Food Assistance: Information on Selected Aspects of WIC (Testimony,
03/17/98, GAO/T-RCED-98-128).

Pursuant to a congressional request, GAO discussed its completed reviews
of the Special Supplemental Nutrition Program for Women, Infants, and
Children (WIC), focusing on the: (1) reasons that states had for not
spending all of their federal grant funds; (2) efforts of WIC agencies
to improve access to WIC benefits for working women; and (3) various
practices states use to lower the costs of WIC and ensure that the
incomes of WIC applicants' meet the program's eligibility requirements
for participation.

GAO noted that: (1) states had unspent WIC funds for a variety of
reasons; (2) in fiscal year 1996, these funds totalled about $121.6
million, or about 3.3 percent of that year's $3.7 billion WIC grant; (2)
some of these reasons were associated with the way WIC is structured;
(3) virtually all the directors of local WIC agencies report that their
clinics have taken steps to improve access to WIC benefits for working
women; (4) the two most frequently cited strategies are: (a) scheduling
appointments instead of taking participants on a first-come,
first-served basis; and (b) allowing a person other than the participant
to pick up food vouchers or checks, as well as nutrition information,
and to pass these benefits on to the participant; (5) the states are
using a variety of cost containment initiatives that have saved millions
of dollars annually for WIC and enabled more individuals to participate
in the program; and (6) some of these initiatives include obtaining
rebates on WIC foods, limiting participants' food choices to lowest-cost
items, and limiting the number of stores that participate in WIC.

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

 REPORTNUM:  T-RCED-98-128
     TITLE:  Food Assistance: Information on Selected Aspects of WIC
      DATE:  03/17/98
   SUBJECT:  State-administered programs
             Children
             Women
             Infants
             Food programs for children
             Unexpended budget balances
             Grants to states
             Cost control
             Eligibility determinations
             Budget administration
IDENTIFIER:  WIC
             Special Supplemental Food Program for Women, Infants, and 
             Children
             
******************************************************************
** This file contains an ASCII representation of the text of a  **
** GAO report.  Delineations within the text indicating chapter **
** titles, headings, and bullets are preserved.  Major          **
** divisions and subdivisions of the text, such as Chapters,    **
** Sections, and Appendixes, are identified by double and       **
** single lines.  The numbers on the right end of these lines   **
** indicate the position of each of the subsections in the      **
** document outline.  These numbers do NOT correspond with the  **
** page numbers of the printed product.                         **
**                                                              **
** No attempt has been made to display graphic images, although **
** figure captions are reproduced.  Tables are included, but    **
** may not resemble those in the printed version.               **
**                                                              **
** Please see the PDF (Portable Document Format) file, when     **
** available, for a complete electronic file of the printed     **
** document's contents.                                         **
**                                                              **
** A printed copy of this report may be obtained from the GAO   **
** Document Distribution Center.  For further details, please   **
** send an e-mail message to:                                   **
**                                                              **
**                                            **
**                                                              **
** with the message 'info' in the body.                         **
******************************************************************


Cover
================================================================ COVER


Before the Committee on Agriculture, Nutrition, and Forestry
U.S.  Senate

For Release
on Delivery
Expected at
9:00 a.m.  EST
Tuesday
March 17, 1998

FOOD ASSISTANCE - INFORMATION ON
SELECTED ASPECTS OF WIC

Statement of Robert A.  Robinson, Director,
Food and Agriculture Issues,
Resources, Community, and Economic
Development Division

GAO/T-RCED-98-128

GAO/RCED-98-128T


(150284)


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

  WIC -
  FNS -
  USDA -

============================================================ Chapter 0

Mr.  Chairman and Members of the Committee: 

I am pleased to be here today to discuss our recently completed
reviews of the Special Supplemental Nutrition Program for Women,
Infants, and Children (WIC).  WIC provides federal grants to states
for supplemental foods, health care referrals, and nutrition
education for low-income\1 pregnant, breast-feeding, and postpartum
women; infants; and children up to age 5 who are at nutritional risk. 
The food benefits are typically provided in the form of vouchers that
can be exchanged for WIC-approved food items at authorized stores. 
The federal WIC cash grants to states totaled $3.7 billion in fiscal
year 1997. 

