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entitled 'Food Stamp Program: Farm Bill Options Ease Administrative 
Burden, but Opportunities Exist to Streamline Participant Reporting 
Rules among Programs' which was released on September 16, 2004.

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Report to the Committee on Agriculture, Nutrition, and Forestry, U.S. 
Senate:

United States Government Accountability Office:

GAO:

September 2004:

FOOD STAMP PROGRAM:

Farm Bill Options Ease Administrative Burden, but Opportunities Exist 
to Streamline Participant Reporting Rules among Programs:

GAO-04-916:

GAO Highlights:

Highlights of GAO-04-916, a report to Committee on Agriculture, 
Nutrition, and Forestry, U.S. Senate: 

Why GAO Did This Study:

Many individuals familiar with the Food Stamp Program view its rules 
as unnecessarily complex, creating an administrative burden for 
participants and caseworkers. In addition many participants receive 
benefits from other programs that have different program rules, adding 
to the complexity of accurately determining program benefits and 
eligibility. The 2002 Farm Bill introduced new options to help simplify 
the program. This report examines (1) which options states have chosen 
to implement and why, and (2) what changes local officials reported as 
a result of using these options. To view selected results from GAO’s 
Web-based survey of food stamp administrators, go to 
www.gao.gov/cgi-bin/getrpt?GAO-04-1058SP. To view the results from the 
local food stamp office surveys, go to 
www.gao.gov/cgi-bin/getrpt?GAO-04-1059SP.

What GAO Found:

As of January 2004, states chose four of the eight Farm Bill options 
with greater frequency than the others. These options provided states 
with more flexibility in requiring participants to report changes and 
in determining eligibility. 

Number of States That Have Chosen, Implemented, or Not Chosen Farm 
Bill Options as of January 2004: 

[See PDF for image]

[End of section]

The most common reasons state officials gave for choosing the eight 
options were to simplify program rules for participants and 
caseworkers.
 
Local food stamp officials reported mixed results from implementing 
the Farm Bill options. Although they reported some improvements for 
both caseworkers and participants from some options, no option received 
consistent positive reports in all the areas where state officials 
expected improvements. In fact, in many cases, officials were as 
likely to report that an option resulted in no change as they were to 
report improvements. 

Moreover, many local officials reported that three options introduced 
complications in program rules. One option that offered the most 
promise because it was selected by most states and affects a large 
number of participants resulted in food stamp participant reporting 
rules that differed from Medicaid and TANF. These differences resulted 
in confusion for food stamp participants and caseworkers, and some 
changes were made that undermined the intended advantages of the 
option. These problems reflect the challenge of trying to simplify 
rules for one program without making the rules of other related 
programs the same. Concerns about whether there are costs associated 
with aligning reporting rules may hinder a state’s decision to pursue 
alignment; yet the extent to which program costs might increase as a 
result of making reporting rules the same is unclear. 

What GAO Recommends:

GAO recommends that the Food and Nutrition Service (FNS) work with the 
Department of Health and Human Services to (1) encourage states to 
explore the advantages and disadvantages of better aligning 
participant reporting rules, particularly for Medicaid and Temporary
Assistance for Needy Families (TANF) and (2) provide information to 
states on the opportunities for better aligning reporting rules. In 
comments on GAO’s draft report, FNS officials agreed with our 
recommendations and said they plan to explore ways to align participant 
reporting rules.

www.gao.gov/cgi-bin/getrpt?GAO-04-916.

To view the full product, including the scope and methodology, click on 
the link above. For more information, contact Sigurd Nilsen, (202) 
512-7215 nilsens@gao.gov.

[End of section]

Contents:

Letter:

Results in Brief:

Background:

States Chose Some Farm Bill Options More Frequently than Others to 
Simplify Program Rules and Ease the Administrative Burden for 
Participants and Caseworkers:

Local Food Stamp Officials Reported Mixed Results for Farm Bill 
Options; These Results Ranged from Improvements to Complications:

Conclusions:

Recommendations for Executive Action:

Agency Comments:

Appendix I: Objective, Scope, and Methodology:

Appendix II: Farm Bill Options That States Have Implemented as of 
January 2004:

Appendix III: Selected Responses to State Survey:

Appendix IV: Selected Responses to Local Surveys:

Appendix V: GAO Contacts and Staff Acknowledgments:

GAO Contacts:

Acknowledgments:

Related GAO Products:

Table:

Table 1: Disposition of Eight Farm Bill Option Samples:

Figures:

Figure 1: Description and Purpose of Farm Bill Options:

Figure 2: Number of States That Have Chosen, Implemented, or Not Chosen 
Farm Bill Options, as of January 2004:

Figure 3: Important Reasons for Choosing Options:

Figure 4: Important Reasons for Not Choosing Options:

Figure 5: Results Reported by Local Officials on Administrative Burden 
for Participants and Caseworkers:

Figure 6: Results Reported by Local Officials on Error Rate, 
Participation, Benefit Amount, and Alignment:

Figure 7: Example of Possible Decisions and Actions under the Expanded 
Simplified Reporting Option:

Figure 8: Farm Bill Options States Have Implemented as of January 2004:

Figure 9: Number of States That Gave Reasons for Choosing Options:

Figure 10: Number of States That Gave Reasons for Not Choosing Options:

Figure 11: Expanded Simplified Reporting:

Figure 12: Simplified Standard Utility Allowance:

Figure 13: Simplified Definition of Income:

Figure 14: Simplified Definition of Resources:

Figure 15: Transitional Benefits:

Figure 16: Child Support Expense Income Exclusion:

Figure 17: Simplified Determination of Deductions:

Abbreviations:

CMS: Centers for Medicare and Medicaid Services:

HHS: Department of Health and Human Services:

FNS: Food and Nutrition Service:

TANF: Temporary Assistance for Needy Families:

USDA: U.S. Department of Agriculture:

United States Government Accountability Office:

Washington, DC 20548:

September 16, 2004:

The Honorable Thad Cochran: 
Chairman: 
The Honorable Tom Harkin: 
Ranking Minority Member: 
Committee on Agriculture, Nutrition, and Forestry: 
United States Senate:

In fiscal year 2003, the federal Food Stamp Program, administered by 
the U.S. Department of Agriculture's (USDA) Food and Nutrition Service 
(FNS), provided about $21.4 billion in food stamp benefits. In that 
same year, the program helped a monthly average of 21 million low-
income individuals, many of whom were children. However, the program 
faces a number of challenges. Many individuals familiar with the Food 
Stamp Program view its rules as unnecessarily complex, creating an 
administrative burden for both program participants and affected 
government offices. In addition, many food stamp participants receive 
benefits from other low-income assistance programs, such as Medicaid 
and Temporary Assistance for Needy Families (TANF). These programs, 
administered by the Department of Health and Human Services (HHS) have 
different rules than those allowed under the Food Stamp Program. 
Differences among these program rules add to the complexity of 
accurately determining eligibility and program benefits. In 2003, 
errors in overpayments and underpayments totaled $1.4 billion. These 
errors occurred in part because of the complexity of program rules. 
Further, FNS estimated that in September 2001, only 62 percent of 
individuals who were eligible to receive food stamps participated in 
the program. In the previous year, FNS established a goal to improve 
the rate of food stamp participation among all eligible people to 68 
percent by 2005.

For many years, states and advocacy groups have called for changes in 
the program to help overcome these challenges. Some changes were made 
to the program beginning in the late 1990s, and the Farm Security and 
Rural Investment Act of 2002 (referred to in this report as the Farm 
Bill) introduced new options, from which states could choose, to help 
simplify the program, encourage greater participation among eligible 
households, ease the administrative burden for participants and program 
administrators, and help support low-income working families. For 
example, one option reduces participant reporting requirements, while 
another helps to ensure that families leaving TANF cash assistance 
continue to receive their food stamp benefits without requiring the 
family to reapply or submit additional paperwork. In addition, some of 
these options permit states to more closely align food stamp 
eligibility rules with the eligibility rules of other programs, an 
improvement that could streamline administrative procedures for food 
stamp workers, improve service for clients who participate in more than 
one assistance program, and help reduce state payment error rates. In 
order to understand whether the Farm Bill options have helped states 
streamline their programs, you asked us to determine (1) which options 
states have chosen to implement and why, and (2) what changes local 
officials reported as a result of implementing these options.

To answer these questions, we surveyed food stamp administrators in the 
50 states and the District of Columbia to collect information on which 
Farm Bill options states have chosen and the reasons states chose 
certain options. We also sent over 1,300 surveys to food stamp 
supervisors in randomly selected local food stamp offices, where the 
options are actually implemented during daily contacts with 
participants. These survey results are generalizable to local offices 
in states that implemented the options. We asked them how Farm Bill 
options had affected several aspects of the Food Stamp Program, such as 
administrative burden on participants and food stamp 
caseworkers.[Footnote 1] We focused our surveys on eight of the nine 
Farm Bill options, excluding one option that allows states on a pilot 
basis to test issuing standardized benefits to residents of certain 
group facilities. To view selected results from GAO's Web-based survey 
of food stamp administrators, go to www.gao.gov/cgi-bin/getrpt?GAO-04-
1058SP. To view the results from the local food stamp office surveys, 
go to www.gao.gov/cgi-bin/getrpt?GAO-04-1059SP.

