prompt_front: You are given two reports by the government agency.



Question: Write a one-page summary of the report 1.



Report 2: USDA’s Food and Nutrition Service (FNS) is responsible for promulgating SNAP program regulations, ensuring that state officials administer the program in compliance with program rules, and authorizing and monitoring retailers from which recipients may purchase food  States are responsible for determining applicant eligibility, calculating the amount of their benefits, issuing benefits on Electronic Benefit Transfer (EBT) cards—which can be used like debit cards to purchase food from authorized retailers—and investigating possible program violations by recipients  SNAP recipients are subject to various work requirements  Generally, all SNAP recipients ages 16 through 59, unless exempted by law or regulation, must comply with work requirements, including registering for work, reporting to an employer if referred by a state agency, accepting a bona fide offer of a suitable job, not voluntarily quitting a job or reducing work hours below 30 hours a week, and participating in a SNAP E&T program or a workfare program—in which recipients perform work on behalf of the state—if assigned by the state agency  SNAP recipients are generally exempt from complying with these work requirements if they are physically or mentally unfit, responsible for caring for a dependent child under age 6 or an incapacitated person, employed for 30 or more hours per week or receive weekly earnings which equal the minimum hourly rate set under federal law multiplied by 30, or are a bona fide student enrolled half-time or more in any recognized school training program, or institution of higher education, amongst other exemptions  SNAP recipients subject to the work requirements—known as work registrants— may lose their eligibility for benefits if they fail to comply with these requirements without good cause  One segment of the work registrant population, SNAP recipients ages 18 through 49 who are “able-bodied,” not responsible for a dependent child, and do not meet other exemptions—able-bodied adults without dependents (ABAWDs)—are generally subject to additional work requirements  In addition to meeting the general work requirements, ABAWDs must work or participate in a work program 20 hours or more per week, or participate in workfare, in which ABAWDs perform work to earn the value of their SNAP benefits  Participation in SNAP E&T, which is a type of work program, is one way for ABAWDs to meet the 20 hour per week ABAWD work requirement, but other work programs are acceptable as well  Unless ABAWDs meet these work requirements or are determined to be exempt, they are limited to 3 months of SNAP benefits in a 36-month period  At the request of states, FNS may waive the ABAWD time limit for ABAWDs located in certain areas of a state or an entire state under certain circumstances  A waiver may be granted if the area has an unemployment rate of over 10 percent or there are an insufficient number of jobs to provide employment for these individuals  If the time limit is waived, ABAWDs are not required to meet the ABAWD work requirement in order to receive SNAP for more than 3 months in a 36-month period yet they must still comply with the general work requirements  Federal requirements for state SNAP E&T programs were first enacted in 1985 and provide state SNAP agencies with flexibility in how they design their SNAP E&T programs, including who to serve and what services to offer  The state has the option to offer SNAP E&T services on a voluntary basis to some or all SNAP recipients, an approach commonly referred to as a voluntary program  Alternatively, the state can require some or all SNAP work registrants to participate in the SNAP E&T program as a condition of eligibility, an approach commonly referred to as a mandatory program  Further, states determine which service components to provide participants through their SNAP E&T programs, although they must provide at least one from a federally determined list  This list includes job search programs, job search training programs, workfare, programs designed to improve employability through work experience or training, education programs to improve basic skills and employability, job retention services, and programs to improve self-sufficiency through self- employment  Total federal expenditures on SNAP E&T programs were more than $337 million in fiscal year 2016  States are eligible to receive three types of federal funding available for state SNAP E&T programs: 100 percent funds—formula grants for program administration, 50 percent federal reimbursement funds, and ABAWD pledge funds—grants to states that pledge to serve all of their at-risk ABAWDs  The Office of Management and Budget has designated SNAP as a high- priority program due to the estimated dollar amount in improper payments—any payments that should not have been made or were made in an incorrect amount (including overpayments and underpayments) under statutory, contractual, administrative, or other legally applicable requirements  According to USDA’s fiscal year 2015 agency financial report, $2 6 billion, or 3 66 percent, of all SNAP benefits paid in fiscal year 2014 were improper, the most recent year for which data are available  SNAP improper payments are caused by variances in any of the key factors involved in determining SNAP eligibility and benefit amounts, and, according to USDA, household income was the most common primary cause of dollar errors  States review the accuracy of SNAP payments to recipients on an ongoing basis, and FNS assesses the accuracy of state reviews and determines a national improper payment rate annually  FNS and states share responsibility for addressing SNAP fraud, which can occur through the eligibility process and when benefits are being used  Specifically, recipients may commit eligibility fraud when they misrepresent their household size, income, or expenses in order to fraudulently obtain SNAP benefits  Another type of fraud—trafficking— occurs when recipients exchange benefits with authorized retailers or other individuals for cash or non-food items (e g  rent or transportation)  In a typical retailer trafficking situation, for example, a retailer may charge $100 to a recipient’s EBT card