Welfare Programs: Opportunities to Consolidate and Increase Program
Efficiencies (Letter Report, 05/31/95, GAO/HEHS-95-139).

Pursuant to a congressional request, GAO reviewed low-income families'
participation in multiple welfare programs, focusing on: (1) program
inefficiencies; and (2) issues to consider in consolidating welfare
programs.

GAO found that: (1) federal expenditures for the 80 welfare programs
that provide assistance to low-income recipients totalled $223 billion
in 1993; (2) many low-income families are eligible for and receive
assistance from multiple programs; (3) most families receiving Aid to
Families with Dependent Children (AFDC) are also eligible for Medicaid
and food stamps; (4) welfare programs are difficult for needy families
to access and for program administrators to operate; (5) numerous
programs target the same clients, share the same goals, and provide
similar services, creating program overlaps which add unnecessary
administrative costs and complicate service delivery; (6) given their
size and complex structure, welfare programs are inherently vulnerable
to fraud and abuse and little is known about their effectiveness; (7)
state governments and local providers have sought to streamline program
operations and service delivery, but their efforts are hindered by the
patchwork of federal programs and funding streams; (8) Congress is
considering consolidating specific federal programs, such as employment
training, child care subsidy, and housing programs; and (9) it is
important to ensure that federal funds are used effectively regardless
of how welfare programs are ultimately restructured.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  HEHS-95-139
     TITLE:  Welfare Programs: Opportunities to Consolidate and Increase 
             Program Efficiencies
      DATE:  05/31/95
   SUBJECT:  Public assistance programs
             Aid to families with dependent children
             Welfare services
             Centralization
             Welfare recipients
             Interagency relations
             Disadvantaged persons
             Administrative costs
             Cost control
             Funds management
IDENTIFIER:  Medicaid Program
             AFDC
             Census Bureau Current Population Survey
             Food Stamp Program
             Supplemental Security Income Program
             HUD Section 8 Housing Assistance Program
             Head Start Program
             Family Assistance Management Information System
             Child Welfare Services Program
             Earned Income Tax Credit
             JOBS Program
             Job Opportunities and Basic Skills Training Program
             Child Care and Development Block Grant
             AFDC Transitional Child Care Program
             HHS At-Risk Child Care Program
             National School Lunch Program
             JTPA
             Job Training Partnership Act Program
             
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Cover
================================================================ COVER


Report to the Chairman, Subcommittee on Department Operations,
Nutrition and Foreign Agriculture, Committee on Agriculture, House of
Representatives

May 1995

WELFARE PROGRAMS - OPPORTUNITIES
TO CONSOLIDATE AND INCREASE
PROGRAM EFFICIENCIES

GAO/HEHS-95-139

Welfare Reform


Abbreviations
=============================================================== ABBREV

  AFDC - Aid to Families With Dependent Children
  CCDBG - Child Care and Development Block Grant
  CPS - Current Population Survey
  CRS - Congressional Research Service
  EIC - Earned Income Credit
  GPRA - Government Performance and Results Act of 1993
  HHS - Health and Human Services
  HUD - Housing and Urban Development
  IRS - Internal Revenue Service
  JOBS - Job Opportunities and Basic Skills
  JTPA - Job Training Partnership Act
  OMB - Office of Management and Budget
  SSBG - Social Services Block Grant
  SSI - Supplemental Security Income
  WIC - Special Supplemental Food Program for Women, Infants and
     Children

Letter
=============================================================== LETTER


B-261056

May 31, 1995

The Honorable Bill Emerson
Chairman, Subcommittee on Department Operations,
 Nutrition and Foreign Agriculture
Committee on Agriculture
House of Representatives

Dear Mr.  Chairman: 

Since the passage of the Social Security Act in 1935, nearly 80
programs have been enacted to help meet the needs of low-income
individuals and families.  Authorized by different congressional
committees at different points in time, these programs were created
to help meet the specific needs of various groups of low-income
people.  The numbers of programs in this system, and the costs
involved, have raised concerns, however, that the system is too
costly and complex and should be overhauled.  In fiscal year 1993
alone, the federal government spent about $223 billion to assist
low-income Americans of all ages.\1 These federal expenditures
accounted for approximately 16 percent of the fiscal year 1993
federal budget. 

Rising program costs, growing caseloads, and dissatisfaction with
current program designs have prompted states to initiate major
reforms.  Escalating costs for Medicaid--the single largest
means-tested\2 program--have prompted some states to move most or all
of their Medicaid population into managed care delivery systems\3 to
control future cost growth.  Several states are simultaneously
seeking to expand Medicaid coverage to previously uninsured
low-income individuals; states anticipate that savings from managed
care systems will help finance this expanded coverage. 

In response to caseload growth in the Aid to Families With Dependent
Children (AFDC) program, states have acted to change welfare
recipients' behavior and enhance family responsibility.  For example,
several states no longer increase the amount of a family's AFDC
benefit for an additional child born while the mother is receiving
welfare.  State Medicaid and AFDC reform efforts are taking place
under specific federal waivers; the Congress is currently considering
restructuring these and other means-tested programs to increase
states' flexibility to design and manage these programs, increase
program efficiency, and constrain spending growth. 

On February 7, 1995, we provided an overview of means-tested programs
in testimony before the Subcommittee;\4 this report expands on the
issues presented in our testimony.  More specifically, we (1)
describe low-income families' participation in multiple welfare
programs; (2) examine program inefficiencies, such as program overlap
and fragmentation; and (3) identify issues to consider in deciding
whether, and to what extent, to consolidate welfare programs. 

To address these issues, we drew from our past work and other reports
on the issues related to the programs within the welfare system. 
(See app.  II.) In deciding which programs to include in our report,
we followed the Subcommittee's request that we discuss the programs
addressed in the Congressional Research Service's (CRS) September
1993 report on cash and noncash benefits for persons with limited
income.\5 Our analysis of low-income families' participation in
means-tested programs is based on data from a national household
survey, the Bureau of the Census' March 1994 Current Population
Survey (CPS). 


--------------------
\1 Program expenditures and numbers of recipients cited in this
report are for fiscal year 1993, the most recent year for which
complete program expenditure and participation information was
available. 

\2 Means-tested programs are restricted to individuals or families
whose incomes fall below defined levels and who meet certain other
eligibility criteria established for each program. 

\3 Managed care in Medicaid is not a single health care delivery
plan, but rather a continuum of models that share a common approach. 
Common to all managed care models in the Medicaid program is the use
of a primary care physician to control and coordinate the delivery of
health services in a cost-conscious manner. 

\4 Means-Tested Programs:  An Overview, Problems, and Issues
(GAO/T-HEHS-95-76, Feb.  7, 1995). 

\5 Cash and Noncash Benefits for Persons With Limited Income: 
Eligibility Rules, Recipient and Expenditure Data, FY 1990-92
(EPW-93-832), Congressional Research Service, Library of Congress,
(Washington, D.C.:  1993). 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :1

About 80 welfare programs provide assistance to low-income
individuals and families; federal expenditures for these programs
totaled $223 billion in 1993.  Federal expenditures for the largest
five programs--Medicaid, Food Stamps, AFDC, Supplemental Security
Income (SSI), and Section 8 Housing Assistance--alone composed about
65 percent of total 1993 welfare expenditures, about $145 billion. 
Many low-income families are eligible for and receive assistance from
multiple programs.  Most families receiving AFDC, for example, are
also eligible for and receive Medicaid and food stamps. 

These myriad welfare programs--each with its own rules and
requirements--are difficult for families in need to access and
cumbersome for program administrators to operate.  For example, the
AFDC, Food Stamp, and Medicaid programs all determine need
differently and set different household maximum resource limits. 
Moreover, interactions among programs may send mixed signals to
recipients.  AFDC recipients whose benefits are reduced because they
failed to attend required employment training activities, for
example, qualify for increased food stamps, thus undermining efforts
to move AFDC recipients from welfare to work. 

We have identified several program areas--including employment
training, food assistance, and early childhood programs--where
numerous programs target the same clients, share the same goals, and
provide similar services.  Such program overlaps add unnecessary
administrative costs and make service delivery more complicated.  For
example, 163 separate employment training programs are scattered
across 15 federal departments and agencies and 40 interdepartmental
offices, which in turn channel funds to state and local program
administrators.  Given their size and complex structure, welfare
programs are also inherently vulnerable to fraud, waste, and abuse. 
Moreover, little is known about the effectiveness of many of these
programs.  Most agencies that administer employment training
programs, for example, do not know if their programs are helping
people find jobs. 