To augment information from our state and local surveys, we conducted 
three comprehensive site visits (Arizona, Maryland, and Michigan) and 
two structured telephone interviews (Colorado and South Carolina). We 
chose states for our site visits and telephone interviews to capture 
the variation in the following criteria: (1) number of and type of 
selected options, (2) numbers of food stamp participants and program 
participation rate, (3) program error rates, and (4) entity (state or 
county) administering the Food Stamp Program. During each visit we met 
with state officials administering and developing policy for the Food 
Stamp Program, local officials in the office where services are 
provided, and officials responsible for other key assistance programs, 
such as TANF and Medicaid.[Footnote 2] We also reviewed Farm Bill 
legislation and related committee reports, and we reviewed FNS reports 
and other program analysis. We held discussions with program 
stakeholders, including officials at FNS headquarters and regional 
offices, officials at HHS, representatives of advocacy organizations, 
and other program experts. We performed our work from August 2003 to 
June 2004 in accordance with generally accepted government auditing 
standards.

Results in Brief:

States chose four of the eight options available in the Farm Bill more 
frequently than the others and based their decisions largely on whether 
they thought the options would help simplify Food Stamp Program rules 
and ease the administrative burden for food stamp participants and 
caseworkers. The four options that states chose most frequently 
provided states more flexibility in how often participants must report 
changes in their household circumstances (such as increases in income), 
the way food stamp caseworkers in local offices calculate utility 
costs, what household income is considered when determining food stamp 
eligibility, and what household resources are considered when 
determining eligibility. As of January 2004, each of these four options 
had been implemented by at least 23 states, and other states told us 
that they were planning to implement them. State officials gave many 
reasons for choosing these options. Among the most common were to 
decrease the workload for caseworkers, decrease the burden on 
participants, and simplify rules for participants and caseworkers. For 
example, at least 30 states cited these reasons in choosing the option 
to reduce how often participants must report changes in household 
circumstances. In addition, many states chose one or more of these 
options because officials believed the option would decrease their 
state's payment error rate, help align the Food Stamp Program with 
other assistance programs, or increase overall participation in the 
Food Stamp Program. States' decisions not to adopt the four other 
options also hinged on what they believed the outcomes would be for 
participants and caseworkers. These options allowed states to provide 
transitional food stamps for up to 5 months to those families that 
leave TANF without requiring the family to reapply for food stamps, 
change how caseworkers treat child support payments for noncustodial 
parents, disregard changes in certain deductions (such as child care 
and medical expenses) during certification periods, and use a standard 
deduction for homeless households that incur some shelter expenses. 
Specifically, fewer states thought these other options would reduce the 
administrative burden for participants and caseworkers. For example, 
many states did not choose the option that provides transitional food 
stamps for up to 5 months after a household leaves TANF cash assistance 
because officials believed it would make program rules for participants 
and caseworkers more complicated. Many states also thought these 
options would have little or no advantage over current policy or would 
create additional problems, including difficulties with programming 
their computer systems. In fact, the majority of states that adopted 
these four options reported that they faced some implementation 
hurdles, such as difficulties related to caseworkers' adjustment to 
program changes and reprogramming computer systems to accommodate 
changes.

Local food stamp officials reported mixed results from implementing the 
options; the results ranged from anticipated improvements to 
complications in program rules. For example, some local officials 
reported that the options they implemented had the anticipated effect 
of easing the administrative burden for food stamp participants and 
caseworkers by reducing the number of times participants are required 
to submit paperwork and the amount of time caseworkers spend on 
paperwork. On the other hand, many other local officials reported that 
the administrative burden remained the same before and after 
implementing the Farm Bill options. Similarly, for options implemented 
in part to increase program participation, some local officials 
reported that participation increased, while others told us that it 
remained the same. Some options may have been associated with no 
change, in part because they affected few food stamp participants. 
Also, many options made minor changes to existing policy. Finally, 
local officials reported that three options introduced complications in 
program rules for both caseworkers and participants. Local officials 
told us that the option to reduce reporting requirements for 
participants--an option that local officials reported affected most 
food stamp participants--introduced complications for food stamp 
participants and caseworkers. Local officials on our site visits and in 
telephone interviews explained that this change to reporting rules was 
not consistent with how states structured the reporting rules of other 
assistance programs, resulting in food stamp reporting rules that are 
not aligned with Medicaid and, in all but one state we visited, are not 
aligned with TANF. For example, in one state, the Food Stamp Program 
requires a participant to report when his or her income rises above 130 
percent of the federal poverty level, but that state's Medicaid program 
requires the same participant to report all changes in household 
circumstances, including any change in income. The variation among 
these reporting rules often resulted in confusion on the part of 
program participants and caseworkers, unnecessary work for the 
caseworker, and the possible payment of improper benefits from the Food 
Stamp Program and other assistance programs.

In order to take advantage of existing opportunities available to 
states for streamlining participant reporting rules, we recommend that 
the Secretary of Agriculture direct FNS to collaborate with HHS to take 
the following two actions: (1) encourage state officials to explore the 
advantages and disadvantages--in terms of both administrative and 
benefit costs and savings--of better aligning participant reporting 
rules in their states, particularly for Medicaid and TANF; and (2) 
disseminate information and guidance to states on the opportunities 
available for better aligning participant reporting rules among food 
stamps, Medicaid, and TANF. In comments on GAO's draft report, FNS 
officials agreed with our recommendations and said they plan to explore 
ways to align participant reporting rules.

Background:

The federal Food Stamp Program is intended to help low-income 
individuals and families obtain a better diet by supplementing their 
income with benefits to purchase food. FNS pays the full cost of food 
stamp benefits and shares the states' administrative cost--with FNS 
paying about 50 percent of the administrative cost. FNS is responsible 
for promulgating program regulations and ensuring that state officials 
administer the program in compliance with program rules. The states 
administer the program by determining whether households meet the 
program's income and asset requirements, calculating monthly benefits 
for qualified households, and issuing benefits to participants on an 
electronic benefits transfer card.

Determination of Eligibility and Benefits:

Eligibility for participation in the Food Stamp Program is based on the 
Department of Health and Human Services' poverty guideline for 
households. In most states, a household's gross income cannot exceed 
130 percent of the federal poverty level (or about $1,654 per month for 
a family of three in 2003), and net income cannot exceed 100 percent of 
the poverty guideline (or about $1,272 per month for a family of three 
in 2003). Net income is determined by deducting from gross income 
expenses such as dependent care costs, medical expenses, utilities 
costs, and shelter expenses. In addition, most states place a limit of 
$2,000 on household assets, and basic program rules limit the value of 
vehicles an applicant can own and still be eligible for the 
program.[Footnote 3] If the household owns a vehicle worth more than 
$4,650, the excess value is included in calculating the household's 
assets.[Footnote 4]

Recipients of TANF cash assistance are automatically eligible for food 
stamps--a provision referred to as "categorical eligibility"--and do 
not have to go through a separate food stamp eligibility determination 
process, although the level of their benefits must still be determined. 
Many needy families who are no longer receiving TANF cash assistance 
may receive other TANF-funded services or benefits, such as child care 
benefits. In 1999, to help ensure that these families are also eligible 
for food stamp benefits, FNS offered states the option to extend 
categorical eligibility to families receiving TANF-funded benefits or 
services. Families who are automatically eligible for food stamps do 
not have to meet the food stamp asset test in order to receive benefits 
but would have to meet the state's TANF asset test.

States also have two ways in which they can allow households to own a 
vehicle that is worth more than the amount allowed in current 
regulations and still remain eligible for food stamp benefits. In 
October 2000, in part to help support low-income working families, the 
Congress enacted legislation that grants states the option to replace 
the federal food stamp vehicle asset rule with the vehicle asset rule 
from their TANF assistance program, which is set by the state and can 
vary from state to state. States can also opt to use the categorical 
eligibility option as a way to exclude all vehicles, as well as other 
assets the family may have. This option affects the food stamp 
eligibility only of food stamp families authorized to receive a TANF-
funded service or benefit. As of October 2003, the majority of states 
had either replaced their federal food stamp vehicle asset rule with 
the vehicle asset rule from their TANF assistance program or conferred 
categorical eligibility as a way to exclude vehicles.

Certification and Reporting Requirements:

After eligibility is established, households are certified eligible for 
food stamps for periods ranging from 1 to 24 months. The length of the 
certification period depends on household circumstances, but only 
households in which all members are elderly or disabled can be 
certified for more than 12 months. Once the certification period ends, 
households must reapply for benefits, at which time eligibility and 
benefit levels are redetermined.[Footnote 5]

Between certification periods, households must report changes in their 
circumstances--such as household composition, income, and expenses--
that may affect their eligibility or benefit amounts. States have the 
option of requiring food stamp participants to report on their 
financial circumstances at various intervals and in various ways. 
States can institute a type of periodic reporting system or they can 
rely on households to report changes in their household circumstances 
within 10 days of occurrence.[Footnote 6] Under periodic reporting, 
participants may report monthly, quarterly, or under a simplified 
system. The simplified reporting system, available since early 2001, 
provides for an alternative reporting option that requires households 
with earned income to report changes only when their income rises above 
130 percent of the poverty level.

FNS's Quality Control System:

FNS monitors how accurately states determine food stamp eligibility and 
calculate benefits. Under FNS's quality control system, the states 
calculate their payment errors by drawing a statistical sample to 
determine whether participating households received the correct benefit 
amount.[Footnote 7] Improper payments, which include overpayments of 
food stamp benefits to participants, underpayments to participants, and 
payments to those who are not eligible, may occur for a variety of 
reasons. Overpayments can be caused by inadvertent or intentional 
errors made by recipients and caseworkers. For example, caseworkers may 
misapply complex food stamp rules when calculating benefits or 
participants may inadvertently or deliberately provide inaccurate 
information to food stamp offices. In the 1990s, the states' error rate 
hovered around 10 percent, but it fell to 6.6 percent in fiscal year 
2003, the lowest level in the program's history. The 2003 combined 
error rate comprised $1 billion in overpayments to food stamp 
participants and underpayments of more than $300 million. According to 
USDA, about half of all payment errors are due to an incorrect 
determination of household income.

