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DOCUMENT RESUME
03053 - [A2153251]
Legislation Needed to Improve Program for Reducing Erroneous
Welfare Payments. HRD-76-164; B-164031(3). August 1, 1977. 50
pp. + 2 appendices (7 pp.).
Report to the Congress; by Elmer B. Staats, Comptroller Gereral.
Issue Area: Income Security Programs: Program Monitoring and
Administration (1303).
Contact: Human Resorces Div.
Budget Function: Incomi Security: Public Assistance and Other
Income Supplements (604).,
Organization Concerned: Department of Health, Education, and
Welfare.
Congressional Relevance: House Committee on Ways and Meaas;
Senate Committee on Finance; Congress.
Authority: Social Security Act (42 U.S.C. 301 et seq.). Social
Security Amendments of 1972. H.R. 7153 (95th Cong.). S.
Rept. 93-1356. S. Rept. 87-1672. 40 Fed. Reg. 21737. 45
C.F.R. 206.10.
Some financial incentive is needed to assure that
States continue to seek appropriate corrective actions to the
high number of erroneous payments made to recipients of
aid-to-families-vith-dependent-chi idren. Findings/Conclusions:
Although error rates have declined since 1973, nearly $500
million a year in Federal funds is being misspent. The
Department of Health, Education, and Welfare (HEW) presently
lacks the means for withholding funds and bill continue to
encounter problems in implementing any financial incentive
provision administratively. Through 1976, HEW has overstated
accomplishments in reducing errors. Changes in administrativc
practices reduced errors, but they did not necessarily reduce
welfare payments. Recommendations: ' o improve the quality
control program administration, the Secretary of Health,
Education, and Welfare should revise HEW's basis for determining
program accomplishments so that savings are determined on the
basis of valid statistical projections and by considering only
error reductions that directly reduce program costs; base HEW
.eporting of State errors on dllar amounts rather than case
error rates; and assist States in identifying cost-effective
corrective actions. Congress should enact legislation to
establish an incentive to encourage better administration and
cost control for the program. Such legislation should provide
for a payment error rat6 rather than a case error rate as the
basis for measuring State accomplishments in reducing error.
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