Review of Improper Temporary Assistance for Needy Families Basic Assistance Payments in Michigan for April 1, 2006, Through March 31, 2007

September 05, 2008 | Audit A-05-07-00067

Executive Summary

For the period April 1, 2006, through March 31, 2007, Michigan made some Temporary Assistance for Needy Families (TANF) basic assistance payments that did not meet Federal and State requirements and did not adequately document all eligibility and payment determinations. TANF is a block grant program that provides funding to States to help families move from welfare to self-sufficiency; TANF's basic assistance includes benefits designed to meet a family's ongoing basic needs. This review, part of an eight-State series, was requested by ACF and the Office of Management and Budget for determining the fiscal year 2008 national TANF error rate. Pursuant to the Improper Payments Information Act of 2002 (P.L. No. 107-300), Federal agencies must estimate and report to Congress on the annual amount of improper payments in their high-risk programs.

Based on our sample results, we estimated that the overall TANF improper payment rate was 24.3 percent of the Federal dollars expended and 22.7 percent of the number of basic assistance payments made for the 1-year audit period. These improper payments totaled an estimated $24 million (Federal share). The payments were improper because they were for recipient families who were ineligible for TANF basic assistance, were calculated improperly, or lacked required documentation.

We recommended that the State (1) develop criteria specifying the circumstances that warrant a hardship exception for purposes of extending TANF basic assistance payments beyond the 60-month Federal lifetime limit, (2) use the results of this review to help ensure compliance with Federal and State TANF requirements, (3) determine the current eligibility of all recipients identified in this review as improperly enrolled in the TANF program and ensure that further assistance is denied for those who remain ineligible, and (4) recalculate assistance budgets for all recipients who received improperly calculated payments. In its comments on our draft report, the State agency provided information on steps that it had taken or planned to take to implement the recommendations.

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