance for developing cost benefit-analysis for practices used by states. The survey provided guidance on how to determine the time involved and costs of practices such as overpayments processing and recovery activities. It also provided guidance on how to document the benefits gained from these activities. Using the guidance, one state (Connecticut) prepared a sample cost-benefit analysis of its overpayment processing and recovery activities as well as cost-benefit analysis of other activities. ACF officials included Connecticut's example in the May 2007 final survey report to share with other states. These actions should enable HHS to better help states assess the effectiveness of practices used to address improper payments.
Department of Health and Human Services To better assist states in managing improper payments in the TANF and CCDF programs and comply with the Improper Payments Act, the Secretary of Health and Human Services should direct the Assistant Secretary of ACF to explore the feasibility of expanding PARIS to include CCDF, in addition to TANF, including a study of the cost-effectiveness of such a plan.
Closed - Implemented
Officials within the Department of Health and Human Services'(HHS) Administration for Children and Families (ACF) completed actions to explore the feasibility of expanding the Public Assistance Reporting Information System (PARIS) to the CCDF program and study the cost-effectiveness of such an expansion. PARIS is designed to match state enrollment data from the TANF, Food Stamp, and Medicaid programs with data from other participating states and from a selected group of Federal databases. On June 30, 2007, ACF officials issued a report, "Evaluation to Determine the Effectiveness of PARIS". This report discussed actions taken to expand the programs included in the PARIS data match. According to the report, ACF is working to expand PARIS to include CCDF/child care payments in the database. In addition, the report also discusses four cost/benefit models that the states can use in determining if using the PARIS data match is cost beneficial. These actions should enable HHS to better assist states in managing improper payments associated with the TANF and CCDF programs.

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