My testimony today is based on our three recently completed reviews
of WIC.\2 These reviews addressed the (1) reasons that states had for
not spending all of their federal grant funds, (2) efforts of WIC
agencies to improve access to WIC benefits for working women, and (3)
various practices states use to lower the costs of WIC and ensure
that the incomes of WIC applicants' meet the program's eligibility
requirements for participation.  We are also currently reviewing
WIC's experiences with rebates from the manufacturers of infant
formula.  This statement contains information on the scope of this
ongoing work. 

In summary, we found the following: 

  -- States had unspent WIC funds for a variety of reasons.  In
     fiscal year 1996, these funds totaled about $121.6 million, or
     about 3.3 percent of that year's $3.7 billion WIC grant.  Some
     of these reasons were associated with the way WIC is structured. 

  -- Virtually all the directors of local WIC agencies report that
     their clinics have taken steps to improve access to WIC benefits
     for working women.  The two most frequently cited strategies are
     (1) scheduling appointments instead of taking participants on a
     first-come, first-served basis and (2) allowing a person other
     than the participant to pick up the food vouchers or checks, as
     well as nutrition information, and to pass these benefits on to
     the participant. 

  -- The states are using a variety of cost containment initiatives
     that have saved millions of dollars annually for WIC and enabled
     more individuals to participate in the program.  Some of these
     initiatives include obtaining rebates on WIC foods, limiting
     participants' food choices to lowest cost items, and limiting
     the number of stores that participate in WIC. 


--------------------
\1 Participants must have incomes at or below 185 percent of the
poverty level.  In 1998, for example, the WIC's annual limit on
income for a family of four is $30,432 in the contiguous states, the
District of Columbia, and Guam and the territories.  Poverty
guidelines are established separately for Alaska and Hawaii. 

\2 WIC:  States Had A Variety of Reasons for Not Spending Program
Funds (GAO/RCED-97-166, Jun.12, 1997); Food Assistance:  Working
Women's Access to WIC Benefits (GAO/RCED-98-19, Oct.  16, 1997); and
Food Assistance:  A Variety of Practices May Lower the Costs of WIC
(GAO/RCED-97-225, Sep.  17, 1997). 


   UNSPENT WIC FUNDS
---------------------------------------------------------- Chapter 0:1

In June 1997, we reported on the results of our interviews with state
WIC officials in 8 states that had unspent federal funds in fiscal
year 1995 and 2 states that did not have unspent funds that year. 
These state officials identified a variety of reasons for having
unspent federal WIC funds that were returned to the U.S.  Department
of Agriculture's (USDA) Food and Nutrition Service (FNS) for
reallocation.  In fiscal year 1996, the states returned about $121.6
million, or about 3.3 percent, of that year's $3.7 billion WIC grant
for reallocation to the states in the next fiscal year.  Some of the
reasons cited by the WIC directors for not spending all available
funds related to the structure of the WIC program.  For example, the
federal grant is the only source of funds for the program in most
states.  Some of these states prohibit agency expenditures that
exceed their available funding.  As a result, WIC directors reported
that they must be cautious not to overspend their WIC grant.  Because
WIC grants made to some states are so large, even a low underspending
rate can result in millions of returned grant dollars.  For example,
in fiscal year 1995, California returned almost $16 million in
unspent WIC funds, which represented about 3 percent of its $528
million federal grant.  Unlike California, New York State had no
unspent grant funds in fiscal year 1995.  New York was one of 12
states that supplemented its federal WIC grant with state funds that
year and hence did not have to be as cautious in protecting against
overspending its federal grant.  Overall, the group of states that
supplemented their WIC grants in fiscal year 1995 returned a smaller
percentage of their combined WIC funds than did the states that did
not supplement their federal grants. 

States also had unspent federal funds because the use of vouchers to
distribute benefits made it difficult for states to determine program
costs until the vouchers were redeemed and processed.  Two features
of the voucher distribution method can contribute to the states'
difficulty in determining program costs.  First, some portion of the
benefits issued as vouchers may not be used, thereby reducing
projected food costs.  Participants may not purchase all of the food
items specified on the voucher or not redeem the voucher at all. 
Second, because of the time it takes to process vouchers, states may
find after the end of the fiscal year that their actual food costs
were lower than projected.  For example, most states do not know the
cost of the vouchers issued for August and September benefits until
after the fiscal year ends because program regulations require states
to give participants 30 days to use a voucher and retailers 60 days
after receiving the voucher to submit it for payment.  The difficulty
in projecting food costs in a timely manner can be exacerbated in
some states that issue participants 3 months of vouchers at a time to
reduce crowded clinic conditions.  In such states, vouchers for
August benefits could be provided as early as June but not submitted
for payment until the end of October. 