The Farm Bill changed the Food Stamp Program's quality control system 
by making only those states with persistently high error rates face 
liabilities.[Footnote 8] The Farm Bill also provides for $48 million in 
bonuses each year to be awarded to states with high or most improved 
performance, including actions taken to correct errors, reduce error 
rates, improve eligibility determinations, and other indicators of 
effective administration as approved by the Secretary of 
Agriculture.[Footnote 9]

Food Stamp Participants Receive Benefits from Other Assistance 
Programs:

Many food stamp participants receive benefits from other federally 
funded low-income assistance programs, including Medicaid and TANF. For 
example, in 2002, about 85 percent of children who received food stamp 
benefits were also on Medicaid, and about 20 percent of food stamp 
households received assistance from TANF. Many food stamp participants 
also receive child care assistance and Supplemental Security 
Income.[Footnote 10] In most states, the Food Stamp Program is 
administered out of a local assistance office that offers benefits from 
these other assistance programs as well. Food stamp participants may 
provide necessary information to only one caseworker who determines 
eligibility and benefits for all of these programs, or they may work 
with several caseworkers that administer benefits for different 
programs.

Despite the overlap in the populations served by these various 
assistance programs, program rules and requirements across these 
programs vary significantly.[Footnote 11] Substantial variation exists 
not only in program financial eligibility rules. The primary sources of 
these variations are generally at the federal level, although for 
several programs, such as TANF and Medicaid, states and localities have 
some flexibility in setting financial eligibility rules. They also have 
flexibility in the rules that govern how often participants are 
required to report changes in their household circumstances. While the 
Food Stamp Program allows states to choose either periodic or change 
reporting, Medicaid provides states with even broader flexibility to 
establish rules for when Medicaid participants must report changes in 
their circumstances. Under Medicaid regulations, states must have 
procedures designed to ensure that participants make timely and 
accurate reports of any change in circumstances that may affect their 
eligibility and that states act promptly to redetermine eligibility 
based on the reported change in circumstances. However, the terms 
"timely" and "promptly" are not defined and can be interpreted in 
various ways by the states. TANF does not mandate a particular set of 
participant reporting rules and generally allows states to develop 
their own rules.[Footnote 12]

Options Made Available by the Farm Bill:

The Farm Bill makes available to states various new options that are 
intended to simplify food stamp program rules, streamline food stamp 
eligibility and benefit rules, and help ensure that food stamp 
participants experience as smooth a transition from welfare to work as 
possible. (See fig. 1.)

Figure 1: Description and Purpose of Farm Bill Options:

[See PDF for image]

[A] In addition to having these eight options, states also have the 
option, on a pilot basis, to test issuing standardized benefits to 
residents of certain group homes, such as facilities for the disabled 
or that operate drug or alcohol treatment programs. The standardized 
benefit would be in lieu of the regular food stamp benefit and would be 
developed by the state, taking into account the food stamp benefits 
typically received by residents of the covered group facilities.

[B] The Farm Bill refers to this option as Simplified Determination of 
Housing Costs.

[End of figure]

States Chose Some Farm Bill Options More Frequently than Others to 
Simplify Program Rules and Ease the Administrative Burden for 
Participants and Caseworkers:

States chose four of the Farm Bill options with greater frequency than 
the others. State officials gave reasons for choosing, or not choosing, 
the options that focused primarily on how they thought the options 
would affect food stamp participants and caseworkers. Other reasons 
were also important in the choice of some options. For example, the 
anticipated effect on the state's payment error rate was a key factor 
in the selection of most options. During the period when states were 
implementing the food stamp options, a number of them posed challenges 
for the states, such as difficulties related to caseworkers' adjustment 
to program changes and programming computer systems.

States Were Most Likely to Choose Four of the Options:

According to our survey of state food stamp administrators, 23 or more 
states had implemented four of the options as of January 2004, while 
less than one-quarter of the states had implemented the other four 
options. (See fig. 2. Also see app. II for the options that individual 
states have chosen and implemented.)

Figure 2: Number of States That Have Chosen, Implemented, or Not Chosen 
Farm Bill Options, as of January 2004:

[See PDF for image]

Notes:

The Simplified Homeless Shelter Costs "chosen and implemented" category 
only includes states that indicated they did not have a Standard 
Homeless Shelter Allowance of $143 prior to the Farm Bill. The "not 
chosen" category for this option includes 21 states that indicated they 
already had a Standard Homeless Shelter Allowance of $143 prior to the 
Farm Bill. One state did not respond to Simplified Homeless Shelter 
Costs status item.

One state did not respond to the Expanded Simplified Reporting status 
item.

[End of figure]

The Reasons States Gave for Choosing Options Were Largely Based on the 
Anticipated Effects on Participants and Caseworkers:

The most common reasons state officials gave for choosing the eight 
options were to simplify program rules for participants and 
caseworkers, according to our survey. For example, state officials we 
interviewed told us they thought program rules would be less confusing 
for participants if the types of income considered in eligibility 
determinations were more uniform across assistance programs, as is 
allowed by the Simplified Definition of Income option. In addition, 
officials in one state commented that they thought the Simplified 
Standard Utility Allowance option would make the rules less complicated 
for caseworkers because it would allow them to apply the standard 
utility allowance--a fixed amount that can be used in place of actual 
utility costs--to households sharing a residence, instead of having to 
prorate the actual utility costs of the household. (See fig. 3 and app. 
III for more detail on reasons states chose options.)

Figure 3: Important Reasons for Choosing Options:

[See PDF for image]

[A] Simplified Homeless Shelter Costs option only includes states that 
indicated they did not have a Standard Homeless Shelter Allowance of 
$143 prior to the Farm Bill.

[B] We only asked the child support item for the Child Support Expense 
Income Exclusion option.

[End of figure]

In addition, two important reasons state officials gave for choosing 
options were to decrease the burden on participants and decrease the 
workload for caseworkers, as shown in figure 3. For example, several 
state officials told us they thought options such as Simplified 
Homeless Shelter Costs and Simplified Standard Utility Allowance that 
allow states to use a standard allowance rather than actual costs in 
determining eligibility would provide relief for participants and 
caseworkers. When standard allowances are used, participants do not 
have to furnish proof of all actual costs and, correspondingly, 
caseworkers have less information to verify.[Footnote 13] In addition, 
some state officials told us that they thought an option, such as 
Transitional Benefits, that decreases the frequency with which 
participants must report changes would reduce workload. Under the 
Transitional Benefits option, households leaving TANF are automatically 
allowed up to 5 months of food stamp benefits and are not required to 
report changes in household circumstances during the transitional 
period.

Other reasons were also important in the choice of some options. 
Lowering their state's payment error rate was an important reason state 
officials gave for choosing seven of the options, including the 
Expanded Simplified Reporting option. States choosing this option are 
held responsible only for errors that result from miscalculating 
benefits at certification, or if income exceeds 130 percent of poverty 
and the change is not reported during the reporting period. A state's 
error rate is also not affected if the household experienced a change 
in its circumstances that it did not report. In addition, officials in 
one state told us they thought the Transitional Benefits option would 
lower the state's payment error rate because it allows for certain 
periods in which states are to be held harmless for unreported changes. 
Otherwise, these unreported changes could be included in calculating 
the error rate. Further, officials told us that the income option would 
make the Food Stamp Program less error prone because it allows states 
to use some of the same income definitions that are used when 
determining eligibility for TANF cash assistance or Medicaid. This 
alignment of income definitions may result in fewer errors because 
following one set of program rules is easier for participants and 
caseworkers than trying to adhere to many different sets of rules.

Increasing participation in the Food Stamp Program, including 
participation of working families, was also an important reason for 
choosing three of the options. For example, officials in one state told 
us that they believed the Expanded Simplified Reporting option would 
contribute to higher participation rates because cases would not be 
closed as often under this option. In addition, state officials 
reported that they thought the Child Support Expense Income Exclusion 
option would help more households to receive food stamps by making it 
easier for them to meet eligibility requirements. This option allows 
states to exclude legally obligated child support payments from the 
gross income of the noncustodial parent who is paying the child support 
when determining food stamp eligibility. Without the option, these 
child support payments are deducted from the noncustodial parent's 
income after eligibility for food stamps is already 
determined.[Footnote 14]

State officials we surveyed gave additional reasons for choosing some 
options, including the desire to align food stamps with other 
assistance programs, increase benefit amounts for participants, and 
encourage payment of child support. Aligning the Food Stamp Program's 
definition of income and resource rules with those used by TANF or 
Medicaid--that is, conforming the definitions of income and resources 
states use in the Food Stamp Program to the definitions they use in 
their TANF or Medicaid program--was an important reason for choosing 
the income and resources options. Increasing benefit amounts for 
participants was an important reason for choosing some options, 
including Transitional Benefits. Officials in one state told us they 
thought this option would result in greater benefit amounts for 
households leaving TANF because the new income that rendered them 
ineligible for TANF is not included in the calculation of their benefit 
amount for the transitional period. If this additional income were 
taken into account, it would most likely result in a lower benefit 
amount. Finally, among other reasons, state officials chose the Child 
Support Expense Income Exclusion option because they thought it would 
encourage payment of child support.

