oversight

Comparison of the Simplified and Traditional Methods of Determining Eligibility for Aid to Families With Dependent Children

Published by the Government Accountability Office on 1971-07-14.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

REPORT TO THE
COMMITTEE   ON
UNITED STATES SENATE                ” .-l




Corn parison Of The Sim plified
And Traditional Methods Of
Determining Eligibility For
Aid To Families
With Dependent Children B-764o31(3J

Social and Rehabilitation Service
Department of Health, Education,
  and Welfare




BY THE COMPTROLLER   GENERAL
OF THE UNITED STATES
                     COMPTROLLER           GENERAL       OF    THE       UNITED       STATES
                                         WASHINGTON.      D.C.       20!!48




      B- 164031(3)




Y-.   Dear    Mr.    Chairman:

                This is our report         on the comparison            of the simplified
      and traditional         methods     of determining       eligibility      for the                       I^
      federally      assisted     program       of aid to families         with dependent
      children.       The Department           of Health,   Education,         and Welfare                     :.-
      is responsible         for administering         the program.

              Our review           was    ,made        pursuant               to your          request   of
      March    3, 1971.

                                                              Sincerely               yours,




                                                              Comptroller                 General
                                                              of the United               States

      The Honorable       Russell           B. Long
      Chairman,       Committee            on Finance
                                                               .? .I              ,
      United    States Senate                                  _I _--




                        50TH       ANNIVERSARY                   1921-        1971
COMPTROLLERGENERAL'S                 COMPARISONOF THE SIMPLIFIED AND
REPORTTO THECOJMITTEE                TRADITIONAL METHODSOF DETERMINING
ONFINANCE                            ELIGIBILITY FOR AID TO FAMILIES WITH
UNITEDSTATESSENATE                   DEPENDENTCHILDREN
                                     Social and Rehabilitation Service
                                     Department of Health, Education, and
                                     Welfare B-164031(3)


DIGEST
------

WHYTHEREVIEWMASMADE
     In January 1969 the Department of Health, Education, and Welfare (HEW)
     permitted the States to accept persons as eligible   for public assis-
     tance on the basis of information   furnished by the applicants without
     verifying their statements.    This is known as the simplified  method for
     determining the eligibility  of persons for public assistance.

     Under the traditional  method, decisions are made as to applicants'    eli-
     gibility only after information  furnished by them is independently    ver-
     ified by welfare agency workers.

     Under the program for aid to families    with dependent children (AFDC),
     States have the option to use either method. As of January 1971 a sim-
     plified method was be'l'ng.used statewide in 22 States.

     The Chairman of the Senate Committee on Finance asked the General Ac-
     counting Office (GAO) to compare the AFDC caseload data from welfare
     centers using the simplified  method with data from centers still using
     the traditional method.
        I -.
     GAO's work was done in three metropolitan  areas--New York City, Kansas
     City, and Los Angeles County--and may not represent the situation   na-
     tionally.

     During February 1971 AFDC expenditures of $105 million  (Federal, State,
     and local) were made in these areas. These expenditures represented
     about 22 percent of the nationwide AFDC expenditures for that month.
     Therefore operations in these three areas do have a significant   impact
     on the total program.

     HEW has not been given an opportunity  to examine and comment on this re-
     port.  Most of the matters in the rebort, however, were discussed with
     local welfare officials.

FINDINGSANDCOUCLUSIONS
     Conformitg to HEWcriteria
     Does the simpZified   method in use conform to HEW'scriteria?


 Tear Sheet
There was not much difference between the extent of verification     of in-
formation at welfare centers using a simplified     method and those using
the traditional  method of determining eligibility.

Welfare centers supposedly using the simplified method were using a
"modified" version of that method. Generally the modified version did
not conform to HEW's criteria  because:                                                         I
                                                                                                I
  --Personal interviews        were carried   out routinely       to obtain     eligibility     I
     information.                                                                               I
                                                                                                I
                                                                                                I
  --Certain      eligibility   factors   were verified      routinely.
                                                                                                I
Without exception, the directors  of the centers using the simplified                           I
method stated that the centers should not rely completely on applicants'                        I
                                                                                                I
statements as a basis for making eligibility   determinations.  The direc-                      I
tors emphasized that, although they believed that most applicants were
honest, eligibility  workers had an obligation  to assure themselves that
their decisions were based on a reasonable amount of evidence that ap-
plicants  qualified.

At centers supposedly using the traditional           method, verification   of fat-            ;
tors having a bearing on applicants'      eligibility      is not as extensive as               I
is commonly thought.       These centers generally verified        certain of the               I
applicants'     statements through home visits      but did not follow normal ad-               I
                                                                                                I
ditional    investigative   techniques before making a final decision.          (See            I
                                                                                                I
ppa 11 to 26.)                                                                                  I
Increase      in caseloads

Does the AFDCeaselload ‘in centers using a simpl.ified             method increase
faster,  stower, or at about the same rate,              as the easelload iw centers
using the traditional  method?

AFDC caseloads have increased significantly   at all              centers     visited     re-
gardless of the type of eligibility   method used.

Caseloads in the centers using a simplified   method increased dispropor-                       I
tionately when (1) the centers first  switched from the traditional   method                    i
and (2) they no longer required the same welfare agency worker to deter-                        I
mine an applicant's eligibility  and also provide social services.    (See                      i
pp. 27 to 36.)                                                                                  I
                                                                                                I
                                                                                                I
Rejection      rates                                                                            I

Do centers  using a simplified  method reject more, less, or about the
same percentage of applications   as do centers using the traditional
method?
Rejection of applications for assistance by centers using a simplified
method were at similar or lower rates than those experienced by centers
in the same area using the traditional  method.

                                    2
        Rejection rates tended to be higher where the eligibility      workers made
        comprehensive investigations,    including checks with collateral     sources,
        than under a simplified    method which relies on applicants'    statements.

        Centers' rejection    rates dropped significantly    immediately after adopt-
        ing a simplified    method but tended to level off, or even recover, as
        eligibility    workers gained experience.     (See pp- 37 to 49.)

        Case closings

        Do centers using a simplified method cZose fewer, more, or about the
        same n-umber of eases as centers using the traditiona method?

        Data available   on case closings--discontinuing       payments to aid recipi-
I       ents--did  not indicate any particular      trend or wide fluctuations   that
        could be attributed    to the different    eligibility   methods in use at the
        centers.

        In all areas visited  by GAO, a lower percentage      of cases was closed
        during 1970 than during earlier   periods.

        Welfare officials   have informed GAO that cases are usually closed on
        the basis of a specific   request by the recipient     or data supplied vol-
        untarily  by informants.    They are seldom closed on the basis of data
        developed during periodic redeterminations     of eligibility   for assis-
        tance.   (See PP* 50 t0 53.)
        1neZigibiZi-Q rates
        Does a simplified     method result in higher, lower, or about the same
        CneZigibiZity    rates among the AFDC recipients  as does the use of the
        traditional     method?
        Where local welfare departments made special reviews of the eligibil-
        ity of recipients  of assistance qualified  under a simplified  method,
        they found that a high percentage of these recipients    were (1) ineli-
        gible,  (2) could not be located, or (3) refused to cooperate.

        Where data was available--regardless         of the method used to determine
        eligibility--the      ineligibility    rates either exceeded the 3-percent
        tolerance level established         by HEWor contained many cases where eli-
        gibility      was questionable.     (See pp. 54 to 61.)

        Any method for determining the eligibility         of an applicant for assis-
        tance should be designed to produce proper and timely decisions.           The
        traditional method did not provide for timely decisions because of the
        time needed to make home visits      and collateral    checks to verify factors
        bearing on an applicant's  eligibility,
    I




        Tear   Sheet
    I
                                                                                     I
                                                                                     I
   The simplified    method--as prescribed by HEW--was not wholly acceptable
   to those who were responsible for implementing it at local levels.        Mod-    1
   ified simplified     methods produced timely results and, for the most part,      :
   caused little    inconvenience to the applicant.    The use of a modified         I
   simplified    method tends to result in a greater number of applications
   being rejected,     when compared with a truly simplified  method.
                                                                                     I
   HEW estimates that nearly 25 million   persons would be eligible for as-          I
   sistance under its proposed welfare reform program--about double the              I
   number currently  receiving public assistance.

   Under a program of that size, it does not appear practicable    to require        1
   detailed field investigations of each eligibility   factor for each appli-
   cant and still render prompt decisions.   On the other hand, the integ-           ;
                                                                                     I
   rity of such a program must be ensured by keeping ineligibility    at a           I
   low level.                                                                        I


RECOhB'ENDATIONS
             ORSUGGESTIONS                                                           I
                                                                                     I
                                                                                     I
   To help maintain   such integrity,   the eligibility   method should provide      I
                                                                                     I
   for                                                                               I


     --determining   the eligibility     of applicants    for assistance on the
        basis of information     obtained through face-to-face      interviews and
        verification  of certain key eligibility       factors;

     --using,   to the maximum extent possible,   experienced people and,
        before assigning new people to do eligibility     work, training    them
        in program policies,  procedures, and interviewing     and investigative
        techniques; and

     --prescribing   a quality control system designed to alert management
        when instances of ineligibility  and incorrect  entitlement  rates
        reach a point where special corrective   action is called for.     (See
        p- 64.)




                                        4
                        Contents
                                                           Page

DIGEST                                                       1

CHAPTER

  1       INTRODUCTION                                      5
              Determinations    of eligibility              5
              Scope of work                                 7

  2       HEW REGULATIONS PERTAINING TO THE SIMPLIFIED
          METHOD                                            8


  3       METHODSUSED TO DETERMINE @DC ELIGIBILITY
          IN AREAS VISITED                                 11
              General observations                         11
              New York City                                12
              Kansas City area                             18
              Los Ang,eles County                          22

  4       INCREASE IN AFDC CASELOADS                       27
              New York City                                29
              Kansas City area                             32
              Los Angeles County                           33
              Conclusions                                  34

  5       REJECTION OF APPLICATIO1;S FOR ASSISTANCE        37
              New York City                                38
              Kansas City area                             43
              Los Angeles County                           46
              Conclusion                                   49

  6       CASE CLOSINGS                                     50
             Closings through      redeterminations   of
                eligibility                                 50

  7       SPECIAL ELIGIBILITY REVIEWS AT CENTERSUSING
          SIMPLIFIED METHODS                                54
              New York City review results                  54
              Los Angeles County review results             60
                                                                       Page
CHAPTER

  8        GENERAL OBSERVATIONSREGARDING AFDC CASE-
           LOADS AND THEIR RELATIONSHIP TO ELIGIBIL-
           ITY METHODS                                                  62

APPENDIX

   I       Letter dated March 3, 1971, from the Chair-
             man, Senate Committee on Finance, to the
             Comptroller General                                       67

                             ABBREVIATIONS

AFDC       Aid to Families      With Dependent         Children

GAO        General    Accounting    Office

HEW        Department     of Health,      Education,     and Welfare

SRS        Social    and Rehabilitation        Service
COMPTROLLERGENERAL'S               COMPARISONOF THE SIMPLIFIED AND
REPORTTO THECOMMITTEE              TRADITIONAL METHODSOF DETERMINING
ONFINANCE                          ELIGIBILITY FOR AID TO FAMILIES WITH
UNITEDSTATESSENATE                 DEPENDENTCHILDREN
                                   Social and Rehabilitation Service
                                   Department of Health, Education, and
                                   Welfare B-164031(3)


DIGEST
------

WHYTHEREVIEWWASMADE
    In January 1969 the Department of Health, Education, and Welfare (HEW)
    permitted the States to accept persons as eligible  for public assis-
    tance on the basis of information  furnished by the applicants without
    verifying their statements. This is known as the simplified    method for
    determining the eligibility  of persons for public assistance.

    Under the traditional  method, decisions are made as to applicants'   eli-
    gibility only after information  furnished by them is independently   ver-
    ified by welfare agency workers.

    Under the program for aid to families   with dependent children (AFDC),
    States have the option to use either method. As of January 1971 a sim-
    plified method was bei'ng.used statewide in 22 States.

    The Chairman of the Senate Committee on Finance asked the General Ac-
    counting Office (GAO) to compare the AFDC caseload data from welfare
    centers usina the simelified method with data from centers still  using
    the traditioial method.

    GAO's work was done in three metropolitan areas--New York City3 Kansas
    City, and Los Angeles County--and may not represent the situation na-
    tionally.

    During February 1971 AFDC expenditures of $105 million  (Federal, State,
    and local) were made in these areas. These expenditures represented
    about 22 percent of the nationwide AFDC expenditures for that month.
    Therefore operations in these three areas do have a significant   impact
    on the total program.

    HEWhas not been given an opportunity   to examine and comment on this re-
    port.  Most of the matters in the report, however, were discussed with
    local welfare officials.

FINDINGSAND CONCLUSIONS
    Conformity to HEWcriteria
    Does the simplified   method in use   conform   to HEW'scriteria?


                                     1
There was not much difference   between the extent of verification   of in-
formation at welfare centers using a simplified     method and those using
the traditional  method of determining eligibility.

Welfare centers supposedly using the simplified method were using a
"modified" version of that method. Generally the modified version did
not conform to HEW's criteria  because:
  --Personal interviews        were carried    out routinely    to obtain     eligibility
     information.

  --Certain      eligibility   factors   were verified   routinely.

Without exception, the directors  of the centers using the simplified
method stated that the centers should not rely completely on applicants'
statements as a basis for making eligibility   determinations.  The direc-
tors emphasized that, although they believed that most applicants were
honest, eligibility  workers had an obligation  to assure themselves that
their decisions were based on a reasonable amount of evidence that ap-
plicants  qualified.