Confronted with this complex system, state governments and local
providers have sought to streamline program operations and service
delivery.  However, such efforts are hindered by the patchwork of
federal programs and funding streams.  To streamline this system, the
Congress and the administration are considering consolidating
specific federal programs, including employment training, child care
subsidy, and housing programs.  Regardless of how welfare programs
are ultimately restructured, ensuring that federal funds are used
efficiently and that programs are focused on outcomes remains
important. 


   BACKGROUND
------------------------------------------------------------ Letter :2

Over the years, the Congress has established about 80 separate
programs to provide cash and noncash assistance to low-income
individuals and families.  Taken together, these programs constitute
the nation's welfare system of means-tested programs.  Means-tested
programs are restricted to individuals or families whose income falls
below defined levels and who meet certain other eligibility criteria
established for each program.  To qualify for assistance, applicants
generally must show proof of income and other documentation, which
administering agencies must then verify. 

Means-tested programs target low-income individuals and families to
meet two broad objectives:  (1) to provide basic support and health
care for those who are often unable to support themselves--the aged,
blind, disabled, and children--and (2) to provide transitional
assistance to able-bodied adults and their families while promoting
self-sufficiency.  These programs provide benefits in six areas of
need:  (1) cash assistance; (2) medical benefits; (3) food and
nutrition; (4) housing; (5) education and training; and (6) other
services, such as child care. 

Federal expenditures for these welfare programs totalled about $223
billion in fiscal year 1993.  Many of these programs are also
partially funded by the states; when state dollars are included, the
total amount of spending reached $311 billion.  Federal spending for
these programs grew from $80 billion in fiscal year 1980; in
inflation-adjusted dollars, this represents a 58-percent increase. 
Table 1 highlights the federal spending levels in some of the largest
programs in each of the six areas of need.  (See app.  I for a
complete listing of the 80 programs and their expenditures.)



                           Table 1
           
           Selected Means-Tested Programs, by Type
               of Assistance (Fiscal Year 1993)

                    (Dollars in billions)

                                                   Estimated
                                                   expenditu
Type of assistance/program                               res
-------------------------------------------------  ---------
Income support
------------------------------------------------------------
Aid to Families With Dependent Children                $13.8
Supplemental Security Income                            21.8
Earned Income Credit (EIC)                              10.9

Medical care
------------------------------------------------------------
Medicaid                                                75.0
Medical Care for Certain Veterans                        8.3

Food and nutrition
------------------------------------------------------------
Food Stamps                                             23.7
School Lunch                                             3.8
Special Supplemental Food Program for Women,             2.9
 Infants. and Children (WIC)
School Breakfast                                         0.9

Housing
------------------------------------------------------------
Section 8 Housing Assistance                            11.2
Low-Rent Public Housing                                  6.2

Education and training
------------------------------------------------------------
Stafford Loans and Pell Grants                          11.6
Job Training Partnership Act (JTPA)                      3.5
Head Start                                               2.8
Job Opportunities and Basic Skills (JOBS)                0.7
 Training Program

Other services
------------------------------------------------------------
Social Services Block Grant (SSBG)                       2.8
Child Care and Development Block Grant (CCDBG)           0.9
Child Care--AFDC, Transitional, and At-Risk              0.8
Community Services Block Grant                           0.4
------------------------------------------------------------
Source:  Congressional Research Service (CRS); the Joint Tax
Committee; and the Departments of Health and Human Services (HHS),
Education, Agriculture, and Housing and Urban Development (HUD). 

While the nation's welfare system consists of about 80 means-tested
programs, a handful of programs account for most of the federal
spending on these programs and have driven much of the spending
growth.  The five largest programs--Medicaid, Food Stamps, AFDC, SSI,
and Section 8 Housing Assistance--accounted for 65 percent of federal
spending for means-tested programs in fiscal year 1993, about $145
billion.  Federal spending on these programs has more than doubled
since 1980 in inflation-adjusted dollars, as shown in figure 1. 

   Figure 1:  Growth in Federal
   Spending For Five Largest
   Means-Tested Programs, 1980-93

   (See figure in printed
   edition.)

Note:  Dollars are in constant 1993 dollars. 

Sources:  The 1980, 1985, and 1990 figures (except for housing) are
from 1995 Budget Perspectives:  Federal Spending for Social Welfare
Programs CRS, 94-215 EPW (Washington, D.C.:  1994).  The housing
expenditures are from HUD.  The 1993 expenditures are from CRS, and
the Departments of HHS, Agriculture, HUD, and Education. 

Four of these programs--Medicaid, Food Stamps, SSI, and AFDC--are
entitlement programs.  Entitlement programs guarantee assistance to
individuals or families as long as they meet the income and
eligibility tests.  The Section 8 Housing Assistance program, as well
as many other means-tested programs, is a nonentitlement program. 
Nonentitlement programs do not guarantee assistance to all those who
qualify.  Instead, they provide qualified applicants support until
funds are depleted. 


      MEDICAID IS THE LARGEST
      MEANS-TESTED PROGRAM
---------------------------------------------------------- Letter :2.1

The Medicaid program is the single largest program and is jointly
funded by federal and state governments.  Federal expenditures
reached nearly $75 billion in fiscal year 1993, and the states spent
an additional $56 billion in 1993 for a total of $131 billion in
Medicaid expenditures (see fig.  2).  Federal law mandates coverage
of certain medical services and population groups.  It also includes
coverage options, allowing states to choose whether to cover
additional services or low-income population groups.  The program
provided health coverage to 33 million low-income individuals in
1993. 

The Medicaid program is also one of the fastest growing components of
both federal and state budgets.  In 1993, Medicaid cost almost $100
billion more and served about 10 million more low-income recipients
than it did a decade ago.  About three-fourths of Medicaid
beneficiaries are poor children and their parents; however,
two-thirds of program expenditures are for poor elderly, blind, and
disabled individuals. 

   Figure 2:  Federal and State
   Expenditures for Five Largest
   Welfare Programs, Fiscal Year
   1993

   (See figure in printed
   edition.)

Source:  CRS and the Departments of HHS, Agriculture, and HUD. 

Medicaid programs vary considerably among the states, which
independently establish eligibility standards and decide on covered
services.  States partly determine the extent of their Medicaid
program when they set eligibility requirements for receiving cash
assistance, primarily AFDC.\6 States also determine program scope by
selecting which optional services or groups to include in their
programs.  With some discretion to modify eligibility and benefit
provisions, the proportion of the poor (as defined by the federal
poverty level) and near-poor served by Medicaid varies greatly by
state.  For example, for every 1,000 people with incomes under 150
percent of the federal poverty level, Rhode Island serves 913
beneficiaries, while Nevada serves 284.  Nationally, in 1994,
Medicaid covered medical services for 58 percent of people under age
65 living in poverty. 

Medicaid provides noncash assistance--eligible individuals receive
services, rather than cash.  The Food Stamp and Section 8 Housing
Assistance programs also provide noncash benefits.  The Food Stamp
program generally provides low-income individuals and families with
monthly food stamps or coupons to help them purchase a nutritionally
adequate diet.\7 Unlike Medicaid, the Food Stamp program is almost
totally funded by federal dollars and has uniform program rules in
the contiguous 48 states.\8 Food Stamp expenditures were over $25
billion in fiscal year 1993; the federal share was about $24 billion. 
About 27 million people received food stamps each month in 1993;
about 50 percent were children and about 7 percent were elderly. 

The Section 8 Housing Assistance program provides rental subsidies to
low-income individuals and families to help them obtain affordable
housing.  Unlike Medicaid, the Section 8 program is fully federally
funded.  The federal government provided about $11 billion in rental
housing assistance to almost 3 million low-income families in 1993. 


--------------------
\6 In 1993, the qualifying level for AFDC varied across states from
17 to 93 percent of the federal poverty level, which in 1993 income
was $1,027 per month for a family of three. 

\7 Some states are experimenting with alternative ways to provide
food assistance by providing cash instead of coupons or using
electronic benefit transfers. 

\8 While Food Stamp program rules are uniform among the states, food
stamp benefits are higher in Alaska and Hawaii. 


      AFDC AND SSI PROVIDE
      BILLIONS IN CASH ASSISTANCE
---------------------------------------------------------- Letter :2.2

The nation's two largest means-tested cash assistance programs--SSI
and AFDC--together provided assistance to over 20 million low-income
individuals in 1993.\9 AFDC provided cash assistance to about 70
percent of these individuals; however, SSI total program costs nearly
equalled those of AFDC.  SSI is mostly federally funded, while the
federal government and the states share the costs of the AFDC
program. 

SSI is a primary source of cash income to aged, blind, or disabled
individuals with low incomes and limited resources.  The program
follows uniform nationwide eligibility requirements.  In 1993, over 6
million people received SSI benefits, and expenditures were almost
$26 billion--nearly $22 billion of that in federal dollars. 

