    Means-Tested Programs: Information on Program Access Can Be an
    Important Management Tool (11-MAR-05, GAO-05-221).

    Federal agencies that administer means-tested programs are
    responsible for both ensuring that people have appropriate access
    to assistance and ensuring the integrity of the programs they
    oversee. To balance these two priorities appropriately, it is
    important for agencies to have information on program integrity
    and program access. Knowing the proportion of the population that
    qualifies for these programs relative to the numbers who actually
    participate can help ensure that agencies can monitor and
    communicate key information on program access. To better
    understand participation in low-income programs, this report
    provides information on: (1) the proportion of those eligible who
    are participating in 12 selected low-income programs; (2) factors
    that influence participation in those programs; and (3)
    strategies used by federal, state, and local administrators to
    improve both access and integrity, and whether agencies monitor
    access by measuring participation rates.
    -------------------------Indexing Terms-------------------------
    REPORTNUM:   GAO-05-221
        ACCNO:   A19137
      TITLE:     Means-Tested Programs: Information on Program Access Can
    Be an Important Management Tool
         DATE:   03/11/2005
      SUBJECT:   Child care programs
    	     Disadvantaged persons
    	     Entitlement programs
    	     Federal aid programs
    	     Federal aid to states
    	     Federal social security programs
    	     Food programs for children
    	     Food relief programs
    	     Housing programs
    	     Income maintenance programs
    	     Medicaid
    	     Program management
    	     Public assistance programs
    	     Statistical data
    	     Strategic planning
    	     Family support programs
    	     Vouchers
    	     Earned Income Tax Credit
    	     Federal Pell Grant Program
    	     Food Stamp Program
    	     Head Start Program
    	     HHS Child Care and Development Fund
    	     HUD Housing Choice Voucher Program
    	     HUD Public Housing Program
    	     Special Supplemental Nutrition Program
    	     for Women, Infants and Children

    	     SSA Supplemental Security Income
    	     Program

    	     State Children's Health Insurance
    	     Program

    	     Temporary Assistance for Needy Families
    	     Program

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    GAO-05-221

    United States Government Accountability Office

    GAO Report to the Ranking Minority Member, Committee on the Budget, House
    of Representatives

    March 2005

    MEANS-TESTED PROGRAMS

           Information on Program Access Can Be an Important Management Tool

    GAO-05-221

    [IMG]

    March 2005

    MEANS-TESTED PROGRAMS

    Information on Program Access Can Be an Important Management Tool

                                     What GAO Found

    For 12 federal programs supporting low-income people, we found that the
    proportion of those eligible who are enrolled varies substantially both
    between and within programs. Among entitlement programs-those programs
    that provide benefits to all applicants that meet program eligibility
    criteria-these rates range from about 50 to more than 70 percent. Among
    non-entitlement programs-those with limited funding-these rates ranged
    from less than 10 percent to more than 50 percent. While it may be neither
    feasible nor desirable for programs to serve 100 percent of those eligible
    for benefits, information on the share of those eligible who are enrolled
    in means-tested programs and on particular recipient groups such as the
    elderly or families with children, can help program managers more
    effectively address issues related to program access. However,
    participation rate estimates must be interpreted carefully because of
    limitations in the data sources and estimation methodologies used to
    calculate the estimates.

    Many factors influence access to low-income programs-including the type of
    benefits, ease of access, misperceptions about program requirements, and
    application and eligibility verification procedures. These factors can
    impact not only the share of eligible people who participate in low-income
    programs, but other aspects of program access as well, including the
    composition of the program caseload and how programs work together to
    serve low-income individuals and families.

    Federal, state, and local administrators have implemented many strategies
    to achieve the goals of access and integrity, but federal agencies
    generally put more emphasis on tracking information and outcomes related
    to program integrity than program access. To better ensure that program
    administrators achieve program integrity goals, agencies have begun to
    develop measures to track and report on program integrity. Federal
    agencies have developed participation rate estimates for several
    low-income programs, but only four-CCDF, food stamps, WIC, and EITC-either
    currently collect and report information on the extent to which they are
    reaching their target populations or plan to do so. Such information can
    guide administrators in setting priorities and targeting scarce resources,
    even among programs that were not intended to serve everyone eligible for
    program benefits.

    Health and Human Services Agriculture Department Temporary Assistance for
    Needy Families . Food Stamps Child Care and Development Fund . Women,
    Infants, and Children Nutrition Head Start Internal Revenue Service
    Medicaid . Earned Income Tax Credit

    State Children's Health Insurance Program Social Security Administration
    Housing and Urban Development . Supplemental Security Income

    Housing Choice Vouchers Education DepartmentPublic Housing . Earned Income
    Tax Credit

    Source: GAO.

    United States Government Accountability Office

    Contents

    Letter

    Results in Brief
    Background
    Use of Federal Low-Income Assistance Varies Greatly by Program

    and by Subgroup
    Many Factors Influence Participation but Their Impact on
    Entitlement and Non-Entitlement Programs Differs

    Program Administrators Have Strategies That Improve Both
    Access and Integrity, but Federal Agencies Have Generally
    Focused More on Measuring Program Integrity Outcomes

    Conclusion
    Recommendations to Executive Agencies
    Agency Comments

                                           1

                                          3 5

    11

    28

    35 47 48 50

    Appendix I Objectives, Scope, and Methodology

    Appendix II	Limitations Affecting Use of Participation and Coverage Rates

    Appendix III	Agency Estimates of Improper Payments for Programs Reviewed

    Appendix IV Comments from the Department of Education

    Appendix V	Comments from the Department of Health and
    Human Services 68

    Appendix VI Comments from the Department of the Treasury 78

            Appendix VII Comments from the Social Security Administration 80

    Appendix VIII GAO Contacts and Staff Acknowledgments 83

    GAO Contacts 83 Staff Acknowledgments 83

    Related GAO Products

    Tables

    Table 1: Fiscal Year 2003 Annual Expenditures and Agencies Responsible for
    Administering 12 Selected Low-Income Programs

    Table 2: Descriptions of 12 Low-Income Programs Table 3. Level of
    Government Responsible for Funding and Design of 12 Low-Income Programs
    Table 4: Estimated Participation Rates for Entitlement Programs for the
    Most Recent Year Data Were Available

    Table 5: Available Subgroup Participation Rate Estimates for Entitlement
    Programs for the Most Recent Year Data Were Available

    Table 6: Estimated Coverage Rates for Non-Entitlement Programs for the
    Most Recent Year Data Were Available

    Table 7: Coverage Rate Estimates for TANF Cash Assistance and WIC
    Subgroups for the Most Recent Year Data Were Available

    Table 8: Potential Cost of Providing Benefits to Eligible Nonparticipants
    for the Most Recent Year Data Were Available Table 9: Status of Agencies
    Identification of and Reporting on the Amounts of Improper Payments by
    Program

    Table 10: Status of Agencies Efforts to Use Information on Participation
    or Coverage Rates in Managing Their Programs

    Table 11: Summary of Participation and Coverage Rate Methodologies Table
    12: Improper Payment Estimates Reported in Agency Fiscal Year 2003
    Performance and Accountability Reports

                                          6 7

                                           9

                                           12

                                         14 19

    22 26 43

    45 54 65

    Figures

    Figure 1: Food Stamp Participation Rate Estimates for Fiscal Years 1999 to
    2002 17 Figure 2: Head Start Coverage Rate Estimates for 1997 to 2003 24

    Abbreviations

    ACF Administration for Children and Families
    CCDF Child Care and Development Fund
    CMS Centers for Medicare & Medicaid Services
    CPS Annual Social and Economic Supplement to the

    Current Population Survey ED Department of Education EITC Earned Income
    Tax Credit FNS Food and Nutrition Service FRED Fraud Early Detection FY
    fiscal year HCV Housing Choice Vouchers HHS Department of Health and Human
    Services HIPAA Health Insurance Portability and Accountability Act HUD
    Department of Housing and Urban Development IPIA Improper Payments
    Information Act IRS Internal Revenue Service NRC National Research Council
    OMB Office of Management and Budget PRWORA Personal Responsibility and
    Work Opportunity

    Reconciliation Act SCHIP State Children's Health Insurance Program SIPP
    Survey of Income and Program Participation SSA Social Security
    Administration SSBG Social Security Block Grant SSI Supplemental Security
    Income program TANF Temporary Assistance for Needy Families TRIM3 Transfer
    Income Microsimulation Model, version 3 USDA Department of Agriculture WIC
    Special Supplemental Nutrition Program for Women

                                 Infants, and Children

    This is a work of the U.S. government and is not subject to copyright
    protection in the United States. It may be reproduced and distributed in
    its entirety without further permission from GAO. However, because this
    work may contain copyrighted images or other material, permission from the
    copyright holder may be necessary if you wish to reproduce this material
    separately.

    United States Government Accountability Office Washington, DC 20548

    March 11, 2005

    The Honorable John M. Spratt, Jr.
    Ranking Minority Member
    Committee on the Budget
    House of Representatives

    Dear Mr. Spratt:

    Each year through more than 80 means-tested programs, the federal
    government provides benefits and services to individuals and families with
    low incomes-just 12 of which account for as much as $330 billion in
    annual federal expenditures. As stewards of these funds, federal agencies
    have many roles, among them: to ensure that people have appropriate
    access to this assistance and to ensure the integrity of these programs by
    guarding against improper payments and unqualified participation. These
    responsibilities can be complementary, but they can also be practiced in
    ways that work at cross purposes. Outreach without appropriate
    screening, for example, can result in service to the wrong recipients, but
    cumbersome enrollment procedures can discourage those who qualify
    from applying. To meet requirements related to the Improper Payments
    Information Act of 2002, federal agencies administering these programs
    will be required to institute new steps to assure integrity by annually
    measuring and reporting improper payments. As they step-up efforts to
    ensure integrity, they will be challenged, as well, to ensure appropriate
    access. Without a sense of the proportion of the population that qualifies
    for these programs relative to the numbers who actually participate,
    however, it may be difficult for most agencies to know whether they have
    struck an appropriate balance in the weight of their strategies and
    whether
    they need to pursue methods that better serve both access and integrity.

    To better understand participation in low-income programs, we have
    agreed to provide you information on: (1) the proportion of those eligible
    who are participating in 12 selected low-income programs; (2) the factors
    that influence participation in those programs; and (3) strategies used by
    federal, state, and local administrators to improve both access and
    integrity, and whether agencies monitor access by measuring participation
    rates. The 12 programs included in this review are among the largest and
    were selected to cover a range of benefits and services aimed at
    supporting needy families and individuals. They include: the Child Care
    and Development Fund (CCDF), the Earned Income Tax Credit (EITC),

    the Special Supplemental Nutrition Program for Women, Infants, and
    Children (WIC), the Food Stamp Program, the Supplemental Security Income
    program (SSI), the Head Start program, the Pell Grant program, the
    Medicaid program, the State Children's Health Insurance Program (SCHIP),
    the Temporary Assistance for Needy Families (TANF) program, the Housing
    Choice Voucher (HCV) program, and the public housing program.

    To address our research objectives, we compiled estimates of the
    proportion of those eligible who participate in each of the programs for
    the most recent year for which data were available1 using different
    methodologies. We refer to this proportion as a participation rate when
    discussing entitlement programs and other programs that provide program
    benefits to all eligible applicants: EITC, food stamps, Medicaid, Pell
    Grants, and SSI. We refer to it as a coverage rate when discussing
    nonentitlement programs that do not necessarily provide benefits to all
    eligible individuals who apply for the program: CCDF, Head Start, Housing
    Choice Vouchers, Public Housing, SCHIP, TANF, and WIC. For seven programs,
    we contracted with the Urban Institute to provide us with information
    about their microsimulation model estimates of participation rates.2 These
    model estimates are also used to calculate estimates of the potential cost
    of serving eligible nonparticipants in a subset of programs. For the
    remaining programs, we provide participation or coverage rate estimates
    based on administrative and national survey data. We held discussions with
    federal agency officials to discuss the reliability of program data used
    in our estimates, reviewed related documentation, and ensured that the
    agencies conducted tests of the data for omissions and errors. In
    addition, we reviewed literature on factors that influence participation
    in the 12 programs covered by the review and strategies to improve program
    access and program integrity. We surveyed and interviewed the federal
    agencies that administer the 12 programs on factors they have identified
    that influence program participation and on

    1The most recent participation rate estimates are available for the years
    1999 to 2003 depending on the program.

    2The Transfer Income Microsimulation Model (TRIM3), developed by the Urban
    Institute and funded by HHS, uses national survey data from the Annual
    Social and Economic Supplement to the Current Population Survey (CPS), the
    Survey of Income and Program Participation (SIPP), the National Survey of
    America's Families, and information on eligibility rules to estimate the
    population eligible for means-tested programs, including CCDF, food
    stamps, Medicaid, SCHIP, SSI, TANF, and WIC. The model estimates the
    amount each individual or household would receive based on their
    characteristics.

      Results in Brief

    strategies they have implemented to improve program access and program
    integrity. In addition, we interviewed federal, state, and local program
    administrators of various programs in California, Connecticut, Georgia,
    Maryland, and Minnesota, on factors that affect participation and
    strategies they have employed to address the goals of program access and
    program integrity. These states were chosen on the basis of innovative
    programs and initiatives related to program integrity and program access
    and demographic and geographic diversity. We performed this work between
    November 2003 and January 2005 in accordance with generally accepted
    government auditing standards. See appendix I for additional information
    on scope and methodology.

    For 12 federal programs supporting low-income people, we found that the
    proportion of those eligible who are actually enrolled varies
    substantially both between programs and among subgroups enrolled in a
    single program. Given the differences in the goals, design,
    administration, and funding of the 12 programs, it is not surprising that
    we found substantial variation in these proportions. For entitlement
    programs-those designed to support all those who qualify-the estimated
    proportion of eligible people who were enrolled ranged from about 50
    percent to more than 70 percent. For example, approximately three-quarters
    of those who were eligible took advantage of the Earned Income Tax Credit
    program in 1999, the most recent year for which data were available. For
    nonentitlement programs-those with limited funding and not necessarily
    intended to cover all eligible persons-the estimated proportion of the
    eligible who were enrolled ranged from less than 10 percent to more than
    50 percent. In the Head Start program, for example, funded enrollment was
    sufficient to cover half of all potentially eligible children in 2003.
    Within some programs, we found that some subpopulations were enrolled in
    different proportions than other groups. For example, in the Food Stamp
    Program, the participation rate for families with children was higher than
    the participation rate for other groups. Some evidence shows that
    enrollees tended to be those among the eligible who had greater needs-as
    indicated by the levels of assistance for which they qualified. While
    information on participation rates can help program managers more
    effectively address issues related to program access, several factors must
    be taken into consideration when interpreting this information. For
    example, because of limitations of the data and methodologies used to
    measure rates of participation, we could not make statistically reliable
    comparisons across programs nor could we describe fluctuations over time
    for most programs.

    The size and type of program benefits, ease of access, misperceptions
    about program requirements and eligibility verification requirements put
    in place to ensure program integrity can affect program access in both
    entitlement and non-entitlement programs. For example, agency officials
    told us that participation in the WIC program is highest among infants in
    part because infants are eligible for the highest benefits, but that
    factors such as extended office hours can also impact participation. The
    factors we identified can affect several aspects of program access,
    including not only the number of program participants, but also the extent
    to which programs reach the total population eligible for benefits and
    services, how well agencies are allocating resources among targeted
    subpopulations, and, from an agencywide or even governmentwide
    perspective, how well specific means-tested programs complement and
    interact with programs that serve similar populations or provide for
    similar needs. While concerns about the allocation of scarce resources and
    interactions with other programs apply to all low-income programs, they
    may be of particular importance to non-entitlement programs whose
    participation is limited by funding constraints. Participation or coverage
    rate information can guide program administrators in setting priorities
    and targeting scarce resources, even among programs that were not intended
    to serve everyone eligible for program benefits.

    Federal, state, and local administrators have implemented a variety of
    strategies to achieve both program access and program integrity, but
    federal agencies generally put more emphasis on tracking information and
    outcomes related to program integrity than program access. Through federal
    agency surveys and site visits, we identified several strategies currently
    being used that have the potential to achieve two of the fundamental goals
    common to all means-tested programs-program access and program integrity.
    These strategies ranged from innovative use of information technology to
    special outreach programs; some were in use nationwide and others were
    state or local efforts. The initiation and control of these strategies is
    often beyond the direct control of the federal agencies managing the
    programs. However, federal managers do play a role in that they encourage
    and facilitate such strategies, even in the most decentralized program, by
    emphasizing the importance of program access and program integrity-even
    absent specific related laws or regulations related to these issues. The
    Improper Payments Information Act of 2002 has built upon existing
    govermentwide efforts to emphasize to federal agencies the importance of
    having an internal control framework to address program integrity issues.
    At the same time, internal controls are important management tools to
    ensure that agencies meet their basic goals of reaching eligible families.
    The federal agencies that oversee these

    entitlement and non-entitlement programs can benefit from having up-todate
    information on the extent to which their programs reach eligible
    individuals. However, while all of the programs we reviewed have begun to
    take steps to measure the extent of improper payments and all make efforts
    to assess how well their programs are working, only four of the programs
    we covered in this review-CCDF, food stamps, WIC, and EITC-either
    currently collect and report information on the extent to which they are
    reaching their target populations in key performance and program reports
    or plan to do so.

    To better ensure that agencies have information on program access, we
    recommend to the Secretaries and Commissioners whose programs do not
    currently use participation rate information to consider the use of
    participation rate information in managing their programs. We also make
    some technical recommendations on how the usefulness of these measures
    could be improved. The agencies generally agreed with these
    recommendations.