Other reasons for states having unspent WIC funds related to specific
circumstances that affect program operations within individual
states.  For example, in Texas the installation of a new computer
system used to certify WIC eligibility and issue WIC food vouchers
contributed to the state's having unspent funds of about $6.8 million
in fiscal year 1996.  According to the state WIC director, the
computer installation temporarily reduced the amount of time that
clinic staff had to certify and serve new clients because they had to
spend time instead learning new software and operating procedures. 
As a result, they were unable to certify and serve a number of
eligible individuals and did not spend the associated grant funds. 
In Florida, a hiring freeze contributed to the state's having unspent
funds of about $7.7 million in fiscal year 1995.  According to the
state WIC director, although federal WIC funds were available to
increase the number of WIC staff at the state and local agency level,
state programs were under a hiring freeze that affected all programs,
including WIC.  The hiring freeze hindered the state's ability to
hire the staff needed to serve the program's expanding caseload. 

Having unspent federal WIC funds did not necessarily indicate a lack
of need for program benefits.  WIC directors in some states with
fiscal year 1995 unspent funds reported that more eligible
individuals could have been served by WIC had it not been for the
reasons related to the program's structure and/or state-specific
situations or circumstances. 


   WIC ACCESS FOR WORKING WOMEN
---------------------------------------------------------- Chapter 0:2

On the basis of our nationwide survey of randomly selected local WIC
agencies, we reported in October 1997 that these agencies have
implemented a variety of strategies to increase the accessibility of
their clinics for working women.  The most frequently cited
strategies--used by every agency--are scheduling appointments instead
of taking participants on a first-come, first-served basis and
allowing other persons to pick up participants' WIC vouchers.\3
Scheduling appointments reduces participants' waiting time at the
clinic and makes more efficient use of the agency staff's time. 
Allowing other persons, such as baby-sitters and family members, to
pick up the food vouchers for participants can reduce the number of
visits to the clinic by working women.  Another strategy to increase
participation by working women used by almost 90 percent of local
agencies was issuing food vouchers for 2 or 3 months.  As California
state officials pointed out, issuing vouchers every 2 months, instead
of monthly, to participants who are not at medical risk reduces the
number of visits to the clinic.  Three-fourths of the local WIC
agencies had some provision for lunch hour appointments, which allows
some working women to take care of their visit during their lunch
break. 

Other actions to increase WIC participation by working women included
reducing the time spent at clinic visits.  We estimated that about 66
percent of local WIC agencies have taken steps to expedite clinic
visits for working women.  For example, a local agency in New York
State allows working women who must return to work to go ahead of
others in the clinic.  The director of a local WIC agency in
Pennsylvania allows working women to send in their paperwork before
they visit, thereby reducing the time spent at the clinic.  The
Kansas state WIC agency generally requires women to participate in
the program in the county where they reside, but it will allow
working women to participate in the county where they work when it is
more convenient for them. 

Other strategies adopted by some local WIC agencies include mailing
vouchers to working women under special circumstances, thereby
eliminating the need for them to visit the clinic (about 60 percent
of local agencies); offering extended clinic hours of operation
beyond the routine workday (about 20 percent of local agencies offer
early morning hours); and locating clinics at or near work sites,
including various military installations (about 5 percent of local
agencies). 

Our survey found that about 76 percent of the local WIC agency
directors believed that their clinics are reasonably accessible for
working women.  In reaching this conclusion, the directors considered
their clinic's hours of operation, the amount of time that
participants wait for service, and the ease with which participants
are able to get appointments.  Despite the widespread use of
strategies to increase accessibility, 9 percent of WIC directors
believe accessibility is still a problem for working women.  In our
discussions with these directors, the most frequently cited reason
for rating accessibility as moderately or very difficult was the
inability to operate during evenings or on Saturday because of lack
of staff, staff's resistance to working schedules beyond the routine
workday, and/or the lack of safety in the area around the clinic
after dark or on weekends. 