The AFDC program provides cash benefits to economically needy
families with children who lack support from one or both of their
parents because of death, absence, incapacity, or unemployment.  As
with Medicaid, AFDC is jointly funded by the federal government and
the states.  The states define benefit need, set their own benefit
levels, establish (within federal limitations) income and resource
limits, and administer the program.  As a result, AFDC monthly
benefits vary widely among states--from Mississippi, where a family
of three received $120 as of January 1994, to Alaska, where the
monthly benefit totalled $923.  In addition to these state variations
in benefit levels, AFDC benefits vary by family size, with larger
families generally receiving higher benefits.\10

In fiscal year 1993, the federal government and the states spent
about $25 billion to assist over 14 million AFDC recipients in nearly
5 million families.  The federal government's share was almost $14
billion.  The majority of children receiving AFDC--nearly 90
percent--live with one parent, usually their mother. 


--------------------
\9 No recipient may receive both SSI and AFDC benefits; however,
families receiving AFDC may have one or more family members who
receive SSI. 

\10 As of July 1, 1994, eight states--Arkansas, California, Georgia,
Kentucky, Oklahoma, Virginia, Washington, and West Virginia--have set
benefit ceilings at a particular family size.  Georgia, for example,
has a maximum benefit of $568 for families of 11 or more; Kentucky
has a maximum of $419 for families of 7 or more.  In addition, six
states--Arkansas, Georgia, Indiana, Nebraska, New Jersey, and
Wisconsin--have received permission from the U.S.  Department of
Health and Human Services (HHS) to freeze family size at the number
of children in the family when the family first applies for AFDC
benefits.  This cap on family benefits is aimed at discouraging
welfare recipients from having additional children while on AFDC. 


   MANY LOW-INCOME FAMILIES
   RECEIVE ASSISTANCE FROM
   MULTIPLE PROGRAMS
------------------------------------------------------------ Letter :3

Low-income families are likely to be eligible for and participate in
several means-tested programs, depending on the programs' specific
eligibility criteria and availability.  We found that families
receiving AFDC, for example, were generally receiving other benefits,
including Medicaid and food stamps; however, the extent to which they
received such noncash assistance varied.  Working poor non-AFDC
families, on the other hand, were less likely to receive multiple
types of noncash assistance than families receiving AFDC. 


      BENEFIT RECEIPT VARIED AMONG
      FAMILIES
---------------------------------------------------------- Letter :3.1

To illustrate what the package of cash and noncash benefits for
low-income families might look like, we analyzed families' receipt of
five types of benefits--AFDC, Medicaid, food stamps, housing,\11 and
school lunches.\12

We compared the benefits that AFDC families--consisting of a female
head of household and two children--received in 1993 with those
working poor female-headed families received.\13

We found that most AFDC families received at least one type of
noncash benefit; however, the extent to which they receive each
benefit varied.  For example, AFDC families are automatically
eligible for Medicaid and most also qualify for food stamps.  Because
both are entitlement programs, every AFDC family that qualifies and
applies will receive benefits.  In contrast, housing assistance is
not an entitlement program, and its availability is limited.  As a
result, all AFDC families participate in Medicaid, while only about
37 percent of AFDC families reported receiving housing assistance in
1993, as shown in figure 3. 

   Figure 3:  Percentage of AFDC
   Families Receiving Noncash
   Assistance (1993)

   (See figure in printed
   edition.)

\a Includes Low Rent Public Housing and Section 8 Housing Assistance. 

Note:  All families are shown as participating in Medicaid because of
their automatic eligibility, although not all may receive medical
care in a given month. 

Source:  CPS, March 1994. 

Working poor families may also be eligible for and receive noncash
assistance; however, they are less likely to receive such assistance
than AFDC families.  An eligible family of three could have a gross
monthly income over $1,200 and be eligible for a small food stamp
benefit.  The same family of three could receive as little as $2 and
as much as $80 per month.  It also could have a monthly income as
high as $3,000 and still receive housing assistance.  Of the working
poor families we studied, about 22 percent received food stamps, and
about 12 percent received housing assistance in 1993.\14

AFDC families are also much more likely to be receiving more than one
type of noncash assistance than are working poor families.  For
example, over 85 percent of the AFDC families received three or more
types of assistance, as shown in figure 4.\15 In contrast, only about
6 percent of working poor families participated in three or more
noncash programs. 

   Figure 4:  Comparison of AFDC
   and Working Poor Families'
   Benefit Receipt (1993)

   (See figure in printed
   edition.)

\a All families receiving AFDC were receiving at least one other type
of assistance. 

Source:  CPS, March 1994. 

Our analysis depicts the set of benefits that low-income families
received at a particular point in time.  However, these families'
economic status may vary considerably over time.  The families we
examined--AFDC families and working poor non-AFDC families--are
frequently the same families observed at particular points in time. 
Many low-income families go on and off AFDC because of events that
affect their ability to go to work at a particular time--for example,
changes in availability of a job, child care arrangements, health of
children, and access to affordable transportation.\16 As these
families' economic circumstances change, their need for different
types of assistance may also change. 


--------------------
\11 Our analysis includes both Low Rent Public Housing and Section 8
Housing Assistance. 

\12 We did not include SSI in our analysis because AFDC recipients
are not eligible for SSI. 

\13 For this analysis, we defined working poor as non-AFDC
female-headed families of three in which the family head worked full
time for a full year and earned up to 1-1/4 times the minimum wage. 

\14 Sampling errors at the 95-percent confidence level are about plus
or minus 12 percentage points for food stamps and about plus or minus
9 percentage points for housing assistance. 

\15 At the 95 percent confidence level, sampling errors for estimates
shown in figure 4 range from 3 percentage points (AFDC family
estimates) to 12 percentage points (percent of working poor receiving
one type of assistance). 

\16 According to a recent study, nearly 64 percent of welfare
recipients leave AFDC within 2 years; however, between two-thirds and
three-fourths of those who leave AFDC return within a 5-year period;
see LaDonna A.  Pavetti, The Dynamics of Welfare and Work:  Exploring
the Process by Which Women Work Their Way Off Welfare (Cambridge,
Mass.:  Harvard University, 1993). 


   COMPLEX SYSTEM OF WELFARE
   PROGRAMS IS INEFFICIENT
------------------------------------------------------------ Letter :4

Low-income families often rely on multiple assistance programs to
meet their needs; moreover, these needs may change over time. 
However, the sheer numbers of programs, and their complex set of
rules and regulations, can make it difficult for a family to piece
together the package of benefits that it needs.  This complex system
is also administratively burdensome and inefficient for the officials
who deliver program services and benefits.  Some programs overlap,
while others are so narrowly focused that service gaps occur. 
Moreover, little is known about the effectiveness of many welfare
programs. 


      MULTIPLE PROGRAMS CREATE
      DIFFICULTIES FOR LOW-INCOME
      FAMILIES WITH MANY NEEDS
---------------------------------------------------------- Letter :4.1

The programs that make up the nation's welfare system have developed
incrementally over time as the Congress addressed specific needs of
low-income individuals and families.  Considered individually, these
programs make sense.  However, no overarching goal was ever developed
to unify the programs and help ensure that families' needs were being
met as efficiently and effectively as possible. 

Instead, each program has its own rules for eligibility and income
requirements, verification standards, and processing time frames. 
For example, Food Stamps, AFDC, and Medicaid use different standards
to determine a family's need for assistance.  The Food Stamp program
determines need on the basis of the relationship of a household's
total income to the federal poverty level, whereas in the AFDC
program, need is based on the relationship of a family's income to
the state's need standard.  Medicaid bases its income limits on the
maximum state AFDC payment made to a family of the same size. 

These three programs also treat assets differently.  The AFDC program
allows a family to possess assets of up to $1,000, whereas the Food
Stamp program sets its maximum resource limit at $2,000 per
household.  Under Medicaid, the resource limit is $2,000 for
individuals and $3,000 for couples and households with an elderly
member.  Income is verified in similar ways by Food Stamps, AFDC, and
Medicaid programs.  However, food stamp regulations also mandate
verification of utility and medical expenses, identity, residency,
disability, and household composition.  For both AFDC and Medicaid,
states may establish other additional verification requirements. 
Moreover, for a family that owns a car, each program has different
rules governing the extent to which the car's value is excluded in
valuing the family's financial resources. 