and give the recipient $50 in cash instead of $100 in food  The federal government reimburses the retailer $100, which results in a fraudulent $50 profit to the retailer  State agencies are directly responsible for preventing, detecting, investigating, and prosecuting recipient fraud, including eligibility fraud and trafficking by SNAP recipients, under the oversight and guidance of FNS  States play a key role in preventing fraud when determining eligibility for SNAP  State agencies collect applicant information, such as household income and employment, and verify it through data matches with other information sources  After benefits are issued, the agencies may monitor EBT transaction data to identify spending patterns that may indicate trafficking  If an individual or household intentionally violates SNAP rules, such as by trafficking or making false or misleading statements in order to obtain benefits, states conduct administrative disqualification hearings or, in some cases, refer the case for criminal prosecution  FNS is responsible for authorizing and overseeing retailers who participate in the program—totaling more than 263,000 in fiscal year 2017—including investigating potential retailer trafficking  In order to participate in SNAP, a retailer applies to FNS and demonstrates that they meet program requirements, such as those on the amount and types of food that authorized stores must carry  FNS verifies a retailer’s compliance with these requirements and generally authorizes retailers for 5 years  FNS then monitors retailers’ continued compliance with program requirements and administratively disqualifies, or assesses money penalties on, those who are found to have trafficked benefits  To this end, FNS officials collect and monitor EBT transaction data to detect irregular patterns of transactions that may indicate trafficking and also conduct undercover investigations  If found to be trafficking, retailers are generally permanently disqualified from SNAP or incur a monetary penalty in lieu of permanent disqualification  According to FNS data, about 14 percent of SNAP recipients, or about 6 1 million, were work registrants who were subject to work requirements, and about 0 5 percent of SNAP recipients, or about 200,000, participated in state SNAP E&T programs, in an average month of fiscal year 2016  (See fig  1 ) According to FNS, most SNAP recipients are exempt from work requirements  For example, according to FNS, almost two-thirds of SNAP recipients were children, elderly, or adults with a disability in an average month of fiscal year 2016—groups that are generally exempt  Further, adults who are already working at least 30 hours a week are also exempt from SNAP work requirements, and according to FNS data, more than 31 percent of non-elderly adult SNAP recipients were employed in an average month of fiscal year 2016  SNAP work registrants who are not participating in SNAP E&T programs may be participating in other activities to meet work requirements or eligible for other exemptions  FNS officials told us that the state data reported to FNS on SNAP E&T participants are the best and most recent data available on this group, yet they also have limitations, which we will continue to explore in our ongoing work  In recent years, the number and percentage of SNAP recipients and work registrants participating in SNAP E&T programs appears to have decreased, according to FNS data  From fiscal year 2008 through fiscal year 2016, the average monthly number of SNAP E&T participants decreased from about 256,000 to about 207,000, or by 19 percent, according to state data on SNAP E&T participants reported to FNS  (See fig  2 ) However, over the same time period, the average monthly number of SNAP recipients appears to have increased from about 27 8 million to about 43 5 million, and work registrants appears to have increased from about 3 million to about 6 1 million, according to FNS data  As a result, the percentage of total SNAP recipients participating in SNAP E&T programs decreased from about 0 9 to about 0 5 percent, and the percentage of SNAP work registrants participating in these programs decreased from approximately 8 1 percent to 3 4 percent, from fiscal year 2008 through fiscal year 2016  Available information suggests the characteristics of SNAP E&T participants are generally similar to those of SNAP work registrants who do not participate in these programs  A recent FNS study, which surveyed SNAP E&T participants and SNAP work registrants who had not participated in SNAP E&T, found that members of the two groups had similar demographic characteristics, including age and gender, and received similar monthly SNAP benefit amounts  Further, at the time they were surveyed, about one third of each group were employed, and their average wage rates were similar, at about $10 per hour  State SNAP agencies have broad flexibility in how they design their SNAP E&T programs, and the characteristics of these programs have changed in several ways over the last decade  For example, states have increasingly moved from mandatory to voluntary programs, focused on serving ABAWDs, and partnered with state and local organizations to deliver services  According to FNS data, states have increasingly moved from mandatory to voluntary SNAP E&T programs in recent years  In fiscal year 2010, 17 states operated voluntary programs; however, by fiscal year 2017, 35 states operated voluntary programs, according to FNS data  (See fig  3 ) FNS officials told us that they have been actively encouraging states to provide more robust employment and training services, such as vocational training or work experience, through voluntary programs  They said that they believe these types of robust services are more effective in moving participants toward self-sufficiency, but that funding may not be sufficient to provide these to the large numbers of participants served in mandatory programs  In addition, FNS officials told us that voluntary programs are less administratively burdensome than mandatory programs, as they allow states to focus on serving motivated participants rather than sanctioning non-compliant individuals  According to FNS officials, when states move to a voluntary program, they generally experience a decline in SNAP E&T participation—a trend consistent