The Reasons States Gave for Not Choosing Options Were Primarily Related 
to Anticipated Effects on Participants and Caseworkers and Other 
Aspects of the Program:

State officials gave a number of reasons for not choosing options. 
Among the most common was their belief that the option would complicate 
rules for participants and complicate rules for caseworkers in their 
state. Because of the variability among states in the design of Food 
Stamp Programs and other assistance programs, an option that simplified 
processes in one state may have a different effect in other states. For 
example, officials in two states commented that they thought the 
Simplified Determination of Deductions option might confuse 
participants and caseworkers because it would create additional, and 
sometimes conflicting, participant reporting rules in their state. As 
one state official noted, this option, which allows states to disregard 
reported changes in certain deductions during the certification period, 
could be confusing for caseworkers because of its inconsistency with 
her stateís policy to act on all reported changes. (See fig. 4. Also 
see app. III for more detail on reasons states did not choose 
options.)

Figure 4: Important Reasons for Not Choosing Options:

[See PDF for image]

Note: Data for Simplified Homeless Shelter Costs option are not 
available.

[End of figure]

State officials gave additional reasons for not choosing some of the 
options. An important reason for not choosing two of the options was 
that officials believed the options would result in little or no 
increase in the amount of food stamp benefits for participants in their 
state. For example, officials in several states noted that according to 
their calculations, implementing the child support option would not 
increase food stamp benefit amounts for participants in their state who 
pay child support. In addition, some state officials commented that 
they did not choose the deductions option, which allows states to 
disregard reported changes in certain deductions during the 
certification period, because they believed the option could prevent 
participants from receiving additional benefits if their expenses 
increased during this period.

State officials also reported an important reason they did not choose 
three of the options was because of their belief that the options would 
affect very few participants in their state. For example, some state 
officials reported that the number of households that would be helped 
by the Transitional Benefits option in their state would be relatively 
small because their state had implemented simplified reporting systems 
that provided similar advantages, such as allowing households to forgo 
reporting most changes between scheduled reporting periods. Similarly, 
officials in one state commented that they thought the child support 
option would not increase the number of eligible households in their 
state because many of the affected households would already be 
categorically eligible for food stamps.

In addition, an important reason state officials gave for not choosing 
five of the options was that they thought the options would have little 
or no advantage over current policy in their state. For example, 
officials in some states commented that the income and resources 
options would not allow them much additional flexibility in their Food 
Stamp Program definitions because FNS placed restrictions on the types 
of incomes and resources that could be excluded under these options, 
while one other state official noted that before these options became 
available, they had already largely aligned TANF and Medicaid 
definitions of resources with those used by the Food Stamp Program. In 
addition, other state officials told us the deductions option would be 
duplicative in their state because they had already implemented 
simplified reporting options that exempt participating households from 
reporting changes in the deductions covered by this option during the 
certification period.

Other reasons were important for not choosing some options, including a 
possible increase in the state's payment error rate or the difficulty 
in programming the state's computer system to implement the change. 
Officials in some states said they thought the Expanded Simplified 
Reporting option might increase the payment error rate in their state. 
Simplified reporting systems reduce the frequency with which households 
must report changes, which may make the reporting rules of food stamps 
different from those of other assistance programs in the state that 
require households to report changes on a more regular basis. These 
differences in reporting rules could lead to errors by participants and 
caseworkers, who often determine eligibility for more than one 
assistance program. In addition, some state officials reported that 
they did not choose the Transitional Benefits option because the 
required changes would be too difficult to program into their state's 
computer systems. Food stamp computer systems in many states are 
integrated with other assistance programs, such as TANF and Medicaid.

Implementation Challenges for States Choosing Certain Options:

In states that did choose specific options, a number of these options 
posed challenges for the states during initial implementation. Reported 
challenges included difficulties related to caseworkers' adjustment to 
program changes, lack of alignment with other assistance programs, and 
programming state computer systems. For example, officials in one state 
told us caseworkers had trouble adjusting to the new reporting system 
under Simplified Determination of Deductions because many were 
accustomed to the former system in which participants reported, and 
caseworkers acted on, changes in some household deductions within 10 
days of the change. In addition, state officials told us some options, 
such as Expanded Simplified Reporting, lessened the degree to which 
Food Stamp Program rules aligned with those of other assistance 
programs, which also presented challenges. Food stamp officials in one 
state told us they selected the Expanded Simplified Reporting option 
even though they knew it was going to result in food stamp reporting 
rules that were different from those of another assistance program 
because they thought the option would have many benefits for 
participants. Finally, difficulties with programming computers were 
commonly mentioned challenges to implementation. We heard from 
officials in two states that had implemented the Transitional Benefits 
option that this integration posed difficulties for them. These 
officials reported that they had to delink the connection with other 
programs so that the food stamp benefit remained frozen during the 5-
month transitional period, regardless of the information recorded in 
the computer system for the other assistance programs. Officials from 
seven states provided cost estimates for implementing the options. The 
cost estimates ranged from $14,880 to $3.7 million, almost all of 
which, in six of the states, represented the costs of changing the 
state's computer system. These estimates included costs for such 
expenses as programming and testing the computer systems. Other states 
did not provide estimates for the costs of implementing the options.

Local Food Stamp Officials Reported Mixed Results for Farm Bill 
Options; These Results Ranged from Improvements to Complications:

Local food stamp officials, who often have day-to-day contact with 
frontline caseworkers and food stamp participants, reported mixed 
results from implementing the Farm Bill options; the results ranged 
from improvements to complications. They reported that most of the 
options achieved at least some of the improvements anticipated by state 
officials. However, in a number of cases, local officials reported that 
the options did not result in expected improvements, or their opinions 
differed on whether the option achieved the anticipated result. 
Finally, local officials reported that three options introduced 
complications in program rules for both caseworkers and participants.

Local Food Stamp Officials Reported the Options Achieved Some, but Not 
All, Anticipated Improvements:

Local food stamp officials reported on our survey that the options 
resulted in some, but not all, of the improvements anticipated by state 
officials. The officials' views were mixed on whether the 
administrative burden was reduced for program participants and 
caseworkers. For example, many local officials reported that the 
options reduced paperwork for participants. However, officials were 
less likely to report that the options reduced the actual time 
participants spent applying for food stamps or reporting changes in 
household circumstances. In addition, some local officials reported 
that participation increased as a result of implementing options 
intended to increase participation, while others told us that those 
options had no effect on participation. Similarly, for the two options 
expected to increase alignment of program definitions with TANF and 
Medicaid, most officials agreed that these options made the definitions 
of income and resources the same as in TANF, but officials' opinions 
differed on whether the options helped increase alignment with 
Medicaid.[Footnote 15]

Administrative Burden on Participants:

Local food stamp supervisors reported mixed results on whether the 
options eased the administrative burden on participants--a primary 
reason that states chose most of these options--as measured by both the 
amount of paperwork required and the time spent applying for food 
stamps and reporting changes.[Footnote 16] These local officials 
reported on our survey that the Expanded Simplified Reporting option 
eased the administrative burden on participants, particularly those who 
do not receive benefits from other assistance programs, by decreasing 
the time needed to prepare paperwork and report changes in their 
household circumstances.[Footnote 17] (See fig. 5.) For five other 
options, local officials differed in their views; some reported that 
the administrative burden on participants decreased while others 
reported no change. These five options are Simplified Standard Utility 
Allowance, Simplified Definition of Income, Simplified Definition of 
Resources, Transitional Benefits, and Simplified Determination of 
Deductions. For example, about the same number of local officials 
reported that the Transitional Benefits option decreased the 
administrative burden on participants as reported that it remained the 
same. Further, most local officials from states that adopted the 
deductions option reported that the administrative burden under this 
option remained the same for participants. This may be because three of 
the four states that implemented this option also implemented Expanded 
Simplified Reporting, which already decreased the administrative burden 
for participants in a similar way.

Figure 5: Results Reported by Local Officials on Administrative Burden 
for Participants and Caseworkers:

[See PDF for image]

[End of figure]

Administrative Burden on Caseworkers:

Although five of the Farm Bill options--Expanded Simplified Reporting, 
Simplified Standard Utility Allowance, Simplified Definition of Income, 
Simplified Definition of Resources, and Simplified Determination of 
Deductions--were chosen by state officials to ease the administrative 
burden on caseworkers, local officials reported that most of these 
options had little effect on reducing the administrative burden on the 
caseworkers. (See fig. 5.) Overall, local officials reported no effect 
on the number of contacts with participants and time spent with 
participants during those contacts. However, local officials reported 
some reduction in the time spent on paperwork. For example, local 
officials told us that the utility option reduced the amount of time 
caseworkers spent on paperwork because they no longer had to conduct an 
additional complicated procedure to determine the correct benefit 
amount for certain participants. (See app. IV for additional details 
from our surveys regarding how Farm Bill options affected participants 
and caseworkers.)

Payment Error Rate, Program Participation, Benefit Amount, and Program 
Alignment:

Similarly, for options implemented in part to achieve other goals--to 
decrease payment error rate, increase program participation, and 
increase benefit amount--some local officials reported improvements, 
while others told us that the options had no effect. (See fig. 6.) 
Although about one-quarter of local officials reported that they did 
not know how most Farm Bill options affected their payment error rates, 
some others attributed improvements in error rates to two 
options.[Footnote 18] About half of the local officials that responded 
said that Expanded Simplified Reporting and the utility option 
decreased the error rate, and the other half reported that the error 
rate remained the same. For options that state officials thought would 
increase program participation, local food stamp officials reported 
that the options had little effect on participation. For example, 
although state officials thought that the Child Support Expense Income 
Exclusion option would increase participation, local officials reported 
that it did not. There was no consensus on whether the other two 
options chosen to increase participation--Expanded Simplified 
Reporting and Transitional Benefits--resulted in increased 
participation. For options that state officials thought would increase 
food stamp benefit amounts, some locals reported improvements, while 
others reported no change. Specifically, local officials reported that 
the utility option increased benefit amounts for participants, while 
about half reported that the income option increased benefits and about 
half reported it did not.