Time limits on eligibility determinations also vary among the
programs.  Decisions on AFDC and Medicaid benefits must be reached
within state-set standards, not to exceed 45 days.  States must
provide AFDC benefits from either the date of authorization or 30
days from application, whichever occurs earlier.  Food stamp
recipients must receive benefits retroactive to the date of
application within 30 days of application under normal processing and
within 5 days for expedited service.  Under Medicaid, states may
provide eligibility either from the date of application or the first
day of the month of the application. 

From the low-income family's perspective, navigating this complex
system of programs can be confusing and time-consuming.  A low-income
mother with two children, for example, may need to visit several
different offices to obtain benefits from 17 different programs, as
shown in figure 5.  To obtain benefits, a family will likely have to
fill out separate applications for each type of assistance.  These
applications are complicated and lengthy and, in most cases, cannot
be processed without documents, such as rent receipts, birth
certificates, and pay stubs.  Such documentation requirements may
result in families' having to return to the same office more than
once, and they may face the same scenario at each office they must
visit to obtain benefits. 

   Figure 5:  Multiple Offices May
   Provide Low-Income Assistance

   (See figure in printed
   edition.)

The variations in eligibility rules and income requirements across
programs can also make it difficult for applicants to provide the
information needed for accurate eligibility and benefit
determinations.  Such complexities may also make it difficult for
eligibility workers to correctly assess an individual's or a family's
eligibility and calculate benefit amounts. 


      PROGRAM INTERACTIONS SEND
      MIXED MESSAGES TO RECIPIENTS
---------------------------------------------------------- Letter :4.2

Interactions among the programs for which a family may be eligible
may send mixed messages to program recipients and undermine program
goals.  The interaction between AFDC and SSI illustrates such a
conflict.  As of January 1994, SSI benefits per person were higher
than AFDC benefits for a family of three in 36 states.  SSI benefits
increase a family's total income, because a family member's SSI
benefits are not included in the family's income when determining
eligibility and calculating benefits for AFDC.  Given this, SSI may
create an incentive for families to coach their children to fake
mental impairments by misbehaving or doing poorly in school so that
they can qualify for SSI.\17 This disparity between AFDC and SSI
benefits thus makes the SSI program susceptible to fraud and
undermines a key goal of the AFDC program--to help adult recipients
reduce welfare dependency. 

Interactions between the AFDC and Food Stamp programs may also
undermine states' efforts to reduce welfare dependency.  For example,
some states sanction certain AFDC recipients for failing to attend
job training activities by reducing their AFDC benefits.  These job
training activities are designed to help adult AFDC recipients obtain
the skills they need to obtain work.  However, this reduction in AFDC
benefits results in recipients' qualifying for increased food stamps. 
Therefore, the impact of the AFDC sanction may have little real
effect on recipients' total income and, thus, may not provide the
intended incentive for the recipient to continue in training
activities. 


--------------------
\17 Social Security:  New Functional Assessments for Children Raise
Eligibility Questions (GAO/HEHS-95-66, Mar.  10, 1995). 


      PROGRAM OVERLAPS AND SERVICE
      GAPS CREATE ADMINISTRATIVE
      INEFFICIENCIES AND SERVICE
      DELIVERY PROBLEMS
---------------------------------------------------------- Letter :4.3

The growth in welfare programs over time and the lack of overarching
goals have also contributed to overlapping and conflicting programs. 
Program overlap adds unnecessary administrative costs at each level
of government and makes service delivery more complicated.  At the
federal level, the myriad of assistance programs are administered by
different agencies, each with its own goals.  In response to program
complexities at the federal level, states have established and
maintained elaborate organizational, programmatic, and financial
structures for each program. 

We have previously reported on several areas of program overlap,
including employment training, food assistance, and early childhood
programs.  In each of these areas, at least some of the overlapping
programs are means-tested.\18

The extent and nature of program overlaps in each of these areas is
summarized below. 


--------------------
\18 GAO's efforts to identify program overlap have been focused on
program areas and were not limited to means-tested programs.  In a
number of cases, multiple programs that GAO identified as overlapping
were cited as a single program in CRS' 1993 report on means-tested
programs. 


         EMPLOYMENT TRAINING
-------------------------------------------------------- Letter :4.3.1

We have identified 163 federal programs scattered across 15 federal
agencies providing employment training assistance.  The Departments
of Education and Labor administer the most programs--61 and 37,
respectively--while the remaining reside in departments not generally
expected to provide employment training assistance, such as the
Departments of Agriculture, Defense, Housing and Urban Development,
and Justice.  Because of the many federal agencies administering
employment training programs, these programs frequently target the
same clients, share the same goals, and provide similar services. 
For example, nine of these programs target economically disadvantaged
individuals. 

These agencies maintain separate administrative structures that
devote staff and other resources to administer, monitor, and review
program implementation.  For example, within the 15 departments and
agencies, 40 interdepartmental offices channel funds to state and
local program administrators.  Each office provides staff and incurs
costs--often at both headquarters and regional locations--to plan and
monitor the implementation of its programs. 


         FOOD ASSISTANCE
-------------------------------------------------------- Letter :4.3.2

The Department of Agriculture administers 14 food assistance programs
for low-income individuals.  These programs vary considerably in the
type of benefits provided and in the manner of providing them.  The
current food assistance approach, which has evolved over the past 46
years, is largely focused on the goals of the individual 14 programs
rather than a broader view of federal food assistance needs.  For
example, these programs have a mix of purposes, including (1)
supporting U.S.  agriculture, (2) enhancing children's learning and
growth processes, (3) improving the health of Americans, and (4)
improving the nutritional content of diets.  No overarching federal
food assistance policy exists to guide these programs or to explain
how each program contributes to the federal food assistance effort. 


         EARLY CHILDHOOD
-------------------------------------------------------- Letter :4.3.3

More than 90 federal programs administered by 11 separate federal
agencies provide education, child care, and other services to very
young children.  Of these, we identified 34 key programs that
provided services to children below age 5.  Key programs include the
Head Start program, which provides education and developmental
services to young children and is administered by the Department of
Health and Human Services.  The Department of Education's Chapter 1
program also provides preschool education to young children. 
Although these programs have some similarities, they may target
different populations, use different eligibility criteria, and
provide a different mix of services to children and their families. 

In contrast, other programs are so fragmented and narrowly focused
that service gaps result.  For example, between 1988 and 1990, the
Congress created four child care programs for low-income families,
and in fiscal year 1994 nearly $2 billion in federal funds was made
available for these programs.  The categorical nature of these child
care subsidy programs creates service gaps that diminish the
likelihood that low-income mothers will work. 

For example, the current system of child care assistance guarantees
subsidies to AFDC recipients participating in employment or
state-approved education and training activities as well as to
employed former AFDC recipients, but not to working poor families
outside the AFDC system.  Yet our analysis of low-income families
showed that an AFDC recipient's economic status may differ little
from a low-income, working non-AFDC recipient's.  In fact, working
non-AFDC recipients may be economically worse off because they face
work-related expenses that may include child care.  Moreover, because
many AFDC recipients cycle on and off welfare, the separate
assistance programs may be distinguishing between the same
individuals at different points in their journey from welfare to
self-sufficiency. 


      PROGRAM BARRIERS HINDER
      STATES' EFFORTS TO DEVELOP
      STREAMLINED AUTOMATED
      SYSTEMS
---------------------------------------------------------- Letter :4.4

The complexity of the welfare system has also made it difficult for
states to develop integrated, streamlined automated information
systems.  Advances in technology have made greater systems
integration, data sharing, and consolidation more feasible, but
program barriers have hindered states' ability to reengineer their
welfare information systems.  Faced with diverse and sometimes
contradictory program requirements, separate funding provisions,
statutory deadlines, and inadequate federal monitoring, states have
developed essentially separate automated systems for each program. 
For example, in a recent survey of the status of state automated
welfare systems, we found that virtually all the states were
operating multiple systems (ranging from 2 to 12) to provide welfare
program support.\19

Federal agencies are undertaking initiatives to help states develop
more efficient and effective automated welfare systems.  Examples
include funding the consolidation of separate AFDC, Medicaid, and
Food Stamp eligibility systems into integrated Family Assistance
Management Information Systems and developing model systems for the
Child Welfare program.  And some states--including Connecticut,
Minnesota, Rhode Island, and Texas--have focused on integrating their
automated welfare systems.  However, the difficulties in surmounting
program barriers such as contradictory program requirements and
separate funding provisions leave many states with little opportunity
or incentive to reexamine and, if necessary, reengineer their
existing automated processes. 


--------------------
\19 Automated Welfare Systems:  Historical Costs and Projections
(GAO/AIMD-94-52FS, Feb.  25, 1994). 