with our analysis of FNS data—which may have contributed to the decline in overall SNAP E&T participation  Of the 22 states or territories that changed from a mandatory to a voluntary program from fiscal year 2010 through fiscal year 2016, according to FNS data, 13 experienced a decrease in SNAP E&T participation—ranging from a 21 percent decrease to a 93 percent decrease  Overall, voluntary programs are generally smaller than mandatory programs, according to our analysis of FNS data  In fiscal year 2016, for example, the 32 states or territories operating voluntary programs together served less than half of the total number of SNAP E&T participants served by the 21 states or territories operating mandatory programs, although these two groups of states had similar numbers of new work registrants  Furthermore, states operating voluntary programs served an average of nearly 7,000 SNAP E&T participants per state, while states operating mandatory programs served an average of 23,000 SNAP E&T participants per state  Evidence suggests that states have increased their focus on serving ABAWDs—a sub-population of SNAP recipients subject to benefit time limits and additional work requirements—through SNAP E&T, as related waivers have expired in recent years, according to FNS data  During and after the 2007-2009 recession, the majority of states operated under statewide waivers of the ABAWD time limit due to economic conditions  However, as the economy recovered, most statewide waivers expired, and the ABAWD time limit was reinstated  For example, according to FNS data, in fiscal year 2011, 45 states or territories had a statewide waiver and 7 states had a partial waiver—one applying to certain localities  By fiscal year 2017, the number of states or territories with a statewide waiver had decreased to 9, while 27 states had partial waivers  FNS officials and state SNAP agency officials we spoke with in some states told us that, as the waivers have ended, state SNAP E&T programs have become increasingly focused on serving ABAWDs  Although state data on SNAP E&T programs reported to FNS suggest a greater percentage of ABAWDs have been participating in these programs in recent years, according to FNS officials, these data have limited usefulness in assessing state trends in serving ABAWDs for several reasons  For example, in recent years, FNS officials learned that there was widespread confusion among states regarding the need to track ABAWDs when waivers were in place, and that as a result, some states had not been tracking ABAWDs or properly documenting SNAP recipients’ ABAWD status  This is consistent with what some of the selected states we spoke with reported  As part of our ongoing work, we are continuing to explore the availability and reliability of data on ABAWDs  State SNAP agencies have increasingly partnered with other state and local organizations, such as workforce agencies, community-based social service providers, and community colleges, to provide services to SNAP E&T participants in recent years, according to FNS and states we selected for our review  In fiscal year 2018, nearly all states partnered with at least one other organization to deliver SNAP E&T services, with the majority partnering with more than one, according to an analysis by FNS  In recent years, FNS has urged states to make use of the broad network of American Job Centers  The American Job Centers, also known as one- stop centers, are funded through the Department of Labor’s Employment and Training Administration and designed to provide a range of employment-related services, such as training referrals, career counseling, job listings, and similar employment-related services, to job seekers under one roof  Our prior work has highlighted the value of coordination between federally funded employment and training programs to ensure the efficient and effective use of resources  Despite encouraging such partnerships, FNS officials said that American Job Centers typically provide lighter touch services to SNAP E&T participants, such as job search and job search training, and they therefore may not be well suited for SNAP E&T participants who have multiple barriers to employment  In our 2003 work on SNAP E&T, we found that while workforce system programs offered some of the activities needed by SNAP E&T participants, officials from 12 of the 15 states we contacted said that most participants were not ready for these activities, in part, because they lacked basic skills, such as reading and computer literacy, that would allow them to successfully participate  An alternative service delivery strategy that FNS has promoted is the development of third party partnerships with community-based social service providers, community colleges, and other entities to help states enhance their SNAP E&T programs  According to FNS, in this model, third party organizations use non-federal funding to provide allowable SNAP E&T services and supports, which are then eligible for 50 percent federal reimbursement funds through the state’s SNAP E&T program  According to FNS officials, third party partnerships enable states to leverage additional resources, grow their SNAP E&T programs, and reach more SNAP participants  In addition, FNS officials said that these partnerships allow states to improve their program outcomes by tapping into providers currently serving communities that include SNAP recipients  Federal 50 percent reimbursement funds expended increased from nearly $182 million to more than $223 million, or by 23 percent, from fiscal year 2007 to fiscal year 2016