At centers supposedly using the traditional          method, verification  of fac-
tors having a bearing on applicants'     eligibility      is not as extensive as
is commonly thought.      These centers generally verified       certain of the
applicants'     statements through home visits     but did not follow normal ad-
ditional    investigative  techniques before making a final decision.         (See
pp. 11 to 26.)
Increase      in caseloads

Does the AFDC caseload in centers using a simplified  method increase
faster,  slower, or at about the same rate, as the caseload in centers
using the traditiona   method?

AFDC caseloads have increased significantly   at all           centers      visited    re-
gardless of the type of eligibility   method used.

Caseloads in the centers using a simplified    method increased dispropor-
tionately  when (1) the centers first  switched from the traditional   method
and (2) they no longer required the same welfare agency worker to deter-
mine an applicant's  eligibility  and also provide social services.    (See
pp- 27 to 36.)
Rejection     rates

Do centers using a simpZified method reject more, Zess, or about the
same percentage of applications as do centers using the traditionaz
method?
Rejection of applications for assistance by centers using a simplified
method were at similar or lower rates than those experienced by centers
in the same area using the traditional  method.

                                    2
Rejection rates tended to be higher where the eli'gibility     workers made
comprehensive investigations,    including checks with collateral      sources,
than under a simplified    method which relies on applicants'     statements.

Centers' rejection    rates dropped significantly  immediately after adopt-
ing a simplified    method but tended to level off, or even recover, as
eligibility    workers gained experience.     be pp- 37 to 49.)
Case ctosings
Do centers using a simplified method cZose fewer, more, or about the
same nwnber of cases as centers using the traditional method?
Data available   on case closings--discontinuing       payments to aid recipi-
ents--did   not indicate any particular     trend or wide fluctuations   that
could be attributed     to the different   eligibility   methods in use at the
centers.

In all   areas visited by GAO, a lower percentage of cases was closed
during   1970 than during earlier  periods.

Welfare officials   have informed GAO that cases are usually closed on
the basis of a specific   request by the recipient     or data supplied vol-
untarily  by informants.    They are seldom closed on the basis of data
developed during periodic redeterminations     of eligibility   for assis-
tance.   (See pp. 50 to 53.)
IneZiqibiZity   rates
Does a simplified method result in higher, lower, or about the same
ineZigibiZity rates amongthe AFDCrecipients as does the use of the
traditionuZ method?
Where local welfare departments madesspecial reviews of the eligibil-
ity of recipients  of assistance qualified under a simplified  method,
they found that a high percentage of these recipients   were (1) ineli-
gible, (2) could not be located, or (3) refused to cooperate.

Where data was available--regardless           of the method used to determine
eligibility--the        ineligibility    rates either exceeded the 3-percent
tolerance level established           by HEWor contained many cases where eli-
gibility       was questionable.      (See pp. 54 to 61.)

Any method for determining the eligibility        of an applicant for assis-
tance should be designed to produce proper and timely decisions.         The
traditional method did not provide for timely decisions because of the
time needed to make home visits      and collateral   checks to verify factors
bearing on an applicant's  eligibility.
    The simplified    method--as prescribed by HEW--was not wholly acceptable
    to those who were responsible for implementing it at local levels.        Mod-
    ified simplified     methods produced timely results and, for the most part,
    caused little    inconvenience to the applicant.    The use of a modified
    simplified    method tends to result in a greater number of applications
    being rejected,     when compared with a truly simplified  method.
    HEW estimates that nearly 25 million   persons would be eligible for as-
    sistance under its proposed welfare reform program--about double the
    number currently  receiving public assistance.

    Under a program of that size, it does not appear practicable    to require
    detailed field investigations of each eligibility   factor for each appli-
    cant and still render prompt decisions.    On the other hand, the integ-
    rity of such a program must be ensured by keeping ineligibility    at a
    low level.


RECOWflDATIOflSOR SUGGESTIONS
    To help maintain   such integrity,    the eligibility   method should provide
    for

      --determining   the eligibility     of applicants    for assistance on the
         basis of information     obtained through face-to-face       interviews and
         verification  of certain key eligibility       factors;

      --using,   to the maximum extent possible, experienced people and,
         before assigning new people to do eligibility    work, training    them
         in program policies,  procedures, and interviewing    and investigative
         techniques; and
      --prescribing   a quality control system designed to alert management
         when instances of ineligibility  and incorrect  entitlement  rates
         reach a point where special corrective   action is called for.     (See
         pa 64,)
                                  CHAPTER1

                               INTRODUCTION

DETERMINATIONS OF ELIGIBILITY

        Determining     an applicant's       eligibility      for public as-
sistance     is of fundamental       importance in achieving effective
operation      of public assistance         programs,      Two different
methods of determining         eligibility--generally            called the
traditional      method and the simplified             method--are    used today.

Traditional     method

       The traditional        method of determining    the eligibility
of an applicant       for public assistance      has been used by pub-
lic welfare agencies for many years.             Under this method,
welfare agency employees interview            each applicant       for public
assistance    and complete an application         form for the appli-
cant (intake      interview).       Decisions regarding     eligibility
and the amount of assistance           are not made until      after a
caseworker visits        the applicant's     home to verify      the infor-
mation obtained at the intake interview.

        In many cases collateral     sources of information--s,uch
as school attendance records,        interviews      with landlords    and
employers,    and inquiries    of the Social Security        Administra-
tion--are    sought to verify    factors    relating     to an appli-
cant's eligibility      and the extent of his entitlement.            A
decision on his eligibility       and on the extent of his entitle-
ment is made only after a thorough investigation,

       For an applicant   determined to be eligible    for public
assistance,   a redetermination     of his eligibility   is made on
a recurring   basis (usually    every 6 to 12 months) following
the same procedures.

Simplified    method

         Criticism    of the traditional    method of determining   eli-
gibility       has been that it is too expensive and time-consum-
ing and that it is humiliating           to the person involved.
Therefore        HEW developed a simplified    method for determining


                                       5
eligibility    designed to initiate    payments to eligible     ap-
plicants    more promptly,  to  reduce  administrative   costs,   and
to make more time available       for social workers to render
services to recipients     of public assistance.

       The HEW simplified       method of determining       eligibility
of applicants     for public assistance       provides for the deter-
minations   to be based, to the maximum extent possible,                 on
information    furnished     by the applicant     without     interviewing
the applicant     for the purpose of verifying          information      and
without verifying       information   through collateral         sources.
For applicants      determined to be eligible,        redeterminations
of need are made on a recurring          basis (usually       6 to 12
months) following       the same procedures.

        On May 28, 1970, the Secretary          of HEW mandated the use
of the simplified        method beginning July 1, 1970, for the
public assistance        programs covering the aged, the blind,
and the disabled        (adult programs).       This method was to be in
effect,     nationwide,     not later than July 1, 1971, for these
programs.       States still     have the option,     however, to use
either    the traditional       or the simplified     method for the aid
to families      with dependent children        program.    HEW records
show that,      as of January 1971, a simplified         method was being
used on a statewide         basis in 37 States for their       adult pro-
grams and in 22 States for their AFDC programs.

Primary    difference     between the two methods

       The primary difference             between the traditional         method
and the HEW-prescribed             simplified     method is the means used
to substantiate        eligibility        information.      Under the tradi-
tional     method emphasis is placed on the verification                   of ap-
plicants'     statements       through home visits         and checks with
collateral      sources.       The simplified       method, on the other
hand, provides       for reliance         on the applicants'       statements
with verification         of these statements          only when there appear
to be reasons for doubting the applicant's                   truthfulness.

        Currently   much attention is being focused on the sim-
plified    method of determining   eligibility  because (1) HEW
is considering      mandating its use in the AFDC program and
(2) HEW has proposed to use such a method in the Family As-
sistance     Program.

                                       6
SCOPE OF WORK

         Our review concerned only the AFDC program.              In New
York City and Los Angeles County, we compared AFDC caseload
data from welfare centers using the simplified               method with
similar     data from welfare centers using the traditional
method.      In the Kansas City area, we compared AFDC caseload
data from the Jackson County, Missouri,            welfare center
(Kansas City, Missouri),       which used the traditional            method,
with similar      data from the Wyandotte County, Kansas, welfare
center (Kansas City, Kansas), which used the simplified
method.      City and county welfare officials         in all locations
stated that the centers selected for comparison were com-
parable in regard to general demographic data, such as eco-
nomic, educational,       and ethnic characteristics,             Informa-
tion was gathered also through interviews            with welfare
agency staff and observations        of activities       relating     to el-
igibility     methods at the centers.

        Our fieldwork      was carried     out in only three major met-
ropolitan     areas and therefore         may not be representative      of
the national      situation;        During February 1971 AFDC expendi-
tures of $105 million          (Federal,     State, and local) were made
in these three areas.           These expenditures      represented    about
22 percent of the nationwide             AFDC expenditures    for that
month and therefore          operations    in these areas do have a sig-
nificant    impact on the total          AFDC program.




1 1970
        census tract   data was not available   for the geographi-
  cal areas covered by the welfare centers.        At our request
  local welfare officials    selected centers using the tradi-
 tional   method that they believed to be comparable to the
  centers using the simplified     method so that comparisons
  could be made.

                                      7
                                 CHAPTER2

     HEW REGULATIONS PERTAINING TO THE SIMPLIFIED METHOD

        Within HEW, the Social and Rehabilitation            Service (SRS)
has been delegated responsibility            for Federal administration
of the various public assistance          programs.       SRS Program Reg-
ulation     10-3, issued on January 24, 1969, provided guidance
to State public assistance         agencies in establishing         and ad-
ministering      a simplified    method for determining       eligibility
under all public assistance         programs authorized       by the So-
cial Security      Act.     The SRS regulation    states:

      "The simplified     method means an organized method
      by which the agency accepts the statements of the
      applicant    for, or recipient   of assistance,  about
      facts that are within his knowledge and competence
      *** as a basis for decisions       regarding his eligi-
      bility    and extent of entitlement."

      The Assistance       Payments Administration      of SRS issued
supplementary     instructions     to State welfare agencies on
March 28, 1969, explaining        more fully     the simplified    method.
These instructions       state that the simplified       method could
not be effective       in a State that required      either    a manda-
tory interview     or a routine     verification    of information    in
all or a substantial        number of cases.

        These instructions     emphasize that the States still
have the task of simplifying         their eligibility     regulations
so that the application        form can be designed to permit ap-
plicants    to clearly     answer questions or furnish       information
relating    to their eligibility.         The instructions    note that
a test of achieving        such simplification      would be whether
personal interviews        were necessary to determine initial          or
continuing    eligibility.

       Under the SRS instructions          the States are required         to
use the information      provided by the applicant            and recorded
on the simplified      application     form in determining         his eligi-
bility    and extent of his entitlement.             If questions arise
concerning    the information      on the form, the applicant            is to
be given the opportunity         to furnish     additional     or clarifying
information.      If the  applicant      is   unable    to provide    such
information, the State       agency is required   to obtain permis-
sion from the applicant       to seek the information    from other
sources.

       The States were instructed        to establish     criteria     for
unusual cases; that is, instances           of inconsistencies        or
gaps in the information       presented by an applicant           which
could not be resolved by him and which, to a prudent person,
suggested the need for further          explanation    or verification.
The instructions   specify that there must be a particular
reason for seeking additional         information;     that is, a spe-
cific   factor of eligibility      for a specific      case must be in
question and not a factor applicable            to all cases.

       States were required   to use the SRS Program Regulation
10-3 and the supplemental       instructions     in establishing    the
simplified    method in their welfare centers.        The simplified
methods in use in the areas we visited          were developed on
the basis of SRS regulations       and instructions     issued early
in 1969.

        In a report to the'senate        Finance Committee on our ob-
servations     on KEW's test of the simplified         method for deter-
mining eligibility      of persons for the adult public assis-
tance programs (B-164031(3),          August 5, 1970),we stated
that one of the main problems that States had in testing
the simplified      method was in determining       the extent to
which they were to verify         information    of the applicants     if
inconsistencies      appeared in information       provided on the ap-
plications.      We concluded in that report that HEW needed to
develop more specific       guidelines      as to when, and the manner
in which, inconsistent        statements made by applicants        should
be verified     by information      obtained from collateral      sources.
In a letter     dated December 4, 1970, to the Comptroller           Gen-
eral in which HEW commented upon that report,              HEW agreed to
issue additional      guidance to the States.

        On February 9, 1971, the Assistance          Payments Adminis-
tration    of SRS issued another supplementary          instruction
further    defining   the simplified    method by specifying        in-
stances when information,        in addition     to that furnished       by
the applicant,      should be secured.       Basically,    however,     this
definition     of the simplified     method is the same as that
enunciated     in Program Regulation      10-3 issued in January 1969.

                                    9
(See p. 8.)        This new instruction       also reiterates        that man-
datory interviews       or routine    verifications        of information
in either      all or a substantial      number of cases are not com-
patible    with the simplified       method.       The instruction
stresses     that interviews      are permissible       for the purpose of
interpreting       the program or assisting         individuals,      upon re-
West 3 to complete the application              form as distinguished
from investigatory        interviews    aimed at gathering         eligibility
information       or documentary proof of applicants'            statements.




                                      10
                               CHAPTER 3

          METHODSUSED TO DETERMINE AF'DC ELIGIBILITY

                          IN AREAS VISITED

        The methods used to determine eligibility   for AFDC in
the areas visited    by us--New York City, Kansas City area,
and Los Angeles County-- differ     from the HEW-prescribed    sim-
plified    method described in chapter 2 and from the tradi-
tional method described on page 5. We believe that the dif-
ferences in the methods used to make eligibility       determina-
tions have had a bearing on the trends in the AFDC data,
which are discussed in later chapters of this report.

GENERALOBSERVATIONS

       Generally welfare centers which were supposedly using
the HEW simplified        method were, in fact, using a modified
version of that method.            We found that applicants     for public
assistance     routinely     were being interviewed       to secure infor-
mation regarding        their eligibility     and that certain     eligi-
bility   information       routinely    was being verified.