      PROGRAMS SUSCEPTIBLE TO
      FRAUD, WASTE, AND ABUSE
---------------------------------------------------------- Letter :4.5

In addition to the challenges involved in efficiently running the
programs and delivering their services, welfare programs are
inherently vulnerable to fraud and abuse.  Given their size and
structure, these programs are subject to billions of dollars in
incorrect payments and services annually as a result of fraudulent or
erroneous eligibility and benefit claims.  In fiscal year 1993,
nearly $1.8 billion in overpayments was estimated to have been made
in the Food Stamp program alone. 

For example, we reported in 1993 that prescription drug diversion and
other fraudulent billings had been an ongoing problem in the Medicaid
program for at least the previous decade.\20 We found that
physicians, clinic owners, and pharmacists collude to defraud
Medicaid by billing for services not rendered or needed and by
prescribing and distributing drugs mainly to obtain reimbursement. 
Patients are often willing participants in these schemes, allowing
the use of their Medicaid recipient numbers for billing purposes in
exchange for cash, drugs, or other inducements. 

In January 1994, California estimated that hundreds of millions of
dollars were being wasted through fraud in its public assistance
programs.  In its AFDC program alone, about 4 percent of cases
randomly selected for quality control review in 1992 and 1993 were
estimated to involve fraud.  In the Food Stamp program, we found four
problems that exist with the current coupon-based system.  In
addition to benefit overpayments that occur during the eligibility
and benefit determination process, we identified the illegal use of
benefits after they are issued, counterfeiting of food stamps, and
theft of coupons from the mail as common problems. 

To cite another example, we found that noncompliance in the Earned
Income Credit (EIC) program has been a continuing concern of the
Internal Revenue Service (IRS).\21 EIC provides assistance to
low-income working taxpayers to offset the impact of Social Security
taxes and to encourage them to work.  EIC expenditures were about
$10.9 billion in fiscal year 1993.  An IRS study of noncompliance for
returns filed electronically during 2 weeks in January 1994 found
that an estimated 29 percent of the returns claimed too much EIC and
that for about 13 percent of these, taxpayers may have intentionally
claimed too much EIC.  Judging by problems spotted by IRS personnel,
noncompliance on EIC paper returns is also a concern.  In 1994, IRS
withheld refunds of about $500 million from about 400,000 paper
return filers due to insufficient proof that they qualified. 

Where benefit overpayments do occur, variations in programs'
authorizing legislation may reduce the government's ability to
recover overpaid amounts.  For example, Food Stamp legislation
authorizes states to intercept individuals' federal income tax
refunds if they are delinquent in repaying overpaid amounts; AFDC
legislation provides no such authority.  AFDC rules generally allow
administrators to reduce benefits in order to collect overpayments on
all types of errors; Food Stamp law allows program administrators to
reduce recipients' benefits in order to recover overpayments due to
agency error only with the recipient's consent.  We will be providing
information on states' efforts to collect overpayments and examining
options for increasing collections in an upcoming report. 


--------------------
\20 Medicaid Drug Fraud:  Federal Leadership Needed to Reduce Program
Vulnerabilities (GAO/HRD-93-118, Aug.  2, 1993.)

\21 Earned Income Credit:  Targeting to the Working Poor
(GAO/T-GGD-95-136, Apr.  4, 1995). 


      LITTLE IS KNOWN ABOUT
      PROGRAMS' EFFECTIVENESS
---------------------------------------------------------- Letter :4.6

With the growth in the size and numbers of welfare programs,
policymakers and the public have become increasingly concerned about
the effectiveness of individual programs as well as the system as a
whole.  However, many programs do not articulate specific and
measurable policy goals that should be achieved; nor do they collect
the data necessary to determine how recipients fare.  Instead,
program monitoring generally focuses on compliance with program
requirements and procedures. 

For example, most agencies that administer employment training
programs do not know if their programs are really helping people find
jobs.  One such program is the Job Opportunities and Basic Skills
program (JOBS), the employment training program designed specifically
to provide parents receiving AFDC with the help they need to find
jobs and avoid long-term welfare dependence.  Since 1989, nearly $8
billion in federal and state funds has been spent on this program,
yet JOBS is not well focused on its primary goal, getting recipients
employed. 

The U.S.  Department of Health and Human Services (HHS) does not know
whether JOBS is reducing welfare dependency because it does not
gather enough information on critical program outcomes, such as the
number of participants entering employment and leaving AFDC annually. 
In addition, states are held accountable for the number and type of
participants enrolled in education and training but not for outcomes,
such as the number of participants finding employment.  While the
current approach to monitoring performance provides important
information on the activities of JOBS participants, state JOBS
directors are concerned that the approach provides little incentive
for states to focus on moving participants off AFDC and into jobs. 

Moreover, despite the JOBS program goal of helping move AFDC adult
recipients from welfare to work, most adult recipients do not
participate in the JOBS program due to allowable exemptions and
minimum participation rates established in the legislation that
created the JOBS program.\22 While JOBS has grown at the gradual rate
provided for by the Family Support Act, the program still reached
only about 13 percent of single female-headed households receiving
AFDC each month in 1992, with about 60 percent exempt from
participation.  Most of the 1.95 million exempt adults were excused
from participation because they were caring for a child less than 3
years old.\23

Recognizing the need to better focus on program results, the Congress
enacted the Government Performance and Results Act of 1993 (GPRA). 
GPRA seeks to shift the focus of federal management and
accountability away from a preoccupation with inputs, such as budget
and staffing levels and adherence to rigid processes, to a greater
focus on outcomes and results.  GPRA requires every agency to
establish indicators of performance, set annual performance goals,
and report on actual performance in comparison with these goals each
March beginning in the year 2000.  However, given the current lack of
data on program outcomes, much of the work needed to comply with GPRA
lies ahead. 


--------------------
\22 The 1988 Family Support Act established the JOBS program. 

\23 Welfare to Work:  Participants' Characteristics and Services
Provided in JOBS (GAO/HEHS-95-93, May 2, 1995). 


   CONSOLIDATION COULD IMPROVE
   PROGRAM EFFICIENCY AND
   EFFECTIVENESS
------------------------------------------------------------ Letter :5

Program consolidation is one possible approach to reducing program
overlaps and service gaps and improving the efficiency and
effectiveness of service delivery.  The Congress and the
administration have proposed consolidating some of these programs to
streamline service delivery, reduce administrative costs, and enhance
the states' ability to deliver services.  However, deciding how and
whether to consolidate specific programs is a complex task because of
differences in existing program structures.  Moreover, consolidation
can be accomplished in a number of different ways, such as using
block grants.  Regardless of how programs are restructured, the
Congress and the federal agencies will continue to maintain an
interest in the efficient and effective use of federal funds. 


      STATE AND LOCAL EFFORTS TO
      CONSOLIDATE SERVICES
---------------------------------------------------------- Letter :5.1

As we have noted, states are moving to reform specific programs such
as Medicaid and AFDC.  In addition, state governments and local
providers have reform efforts underway that are designed to
coordinate service delivery and streamline operations across several
programs.  Connecticut, for example, has a project to provide an
integrated set of services in one location, in conjunction with
efforts to integrate its automated processes.  Under this initiative,
the state's Departments of Labor and Social Services are jointly
establishing one-stop shopping career centers located throughout the
state.  These centers will provide individuals with employment
training and unemployment compensation benefits and services. 

Oregon has developed a multiyear demonstration to encourage
cooperation among federal, state, and local agencies.  Known as the
Oregon Option, this demonstration is focused on redesigning and
testing an outcomes-oriented approach to intergovernmental service
delivery.  As part of this effort, a Federal Interagency Action Team
was organized to work with state and local officials.  This team
includes officials from the Domestic Policy Council, the Office of
Management and Budget (OMB), and seven federal
departments--Agriculture, Commerce, Education, HHS, Housing and Urban
Development (HUD), Justice, and Labor.  Together with state and local
agencies, this interagency team developed cross-cutting initiatives
for children and families and is using measurable outcomes to
determine how well the state is meeting long-range goals. 

In another example, local providers in Baltimore are working
collaboratively to make needed services more accessible to families
in low-income neighborhoods.  The city's Lafayette Square Community
Center provides training, employment, and scholarship programs for
unemployed young adults seeking jobs and educational opportunities. 
As a long-term community-based effort, the center currently works
collaboratively with the Sandtown-Winchester neighborhood to offer a
broad array of services for the local community. 

State and local officials who seek innovative approaches for
delivering services and benefits are faced with the challenge of
funding and managing multiple programs.  For example, the different
funding sources needed to support multiple programs create a strain
on the financial systems of community-based organizations because
each program has a different set of accounting standards and
reporting requirements and, therefore, has to be tracked separately. 
Other efforts, such as those in Baltimore, have been hindered by the
lack of coordination among the many federal departments and agencies
that have responsibility for administering the programs that can be
used to assist distressed communities. 