Figure 6: Results Reported by Local Officials on Error Rate, 
Participation, Benefit Amount, and Alignment:

[See PDF for image]

[A] We did not measure this item at the local level.

[End of figure]

Most local officials reported increased alignment of the definitions of 
income and resources between food stamps and TANF from the income and 
resources options. States selected these two options in part to 
increase alignment by making these definitions the same in their Food 
Stamp Program and TANF. For example, local food stamp officials from 
one state we visited told us that aligning the definition of income 
under the income option eliminated a food stamp form that was not 
required for TANF or Medicaid. This form was used to verify loans from 
educational institutions, such as community colleges, regarding the 
amount and duration of the loan. They told us that obtaining this 
information from educational institutions could take a month and 
possibly require several follow-up contacts with the institution. This 
decrease in paperwork for both participants and some caseworkers 
demonstrates one benefit from increased alignment. However, on our 
survey, officials' opinions differed on whether the income and 
resources options helped increase alignment of definitions between food 
stamps and Medicaid.

Local officials may have reported little or no change from certain 
options because they affected relatively few food stamp participants or 
they did not affect caseworkers' responsibilities. For example, most 
local officials reported that four options--income, resources, 
transitional benefits, and child support--affected less than 20 percent 
of their caseload. In addition, most options made only slight changes 
to caseworkers' administrative processes, and others may not have 
affected their processes at all because some changes were automatically 
incorporated into state computer systems.[Footnote 19] For example, 
local officials reported that the child support option was 
automatically incorporated into state computer systems, so caseworkers' 
responsibilities were not affected by this change.

Several of the Farm Bill options made only slight changes to existing 
food stamp policy, such as the utility, child support, and Simplified 
Homeless Shelter Costs options. For example, the utility option 
expanded the existing standard utility allowance policy to cover two 
additional types of households that were previously excluded: 
households sharing a living space and public housing residents who were 
charged for only excess utility costs. Also, of the local officials we 
surveyed on the homeless option, the majority indicated that they 
implemented a similar policy prior to its availability under the Farm 
Bill.

Many Local Food Stamp Officials Reported That Certain Options 
Introduced Complications in Program Rules for Participants and 
Caseworkers:

Many local officials reported on our surveys that three options--
Expanded Simplified Reporting, Transitional Benefits, and Simplified 
Determination of Deductions--introduced complications in program rules 
for participants and caseworkers. Of these options, the Expanded 
Simplified Reporting option--an option that local officials told us 
affected most of their caseloads--introduced the most serious 
complications because of how it interacts with participant reporting 
rules for other assistance programs. Officials told us that adopting 
the Expanded Simplified Reporting option resulted in Food Stamp Program 
reporting rules that differed in important ways from the reporting 
rules of other assistance programs, such as Medicaid and TANF, 
depending on how their states have structured these programs. About 
one-third of local officials we surveyed reported that this option 
decreased alignment between Food Stamp Program reporting rules and 
those of Medicaid; about one-half reported a decrease in alignment with 
TANF.

Local officials told us that these differences in reporting rules often 
resulted in confusion on the part of food stamp participants, 
particularly because most participate in other assistance programs. 
They explained that although the caseworkers provided information to 
help participants determine which changes they were required to report 
(i.e., changes that increased their income to over 130 percent of the 
federal poverty level), some participants still reported changes that 
were not required. According to a recent case study, some participants 
may believe they need to report these changes to maintain their food 
benefits.[Footnote 20] On the other hand, local officials told us that 
some participants think that the new reduced reporting requirements 
apply to other assistance programs in addition to the Food Stamp 
Program. Consequently, some participants do not report changes they are 
required to report for these other assistance programs, and in some 
cases, participants might face interruptions in benefits or penalties 
for not reporting changes for other programs.

In addition to reporting complications for participants, local food 
stamp officials on our site visits and in telephone interviews told us 
that different participant reporting rules for assistance programs are 
confusing for caseworkers because they are uncertain whether to act on 
a change for the Food Stamp Program when reported for another 
assistance program. Moreover, trying to determine whether to act on a 
change for the Food Stamp Program can cause them to perform additional 
work. When a participant reports a change that is required for Medicaid 
or TANF,[Footnote 21] but not for food stamps, caseworkers must decide 
whether to act on that change for the Food Stamp Program.[Footnote 22] 
Caseworkers, who often determine benefits for more than one assistance 
program, first must decide if a change will increase the participant's 
food stamp benefit. To make this decision, caseworkers typically enter 
the information into the computer system as if they were going to act 
on the change in order to determine if the change will result in an 
increase in the participant's food stamp benefit. If the caseworker 
determines that the change reported by the participant will increase 
the participant's benefit, caseworkers are required to act on the 
change. On the other hand, if the caseworker determines that the change 
reported by the participant will decrease the benefit, the caseworker 
must then determine whether or not to act on this change. (See fig. 7 
for one example of how this process would work.) FNS regulations 
mandate that states not act on changes that would result in a decrease 
in benefits for participants unless one of three exceptions is met: (1) 
the household voluntarily requests that the case be closed, (2) the 
participant's TANF (or, in some areas, General Assistance) grant is 
changed, or (3) the information about the change is considered 
"verified upon receipt."[Footnote 23] A reported change is considered 
verified upon receipt when the information is not questionable and the 
provider is its primary source, such as information about earnings 
provided by the participant's employer.[Footnote 24] Many local 
officials suggested that aligning food stamp reporting rules with 
Medicaid and TANF, by making them the same across these programs, would 
help to simplify this process.

Figure 7: Example of Possible Decisions and Actions under the Expanded 
Simplified Reporting Option:

[See PDF for image]

[A] This example assumes the caseworker is the same for food stamps, 
TANF, and Medicaid.

[End of figure]

State officials generally believed that the Expanded Simplified 
Reporting option would help states reduce their food stamp payment 
error rates. However, local officials told us that caseworkers' 
confusion about the reporting rules for different assistance programs 
could result in improper food stamp and other assistance program 
benefits. A recent case study found that caseworkers were concerned 
that they might make errors in benefits because of the complexity of 
the decision-making process involved in determining when to act or not 
to act on a change.[Footnote 25] Moreover, supervisors told us that 
payment error rates of other assistance programs might increase if 
participants do not report required changes to these assistance 
programs because they believe the Expanded Simplified Reporting rules 
apply to these other programs.

In an attempt to address these issues, many states have modified this 
option in a way that may undermine some of its benefits. Officials in 
17 of the 33 states that implemented this option told us that rather 
than having caseworkers decide whether or not to act on a change, they 
have a waiver from FNS that requires caseworkers to act on all changes 
reported by participants, including those that would decrease benefits. 
Some states choosing this waiver did so because acting on some but not 
all changes would require significant reprogramming of their computer 
systems and may be difficult for their caseworkers to understand. 
However, acting on all changes counteracts the potential reduction in 
workload for caseworkers. Further, when the participant reports a 
change during the reporting period, having the waiver does not reduce 
exposure to errors in the way that the option does for states without 
the waiver. In short, the more changes caseworkers make, the more 
opportunity there is for a change to be processed incorrectly. In 
addition, in certain circumstances, a change might result in lower 
benefits for participants in states with this waiver as opposed to 
states without this waiver.[Footnote 26]

In April 2004, USDA proposed some revisions to simplified reporting 
regulations in order to help alleviate some of these complications with 
this waiver.[Footnote 27] USDA proposed that state agencies that have 
this waiver not be required to act on changes a household reports for 
another public assistance program when the change does not trigger 
action in that other program. For example, if a household receiving 
food stamps and Medicaid reports an increase in income to its Medicaid 
caseworker that is not required to be reported for food stamp purposes, 
the state agency would not have to reduce the household's food stamp 
benefit if the income change does not affect its Medicaid eligibility 
or benefits. This proposed change would simplify the procedure for 
caseworkers and, in some cases, eliminate the possibility that benefits 
would be reduced in states with this waiver. However, while this 
proposal addresses issues for caseworkers and participants in states 
with this waiver, we found that local officials in states without the 
waiver were more likely to report that this option introduced 
complications for caseworkers than local officials in states with the 
waiver.