    Background 	The federal government funds a wide array of programs intended
    to provide benefits or services to low-income individuals, families, and
    households. The 12 programs included in this review include the largest of
    these programs, Medicaid, as well as some relatively small programs such
    as WIC. The 12 programs are administered by seven different federal
    agencies.3 Table 1 shows the agencies responsible for each program and
    federal expenditures for fiscal year 2003, the most current year
    available.

    3Two of these agencies, the Centers for Medicare & Medicaid Services and
    the Administration for Children and Families, are part of the Department
    of Health and Human Services.

    Table 1: Fiscal Year 2003 Annual Expenditures and Agencies Responsible for
    Administering 12 Selected Low-Income Programs

                                                                  FY 2003 federal
                                                                   expenditures a
             Program                    Agency              (dollars in billions)
              CCDF          Department of Health and Human                   $7.3
                                       Services
                              (HHS), Administration for
                                     Children and
                                    Families (ACF)
              EITC         Department of Treasury, Internal                 37.9b
                                       Revenue
                                    Service (IRS)
                              Department of Agriculture
    Food Stamp Program            (USDA), Food
                             and Nutrition Service (FNS)
           Head Start                  HHS/ACF
         Housing Choice                                                     13.4c
         Voucher Program   Department of Housing and Urban
                             Development (HUD), Office of
                                      Public and
                                    Indian Housing
            Medicaid         HHS, Centers for Medicare &                    160.7
                                       Medicaid
                                    Services (CMS)
    Federal Pell Grant   Department of Education (ED),
             Program                  Office of
                                 Federal Student Aid
         Public Housing    HUD, Office of Public and Indian                  7.6d
             Program                   Housing
              SCHIP                    HHS/CMS
               WIC                     USDA/FNS
               SSI          Social Security Administration
                                        (SSA)
              TANF                     HHS/ACF                              $16.3

    Source: Federal agency officials.

    aThis includes the total amount of federal expenditures in fiscal year
    2003, which is the most recent year for which these data were available.
    It includes current and prior year federal funds expended in fiscal year
    2003; it does not include state expenditures.

    bThis includes both credits paid out in refunds and reduced tax
    liabilities.

    cThis includes funding for the housing choice voucher and moderate
    rehabilitation programs.

    dThis includes expenditures for the public housing capital fund, the
    public housing operating fund, and revitalization of severely distressed
    public housing (HOPE VI).

    These programs provide different benefits and services to different target
    populations. Some of the programs provide benefits that phase out
    gradually, so some people may be eligible for a very low benefit. For
    example, in fiscal year 2005, monthly food stamp benefits for a
    threeperson household can be as low as $1 per month. Other programs, such
    as Medicaid, generally offer comparable benefits to every resident of a
    state who meets eligibility requirements. Table 2 provides a brief
    description of each of the programs covered in this report and the types
    of benefits offered by each program.

    Table 2: Descriptions of 12 Low-Income Programs

    Program Description

    CCDF 	The Personal Responsibility and Work Opportunity Reconciliation Act
    of 1996 (PRWORA) authorized CCDF to help provide child care to low-income
    families and to give states more flexibility to design child care
    policies. CCDF is funded through an annual block grant to states and
    required state funds and may also include transfers from TANF. States are
    permitted to transfer up to 30 percent of their TANF block grant to CCDF.
    Under CCDF, child care services are available to eligible families through
    certificates or contracts with providers, and parents may select any
    legally operating child care provider, including home-based or
    center-based providers.

    EITC	EITC is a refundable federal tax credit available to eligible workers
    earning relatively low incomes. Because the credit is refundable, a person
    does not need to owe taxes to receive benefits. EITC is based on earned
    income, adjusted gross income, and the presence of qualifying children, if
    any. Under current law, there are three categories of EITC recipients:
    childless adults, adults with one child, and adults with two or more
    children.

    Food Stamps 	The Food Stamp Program is the primary source of nutrition
    assistance for many low-income households. It enables eligible low-income
    households to buy nutritious food with electronic benefit cards at
    authorized retail food stores across the country. State and local welfare
    offices operate the program, and the federal government oversees the state
    operation of the program. Participants must meet income and resource
    standards and be U.S. citizens or eligible non-citizens, and all
    able-bodied individuals between 16 and 60 without dependents must register
    for work, take part in an employment and training program, or accept or
    continue suitable employment. Households with incomes are expected to
    spend about 30 percent of their income, after certain deductions, on food.

    Head Start 	Head Start provides comprehensive developmental services for
    low-income, pre-school children ages 3 to 5, and social services for their
    families. Services can be provided through either a half-day or a full-day
    program. Head Start provides diverse services in four components:
    education, health, parent involvement, and social services. Grants are
    awarded to about 1,400 local public or private non-profit agencies, and
    the community must contribute about 20 percent of the total cost of a Head
    Start program.

    Housing Choice Vouchers 	The Housing Choice Voucher program is the federal
    government's major program for assisting very low-income families, the
    elderly, and the disabled with their housing needs. HUD gives public
    housing agencies the funds to administer the program. Participants use
    vouchers to find their own housing, including single-family homes,
    townhouses and apartments. The voucher recipient pays the difference
    between the actual rent charged by the landlord and the amount subsidized
    by the program. Generally, the subsidy allows the tenant to pay no more
    than 30 percent of adjusted monthly income towards the rent and utilities.

    Medicaid 	Medicaid (title XIX of the Social Security Act) is a
    federal/state entitlement program that generally provides health insurance
    coverage for low-income families and individuals who are aged or disabled.
    Medicaid is the largest source of funding for medical and health-related
    services for America's poorest people. Within broad federal guidelines,
    each state can (1) establish its own eligibility standards; (2) determine
    the type, amount, duration, and scope of services; (3) set the rate of
    payment for services; and (4) administer its own program. Medicaid
    policies for eligibility, services, and payment are complex and vary
    considerably, even among states of similar size or geographic proximity.

    Pell Grant 	The Pell Grant program provides grants (i.e., aid that does
    not have to be repaid) to needy undergraduates. It is the largest source
    of grant aid for postsecondary education attendance funded by the federal
    government and provided an estimated $13.1 billion to students in fiscal
    year 2004. Pell Grants are intended to be the foundation for all federal
    aid awarded to undergraduates and constituted an estimated 19 percent of
    all federally supported aid in fiscal year 2004 that benefited
    postsecondary education students. For fiscal year 2004-2005, grants ranged
    from $400 to $4,050.

    Program Description

    Public Housing 	Public housing was established to provide decent and safe
    rental housing for eligible low-income families, the elderly, and persons
    with disabilities. Public housing comes in all sizes and types, from
    scattered single family houses to high-rise apartments for elderly
    families. HUD contributes both capital and operating funds to local
    housing agencies that manage the housing for low-income residents at rents
    they can afford. HUD also furnishes technical and professional assistance
    in planning, developing, and managing these developments.

    SCHIP 	As part of the Balanced Budget Act of 1997, Congress created SCHIP
    as a federal/state partnership, similar to Medicaid, with the goal of
    expanding health insurance to low-income children-i.e., those children
    whose families earn too much money to be eligible for Medicaid, but not
    enough money to purchase private insurance. States can (1) use SCHIP funds
    to expand Medicaid eligibility to children who previously did not qualify
    for the program; (2) design a children's health insurance program entirely
    separate from Medicaid; or (3) combine both the Medicaid and separate
    program options.

    WIC	WIC provides supplemental foods to low-income women, infants, &
    children up to age 5 who are at nutritional risk. The WIC target
    population consists of low-income, nutritionally at risk: pregnant and
    breastfeeding women; nonbreastfeeding postpartum women; infants (up to 1st
    birthday), and children up to their 5th birthday. It provides supplemental
    nutritious foods, including infant formula; nutrition education and
    counseling at WIC clinics; and screening and referrals to other health,
    welfare and social services.

    SSI 	The SSI program, title XVI of the Social Security Act, was enacted in
    1972 and implemented in 1974 to ensure a minimum cash income to all aged,
    blind, or disabled persons. SSI is provided to eligible individuals or
    couples who have limited income and resources (the countable resource
    limit is $2,000 for an individual and $3,000 for a couple). Federal SSI
    benefits are paid from federal general revenues, but many states also
    supplement payments.

    TANF	The Personal Responsibility and Work Opportunity Reconciliation Act
    of 1996 (PRWORA) replaced Aid to Families with Dependent Children (AFDC)
    with TANF, which marked the end of federal entitlement to assistance. TANF
    ended unlimited matching funding for family cash welfare and created
    fixed-block grants to states. The block grant covers benefits,
    administrative expenses, and services targeted to needy families and gives
    states great flexibility to design their own TANF programs. PRWORA imposed
    a 5-year limit on TANF cash assistance paid with federal funds and
    required states to achieve minimum participation rates in federally
    recognized work activities. In addition, they must spend a specified
    amount of state funds on eligible low-income families-at least 75 percent
    of the state funds they spent in fiscal year 1994, known as the
    maintenance-of-effort requirement. States may use these funds to pay for
    separate state programs.

                                 Program Administration

    Source: Federal agency documents.

    The programs covered by this review represent both entitlement and non
    entitlement programs; programs that are administered entirely by federal
    agencies and those that are administered through federal partnerships
    with state and/or local agencies; programs that allow substantial state
    and
    local variation and those that provide uniform benefits throughout the
    country. Table 3 summarizes the level of government with whom
    responsibility for funding and design resides for each of the
    12 programs.

    Table 3. Level of Government Responsible for Funding and Design of 12
    Low-Income Programs

                               Program    Fundinga           Designb  Entitlement
                                  EITC    Federal            Federal          Yes
                    Food Stamp Program    Federal            Federal          Yes
                              Medicaid Federal/state  Federal/state           Yes
                                   SSI    Federalc           Federal          Yes
                           Pell Grants    Federal            Federal           No
                                  CCDF Federal/state  Federal/state            No
                            Head Start    Federal     Federal/local            No
                Housing Choice Voucher    Federal            Federal           No
                        Public Housing    Federal            Federal           No
                                 SCHIP Federal/state  Federal/state            No
                  TANF cash assistance Federal/state  Federal/state            No
                                   WIC    Federal            Federal           No

    Program Performance Management

    Source: GAO.

    aDefined as the level of government that supplies the primary source of
    funding for the support. If substantial funding comes from more than one
    source, we list both sources. Some additional funding may come from
    sources not listed in the table.

    bDefined as the level of government that is primarily responsible for
    availability, eligibility, and benefit amount determination.

    cSome states contribute to the SSI program, but state funding is not
    required and is not provided in all states.

    Although state and local agencies responsible for administering several of
    the programs have some control over program design and implementation,
    primary responsibility for setting priorities, guiding policy, and
    measuring performance rests with the federal agencies that oversee the
    programs. The programs covered by this review may have many different
    goals and objectives of varying degrees of importance, but all of these
    programs- regardless of size, target population, funding structure, or
    types of benefits offered-were established to assist persons with limited
    income, and as such, all were tasked with the overarching goal of reaching
    and serving those eligible for program benefits or services. Likewise, all
    means-tested programs share the common goal of ensuring that the funds
    allocated for program benefits are provided only to those eligible.

    A key factor in achieving desired program outcomes, including program
    access and program integrity, is the implementation of appropriate
    internal control. As discussed in our prior work on this topic, internal
    control is an integral component of an organization's management that

    provides reasonable assurance that agencies are achieving outcomes related
    to the effectiveness and efficiency of operations and compliance with laws
    and regulations, among other things.4

    Federal agencies have several key management tools and program reports
    that they use to provide information about the programs they administer,
    develop policy, help with management decision-making, and help focus
    program administrators at all levels of government on achieving the
    federal agency's highest priorities. For example, through their strategic
    and annual performance plans and accountability reports, federal agencies
    set program goals, measure program performance against those goals, and
    report publicly on their progress. Some programs also issue annual or
    biennial reports to Congress on specific programs they administer; these
    generally include important program information.

    A number of governmentwide initiatives have resulted in increased emphasis
    by program managers on program integrity issues, including OMB guidance,
    the President's Management Agenda, GAO's High-Risk series and the Improper
    Payments Information Act of 2002 (IPIA). The IPIA requires the head of
    each federal agency to annually review all programs and activities that
    the agency administers and to identify all such programs and activities
    that may be susceptible to significant improper payments.5 For each
    program and activity identified, the agency is required to estimate the
    annual amount of improper payments and submit those estimates to Congress
    before March 31 of the following applicable year. OMB guidance then
    directs federal agencies to include a measure of improper payments in
    their annual Performance and Accountability Reports. All 12 programs we
    reviewed are subject to these requirements.

    4See GAO, Standards for Internal Control in the Federal Government,
    GAO/AIMD-00-21.3.1(Washington, D.C.: Nov. 1999).

    5Improper payments can include both overpayments and underpayments.

      Use of Federal Low-Income Assistance Varies Greatly by Program and by Subgroup

    The proportion of those eligible who are actually enrolled in 12 selected
    low-income programs varies substantially both between and within programs,
    but several factors must be considered to understand the implications of
    this information for program access. The estimated proportion of eligible
    people who were enrolled in entitlement programs- those designed to
    support all those who apply and qualify-ranged from about 50 percent to
    more than 70 percent. In contrast, the estimated proportion of the
    eligible who were enrolled in non-entitlement programs-those with limited
    funding and not necessarily intended to cover all eligible persons-ranged
    from less than 10 percent to about 50 percent. Within programs, we found
    that subpopulations were enrolled in different proportions. Some evidence
    also suggests that enrollees in some programs, such as the Food Stamp
    Program, tend to be those who are eligible for larger benefit amounts.

    For Entitlement Programs, the Proportion of Those Eligible Who Were
    Enrolled Ranged from about 50 Percent to More Than 70 Percent, but
    Participation Rates Are Higher among Some Groups

    For four of the five entitlement programs we examined, the proportion of
    eligible people who were enrolled varied from around 50 percent in the
    Food Stamp Program to more than 70 percent in the EITC and SSI programs;
    and within programs, different types of participants, such as children or
    the elderly, were enrolled in varying proportions.6 Table 4 provides
    estimated participation rates for each of these programs, expressed in
    ranges to reflect potential errors in sample survey data. The actual
    participation rates may be outside the range of estimates shown because
    some types of uncertainty in the estimation of participation rates cannot
    be quantified. Estimates for the Food Stamp, Medicaid and SSI programs
    were developed by the Urban Institute under contract with HHS and Food
    Stamp Program estimates were developed by Mathematica Policy Research,
    Inc., under contract with USDA. HHS and USDA are the only two agencies to
    regularly estimate participation rates in low-income programs. We
    estimated the EITC participation rate for 1999. However, we were unable to
    estimate an enrollment rate for the Pell Grant program because of concerns
    about the reliability of some of the data needed to estimate the rate.

    6While the Pell Grant program is not an entitlement program, we have
    included it in this group because program administrators told us that they
    manage it to allow all eligible people who apply to receive benefits.

    Table 4: Estimated Participation Rates for Entitlement Programs for the
    Most Recent Year Data Were Available

                                                               Participation rate
                                                                      estimates b
                              Program (year)a Eligibility unit       (in percent)
                                  EITC (1999)       Households                75c
                   Food Stamp Program (2001):      dHouseholds              46-48
                          HHS/Urban Institute
              (2002): USDA/Mathematica Policy       Households                48e
                               Research, Inc.
                                                   Individuals                54f
                              Medicaid (2000)     Individualsg              66-70
                                  Pell Grants    Not available     Not availableh
                                              Individuals and
                                   SSI (2001) married
                                                     i couples              66-73

    Sources: GAO's analysis of CPS and IRS survey data and data from the Urban
    Institute's TRIM3 model and Mathematica Policy Research, Inc.

    aAll estimates are for the calendar year indicated in the table, except
    the food stamp estimates created by Mathematica, which are for fiscal year
    2002.

    bThis range represents a 95 percent confidence interval based on estimated
    sampling error in the national survey data. This interval does not take
    into account errors introduced by the modeling process or by
    administrative data. We assessed but did not quantify these errors.

    cThe EITC participation rate shown has a sampling error that does not
    exceed plus or minus 2.7 percentage points. The number of eligible tax
    filers used in this estimate was adjusted to exclude those who received
    EITC benefits in error. The participation rate is a conservative estimate
    based on 32 percent of EITC dollars being claimed in error; the IRS
    estimated between 27 and 32 percent of these tax dollars were paid in
    error in 1999. Because more recent information about EITC payment errors
    is not available, we were unable to provide a more recent estimate.
    However, Congress has enacted new tax laws and the IRS has taken steps to
    improve compliance. For more details, see GAO, Earned Income Tax Credit
    Participation, GAO-02-290R (Washington, D.C.: Dec. 14, 2001).

    dWhile the Urban Institute and Mathematica each generate food stamp
    participation rate estimates using data from the CPS, their estimates
    differ slightly. The differences arise primarily from differences in
    imputation methodology for data missing from the CPS-such as assets,
    immigration/refugee status, and information on which household members buy
    and prepare food together.

    e,fConfidence intervals are not available. These estimates are from
    Mathematica Policy Research, Inc., Trends in Food Stamp Program
    Participation Rates: 1999 to 2002. (Washington, D.C.: Sept. 2004).

    gEstimates do not include individuals who are institutionalized. Estimates
    do account for variation in state eligibility rules and for people who may
    be eligible for only part of the year.

    hWe were unable to estimate a participate rate for the Pell Grant program
    because we were unable to assess the reliability of data on the family
    income of students that did not apply for federal financial assistance.

    iNo reliable national survey data exist on individuals who meet the SSI
    disability criteria. Therefore, researchers made assumptions about a
    person's disability based on self-reported information on inability to
    work due to illness or other disability, lack of work activity in the
    prior year, and receipt of disability income. Some of those assumed
    eligible for SSI based on disability may not meet the criteria and vice
    versa. As a result, the models may overestimate or underestimate the
    number of eligible people. This estimate also does not include
    institutionalized individuals and disabled children.