       Centers which were supposedly using the traditional
method generally       verified     certain   of the applicants"  state-
ments through home visits           but did not follow normal addi-
tional   investigative        techniques    before making a final  eligi-
bility   decision.      There appears to have been a decreasing
emphasis placed on the use of collateral             sources of informa-
tion because

      --the unprecedented     increase in AFDC caseloads made it
          impossible to follow normal investigative    procedures
          and

      --SRS regulations    require eligibility        decisions     to be
         made within   30 days of submission        of applications
         for assistance.

      Under both the traditional      and the various    simplified
methods of determining   eligibility,     the information     fur-
nished by the applicant    was relied    upon to a large extent.
For example, we noted that eligibility        workers at centers
using the traditional     method were verifying     information
furnished   by the applicants   concerning    such eligibility
factors   as cash in the bank or amount of earnings only if
the applicants    stated that they had bank accounts or were
working.

        Similarly,     eligibility      workers at centers using a sim-
plified    method pursue with applicants             questions about p=-
erty 2 earnings,       or other resources,        only if the applicants
state that they have them.              Usually no further      inquiry    is
made regarding        any eligibility       factor which is answered in
the negative by the applicant--such               as no earnings,      no sav-
ings, no property.           Thus the verification        is dictated--un-
der either      method--to       a great extent by the information
willingly      furnished     by an applicant.

      The details    of the eligibility        methods used in the
areas visited     by us are described        below.

NEW YORK CITY

Simplified    method

       In April 1967 the East End and Clinton welfare centers
in New York City began a pilot       program using a simplified
method for determini?g   eligibility      under the various public
assistance    programs.  The pilot      program ended in February
1969, but the two centers continued to use this method.

       Under the simplified   methods in use, both centers re-
quire applicants    to apply in person for assistance     unless
they are homebound; in such cases a welfare center worker
visits   the home and assists   the applicant  in filling    out
the application.      Thus in every case a face-to-face    inter-
view between an applicant     and a welfare center worker is


1The pilot  program to test the simplified   method was funded,
 in large part, by an HEM demonstration    project   gra& under
 title  XI, section 1115 of the Social Security Act.      The
 total  Federal contribution  of special project   funds was
 about $175,300.


                                     12
required    to develop information     regarding   the applicant's
eligibility    for assistance    before an eligibility       decision
is made. Neither cefter makes home visits            to verify    any
eligibility    factors.

       According to officials    at the two centers,      eligibility
decisions     in about 90 percent of the cases are made on the
day of application.      Also, the directors      of both welfare
centers have advised us that, in their opinion,           eligibility
workers must be experienced,      trained    employees if they are
to develop complete information        during interviews     with ap-
plicants    to enable proper eligibility      decisions  to be made.

      Although both centers routinely          interview     all appli-
cants to establish  their   eligibility,         the eligibility    work-
ers at the two centers differed          in the degree to which they
relied upon the applicants'      statements.

         From April 1967 until     March 1969, eligibility       workers
at the East End center used a model simplified              method; that
is, they relied comnletelv         on the applicants1      statements
and did not verify       any items affecting      the applicants'     eli-
gibility.      The director     of the East End center advised us
that--since     this was a pilot      program--he    wanted the center
to apply a truly      simplified    method as intended by the New
York City Department of Social Services.

       After the test period,           however, the director        assigned
his more experienced caseworkers as eligibility                   workers to
routinely     interview      applicants     and encouraged these eligi-
bility    workers to verify         applicants'   eligibility      factors,
such as rent payments, income, and number of children,                      in
any case in which there was any doubt as to the validity                       of
the information        furnished     by an applicant.         Over a period
of time, the verification            of such items has become almost
routine.     Thus since March 1969 the East End center has been
using a modified        simplified      method.


1An exception    exists if the applicant     is a narcotic  addict
 or an alcoholic,      has a previous record of fraud, or has
 had a welfare case closed previously        because he had not re-
 ported,all   income or resources.       In such cases, investiga-
 tions of eligibility      factors   are made.

                                       13
       The Clinton welfare center,             on the other hand, operated
a modified    simplified      method from the beginning of the pilot
program.     The director       of the center told us that he felt
that it was necessary to verify               certain      key items affecting
every applicant's       eligibility        for assistance          and extent of
his entitlement.        Therefore      from the inception             of the modi-
fied simplified      method, the center's             eligibility        workers
have verified     applicants'       statements regarding              their   rent
payments and income earned for those applicants                        who stated
that they were employed.            Rent verification             consisted    of
(1) examining a rent receipt             furnished       by the applicant          or
(2) securing confirmation           from the landlord.              Income verifi-
cation consisted       of (1) examining pay slips furnished                    by the
applicant    or (2) securing confirmation                from the employer.
Contacts with landlords           and employers were usually by tele-
phone.

       A third center was created in February 1969, from part
of the territory          and caseloads previously      served by the East
Rnd center.        This center --Franklin--operated         a simplified
method from its inception           in much the same manner as the
Clinton    center;      that is, certain    eligibility     factors    were
routinely     verified.

       In March 1970 the New York City Department of Social
Services began to separate the eligibility        and service func-
tions of the 44 welfare centers in the city.         Under this
separated approach, a staff of social workers handles the
service needs of the recipients      (such as housing, child
care, medical)   and a staff    of administrative   workers handles
money payment needs (eligibility      and extent of entitlement).

       The three centers--Clinton,       East tid, and Franklin--us-
ing the modified     simplified    method for determining    appli-
cants’   eligibility   for assistance     were the first   centers to
separate the eligibility        and service functions.   1 Thus in
March 1970 these centers began using eligibility          workers to
make eligibility     decisions.     These workers were not


1As of May 1971 six centers had separated the eligibility
 and service functions.     A city official  advised us that a
 separation  of these functions    at other centers was being
 delayed pending negotiations     with the social workers'  union.

                                         14
     experienced caseworkers but were, for the most part, high
     school graduates who were either newly hired or newly
     trained.

             As noted earlier,          under the simplified          method at the
     Clinton     and Franklin       centers--prior        to separation      of the
     eligibility     and service functions--all               applicants'      state-
     ments regarding        their     rent and income were verified.               At
     the East End center,           these eligibility         factors    were veri-
     fied only when there was a question regarding                      the informa-
     tion provided by an applicant.                 According to the directors
     of the three centers,            the inexperience        of the new eligibil-
     ity workers delayed effective                implementation       of the centers1
     particular     verification         policies     for several months.          As
..   the new workers at each center gained experience,                       however,
     they were able to more effectively                  evaluate information         pro-
     vided by the applicants             and to follow established           center
     policies.      By March 1971 when we visited                 the three centers
     in New York City, workers in all the centers were routinely
     interviewing      applicants        and routinely       verifying     certain
     eligibility     factors.     '
          On the basis of information   gathered by us, we con-
     clude that the simplified  method in use at the three wel-
     fare centers in New York City does not meet the HEW crite-
     ria but is a modification  of those criteria  in that

            --applicants  for assistance              are interviewed   in all
               cases to secure eligibility               information  and

            --certain     eligibility       factors     are routinely      verified.

     HEW criteria    state that a simplified      system cannot be effec-
     tive if it requires     either  of the above-mentioned         factors.
     The directors    of each of the three New York City welfare
     centers told us that they did not believe that the integrity
     of their welfare operations      could be maintained        if they did
     not operate under a modification       of the HEW criteria.           They
     stated that, under the modified       simplified     method, there
     was better    assurance that only eligible       applicants      would be
     provided assistance     and that it would be in the proper
     amount.



                                              15
Traditional      method

       We also visited        certain    welfare centers in New York
City that were using the traditional               method of determining
an applicant's      eligibility       for assistance.        Under this
method an applicant         must apply in person at the center.
Exceptions are made for homebound cases.                 The applicant       is
interviewed     by a center worker (intake           interviewer)      who re-
cords the applicant's           family and economic history.           If, on
the basis of the information             obtained and recorded during
this interview,      the center worker believes            the applicant       to
be eligible     for assistance,        he is considered presumptively
eligible     and the case is referred           to a caseworker for field
investigation.       The interview,        however, can result       in a de-
cision of ineligibility,            in which case the application          is
not processed any further.

       Caseworkers usually make an appointment and visit           the
applicant's     home within    a week after the case has been re-
ferred by the intake interviewer.            While in the home the
caseworkers review pertinent         available    documents, such as
birth certificates,        bankbooks, or insurance policies,     to
substantiate     information    provided by the applicant     at the
time of application.

       The center directors          and caseworkers whom we inter-
viewed stated that the home visit               was not a very effective
means of determining        eligibility        but that it was vital           for
providing    social services.           They stated also that arranging
appointments     for home visits          with applicants       permitted      the
applicants    to ensure that their living             situations       conformed
to what was reported at the intake interviews.                      Further,
the caseworkers      said that they generally            do not seek collat-
eral sources of information             to substantiate       factors     affect-
ing an applicant's       eligibility         or the extent of his entitle-
ment.     For example, inquiries           are usually not made of (1)
the landlord     or neighbors as to whether the applicant                    is
known to be working or as to the whereabouts of a reported
absent father,      (2) school off icials          as to whether a child
over 18 is regularly        attending        school, or (3) the last
known employers as to reasons for applicants'                    leaving em-
ployment and possible availability                of unemployment compensa-
tion.


                                       16
        Directors,       eligibility    workers,   social workers,           and
various management officials             of the New York City Depart-
ment of Social Services advised us that--with                     the exception
of a visit       to an applicant's       residence--the        verification        of
eligibility        factors     under the traditional       method was not as
extensive       as was commonly thought.          Those interviewed            at-
tributed      the lessening of eligibility           verification          to in-
sufficient       time to carry out such work which was, in turn,
attributed       to the increased AFDC caseloads which the centers
were handling.           Certain of these officials          stated that the
general attitude          of many caseworkers had changed in recent
years with more emphasis being placed on providing                         services
to recipients         than on making detailed        eligibility         investi-
gations.




                                          17
KANSAS CITY AREA

Simplified    method (Wyandotte       County,     Kansas)

       On March 23, 1970, Wyandotte County began using a type
of simplified    method for determining     an applicant's     eligi-
bility   for assistance    under the AF'DC program.      Separation
of eligibility     and service functions    (see p, 14) began in
June 1970 and was completed by October 1970.           In this county
there is only one welfare office       that processes applications
for AFDC assistance.

       Our observations     and discussions  with State and county
welfare officials      indicated   that the county had been using
a type of simplified       method for more than a year prior to
its formal adoption in March 1970.

        In the summer of 1968 caseworkers became unable to in-
vestigate     each applicant  under the traditional     method and
began using a type of simplified       method.    According to the
caseworkers whom we interviewed,       they could not use the
traditional     method because of

      --the   increasing   caseload     for     each worker   and

      --HEW's requirement     that eligibility decisions            be made
         within    30 days of submission of applications            for as-
         sistance.

      We were advised that the sharp increase in the AFDC
caseload began occurring     in the summer of 1968 primarily        be-
cause of strong community pressure on the welfare center
from community action groups which urged low-income persons
to apply for public assistance       and urged recipients    to ap-
ply for special clothing     and furniture     grants.1   According
to county welfare officials,      these groups also pressured
for quick eligibility    decisions.     Caseworkers advised us
that,  because of the increased work load, it was necessary
to forego their normal eligibility        investigations.

1A Jackson County welfare  official informed us that                pres-
 sures from community groups did not begin to affect                 the
 caseloads until 1969.

                                  18
       From the summer of 1968 until      March 1970, eligibility
decisions    were made in many cases on the basis of informa-
tion provided by an applicant      during the intake interview
and obtained during the visit      to the applicant's       home. In
some cases decisions were made on the basis of the intake
interview    and an examination   of certain   documents furnished
by the applicant    without   an additional   verification     of the
information.     Thus before the county formally         began using
a simplified    method, it had already begun to shift away from
the traditional    method.

       When the simplified   method was formally      adopted   on
March 23, 1970, the method of determining        eligibility     of an
applicant   was changed further.    The current policies        of the
county are discussed below.

       An application     for assistance   can now be made by mail.
Applicants   need not apply in person at the welfare center
for assistance,      although--according    to the chief of the in-
take section--about       90 percent of all applicants      do so. At
the center group interviews         of new applicants   are held to
explain the welfare department policies           and to instruct  the
applicants   concerning the proper way to complete an applica-
tion form.

       After an applicant    completes an application     form, it is
forwarded to an eligibility         worker for review and a decision
as to the applicant's     eligibility      and the extent of his en-
titlement.    According to local welfare officials,         these
workers are not experienced caseworkers but area for the
most part, newly hired college graduates who have had brief
exposure to the welfare department's          operation.1

        No face-to-face      interviews are routinely    made to ob-
tain information        needed to make an eligibility     decision,
Eligibility     workers have told us that,      for three of every
four applications,        they find it necessary to contact the
applicants--     either by telephone or by their      return to the


1
    According to State officials, of the 121 caseworkers  in
    Wyandotte County, 73, or 60 percent, were hired in the
    last 2 years.


                                  19
center --to obtain clarification      of eligibility     information
shown on the application      or to develop eligibility        informa-
tion which was not shown on the application.            They have
stated that, because of the complicated          State regulations
concerning,welfare,    the application     form is necessarily       com-
plicated    and that many applicants    are not able to complete
it correctly.

        The eligibility       workers have advised us that they
(1) routinely       verify    an applicant's    reported    income by re-
quiring    the applicant       to produce pay slips or by contacting
his employer or other sources from which he receives income--
such as the State unemployment office--and               (2) verify   other
factors    affecting       the applicant's   eligibility     whenever they
have any doubts concerning the information               furnished   by the
applicant.

         The Wyandotte County welfare center uses a separate
 staff to handle the eligibility           and service functions.        The
 director     of the center advised us that, because of the im-
 portance of making correct         decisions   concerning applicants'
 eligibility      and extent of their entitlement,        the center em-
ployed college graduates as eligibility             workers.     He stated
that,      in his opinion,   these workers could exercise better
judgment than clerical         staff in reviewing     applications     for
assistance       and in computing recipients'       budgetary needs.