States have flexibility to align the reporting rules for Medicaid and 
TANF with their food stamp reporting rules available under the Expanded 
Simplified Reporting option, but many have not done so. Although one of 
the three states we visited achieved some alignment of reporting rules 
between TANF and food stamps, none of the three states, despite 
preliminary discussions between Medicaid and food stamp officials, had 
been successful in aligning Medicaid and food stamp reporting 
rules.[Footnote 28] Food stamp officials in these states told us the 
discussions had not resulted in alignment of reporting rules largely 
because Medicaid officials believed that Medicaid benefit costs could 
increase. For example, if a participant experienced a household change 
that would not affect the participant's food stamp benefit but would 
affect Medicaid eligibility, the participant might receive Medicaid 
benefits for longer periods than he or she would have under a state's 
current reporting rules. Thus Medicaid benefit costs could increase. A 
recent study of four states found that states are often reluctant to 
make changes in policies that may increase TANF or Medicaid benefit 
costs or caseloads, particularly when states experience budget 
shortfalls.[Footnote 29] For example, because states contribute a 
nationwide average of 43 percent to Medicaid benefit costs (while food 
stamp benefits are 100 percent federally funded), increases in Medicaid 
caseloads or costs would place demands on state budgets that increases 
in food stamp caseloads would not. In addition, another report noted 
that changes to rules and procedures typically require that a state 
reprogram its computer to apply the new policies, and these changes may 
result in increased cost to the state.[Footnote 30] However, the extent 
to which program costs might increase as a result of alignment is 
unclear, and in two of the three states we visited, state officials had 
little or no information on possible costs associated with implementing 
such changes.[Footnote 31]

A case study also noted that in some states, staff responsible for 
these various benefit programs work in different agencies with varied 
priorities, and there is no incentive to coordinate policy across these 
programs.[Footnote 32] Finally, an official from HHS's Centers for 
Medicare and Medicaid Services (CMS) noted that there are numerous 
groups of eligible Medicaid participants, and many groups, depending on 
state eligibility rules, may receive continuous eligibility for 12 
months.[Footnote 33] For these participants, reporting on a 6-month 
schedule for Medicaid would not be appropriate.

Two additional options introduced complications in program rules, 
though to a lesser extent. Some local officials reported that the 
Transitional Benefits option introduced complications for the 
caseworkers, again because of interactions between this option and 
other assistance programs. For example, transitional benefits from 
Medicaid are for persons transitioning to work and are provided for up 
to 1 year. On the other hand, transitional food stamp benefits are for 
persons leaving TANF and are granted for a maximum of 5 months. In 
addition, program experts told us that reporting rules for the two 
types of transitional benefits are not aligned, and this creates an 
additional administrative burden for caseworkers. Medicaid requires 
persons receiving transitional benefits to report household financial 
circumstances at the 4th, 7th, and 10th month of transitional benefits, 
whereas persons receiving food stamp transitional benefits must reapply 
at the end of the 5th month. About a third of local officials reported 
that they would like transitional food stamp benefits to be available 
for 6 months or to be aligned with transitional benefits from Medicaid.

Finally, some local officials reported that the Simplified 
Determination of Deductions option introduced complications for the 
participants and the caseworkers. For example, local officials told us 
that this option complicates decisions about whether to act on changes 
reported by participants. Local officials told us that when 
participants report a change that is not required under the deductions 
option, caseworkers must first determine if the household is subject to 
reporting rules under Expanded Simplified Reporting or not. If the 
household falls under Expanded Simplified Reporting, the caseworkers 
must follow the decision-making process for Expanded Simplified 
Reporting depicted in figure 7 above. If the household does not fall 
under Expanded Simplified Reporting and the change is to a deduction 
from household income, the caseworkers must not act on the change.

Conclusions:

Since the late 1990s, and most recently in the Farm Bill, the Congress 
and FNS have offered states a number of options to simplify and 
streamline the administration of the Food Stamp Program. These options 
presented states with additional opportunities to tailor their Food 
Stamp Programs to the social and economic needs of their own states. 
Moreover, these changes coincided with actions taken by the Congress to 
grant states considerable flexibility in the design and administration 
of other key assistance programs, such as TANF and Medicaid, and the 
growing realization that the Food Stamp Program provides crucial 
support to low-income working families.

Local officials, who have day-to-day contact with frontline caseworkers 
and food stamp participants, reported mixed results from implementing 
the options. Although they reported some improvements for both 
caseworkers and participants from some options, no option received 
consistently positive reports in all the areas where state officials 
expected improvements when they selected the option. In fact, in many 
cases, officials were as likely to report that an option resulted in no 
change as they were to report improvements. This may be due in part to 
the fact that the Farm Bill options made only slight changes to policy 
and, as reported, affected relatively few program participants.

Of all the options, the Expanded Simplified Reporting option offered 
the most promise because it was selected by the most states, affects a 
large number of participants, and has the potential to significantly 
streamline the participant reporting process. The fact that local 
officials reported that adopting this option actually complicated 
program rules in many states reflects the challenge of trying to 
simplify requirements for one program without efforts by states to 
adjust the rules of other related assistance programs. This is 
particularly relevant because most food stamp recipients also 
participate in other assistance programs. The reported complications 
resulted in problems, such as confusion for the caseworker and a 
possible increase in payment errors. In response, many states adopted a 
waiver that negated many of the potential benefits of Expanded 
Simplified Reporting for caseworkers and participants. Although USDA 
proposed a change to this waiver, the change will not address the 
complications reported by local officials in states without the waiver. 
Moreover, neither the waiver to act on all changes nor USDA's proposed 
change to the waiver will address overall alignment issues related to 
reporting rules among various assistance programs.

Although federal law and program rules allow states to align 
participant reporting rules among assistance programs, state officials 
in most states have not made the broad changes that would result in 
greater consistency among programs. Concerns regarding whether there 
are costs associated with aligning participant reporting requirements 
may hinder a state's decision to make program changes that increase 
alignment. These concerns may include the cost of programming changes 
into state computers and the concern that benefit costs may increase in 
those programs that require a higher proportion of state funds, such as 
the Medicaid program. On the other hand, savings could result from 
reducing the administrative burden on caseworkers. Yet it is unclear 
whether costs would rise or savings would be realized. In addition, 
aligning Medicaid reporting rules with food stamp rules may work for 
some groups of Medicaid participants, but not others. Although 
alignment of state program rules may not be advantageous in every 
circumstance, many government officials told us that they were 
interested in improved alignment. In general, increased alignment 
remains important to simplification and ease of service delivery.

Recommendations for Executive Action:

In order to take advantage of existing opportunities available to 
states for streamlining participant reporting rules, we recommend that 
the Secretary of Agriculture direct FNS to collaborate with HHS to take 
the following two actions:

1. Encourage state officials to explore the advantages and 
disadvantages--in terms of both administrative and benefit costs and 
savings--of better aligning participant reporting rules in their 
states, particularly for Medicaid and TANF, and:

2. Disseminate information and guidance to states on the opportunities 
available for better aligning participant reporting requirements among 
food stamps, Medicaid, and TANF.

Agency Comments:

We provided a draft of this report to the U.S. Department of 
Agriculture for review and comment and on August 20, 2004, we met with 
FNS officials to get their comments. The officials said they agreed 
with our findings, conclusions, and recommendations. They stated that 
they are interested in helping states better align their participant 
reporting requirements and that they plan to contact HHS to initiate 
discussions on ways to help states align these reporting requirements. 
They also said they plan to provide best practices information to 
states regarding the administration of the Food Stamp Program and that 
they would explore disseminating information on any progress states 
have made in streamlining their participant reporting rules. FNS 
provided us with technical comments, which we incorporated where 
appropriate.

We are sending copies of this report to the Secretary of Agriculture, 
appropriate congressional committees, and other interested parties. We 
will also make copies available to others upon request. In addition, 
the report will be available at no charge on GAO's Web site at http://
www.gao.gov. Please contact me at (202) 512-7215 if you or your staffs 
have any questions about this report. Major contributors to this report 
are listed in appendix V.

Signed by: 

Sigurd R. Nilsen: 
Director, Education, Workforce, and Income Security Issues:

[End of section]

Appendix I: Objective, Scope, and Methodology:

To accomplish our research objectives, we surveyed state food stamp 
administrators and local food stamp supervisors on the implementation 
of the Farm Bill food stamp options. To augment information from our 
state and local surveys, we conducted three comprehensive site visits 
(Arizona, Maryland, and Michigan) and two semi-structured telephone 
interviews (Colorado and South Carolina). We chose states for our site 
visits and telephone interviews to capture variation in the following 
criteria: (a) number of and type of selected options, (b) number of 
food stamp participants and program participation rate, (c) program 
error rate, and (d) entity (state or county) administering the Food 
Stamp Program. During each visit we met with state officials 
administering and developing policy for the Food Stamp Program, local 
officials in the office where services are provided, and officials 
responsible for other key assistance programs, such as Temporary 
Assistance for Needy Families (TANF) and Medicaid. We also reviewed 
Farm Bill legislation and related committee reports, and we reviewed 
Food and Nutrition Service (FNS) reports and other program analysis. We 
held discussions with program stakeholders, including officials at FNS 
headquarters and regional offices, representatives of advocacy 
organizations, and other program experts. We performed our work from 
August 2003 to June 2004 in accordance with generally accepted 
government auditing standards.

Survey of State Food Stamp Administrators:

To learn about state-level use of the food stamp options made available 
under the Farm Bill, we conducted a Web-based survey of food stamp 
administrators in the 50 states and the District of Columbia. For each 
of the eight Farm Bill options, we asked state officials to provide 
information on whether or not their state had chosen and implemented 
the option, reasons for choosing (or not choosing) the option, program 
challenges in implementing the option, changes because of the options, 
and potential improvements to the option. In addition, we asked for 
other information, including cost estimates for implementing the 
options, estimates of time and cost savings as a result of implementing 
the options, efforts to align the Food Stamp Program with TANF and 
Medicaid, and other food stamp options states had implemented prior to 
the Farm Bill. We administered the survey between December 9, 2003, and 
January 30, 2004. We also contacted some respondents via phone or e-
mail to clarify their responses after the Web survey was completed. 
Food stamp administrators in all 50 states and the District of Columbia 
participated in the survey, for a response rate of 100 percent. To view 
selected results of GAO's Web-based survey of food stamp adminstrators, 
go to www.gao.gov/cgi-bin/getrpt?GAO-04-1058SP.