Past efforts to better coordinate at the federal level have generally
been unsuccessful, leaving community organizations to try to piece
together programs to serve their communities.  For example, we found
that the federal government had set up a patchwork of parallel
administrative structures to deliver an estimated $25 billion
annually in employment and training services.  Many of these programs
target the same population, yet despite decades of attempts to
improve coordination, conflicting program requirements continue to
hamper administrators' efforts to coordinate activities and share
resources.\24


--------------------
\24 Community Development:  Comprehensive Approaches Address Multiple
Needs but Are Challenging to Implement (GAO/RCED/HEHS-95-69, Feb.  8,
1995). 


      FEDERAL PROPOSALS TO
      CONSOLIDATE PROGRAMS
---------------------------------------------------------- Letter :5.2

To provide states with greater flexibility and reduce administrative
costs, the Congress and the administration are considering proposals
to consolidate certain welfare programs.  For example, the welfare
reform bill recently passed by the House--H.R.  4--would consolidate
eight child care programs into one Child Care Block Grant.  Included
in this proposal are the four subsidy programs--Child Care and
Development Block Grant, AFDC-Child Care, Transitional Child Care,
and At-Risk Child Care--where we found service gaps.  Congressional
committees are also considering proposals to consolidate a number of
the employment training programs that we identified as overlapping. 
These committees also have proposed consolidating three federal
departments and agencies--the Departments of Education and Labor and
the Equal Employment Opportunities Commission--to improve the quality
of services provided.\25 In the housing area, HUD has proposed
consolidating 60 programs into 3. 

Consolidating overlapping programs or groups of programs that create
service gaps could improve program efficiency and effectiveness. 
Consolidating the child care subsidies, for example, could be a
remedy for the service gaps that trouble mothers, child care
providers, and program administrators alike.  Consolidation could
also offer states the flexibility to tailor their child care
assistance programs to their particular mix of low-income families. 
Consolidating overlapping employment training programs could reduce
administrative costs by eliminating duplicative bureaucracies. 


--------------------
\25 In an upcoming report, we address issues related to this proposed
consolidation. 


      ISSUES TO CONSIDER IN
      CONSOLIDATING PROGRAMS
---------------------------------------------------------- Letter :5.3

Although consolidating overlapping programs or programs that create
service gaps can improve program effectiveness and efficiency,
decisions on program consolidation are complex.  Officials from OMB
and public policy researchers believe that program consolidation has
historically been difficult to achieve because of the congressional
subcommittee structure, the protectiveness of agencies toward their
programs, and the strong program support of constituent groups.  In
addition, overlapping programs may have different managerial and
financial requirements that may make it difficult to combine program
resources. 

For example, the nine employment training programs that target the
economically disadvantaged are administered by five different federal
departments and have three different operating cycles--starting
either October 1, July 1, or September 1.  Moreover, these programs
use separate, parallel structures to administer the delivery of
services.  The Job Training Partnership Act program (JTPA), for
example, funds about 630 service delivery areas to administer local
services.  In contrast, the JOBS and Food Stamp Education and
Training programs frequently use the network of over 3,000 state- or
county-run welfare offices to administer the delivery of program
services.  These differences could serve as barriers to program
consolidation and should be considered in deciding which programs to
consolidate. 

In addition to determining which programs to consolidate, decisions
as to what the federal government's role will be in overseeing and
managing a consolidated set of programs are critical.  A major goal
of current program consolidation proposals--especially those that
would provide block grants to the states--is to provide the states
with more flexibility to set priorities and manage programs and
funds. 

In previous reports, we have recommended a shift in program focus
from federal management and accountability toward program results and
outcomes, with less emphasis on rigid adherence to rules.  This focus
on outcomes--lacking in many of the individual welfare programs--will
be especially important if states are provided greater flexibility in
determining specific problems to address and strategies for
addressing them.  Decisions will need to be reached as to the kinds
and nature of information needed to assess program results.  Given
its focus on program outcomes and results, GPRA may provide a useful
accountability framework. 


   CONCLUSIONS
------------------------------------------------------------ Letter :6

The federal government provides billions of dollars annually in
public assistance through an inefficient welfare system that is
increasingly cumbersome for program administrators to manage and
difficult for eligible clients to access.  Program consolidation may
be one strategy to reduce the inefficiency of the current system of
overlapping and fragmented programs.  Regardless of how the welfare
system is restructured, ensuring that federal funds are used
efficiently and that programs are focused on outcomes remains
important.  Without a focus on outcomes, concerns about the
effectiveness of welfare programs will not be adequately addressed. 

Because this report is based on information contained in published
GAO reports and testimonies, we did not obtain official agency
comments.  We are sending copies of this report to the appropriate
congressional committees and federal agencies.  Copies also will be
available to others on request. 

If you or your staff have any questions concerning this report,
please call me on (202) 512-7215.  Other GAO contacts and staff
acknowledgments are listed in appendix I. 

Sincerely yours,

Jane L.  Ross
Director, Income Security Issues


ESTIMATED EXPENDITURES FOR
MEANS-TESTED ASSISTANCE PROGRAMS
(FISCAL YEAR 1993)
=========================================================== Appendix I



                          Table I.1
           
           Summary of Welfare Programs (Fiscal Year
                            1993)


                                      Federa
Benefit category                           l   State   Total
------------------------------------  ------  ------  ------
Income support                        $53,32  $20,35  $73,68
                                           5       6       1
Medical care                          86,293  61,493  147,78
                                                           6
Food and nutrition                    33,185   1,544  34,729
Housing                               22,757      64  22,821
Education                             16,690     632  17,322
Training                               4,733     562   5,295
Services                               5,536   3,866   9,402
============================================================
Total                                 $222,5  $88,51  $311,0
                                          19       7      36
------------------------------------------------------------


                                    Table I.2
                     
                       Income Support Programs (Fiscal Year
                                      1993)


                                                                         Average
                                                                         monthly
                                                                      recipients
                                           Federa                            (in
Program                                         l   State   Total     thousands)
-----------------------------------------  ------  ------  ------  -------------
Aid to Families With Dependent Children\a  $13,75  $11,30  $25,05       14,144\b
                                                7       2       9
Supplemental Security Income\a             21,801   3,908  25,709        6,021\c
Earned Income Credit\a,d                   10,883      \e  10,883         14,004
Pensions for Needy Veterans, their          3,477       0   3,477            896
 Dependents, and Survivors\a
Foster Care\a                               2,524   1,171   3,695            233
General Assistance (nonmedical care             0   3,350   3,350          1,168
 component)\a
Adoption Assistance\f                         272     231     503             78
Assistance to Refugees and Cuban/Haitian       74       0      74             26
 Entrants (cash components)\f
Emergency Assistance\a                        394     394     788          165\g
Dependency and Indemnity Compensation and      60       0      60             30
 Death Compensation for Parents of
 Veterans\a
General Assistance to Indians\a                83       0      83             56
================================================================================
Total                                      $53,32  $20,35  $73,68             \h
                                                5       6       1
--------------------------------------------------------------------------------
\a Congressional Research Service. 

\b Children and/or parents. 

\c Annual number. 

\d Data are from the Joint Tax Committee and refer to the calendar
year in which the credit was received.  Benefits exclude tax
expenditures (reductions in taxes owed), which totalled $2.3 billion
in 1993. 

\e Not available. 

\f Department of Health and Human Services. 

\g Families or households. 

\h Because of overlap, and in some cases because of mixture of
monthly and annual numbers and mixture of dwelling units, loans,
grants, children, families, and households, recipient totals are not
shown. 



                                    Table I.3
                     
                     Medical Care Programs (Fiscal Year 1993)


                                                                         Average
                                                                         monthly
                                                                      recipients
                                           Federa                            (in
Program                                         l   State   Total     thousands)
-----------------------------------------  ------  ------  ------  -------------
Medicaid\a                                 $74,95  $55,88  $130,8       33,432\b
                                                3       6      39
Medical Care for Veterans Without           8,349       0   8,349          601\d
 Service-Connected Disability\c
General Assistance (medical care                0   5,189   5,189             \e
 component)\c
Indian Health Services\c                    1,525       0   1,525        1,300\b
Maternal and Child Health Services Block      558     418     976         11,600
 Grant\c
Community Health Centers\c                    559      \e     559        6,200\b
Title X Family Planning Services\c            173       0     173        4,000\b
Migrant Health Centers\c                       57      \e      57          550\b
Medical Assistance to Refugees and Cuban/     119       0     119             37
 Haitian Entrants\a
================================================================================
Total                                      $86,29  $61,49  $147,7             \f
                                                3       3      86
--------------------------------------------------------------------------------
\a Department of Health and Human Services. 

