Food Stamp Program: FNS Could Improve Guidance and Monitoring to Help Ensure Appropriate Use of Noncash Categorical Eligibility

GAO-07-465 Published: Mar 28, 2007. Publicly Released: Mar 28, 2007.
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In fiscal year 2005, the Department of Agriculture's (USDA) Food Stamp Program served over 25 million individuals per month, on average, providing over $28 billion in benefits for the year. To reduce the administrative burden on state agencies, current food stamp regulations allow households that receive or are authorized to receive Temporary Assistance for Needy Families (TANF) noncash services to obtain automatic eligibility for food stamps, known as categorical eligibility. TANF noncash services include any TANF noncash or in-kind benefits, such as child care and transportation aid. Under categorical eligibility, households must apply to determine if they will receive any food stamp benefits. The application process for categorically eligible food stamps is the same as for regular food stamps, except that caseworkers apply the different income and asset limits for the TANF noncash services, or those imposed by the state. Under current food stamp regulations, states must confer categorical eligibility for individuals receiving, or authorized to receive, TANF noncash services that are funded with more than 50 percent federal or state maintenance of effort (MOE) funds and serve certain TANF purposes. In addition, states have the option to confer categorical eligibility using TANF noncash services funded with less than 50 percent federal or state funds. States are required to determine that individuals are eligible for a TANF noncash service and notify them of this determination before conferring categorical eligibility, but individuals are not required to receive these services. USDA's Food and Nutrition Service (FNS), which administers the Food Stamp Program, is not required to track how states are implementing categorical eligibility, but it does sporadically collect information from the states on the nature and funding of the services used to confer categorical eligibility. The Administration has proposed eliminating TANF noncash categorical eligibility for food stamps, and the Congressional Budget Office has estimated that about 280,000 participants would no longer be eligible for food stamps in fiscal year 2008 if the proposal is implemented. Also, because food stamp eligibility confers automatic eligibility for other nutrition programs, such as the National School Lunch Program, there is some question as to how the elimination of TANF noncash categorical eligibility would affect the recipients of other nutrition programs. In this context, Congress asked us to review the implementation of TANF noncash categorical eligibility and examine the potential effect of its proposed elimination. Specifically, Congress asked us to answer the following questions: (1) How have states implemented categorical eligibility for TANF noncash recipients? (2) How do the income and asset levels of TANF noncash food stamp recipients compare to those of TANF cash food stamp recipients? (3) What is the potential effect of eliminating TANF noncash categorical eligibility on Food Stamp Program participation, administration, and state administrative costs?

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Recommendations for Executive Action

Agency Affected Recommendation Status
Food and Nutrition Service FNS should provide guidance and technical assistance to states clarifying which TANF noncash services states must use to confer categorical eligibility for food stamps and monitor states' compliance with the categorical eligibility requirements.
Closed – Implemented
In September 2009, Food and Nutrition Service (FNS) issued a memo, including a handout and flow chart, to provide guidance on the complex regulations that define and regulate categorical eligibility and to encourage states to adopt categorical eligibility policies that would expand eligibility for SNAP. FNS collects information on their implementation of categorical eligibility through its annual State Options report, and tracks states that have implemented "broad-based," categorical eligibility or "narrow-based" categorical eligibility. According to FNS, many of the states we identified at the time of our 2007 report that were potentially not following categorical eligibility rules have adopted broad-based categorical eligibility.

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