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

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.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

Director: Joseph F. Delfico Team: General Accounting Office: Human Resources Division Phone: (202) 512-7215