Title page

Contents

Highlights 2

Letter 5

Background 9

TANF Funding and Purposes 9

Fraud Risk Management 10

HHS Identified and Assessed TANF Fraud Risks, but Processes Are Not Fully Consistent with Leading Practices 13

HHS Identified and Assessed TANF Fraud Risks 13

HHS's Processes for Assessing TANF Fraud Risks Are Not Fully Consistent with Leading Practices 15

Conclusions 31

Recommendations for Executive Action 31

Agency Comments and Our Evaluation 32

Appendix I: Temporary Assistance for Needy Families Fraud Risks Identified and Assessed by the U.S. Department of Health and Human Services 35

Appendix II: Comments from the U.S. Department of Health and Human Services 37

Appendix III: GAO Contact and Staff Acknowledgments 43

Figure 1. The Four Components of GAO's Fraud Risk Framework and Selected Leading Practices 11

Figure 2. Fraud Risk Categories and Hypothetical Examples Associated with Temporary Assistance for Needy Families (TANF) 14

Figure 3. Illustrative Examples of Billing Fraud, Misuse of Award Funds, and Misrepresentation with Temporary Assistance for Needy Families (TANF) 15

Figure 4. Key Elements of the Fraud Risk Assessment Process 21

Figure 5. Prioritization of Temporary Assistance for Needy Families (TANF) Fraud Risks 23

Figure 6. Hypothetical Fraud Risk Examples of Beneficiary Misuse of Electronic Benefit Transfer (EBT) Card Funds 27

Figure 7. Example of the Risk of Electronic Benefit Transfer (EBT) Card Fraud by State Employees 28

Figure 8. Fraud Risk Example Associated with Opaque Accounting Practices by a Temporary Assistance for Needy Families (TANF) Subrecipient 30

Table 1. The 21 Temporary Assistance for Needy Families (TANF) Fraud Risks Identified and Assessed by the U.S. Department of Health and Human... 35