    These estimates indicate that between half and three quarters of those
    eligible are participating in four of the entitlement programs. Although
    differences in years, data sources, and estimation methodologies make it
    inappropriate to compare participation rates across programs, these
    estimates provide a general sense of the extent to which programs are
    reaching those eligible for benefits. Specifically, we found:

    o  	For the EITC program, we estimated in prior work that about 75 percent
    of eligible households took advantage of this credit in 1999. This
    estimate was adjusted to account for tax dollars that were distributed in
    error that year.7 However, Congress has enacted new tax

    laws and the IRS has taken steps to improve EITC program

    compliance.  o  Two organizations, the Urban Institute and Mathematica
    Policy Research, Inc., have estimated food stamp participation rates using
    different methodologies but both found that about 48 percent of eligible
    households participated in this program in 2001 and 2002, respectively. In
    addition, Mathematica found that 54 percent of eligible individuals were
    enrolled in 2002.

    o  	An estimated 66 to 70 percent of eligible, noninstitutionalized people
    were enrolled in Medicaid in 2000. This estimate does not include
    institutionalized people, such as those in nursing homes.

    o  	We were unable to estimate Pell Grant participation rates because we
    were unable to assess the reliability of available data on the family
    income of enrolled students who did not apply for federal financial aid.

    o  	For SSI, an estimated 66 to 73 percent of eligible adult individuals
    and married couples received benefits in 2001. This estimate also does not
    include institutionalized people or disabled children.

    Participation rates also can vary substantially even within a single
    program. Disaggregating program participation rates by targeted
    subpopulations can help us to better understand the implications of
    overall program participation rates. In table 5, we provide participation
    rate estimates for selected subgroups within the four entitlement

    7For more details, see GAO, Earned Income Tax Credit Participation,
    GAO-02-290R (Washington, D.C.: Dec. 14, 2001).

    programs for which we have participation rate estimates. As in table 4,
    these estimates are expressed in ranges to reflect potential errors that
    result from using sample survey data. (See the footnotes to table 5 for
    more details.)

    Table 5: Available Subgroup Participation Rate Estimates for Entitlement
    Programs for the Most Recent Year Data Were Available

                                                               Participation rate
                                                                      estimates b
                 Program (year)a                      Subgroup          (percent)
                     EITC (1999)               cAll Households                75d
                                   Households with No children                45e
                                       Households with 1 Child                96r
                                    Households with 2 Children                93g
                                     Households with 3 or More                63h
                                                      Children
              Food Stamps (2001)               iAll Households              46-48
                                      Households with Children              55-57
                                 Households with Elderly                    27-28
                                 Members
                 Medicaid (2000)              All Individualsj              66-70
                                                        Adults              56-64
                                                      Children              74-79
                                                       Elderly             40-43k
                      SSI (2001) lAll Individuals and Married               66-73
                                 Couples
                                                       Elderly             61-68m

    Source: GAO's analysis of CPS and IRS survey data and the Urban
    Institute's TRIM3.

    aAll estimates are for the calendar year mentioned.

    bThis range represents a 95 percent confidence interval based on estimated
    sampling error in the national survey data. This interval does not take
    into account errors introduced by the modeling process or by
    administrative data. We assessed but did not quantify these errors.

    cThe number of eligible tax filers used in these estimates were adjusted
    to exclude those who received EITC benefits in error. The participation
    rate is a conservative estimate based on 32 percent of EITC dollars being
    claimed in error; the IRS estimated between 27 and 32 percent of EITC
    dollars claimed in 1999 were paid in error. Because more recent
    information about EITC payment errors is not available, we were unable to
    provide a more recent estimate. However, since 1999, Congress has enacted
    new tax laws and the IRS has taken steps to improve compliance. For more
    details, see GAO, Earned Income Tax Credit Participation, GAO-02-290R
    (Washington, D.C.: Dec. 14, 2001).

    dThe EITC participation rate for all households has a sampling error that
    does not exceed plus or minus 2.7 percentage points.

    eThe EITC participation rate for households with no children has a
    sampling error that does not exceed plus or minus 3.9 percentage points.

    fThe EITC participation rate for households with one child has a sampling
    error that does not exceed plus or minus 7.7 percentage points. The actual
    participation rate cannot exceed 100 percent.

    gThe EITC participation rate for households with 2 children has a sampling
    error that does not exceed plus or minus 8.3 percentage points. The actual
    participation rate cannot exceed 100 percent.

    hThe EITC participation rate for households with 3 or more children has a
    sampling error that does not exceed plus or minus 8.3 percentage points.

    iEstimates in the table are from the Urban Institute. Mathematica has also
    estimated participation rates for these subgroups and found that about 66
    percent of eligible households with children and 28 percent of those with
    elderly members participated in fiscal year 2002. While the Urban
    Institute and Mathematica each generate food stamp participation rate
    estimates using data from the CPS, their estimates differ slightly. The
    differences arise primarily from differences in imputation methodology for
    data missing from the CPS-such as assets, immigration/refugee status, and
    information on which household members buy and prepare food together.

    jEstimates do not include individuals who are institutionalized. Estimates
    do account for variation in state eligibility rules and for people who may
    be eligible for only part of the year.

    kEstimates include those who are dually enrolled in Medicare and Medicaid
    who thus qualify for the full Medicaid benefit and those who only receive
    Medicaid assistance for their Medicare cost sharing. Estimates do not
    include eligible elderly people who are institutionalized. The
    participation rate may be lower for this group in part because those over
    the age of 65 may have Medicare coverage.

    lNo reliable national survey data exist on individuals who meet the SSI
    disability criteria. Therefore, researchers made assumptions about a
    person's disability based on self-reported information on inability to
    work due to illness or other disability, lack of work activity in the
    prior year, and receipt of disability income. Some of those assumed
    eligible for SSI based on disability may not meet the criteria and vice
    versa. As a result, the models may overestimate or underestimate the
    number of eligible people. This estimate also does not include
    institutionalized individuals or disabled children.

    mEstimates do not include eligible elderly people who are
    institutionalized.

    As shown, participation in low-income programs varies markedly across
    subgroups. For example, a smaller share of elderly people eligible for low
    income programs tend to participate in the Food Stamps and Medicaid
    programs than among the total eligible population. The elderly may
    participate in the Food Stamp Program at a lower rate than other
    households because most elderly households receive Social Security and are
    eligible for relatively small food stamp benefits. For example, in 2000,
    44 percent of all households with elderly members eligible for food stamps
    were eligible for a monthly benefit of only $10 or less, the minimum
    benefit for households of one or two persons. In comparison, 12 percent of
    households without elderly members eligible for food stamps receive
    benefits that low. Similarly, Medicaid participation among the elderly may
    be low because Medicare also covers many elderly people who are eligible
    for Medicaid. In contrast, families with children tend to participate in
    food stamps, Medicaid, and the EITC at higher than average rates than
    those

    households without children.8 Although we were unable to disaggregate
    participation rates by geographic area, program participation rates can
    also vary by state or locality.

    Information on trends in program participation rates over time can also
    help in interpreting participation rate estimates, but we were only able
    to provide information on trends in participation for one program.
    Mathematica Policy Research, Inc., estimates food stamp participation
    rates annually under contract with USDA and has taken steps to ensure that
    estimates are comparable over time. As shown in figure 1, food stamp
    participation rates remained fairly stable between fiscal years 1999 and
    2002, declining slightly from 52 percent in fiscal year 1999 to 48 percent
    in fiscal year 2002 among eligible households and 56 percent in fiscal
    1999 to 54 percent in fiscal year 2002 among eligible individuals.

    8We estimated a food stamp participation rate for another subgroup,
    eligible individuals in working families, in prior work and found that 52
    percent of these individuals were enrolled in 2001. See GAO, Food Stamp
    Program: Steps Have Been Taken to Increase Participation of Working
    Families, but Better Tracking of Efforts Is Needed, GAO-04-346
    (Washington, D.C.: Mar. 5, 2004).

    Figure 1: Food Stamp Participation Rate Estimates for Fiscal Years 1999 to
    2002

    Percent 60

    55

    50

    45

    0 1999 2000 2001 2002

    Fiscal year

    Participation rate for households

    Participation rate for individuals

    Source: Mathematica Policy Research, Inc., Trends in Food Stamp Program
    Participation Rates: 1999 to 2002. (Washington, D.C.: Sept. 2004)

    We were not able to provide information on trends in participation rates
    for the Medicaid and SSI programs because the most recent participation
    rate data available for these programs is not comparable to prior year
    estimates. While prior year estimates are available, because of changes
    from 1 year to the next in the methodology used to estimate participation
    rates, estimates for prior years are not perfectly comparable with the
    most recent estimates and are therefore not shown in this report. The
    participation rate estimate for the EITC was available for only 1 year.

    For Non-Entitlement Programs, the Proportion of Those Eligible Who Were
    Enrolled Ranged from Less Than 10 Percent to about 50 Percent

    Among the seven non-entitlement programs we reviewed, the share of those
    eligible who participate ranges from less than 10 percent to about 50
    percent. These programs are generally not funded to serve all eligible
    applicants, and many have other design features, such as the
    prioritization of certain subgroups and eligibility criteria specific to a
    state or locality, that would not necessarily allow for all eligible
    people who apply to receive benefits.9 Consequently, we refer to these
    estimates as coverage rates rather than participation rates. Table 6
    provides estimated coverage rates for each of these programs, expressed in
    ranges to reflect potential errors in survey data. The actual coverage
    rates may be within a broader range of estimates than shown because other
    errors that may have resulted from calculating these estimates could not
    be quantified. Estimates for the CCDF, SCHIP, and TANF cash assistance
    programs were developed by the Urban Institute under contract with HHS. We
    also include a WIC estimate developed by the National Research Council,
    and another WIC estimate developed by the Urban Institute under contract
    with us. We estimated the Head Start and housing programs using
    administrative and national survey data.

    9In recent years WIC has been funded at levels that allow the program to
    serve all or nearly all applicants who have sought services and meet
    program eligibility criteria. However, WIC is a non-entitlement program
    whose funding is determined annually through the congressional
    appropriations process. In addition, because the SCHIP and TANF programs
    provide grants directly to states and allow states substantial flexibility
    in determining program eligibility and implementation, funding constraints
    contribute to, but do not determine coverage rates to the extent that they
    do for the remaining programs.

    Table 6: Estimated Coverage Rates for Non-Entitlement Programs for the
    Most Recent Year Data Were Available

                                                                    Coverage rate
                                                                        estimates
                               Program (year)   Eligibility unit       (percent)a
                                  CCDF (2001)             bChildren        18-19c
                            Head Start (2003)             dChildren        44-54e
               Housing Choice Vouchers (1999)           fHouseholds         13-15
                        Public Housing (1999)           Householdsg           7-9
                                SCHIP (2000)h             iChildren         44-51
                TANF - cash assistance (2001)             Familiesj         46-50
                WIC (1998): National Research           Individuals           51l
                                      Council
                      (2001): Urban Institute kInfants and Children        51-55m

    Source: The Urban Institute's TRIM3 and GAO's analysis of data from the
    CPS and HUD.

    aThis range represents a 95 percent confidence interval based on estimated
    sampling error in the national survey data. This interval does not take
    into account errors introduced by the modeling process or by
    administrative data. We assessed but did not quantify these errors.

    bThe estimates account for variations in state eligibility criteria and
    are based on criteria as of October 2001. Estimates do not account for
    participation in other programs that provide similar services.

    cTo increase the precision of these estimates, 3 years of CPS data were
    used to estimate the eligible population; other coverage rates and
    participation rates estimated using TRIM3 only use 1 year of data. As a
    result, the confidence interval based on the sampling error is smaller
    than for the other estimates.

    dHead Start participation is measured by the number of funded slots, not
    the number of children in the program. Therefore, this estimate may
    overstate or understate the actual coverage rate because more than one
    child may fill a slot in a year and some slots may go unfilled. Estimates
    do not account for participation in other programs that provide similar
    services.

    eThe coverage rate does not include enrolled children living above the
    poverty threshold. Nonpoor children can comprise up to 10 percent of Head
    Start enrollment slots.

    fHUD's data on the number of eligible households was based on the American
    Housing Survey. This survey may overestimate household income and
    underestimate the number of households in poverty. These estimates also
    may include households who do not qualify for the voucher despite their
    lowincome status. Coverage rates are based on the number of households who
    successfully leased units in 1999. A total of 1,649,645 vouchers were
    authorized, but some of these were not used partially due to
    voucher-holders' inability to find housing. Rates reflect only those
    participating in the Housing Choice Voucher program; however, those
    eligible may also be served by a number of other federal, state, and local
    housing assistance programs.

    gHUD's data on the number of eligible households was based on the American
    Housing Survey. This survey may overestimate household income and
    underestimate the number of households in poverty. Income-eligible
    households may not be eligible for other reasons-for example, local public
    housing authorities may deny assistance to people with habits and
    practices that may be detrimental to other public housing tenants-and the
    estimate does not account for this. Coverage rates are based on the number
    of public housing units that were leased; a total of 1,235,229 units were
    available but some were unleased for a variety of reasons, such as
    resident turnover. Rates reflect only those participating in the public
    housing program; however, those eligible may also be served by a number of
    other federal, state, and local housing assistance programs. GAO used an
    eligible population of those who earn less than 80 percent area median
    income as per the eligibility criteria; however, nationally the vast
    majority of those served by public housing make less than 50 percent of
    the area median income.

    hA new program established in 1997, SCHIP saw its enrollment increase 75
    percent between fiscal years 2000 and 2003; a more recent estimate of the
    SCHIP coverage rate would likely be higher than the range shown. In
    addition, because states' implementation of their programs varied,
    awareness of SCHIP may lag in states that created their programs more
    recently.

    iEstimates account for variation in state eligibility rules, and the
    estimates are based on state eligibility rules in place in 2000. Children
    who are eligible for Medicaid expansion SCHIP programs and separate state
    SCHIP programs are included in the estimate. Children covered by private
    and other public health insurance such as Medicaid are generally not
    eligible for SCHIP and are, therefore, not included in the denominator for
    the calculation; to the extent that some are included in the actual
    caseload under "employer buy in" programs, the coverage rate will be
    slightly overestimated.

    jEstimates account for variation in state eligibility rules. All units
    receiving TANF cash assistance are included, even though a separate state
    program might fund their benefits. Families receiving noncash benefits
    funded by TANF are not included, although an increasing proportion of TANF
    funds are being used to provide non-cash assistance to families. Some
    families or individuals that may appear eligible according to model may
    not be participating because they have not complied with program
    requirements, such as being involved in work activities. However, those
    who have reached their state or federal TANF time limit are appropriately
    excluded from eligibility in estimating the coverage rate.

    kEstimates only include eligible infants and children, even though
    pregnant, postpartum, and breastfeeding women are eligible for this
    program, because the CPS does not have data to determine a woman's
    pregnancy status or whether she is breastfeeding. According to the FNS,
    women account for a quarter of WIC participants.

    lA confidence interval is not available. This estimate is based on data
    from National Research Council of the National Academies, Estimating
    Eligibility and Participation for the WIC Program (Washington, D.C.: Sept.
    2003). Estimates include pregnant women, infants, and children. It does
    not include postpartum and breastfeeding women.

    mEstimates are preliminary because they are partially based on the numbers
    used to create Medicaid participation rates and SCHIP coverage rates. The
    Medicaid participation rate and SCHIP coverage rate for 2001 had not been
    completed in time to include in this report.

    Generally less than half of those eligible participate in the seven
    nonentitlement programs. Coverage rates also have limitations such as data
    sources, and estimation methodologies that make it inappropriate to
    compare the estimates across programs. However, they provide a general
    sense of the extent to which these programs are reaching eligible people.
    Specifically, we found:

    o  Almost 20 percent of children who meet state-defined eligibility
    criteria

    are receiving child care services through CCDF.10 This estimate does not
    reflect participation in child care funded by other federal sources. HHS
    estimates that about 26 percent of CCDF-eligible children are receiving
    child care services through either CCDF (including the Child Care and
    Development Block Grant, state CCDF funds or TANF

    10Under CCDF, states may provide child care subsidies to families with up
    to 85 percent of state median income, if they are working or involved in
    education or training. States determine the income criteria up to this
    maximum. See GAO, Child Care: Recent State Policy Changes Affecting the
    Availability of Assistance for Low-Income Families,

    GAO-03-588 (Washington, D.C.: May 5, 2003).

         transfers to CCDF), or child care services funded directly through the

    Social Services Block Grant (SSBG), TANF, or TANF state funds.11  o  The
    Head Start program funded enough slots to serve about 44 to 54 percent of
    eligible 3-to 4-year-old low-income children in 2003.12

    o  	An estimated 13 to 15 percent of households eligible for Housing
    Choice Vouchers on the basis of income both received a voucher and were
    able to successfully lease a housing unit in 1999, the most recent year
    for which these data were available. In addition, less than 10 percent of
    households eligible on the basis of income were served through the Public
    Housing program in 1999. While HCV and public housing are the two largest
    federal housing programs, there are other federal, state, and local
    housing programs from which eligible households could receive assistance.
    HUD estimated that in 1999 about a quarter of all households eligible for
    any kind of housing assistance received assistance.

    o  	In 2000, about 44 to 51 percent of eligible children participated in
    SCHIP. Since 2000, SCHIP enrollment has increased by nearly 3 million
    children, but the impact this has had on the coverage rate is not known
    because information on how the eligible population may have changed over
    this time period is not available. In addition, because states'
    implementation of their programs varied, awareness of SCHIP may lag in
    states that created their programs more recently.

    o  	About half of all eligible households receive cash assistance through
    TANF. This estimate does not account for families that receive other
    services, such as transportation and child care, that are offered through
    this program, but who do not receive cash assistance.13

    o  	WIC participation rates were available from two sources. The National
    Research Council using the Survey of Income and Program Participation
    found that 51 percent of eligible infants, children ages 1 to 4 and
    pregnant women were enrolled in WIC in 1998. The Urban

    11HHS does not collect information on the number of children who receive
    child care subsidies through the SSBG, TANF and TANF Maintenance of Effort
    funding. Therefore, the agency estimated the number of children served
    through those other funding sources by dividing the total amount spent on
    child care services from each source by the average cost of serving a
    child under CCDF.