\b Annual number. 

\c Congressional Research Service. 

\d Annual number of episodes. 

\e Not available. 

\f Because of overlap, and in some cases because of mixture of
monthly and annual numbers and mixture of dwelling units, loans,
grants, children, families, and households, recipient totals are not
shown. 



                                    Table I.4
                     
                     Food and Nutrition Programs (Fiscal Year
                                      1993)


                                                                         Average
                                                                         monthly
                                                                      recipients
                                           Federa                            (in
Program                                         l   State   Total     thousands)
-----------------------------------------  ------  ------  ------  -------------
Food Stamps\a                              $23,69  $1,544  $25,24         26,983
                                                8               2
School Lunch Program (free and reduced-     3,791      \b   3,791          4,800
 price segments)\a
Special Supplemental Food Program for       2,928      \b   2,928          5,921
 Women, Infants, and Children\a
School Breakfast Program (free and            877      \b     877          4,844
 reduced-price segments)\a
Child and Adult Care Food Program\a           697      \b     697          2,119
Nutrition Program for the Elderly (no         607      \b     607        3,200\d
 income test, but preferences for those
 with greatest economic or social
 needs)\c
The Emergency Food Assistance Program\a       207      \b     207        7,759\e
Summer Food Service Program for               228      \b     228          2,057
 Children\a
Commodity Supplemental Food Program\a          82      \b      82            371
Food Distribution Program on Indian            68      \b      68            116
 Reservations\a
Special Milk Program (free segment)\a           2      \b       2             61
================================================================================
Total                                      $33,18  $1,544  $34,72             \f
                                                5               9
--------------------------------------------------------------------------------
\a Department of Agriculture. 

\b Not available. 

\c Congressional Research Service. 

\d Annual number. 

\e Families or households. 

\f Because of overlap, and in some cases because of mixture of
monthly and annual numbers and mixture of dwelling units, loans,
grants, children, families, and households, recipient totals are not
shown. 



                                    Table I.5
                     
                                 Housing Programs


                                                                     Families or
                                                                    units during
                                           Federa                   the year (in
Program                                         l   State   Total     thousands)
-----------------------------------------  ------  ------  ------  -------------
Section 8 Low-Income Housing Assistance\a  $11,15      $0  $11,15        2,812\b
                                                8               8
Low-Rent Public Housing\a                   6,180       0   6,180        1,408\b
Low-Income Home Energy Assistance\c         1,346      64   1,410          5,600
Rural Housing Loans\d                       1,831       0   1,831             31
Section 236 Interest Reduction Payments\a     635       0     635          510\b
Rural Rental Housing Loans\d                  574       0     574             15
Rural Rental Assistance\d                     404       0     404           34\b
Weatherization Assistance\c                   186       0     186            107
Section 101 Rent Supplements\a                 55       0      55           19\b
Section 235 Homeownership Assistance\a         62       0      62           95\b
Farm Labor Housing Loans and Grants\d          32       0      32              1
Rural Housing Repair Loans and Grants\d        26       0      26            6\e
Rural Housing Preservation Grants\d            23       0      23              6
Indian Housing Improvement Grants\c            20       0      20            1\b
Rural Self-Help Technical Assistance           19       0      19             \f
 Grants and Site Loans\d
Home Investment Partnerships\a                206      \f     206             \f
================================================================================
Total                                      $22,75     $64  $22,82             \g
                                                7               1
--------------------------------------------------------------------------------
\a Department of Housing and Urban Development. 

\b Units. 

\c Congressional Research Service. 

\d Department of Agriculture. 

\e Loans or grants. 

\f Not available. 

\g Because of overlap, and in some cases because of mixture of
monthly and annual numbers and mixture of dwelling units, loans,
grants, children, families, and households, recipient totals are not
shown. 



                                    Table I.6
                     
                      Education Programs (Fiscal Year 1993)


                                                                   Annual number
                                                                   of recipients
                                           Federa                            (in
Program                                         l   State   Total     thousands)
-----------------------------------------  ------  ------  ------  -------------
Stafford Loans\a                           $5,825      $0  $5,825          5,300
Pell Grants\a                               5,788       0   5,788          3,808
Head Start\b                                2,800     560   3,360            714
College Work-Study Program\a                  617       0     617            713
Supplemental Educational Opportunity          583       0     583            991
 Grants\a
Federal TRIO Programs\b                       385       0     385            648
Chapter 1 Migrant Education Program\b         303       0     303            402
Perkins Loans\a                               181       0     181            697
State Student Incentive Grant Programs\a       72      72     144            241
Fellowships for Graduate and Professional      63       0      63              6
 Study\b
Health Professions Student Loans and           49       0      49             36
 Scholarships\a
Follow Through\b                                9       0       9             \c
Migrant High School Equivalency Program\b       8       0       8              3
Ellender Fellowships\b                          4       0       4              6
College Assistance Migrant Program\b            2       0       2              0
Child Development Associate                     1       0       1             \c
 Scholarships\b
================================================================================
Total                                      $16,69    $632  $17,32             \d
                                                0               2
--------------------------------------------------------------------------------
\a Department of Education. 

\b Congressional Research Service. 

\c Not available. 

\d Because of overlap, and in some cases because of mixture of
monthly and annual numbers and mixture of dwelling units, loans,
grants, children, families, and households, recipient totals are not
shown. 



                                    Table I.7
                     
                       Training Programs (Fiscal Year 1993)


                                                                         Average
                                                                         monthly
                                                                      recipients
                                           Federa                            (in
Program                                         l   State   Total     thousands)
-----------------------------------------  ------  ------  ------  -------------
JTPA (Training Services for Disadvantaged  $1,015      $0  $1,015            358
 Adults)\a
JTPA (Training Services for Disadvantaged     677       0     677            281
 Youth)\a
JTPA (Summer Youth Employment and             849       0     849            569
 Training Program)\a
JTPA (Job Corps)\a                            966       0     966            102
Job Opportunities and Basic Skills            735     471   1,206            542
 Training Program\a
Senior Community Service Employment           396      44     440             65
 Program\a
Foster Grandparents\a                          65      30      95             22
Senior Companions\a                            30      17      47             13
================================================================================
Total                                      $4,733    $562  $5,295             \b
--------------------------------------------------------------------------------
\a Congressional Research Service. 

\b Because of overlap, and in some cases because of mixture of
monthly and annual numbers and mixture of dwelling units, loans,
grants, children, families, and households, recipient totals are not
shown. 



                                    Table I.8
                     
                           Services (Fiscal Year 1993)


                                                                   Annual number
                                                                   of recipients
                                           Federa                            (in
Program                                         l   State   Total     thousands)
-----------------------------------------  ------  ------  ------  -------------
Social Services Block Grant (Title XX)\a   $2,800  $3,332  $6,132             \b
Child Care and Development Block Grant\a      893      \b     893             \b
AFDC and Transitional Child Care\a            583     420   1,003          474\c
At Risk Child Care\a                          264     114     378          219\c
Community Services Block Grant\a              441       0     441             \b
Legal Services\a                              357       0     357             \b
Emergency Food and Shelter program\a          129       0     129             \b
Social Services for Refugees and Cuban/        69       0      69            114
 Haitian Entrants\d
================================================================================
Total                                      $5,536  $3,866  $9,402             \e
--------------------------------------------------------------------------------
\a Congressional Research Service. 

\b Not available. 

\c Children and/or parents. 

\d Department of Health and Human Services. 

\e Because of overlap, and in some cases because of mixture of
monthly and annual numbers and mixture of dwelling units, loans,
grants, children, families, and households, recipient totals are not
shown. 


GAO REPORTS AND TESTIMONIES ON
WELFARE PROGRAMS AND ISSUES
========================================================== Appendix II


   INCOME SUPPORT
-------------------------------------------------------- Appendix II:1

Earned Income Credit:  Targeting to the Working Poor
(GAO/T-GGD-95-136, Apr.  4, 1995). 

Social Security:  New Functional Assessments for Children Raise
Eligibility Questions (GAO/HEHS-95-66, Mar.  10, 1995). 

Means-Tested Programs:  An Overview, Problems, and Issues
(GAO/T-HEHS-95-76, Feb.  7, 1995). 

Low-Income Families:  Comparison of Incomes of AFDC and Working Poor
Families (GAO/T-HEHS-95-63, Jan.  25, 1995). 

Welfare to Work:  Current AFDC Program Not Sufficiently Focused on
Employment (GAO/HEHS-95-28, Dec.  19, 1994). 