        The center's   staff   told us that they generally       felt
that the type of simplified         eligibility   method in use was
not much different      from the method in use from mid-1968 to
March 1970.      They also stated that the information          obtained
under the traditional        method by interviewing     the applicant
at home was just as easily obtained by talking             to the ap-
plicant    on the telephone or in an interview        at the welfare
center.

      On the basis of the data gathered by us, we believe
that Wyandotte County has been using a type of simplified
method since mid-1968.      When the county formally  adopted
the simplified  method in March 1970, the eligibility       workers
found it necessary to routinely     contact most of the appli-
cants to obtain eligibility     data and to routinely  verify
stated income.    Wyandotte County's method of determining       an


                                    20
applicant's     eligibility for assistance    therefore            does not
strictly    conform to HEW's prescribed    simplified             method.

Traditional      method (Jackson       County,    Missouri)

        Jackson County has always used the traditional                   method
for determining      an applicant's         eligibility       for assistance
under the AFDC program.           The county has one welfare office
where all applications         are processed.            Cur discussions     with
the county welfare director            and other county officials             in-
dicate that considerable          emphasis is placed on making com-
plete investigations        of factors       affecting       an applicant's
eligibility     before his application            is approved or rejected.
According to the county director,               Missouri      law requires     com-
plete investigations        prior to making an eligibility               deci-
sion.1      Thus the county's       welfare office          caseworkers,    in
addition     to conducting     eligibility        interviews,      must obtain
evidence --including      responses from collateral               sources con-
tacted--on     all relevant     eligibility         factors    before making a
decision.

       HEW regulations'   require that eligibility      decisions    con-
cerning assistance      under the AFDC program be made within
30 days from the time of application.          The Jackson County
investigations,     however, have resulted     in eligibility      deci-
sions'not     being made within   the prescribed   time.       For ex-
ample, in calendar year 1970 the average time taken by the
county to approve an AFDC application         was 46 days and the
average time taken to reject        an &DC application        was 40 days.

      County welfare officials      advised us that there were no
delays in making home visits      to interview     the applicants
but that the primary cause of the delays was the time needed
to verify   eligibility information      with collateral     sources--
such as present or former employers,         schools., insurance


1 Section     208.070   of the Missouri       Social   Security    Law states:
      "Whenever the County office      receives   an applica-
      tion for benefits    an investigation     and record
      shall be promptly made of the circumstances            of
      the applicant   by the County office      in order to
      ascertain   the facts supporting      the application."


                                       21
companies, and the county assessor's              office.      They empha-
sized that checks with collateral          sources were vital             to
verify    information     upon which eligibility          decisions were
based.     They   have  pointed   out, however,        that   collateral
checks are made only if applicants            indicate      that they have
resources     and that no checks are made if negative responses
are given.      Therefore,     even under the traditional            method,
the extent of the investigation          depends to some degree upon
the information       which an applicant     willingly       provides.
County officials       also noted that, in their opinion,                most
information     obtained during a visit         to an applicant's          home
could just as easily be obtained by interviewing                    the appli-
cant at the welfare center.
        In January 1971 HEW conducted a hearing regarding      Mis-
souri's    compliance with Federal welfare laws.      In a report
dated May 3, 1971, to the Administrator       of SRS, the hearing
examiner proposed that the State be found out of compliance
with the Federal laws because--among other compliance is-
sues-- the State was not furnishing     public assistance   with
reasonable promptness to all persons eligible       under the AFDC
program, that is, within    the prescribed    30 days for that
program.
        The State took the position       during the hearing that the
30-day rule was arbitrary         and unreasonable  in the light     of
existing    Missouri     law requiring  complete investigations.
        The Administrator,      SRS, has 60 days to decide whether
to find the State out of compliance and withhold            applicable
Federal funds.l        If found out of compliance,    the decision
may be appealed in the U.S. Court of Appeals for the Eighth
Circuit.
LOS ANGELES COUNTY
Simplified    method
      In October 1969 the Pomona and Inglewood welfare ten..
ters in Los Angeles County adopted a simplified     method for
determining  an applicant's eligibility  for assistance.
       The two centers had separated their eligibility                   and
service   functions   in July 1969 but did not complete              a

1On July 2, 1971, the Administrator  found Missouri out of
 compliance because the State was not furnishing   assistance
 with reasonable promptness.
                                      22
changeover to the use of eligibility           workers (clerical
staff)      to carry out functions   relating    to determination  of
eligibility      and extent of entitlement      until  the summer of
1970. At the time of our fieldwork            in April 1971, 18 other
centers in the county were still         using the traditional
method.

         Under the type of simplified         method adopted, applicants
usually fill      out an application      form at the centers and eli-
gibility     workers routinely     interview     the applicants  to clar-
ify information      recorded on the form and to develop other
information      needed to make an eligibility        decision.    Welfare
officials     at both centers have told us that the routine            in-
terviews     are considered     essential     if they are to make reli-
able eligibility      decisions.      County welfare officials      have
pointed out to us that the HEW-prescribed             simplified  method
cannot really      be effective    until    the complex State and
county welfare eligibility         rules are also simplified.

        Although primary reliance            is placed on the information
furnished      by an applicant     on the application             form and in
the interview,       we have.found      that    eligibility        workers at
both centers (1) routinely          verify      an applicant's         reported
earned income and (2) often verify               the place of residence or
the primary factor causing a need for emergency aid in cases
where such aid is being requested.                 Verification        of earned
income usually consists          of examining pay slips provided by
the applicant       or contacting     the applicant's           employer.      Ver-
ification      of an applicant's      place of residence or other
factors     necessitating      emergency aid usually consists               of re-
quiring     the applicant      to provide appropriate             documents,
such as a driver's        license,    an eviction         notice,     or a utility
shutoff     notice.

        In cases where AFDC assistance    is provided to an ap-
plicant    who is earning some income, both centers require
that he file     a monthly earnings report with the welfare cen-
ter.

       The directors of the two centers have advised us that,
under the type of simplified   method followed,  their  eligi-
bility   workers have been able to approve or reject   about
90 percent of the applications    for assistance on the day


                                       23
the applications      were submitted despite         the sharp increase
in applications      under the AFDC program.

        Cur review showed that Los Angeles County used a type
of simplified     method which deviated from the method pre-
scribed by HEW. County welfare officials               felt that,   to en-
sure effective      operation       of their AFDC program, it was es-
sential    to routinely       interview     applicants and to routinely
verify    certain   eligibility       factors.

Traditional     method

        Eighteen welfare centers in Los Angeles County use the
traditional     method for determining     an applicant's      eligibil-
ity for assistance.       The separation    of the eligibility         and
service functions     has facilitated    the determinations.

        An applicant     applying for assistance         at a center using
the traditional       method for determining        eligibility       is pro-
vided an eligibility         packet containing      the necessary appli-
cation forms.        The applicant     completes the forms and is then
interviewed     by an eligibility        worker--usually        on the day of
application.       During this intake interview           the eligibility
worker asks the applicant          probing questions        about his family
and financial      situation     and why assistance       is needed.      The
eligibility     worker can reject        an application       on the basis
of this interview        if it is apparent that the applicant"s
family would not be eligible           for assistance.

         If the eligibility        worker believes that the applicant's
family might be eligible            after reviewing       the application
forms and interviewing           the applicant,       he arranges to visit
the applicant's          home within    24 hours.       During this home
visit      the worker asks the applicant           to produce docume,ntation
to support statements made at the intake interview                     (such as
birth      certificates     and pay slips).        After the visit      the el-
igibility         worker can declare the applicant           presumptively
eligible        and provide him with assistance.             If the eligibil-
ity worker believes that there is still                  a need to make col-
lateral       checks regarding      such factors      as ownership of prop-
erty,      savings accounts,       or receipt     of unemployment compen-
sation,       the case is referred       to a separate property unit
for investigation.           Thus welfare     officials      have stated that,
even under the traditional             method, basic reliance        is placed

                                      24
on the applicant   for eligibility       information     and that usually
no independent verification        is routinely     undertaken   in the
case of applicants    who state that they have no income or
other resources.

        The caseworkers whom we interviewed       pointed out that,
although they believed visits        to an applicant*s      home to be
beneficial,      eligibility  determinations    could be just as ef-
fective     if the applicants   brought all the necessary documen-
tation    to the welfare center.       The workers emphasized, how-
ever, that they found home visits          to be an effective    way
for quickly assessing the service needs of the applicants
and their children.

         According to officials          at two traditional     centers which
we visited,       eligibility       decisions were made in most cases
within      48 hours after the home visit,            As noted above, eli-
gibility      workers can refer an application            to the property
unit for investigation            if they have some reason to question
the applicant's         statements     after the intake interview       and
the home visit.           Generally,     though, primary emphasis is
placed on the applicant's             word and documentation      to support
eligibility       factors     rather than on independent checks with
collateral       sources.

        The increase in welfare applications                during the last
6 months of 1970--particularly                under the AFDC program--cur-
tailed      the ability      of eligibility       workers at the traditional
centers to use their normal investigation                   techniques,         At
one of the traditional              centers which we visited,         officials
stated that,       from June through December 1970, home visits
were curtailed         because of the tremendous increase in the
application       caseload.         They stated also that, to make prompt
eligibility       decisions       during this period,       the eligibility
workers often relied            entirely    on the applicants#        statements
and on documentation            which the applicants        furnished      during
the intake interviews.               Also eligibility     workers at the
other traditional          center which we visited          stated that,        dur-
ing this period,         they frequently        were not able to adequately
carry out their         eligibility       work9 including      home visits,
In effect,      the two centers curtailed             normal procedures under
the traditional         method during this period.



                                        25
      In December 1970 the Los Angeles County Department of
Public Social Services-- in recognition    of the problems
caused by the increased caseloads-- issued a memorandum to
the centers restating   the policy requiring     that visits     to
an applicant's  home be made before financial       assistance     is
provided to the applicant.    Eligibility    workers have told us
that they have been able to make timely home visits          since
January 1971.

       As in New York City, the Los Angeles County eligibility
workers had to curtail         their normal investigative       efforts
when the caseload was increasing           rapidly.   Also, as in both
Jackson County and New York City, the traditional               method as
followed     by the two centers in Los Angeles County places
primary reliance       on the willingness      of the applicant     to fur-
nish eligibility       information   rather than on independent in-
vestigations      through collateral      sources.




                                     26
                               CHAPTER 4

                   INCREASE IN AF'DC CASELOADS

       AF'DC caseloads increased significantly     in recent years
in the areas where we made our review as well as in the in-
dividual   welfare centers visited.      Such increases    followed
a nationwide    trend in the AFDC program.      The increases ex-
perienced nationwide     and in the areas included in our re-
view are shown below.

                                                                 Percentage
                                                                  increase
                      Number of AFDC cases in December               from
                   1967       1968       l-969     1970              1967

Nationwide       1,297,OOO 1,522,OOO 1,876,OOO 2,552,OOO               97
New York City      133,164   172,968   190,871   220,488               66
Los Angeles
  county            64,189    75,988    90,346   125,269               95
Jackson County        3,305    3,881     4,901      7,223             119
Wyandotte County     1,436     1,892     2,476     3,750              161

        County and city welfare officials  in the areas we
visited    attributed  the increase in the AFDC caseloads to
three primary factors.

     --Liberalization       of eligibility       requirements     through
        changes in welfare policies            and court decisions,
        such as the 1967 amendment to the Social Security
        Act which requires       States to disregard          the first   $30
        and an additional      one third       of a working welfare re-
        cipient's     monthly income when computing the extent
        of his entitlement       and the Supreme Court decision
        prohibiting     a durational       residency    requirement.

      --Activities   of community action groups           in increasing
         the awareness of potential   recipients          of benefits
         available under the program.

      --General   downturn in economic conditions which resulted
         in increased unemployment and fewer job opportunities.

      The city and county welfare officials   have stated that,
although it is undoubtedly  easier for applicants   to obtain

                                     27
assistance    under a truly   simplified     method, compared with
the traditional     method, generally     they did not believe that
the adoption of the modified       simplified    methods had resulted
in providing    assistance  to more ineligible       persons than
would have been provided under the traditional            method.
They have stated also that, under the simplified            method,
more persons may have been encouraged to apply for assis-
tance.

       To evaluate the effect   of the simplified    methods on
the size of the caseloads,    in the areas where we made our
review, we compared the quarterly      changes in caseload of
welfare centers using the simplified      methods with the
changes in caseload of welfare     centers using the traditional
method.    For the New York City and the Kansas City areas,
we used January 1966 as the base period;        for Los Angeles
County we used July 1967 as the base period because not all
of the centers used for comparison were in existence        before
that date.     The results of our comparisons are discussed
below.

NEWYORK CITY

       As shown in the following   graph, the two centers which
began using simplified    methods (Clinton   and East End) had
greater percents of increases    in their AFDC caseloads for
about a year after the adoption in April 1967 of the modi-
fied simplified   methods than the two centers      (Harlem and
Fort Greene) that used the traditional     method.     Also, for
most of that year, there was a slightly      greater percent of
increase in the caseload of the two simplified        centers than
in the caseload of all other centers in New York City.

      As shown by the graph, the percent of increase in the
caseloads during the period April 1967 through June 1968
over the base period (January 1966) was as follows:




                                 28
                                                                  PERCENT OF INCREASE IN AFDC CASELOADS
                                                                              NEW YORK CITY
    PERCENT                                                         PERCENTS BASED ON CASELOAD AS OF
                                                                              JANUARY 1, 1966


    22.5




                                                                                                                                     ALL         TRADITIONAL           CENTERS
                               SIMPLIFIED       CENTERS


z
    12.5
                                                       \          /\
                                                                                                                                                                                                                                .,.
                                                                                                                                                                                                                            .
                                                                                                                                                                                                                        .
                                                                                                                                                                                                                    0
                                                                                                                                                                                                                .
                                                                                                                                                                                                            .