    12Even so, in some areas, Head Start programs are underenrolled. See GAO,
    Head Start: Better Data and Processes Needed to Monitor Underenrollment,
    GAO-04-17 (Washington, D.C.: Dec. 4, 2003).

    13For more information on those who receive TANF-funded services other
    than cash assistance, see GAO, Welfare Reform: States Provide TANF-Funded
    Work Support Services to Many Low-Income Families Who Do Not Receive Cash
    Assistance,

    GAO-02-615T (Washington, D.C.: Apr. 10, 2002).

    Institute, using the Current Population Survey, found that about 51 to 55
    percent of eligible infants and children participated in 2001.

    Coverage rates for these programs can also vary substantially by subgroup,
    and they do vary within the TANF and WIC programs, the only
    non-entitlement programs for which we have this information. Understanding
    the extent to which different subgroups are covered by non-entitlement
    programs can be particularly important precisely because these programs
    are not necessarily funded to cover all those eligible. Table 7 provides
    coverage rates for groups of people eligible for TANF cash assistance and
    WIC.

    Table 7: Coverage Rate Estimates for TANF Cash Assistance and WIC
    Subgroups for the Most Recent Year Data Were Available

                                                                    Coverage rate
                                                                        estimates
                              Program (year)      Eligibility units     (percent)
              TANF - cash assistance (2001)a           All Families         46-50
                                             bFamilies with Earners         37-44

                                           c

                             Families with No Earners 51-56

                               Two-Parent Families 31-36

                             Families with Immigrants 34-43

    e

                    WIC (2001)d All Individuals 51-55 Infants 79-93

                                Children Ages 1-4 41-45

    Source: GAO analysis of estimates from the Urban Institute's TRIM3.

    aEstimates account for variation in state eligibility rules. All units
    receiving TANF cash assistance are included, even though a separate state
    program might fund their benefits. Some families or individuals that may
    appear eligible according to the model may not be participating because
    they have not complied with program requirements, such as being in
    involved in work activities. However, those who have reached their state
    or federal TANF time limit are ineligible and are not included, unless
    receiving assistance through a separate state program.

    b,cEstimates only include families with one parent or no parents present.

    dEstimates are preliminary because they are partially based on the numbers
    used to create Medicaid participation rates and SCHIP coverage rates. The
    Medicaid participation rate and SCHIP coverage rate for 2001 had not been
    finalized during the time frames of this report.

    eEstimates only include eligible infants and children, even though
    pregnant, postpartum, and breastfeeding women are eligible for this
    program, because the CPS does not have data to determine a woman's
    pregnancy status or whether she is breastfeeding. According to the FNS,
    women account for a quarter of WIC participants.

    As shown, families with no income earners tend to receive TANF cash
    assistance at a higher rate in the TANF program than families with earners

    or two-parent families. The data also suggest that families with
    immigrants have a lower coverage rate than families without immigrants. As
    noted earlier, some families within these subpopulations may be receiving
    other services funded by TANF, although data are not available on this.
    The participation rate among infants eligible for WIC is higher than among
    children ages 1 to 4.

    We were unable to provide estimates of changes in coverage rates over time
    for most of the non-entitlement programs covered in this review, but we
    did find an increase in the coverage rate for the Head Start program over
    the past several years. Since 1997, Head Start coverage rates have
    increased from about 40 percent to 50 percent. However during this time
    period, the coverage rate increased between 2000 and 2001 from about 50
    percent to 58 percent and then gradually declined. The coverage rate
    increased by this amount within 1 year because slots increased by nearly
    40,000 for the Head Start program while the number of children eligible
    decreased by about nearly 130,000. Since 2001 the number of funded Head
    Start slots has increased, but the coverage rate fell because the child
    poverty rate, and thus the number of eligible children, increased. Figure
    2 shows Head Start coverage rate estimates for 1997 to 2003.

    Figure 2: Head Start Coverage Rate Estimates for 1997 to 2003

    Percent
    60

    55

    50

    45

    40

    35

    0
    1997 1998 1999 2000 2001 2002 2003

    Year

    Source: GAO's analysis of CPS and HHS data.

    Because of changes in the methodology used to estimate coverage rates from
    1 year to the next, we cannot reliably compare the most recent coverage
    rate estimates for SCHIP and TANF to those of prior years, but there is
    compelling evidence that coverage rates for these two programs changed
    significantly over time. SCHIP was first implemented in 1997 and the
    number of children in the program grew from 660,351 in fiscal year 1998 to
    over 3 million in fiscal year 2000. As states continued to reach out to
    eligible children in subsequent years, participation continued to increase
    to nearly 6 million in fiscal year 2003. This eightfold increase in the
    number of children enrolled in SCHIP since fiscal year 1998 almost
    certainly had a significant impact on the coverage rate. Meanwhile, as
    states implemented welfare reforms during the strong economy of the late
    1990s and other changes occurred in programs serving low-income families,
    the number of families receiving TANF cash assistance declined, falling by
    about 50 percent between fiscal years 1997 and 2003.14 This also likely
    had a significant impact on the program coverage rate. HHS has reported
    that about 70 percent of families eligible for TANF cash assistance were
    enrolled in the program in 1997, compared to less than 50 percent in 2001,
    but we were unable to quantify how much of this change was caused by
    changes in estimation methodology.15 It is also important to note that
    states' TANF programs have changed over this time. States have more
    flexibility in the types of non-cash assistance they may provide families,
    and some families eligible for cash assistance may be receiving other
    forms of aid instead. In addition, some families or individuals that may
    appear eligible according to the model may not be participating because
    they have not complied with program requirements, such as being involved
    in work activities.

    14For more information on recent program changes see GAO, Supports for
    Low-Income Families: States Serve a Broad Range of Families Through a
    Complex and Changing System, GAO-04-256 (Washington, D.C.: Jan 26, 2004).

    15While the exact effect of the methodological changes has not been
    quantified, Urban Institute staff and HHS do not believe that the
    methodological changes are driving measured changes in participation
    rates. See U.S. Department of Health and Human Services, Indicators of
    Welfare Dependence: Annual Report to Congress, 2004, (Washington,
    D.C.:2004).

    The Estimated Costs of Serving Eligible Nonparticipants Show That in Some
    Programs, Those Eligible for the Largest Benefits Are More Likely to be
    Enrolled

    Our estimates of the costs of providing benefits to eligible
    non-participants show that for some programs, those currently
    participating in the programs are generally eligible for a greater benefit
    amount than those not participating. For these programs, the estimated
    costs of serving those eligible but not currently receiving benefits may
    be less than one might expect based on the participation or coverage rates
    we estimated. This is not surprising, as it makes sense that, for example,
    a person eligible for a $10 food stamp benefit might be more likely to
    forgo that benefit than a person eligible for a $150 benefit. More
    specifically, Mathematica found that the 48 percent of households
    participating in the Food Stamp Program in fiscal year 2001 received about
    62 percent of the total amount of benefits that would be paid out if all
    eligible households received benefits.

    As shown in table 8, we were able to estimate the additional cost of
    providing benefits to eligible nonparticipants for 6 of the 12 programs we
    reviewed. These cost estimates take into consideration the characteristics
    of non-participants and the benefits for which they would be eligible but
    do not account for increases in administrative costs that could result
    from participation increases. We were unable to estimate the cost of
    providing benefits to eligible, non-participants in the six other
    programs-CCDF, HCV, Medicaid, Pell Grants, Public Housing, and
    SCHIP-because we did not have enough information to determine how the
    characteristics of the non-participants would have affected the benefit
    amounts they could have received.

    Table 8: Potential Cost of Providing Benefits to Eligible Non-participants
    for the Most Recent Year Data Were Available

                                                            Potential annual cost
                                                              of serving eligible
                                               Program (year) non-participantsa,b

                                  EITC (1999) $2-3.4c

                           Food Stamp Program (2001) 8.8-11.5

                               Head Start (2003) 3.8-5.6d

                                    SSI (2001) 8-9.8

                            TANF-cash assistance (2001)e 8-9

                                  WIC (2001)f 1.9-2.1

    Source: The Urban Institute's TRIM3 and GAO's analysis of data from CPS,
    HHS, and IRS.

    Note: Cost estimates do not include increases in administrative costs
    associated with greater program participation.

    aThis range represents a 95 percent confidence interval based on estimated
    sampling error in the national survey data. This interval does not take
    into account errors introduced by the modeling process or by
    administrative data. We assessed but did not quantify these errors.
    Estimates are based on most of the same data used to estimate
    participation and coverage rate estimates for the related programs and,
    therefore, many of the same data and model limitations apply.

    bEstimates do not account for policy or economic changes that would occur
    if participation in these programs increased. All estimates are based on
    the assumption that participation in other programs remains constant.

    cEstimates are from GAO, Earned Income Tax Credit Participation,
    GAO-02-290R (Washington, D.C.: Dec. 14, 2001).

    dEstimate is based on an average cost per slot multiplied by the number of
    non-participating eligible children. This estimate does not account for
    local variation in the cost of services, and does not account for the
    possibility of more than one child filling a slot.

    eEstimates are only for the additional cost of providing TANF cash
    assistance. The program provides other supports, such as child care and
    transportation, to needy families, and the cost of these services would
    increase the estimate if they were included.

    fEstimates are only for the additional cost of providing food benefits to
    infants and children who are not enrolled.

    Although Medicaid is by far the largest program we reviewed, developing
    reliable estimates of the costs of serving those eligible but not enrolled
    in the Medicaid program is difficult for a number of reasons. These
    reasons include a lack of information about the health status of eligible
    nonparticipants, the many variables that affect health care costs, and the
    open-ended nature of health care benefits.

    The costs included in the table do not reflect the total costs that would
    be incurred if all eligible people enrolled in these programs. Probable
    increases in administrative costs that would be incurred are not included,
    and we did not estimate how the cost of goods and services offered through
    the Food Stamp, Head Start, and WIC programs would change if more
    participants were demanding them. However, the costs do include some
    additional costs that would be incurred by states in programs where states
    are required to cover some of the program costs.

    Recognizing the differences in goals, design, administration, and funding
    in the 12 programs, it may be neither feasible nor desirable to provide
    program benefits to all those eligible. Because alternative programs could
    offer the similar benefits and services as the programs we reviewed, some
    of these programs, especially those with limited funding, may be best
    administered by only serving a certain subgroup of their eligible
    population. For example, in localities where school systems offer
    prekindergarten classes to 4-year-old children, Head Start programs may
    want to focus more on enrolling 3-year-olds from low-income families.
    Also, limited administrative resources may prevent federal, state, and
    local

    agencies from serving all those eligible. Full participation among
    eligible people also may not be feasible because some choose not to enroll
    in means-tested programs. Given these constraints, some programs may focus
    on targeting their resources to those most in need of program services.

    Finally, while participation and coverage rate estimates as well as
    estimates of potential program costs provide important program information
    that can be useful to both policymakers and program administrators, these
    estimates must be interpreted carefully to take into consideration such
    factors as survey data, research methodology, timeliness of estimates, and
    the availability of alternative programs. These factors limit our ability
    to compare rates across programs and would need to be considered in
    efforts to define appropriate or desired participation or coverage rate
    levels. For a detailed discussion of the factors that affect use of these
    estimates, see appendix II.

    Many factors influence access to means-tested programs, including the
    benefits provided by the program, ease of access, misperceptions about
    program requirements, and eligibility verification procedures put in place
    to ensure program integrity, based on our literature review and agency
    interviews. These factors influence participation by affecting the number
    of people who participate in a program as well as the type of people who
    participate. Entitlement programs may focus on addressing factors that
    affect access in order to increase program participation. However, because
    coverage rates in non-entitlement programs are determined primarily by
    funding levels, non-entitlement programs are more likely to be concerned
    about the impact of these factors on other aspects of program access, such
    as the composition of the program caseload and how the program interacts
    with alternative programs that provide similar benefits.

      Many Factors Influence Participation but Their Impact on Entitlement and
      Non-Entitlement Programs Differs

    The Size and Type of Benefits Can Affect Participation

    The size and type of program benefits can affect whether or not an
    individual participates in a program. Numerous studies show that the size
    or value of the benefit influences program participation, and this depends
    largely on the structure of program benefits. Some programs, such as the
    Food Stamp Program, determine benefit levels based on income, allowing a
    three-person household to receive as little as $1 per month depending on
    household income. Other programs, such as Medicaid, generally offer
    comparable benefits to every resident of a state who meets eligibility
    requirements. A recent National Bureau of Economic Research study

    showed that across a range of programs and within programs, larger
    benefits were associated with higher participation and coverage rates.16
    In addition, our literature review, site visits, and analysis of
    participation rates for selected programs showed that participation and
    coverage rates tend to be higher among subgroups eligible for larger
    benefits. For example:

    o  	Elderly individuals are generally eligible for small food stamp
    benefits; their participation rate in the program is lower than for other
    groups.

    o  	Families with infants participate in WIC at higher rates than families
    with older children, in part because the value of the WIC voucher is
    greater for families with infants. WIC officials in Connecticut reported
    to us that 10 percent of families stopped participating in the program
    when their youngest child reached age 1.17

    o  	On average, families with children who are eligible for the EITC
    receive a higher EITC benefit than individuals and families without
    children, and they participate at a higher rate.

    The type of benefits offered can also influence whether someone eligible
    for a program participates. Some programs-such as EITC and SSI-offer cash
    benefits while other programs-such as Head Start and Medicaid- offer
    direct services, such as educational or health services. Our research on
    participation in low-income programs generally shows that participation
    and coverage rates are higher among programs that provide cash benefits
    than among programs that provide direct services. One reason for this
    difference is the flexibility cash benefits give to individuals. Although
    the recipient may need the services provided by programs in which they are
    enrolled, these types of benefits do not allow individuals to shift
    resources away from program purposes toward what they might consider more
    pressing needs. Our site visits confirmed that the type of benefits
    influence participation and coverage rates. For example, we found that:

    16Currie, Janet, The Take Up of Social Benefits, NBER Working Paper 10488,
    (Cambridge Mass.: National Bureau of Economic Research, May 2004). This
    study reviews literature on participation and coverage rates among social
    programs in both the United States and the United Kingdom.

    17This decline in participation is consistent with national data provided
    by USDA. Nationally, there is about a 30 percent decline in enrollment
    when the value of a child's benefit decreases. The average benefit
    declines by about 60 percent after the child's first birthday.

    o  	SSI recipients who participated in a pilot project that allowed them
    to receive their food stamp allotment in cash expressed a strong
    preference for this over traditional food stamp coupons.

    o  	Some individuals who need subsidized housing may prefer the Housing
    Choice Voucher program, which allows individuals to choose their housing
    in neighborhoods that offer better educational and employment
    opportunities or choose to remain in a place while paying less rent, over
    the Public Housing program that does not give the individuals flexibility
    to choose where they live.

    Ease of Access to Program Benefits and Services Can Influence
    Participation

    Factors that influence the ease with which potential participants can
    access a program-including office hours, program location, and the ability
    of program participants to redeem or use their benefits-can also affect
    the number and groups of people who participate in the programs. Several
    of the programs we reviewed require applicants to visit the program office
    to establish and maintain eligibility. For instance, local WIC, TANF, and
    Food Stamp Program offices typically require face-to-face interviews
    before individuals can receive benefits.18 Those programs that keep
    traditional office hours-8:00 a.m. to 5:00 p.m.-pose a barrier to
    potential applicants who work and would have to take time away from their
    job in order to apply. Studies on child care and WIC programs identify
    traditional office hours as a barrier for working families. Similarly,
    Medicaid officials in California told us that one of their barriers to
    participation is office hours that do not accommodate working families.
    Although many program officials suggested that having flexible office
    hours is important to participants, some offices are challenged to extend
    their operating hours. WIC officials in Connecticut told us that they have
    attempted to promote extended hours and have made some progress; however,
    instituting extended hours remains problematic due to limited funding and
    contracts governing the workforce.

