Summary

In response to a congressional request, GAO reviewed the quality control systems states use to administer the Aid to Families with Dependent Children (AFDC), Medicaid, and Food Stamp programs.

GAO found that: (1) the administration established comprehensive quality control systems for AFDC in 1973, and for Medicaid and Food Stamps in 1978; (2) by 1984, error rates for all three programs had dropped to nearly half the original rates; (3) erroneous payments in the AFDC and Food Stamp programs still amounted to almost $2 billion annually; (4) beginning in 1981, states became subject to withholding of federal funds, if their excess payments exceeded legislated error-rate thresholds; and (5) for fiscal years 1981 through 1988, the administration estimates that such disallowances cumulatively may total about $2.5 billion for the three programs. GAO also discussed several issues that could affect both the design and effectiveness of welfare quality control systems.