We believe the state survey data are sufficiently reliable to be used 
for the applicable questions of our work. We pretested the survey with 
several state Food Stamp administrators and modified the survey to take 
their comments into account. We also compared our survey responses on 
which of the states had implemented the options with information 
published by FNS and found our data had a reasonable level of 
consistency with the agency's data, with the exception of data for the 
Simplified Homeless Shelter Costs option. Our analysis indicated fewer 
states had implemented this option than are listed in the FNS report. 
The cause of the discrepancy is that many states were already using a 
homeless shelter allowance of $143 prior to the Farm Bill, and many of 
these states are included in the information published by FNS as having 
implemented the Farm Bill option. However, for the purposes of our 
study, we decided to limit our analysis to only those states that 
implemented the homeless shelter allowance of $143 after the Farm Bill 
became effective.

Survey of Local Food Stamp Supervisors:

To learn about local-level use of the Farm Bill options, we 
administered 1,328 mailed surveys to supervisors in local food stamp 
offices in the states that had implemented the options. These survey 
results are generalizable to local offices in states that implemented 
the options. We conducted a separate survey for each of the eight 
options and used a separate sample for each of the surveys. On all 
eight surveys, we asked supervisors in local offices for their opinions 
about the extent to which the Farm Bill option had affected change in 
several areas of the Food Stamp Program, including administrative 
burden on participants and caseworkers, the error rate, program 
participation, and alignment with other assistance programs. In 
addition, we asked the supervisors for their opinions about the 
proportion of the local office's food stamp caseload that was affected 
by the option and changes the local office officials would like to see 
to the option. To view the results from the local food stamp office 
surveys, go to www.gao.gov/cgi-bin/getrpt?GAO-04-1059SP.

We chose to survey food stamp supervisors because we believed they 
would be aware of the changes for participants and caseworkers 
resulting from the Farm Bill options. We collected the opinion of these 
supervisors because we did not find existing data on the information we 
needed to complete the objectives of this study, including the number 
of food stamp recipients affected by each option and the time costs or 
savings for food stamp participants and caseworkers because of the 
implementation of the options. We conducted the surveys between 
December 2003 and April 2004. We also contacted some respondents via 
phone or e-mail to clarify their responses after the mailed survey was 
completed.

Local Survey Sample Design:

For each Farm Bill option, the population of interest was the set of 
all local food stamp offices located in states that adopted the option. 
Because we could not survey the entire population of local offices, we 
selected a sample of local offices to be representative of this 
population of interest. In each sample, the sampling unit is the local 
food stamp office. To determine the eight samples, we contacted state 
and county food stamp officials to compile a complete mailing list of 
food stamp offices in the 50 states and the District of Columbia. We 
compiled our own list because we were unaware of any other such 
comprehensive list. From these lists of local offices, we selected a 
simple random sample of local offices located in states that, according 
to information provided by FNS, had already implemented the 
option.[Footnote 34] For example, if the FNS report indicated 12 states 
had implemented an option, we drew the sample for that option from the 
combined list of the local offices in those 12 states.

Since many states had chosen multiple options, we capped the number of 
surveys a local office could receive at three in order to minimize 
response burden. Only one local office was randomly selected to receive 
more than three surveys. To make sure this office did not receive more 
than three surveys, we randomly selected two of the five options for 
which we had drawn this office. We then randomly selected two 
replacement offices to receive the surveys. To select the replacement 
offices, we used the remaining offices on the list.

Sampling and Nonsampling Errors:

Because we surveyed a random sample of local food stamp offices, our 
results are estimates of the responses we would have received had we 
surveyed the entire population of interest, and are thus subject to 
sampling errors. We are 95 percent confident that each of the 
confidence intervals in the local survey results will contain the true 
values of the population of interest. All percentage estimates from the 
local survey have sampling errors of plus or minus 10 percentage 
points. We calculated confidence intervals for our local survey results 
using methods that are appropriate for probability samples of this 
type.

In addition to sampling errors, the practical difficulties in 
conducting surveys of this type may introduce other types of errors, 
commonly referred to as nonsampling errors. For example, questions may 
be misinterpreted, the respondents' answers may differ from those in 
local offices that did not respond, or errors could be made in keying 
completed questionnaires or in the preparation of data files for 
analysis. We took steps in the development, collection, and analysis of 
the local surveys to minimize these errors. For example, we pretested 
each of the eight local surveys with at least one local food stamp 
official prior to mailing the surveys.

Response Rates:

The response rates for the eight surveys ranged from 74.0 percent to 
86.1 percent (see table 1 below). Some respondents returned the survey 
to us but indicated that their local office had not implemented the 
option we asked them about or that they implemented the option prior to 
the date the Farm Bill became effective. We refer to these surveys as 
"out of scope." There are several reasons surveys could be out of 
scope, including the time lag between the FNS report we used to 
determine our sample and the launch of our survey and possible delays 
in state-level policy decisions being implemented on the local level. 
Given how quickly the status of the Farm Bill options can change in 
states, the number of out of scopes is not surprising. In this report 
we did not use out-of-scope surveys in the estimates derived from local 
survey data.

We did not use the data we collected from the local survey on the 
Simplified Homeless Shelter Costs option because we had used the FNS 
list of states that had implemented the option to draw our sample, but 
later we learned of the discrepancy between our definition of the 
option and the data provided by FNS that had implemented this option. 
We concluded our sample for this option was flawed and the results 
should not be used in the local survey analysis.

Table 1: Disposition of Eight Farm Bill Option Samples:

Farm Bill option: Expanded simplified reporting; 
Sample: Sample: 192; 
Sample: Received: 157; 
Sample: Out of scopes: 3; 
Sample: Response rate[A]: 81.5%.

Farm Bill option: Transitional benefits; 
Sample: Sample: 165; 
Sample: Received: 134; 
Sample: Out of scopes: 10; 
Sample: Response rate[A]: 80.0%.

Farm Bill option: Simplified definition of income; 
Sample: Sample: 181; 
Sample: Received: 152; 
Sample: Out of scopes: 37; 
Sample: Response rate[A]: 79.9%.

Farm Bill option: Simplified definition of resources; 
Sample: Sample: 170; 
Sample: Received: 141; 
Sample: Out of scopes: 48; 
Sample: Response rate[A]: 76.2%.

Farm Bill option: Simplified homeless shelter costs; 
Sample: Sample: 176.

Farm Bill option: Simplified standard utility costs; 
Sample: Sample: 179; 
Sample: Received: 155; 
Sample: Out of scopes: 6; 
Sample: Response rate[A]: 86.1%.

Farm Bill option: Simplified determination of deductions; 
Sample: Sample: 126; 
Sample: Received: 100; 
Sample: Out of scopes: 8; 
Sample: Response rate[A]: 78.0%.

Farm Bill option: Child support expense income exclusion; 
Sample: Sample: 139; 
Sample: Received: 112; 
Sample: Out of scopes: 35; 
Sample: Response rate[A]: 74.0%. 

[A] The response rates shown in table 1 are calculated using the 
following formula:

(Total number of responses - Number of out of scopes)/(Total sample 
size - Number of out scopes) = Response rate.

[End of table]

[End of section]

Appendix II: Farm Bill Options That States Have Implemented as of 
January 2004:

Figure 8: Farm Bill Options States Have Implemented as of January 2004:

[See PDF for image]

[A] Simplified Homeless Shelter Costs option only includes states that 
indicated they did not have a Standard Homeless Shelter Allowance of 
$143 prior to the Farm Bill.

[End of figure]

[End of section]

Appendix III: Selected Responses to State Survey:

Figure 9: Number of States That Gave Reasons for Choosing Options:

[See PDF for image]

[A] Simplified Homeless Shelter Costs option only includes states that 
indicated they did not have a Standard Homeless Shelter Allowance of 
$143 prior to the Farm Bill.

[B] We only asked child support item for Child Support Expense Income 
Exclusion option.

[End of figure]

Figure 10: Number of States That Gave Reasons for Not Choosing Options:

[See PDF for image]

Notes: Data for Simplified Homeless Shelter Costs option are not 
available.

[A] We only asked child support item for Child Support Expense Income 
Exclusion option.

[End of figure]

[End of section]

Appendix IV: Selected Responses to Local Surveys:

Figure 11: Expanded Simplified Reporting:

[See PDF for image]

Note: These estimates are accurate to within plus or minus 10 
percentage points at the 95 percent level of confidence. Rows may not 
sum to 100 percent because of rounding errors.

[End of figure]

Figure 12: Simplified Standard Utility Allowance:

[See PDF for image]

Note: These estimates are accurate to within plus or minus 10 
percentage points at the 95 percent level of confidence. Rows may not 
sum to 100 percent because of rounding errors.

[End of figure]

Figure 13: Simplified Definition of Income:

[See PDF for image]

Note: These estimates are accurate to within plus or minus 10 
percentage points at the 95 percent level of confidence. Rows may not 
sum to 100 percent because of rounding errors.

[End of figure]

Figure 14: Simplified Definition of Resources:

[See PDF for image]

Note: These estimates are accurate to within plus or minus 10 
percentage points at the 95 percent level of confidence. Rows may not 
sum to 100 percent because of rounding errors.

[End of figure]

Figure 15: Transitional Benefits:

[See PDF for image]

Note: These estimates are accurate to within plus or minus 10 
percentage points at the 95 percent level of confidence. Rows may not 
sum to 100 percent because of rounding errors.