    The location of the program office can also affect participation and
    caseload composition. For many individuals-like the elderly, individuals
    with disabilities, and families living in rural areas-traveling to a
    program office that is outside the limits of their available mode of
    transportation makes it difficult for them to receive needed benefits. The
    USDA published in its National Survey of WIC Participants that one of the
    top barriers in the WIC program is transportation with 30 percent of
    participants reporting that they missed appointments because they lack
    transportation

    18Most programs waive the requirement for a face-to-face interview in
    hardship cases.

    to the office. Studies on the Housing Choice Voucher, child care, Head
    Start, and Food Stamp programs reported similar findings. Many state and
    local officials we visited agreed that transportation is a barrier to
    participation. A TANF, Food Stamp, and Medicaid official in Washington
    County, Maryland, told us that public transportation is limited and
    getting to and from the program offices poses a barrier to participation
    for many individuals, especially those in rural communities. According to
    officials, participants without vehicles have to seek rides from family
    members or acquaintances to access services. For many of these
    participants being seen going to the welfare office is difficult and
    sometimes stigmatizing.

    Some programs-including child care, Housing Choice Voucher, and
    Medicaid-offer benefits that can be difficult for participants to use, as
    some service providers-landlords, day care workers, or health care
    providers-will not exchange their services for program benefits. For
    example, our prior work found that the proportion of providers who will
    accept child care subsidies varied widely by state, ranging from 23 to 90
    percent. Even in cases where providers accepted subsidies, the number

    19

    of slots for children that used child care subsidies was limited.
    Additionally, several state and local officials suggested that
    participants are sometimes challenged to find health care providers that
    accept Medicaid. According to officials in Chisago County, Minnesota,
    participants have to drive up to 200 miles to visit a dentist that accepts
    Medicaid.

    Misperceptions about Program Requirements Discourage Some Individuals from
    Participating

    From our literature review and interviews with program officials, we also
    found that many individuals do not participate in low-income programs
    because they do not know that they are potentially eligible for benefits.
    Numerous studies have documented instances where participation was
    compromised because individuals were unaware of program benefits or had
    misconceptions about eligibility. For example, several EITC, Medicaid,
    Food Stamp, Head Start, and SSI studies indicate that one of the primary
    barriers to participation is that individuals do not know that they are
    eligible for these benefits. For some individuals-like the elderly and
    non-English speakers-this unfamiliarity with program benefits is even more
    widespread, creating a larger barrier to participation and an under
    representation of these individuals in the caseload. Many program
    officials

    19GAO, Child Care: States Exercise Flexibility in Setting Reimbursement
    Rates and Providing Access for Low-Income Children, GAO-01-894 (Washington
    D.C.: Sept. 2002).

    we visited agreed and explained that individuals also have misconceptions
    about program eligibility. For example, some individuals do not believe
    that they are eligible for benefits because they are employed while others
    do not want to be attached to the perceived stigma associated with the
    programs. In Los Angeles, Medicaid officials noted that rumors circulated
    about the eligibility criteria for Medicaid prevent many potential
    recipients from applying for the program. Particularly in non-English
    speaking communities, information about social services is often received
    through word of mouth; thus, when incorrect information circulates, it can
    have a significant impact on participation.

    Application Process and Eligibility Verification Requirements to Ensure
    Program Integrity Can Have an Effect on Participation

    Eligibility verification requirements-rules put in place to improve
    program integrity by ensuring that only those eligible for program
    benefits receive them-can also affect the overall number and
    characteristics of people who participate in the program. Each low-income
    program in this study has a set of verification requirements that
    individuals must complete to establish and maintain eligibility. Common
    requirements among the programs include completing application forms and
    providing necessary documentation. In addition, some programs require
    applicants to take additional steps, such as attending face-to-face
    interviews, documenting parental or spousal assets, or participating in
    orientation classes. According to our literature review, the complexity of
    verification requirements can impact the number of enrollees, especially
    for individuals with mental disabilities or who are homeless. One WIC
    study reviewed participation rate differences among states and found that
    states that required applicants to provide proof of income (before it was
    federally mandated) and had stricter program rules had lower program
    participation than states that did not require income documentation.20
    Additionally, another study examined EITC participation rates across
    states and found that differences in participation rates are due in part
    to the applicant having help completing the complex tax forms.21 Many
    state and local officials agree that strict and/or complicated
    verification requirements can decrease participation, particularly among
    certain groups of people. For example, we found:

    20M. Bitler, J. Currie, and J. Scholz, WIC Eligibility and Participation,
    Institute for Research on Poverty Discussion Paper 1255-02 (Madison, WI:
    Institute for Research on Poverty, June 2002, revised March 2003).

    21SB/SE Research, Participation in the Earned Income Tax Credit Program
    for Tax Year 1996 (Greensboro, N.C.: January 2002).

    o  	According to officials, the Pell Grant application is very long and
    complicated and can be difficult for students and their parents to
    complete. Staff from an organization in St. Paul, Minnesota, dedicated to
    assisting low-income students to access higher education told us that many
    low-income students in the area would not be able to complete the forms
    correctly without their assistance.

    o  	CCDF Officials in Connecticut and Georgia told us that the application
    process can be complex and difficult for applicants and, as a result, many
    applicants submit their applications late or incomplete. Because there is
    very high demand for child care subsidies, these families are often denied
    benefits or removed from the waiting list.

    o  	Local SSI officials told us that participants face many life changes
    such as frequent hospitalization and institutionalization, moving into
    different family households, and changes in the hours that they work. To
    remain eligible for program benefits, SSI recipients must report these
    types of changes within 10 days from the end of the month of the change.

    Finally, while each program has its own set of verification requirements,
    these requirements become even more challenging when participants are
    applying or maintaining eligibility for multiple programs. Program
    officials in Maryland told us that one of the biggest barriers to
    accessing multiple means-tested programs is the many different eligibility
    criteria and reporting requirements of the various programs. According to
    state officials in Maryland, the TANF and Food Stamp Programs are
    relatively well aligned, but Medicaid has not coordinated as much with the
    other programs. According to officials, this can be problematic because a
    participant who is turned down for one program might assume that he or she
    is ineligible for other low-income programs and may fail to apply for
    benefits for which they are eligible.

    Factors That Influence Participation Rates Can also Impact Other Aspects
    of Program Access Such As Targeting and Program Interactions

    Factors that influence participation also impact other aspects of program
    access such as targeting and program interactions among all low-income
    programs, but particularly among non-entitlement programs whose enrollment
    levels are determined largely by funding levels. The nonentitlement
    programs covered in this review-CCDF, Head Start, Housing Choice Vouchers,
    Public Housing, SCHIP, and TANF-have funding limitations that could
    restrict the total number of people who could potentially participate in
    the programs and, as a result, coverage rates for these programs may be
    determined, at least in part, by funding. However, among programs that
    allow states substantial flexibility in determining program eligibility
    and implementation such as CCDF, SCHIP, and TANF,

    funding constraints contribute to, but do not determine coverage rates to
    the extent that they do for programs that allow less state and local
    flexibility. Given funding constraints for non-entitlement programs,
    agencies are challenged to allocate scarce resources appropriately by
    targeting their benefits to specific groups of people and planning
    strategically to ensure that the program complements a broader range of
    programs administered by the same agency or that provide similar services
    or benefits to the program's eligible population.

    Because factors that influence participation often affect the composition
    of a program's caseload, some agencies that administer programs with
    limited funding have put measures in place to ensure that their caseloads
    reflect program priorities-whether that involves targeting certain groups
    or ensuring that benefits do not disproportionately favor or exclude
    certain subpopulations. For example, although the public housing program
    generally does not target benefits to households with the lowest incomes,
    it allows priority to be given to elderly and disabled recipients. Agency
    officials reported that they track participation of these groups to ensure
    that their share of the total caseload does not change dramatically from 1
    year to the next. Similarly, state child care officials told us that funds
    are generally provided to recipients based on priority groups that favor
    families receiving public assistance and those with the greatest financial
    need.

    Additionally, many agencies are cognizant of how their programs interact
    with and complement other programs that serve the same population. For
    example, some child care programs pair with half-day Head Start programs
    to provide continuous care to children of working parents; Medicaid and
    SCHIP programs within some states coordinate their enrollment processes to
    facilitate access to health insurance for individuals in the state; and
    between 1998 and 2003, HUD responded to a decrease in the number of public
    housing units available for low-income households by increasing resources
    available through its voucher program to maintain coverage for families.
    Likewise, in allocating TANF resources, programs often coordinate with
    local workforce development agencies, child care programs, and other
    programs that provide similar services to best meet the needs of their
    clients without duplicating an existing effort. In these ways, programs
    acknowledge and respond to access issues and ways in which factors affect
    access other than participation levels and rates.

      Program Administrators Have Strategies That Improve Both Access and Integrity,
      but Federal Agencies Have Generally Focused More on Measuring Program
      Integrity Outcomes

    Program administrators have implemented many strategies to achieve desired
    program outcomes, including those related to program access and program
    integrity, but while agencies have generally taken steps to monitor and
    disseminate information on program integrity, few track and report on the
    extent to which they are serving their eligible populations. The programs
    we reviewed have many goals and objectives of varying degrees of
    importance to the agencies that administer them, among them program access
    and program integrity. Strategies implemented at the federal, state, and
    local level to address these two issues include information systems, data
    sharing, and technological innovation, changes to the application and
    eligibility verification process, and outreach and coordination with other
    programs. Although federal agencies do not have direct control over many
    of the strategies we identified-including those mandated by law and those
    initiated at the state and local level-federal managers can play a role in
    encouraging and facilitating such strategies by emphasizing program access
    and program integrity as federal agency priorities. In response to the
    Improper Payments Information Act of 2002, all of the federal agencies we
    reviewed have taken at least some steps to identify and begin reporting
    information to Congress and others on the extent of improper payments. We
    also found, however, that for several of the programs we reviewed, federal
    agencies have not taken steps to identify and use participation or
    coverage rate information in managing their programs. Having up-to-date
    information on the extent to which their programs reach eligible
    individuals can help agencies plan strategically, set priorities, and
    ensure that agencies are reaching eligible families.

    Programs Have Found Ways to Improve Access by Reducing the Burden on
    Applicants While at the Same Time Improving Program Integrity

    Information Systems, Data Sharing, and Technological Innovation

    The state, local and federal program officials we spoke with identified
    several strategies that they believe may improve either of the two
    objectives-program access or program integrity-without harming, and in
    many cases improving, the other. As mentioned, some efforts to increase
    program integrity and prevent fraud, such as increasing the amount of
    eligibility verification required, may actually hurt access to the program
    by deterring even those eligible from applying. However, program
    administrators told us of several strategies that increase access while
    maintaining and even improving integrity. The complementary strategies we
    identified are enabled by information systems, data sharing, and
    technological innovations, changes in the application and eligibility
    verification process, and outreach and coordination with other programs.

    Improved information systems, sharing of data between programs, and use of
    new technologies can help programs to better verify eligibility and make
    the application process more efficient and less error prone. These
    strategies can improve integrity not only by preventing outright abuse of

    programs, but also by reducing chances for client or caseworker error or
    misunderstanding. They can also help programs reach out to populations who
    may face barriers. One strategy involves sharing verified eligibility
    information about applicants across programs. Data sharing prevents
    applicants from having to submit identical verification to multiple
    programs for which they may be eligible, and it can also speed up the
    sometimes-lengthy application process. In addition, data sharing allows
    programs to check the veracity of information they receive from applicants
    with other databases.

    In Minnesota, WIC caseworkers are able at the time of application to
    determine participant eligibility by accessing basic eligibility
    information via technology systems from other means-tested programs, such
    as Medicaid, food stamps and TANF. SSI administrators told us that during
    the application interview, income data is entered in their computer
    system. This information is then checked with a number of other databases
    including those of the IRS, the Department of Veterans Affairs, and the
    state Civil Service Administration to quickly verify earnings and other
    eligibility requirements and inconsistencies are flagged. Similarly,
    Georgia has an interactive computer system that aggregates client
    information for TANF, Medicaid, and the Food Stamp Program and calculates
    benefits for all three programs. Additionally, when clients need to make a
    change in their eligibility information, these data are automatically
    changed for all three programs, so that clients can receive the
    appropriate level of benefits based on their most current eligibility
    information. Furthermore, the data reliability matches may include
    information from the Department of Labor wage match, SSI benefits, prison
    information, and information on a person's death. If any of the matched
    information conflicts with the information provided by the client, a
    caseworker is to ask additional questions of the client. In all these
    ways, caseworkers can accelerate the application process while
    capitalizing on verified eligibility information already provided to other
    programs.

    Some administrators told us that such data sharing, however, can be
    complicated by concerns over ensuring privacy and by insufficient
    technological capacity. Local program administrators told us that
    eligibility data for Medicaid and SCHIP is tightly controlled because of
    Health Insurance Portability and Accountability Act (HIPAA)-a law that
    limits access to an individual's health information-but that its data
    might be shared, if warranted, with proper consent. Data sharing can be
    impeded by technological limitations, such as computer systems that cannot
    communicate directly with other systems over the Internet or some other
    network, or a lack of software needed to translate information into

    Application and Eligibility Verification Process Changes

    formats that other computers can understand. Our prior work on data
    sharing identifies strategies agencies have implemented to address
    concerns about privacy and technological capacity issues.22

    Some agency officials told us of ways in which on-line applications can
    improve both access and integrity. As stated, program integrity is
    compromised not only by willful misrepresentation, but also by applicant
    and caseworker error. Web-based or partially web-based applications can
    automatically check that all required fields are completed before an
    application is submitted for review and automatically calculate benefits
    thereby reducing error. Moreover, having the option of an on-line
    application can increase access to those who are eligible for benefits but
    who may have difficulty physically getting to program offices. Minnesota
    has instituted an on-line interactive application for Medicaid that
    program administrators believe will make the application process easier
    for both participants and caseworkers. In addition to making the process
    easier, the system will also check verification information with a variety
    of other data sources and thus reduce the likelihood of errors as well. In
    this way, a potentially burdensome application process becomes simpler,
    more accessible, and less error prone. Similarly, eight states accept food
    stamp applications through the Internet. Of course, this strategy is less
    viable or effective where access to computers is limited or where the
    on-line environment cannot be adequately secured.

    Program administrators told us about several changes in the application
    and eligibility verification process that have improved their ability to
    promote access and ensure integrity. Efforts to increase the accuracy of
    eligibility and benefit determination can increase access by reducing the
    number of applicants who were incorrectly denied benefits or whose benefit
    determinations resulted in underpayments. For example, streamlining or
    simplifying the application and providing applications in other languages
    can increase access, but also promote program integrity by reducing errors
    or misunderstanding in the application process. Simplifying applications
    by clarifying confusing wording and removing redundant questions as well
    as providing applications in an applicant's native language can reduce the
    possibility of these types of errors. According to federal officials, most
    states use a simplified application

    22See GAO, The Challenge of Data Sharing: Results of a GAO-Sponsored
    Symposium on Benefit and Loan Programs, GAO-01-67 (Washington, D.C.: Oct.
    20, 2000), and GAO, Benefit and Loan Programs: Improved Data Sharing Could
    Enhance Program Integrity,

    GAO/HEHS-00-19 (Washington, D.C.: Sept. 13, 2000).

    form for the SCHIP program to remove application barriers for families.
    For example, the SCHIP program applications in both Connecticut and
    California have been reduced from 17 and 27 pages respectively to only 4
    pages each without sacrificing required information, according to state
    officials. In many cases, the SCHIP streamlined application forms caused
    corresponding changes in state Medicaid applications as well. In addition,
    many of the program administrators with whom we spoke told us that their
    applications and forms were available in many languages. For example, the
    Minnesota Department of Revenue now has state EITC tax forms and fact
    sheets directing them to the federal EITC in eleven languages.

    Another way in which programs can streamline the application process is
    through categorical eligibility with other programs, which can be set at
    the federal or state level depending on the program. Categorical
    eligibility, also known as adjunctive eligibility, allows an individual
    who has been found eligible for one program to be automatically granted
    eligibility for another program, typically one with less stringent
    eligibility criteria. For example, if an individual is receiving SSI,
    federal legislation generally requires that that person be automatically
    eligible for Medicaid.23 Similarly, if a pregnant woman is receiving Food
    Stamps, Medicaid, or TANF, then she automatically qualifies for WIC
    benefits-and thus does not need to provide income verification once again
    when applying for the program. States also have flexibility to grant
    automatic eligibility for other programs. A state WIC program, for
    example, may grant automatic eligibility for families receiving Free and
    Reduced Price School lunches. These adjunctive or automatic eligibility
    policies allow ultimately for simpler applications, which may enhance
    access and reduce error. In fact, federal administrators at USDA noted
    that adjunctive eligibility is one of the most important tools now used to
    address program integrity and access issues in a way that cuts across
    programs.

    The provision of more comprehensive in-person assistance in filling out
    applications can encourage a candidate eligible for benefits to complete
    an otherwise lengthy, complicated, or intimidating application process.
    Such personal assistance can also prevent errors that result from

    23Individuals receiving SSI are assured eligibility for Medicaid in 39
    states and the District of Columbia. The remaining 11 states may use
    different or more restrictive standards for disability, income or assets;
    thus, SSI beneficiaries in these 11 states may not have assured
    eligibility for Medicaid. These 11 states are known as 209(b) states based
    on section 209(b) of the Social Security Amendments of 1972.

    misunderstanding of application questions or requirements or even fraud by
    reminding applicants in person that fraudulent claims are punishable by
    law. For example, to increase access to the program, California program
    officials told us that the SCHIP program developed a training process that
    certified staff from other entities, such as schools and community-based
    organizations, as "application assistants." These "application assistants"
    are also trained to recognize when applicants seem to be submitting false
    information and are prohibited from assisting families who have previously
    been found to have committed fraud. In a Maryland SSA office, SSI program
    administrators told us that they had abbreviated their application form so
    that most information is now collected in an interview. This process helps
    improve access for those with limited literacy or those who may be
    discouraged by a long paper application. Officials also noted that this
    process helps program integrity because the interviews allow caseworkers
    the opportunity to remind clients that fraudulent claims are punishable by
    law. Similarly, EITC officials in Minnesota told us that free tax
    preparation assistance could make the process less complicated for filers
    and could also cut down on fraud from tax preparers. As one official
    explained, many low-income families live near a high concentration of paid
    tax preparers, who have incentives to fraudulently file for a high credit.
    While more in depth application assistance has these benefits, it can pose
    challenges to programs in ensuring the quality of the assistance offered
    and it can be costly. According to California SCHIP officials, funding to
    train "application assistants" for the SCHIP program in California was
    ended in May 2002 due to budget constraints.