Our survey also identified several factors not directly related to
the accessibility of clinic services that serve to limit
participation by working women.  The factors most frequently cited
related to how working women view the program.  Specifically,
directors reported that some working women do not participate because
they (1) lose interest in the program's benefits as their income
increases, (2) perceive a stigma attached to receiving WIC benefits,
or (3) think the program is limited to those women who do not work. 
With respect to the first issue, 65 percent of the directors reported
that working women lose interest in WIC benefits as their income
rises.  For example, one agency director reported that women gain a
sense of pride when their income rises and they no longer want to
participate in the program.  Concerning the second issue, the stigma
some women associate with WIC--how their participation in the program
makes them appear to their friends and co-workers--is another
significant factor limiting participation, according to about 57
percent of the local agency directors.  Another aspect of the
perceived stigma associated with WIC participation is related to the
so-called "grocery store experience." The use of WIC vouchers to
purchase food in grocery stores can cause confusion and delays for
both the participant-shopper and the store clerk at the check-out
counter.  For example, Texas requires its WIC participants to buy the
cheapest brand of milk, evaporated milk, and cheese available in the
store.  Texas also requires participants to buy the lowest-cost
46-ounce fluid or 12-ounce frozen fruit juices from an approved list
of types (orange, grapefruit, orange/grapefruit, purple grape,
pineapple, orange/pineapple, and apple) and/or specific brands.  In
comparing the cost of WIC-approved items, participants must also
consider such things as weekly store specials and cost per ounce in
order to purchase the lowest-priced items.  While these restrictions
may lower the dollar amount that the state pays for WIC foods, it may
also make food selections more confusing for participants.  According
to Texas WIC officials, participants and cashiers often have
difficulty determining which products have the lowest price. 
Consequently, a delay in the check-out process may result in unwanted
attention for the WIC participant.  Finally, more than half of the
directors indicated that a major factor limiting participation is
that working women are not aware that they are eligible to
participate in WIC.  Furthermore, local agency officials in
California and Texas said that WIC participants who were not working
when they entered the program but who later go to work often assume
that they are then no longer eligible for WIC and therefore drop out
of the program. 


--------------------
\3 While we found 100 percent of the local WIC agencies we surveyed
have implemented these strategies, our results are based on a sample,
not the entire universe.  Therefore, we would estimate that at the
95-percent confidence level our finding applies to at least 99
percent of the entire universe. 


   CONTAINING PROGRAM COSTS
---------------------------------------------------------- Chapter 0:3

In September 1997, we reported that the states have used a variety of
initiatives to control WIC costs.  According to the WIC agency
directors in the 50 states and the District of Columbia we surveyed,
two practices in particular are saving millions of dollars.  These
two practices are (1) contracting with manufacturers to obtain
rebates on WIC foods in addition to infant formula and (2) limiting
authorized food selections by, for example, requiring participants to
select brands of foods that have the lowest cost.  With respect to
rebates, nine state agencies received $6.2 million in rebates in
fiscal year 1996 through individual or multistate contracts for two
WIC-approved foods--infant cereal and/or infant fruit juices.  Four
of these state agencies and seven other state agencies--a total of 11
states--reported that they were considering, or were in the process
of, expanding their use of rebates to foods other than infant
formula.  In May 1997, Delaware, one of the 11 states, joined the
District of Columbia, Maryland, and West Virginia in a multistate
rebate contract for infant cereal and juices.  Another state,
California, was the first state to expand its rebate program in March
1997 to include adult juices.  California spends about $65 million
annually on adult juice purchases.  California's WIC director told us
that the state expects to collect about $12 million in annual rebates
on the adult juices, thereby allowing approximately 30,000 more
people to participate in the program each month. 

With respect to placing limits on food selections, all of the 48
state WIC directors responding to our survey reported that their
agencies imposed limits on one or more of the food items eligible for
program reimbursement.  The states may specify certain brands; limit
certain types of foods, such as allowing the purchase of block but
not sliced cheese; restrict container sizes; and require the
selection of only the lowest-cost brands.  However, some types of
restrictions are more widely used than others.  For example, 47 WIC
directors reported that their states' participants are allowed to
choose only certain container or package sizes of one or more food
items, but only 20 directors reported that their states require
participants to purchase the lowest-cost brand for one or more food
items.  While all states have one or more food selection
restrictions, 17 of the 48 WIC directors responding to our
questionnaire reported that their states are considering the use of
additional limits on food selection to contain or reduce WIC costs. 