                           L




                                                                                 TWO   TRADITIONAL             CENTERS




     2.5

                                                                       TWO        SIMPLIFIED         CENTERS                                                       THREE       SIMPLIFIED      CENTERS
                                                             I               I            I          I             I        I        I             I                                   I#+     I                                  I
           0        I      I                I     c          I               I            IAl                      I                 I     \/I                 I           I           I       I       I
           3/66   6/66   9/66         12/66     3/67       6/67         9/67           12/67     3/68        6/68        9/68     12/68          3/69      6/69        9/69        12/69     3/70    6/70                   9/70      12/70
                                                                                                         QUARTER         ENDING
                             Percent   of increase        in caseloads
                       TWO                        TWO                    All
  Quarter          simplified               traditional           traditional
  ending            centers                    centers               centers
June    1967           11.2                      6.1                      9.6
Sept.     "            13.7                      9.0                     10.7
Dec.      "             9.6                      7.5                      9.9
Mar.    1968            9.6                      6.6                      8.2
June      "             9.8                      8.1                     10.8
Although the caseload of all centers increased,    the adoption
by the two centers of simplified   methods may have accounted
for some of the difference   in the intensity of the percent
of increase.

        In the quarter   (April to June 1970) in which the sim-
plified    centers separated their    eligibility and service
functions,     the percent of increase in the centers? case-
loads was greater than for the two traditional       centers.
The percent of increase in the caseloads of the simplified
and traditional     centers during the period October 1969 to
December 1570 over the caseload during the base period fol-
lows.

                         Percent       of increase        in caseloads
                      Three
                  simplified                     TWO                   All
  Quarter            centers                traditional          traditional
  ending            (note a>                   centers              centers

Dec.    1969            2.1                      1.4                      3.2
Mar.    1970            4.2                      2.6                      5.7
June        11          8.1                      3.8                      8.5
Sept.       II          7.7                      4.5                     11.6
Dec.        It          5.6                      4.6                      9.5
aIn February 1969 a third   simplified  center (Franklin)  was
 created from territory   and caseloads previously   served by
 the East End center.

      The separation     of the functions    may have accounted for
some differences     in the intensity     in the rate of increase
in the caseloads,      as did the situation     when the simplified


                                       30
methods were adopted.     As the eligibility  workers gained
experience and began to apply the simplified      eligibility
methods more effectively,     the percent of increase in the
simplified  centers'   caseloads dropped back to a level com-
mensurate with that for the two traditional      centers.

       A city welfare official      advised us that, during the
period June to December 1970, the increases in the case-
loads were particularly       great because of poor economic con-
ditions.     He stated that the increases were greatest       in
those centers serving areas where the potential         for unem-
ployment and the resultant       need for public assistance     was
high.     The poorer areas --which had already experienced       the
precipitous     rise in the number of persons receiving      assis-
tance--included      the areas served by the simplified     centers
where high unemployment had already been experienced.




                                 31
KANSAS CITY AREA

       The AFDC caseloads in Wyandotte County and Jackson
County have been steadily         increasing    in recent years (see
     27 >     Our analysis     of available    caseload data shows,
kwev&,      that the percent of increase in the caseload of the
Wyandotte County center,         which uses a simplified       method of
determining     an applicant's     eligibility     for assistance,   has
been markedly greater than the percent of increase in the
caseload of the Jackson County center, which uses the tradi-
tional method.      The differences        are depicted on the follow-
ing graph.

         The largest   differences   in the caseloads of the two
counties began to show up in the summer of 1968 when the
Wyandotte County center began using a simplified          method and
became greater       in the quarters   immediately  after the formal
adoption of the method in March 1970. The differences            be-
came even greater when the center began to separate the
eligibility      and service functions     in June 1970. The percent
of increase in the caseloads of the two counties over the
caseloads during the base period is as follows:

                           Percent of increase in caseloads
 Quarter             Wyandotte County             Jackson County
  ending          (simplified     method)     (traditional  method)
June    1968                6.1                          4.1
Sept.   1968               10.5                          3.9
Dec.    1968               16.3                          6.9
Mar.    1969               11.2                          3.4
June    1969               14.2                          3.0
Sept.   1969               17.8                         11.3
Dec.    1969               12.7                         13.7
Mar.    1970               22.0                         15.9
June.   1970               26.6                         14.6
Sept.   1970               46.4                         20.4
Dec.    1970               27.0                         20.2
       As shown by the above table,   the rate of increase in
the Jackson County center's    caseload was much lower than the
rate of increase in the Wyandotte County center's       caseload.
The lesser rate of increase can be attributed      mainly to two
factors:   (1) the Jackson County center generally    made a


                                   32
                                                       PERCENT OF INCREASE IN AFDC CASELOADS                                                                                         27.0
                                                                 KANSAS CITY AREA
     PERCENT
                                                         PERCENTS BASED ON CASELOAD AS OF
                                                                   JANUARY 1, 1966

     22.5



     20.0



     17.5



     15.0
                                                         WYANDOTTECO~NTKKAN.                          I\
w                                                          (SimpliNad       method adopted
w    12.5                                                   infonnaflly     in ammer    of
                                                             1968 wd fomrally        in
                                                            Mach      1970)

     10.0




                                                                                                                                    (Treditionol          Method)




    - 2.5            I                     I      I        I        I         I         I      I           1     I      I      I       I             I          I       I      1
            3/66   6/66   9/66   12/t%   3/67   6/67     9/67    12/67     3160       6/68   q/b0     12/H     3/69   b/69   9/69   12169          3/70       61’70   9/70   12/7C
                                                                                  QUARTER    ENDING
complete investigation     of an applicant's        entitlement    to as-
sistance   and (2) Missouri's   eligibility       requirements     are
more restrictive    than those of Kansas,

LOS ANGELES COUNTY

      Our comparison of the percent of increase in the case-
loads of two simplified       and two traditional      centers in Los
Angeles County showed that there was no significant              differ-
ence in the rates of increase for centers using a simplified
method and centers using the traditional          method.     The Pomona
and Inglewood centers began using a simplified             method for
determining    an applicant's    eligibility    in October 1969 and,
as shown by the graph on the next page, the percent of in-
crease in their    caseloads was slightly       greater    in four of
the five quarters--    October 1969 through December 1970--than
(1) the percent of increase in the caseloads of the El Monte
and Exposition    Parkcenters     which used the traditional
method, and (2) the percent of increase for all centers in
the county.     The percent of increase in the caseloads during
January 1969 through December 1970 over the base period
(July 1967) is as follows:

                        Percent    of increase in caseloads
 Quarter         zt70 simpli-           Two tradi-      All county
 ending          Lied centers        tional   centers    centers

Mar.    1969                                3.8                    4.5
June    1969                                3.0                    4.1
Sept.   1969                               12.4                    7.9
Dec.    1969          12.2                  9.6                    8.9
Mar.    1970           8.5                 11.6                   11.9
June    1970          21.3                 17.7                   13.8
Sept.   1970          24.7                 22.1                   20.9
Dec.    1970          21.1                 16.1                   15.3

CONCLUSIONS

      It seems evident  that the adoption of the simplified
method and the separation    of eligibility and service func-
tions have had an impact in the form of increased caseloads
in the welfare centers included in our review.      The effect
of the impact was diminished,    however, as time permitted
the eligibility  workers to become experienced    in carrying


                                  34
                             PERCENT OF INCREASE IN AFDC CASELOADS
                                     LOS ANGELES COUNTY
      PERCENT                   PERCENTS BASED ON CASELOAD AS OF
                                            JULY 1, 1967




                                                                            TWO   SIMPLIFIED   C



                                                                                                            .
                                                                                                                0

                                                                                                                    0
                                                                                                                     .
                                                                                                                         l


                                                                                                        .
                TWO   TRADITIONAL   CENTERS                                                        .’
w
WI   12.5



                                                  ALL   COUNTY    CENTERS




     2.5

                                                                                                                ;




                                              QUARTER    ENDING
out the   eligibility   functions,      and the centers modified their
systems   for determining     eligibility      to provide better as-
surance   that proper eligibility         decisions were made. Our
overall   conclusions   are discussed in chapter 8.




                                   36
                                 CHAPTER 5

            REJECTION OF APPLICATIONS FOR ASSISTANCE

       As part of our evaluation        of the relative  effects   of
determining     an applicant's    eligibility   for assistance    under
the traditional     method and under the simplified        methods, we
examined whether the centers using simplified           methods were
rejecting    a higher,    lesser9 or about the same percentage of
applications     as centers using the traditional       method,    On
the basis of our examination,         we concluded that:

      --The rates of rejection        of applications      resulting    from
         the use of the modified simplified           methods, under
         which center workers interviewed          applicants      and ver-
         ified certain   eligibility     factors,     did not differ
         significantly    (although they were lower) from the
         rates of rejection      that resulted     from the use of the
         traditional   method.

      --The use by one center of a truly        simplified    method,
         under which reliance   was placed entirely        on the ap-
         plicants'  statements,   resulted   in a significant       drop
         in the rate of rejection     of applications      in relation
         to the rate of rejection     of centers using modified
         simplified  methods.

      --The centers'    separation    of'their   eligibility     and ser-
         vice functions   resulted    in reductions       in the rates
         of rejection   of applications.

       Because of dissimilarities        in eligibility        requirements
of the States, there is no average rejection                rate against
which to measure the correctness           of eligibility        decisions.
Rejection    rates for the areas visited         by us therefore         should
not be compared in terms of percentage differences.                     What
can be compared is the trend in rejection               rates when certain
events --which have an impact on all welfare centers and
which are not affected      by dissimilarities           in eligibility      re-
quirements--occur,     such as the introduction            of a simplified
method and the separation        of eligibility       and service func-
tions.    The data we obtained concerning the rejection                  rates
in the areas is discussed below.


                                       37
NEWYORK CITY

        Two dates are important    when analyzing    rejection   rates
in New York City, namely, April 1967 (the adoption by two
centers of a simplified       method) and March 1970 (the separa-
tion at the two centers of eligibility        and service func-
tions).     As shown by the graph on the following         page, a sig-
nificant    drop in the rate of rejection     of applications     for
assistance     occurred upon the centers'    adoption of a simpli-
fied method and an even greater drop occurred upon the sep-
aration    of the eligibility    and service functions.

Adoption    of simplified     methods

        Immediately   following    the adoption by the Clinton        and
East End welfare centers of simplified            methods, the rate
of rejection      of applications     of about 30 percent experienced
in the preceding year dropped to about 15 percent and did
not return to the 30-percent          level until   2 years later.
During this 2-year period,         the rejection    rate of all centers
in the city also dropped-- from about 27 to 21 percent--but
not as drastically       as that of the simplified       centers.     Local
welfare officials      attributed     the drop in the citywide      rejec-
tion rate to pressure caused by community groups and riots.
The two traditional        centers used for comparative       purposes--
Fort Greene (which includes part of Bedford-Stuyvesant)                and
Harlem--also     experienced a large drop in the rejection           rate.
Officials    at these centers advised us that the eligibility
workers had been unable to make their normal eligibility                 in-
vestigations     during this period.

        They advised us     also that a drop in the two centers'
rate of rejection      of   applications  had been expected upon
adopting the simplified         method but that they had also ex-
pected that the rates        would return to the previous levels
much sooner than they        had. Cur analysis    of the recovery of
the rates of rejection         of the two centers using the simpli-
fied method (Clinton        and East End) indicates    that the type
of simplified     method    used affects  the rates of rejection
differently.

       As noted on page 14, Clinton         center eligibility        workers
routinely     interviewed      applicants  and routinely     verified     cer-
tain eligibility       factors    under its simplified     method.      In


                                     38
                                                                                 RATE OF REJECTION OF
    PERCENT
                                                                           AFDC APPLICATIONS FOR ASSISTANCE
    50
                                                                                    NEW YORK CITY


    45          -
                1
    40
                 \                             TWO   TRADITIONAL            CENTERS



                                                                                                                     ALL        TRADITIONA           iL       CENTERS
    35
                                                            /                                                                                    \
                            •--~#~--\


    30




    25
2

                                                                                                                     -   --..
    20                  SIMPLIFIED         CENTERS
                                                                \                                                                            /



    15




    10



                                                                           TWO     SIMPLIFIED          CENTERS                                                                 THREE    SIMPLIFIED          CENTERS
     5      -
                                                                                                A                                                                                                A
                                                     1                                                                                           I        I




         3/66        6/66           9/66   12/66     3/67           6/67    9/67       12/67        3/68        6/68             9/68    12/68                3/69      6/69     9/69    12/69       3/70       6/70   9/70   12/70

                                                                                                           QUARTER              ENDING
contrast,    as noted on page 13, East End center eligibility
workers, under a model simplified                  method, relied       completely
on applicants'        statements       from April 1967 until          March 1969,
at which time they began making routine                   verifications       of
certain   eligibility         factors.       The graph on the following
page shows (1) that the East End center experienced                        a greater
drop in its rejection            rate than did the Clinton center and
(2) that East End centerIs               rejection    rate remained at a very
low level until        March 1969 when eligibility              workers began
making routine        verifications.

Separation     of functions

        During the quarter April to June 1970, the simplified
centers again experienced        a drastic   drop in their    rates of
rejection     of applications,      (See graph on p* 39.)      This
drop--greater     than any previously      experienced--was    due to
the centers'     separation    of their eligibility      and service
functions.

         Upon the separation        of these functions,    newly hired or
newly trained       eligibility      workers were responsible      for mak-
ing eligibility        decisions.      According to the local welfare
officials,      the new workers initially        were not effectively
interviewing       applicants      and were not detecting     discrepancies
in the applications           that, to an experienced     caseworker,
would have raised questions concerning the applicants'                  eli-
gibility     for assistance.