    Lastly, some policies put in place to prevent fraud at the time of
    application can also help with program access. Connecticut Department of
    Social Services has begun a fraud prevention program, termed FRED (Fraud
    Early Detection), which was instituted to address an increase in the
    amount of fraud and error detected in the program. The purpose of FRED is
    to identify potential fraud cases before benefits are paid out to prevent
    improper payments rather than identifying fraud after the payments have
    been made. Under FRED, cases that meet 1 of 12 risk criteria are to be
    referred to a fraud investigator who is to visit the home within 10 days
    of the referral. While the investigator is visiting the home, he/she is to
    interview the client about aspects of the risk criteria, and make a
    recommendation regarding eligibility. While the primary purpose of the
    visit is to prevent fraud, in practice investigators have found that their
    role is also to explain the eligibility criteria more clearly to
    applicants and to explain what steps they need to take in order to be
    eligible for program benefits. In addition, investigators are trained to
    provide additional information to the family on other resources available
    to them

    Outreach and Coordination with Other Programs

    and to assist them with referrals, thereby increasing access to an array
    of related social services.

    Targeted outreach to populations that might have more barriers to
    accessing the program has the potential to increase access without
    necessarily compromising integrity. Many program officials we spoke with
    told us that they had outreach strategies to reach out to populations-such
    as rural-dwellers, the elderly, or those with limited English proficiency-
    that have had trouble accessing the program. Such strategies include
    information sessions or pamphlets in ethnic community centers or
    partnering with advocacy groups. In addition, cross agency referrals for
    applicants already found to be eligible and more overall agency
    coordination can improve access without sacrificing integrity.

    Many agency officials with whom we spoke told us that they coordinated
    with other programs to reach potential clients. In Maryland, the
    Department of Social Services invites the Volunteer Income Tax Assistance
    program to work out of its office, so that those low-income earners
    already in contact with social services can have better access to the
    EITC. Some offices in California participate in an open door policy
    program in which clients can access any social service program through
    referrals at any state government office they walk in to. Some program
    administrators told us that program co-location can help increase access.
    This happens when an individual applying for one program in an office is
    referred to and immediately serviced by another program in that same
    location. Some examples we found had Food Stamps located in TANF offices
    and a WIC clinic collocated with the state Children's Health Insurance
    Program.

    Federal Agencies Have Taken Steps to Track Improper Payments, but Few
    Estimate Program Participation or Coverage Rates to Monitor Program Access

    All of the programs we reviewed emphasize both program access and program
    integrity, and as we have described, many federal, state, and local
    program administrators have implemented strategies intended to achieve
    access and integrity goals. However, not all agencies responsible for
    administering these programs have established management practices, in
    keeping with standards of internal control, that will consistently guide
    them in achieving these outcomes. Among the standards that are
    particularly relevant for agencies responsible for administering
    meanstested programs are:24

    o  	establishing and maintaining a control environment, a culture of
    accountability that sets a positive and supportive attitude toward
    achieving management objectives;

    o  monitoring program performance over time; and

    o  	recording and communicating relevant, reliable, and useful information
    to management and others who need it to carry out their internal control
    and operational responsibilities.

    To achieve desired program outcomes and safeguard federal funds, these
    standards should be part of an agency's operational and management
    practices. While the agencies we reviewed have taken steps to establish
    internal controls for improper payments and program integrity, not all
    have established similar controls for achieving desired program access
    outcomes.

    There are many ways in which federal agencies can establish a culture of
    accountability, one that "sets the tone" for program administrators at all
    levels of government to emphasize certain priorities. One way to do this
    is to monitor progress toward achieving desired program outcomes, and
    another is to effectively communicate program information in a broad
    sense, with information flowing down, across, and up the organization.
    Depending on the program, some aspects of an achievement-oriented
    environment are codified in laws, regulations, and federal policies. For
    example, the Improper Payments Information Act of 2002 requires those
    programs and activities susceptible to significant erroneous payments to
    calculate annual improper payment estimates and sets statistical sampling
    confidence and precision levels for estimating those payments.

    24See GAO, Standards for Internal Control in the Federal Government,
    GAO/AIMD-00-21.3.1 (Washington D.C.: Nov. 1999), and GAO, Internal Control
    Management and Evaluation Tool, GAO-01-1008G (Washington, D.C.: Aug.
    2001).

    As shown in table 9, some of the federal agencies covered by this review
    have already begun to monitor improper payments for the programs they
    administer and, as directed by OMB guidance, communicate this information
    by including a measure of improper payments in their annual Performance
    and Accountability Reports.25 Including measures of improper payments in
    agency annual performance plans and accountability reports is one way to
    provide officials with important information on areas of success and areas
    that need improvement and to send a signal to all working on agency
    programs that the measured goal is a priority. (For information on the
    amounts of improper payments reported by agencies, see app.III.) To
    varying degrees, the other agencies included in this review have begun
    taking steps to identify and report on improper payments as well. While
    agencies are taking steps, much remains to be accomplished before a
    comprehensive picture is available of the amount of improper payments for
    these programs.26

    25Agency focus on program integrity might also be encouraged by other
    agency-specific OMB guidance, the Presidents Management Agenda as well as
    the GAO's High-Risk series-all strategies that encourage or require
    agencies to focus on integrity.

    26For more information on the implementation of the IPIA governmentwide,
    see GAO, Financial Management: Fiscal Year 2003 Performance Accountability
    Reports Provide Limited Information on Governmentwide Improper Payments,
    GAO-04-613T (Washington, D.C.: Apr. 15, 2004).

     Table 9: Status of Agencies Identification of and Reporting on the Amounts of
                              Improper Payments by Program

                                      Agency included improper    If not, has the
                                                                  agency reported
                                      payment information in   taking some steps
                                      fiscal                   to identify
                           Subject to year 2004 annual         and monitor the
                                      performance              amount of
    Agency    Program   the IPIA?     and accountability    improper payments?
                                               report
        USDA   Food Stamps    Yes               Yes
                   WIC        Yes                No                   Yes
    HHS/ACF    TANF        Yes                No                   Yes

                                    CCDF Yes No Yes

                                           a

          Head Start Yes No Yes IRS EITC Yes Yes HHS/CMSb Medicaid Yes No Yes

    SCHIP Yes No Yes

    SSA               SSI          Yes             Yes
    ED             Pell Grant      Yes             Yes
    HUD             Public Housing Yes             Yes
                       Housing Choice Yes             Yes
                       Voucher

    Source: GAO survey of federal agencies and interviews with agency
    officials and agency performance and accountability reports.

    aACF has estimated the percentage of "over-income" families served by Head
    Start in excess of the 10 percent allowed by regulation.

    bCMS has a performance goal in its annual performance plan related to a
    pilot project to develop payment error rates for both SCHIP and Medicaid.

    While an internal control framework is emerging for addressing financial
    program integrity issues, few of the agencies responsible for
    administering the programs we reviewed have established a similar
    framework for achieving desired program access outcomes, although they
    have implemented numerous strategies to increase program participation.
    The 12 programs we reviewed have numerous program goals and objectives of
    varying degrees of importance to the agencies that administer them.
    Because the most fundamental purpose of these programs is to serve
    lowincome individuals and families, all track measures that provide some
    information about program participation and access. For example:

    o  	All of agencies responsible for administering the programs we reviewed
    track the number of people participating in their programs.

    o  	Some federal agencies-such as HUD-measure the extent to which program
    participants redeem or use benefits provided to them.

    o  	Others use other measures related to access. CMS tracks the number of
    individuals who are uninsured each year.

    o  	Many agencies track participants and participant outcomes through
    program effectiveness studies.27

    Through these efforts, agencies have demonstrated their concern about
    program access, yet, the ways in which most of these agencies measure
    program participation do not inform administrators about the extent to
    which they are meeting overall need and therefore do not provide all the
    information they need to monitor access. As discussed above, access
    encompasses not only the number of program participants, but also the
    extent to which programs reach the total population eligible for benefits
    and services, how well agencies are allocating resources among targeted
    subpopulations, and, from an agencywide or even governmentwide
    perspective, how well specific means-tested programs complement and
    interact with programs that serve similar populations or provide for
    similar needs. While concerns about the allocation of scarce resources and
    interactions with other programs apply to all low-income programs, they
    may be of particular importance to non-entitlement programs whose
    participation is limited by funding constraints. Participation or coverage
    rate information can guide program administrators in setting priorities
    and targeting scarce resources, even among programs that were not intended
    to serve everyone eligible for program benefits.

    As shown in table 10, only one of the agencies we reviewed, USDA,
    regularly estimates participation rates for the programs it administers
    and communicates and disseminates information on these rates in a way that
    promotes a culture of accountability supportive of achieving program
    access outcomes. USDA has been estimating participation rates annually for
    the Food Stamp Program since 1975. The agency uses this information to get
    a better understanding of how well they are reaching certain priority
    subpopulations such as the working poor, single-parent families with
    children, and SSI recipients; and to identify states in need of outreach
    assistance. In addition, USDA has established a performance goal to
    increase participation rates in the Food Stamp Program and reports food
    stamp participation rates in its annual performance report.28 In these

    27Studies on program effectiveness typically do not provide information on
    the number or characteristics of those eligible but not participating in
    low-income programs.

    28USDA also provides performance bonuses to reward states for their
    performance in administering the Food Stamp Program. Awards focus on
    payment error rates, negative error rates, participant access rates, and
    timeliness of application processing.

    ways, the agency uses this information for program management purposes.

        Table 10: Status of Agencies Efforts to Use Information on Participation
                      or Coverage Rates in Managing Their Programs
         If the       Does If so, participation            use this        does it                                                                           other
         agency        the does   or coverage     estimate rate            include                             in their    Agency Program coverage measure?   key    USDA        Yes Yes Yes
        estimates   agency the    rate,              a     information        rate   participation    as a     performance                 rate?            program        Food
            a              agency                                      information        or       performance report or                                    report?a      Stamps

                        WIC                    Yes             No            bYes
    HHS/ACF          TANF                   Yes             No             Noc
                        CCDF                   Yes             No            dYes
                              Head Start       Yes             No              No
    IRS              EITC                   Yese            No             Nof
    HHS/ CMS                Medicaid        No
                        S-CHIP                 No
    SSA              SSI                    Nog
    ED                     Pell Grant       Noh
    HUD                  Public Housing     Noi
                            Housing Choice     No
                        Voucher

    Source: GAO survey of federal agencies, agency annual performance plans.

    aKey program reports include routine reports that agencies must prepare
    for Congress for the purpose of providing updated information on the
    status of the programs they administer.

    bUSDA's methodology for calculating the WIC coverage rate is being
    revised. The agency has not yet started reporting in its annual program
    reports but it has plans to do so.

    cHHS includes a TANF coverage rate as part of their Indicators of Welfare
    Dependence report.

    dCCDF has published a coverage rate for child care in their Biennial
    Report to the Congress, which includes SSBG and TANF funds.

    eIRS has calculated a participation rate for the EITC, but only for
    selected years.

    fIRS has plans to use a participation rate as part of their Strategic
    Plan.

    gSSA has calculated a participation rate for the years 1991-1996, but only
    for a subpopulation of those participating in SSI.

    hED has calculated a take-up rate, which is the share of those who applied
    and were found eligible for a Pell Grant who actually received a grant.

    iHUD has calculated a voucher utilization rate for the housing choice
    voucher program, and tracks the occupancy rates of public housing
    authorities.

    USDA has taken steps to develop a reliable participation rate measure for
    the WIC program and plans to estimate the WIC participation rate annually.
    Because the WIC program is not an entitlement and participation is
    determined by the appropriated funds, FNS officials told us they do not
    plan to establish a performance goal related to the WIC participation
    rate. However, officials told us that they do think it is important to
    monitor and report on the WIC participation rate for policy, planning, and
    budgeting purposes, and the agency plans to use these data in managing the
    program by highlighting the measure in the program's budget reports and
    its annual report to Congress.

    HHS plays a key role in estimating participation rates for several
    meanstested programs. Since 1973, HHS's Office of the Assistant Secretary
    for Planning and Evaluation has funded TRIM3 for the purposes of policy
    development, analysis, and research on such topics as the interactive
    effects of programs serving low-income families. The Welfare Indicators
    Act of 1994,29 requires HHS to submit annual reports to Congress on
    welfare receipt in the United States and key indicators and predictors of
    welfare dependence. These reports, produced annually since 1997, include
    participation and coverage rates from TRIM3 for TANF (and its predecessor
    program, Aid to Families With Dependent Children), SSI, and food stamps.

    HHS includes CCDF coverage rates30 in the biennial congressional report
    and plans to include a performance measure related to participation rates
    in its annual performance reports starting in fiscal year 2006. However,
    HHS generally does not use participation rate estimates it has available
    from TRIM3 in managing its other programs by highlighting the information
    in its annual performance plans or congressionally mandated program
    reports. For example, TANF participation rates are not included in the
    agency's TANF Annual Report to Congress and Medicaid and SCHIP
    participation and coverage rates are not included in any of the other
    congressionally mandated reports disseminated by CMS, the agency that
    administers these programs.

    Only one of the other agencies we reviewed, the IRS, has plans to estimate
    and report on participation rates for the programs they administer. IRS

    29Pub. L. No. 103-432 (1994).

    30CCDF's coverage rate also includes an estimate of the children served
    through the TANF block grant and the Social Services Block Grant.

    plans to begin estimating the participation rate in the EITC program on an
    annual basis starting in fiscal year 2005 and to use the EITC
    participation rate as a performance measure in its annual performance
    report. However, the other agencies we reviewed, including SSA, HUD, and
    ED, do not estimate participation or coverage rates for the SSI, Housing
    Choice Voucher, Public housing, or Pell Grant programs and reported no
    plans to do so.31

    There are several reasons agency officials cited for not collecting
    participation rate information. For some programs, information on certain
    eligibility criteria can be difficult or costly to obtain. For example,
    reliable data on the disability status of children who do not receive SSI
    is not readily available from national survey data. We were unable to
    provide a participation rate estimate for this group for this reason.
    Absent a legislative or other mandate to estimate participation and
    coverage rates, agency officials may not consider conducting such
    estimates a priority. However, some agency officials that do not regularly
    estimate participation or coverage rates indicated they would find such
    estimates useful. For example, HUD officials indicated that the agency
    finds its estimates of worst case housing needs, which include some
    coverage rate measures for all housing programs, useful for policy and
    planning purposes. Similarly, while Head Start officials do not publish or
    report coverage rate estimates in any agency documents, they indicated
    that they occasionally estimate participation rates informally for
    internal use in policy, planning, and budgeting.

    Conclusion 	Federal agencies responsible for administering means-tested
    programs are charged with ensuring that those eligible for program
    benefits and services are able to access them and with ensuring prudent
    oversight of taxpayer dollars by maintaining program integrity, including
    preventing improper payments. Program administrators may find it
    challenging to achieve these

    31ED monitors the share of student financial aid applicants found eligible
    for a Pell Grant who receive a grant. We would refer to this as a
    "take-up" rate rather than a participation rate as we have defined it,
    because it does not provide information on individuals who are eligible
    but do not complete an application. Similarly, HUD monitors the
    utilization rate in its housing choice voucher program. This measure
    tracks the extent to which voucher recipients are able to redeem their
    benefits by leasing apartments. Like the Pell Grant "take-up" rate, this
    rate provides program managers with important information they need to
    manage their programs, but it does not provide them with a sense of the
    extent to which their programs are reaching all eligible households and
    is, therefore, not comparable to a participation or coverage rate for
    monitoring program access.

    goals in part because they may conflict-ensuring program integrity can
    potentially come at the expense of program access. While we identified a
    number of strategies that have been implemented by federal, state, and
    local agencies that could potentially achieve both of these goals, unless
    agencies track progress toward meeting these goals in a way that signals
    to program administrators at all levels of government that both access and
    integrity are federal priorities, there is a risk that one of the goals
    may be compromised. Estimating participation rates for means-tested
    programs is difficult-and more difficult for some than for others-and
    cannot be considered "an exact science." Nevertheless, when done
    rigorously-in a way that ensures that estimates are comparable over time
    and quantifies the errors that result from the estimation
    methodology-these estimates can provide a basic understanding of the
    extent to which needy populations are being served by federal programs and
    can be a key component of a federal agency's efforts to establish a
    culture of accountability that emphasizes the importance of program
    access. Federal agencies responsible for administering only four of the
    programs we covered in this review-CCDF, food stamps, WIC, and EITC-either
    currently collect and report information on the extent to which they are
    reaching their target populations in key performance and program reports
    or plan to do so. As a result, the federal agencies that administer the
    other nine programs covered by this review may lack data that could inform
    their budgetary and programmatic decisions, assist them in ensuring that
    their programs are coordinated with and appropriately complement other
    programs available to their target populations, help them to manage their
    programs effectively, and enable them to provide policymakers with the
    information they need to make decisions.