Separately or in conjunction with measures to contain food costs, we
found that 39 state agencies have placed restrictions on their
authorized retail outlets (food stores and pharmacies allowed to
redeem WIC vouchers--commonly referred to as vendors) to hold down
costs.  For example, the prices for WIC food items charged by WIC
vendors in Texas must not exceed by more than 8 percent the average
prices charged by vendors doing a comparable dollar volume of
business in the same area.  Once selected, authorized WIC vendors
must maintain competitive prices.  According to Texas WIC officials,
the state does not limit the number of vendors that can participate
in WIC.  However, Texas' selection criteria for approving a vendor
excludes many stores from the program.  In addition, 18 WIC directors
reported that their states restrict the number of vendors allowed to
participate in the program by using ratios of participants to
vendors.  For example, Delaware used a ratio of 200 participants per
store in fiscal year 1997 to determine the total number of vendors
that could participate in the program in each WIC service area.  By
limiting the number of vendors, states can more frequently monitor
vendors and conduct compliance investigations to detect and remove
vendors from the program who commit fraud or other serious program
violations, according to federal and state WIC officials.  A July
1995 report by USDA's Office of Inspector General found that the
annual loss to WIC as a result of vendor fraud in one state could
exceed $3 million.  The WIC directors in 2 of the 39 states that
reported limiting the number of vendors indicated that they are
planning to introduce additional vendor initiatives, such as
selecting vendors on the basis of competitive food pricing. 

We also found that opportunities exist to substantially lower the
cost of special infant formula.  Special formula, unlike the regular
formula provided by WIC, is provided to infants with special dietary
needs or medical conditions.  Cost savings may be achieved if the
states purchase special infant formula at wholesale instead of retail
prices.  The monthly retail cost of these special formulas can be
high--ranging in one state we surveyed from $540 to $900 for each
infant.  These high costs occur in part because vendors' retail
prices are much higher than the wholesale cost.  Twenty-one states
avoid paying retail prices by purchasing the special formula directly
from the manufacturers and distributing it to participants.  For
example, Pennsylvania turned to the direct purchase of special infant
formula to address the lack of availability and high cost of
vendor-provided formulas.  It established a central distribution
warehouse for special formulas in August 1996 to serve the less than
1 percent of WIC infants in the state--about 400--who needed special
formula in fiscal year 1996.  The program is expected to save about
$100,000 annually.  Additional savings may be possible if these 21
states are able to reduce or eliminate the authorization and
monitoring costs of retail vendors and pharmacies that distribute
only special infant formula.  For example, by establishing its own
central distribution warehouse, Pennsylvania plans to remove over 200
pharmacies from the program, resulting in significant administrative
cost savings, according to the state WIC director. 

While the use of these cost containment practices could be expanded,
our work found that a number of obstacles may discourage the states
from adopting or expanding these practices.  These obstacles include
problems that states have with existing program restrictions on how
additional funds made available through cost containment initiatives
can be used and resistance from the retail community when states
attempt to establish selection requirements or limit retail stores
participating in the program.  First, FNS policy requires that during
the grant year, any savings from cost containment accrue to the food
portion of the WIC grant, thereby allowing the states to provide food
benefits to additional WIC applicants.  None of the cost savings are
automatically available to the states for support services, such as
staffing, clinic facilities, voucher issuance sites, outreach, and
other activities that are funded by WIC's NSA (Nutrition Services and
Administration) grants.\4

These various support activities are needed to increase participation
in the program, according to WIC directors.  As a result, the states
may not be able to serve more eligible persons or they may have to
carry a substantial portion of the program's support costs until the
federal NSA grant is adjusted for the increased participation
level--a process that can take up to 2 years, according to the
National Association of WIC Directors.  FNS officials pointed out
that provisions in the federal regulations allow the states that have
increased participation to use a limited amount of their food grant
funds for support activities.  However, some states may be reluctant
to use this option because, as one director told us, doing so may be
perceived as taking food away from babies. 

FNS and some state WIC officials told us that limiting the number of
vendors in the program is an important aspect of containing WIC
costs.  However, they told us the retail community does not favor
limits on the number of vendors that qualify to participate. 
Instead, the retail community favors the easing of restrictions on
vendor eligibility thereby allowing more vendors that qualify to
accept WIC vouchers.  According to FNS officials, the amount that WIC
spends for food would be substantially higher if stores with higher
prices were authorized to participate in the program.  To encourage
the further implementation of WIC cost containment practices, we
recommended in our September 1997 report that FNS work with the
states to identify and implement strategies to reduce or eliminate
such obstacles.  These strategies could include modifying the
policies and procedures that allow the states to use cost containment
savings for the program's support services and establishing
regulatory guidelines for selecting vendors to participate in the
program.  FNS concurred with our findings and recommendations.  We
will continue to monitor the agency's progress made in implementing
strategies to reduce or eliminate obstacles to cost containment. 