       The eligibility          workers whom we interviewed       indicated
that they had not         been given sufficient        training   in effec-
tive interviewing         techniques     or had not been adequately
trained   regarding       the detailed     welfare policies.        Generally
the workers were         given 2 weeks of formal training           before
they began making         eligibility     decisions,       Thus according to
both the welfare         officials     and the eligibility      workers,    ad-
equate eligibility          decisions    were not made until      the workers
gained experience         on the job.

      An official  of the New York City Department of Social
Services has informed us that the department has strength-
ened its prejob training    of new eligibility    workers in those
centers that were scheduled to separate their eligibility
and service functions    in an effort   to prevent a drop in the


                                        40
Ir
rate of rejection   of applications   that   has been experienced
by the other centers.    Three additional     centers were sched-
uled   to adopt   a simplified   method and to separate   their   el-
igibility  and service functions    in March 1971. Thus at the
time of our fieldwork,   data was not available    to indicate
whether the strengthened   training   had been effective.




                                 42
KANSAS CITY AREA

      As shown by the graph on the next page, a comparison of
the rates of rejection    of applications     for assistance by the
Jackson County center and by the Wyandotte County center
showed that,during    the past 5 years, the Jackson County cen-
ter experienced    a much higher rejection     rate than the
Wyandotte County center regardless       of the eligibility  meth-
ods in use.

       It appears that there were two primary reasons for the
Jackson County center having a higher rate of rejection               of
applications     than the Wyandotte County center,         First,    in
computing the needs of an AFDC family in Kansas where the
family had some earnings,        the State allows more of the earn-
ings to be exempted than does Missouri.            For example, in
computing the needs of a family in Kansas, exemptions are
made for the actual amount of social security            and income tax
withheld,    actual cost of transportation       to and from work (up
to 9 cents a mile in Wyandotte County),and           other work-
related    expenses.     In uissouri,  however, a fixed-dollar        ex-
emption is allowed;        the amount exempted is dependent upon
the applicant's      gross income.    These fixed exemptions are
generally    less than the actual work expenses and taxes in-
curred by the applicant.         Thus families   with similar     incomes
are more likely      to receive assistance     in Kansas than in Mis-
souri,

        Secondly, as discussed earlier           on pages 21 and 22,the
Jackson County center conducted an extensive                eligibility      in-
vestigation      of an applicant      before making an eligibility           de-
cision,     As noted also, an SRS hearing examiner has recom-
mended that Missouri         be held out of compliance with Federal
law because of the length of time being taken to make eligi-
bility    decisions.      The extra time taken by Jackson County to
process applications         would have a tendency to result            in a
higher rejection       rate compared with that of'wyandotte              County
because of the possibility          that (1) evidence gathered during
the detailed      investigations     would show that the applicants
did not meet all of the State's            eligibility    requirements       and
(2) family and economic changes would occur subsequent to
the date of application          and before the detailed         investiga-
tions were completed --such as applicants!              securing employ-
ment or the return of an absent parent.

                                      43
                                                                    RATE OF REJECTION OF
PERCENT                   61.4                                AFDC APPLICATIONS FOR ASSISTANCE
                                                                      KANSAS CITY AREA
60     :               lb\

            4                                                    -\
                                                                      \




      t                                                                                                                                  ---

                                                                                                                                                                                            \ -
                                                                      JACKSON            COUNTY,              MO.
                                                                                                                                                       1                                                  I
                                                                          (Traditional              Method)
40
                                                                                                                                                             \
                                                                                                                                                                 \          I
                                                                                                                                                                                /            \\ I’
30



                                                k,VYANDOTTE           COUNTY,            KAN.
25                                                                                                                           \
                                                  (Simplified       method         adopted
                                                   informally       in e-er            of
                                                   1968 and formally               in
                                                   March      1970)




     3/66       6/66    9/66     12/66   3/67     6/67        9/67         12/67             3/68        6/68        9/68        12/68         3/69   6/69           9/69           12/69   3/70   6/70       9/7Q   12/70,

                                                                                                QUARTER             ENDING
Simplification       of procedures

       As discussed on pages 18 and 19, the Wyandotte County
center,   in effect,     began using a simplied method in the sum-
mer of 1968 because pressure from community groups forced
the county to suspend normal eligibility               checks.   Because of
the pressures,     eligibility          decisions were sometimes made on
the basis of interviews           at the center and examination      of
documents furnished        by the applicant       at the center.    Thus at
the time of the center's            formal adoption of its simplified
method in March 1970, no significant              change occurred in its
method of determining          eligibility,

       The rejection rate data for the Wyandotte County center
(see graph on p. 44) shows that a significant   drop--about     10
percent-- occurred during the June to December 1968 period
and that the rate in later periods was at a similarly       low
level.

Separation       of functions

        The director   of the Wyandotte County center advised us
that he considered the method of determining             the eligibility
of an applicant      to be extremely    important     in maintaining     the
integrity    of the welfare program.         He stated that,     at the
time of the separation        of the eligibility      and service func-
tions (between June and October 19701, he assigned college
graduates,     when possible,    to perform the eligibility        func-
tions.     He expressed the opinion that the quality           of such a
staff permitted      better judgments to be made and probably re-
sulted in keeping the rejection         rate from dropping signifi-
cantly.


       A comparison of the effect          of the adoption of simplified
methods for determining        eligibility      and of the separation    of
the eligibility       and service functions        by the New York City
centers and the Wyandotte County center showed that               the New
York City centers experienced much sharper drops in their
rates of rejection       of applications      after   the adoption of the
simplified      method (see pp. 38 to 40) and after         the separation
of the functions       (see p. 40) than were experienced         by the
Wyandotte County center.


                                      45
         Two factors     may have contributed         to the differences     in
the drop in the rejection           rates.     First,    the New York City
centers separated their eligibility                and services functions
on a specific        day,    In contrast,    the Wyandotte County center
took about 5 months to complete the separation                    of its func-
tions and thus permitted           the eligibility       workers to gradu-
ally become familiar          with its functions.         Secondly, the New
York City centers used clerical             workers--usually        newly hired
or newly trained         high school graduates--to          perform the eli-
gibility     functions.        In contrast,    the Wyandotte County cen-
ter used co_llege graduates to perform those functions,

      A comparison of the rejection     rates for Jackson and
Wyandotte Counties showed that other sharp changes occurred
in the rates at times other than those discussed above.             The
most obvious changes were during the quarters           ended Septem-
ber 1966 through March 1967 in Wyandotte County and in 1969
and 1970 in Jackson County.    We found that these sharp
changes were caused by administrative         decisions   unrelated  to
the methods used for determining     eligibility,

       On August 1, 1966,Kansas           increased the AFDC basic needs
allowance;   this automatically           made more persons eligible for
assistance.

         According     to the director    of the Jackson County welfare
center,      the overall     increase in applications    during 1969 and
1970 created an administrative            logjam for the center's  eli-
gibility      workers.     He said that periodically     the staff in-
tensified       their efforts     to clear out the backlog which re-
sulted in the rejection           rate peaks and valleys during that
period.

LOS ANGELES COUNTY

      All Los Angeles County welfare centers began to sepa-
rate their  eligibility      and service functions  during the last
half of 1969; the separations       were completed during different
periods of time.        Two of the centers,  Pomona and Inglewood,
began using simplified       methods in October 1969.

      As shown by the graph on the next page, the two cen-
ters'   rate of rejection  of applications increased in the
quarters    ended June and September 1969, According   to the


                                     46
                                                                       RATE OF REJECTION OF AFDC APPLICATIONS
      PERCENT                                                                     FOR ASSISTANCE
      60
                                                                                LOS ANGELES COUNTY




      50           -                                                                                      TWO      SIMPLIFIED             CENTERS
                                                                                        (Simplified         Method        adopted         in October          1969)


      45


                                                                                                TWO        TRADITIONAL               CENTERS

      40


P
--I   35



      30

                                                                                                                                                                                                    1

      25                                                                                                                            ALL      COUNTY             CENTERS




      20




      15
           4   /
       0                      I          I      I       I          I        I       I                 I            I            I           I             I                  I          I      I          I       I      I
           3/66        6/66       9/66       12/66   3/67   6/67         9/67   12/67         3/6a              6/68      9/68        12/68            3/69           6/69       9/69       12/69       3/70   6/70   9,‘70   12/70

                                                                                                  QUARTER              ENDING
directors     of the centers,   these increases resulted  from ad-
ministrative     action taken to clear up all pending applica-
tions before adopting the simplified        methods and separating
the eligibility      and service functions.
         Most of the pending applications                 were under investiga-
tion by the property            units which were responsible               for making
collateral        checks on eligibility           factors,     such as appli-
cants' ownership of savings accounts and property                          and re-
ceipt of unemployment compensation.                      The directors       stated
that they had assigned their most experienced workers to as-
 sist in evaluating          the results      of the detailed          investiga-
tions by the property            units to expedite eligibility                deci-
sions.       According to the directors,               the assignment of the
experienced workers and the information                     obtained by the
property      units resulted        not only in a reduction             of the back-
log of pending applications               but also in a more thorough re-
view of the applications              and a temporary increase in the re-
jection      rate.
         Since the adoption of the simplified                  method in October
 1969, the trend in the rejection                 rate for the two simplified
 centers --although        slightly      higher--has       not been signif-
 icantly     different     from all centers in the county or from the
 two traditional        centers used for comparison.                 Perhaps this
 can be attributed         to the similarities            between the manner in
which the two methods were actually                    being carried       out.     As
discussed on pages 22 and 23 the simplified                       centers were US-
 ing a modified version of simplification                     (routinely      inter-
viewing and verifying            certain     eligibility       factors)      and the
 traditional       centers were placing considerable                 reliance     on
 the applicants'        statements rather than independently                    verify-
 ing eligibility        factors      through collateral          sources.

        The county's      centers-- including      the two simplified   cen-
ters --experienced        a relatively     sharp drop in the rate of ap-
plications      rejected     in the quarters     ended December 1969 and
March 1970, the period            in which most of the centers sepa-
rated their eligibility            and service functions    and the new
eligibility      workers were gaining experience          in carrying   out
the eligibility        functions.      Welfare officials    of the two
simplified      centers advised us that the lower rejection           rates
represented,       to some extent,       a return to the rejection    rate
levels existing        before clearing       out the backlog of pending
applications.


                                          48
        The drop in the rejection      rates during the July to De-
cember 1970 period of the two traditional          centers used for
comparison purposes probably occurred because of the in-
crease in the number of applications         that curtailed   the
ability    of eligibility    workers to use their normal investi-
gation techniques.        (See p. 25.)

CONCLUSION

        The findings    of our review indicate           that the rejection
rate is higher when eligibility             workers perform comprehen-
sive eligibility       investigations,        including     checks with col-
lateral    sources, as was noted in Jackson County and in the
Pomona and Inglewood centers in Los Angeles County just
prior to separation        of eligibility        and service functions      and
the adoption of the simplified             method.      Also our findings
indicate    that the rejection         rates drop when changeover to
separation     or simplification         occurs but tend to level off,
or even recover,       as  eligibility      workers gain experience,
Our overall      conclusions     are discussed in chapter 8.




                                       49
                                CHAPTER 6

                              CASE CLOSINGS

       Once an AFDC applicant     is determined to be eligible      for
assistance,   the case  generally    remains   open and  payments   are
continued until   (1) the recipient      requests that the case be
closed or (2) information     becomes available     to the welfare
center that the recipient     is no longer eligible      for assis-
tance,

         The available data we examined pertaining    to the number
of AFDC cases closed in New York City, the Kansas City area,
and Los Angeles County did not indicate       any particular  trend
or wide fluctuations      in the number of cases closed that
could be attributed     to the different  methods for determining
eligibility.

       For example, during 1969 an average of 1.7 cases per
hundred each month were closed by the New York City centers
using a simplified   method, compared with an average of
2 cases by all New York City centers,      Conversely, during
this same period,   an average of 4.2 cases per hundred each
month were closed by the Los Angeles centers using the tra-
ditional   method compared with an average of 5.4 cases by
the centers using the simplified   method.

     In the Kansas City area during 1969, both Jackson County
and Wyandotte County were using the traditional   method. For
all areas visited by us, the percentage of cases closed dur-
ing 1970 was lower than in the 2 preceding years.

CLOSINGS THROUGH
REDETERMINATIONS OF ELIGIBILITY

       Once an applicant      is determined to be eligible         for as-
sistance under a public assistance          program, HEW regulations
require   that his eligibility       be periodically      redetermined.
For the AFDC program, HEW has prescribed             that such redeter-
minations    be made at least every 6 months.            The manner in
which these determinations        are made by the centers visited
by us arc described below.



                                    50
Traditional      method

        Each of the welfare centers we visited                that use the
traditional       method for determining         the eligibility       of appli-
cants for assistance           followed the same procedures          in making
eligibility       redeterminations        as in making initial       eligibility
determinations.           Caseworkers usually       interview     the recipi-
ents in their homes and make their usual investigations                        in
an effort      to ascertain       that recipients'      economic and family
situations       qualify    them for continued assistance,            The re-
determinations         are usually      completed more quickly than the
initial     determinations         since some of the previously         verified
eligibility       factors     are relied upon at the time of redeter-
mination     (for example, age of children             and establishment         of
paternity).

Simplified     method

         The centers visited     by us that were using simplified
methods did not follow the same procedures in redetermining
eligibility      that were used in making initial      eligibility    de-
terminations,        The cefiters initiate  a redetermination      of el-
igibility     by mailing a form to the recipient       to be completed
and returned to the center.

        The content of the forms used in making redetermina-
tions of eligibility       differed    markedly between those used
by the New York City centers and those used by the centers
in the Kansas City area and Los Angeles County, which ,used
a form similar       to the one originally      completed by the recip-
ient.     The New York City centers used a single sheet "decla-
ration"     form on which recipients       could certify  that they
were still      in need, or not in need, of public assistance,         or
note changes which might have an effect            on the extent of
their    entitlement    to assistance.      A copy of this declaration
form is reproduced on the next page.