      Recommendations to Executive Agencies

    Recommendations to the As the department moves forward with participation
    rate estimates for the Secretary of the WIC program, we recommend that the
    Secretary:

    Department of Agriculture

    1. take steps to clarify to users the limitations of the estimates; and

    2. 	comparability between estimates by reanalyzing data as estimation
    methodologies change, so that consistent methods are applied over time.

    Recommendation to the To help ensure that agencies have information on
    program access, we Secretaries of the recommend that the Secretaries of
    Education and HUD study the Department of Education feasibility of
    calculating participation or coverage rates and including and the
    Department of them in key program management reports.

    Housing and Urban Development Recommendations to the Secretary of the
    Department of Health and Human Services

    We recommend that the Secretary of HHS consider making some improvements
    to the participation and coverage rate information produced for the CCDF,
    Medicaid, SCHIP, and TANF programs, such as:

    1. 	quantifying errors that result from calculating these estimates to
    help users better understand the accuracy of the data; and

    2. 	ensuring, to the extent possible, that estimates are comparable over
    time.

    We also recommend that the Secretary include participation and coverage
    rate estimates in key program reports for these four programs.

    We also recommend that the Secretary study the feasibility of estimating
    the coverage rate for the Head Start program on a regular basis and to
    include these estimates in key Head Start program reports.

    Recommendation to the As the IRS moves forward on developing participation
    rate estimates to Commissioner of the use as a program performance measure
    for the Earned Income Tax Credit, Internal Revenue Service we recommend
    that the Commissioner of the Internal Revenue Service

    take steps to quantify errors that may result from estimating these
    participation rates to help users better understand the accuracy of the
    data and ensure that estimates will be comparable over time.

    Recommendation to the To help ensure that the agency has information on
    program access, we Commissioner of the recommend that the Commissioner
    consider the feasibility of providing Social Security participation rate
    information (from the existing source or another source) Administration in
    SSA program management reports.

      Agency Comments

    We provided drafts of this report to and received comments from the
    Departments of Agriculture, Education, Health and Human Services, and
    Housing and Urban Development; the Internal Revenue Service; and the
    Social Security Administration. They generally agreed with our conclusions
    and recommendations. Agency written comments appear in appendixes IV
    through VII.

    On February 3, 2005, we met with FNS officials to discuss their comments.
    The officials said they agreed with our conclusions and recommendations.
    They stated that they recognize the importance of tracking both program
    access and program integrity and their ongoing efforts to estimate
    participation rates in the food stamp program reflect their commitment to
    balancing the goals of access and integrity. They stated that as they move
    forward in developing a participation rate estimate for the WIC program,
    they plan to take steps to clarify to users the limitations of the
    estimates and to ensure that the estimates will be comparable over time.
    Agency officials also provided technical comments, which we incorporated
    in the report where appropriate.

    The Department of Education agreed that data sources now available would
    not provide sufficient information to develop a reliable participation
    rate estimate for the Pell Grant program. However, the department cited a
    study currently being conducted by the National Center for Education
    Statistics that will determine the feasibility of implementing a system of
    collecting data on all postsecondary students. This study will also
    provide information that could be used to examine the feasibility of
    estimating participation rates for the Pell Grant program.

    The Department of Health and Human Services provided comments related to
    each of the five programs under its jurisdiction. The department noted
    that it has taken steps to measure program access in the TANF, CCDF,
    Medicaid, and SCHIP programs through their funding of TRIM3, although they
    do not always report these estimates in key program reports. With regard
    to CCDF, HHS recognized the importance of coupling efforts to control
    improper payments with efforts to provide effective service delivery, and
    therefore access. The department noted that it has recently established a
    performance measure related to coverage rates for the CCDF program. We
    incorporated this information into the report. HHS also thought that we
    overstated the differences between CCDF and TANF in the impact of state
    flexibility on coverage rates so we changed that section of the report.
    With regard to TANF, HHS raised the concern that increasing coverage rates
    may conflict with other TANF program goals and consequently, coverage
    rates are not an appropriate performance

    measure for the TANF program. We recognize that increasing the coverage
    rate is not an explicit goal of TANF and believe this concern is
    consistent with the report's conclusion that increasing program access may
    not be feasible or desirable for some programs. Nevertheless, we continue
    to believe that including program participation and coverage rates in key
    program reports can help inform policymakers and program administrators at
    all levels of government and assist them making budgetary and programmatic
    decisions. In its discussion of SCHIP and Medicaid, HHS indicated that the
    report reinforced the agency's approach to promoting both access and
    integrity. The department noted that CMS is working to improve its
    coverage rate estimates for SCHIP and meanwhile, it continues to measure
    progress toward increasing coverage among children under 200 percent of
    poverty, a proxy for the program coverage rate.

    HHS also highlighted several other issues that we believe are already
    sufficiently discussed in the report. These include the fact that not all
    those eligible and not participating need program services; that some
    programs allow states considerable flexibility in implementing programs
    and determining eligibility; that participation or coverage rates can be
    challenging to estimate accurately; and that uncertainties and limitations
    surrounding participation and coverage rate estimates should be made clear
    to users of this information. HHS also reiterated some of the limitations
    of our cost estimates and our Head Start coverage rate estimates. Agency
    officials also provided technical comments, which we incorporated in the
    report where appropriate.

    Department of Housing and Urban Development officials provided us with
    technical comments, which we incorporated in the report where appropriate.

    The Internal Revenue Service agreed with our conclusions and
    recommendation. The IRS recognizes the interactions between efforts to
    improve program access and those intended to improve program integrity,
    and as part of their efforts to utilize a balanced approach that
    emphasizes both goals, the IRS has recently established the EITC
    participation rate as a GPRA measure. As it moves forward in developing
    the EITC participation rate, the IRS plans to take steps to quantify
    errors that may result from estimating these participation rates to help
    users better understand the accuracy of the data and ensure that estimates
    will be comparable over time. Agency officials also provided technical
    comments, which we incorporated in the report where appropriate.

    The Social Security Administration agreed with our conclusions and
    recommendation. The agency noted that it has considered the feasibility of
    estimating participation rates in the past and has calculated
    participation rates among the elderly. However, the agency also noted that
    limitations of the national survey data make such estimates challenging
    for the SSI program. The agency agreed that estimating participation rates
    on a regular basis could provide an important management tool.

    As agreed with your office, unless you publicly announce its contents
    earlier, we plan no further distribution of this report until 30 days
    after its
    issue date. At that time we will send copies of this report to the
    Secretaries
    of the Departments of Agriculture, Education, Health and Human Services,
    and Housing and Urban Development; the Commissioners of the Internal
    Revenue Service and the Social Security Administration; relevant
    congressional committees; and others who are interested. Copies will be
    made available to others upon request, and this report will also be
    available on GAO's Web site at http://www.gao.gov.

    If you or your staff have any questions about this report, please contact
    me
    on (415) 904-2272. Additional GAO contacts and acknowledgments are
    listed in appendix VIII.

    Sincerely,

    David Bellis, Director
    Education, Workforce, and Income Security

    Appendix I: Objectives, Scope, and Methodology

    We designed our study to provide information on (1) the proportion of
    those eligible who are participating in 12 selected low-income programs;
    (2) the factors that influence participation in those programs; and (3)
    strategies used by federal, state, and local administrators to improve
    both access and integrity, and whether agencies monitor access by
    measuring participation rates. To obtain information on these issues, we
    compiled estimates of participation and coverage rates for each of the
    programs covered by the review for the most recent year for which data
    were available, we reviewed literature on participation in programs for
    low-income people, and we gathered information directly from both federal
    program officials and state and local administrators. To determine the
    completeness and accuracy of data obtained from various sources, we took
    several steps, described below, to assess the data and determined that the
    data were sufficiently reliable for use in this report.

    We performed this work between November 2003 and January 2005 in
    accordance with generally accepted government auditing standards.

    Participation and Coverage Rates

    To obtain information on the proportion of those eligible who are
    participating in 12 selected low-income programs, we used information
    developed by the Urban Institute under contract with HHS about the
    participation and coverage rates they estimated for 7 programs-CCDF,
    Medicaid, TANF, food stamps, SCHIP, SSI, and WIC. Also, we estimated the
    coverage rates for the Head Start program using administrative data and
    CPS data and for the Housing Choice Voucher and Public Housing programs
    using data from a HUD report on worst case housing needs in 1999. The
    participation rate estimate for the EITC program was from our previous
    work. In addition, we performed a literature review to obtain information
    about program participation and coverage rates that were estimated by
    other organizations. When possible, we obtained rates from 1997 to the
    most recent year available, but as mentioned in the report, we did not
    present many estimates of rates prior to the most recent year available
    because changes in methodologies did not allow us to determine whether
    changes in the rates over time were actual changes in participation rates
    or resulted from changes to the estimation methodology. We were unable to
    provide a Pell Grant program participation rate because we were unable to
    assess the reliability of available data on the family income of students
    who did not apply for federal financial assistance, which is necessary for
    determining program eligibility. Table 11 summarizes the methodologies
    used to calculate participation and coverage rates for the 12 programs
    covered in this review.

    Appendix I: Objectives, Scope, and Methodology

           Table 11: Summary of Participation and Coverage Rate Methodologies
                                                                                                       version 3                                                   model
     Participation                                       Estimate         The Urban TANF,      of      (TRIM3),          Estimate            TRIM3;      of      developed       Estimate
      or coverage   Program methodology  Data            of               Institute SCHIP, potentially developed         of             Mathematica  potentially   under   EITC     of       percentage
         rate                           source   SSI,    recipients Transfer Income  WIC    eligible     under    Food   recipients          Policy   eligible   contract        eligible        of
                                               Medicaid, as a       Microsimulation                    contract   Stamp  as a       Research, Inc.,                with         recipients   potentially
                                                 CCDF,   percentage          model,                    with HHS. Program percentage microsimulation                USDA.            as        eligible

    GAO estimate based on administrative and CPS data and compliance
    information provided by IRS, see GAO, Earned Income Tax Credit
    Participation, GAO-02-290R (Washington, D.C.: Dec. 14, 2001).

    Housing Choice Voucher, Estimate of eligible recipients as GAO estimate based on
                         administrative data and data from the

    public housing

      percent of potentially eligible HUD 1999 worst case needs report. Head Start
     Estimate of number of funded slots as GAO estimate based on administrative and
                                  national survey data

          a percentage of 3- and 4-year-old children in families below poverty

    from the U.S. Census Bureau's Annual Social and Economic Supplement to the
    Current Population Survey (CPS).

    Participation and Coverage Rates Estimated by The Urban Institute

    Source: GAO.

    Note: Some participation and coverage rate estimates are based on the
    average monthly number of recipients and people who are eligible for a
    program while others are based on the total number of recipients and
    people who are eligible at any point in the year. The participation and
    coverage rate for any program will differ by whether average monthly or
    total numbers are used.

    The Urban Institute estimated participation and coverage rates for CCDF,
    Medicaid, TANF, food stamps, SCHIP, SSI, and WIC under a contract with the
    Department of Health and Human Services (HHS). In order to evaluate the
    reliability of these data and to determine whether it met our standards
    for reporting quantitative information, we contracted with the Urban
    Institute to obtain additional information about these estimates and the
    methodologies used to calculate them, including the Transfer Income Model,
    version 3 (TRIM3).

    The TRIM3 microsimulation model was used to determine the number of people
    who would be eligible for a program if they applied. This model simulates
    the process that a caseworker would undergo to determine eligibility by
    reviewing individual or household characteristics such as household
    composition, income, disability, and other factors as appropriate for the
    programs. TRIM3 primarily relies on the Census Bureau's Annual Social and
    Economic Supplement to the Current Population Survey to estimate the
    eligible population. For some programs, this data source does not include
    all information needed to determine a person's or household's eligibility.
    For example, the data do not include information on the value of certain
    assets that might be considered during eligibility determination for some
    programs. In these instances, the Urban Institute researchers used TRIM3
    to assign eligibility-related

    Appendix I: Objectives, Scope, and Methodology

    characteristics to individuals included in the CPS who they believed were
    likely to have them, a process referred to as imputation. The estimates of
    the eligible population were used as the denominators of the participation
    and coverage rates, and administrative data on the number of participants
    were generally used as the numerator. In general, groups excluded from the
    TRIM3 eligibility estimate used for the denominator (such as those who are
    institutionalized) were also excluded from the administrative data used
    for the numerator.

    The CPS data limitations and the process of assigning characteristics may
    have resulted in errors in the estimates of the eligible population and,
    therefore, the participation and coverage rates for seven programs. These
    include sampling error, non-sampling error, error related to the
    imputation process, and error related to program implementation. GAO
    statisticians and social science analysts reviewed the Urban Institute's
    TRIM3 technical documentation, interviewed the Urban Institute
    researchers, requested additional TRIM3 calculations from the Urban
    Institute, and reviewed available academic and government literature on
    the sources of error in microsimulation models of low-income program
    participation to determine what errors existed. Although there are several
    types of potential errors, not all the errors could be quantified.

    o  	The CPS, like all sample surveys, is subject to sampling error. This
    error reflects the difference between (1) the results that are obtained
    from the members of the sample that are actually surveyed and (2) the
    results that would be obtained if each member of the population were
    surveyed. We contracted with the Urban Institute to calculate the sampling
    error of CPS data used in TRIM3, and we verified that they used the
    appropriate procedures to make these calculations. We used the estimates
    of sampling error provided by the Urban Institute to calculate a range for
    the most recent TRIM3 estimates at the 95 percent confidence level, and
    these ranges are presented in the report. However, the ranges
    underestimate the total error in TRIM3 estimates.

    o  	The CPS data used in TRIM3 are also subject to non-sampling error that
    has not been quantified. These errors can occur if survey respondents have
    difficulty interpreting a particular question, lack information necessary
    to answer a question, are uncomfortable with accurately reporting certain
    sensitive information, or do not answer certain questions, among other
    factors that affect data collection and measurement. Such non-sampling
    errors are likely to have affected variables that are used by TRIM3, such
    as labor force participation for

    Appendix I: Objectives, Scope, and Methodology

    Participation and Coverage Rates We Estimated

    example. According to a 2002 Census Bureau report, the 1996 CPS covers a
    smaller proportion of the Black population (84 percent) than it does of
    the White population (94 percent). The Census Bureau reported that this
    low coverage rate biases labor force estimates, because those who are left
    out of the sampling frame are quite different from those who are included
    in it. Yet, the full extent of non-sampling error in the CPS is unknown.

    o  	The process of assigning characteristics when CPS data are not
    available-the imputation process-also can produce error. In most
    instances, efforts were not made to quantify the error associated with
    these imputed data. However, a National Research Council (NRC) panel
    attempted to quantify such error when reviewing methods for estimating
    participation rates for WIC and found that estimates can vary noticeably
    depending on whether imputed or reported monthly income data are used to
    determine eligibility. During this review, the NRC panel compared
    TRIM-adjusted CPS data, in which monthly income is imputed on the basis of
    annual income, and Survey of Income and Program Participation (SIPP) data,
    in which monthly income is collected directly from survey respondents.

    o  	Specification error can result when the variables in a microsimulation
    model incorrectly represent the process for determining program
    eligibility that actually occurs between caseworkers and applicants. For
    example, in its TANF module, TRIM3 does not consider certain aspects of
    program eligibility, including specific work requirements, behavioral
    requirements such as school attendance and immunizations, and sanctions
    from failing to comply with work rules or child support rules. These
    exclusions could cause TRIM3 to overestimate eligibility and therefore
    underestimate participation and coverage rates. Similarly, while several
    means-tested programs base their eligibility on the federal poverty
    guidelines, there is no universal administrative definition of "family,"
    or "household" that is valid for all programs that use the poverty
    guidelines. To the extent that federal programs use administrative
    definitions that differ somewhat from the statistical definitions used by
    the CPS, estimates of the eligible population could be affected.

    We estimated the participation and coverage rates for the Head Start,
    Housing Choice Vouchers, Public Housing, and EITC (in prior work). These
    estimates are also limited by the data sources and assumptions of who may
    be eligible for these programs. The EITC and Head Start rates were
    estimated using the CPS and, therefore, estimates are subject to sampling
    and non-sampling errors mentioned earlier. In addition, because

    Appendix I: Objectives, Scope, and Methodology

    the CPS did not have complete information to determine who may be eligible
    for the EITC, we made assumptions about whether children were in a
    household long enough for them to be counted as a member for tax purposes.
    We also assumed that the lack of data on certain assets would not
    significantly affect participation rate estimates.1 For Head Start, the
    administrative data did not allow us to determine the number of children
    who are actually served in the program. The data were only on the number
    of program slots funded, and more than one child can be served with each
    slot over the course of a program year if there is turnover in
    participation. However, for the purposes of calculating Head Start
    coverage rates, we assumed that only one child filled a slot.

    We used a HUD report on the households with worst case housing needs in
    1999 and administrative data to estimate the Housing Choice Vouchers and
    Public Housing coverage rates. HUD used data from the American Housing
    Survey in this report.2 We assessed the reliability of the survey data and
    determined that the data were sufficiently reliable for use in this
    report. In conducting this assessment, we reviewed Bureau of the Census
    studies on the survey. Census reported that the American Housing Survey
    underestimates income and overestimates poverty for households, variables
    used to determine the number of people with housing needs. We were unable
    to quantify the error this may have produced in the estimates.

    We determined that the administrative data used to estimate participation
    and coverage rates were reasonably reliable for this purpose. As a part of
    this assessment, we reviewed the data on the number of participants and we
    discussed this information with federal agency officials. However, with
    the exception of the EITC data, we did not adjust the number of
    participants to account for those who may have received program benefits
    and/or services in error. As a result, the administrative data could have
    produced errors in the estimates due to potential inaccuracies in
    reporting the number of eligible participants.