[End of figure]

Figure 16: Child Support Expense Income Exclusion:

[See PDF for image]

Note: These estimates are accurate to within plus or minus 10 
percentage points at the 95 percent level of confidence. Rows may not 
sum to 100 percent because of rounding errors.

[End of figure]

Figure 17: Simplified Determination of Deductions:

[See PDF for image]

Note: These estimates are accurate to within plus or minus 10 
percentage points at the 95 percent level of confidence. Rows may not 
sum to 100 percent because of rounding errors.

[End of figure]

[End of section]

Appendix V: GAO Contacts and Staff Acknowledgments:

GAO Contacts:

Kay Brown, (202) 512-3674, brownke@gao.gov 
Elizabeth Morrison, (202) 512-9641, morrisone@gao.gov:

Acknowledgments:

Katharine Leavitt and Anne Welch also made significant contributions to 
this report. In addition, Carl Barden, Kevin Jackson, MacDonald 
Phillips, and Jay Smale were responsible for sampling, survey design, 
and data analysis,and Corinna Nicolaou assisted in the report 
development.

[End of section]

Related GAO Products:

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

Food Stamp Employment and Training Program: Better Data Needed to 
Understand Who Is Served and What the Program Achieves. GAO-03-388. 
Washington, D.C.: March 12, 2003:

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

Food Stamp Program: States Seek to Reduce Payment Errors and Program 
Complexity. GAO-01-272. Washington, D.C.: January 19, 2001.

Means-Tested Programs: Determining Financial Eligibility Is Cumbersome 
and Can Be Simplified. GAO-02-58. Washington, D.C.: November 2, 2001.

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

FOOTNOTES

[1] See appendix I for a detailed explanation of the methodology we 
used for the state and local surveys.

[2] The Personal Responsibility and Work Opportunity Reconciliation Act 
of 1996 reformed Aid to Families with Dependent Children and 
established the $16.5 billion Temporary Assistance for Needy Families 
block grant, which provides to the states federal funds to support low-
income families and help these families reduce their dependence on 
welfare. Medicaid, established in 1965, is a joint federal-state 
entitlement program that finances health care coverage for certain low-
income families, children, pregnant women, and individuals who are aged 
or disabled. Federal income limits for children and pregnant women 
range from 100 percent to 185 percent of the federal poverty level, 
depending on age. Income limits for adults and individuals who are aged 
or disabled vary by state. 

[3] Households with disabled or elderly members are exempt from the 
gross income limit. In addition, households with elderly members may 
have assets valued at $3,000.

[4] If a household has no other assets, its vehicle can be worth 
$6,650.

[5] Prior to welfare reform, federal regulations required households to 
have a face-to-face interview with an agency worker at each 
recertification. Current regulations give states the option to require 
only one face-to-face interview a year regardless of the length of 
certification.

[6] States can choose from a variety of change-reporting methods. They 
can require households to report only when a member changes jobs, 
receives a different rate of pay, or has a change in his or her work 
status, i.e., from full-time to part-time or vice versa. States can 
also require households to report only when there is a change in 
earnings of $100 or more per month. 

[7] The food stamp error rate is calculated for the entire program, as 
well as every state, by adding overpayments to those who are eligible 
for smaller benefits, overpayments to those who are not eligible for 
any benefit, and underpayments to those who do not get as much as they 
should. The program also calculates a negative action error rate, 
defined as the rate of improper denials or terminations of benefits.

[8] Before the Farm Bill, states were penalized if their combined 
payment error rate was higher than the national average. As a result, 
about half of states were subject to financial sanctions each year. 
States are required to either pay the sanction or provide additional 
state funds--beyond their normal share of administrative costs--to be 
reinvested in error-reduction efforts, such as additional training in 
calculating benefits for certain households. Under the Farm Bill, a 
state will be subject to fiscal sanction if there is a 95 percent 
statistical probability that the state's payment error rate exceeds 105 
percent of the national average for 2 consecutive years.

[9] The Farm Bill requires the Secretary to issue regulations for 
fiscal year 2005 and thereafter that will establish criteria related to 
these improved performances and be used to award performance bonus 
payments.

[10] Supplemental Security Income is a federal income supplement 
program that assists people who are age 65 or older, blind, or 
disabled, and who have limited income and resources. The program 
provides monthly cash payments to help those who are qualified meet 
basic needs for food, clothing, and shelter. 

[11] See GAO, Means-Tested Programs: Determining Financial Eligibility 
Is Cumbersome and Can Be Simplified, GAO-02-58 (Washington, D.C. Nov. 
2001) for a comprehensive discussion of the overlap and complexities in 
financial eligibility rules for 11 federal assistance programs, and the 
cumbersome effect for both caseworkers and participants.

[12] TANF regulations require that states report information such as 
the type and amount of assistance received, work participation 
activities, and earned and unearned income. The regulations do not 
specify how the states collect such information. (45 CFR 265.) States 
set their own income limits for eligibility purposes. 

[13] Homeless households may have shelter costs for a variety of 
reasons, for example, if they pay to board with a family member or at a 
homeless shelter.

[14] Deductions are subtracted from the household's gross income to 
determine net income. Deductions include household expenses such as 
those for shelter, utilities, and medical care. Absent the option, the 
amount paid for child support would be deducted as a household expense.

[15] States provided a reason for selecting the Child Support Expense 
Income Exclusion (encourage payment of child support) option that we 
did not measure at the local level. 

[16] This section excludes a discussion of the effects of the 
Simplified Homeless Shelter Costs option because the majority of local 
officials we surveyed indicated that they were already using a food 
stamp policy that allowed them the same homeless shelter cost deduction 
as this Farm Bill option. 

[17] It is likely that many local officials reported improvements that 
pertain to all households covered by the Expanded Simplified Reporting 
option, that is, earned-income and most other food stamp households, 
including unearned-income households. 

[18] Although some factors, such as the time spent on paperwork, may 
affect the administrative burden on participants and caseworkers, local 
officials may not have been able to relate changes in error rates to 
specific options because local officials are not immediately aware of 
whether an error has occurred (when determining eligibility and 
benefits). Moreover, according to an official at FNS, 4 months elapse 
between collecting the information for the payment error rate analysis 
and when FNS reports the payment error rate to the states, thus making 
it even harder for local officials to tie changes in error rates to 
specific options.

[19] We generally found no differences between the responses of local 
officials in states that implemented an option in the first 6 months 
after it became available and those in states that implemented the 
option later. 

[20] Carole Trippe, Liz Schott, Nancy Wemmerus, and Andrew Burwick, 
Simplified Reporting and Transitional Benefits in the Food Stamp 
Program--Case Studies of State Implementation. Final Report. 
Mathematica Policy Research, Inc. E-FAN-04-003 May 2004 (Economic 
Research Service).

[21] In some cases, a change reported by a participant may not result 
in a change in Medicaid or TANF benefits. For example, a person may 
have a change in income but the change does not affect that person's 
Medicaid eligibility. 

[22] Caseworkers can also learn of some changes through an automated 
process that matches participants' information with other databases, 
such as a new hire database, that could indicate a change in household 
circumstances that might merit a change in the food stamp benefit.

[23] These exceptions are noted in current USDA regulations related to 
Simplified Reporting: 7 CFR 273.12 (a)(1)(vii)(A). Proposed regulations 
for Expanded Simplified Reporting maintain these same exceptions. 69 
Fed. Reg. 20762. 

[24] Information is considered verified upon receipt when the source 
is, but is not limited to, specific data from the Social Security 
Administration, data from the U.S. Citizenship and Immigration 
Services, and Unemployment Compensation data from a state agency.

[25] See Economic Research Service: E-FAN-04-003 May 2004. 

[26] Specifically, if a participant reports a change that would 
decrease the benefit but does not meet any of the three exceptions as 
explained on page 28, the change would not be made in states without 
the waiver but would be made in states with the waiver. 

[27] 69 Fed. Reg. 20724-64.

[28] A recent informal study that gathered information from 12 states 
that are using the simplified or expanded simplified reporting option 
showed that 3 states have aligned TANF and food stamp rules. Upon 
further clarification, no state has aligned Medicaid and food stamp 
rules. See www.NAPIPM.org (www.napipm.org/simp%20reporting.htm 5/10/
04).

[29] See Economic Research Service: E-FAN-04-003 May 2004.

[30] Liz Schott, Stacey Dean, Jocelyn Guyer, Coordinating Medicaid and 
Food Stamps: How New Food Stamp Policies Can Reduce Barriers to Health 
Care Cover for Low-Income Working Families. Center on Budget and Policy 
Priorities, September 2001. 

[31] One state provided preliminary analysis of estimated costs for 
aligning reporting rules for TANF and child care programs to 6-month 
reporting for earned-income households only.

[32] See Economic Research Service: E-FAN-04-003 May 2004. 

[33] Federal Medicaid statute identifies over 25 different eligibility 
categories of persons who may be covered under a state Medicaid plan. 
According to a CMS official, a state could have as many as 50 groups of 
eligible Medicaid participants.

[34] We used draft information provided by FNS, which we later 
supplemented with information from its October 2003 report, released in 
November 2003: United States Department of Agriculture, Food and 
Nutrition Service, Food Stamp Program: State Options Report, Third 
Edition, October 2003. The FNS State Options Report was the only source 
of which we were aware at that time that listed which states had 
implemented the option. We could not use our state survey data to 
develop the list of states that had implemented the option because we 
had not completed the state survey at the time we needed to draw the 
sample for the local survey.

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