         Upon receipt    of the completed forms, the welfare cen-
ters'     eligibility    workers review the forms to ascertain
whether the information         reported affects     the recipients'      el-
igibility       and extent of entitlement,       Eligibility      workers
only contact recipients         to clarify  information       noted on the
form.      Center directors     in Wyandotte County and Los Angeles
County advised us that s,uch contacts--usually               by telephone--
are needed in many of the redetermination              cases.
                                        51
Form W-1OC (face)                                                       THE CITY OF NEW YORK
l/24/69                                                          DEPARTMENT     OF SOCIAL SERVICES
                                                                                                                                      Date

                                    DECLARATION                - CONTINUED          NEED       FOR PUBLIC          ASSISTANCE       OR CARE

It is necessary    at this time for us to secure information    from you about your current   situation.                                     Therefore, we want to know
if there have been any changes       which would affect your need for public assistance.       Complete                                     this form.  Sign and date the
certification.   Mail in the enclosed     envelope.  No. postage    stamp is required. It is important                                    that you complete   and return
this form promptly     to prevent any lapse in your public assistance     grant.

Please     check      the box which           applies     to your    situation.

           I CERTIFY             THAT      I AM STILL          IN NEED     OF PUBLIC           ASSISTANCE

             n       THERE          ARE     NO CHANGES

            m        HAVE         ANY      OF THE       FOLLOWING           CHANGES        OCCURRED’

                            a.    Has anyone       left or been added to the members    of your family ? If so, please                          list     the changes,         the date
                                  the changes      occurred   and the relationship to you of the person(s)   involved:




                            b.   Has there been any change in your financial                      situation ? (such as bank accounts,                     Unemployment          Dis-
                                 ability Benefits, Soc~ol Security, Workmen’s                     Compensation,    property, etc.)




                            c.    Has there     been any        change    in your    regular    Income    from     employment,    relatives,           or other    sources?




                           d.     Other    changes?



  u        I AM NO
           BECAUSE:
                            LONGER         IN NEED        OF    PUBLIC       ASSISTANCE          AND     YOU     MAY    DISCONTINUE            SENDING            ME FURTHER             AID




                                                                                                       (For additional     space sse reverse        side)
(I) (We) certify   that all of the informotlon      contaIned     in this Declaration        is true and correct        to the best of our knowledge         and
belief.    We understand      that we will furnish     any additional      information      which may be required          and that we will report imma
diotely   any changes      in circumstances    Including     changes     in flnoncial     resources,       to the public welfare    official    to thorn this
statement    is submitted.       We have not assIgned      any of our assets        or property      to anyone in order to qualify         for public ossist-
once.

(I) (We) know that anyone who obtains,       or attempts  to obtoin,    public assistance                                 or care based on false statement,                   or deliber-
ore co~~reaiment,  is sublecr to prosecution     and punishment      in accordance     with                            the penalties   fixed by law.

                          WiTNESS                                                                                SIGNATURE(S)       OF CLIENT(S)                          DATE
Ilecessq           only     if signature      of client     ts b? markj


                                                                                                                  1.
                                    S8gncture

                                                                                                                  2.
                                    Address




                                                                                           52
       The Wyandotte and Los Angeles County centers accumu-
lated no statistical        data showing the nature of decisions
made on the basis of redetermination           forms.    The center di-
rectors    or supervisors,      however, stated that most of the
recipients    reported     some change in their     family or economic
condition    but that few recipients       were actually    removed from
the welfare rolls       on the basis of these changes.        Tl=Y
stated also--as      did welfare officials       in New York City--that,
once recipients      were on the rolls,     they were usually     removed
on the basis of (1) the specific         request of the recipient        or
 (2) data voluntarily       supplied by informants.

      At the three New York City centers using simplified
methods, we were able to obtain statistics     on the experience
with the use of the declaration   form.    The data, however, is
for all categories  of public assistance    (aged, blind,   dis-
abled, AFDC, and general assistance)     and is not limited    to
the AFDC program.   A summary of the data for the period
April through December 1970, follows,
                                                                                                  Number of
                                                                                                    cases                     Percent

 Total declaration  forms           due during         the April-
   December 1970 period                                                                             23,391                     100.00

           Declaration      forms   received                                                        22,372                      95.64
           Declaration      forms   not received                                                     1,019                       4.36



 Total     declaration      forms   received                                                        22.,372                    100.00
           No changes reported                                                                      21,368                       95.51
           Changes reported    (note a)                                                                 894                       3.99
           Closed--termination     of assistance              requested                                 110                         .50



 Declaration        forms   not received                                                                 &olJ                  100.00

           Recertified     as eligible        (note b>                                                      266                  26.10
           Suspended--assistance           discontinued         (note     C)                                753                  73.90
                                                                    - - - -
 Percent       of cases closed      or suspended          (110 + 753 + 23,391)                                                      3.69

 aInformation   was not available     as to the number of cases, if any, which were closed because of
   a reported change.
 b
   Cases in which follow-up     contacts   by eligibility      workers found recipients   to be eligible  or
   cases in which recipients      came to the welfare     office    once their assistance   payments were
   stopped and eligibility    was reestablished.
 'Cases in which additional              information        could       not be obtained   to determine          eligibility   and
  payments were discontinued.



                                                                     53
                                 CHAPTER 7

                     SPECIAL ELIGIBILITY        REVIEWS

                AT CENTERSUSING SIMPLIFIED METHODS

       Since 1964 HEW has required       States to maintain    a system
of quality   control   over the decisions made by local welfare
workers regarding    eligibility      and extent of entitlement     of
recipients   for public assistance.        Past reviews by HEW and
GAO have shown that the system, as it was generally            imple-
mented by the States, did not provide Federal and State pro-
gram managers with information         needed to assure them that
proper eligibility     determinations     were being made.

         In October 1970 HEW prescribed            a revised quality       con-
trol system designed to ensure the integrity                    of the public
assistance      program by alerting        responsible       program officials
to the need for instituting            corrective     measures whenever es-
tablished     ineligibility      tolerances       (3 percent)     or incorrect
payment tolerances          (5 percent ignoring        first    $5) were ex-
ceeded.      The revised system has been modified to recognize
the increasing       use of the simplified          method of determining
eligibility.

        At the time of our visit   to welfare centers in New York
City, the Kansas City area, and Los Angeles County, data had
not been compiled on the results       of the States'     experience
with the new quality     control  system for the quarters        ended
December 1970 or March 1971.       New York City and Los Angeles
County had made, however, special--although         dissimilar--
eligibility    reviews concerning    implementation    of the simpli-
fied method.      No such reviews were made by Wyandotte County.

NEW YORK CITY REVIEW RESULTS

       The New York City Department of Social Services re-
viewed a sample of all cases approved by the three centers
using the simplified     method during the period April 1, 1970,
through August 31, 1970. The test consisted        of a random
sample of 20 percent of approvals of eligibility         whether
they were based on initial     applications   for assistance     or re-
determinations,     The sample consisted    of 895 family cases,
including    AFDC cases, AF'DC-unemployed parent cases, Home

                                      54
Relief   cases                            (non-Federal  participating),     and other family-
type cases,                               The results  of the New York City review of
these cases,                              as shown in the following     table,  showed that
13.2 percent                              of the cases were ineligible      or questionable   as
to eligibility.

                                                                        Special          Review of       Family Cases
                                                                         Under          the Simplif        d M th d

                                                                               April     l%$&&,'l9~0

                                                                                                                         AFDC-
                                                                                                                    Unemployed                                             other    family
                                                                Total                         AFDC                    p=WIlt                           Home Relief            (note    a)
                                                      Number
                                                      ---------     Percent            Number    Percent          Number    Percent                  Number  Percent      Number      Percent

Verified          as eligible                            -???       ----86.8             469           92.5         32               84.2
                                                                                                                                   -133-.---.-                    75.1       143        82.7

Determined          to be ineligible
   (note b)                                               14            1.6                 7           1.4             2               5.3              3          1.7         2         1.2
Classified          as:
      Unwilling          to participate                    29
      Unable to locate             recipient.              59
      Unable to complete              for
          other       reasons    (death,
          left      state,    in state        in-
           stitution)                                    - 16
Ineligible           or questionable          as to
   eligibility                                           -118       ----13.2               38           7.5             6          -----15.8            44         24.9       30         17.3

                 Total   cases    reviewed 695      100.0       507                                100.0            36             100.0               177       100.0       173        100.0
                                           =-       ~=~=~=~=                                                                                                                            -
%ses        in which a family  payment   is primary     and a nonfamily                                 member     is       included;          for    example,     an AFDC case     which in-
 cludes       a payment for an aged, blind,     or disabled   person.

bA case which was ineligible                      for one       category--such       es AFDC--but                eligible        for another            category--such      as Home Re-
 lief--was   not considered                  ineligible.           Nb data     could be obtained                 on such        cases.




        The city's    review classified       a case as ineligible   only
 if the case was found to be ineligible            for &     types of fi-
 nancial assistance       available    under New York State law.      For
 example, if a reviewer         found that parental     deprivation  did
 not exist in an AFDC case but that the family had limited
 income and would qualify          for assistance    under the non-
 Federal-sharing      Home Relief program, the case was not clas-
 sified   as ineligible,

        It was not possible for us to ascertain     how many of the
 federally   supported cases (AFDC, AFDC-unemployed parent,       and
 other family)   may have been classified   as eligible   on the
 basis that, under the State- and City-financed       Home Relief
 program, they were in need.     In our report on a special re-
 view of the AFDC program in New York City in 1969, however,
 we stated that, of the 543 cases examined for eligibility
 during that review, 58 cases (10.7 percent)      were considered




                                                                                                 55
by us to be ineligible         for AFDC.l Of these 58 cases, we
considered     26 cases   (4.8 percent of all cases reviewed)       to
be eligible     for the   Home Relief      program.   Thus the number
of cases classified       by the city in its special test as eli-
gible for AFDC most       likely    contains    some cases which are not
eligible    for Federal     financial    assistance.

      In discussing    the results     of the testing     of the simpli-
fied method of determining       eligibility    with officials     of the
New York City Department of Social Services,            they informed
us that assistance     payments were discontinued         in 11.6 per-
cent of the cases classified        as: unwilling     to participate
(3.2 percent),    unable to locate (6.6 percent),          or unable to
complete for other reasons (1.8 percent).

        According to these officials,      about half of the cases
in which the recipient      refused to participate        in the special
review were not receiving       assistance     when the city's       inves-
tigator    attempted to interview      the recipient     but had been
receiving     assistance  when the sample case was selected.              In
the other half of the cases, the recipients            refused to co-
operate even though they were still          receiving    assistance.
Examples of cases classified        as unwilling     to participate,        as
furnished     to us by the Department,     follow.

      "Case was reviewed as a 6/70 recert         [recertifica-
      tion],    the case was closed at the client's          re-
      quest prior to the review on 7/16/70 for reasons
      of full     employment, the validator    contacted       the
      former client      at her place of employment on
      10/18/70,     Mrs.            refused to participate         in
      a interview     either  at her home, during her lunch
      hour or at the V&R [validation        and review] of-
      fice."'


1Report   to the Committee on Ways and Means, House of Represen-
 tatives,   entitled "Monitoring  of Special Review of Aid to
 Families With Dependent Children in New York City conducted
 by the Department of Health,    Education,  and Welfare and the
 New York State Department of Social Services,"      (B-164031(3),
 dated October 17, 1969).



                                      56
      "Case was reviewed as a 6/70 accept [new case ac-
      ceptance].    Validator    attempted   to visit
      Mr.                  on 8/20 and g/3/70,     he was not
      at home, notes were left       both times which
      Mr.                  did not respond to.        A regis-
      tered letter   was sent on g/16/70,       no reply re-
      ceived.    The center was notified       and the case was
      closed g/30/70,    at the address of record for rea-
      sons of employment."

      "Case was reviewed as a 5/70 recert.       [recertifica-
      tion],     The client  was visited  on g/24/70 she was
      not at home, a note was left,      another visit      was
      made on g/27/70 again a note was left.         The client
      phoned on g/30/70 and made an appointment          for an
      office   interview,   this appointment   was not kept.
      On 10/8/70 a third visit      was made no contact was
      made, the case was closed on 11/25/70."

       "Case reviewed as a 4/70 accept [new case accep-
       tance].   V&R [validation    and review]   worker vis-
       ited address of'record     and was informed by cli-
       ent's sister   that client   now resided at
       Flushing Avenue, worker visited       this address no
       one was home a note was left,      client  never re-
       sponded, a letter    was sent on 6/8/70 it was not
       returned.    Case was closed on g/17/70,     -kdr*."

        Concerning the cases in which the recipients                   of assis-
tance could not be located,           officials       of the New York City
Department of Social Services advised us that they follow                          a
standard procedure in attempting                to find recipients.           A re-
cipient     is first    sent a letter       requesting     to vis-it     the home.
If no reply is received,         a city investigator            visits     the re-
cipient's     home, and if unable to interview               the recipient,
leaves a note requesting         the recipient          to contact     the in-
vestigator.        If the recipient       still    does not respond, a sec-
ond letter     is mailed advising         the recipient        that his assis-
tance payments are to be suspended,                  Examples of cases in
which the investigators         were unable to locate the recipi-
ents, as provided to us by the department,                   follow.