    Reliability of Administrative Data

    1For more details, see GAO, Earned Income Tax Credit Participation,
    GAO-02-290R (Washington, D.C.: Dec. 14, 2001).

    2For more details, see U.S. Department of Housing and Urban Development,
    Trends in Worst Case Needs for Housings, 1979-1999: A Report to Congress
    on Worst Case Housing Needs (Washington, D.C.: December 2003).

                     Appendix I: Objectives, Scope, and Methodology

                                     Cost Estimates

    To obtain the estimated cost of providing benefits to those eligible and
    not participating in the Food Stamp Program, SSI, TANF cash assistance and
    WIC, we contracted with the Urban Institute to provide us with these
    estimates. The organization used the TRIM3 model to estimate the total
    benefit amount for eligible non-participants, and these estimates were
    based on the amount that each individual or household would receive based
    on their characteristics. These estimates have similar limitations as
    their related participation and coverage rates, and not all of their
    errors could be quantified.

    The EITC cost estimate was based on our prior work,3 but the Head Start
    cost estimates were done during the course of this project. We estimated
    the potential costs for Head Start using administrative data on the
    average cost per slot and the number of eligible non-participating
    children we estimated using the CPS. We assume that only one child would
    be served with a slot, even though in actuality more one than can. We also
    did not account for variation in program cost at the local level, and we
    did not account for variation in local eligibility criteria.

    All of the estimates have two major limitations. We did not include the
    administrative costs of serving the non-participants; this would increase
    the cost estimates for all programs. For some programs, federal, state,
    and local governments would share these administrative costs. We also did
    not factor in policy or economic changes that may occur if participation
    increased in these programs. In addition, for all programs, we calculated
    the estimates for each program individually and we did not account for how
    changes in the participation for one program could influence benefit
    amounts in another.

    We were unable to estimate the cost of serving eligible, non-participants
    in the five other programs-CCDF, HCV, Medicaid, Pell Grants, Public
    Housing, and SCHIP-because we did not have enough information to determine
    how the characteristics of the non-participants would have affected the
    benefit amounts they could have received.

    3For more details, see GAO, Earned Income Tax Credit Participation,
    GAO-02-290R (Washington, D.C.: Dec. 14, 2001).

    Appendix I: Objectives, Scope, and Methodology

    Factors That Affect Participation and Strategies to Improve Access and
    Integrity

    To obtain information about factors that affect participation and
    strategies to improve access and integrity for the 12 selected programs,
    we conducted a literature review, obtained documentation from federal
    officials, interviewed federal officials and interviewed state and local
    officials in California, Connecticut, Georgia, Maryland, and Minnesota.
    The literature review consisted of studies on factors that affect
    participation and program integrity issues that we found through searches
    of the Internet and social science research databases and recommendations
    from federal agency officials. Among the documentation we reviewed for
    this objective were the available fiscal year 2004 and 2005 annual plans
    for each program and agency reports to Congress to determine whether the
    relevant agencies had stated measures for program integrity and access
    outcomes. We selected states to visit primarily based on their innovative
    practices to address barriers to participation for multiple programs we
    reviewed. We obtained information on innovative practices from federal
    officials, federal agency publications and a database on state and local
    initiatives complied by the Administration for Children and Families and
    several non-profit, non-partisan agencies. We also considered state
    efforts to ensure program integrity, program aspects that may create
    barriers to access and demographic and geographic diversity in making our
    selection. We were not able to address all the programs we reviewed during
    every site visit, and information from these site visits cannot be
    generalized to all states and localities and to all programs we reviewed.
    In addition, we did not assess the effectiveness of the strategies we
    presented.

    Appendix II: Limitations Affecting Use of Participation and Coverage Rates

    While participation and coverage rate estimates provide important program
    information that can be useful to both policymakers and program
    administrators, these estimates must be interpreted carefully to take into
    consideration such factors as survey data, research methodology,
    timeliness of estimates and the availability of alternative programs.
    These factors limit our ability to compare rates across programs and must
    be considered in efforts to define appropriate or desired participation or
    coverage rate levels.

    Limitations of National Survey Data

    There are two national household level surveys conducted by the Census
    Bureau that can be used to estimate the total number of people eligible
    for low-income programs, the Annual Social and Economic Supplement to the
    Current Population Survey (CPS) and the Survey of Income and Program
    Participation (SIPP) and each has advantages and disadvantages. The CPS is
    the larger of the two surveys and data from this survey are available
    annually for the prior year. In addition, it has detailed information
    about income, household composition, labor force participation, and
    receipt of many federal benefits, but it does not include all the
    information that may be needed to determine program eligibility. For
    example:

    o  	Although the value of assets such as automobiles and savings accounts
    are considered when determining financial eligibility for some of programs
    we reviewed, the CPS does not collect some of these data.

    o  	The CPS also omits institutionalized individuals, some of whom may be
    eligible for Medicaid and SSI.

    Researchers at the Urban Institute and Mathematica told us that, while
    they were aware of these disadvantages, they continue to use CPS data in
    their calculations because of the relatively large sample size and because
    the CPS is conducted annually, which makes it a good source for yearly
    snapshots of participation. To compensate for the limitations in the data,
    researchers either make assumptions and assign information needed to
    determine eligibility, such as asset values, to individuals in order to
    determine their program eligibility or they omit certain subpopulations
    such as institutionalized individuals or pregnant and postpartum women
    from their participation rate estimates.

    The SIPP is a smaller survey than the CPS, but because it was designed
    specifically to better measure low-income program participation, it has
    some advantages over the CPS. Specifically, it includes more detailed
    information about individual characteristics, monthly labor force
    activity, monthly income, and household assets that factor in program
    eligibility

    Appendix II: Limitations Affecting Use of Participation and Coverage Rates

    determinations.1 However, the SIPP is designed as a panel study (following
    the same individuals for 2 1/2 to 4 years) and thus may be more suited for
    use in examining detailed characteristics of participants and reasons for
    movement into and out of social programs. In addition, the sample faces
    attrition over the survey period, and some data needed to determine
    eligibility are available only for a limited number of years. The National
    Research Council used the SIPP to estimate WIC participation rates. This
    estimate included pregnant women in addition to infants and children, but
    by 2003 when this estimate was published, the most recent estimate they
    could create using SIPP was for 1998.

    There are some low-income programs for which neither the CPS nor the SIPP
    provide sufficient information to estimate participation rates. For
    example, to estimate the proportion of enrolled students eligible for a
    Pell Grant would require information on student enrollment status in
    addition to family income information. The National Center for Education
    Statistics within the Department of Education conducts a survey, the
    National Postsecondary Student Aid Study, that includes both student
    enrollment and family income information. However, concerns have been
    raised about the reliability of the family income data for students who
    did not apply for federal financial assistance. We were unable to assess
    the reliability of this data element and thus were unable to determine
    whether the data were sufficiently reliable for our purposes. As a result,
    we did not estimate a participation rate for this program.

    Errors from Research Methodology

    Because no existing national data provide every piece of information
    needed to determine the exact size of the eligible population for
    lowincome programs, all participation rate estimates involve certain
    assumptions and generalizations. These assumptions can create errors that
    are difficult or impossible to quantify. Consequently, the margins of
    error we present, which only capture errors that result from sampling,
    could understate the true range within which participation rate estimates
    are most likely to fall.

    One way to better understand how these estimates are affected by the
    research methodology is to compare them to alternative participation rate
    estimates that have been calculated using different assumptions. While the

    1The SIPP collects a detailed inventory of real and financial assets once
    a year and conducts more frequent measures of assets relevant for
    assistance programs.

    Appendix II: Limitations Affecting Use of Participation and Coverage Rates

    Urban Institute and Mathematica Policy Research, Inc., both estimate food
    stamp participation rates based on CPS data, they use slightly different
    assumptions to estimate the eligible population. For example, because the
    CPS does not include information on which household members purchase and
    prepare food together, model estimates had to make assumptions about
    household food preparation habits. Despite differences in assumptions, the
    participation rates estimated by the Urban Institute and Mathematica were
    very similar.

    Years for Which Estimates Are Available

    The most recent participation rate data available varies by program, and
    all estimates are at least 3 years old. As a result, changes in
    legislation, state policy, program administration, the national economy,
    and other factors that may have influenced the participation rate over the
    past few years are not reflected in these estimates.

    o  	The EITC participation rate estimate is based, in part, on an
    estimated 32 percent of EITC claims being made in error in 1999. Since
    that time, Congress has enacted new tax laws and the IRS has taken steps
    to improve compliance.

    o  	The total number of people receiving food stamps and Medicaid fell
    after passage of the Personal Responsibility and Work Opportunity
    Reconciliation Act of 1996 when participation in these programs was
    "de-linked" from participation in TANF. Since 2000, however, states have
    implemented policies to ensure that those eligible for food stamps and
    Medicaid continue to receive benefits when they leave TANF.

    o  	Since 2000, the national economy has emerged from a recession, but
    economic growth, until recently, has been slow and uneven and marked by
    slow job growth. Economic conditions have historically been correlated
    with low-income program participation.

    None of these factors are reflected in the numbers we presented in this
    report.

    Availability of Alternative When interpreting the participation and
    coverage rate estimates we

    Programs 	provided, it is important to keep in mind that those eligible
    but not participating in the programs we reviewed may not be living
    without assistance; many could be receiving assistance from alternative
    programs. In some cases, people could be eligible for more than one
    program we reviewed and able to receive similar services from these
    programs. Those eligible could also have access to state and local
    programs that address

    Appendix II: Limitations Affecting Use of Participation and Coverage Rates

    similar needs. This is particularly relevant for the non-entitlement
    programs covered by our review.

    The coverage rates we provide for the two housing programs in this review
    are calculated in isolation, and as a result, some of the households that
    appear eligible but not participating in the Public Housing program are
    receiving Housing Choice Vouchers (HCV), and vice versa. In addition,
    while HCV and public housing are two of the largest federal housing
    programs, there are several other federal, state, and local housing
    programs from which eligible households could receive assistance. HUD
    estimated that in 1999 about a quarter of all households eligible for any
    kind of housing assistance received assistance.

    The availability of alternative programs could also affect coverage rates
    for CCDF and Head Start. For example, state-financed pre-school programs
    provide child care and educational development services for many
    4-year-olds who appear eligible but are not enrolled in Head Start.
    Children could be eligible for both programs but only receiving services
    in one, but this would not be reflected in program coverage rate
    estimates. HHS officials have recognized that other federal programs, such
    as TANF and Social Services Block Grant (SSBG), also provide child care to
    children eligible for CCDF. Because the CCDF participation rate does not
    reflect these additional sources of federal child care funds, HHS has
    produced a different coverage rate, estimating that about 26 percent of
    CCDF-eligible children were receiving child care services through one of
    four federal funding streams-CCDF, SSBG, TANF, and TANF state funds in
    2001.2

    Cost Considerations 	State and localities are able to set the eligibility
    criteria for some of these programs, and the cost estimates do not account
    for the policy changes agencies may make if the current criteria resulted
    in increased participation. For example, if states found that current
    eligibility limits may result in increased TANF participation, they may
    change eligibility criteria or benefit levels to ensure state costs do not
    increase. Either of these changes may reduce the total additional costs.

    2HHS does not collect information on the number of children who receive
    child care subsidies through the SSBG, TANF and TANF Maintenance of Effort
    funding. Therefore, the agency estimated the number of children served
    through those other funding source by dividing the total amount spent on
    child care services from each source by the typical cost of serving a
    child under CCDF.

    Appendix II: Limitations Affecting Use of Participation and Coverage Rates

    All cost estimates were calculated individually and, therefore, do not
    account for how participation changes in one program may influence benefit
    amounts in another. For example, Food Stamp Program costs may not be as
    high if participation in the SSI program increased because some eligible
    non-participants would qualify for lower food stamp benefits due to the
    cash assistance. Also, as mentioned earlier, other federal, state, and
    local programs may provide similar benefits that non-participants could be
    receiving, and, therefore, they may not need or want the benefits from the
    programs we covered. For example, food stamp eligible non-participants
    with short-term nutritional needs may decide to receive assistance through
    food banks. In addition, the TANF estimate we provide is only the cost of
    providing cash assistance to eligible people who are not participating;
    this program offers other supports to needy families, such as
    transportation to work and child care, that is funded by the federal and
    state government.

    Appendix III: Agency Estimates of Improper Payments for Programs Reviewed

        Table 12: Improper Payment Estimates Reported in Agency Fiscal Year 2003
                         Performance and Accountability Reports
      Reported                               Food
        amount Agency Program payments USDA  Stamp  $1,507,000,000  WIC NA HHS/ACF TANF NA  CCDF NA  Head  NA IRS EITC 10,500,000,000 HHS/CMS Medicaid NA  SCHIP NA SSA SSI 2,740,000,000 Education Pell  377,500,000 HUD Public  650,000,000  Housing                  $1,877,000,000
            of                              Program                                                  Start                                                                                          Grant                 Housing              Choice      (Tenant- and
      improper                                                                                                                                                                                                                                 Voucher   Project-Based)

    Source: GAO, Financial Management: Fiscal Year 2003 Performance
    Accountability Reports Provide Limited Information on Governmentwide
    Improper Payments, GAO-04-631T (Washington, D.C.: Apr. 15, 2004). Data
    from this report were based on agency fiscal year 2003 Performance and
    Accountability Reports.

    Appendix IV: Comments from the Department of Education

    Appendix IV: Comments from the Department of Education

                        Page 68 GAO-05-221 Means-Tested Programs

                        Page 69 GAO-05-221 Means-Tested Programs

                        Page 70 GAO-05-221 Means-Tested Programs

                        Page 71 GAO-05-221 Means-Tested Programs

                        Page 72 GAO-05-221 Means-Tested Programs

                        Page 73 GAO-05-221 Means-Tested Programs

                        Page 74 GAO-05-221 Means-Tested Programs

                        Page 75 GAO-05-221 Means-Tested Programs

                        Page 76 GAO-05-221 Means-Tested Programs

                        Page 77 GAO-05-221 Means-Tested Programs

    Appendix VI: Comments from the Department of the Treasury

    Appendix VI: Comments from the Department of the Treasury

    Appendix VII: Comments from the Social Security Administration

    Appendix VII: Comments from the Social Security Administration

    Appendix VII: Comments from the Social Security Administration

    Appendix VIII: GAO Contacts and Staff Acknowledgments

    GAO Contacts

      Staff Acknowledgments

    Gale Harris (202) 512-7235, harrisg@gao.gov Kathryn Larin (202) 512-5045,
    larink@gao.gov

    Carolyn Blocker, Cheri Harrington, Danielle Giese, Amanda Mackison, and
    Kim Siegal also made significant contributions to this report. Jay Smale,
    Mark Braza, Doug Sloane, Ed Nannenhorn, and Beverly Ross provided
    technical assistance in developing and evaluating the reliability of
    participation rate and potential program cost estimates; Lise Levie
    provided key technical assistance; and Johnnie Barnes, Carrie Watkins, and
    Charles Wilson provided information on the two housing programs covered in
    the report.

    Related GAO Products

    Food Stamp Program: Farm Bill Options Ease Administrative Burden, but
    Opportunities Exist to Streamline Participant Reporting Rules among
    Programs. GAO-04-916. Washington, D.C.: September 16, 2004.

    Food Stamp Program: Steps Have Been Taken to Increase Participation of
    Working Families, but Better Tracking of Efforts Is Needed. GAO-04-346.
    Washington, D.C.: March 5, 2004.

    SSA Disability Decision Making: Additional Steps Needed to Ensure Accuracy
    and Fairness of Decisions at the Hearing Level. GAO-04-14. Washington,
    D.C.: November 12, 2003.

    Federal Student Aid: Expanding Eligibility for Less Than Halftime Students
    Could Increase Program Costs, but Benefits Uncertain. GAO-03-905.
    Washington, D.C.: September 10, 2003.

    Social Security Disability: Reviews of Beneficiaries' Disability Status
    Require Continued Attention to Improve Service Delivery. GAO-03-1027T.
    Washington, D.C.: July 24, 2003.

    Welfare Reform: States Provide TANF-Funded Work Support Services to Many
    Low-Income Families Who Do Not Receive Cash Assistance. GAO-02-615T.
    Washington, D.C.: April 10, 2002.

    Food Stamp Program: States' Use of Options and Waivers to Improve Program
    Administration and Promote Access. GAO-02-409. Washington, D.C.: February
    22, 2002.

    Medicaid and SCHIP: States' Enrollment and Payment Policies Can Affect
    Children's Access to Care. GAO-01-883. Washington, D.C.: September 10,
    2001.

    Food Stamp Program: Program Integrity and Participation Challenges.
    GAO-01-881T. Washington, D.C.: June 27, 2001.

    Medicaid and SCHIP: Comparisons of Outreach, Enrollment Practices, and
    Benefits. HEHS-00-86. Washington, D.C.: April 14, 2000.

    Medicaid Enrollment: Amid Declines, State Efforts to Ensure Coverage after
    Welfare Reform Vary. HEHS-99-163. Washington, D.C.: September 10, 1999.

    Related GAO Products

    Food Stamp Program: Various Factors Have Led to Declining Participation.
    RCED-99-185. Washington, D.C.: July 2, 1999.

    Medicaid: Demographics of Nonenrolled Children Suggest State Outreach
    Strategies. HEHS-98-93. Washington, D.C.: March 20, 1998.

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