Our survey also collected information on the practices that the
states are using to ensure that program participants meet the
program's income and residency requirements.  The states'
requirements for obtaining income documentation vary.\5 Of the 48 WIC
directors responding to our survey, 32 reported that their state
agencies generally require applicants to provide documentation of
income eligibility; 14 reported that their states did not require
documentation and allowed applicants to self-declare their income;
and 2 reported that income documentation procedures are determined by
local WIC agencies.  Of the 32 states requiring income documentation,
30 reported that their documentation requirement could be waived
under certain conditions.  Our review of state income documentation
polices found that waiving an income documentation requirement can be
routine.  For example, we found that some states requiring
documentation of income will waive the requirement and permit
self-declaration of income if the applicants do not bring income
documents to their certification meeting.  While existing federal
regulations allow the states to establish their own income
documentation requirements for applicants, we are concerned that
basing income eligibility on the applicants' self-declarations of
income may permit ineligible applicants to participate in WIC. 
However, the extent of this problem is unknown because there has not
been a recent study of the number of program participants who are not
eligible because of income.  Information from a study that FNS has
begun should enable that agency to determine whether changes in
states' requirements for income documentation are needed.  Regarding
residency requirements, we found that some states have not been
requiring proof of residency and personal identification for program
certification, as required by federal regulations.  In our September
1997 report, we recommended that FNS take the necessary steps to
ensure that state agencies require participants to provide
identification and evidence that they reside in the states where they
receive benefits.  In February 1998, FNS issued a draft policy
memorandum to its regional offices that is intended to stress the
continuing importance of participant identification, residency, and
income requirements and procedures to ensure integrity in the
certification and food instrument issuance processes.  Also, at the
request of FNS, we presented our review's findings and
recommendations at the EBT [Electronic Benefit Transfer] and Program
Integrity Conference jointly sponsored by the National Association of
WIC Directors and FNS in December 1997.  The conference highlighted
the need to reduce ineligible participation and explored improved
strategies to validate participants' income and residency
eligibility. 


--------------------
\4 WIC grants to states are divided into food grants and NSA grants. 
Food grants are allocated to states through a formula that is based
on the number of individuals in each state who are eligible for WIC
benefits because of their income.  NSA grants are allocated to states
through a formula that is based on factors such as the state's number
of program participants and WIC salary costs.  Both food and NSA
grants have a stability feature that attempts to ensure that prior
year funding levels are maintained.  Since 1995, food grants have
represented about 74 percent of WIC grant funds and NSA grants about
26 percent.  Food grants cover the costs of supplemental foods.  NSA
grants cover costs for program administration, start-up, monitoring,
auditing, the development of and accountability for food delivery
systems, nutrition education, breast-feeding promotion and support,
outreach, certification, and developing and printing food vouchers. 

\5 Within approved boundaries, federal regulations allow considerable
discretion to state and local agencies in determining and verifying
an applicant's income.  States may use self-declaration, in which the
state accepts the income amount reported by the applicant, or they
may request or require the applicant to provide documents, such as
pay stubs, to substantiate the reported income.  Additionally, state
and local WIC agencies may verify the accuracy of these documents by
conducting in-depth audits of the applicant's reported income. 


   IMPACTS OF REBATES FOR WIC
   INFANT FORMULA
---------------------------------------------------------- Chapter 0:4

FNS requires the states to operate a rebate program for infant
formula.  By negotiating rebates with manufacturers of infant formula
purchased through WIC, the states greatly reduce their average per
person food costs so that more people can be served.  At the request
of the Chairman of the House Budget Committee, we are currently
reviewing the impacts that these rebates have had on non-WIC
consumers of infant formula.  Specifically, we will report on (1) how
prices in the infant formula market changed for non-WIC purchasers
and WIC agencies after the introduction of sole-source rebates, (2)
whether there is any evidence indicating that non-WIC purchasers of
infant formula subsidized WIC purchases through the prices they paid,
and (3) whether the significant cost savings for WIC agencies under
sole source rebates for infant formula have implications for the use
of rebates for other WIC products. 


-------------------------------------------------------- Chapter 0:4.1

Thank you again for the opportunity to appear before you today.  We
would be pleased to respond to any questions you may have. 


*** End of document. ***