                                        57
      "Case was reviewed as a 4/70 accept [new case ac-
      ceptance].    An appointment   letter  sent by the
      validator   to the address of record was returned
      marked 'Addressee Unknown.' A new address was se-
      cured from the center the validator      visited     on
      5/14/70 and discovered that the entire        building
      was vacant, the checks of 5/16, 6/l and 6/16/70,
      were returned    to the center and cancelled.        The
      case was closed 6/17/70,     whereabouts unkn~wn.~~

      "Case reviewed as a 5/70 accept [new case accep-
      tance].     A visit  was attempted on g/30/70.    The
      client    was not at home, a collateral   [check] was
      made with the super of the address of record, he
      stated the client     had moved and left no forwarding
      address, that he only came by to pick up his check.
      The center was notified      and the case was closed
      l/18/70    whereabouts unknown, there were no checks
      returned,"

     "Case reviewed as a 5/70 accept [new case accep-
     tance].     V&R [validation    and review investigator]
     visited    on 8/13 and g/14/70 no contact made. A
     collateral    contact with the primary tenant re-
     vealed that client       had never resided at address
     of record,    but just picked up his checks there,
     The 6/l/70,    check was returned     and cancelled.
     The center was notified       on 12/7/70 that the cli-
     ent could not be located,       the case was closed on
     12/16/70."

     "Case was reviewed as a 5/70 accept [new case ac-
     ceptance].    Letters sent client    on 9/2 - g/25/70,
     returned   'Addressee Unknown.'     Home visits  at-
     tempted on 9/30 and 11/2/70,      a contact with the
     center on 11/6/70 showed that the address was cor-
     rect.    The super and tenants of the building      never
     heard of the client.     Case was closed 11/10/70**,
     there were no checks returned."

      We discussed with New York City Department of Social
Service officials     their reasons for not classifying      a case
as ineligible     when the recipient  was receiving   assistance
but (1) refused to cooperate or (2) could not be located.


                                  58
The officials  stated that the recipients     might have been
found to be eligible     if they had cooperated or if they had
been located,    They conceded that the reverse might be true
and agreed that eligibility      was at least questionable.

       New York City did     not have comparable eligibility    data
for centers using the      traditional    method,  The special re-
view of AFDC eligibility        in New York City during 1969 by
HEW and New York State       and monitored by GAO, however, showed
the AFDC ineligibility       rate at that time to be 10.7 per-
cent.1    That review of     eligibility   for 543 cases included
508 cases from centers       using the traditional   method and 35
cases from two centers       using the simplified   method.

        Direct comparisons between the rates of ineligibility
found in the 1969 review and the spec9al review by the city
in 1970 are not susceptible      to meaningful   comparison because
of the differences      in time and methodology.    Nevertheless,
results     from both reviews show that New York City's     AFDC
caseload contains many ineligible      and/or questionable     cases.


1See footnote   on p. 56.




                                   59
LOS ANGELES COUNTY RFVIEW RESULTS

       The Los Angeles County Department of Public Social
Service reviewed a sample of AFDC cases determined to be
eligible    for assistance  under the simplified  method.   The
sample, covering determinations     made from October through
December 1970, was selected from all AFDC cases on the
rolls    at the two welfare centers using the simplified
method.     The sample drawn was based upon random-sampling
techniques.

      The review of AFDC         cases consisted    of (1) a review of
the case record,   (2) an        interview   with the recipient,    and
(3) verification   of data        with collateral    sources, as con-
sidered necessary.    The        results   of the county's   review ap-
pear below.

                                                   Number of
                                                     cases      Percent

Verified      as eligible

Determined       to be totally     ineligible               8       4.0
Determined to be partially            inelibible
  (some member of family           included in
  grant was ineligible)                               -ui         ' 8.9
Totally      or partially    ineligible               _26         12.9
     Total     cases reviewed

       In contrast     to the review in New York City, Los Angeles
 (1) classified      an AFDC case as ineligible     even if the fam-
ily qualified      for assistance   under some other public assis-
tance program and (2) made an eligibility           decision for all
cases--including       those who refused to cooperate or could
not be located--on        the basis of information     in the case
record and data obtained from collateral           sources.

      The county also made a special review of AFDC cases
determined      to be eligible  for assistance under the tradi-
tional method during October 1970. According to local wel-
fare officials,      this review of cases was not undertaken

                                          60
specifically  for comparative     purposes, but the results
could be used to indicate    differences     in ineligibility       at
centers using the simplified      and the traditional        methods.
In this special review, reliance       was placed completely        on
eligibility  data in the case records;       recipients      were not
interviewed  and collateral   checks were not made. Officials
involved in the review told us that,       if these additional
steps had been taken, the percentage of ineligible             cases
probably would have been higher.        The results     of this spe-
cial review are shown below,

                                                   Number of
                                                     cases       Percent

Verified      as eligible                             352          91.9

Determined       to be totally    ineligible

Determined to be partially            ineligible
  (some member of family           included in
  grant was ineligible)                               27            7.1

Totally      or partially    ineligible                             8.1

     Total     cases reviewed

      Considering   that the ineligibility         findings    in the re-
view of cases under the traditional           method may have been
higher than 8.1 percent if full         field   investigations     had
been done, the difference       between the percentage of ineli-
gible cases approved under the traditional              method and under
the simplified    method would have been narrowed.             Under both
methods, however, the percentages          of ineligible      cases ex-
ceed HEW's 3-percent     tolerance    level.




                                          61
                               CHAPTER 8

        GENERAL OBSERVATIONSREGARDING AFDC CASELOADS
        AND THEIR RELATIONSHIP TO ELIGIBILITY            METHODS
        Welfare centers in New York City,            the Kansas City area,
and Los Angeles County that were supposedly using a simpli-
fied method for determining          applicants'eligibility         for as-
sistance were, in fact, using a modified version of the HEW-
prescribed        simplified method.     We found that generally         these
centers were routinely        interviewing      applicants   to obtain
eligibility        data and were routinely      verifying   certain     eligi-
bility      factors.

        Without exception,         the directors    of the centers using
simplified       methods stated that the centers should not rely
completely       on applicants'       statements   as a basis for making
eligibility       determinations.         They have emphasized that, al-
though they believed           that most applicants      are honest, eligi-
bility      workers have an obligation          to assure themselves that
their decisions        are based on a reasonable amount of evidence
that applicants        qualify     for assistance.

       Further,     in our visits    to centers using the traditional
method, we found that verification           of factors  having a bear-
ing on applicants'       eligibility    was not as extensive'as    was
commonly thought,        In essence, there was not a great deal
of difference      between the verifications       being made under the
simplified      methods and the traditional      method in use at the
centers.

      A summary of our findings   for the areas visited,    as
presented  in detail  in the preceding chapters,   follows.

      --AFDC caseloads increased significantly            at all centers
         regardless     of the type of eligibility      method being
         used.     However, caseloads in the centers        using     sim-
         plified     methods experienced   disproportionate       in-
         creases when (11 they first       switched over from the
         traditional     method and (2) the centers first         sepa-
         rated the eligibility       and service functions.

      --Rates of rejection   of applications     for assistance          (1)
         by centers using the simplified     method in
                                   62
  Los Angeles County were similar         to those experienced
  by centers using the traditional          method:   and (2) by
  centers using simplified        methods in New York City and
  in Kansas City area were lower than those experienced
  by centers using the traditional          method in those areas.
  The rates of rejection       tend to be higher where the
  eligibility    workers made comprehensive eligibility           in-
  vestigations,    including     checks with collateral     sources,
  than under a simplified        method which relies    on appli-
  cants ' statements.      Also centers'     rates of rejection
  dropped significantly       immediately    after adopting a
  simplified    method or separating      eligibility   and ser-
  vice functions     but tended to level off, or even re-
  cover, as eligibility       workers gained experience,

--Data available      on closing   of cases did not indicate
   any particular     trend or wide fluctuations        that could
   be attributed    to the different     eligibility     methods
   in use at the centers.        The percentage of cases
   closed during 1970 in all areas visited            by us was
   lower than during earlier       periods.      Welfare offi-
   cials advised us that, once recipients            began receiv-
   ing assistance,      cases were seldom closed on the basis
   of data developed at the time of the periodic             rede-
   terminations    of their eligibility       for assistance     but
   were usually closed on the basis of (1) the specific
   request of a recipient       or e(2) data voluntarily       sup-
   plied by informants.

--Where local welfare departments made special reviews
   of the eligibility           of recipients    of assistance      that
   had been provided under the simplified               methods, in-
   eligibility      rates were found to be high.            Sufficient
   data on ineligibility           under the traditional       method
   was not available          to us to make meaningful       compari-
   sons with the simplified             method,   Nevertheless,       the
   ineligibility       rates in the centers where data was
   available,     regardless       of the method followed       in de-
   termining     eligibility,        either   exceeded the 3-percent
   tolerance     level established          by HEW as the point be-
   yond which special corrective              measures are called
   for or contained many cases where eligibility                  was
   questionable.

                                 63
        Any method for determining       the eligibility     of an appli-
cant for assistance         should be designed to produce proper
and timely decisions.          Ideally this should be done with lit-
tle inconvenience       to the applicants.      The traditional    method
does not provide for achieving         such a goal because of the
time needed to make home visits          and collateral     checks to
verify      various factors    having a bearing on an applicant's
eligibility.

      The simplified   method-- as prescribed       by HEW--was not
wholly acceptable    to those who were responsible          for imple-
menting it at local levels.         Therefore modified simplified
methods were adopted which produced timely results             and, for
the most part, caused little         inconvenience    to the applicant.
The use of a modified     simplified      method tends to result     in
a greater number of applications          being rejected   when com-
pared with the use of a truly simplified           method.

        HEW estimates   that nearly 25 million      persons would be
eligible    for assistance      under its proposed welfare reform
program-- about double the number currently           receiving     public
assistance,      Under a program of that size, it would not ap-
pear practicable      to require detailed     field   investigations
of each eligibility       factor   for each applicant     and still    ren-
der prompt decisions.         On the other hand, the integrity         of
such a program must be ensured by keeping ineligibility                at
a low level.

         To help achieve this objective,  we believe that the
eligibility     method in a welfare program should provide for
      --determining   the eligibility        of applicants    for assis-
         tance on the basis of information         obtained through
         face-to-face   interviews    with applicants       and verifi-
         cation of certain     key eligibility     factors;

      --using,   to the maximum extent possible,        experienced
         personnel and having newly hired personnel trained
         in program policies,     procedures,    and interviewing
         and investigative    techniques    before assigning      them
         to do eligibility    work; and

      --prescribing    a quality   control   system designed to alert
         management when instances      of ineligibility   and incor-
         rect entitlement    rates reach a point at which special
         corrective   action is called for.
                                     64
     APPENDIX




65


                .- __.. -.
                                                                                                                                    APPENDIX   I




A!stAHAM      RImeoFF.       CONN.     PI”L   1. FINNIN.      *RIZ.
FRED     R. HARRIS.      OKLA.         CLWFORD       P. “INSEN.       WYO.
HARRY      C. WRD.     ,I?..   Y*.     ROBERT    P. GRIFFIN.        MIC”.
GAYLORD
    NELSON.
        WIS.
       TOM
         "AIL.
             CHIEF
               COUNSEL                                                                             COMMITTEE    ON FINANCE

                                                                                                  WASHINGTON,        D.C.   20510




                                                                                                   March        3,      1971
                         B-164031               (3)


                        The Honorable
                        Elmer      B. Staats
                        Comptroller       General                               of
                          the United     States
                        Washington,       D. C.                               20548

                         Dear        Mr.       Staats:

                                               In the Senate      Finance        Committee’s         forthcoming
                         deliberations       on the Administration’s              proposed       welfare         reform
                         legislation    - - known       as the Family         Assistance        Plan -- it would
                         be beneficial      if we could obtain         information         concerning           the effect,
                         if any, which       the simplified       method        of determining          eligibility
                         has had on the current            Aid to Families           with Dependent            Children
                         caseloads     and whether         the recently        revised     quality      control        system
                         of the Department          of Health,      Education,         and Welfare          is adequately
                         monitoring      the eligibility       aspects     ‘of the several         public      assistance
                         programs.

                                            The Committee        staff has discussed       the above
                         matters    with representatives       of your staff at HEW on several
                         occasions.      On the basis    of these     discussions,     the Committee
                         requests    the Government      Accounting        Office  to:

                                                              1.             Analyze     AFDC        caseload     data of selected
                                                                             welfare     centers       using the simplified
                                                                             method     and compare           with centers     still
                                                                             using   the traditional         method    of deter-
                                                                             mining     eligibility.

                                                              2.             Evaluate      the effectiveness        of the revised
                                                                             quality     control     system     in monitoring        the
                                                                             eligibility     aspects      of the several      public
                                                                             assistance        programs.
APPENDIX          I


The Honorable
Elmer  B. Staats                                     -2-                          March      3,      1971




                   With   respect     to the                 comparative    analysis      work for
the AFDC     program     (item    number                   l), the Committee         staff has ad-
vised   me that GAO will do work            at               two or three    locations     and will
furnish   a report    on its findings      to               the Comrnittee      by the end of May,

                       The Committee            understands     that GAO plans to start
a review      during     this month        of the effectiveness        of HEW’s     quality
control     system;      this work       is to be performed         in the States     of
California,        Colorado,       Maryland,        Michigan,     New York,       Ohio,
and Texas,        which      account    for nearly       half of all Federal      welfare
funds.

                      Since the fieldwork                on this review              is not planned
to be completed           until August           and a report          not issued         until     some
months      after  that,       we have agreed             that,     to accomplish             item
number      2 above,       periodic         informal        briefings          concerning        the prog-
 ress of this review            and the receipt            of raw data compiled                  by you
in connection       with your           review      would      be very beneficial.                 In this
connection,       we are seeking               ways in which            any shortcomings               in
the existing      quality       control       system       -- particularly              as it relates
to the simplified          method         of determining            eligibility        -- can be over-
come in any welfare               reform        program         approved          by the Congress.

                    I want to          express     the Committee’s       appreciation       for
the valuable     assistance           provided      by your Office    during     our consid-
eration    of H. R. 16311             during    the last session    and assure         you that
this information        will be        of great    help in our further       consideration
of the proposed        reforms.

                        With     every     good     wish,       I am




                                                                       Chairman




                                                                                               U.S    GAO,   Wash..   D.C.
                                                           68