Child Welfare:  HHS Begins to Assume Leadership to Implement National
and State Systems (GAO/AIMD-94-37, June 8, 1994). 

Tax Administration:  Earned Income Credit-Data on Noncompliance and
Illegal Alien Recipients (GAO/GGD-95-27, Oct.  25, 1994). 

Welfare to Work:  JOBS Participation Rate Data Unreliable for
Assessing States' Performance (GAO/HRD-93-73, May 5, 1993). 

Earned Income Tax Credit:  Effectiveness of Design and Administration
(GAO/T-GGD-93-20, Mar.  30, 1993). 


   MEDICAL CARE
-------------------------------------------------------- Appendix II:2

Medicaid:  Restructuring Approaches Leave Many Questions
(GAO/HEHS-95-103, Apr.  4, 1995). 

Medicaid:  Spending Pressures Drive States Toward Program Reinvention
(GAO/HEHS-95-122, Apr.  4, 1995). 

Medicaid:  Experience With State Waivers to Promote Cost Control and
Access to Care (GAO/T-HEHS-95-115, Mar.  23, 1995). 

Medicaid:  A Program Highly Vulnerable to Fraud (GAO/T-HEHS-94-106,
Feb.  25, 1994). 

Medicaid:  Alternatives for Improving the Distribution of Funds to
States (GAO/HRD-93-112FS, Aug.  20, 1993). 

Medicaid Drug Fraud:  Federal Leadership Needed to Reduce Program
Vulnerabilities (GAO/HRD-93-118, Aug.  2, 1993); testimony on same
topic (GAO/T-HRD-93-28, Aug.  2, 1993). 

Medicaid:  Data Improvements Needed to Help Manage Health Care
Program (GAO/IMTEC-93-18, May 13, 1993). 

Medicaid:  States Turn to Managed Care to Improve Access and Control
Costs (GAO/HRD-93-46, Mar.  17, 1993); testimony on same topic
(GAO/T-HRD-93-10, Mar.  17, 1993). 


   FOOD AND NUTRITION
-------------------------------------------------------- Appendix II:3

Food Assistance:  Potential Impacts of Alternative Systems for
Delivering Food Stamp Program Benefits (GAO/RCED-95-13, Dec.  16,
1994). 

Food Assistance:  Information on Meal Costs in the National School
Lunch Program (GAO/RCED-94-32BR, Dec.  1, 1993). 

Food Assistance:  USDA's Multiprogram Approach (GAO/RCED-94-33, Nov. 
24, 1993). 

Food Stamp Program Provisions (GAO/RCED-93-70R, Nov.  25, 1992). 


   HOUSING
-------------------------------------------------------- Appendix II:4

Housing and Urban Development:  Reinvention and Budget Issues
(GAO/T-RCED-95-112, Feb.  22, 1995). 

Housing and Urban Development:  Reforms at HUD and Issues for Its
Future (GAO/T-RCED-95-108, Feb.  22, 1995). 

Housing and Urban Development:  Major Management and Budget Issues
(GAO/T-RCED-95-89, Jan.  24, 1995). 

Federally Assisted Housing:  Conditions of Some Properties Receiving
Section 8 Project-Based Assistance Is Below Housing Quality Standards
(GAO/T-RCED-94-273, July 26, 1994). 

Public Housing:  Information on Backlogged Modernization Funds
(GAO/RCED-94-217FS, July 15, 1994). 

Section 8 Rental Housing:  Merging Assistance Programs Has Benefits
but Raises Implementation Issues (GAO/RCED-94-85, May 27, 1994). 

Multifamily Housing:  Status of HUD's Multifamily Loan Portfolio
(GAO/RCED-94-173FS, Apr.  12, 1994). 

Public Housing:  Low-Income Housing Tax Credit as an Alternative
Development Method (GAO/RCED-93-31, July 16, 1993). 


   EDUCATION AND TRAINING
-------------------------------------------------------- Appendix II:5

Welfare to Work:  Participants' Characteristics and Services Provided
in JOBS (GAO/HEHS-95-93, May 2, 1995). 

Welfare to Work:  Measuring Outcomes for JOBS Participants
(GAO/HEHS-95-86, Apr.  17, 1995). 

Multiple Employment Training Programs:  Major Overhaul Needed to
Create a More Efficient, Customer-Driven System (GAO/T-HEHS-95-70,
Feb.  6, 1995). 

Welfare to Work:  AFDC Training Program Spends Billions, but Not Well
Focused on Employment (GAO/T-HEHS-95-51, Jan.  10, 1995). 

Multiple Employment Training Programs:  Major Overhaul Needed to
Reduce Costs, Streamline the Bureaucracy, and Improve Results
(GAO/T-HEHS-95-53, Jan.  10, 1995). 

JOBS and JTPA:  Tracking Spending Outcomes and Program Performance
(GAO/HEHS-94-177, July 15, 1994). 

Multiple Employment Training Programs:  Overlap Among Programs Raises
Questions About Efficiency (GAO/HEHS-94-193, July 11, 1994). 

Multiple Employment Training Programs:  Conflicting Requirements
Underscore Need for Change (GAO/T-HEHS-94-120, May 10, 1994). 

Multiple Employment Training Programs:  Major Overhaul Is Needed
(GAO/T-HEHS-94-109, Mar.  3, 1994). 

Multiple Employment Training Programs:  Most Federal Agencies Do Not
Know If Their Programs Are Working Effectively (GAO/HEHS-94-88, Mar. 
2, 1994). 

Multiple Employment Training Programs:  Overlapping Programs Can Add
Unnecessary Administrative Costs (GAO/HEHS-94-80, Jan.  28, 1994). 

Multiple Employment Training Programs:  Conflicting Requirements
Hamper Delivery of Services (GAO/HEHS-94-78, Jan.  28, 1994). 


   SERVICES
-------------------------------------------------------- Appendix II:6

Child Care:  Recipients Face Service Gaps and Supply Shortage
(GAO/T-HEHS-95-96, Mar.  1, 1995). 

Child Care:  Narrow Subsidy Programs Create Problems for Mothers
Trying to Work (GAO/T-HEHS-95-69, Jan.  31, 1995). 

Child Care:  Child Care Subsidies Increase Likelihood That Low-Income
Mothers Will Work (GAO/HEHS-95-20, Dec.  30, 1994). 

Child Care:  Promoting Quality in Family Child Care (GAO/HEHS-95-36,
Dec.  7, 1994). 

Child Care:  Current System Could Undermine Goals of Welfare Reform
(GAO/T-HEHS-94-238, Sept.  20, 1994). 

Child Care:  Working Poor and Welfare Recipients Face Service Gaps
(GAO/HEHS-94-87, May 13, 1994). 


   MANAGEMENT ISSUES
-------------------------------------------------------- Appendix II:7

Department of Education:  Information on Consolidation Opportunities
and Student Aid (GAO/T-HEHS-95-130, Apr.  6, 1995). 

Tax Administration:  IRS' Fiscal Year 1996 Budget and the 1995 Filing
Season (GAO/T-GGD-95-97, Feb.  27, 1995). 

Block Grants:  Characteristics, Experience, and Lessons Learned
(GAO/HEHS-95-74, Feb.  9, 1995). 

Community Development:  Comprehensive Approaches Address Multiple
Needs but Are Challenging to Implement (GAO/RCED/HEHS-95-69, Feb.  8,
1995). 

Health and Human Services:  Opportunities to Realize Savings
(GAO/T-HEHS-95-57, Jan.  12, 1995). 

Early Childhood Programs:  Multiple Programs and Overlapping Target
Groups (GAO/HEHS-95-4FS, Oct.  31, 1994). 

Automated Welfare Systems:  Historical Costs and Projections
(GAO/AIMD-94-52FS, Feb.  25, 1994). 

Management Reform:  GAO's Comments on the National Performance
Review's Recommendations (GAO/OGC-94-1, Dec.  3, 1993). 

Integrating Human Services:  Linking At-Risk Families with Services
More Successful Than System Reform Efforts (GAO/HRD-92-108, Sept. 
24, 1992). 


GAO CONTACT AND ACKNOWLEDGMENTS
========================================================= Appendix III

CONTACT

Cynthia M.  Fagnoni, Assistant Director, (202) 512-7202

ACKNOWLEDGMENTS

In addition to the contact named above, the following individuals
made important contributions to this report:  Paula A.  Bonin, Senior
Computer Specialist; Karen A.  Brown, Evaluator; Annette Graziani
Lozen, Evaluator; Ronald Vieregge, Senior Evaluator; and Mark E. 
Ward, Senior Evaluator. 