Report 2:  Federal internal control standards state that management should share quality information throughout an organization to enable personnel to perform key roles, and we have previously reported that by regularly sharing useful performance information with leaders at multiple levels of an organization, agencies can help leaders make informed decisions  Without this information, individual unit commanders or the commanders’ supervisors cannot determine whether Coast Guard servicemembers under their command completed TAP or identify whether there is a need for corrective actions to ensure they do so  As we mention earlier in this report, the Coast Guard plans to adopt DOD’s TAP-IT Enterprise System, which according to officials, could help the Coast Guard ensure eligible servicemembers participate in the program  According to a Coast Guard official, once the system is fully implemented by the Coast Guard, commanders will be required to verify and document whether Coast Guard servicemembers under their command completed TAP, potentially making commanders more vested in the process  We previously reported that a senior DOD official said that the TAP-IT Enterprise System may be able to generate unit- and installation-level reports for the four DOD-led military services by October 2018, and a Coast Guard official said he would work with DOD to identify whether this capability could also extend to the Coast Guard  Once data reliability improves, sharing installation and unit-level TAP performance information with Coast Guard commanders could support monitoring efforts  The performance measures tracked by the TAP interagency working group do not reflect TAP implementation broadly across all five military services, according to a Coast Guard official we interviewed  The Coast Guard does not currently share TAP data it collects with DOD or other members of the interagency performance working group  While the benefits of interagency data sharing cannot be realized without the Coast Guard first improving the quality and completeness of its TAP data, we have identified leading practices for interagency collaboration, including that members of interagency working groups identify and share relevant agency performance data  Moreover, federal internal control standards call for management to communicate quality information to external parties  Because the Coast Guard does not share TAP data, the performance measures tracked by the interagency group do not reflect Coast Guard servicemembers’ experiences and thus do not provide a complete picture of TAP implementation across the five military services  More specifically for the Coast Guard, without such data sharing, future TAP evaluations may not be able to assess the effectiveness of TAP delivery, hindering the Coast Guard’s ability to make program adjustments to better prepare its servicemembers to successfully transition to life after military service  Coast Guard officials said migrating to DOD’s TAP-IT Enterprise System will facilitate information sharing with interagency partners and that improving data completeness and reliability is a top priority for 2018  Given the sacrifices servicemembers have made to serve their country, it is imperative they are afforded every chance to adequately prepare for civilian life before leaving military service  In order to make a successful transition, servicemembers need to be well-positioned to get a job or make an informed decision about whether to pursue additional education or start a small business  As such, the Transition Assistance Program (TAP) serves a critically important function—to give servicemembers the tools and information they need to successfully transition to life outside the military  Federal law requires that the Coast Guard ensure all eligible servicemembers participate in the program, but thousands of Coast Guard servicemembers may have transitioned without the support provided by TAP  Reliably tracking participation has proven to be a challenge for the Coast Guard, in part because it lacks a current Commandant Instruction that defines the roles and responsibilities of staff responsible for implementing TAP and ensuring complete and reliable data are collected  In preparing to issue an updated Commandant Instruction, the Coast Guard has taken a positive step toward addressing the limitations of its current TAP data, and will be better positioned to ensure compliance with VOW Act requirements using reliable data  In addition to collecting reliable data, the Coast Guard could further demonstrate its commitment to meeting TAP requirements by establishing formal performance goals that measure the extent to which Coast Guard servicemembers participate in TAP  By establishing interim performance goals, the agency would be able to show its progress towards achieving full compliance  Moreover, communicating performance goals to unit and installation commanders could enhance accountability and might spur progress toward meeting federal program requirements  By expanding its monitoring efforts beyond tracking participation in TAP’s required classes, the Coast Guard could enhance its ability to ensure other TAP requirements are met and that its servicemembers are able to access additional transition resources  Monitoring the timeliness of participation would help ensure Coast Guard servicemembers have adequate time to complete TAP before leaving the military  Further, by monitoring requests to participate in additional 2-day classes and 2-day class attendance, the Coast Guard would be in a better position to identify whether servicemembers who wish to attend the classes are able to do so, to determine whether more classes are needed, and to communicate this information to the interagency partners responsible for delivering these classes  Commanders can also play a key role in bolstering TAP participation  Having an up-to-date written Commandant Instruction that explicitly describes commanders’ roles and responsibilities could enhance commanders’ ability to ensure TAP’s proper implementation and compliance with VOW Act requirements  Moreover, once data quality improves, providing commanders a mechanism to readily determine whether servicemembers under their command have completed TAP could help them monitor the program to ensure that all TAP-eligible servicemembers receive the resources they need to successfully transition to civilian life  Finally, once more reliable data on Coast Guard servicemember participation are available, sharing this information with interagency partners could improve TAP implementation on a broader scale  Sharing reliable data, such as participation figures for the Coast Guard, would give TAP interagency partners a more complete picture of implementation across all five military services  Sharing such information would also enhance the interagency group’s ability to evaluate how well TAP serves the entire population of servicemembers  Improving the reliability of the Coast Guard’s TAP data will be essential for the benefits of data sharing to be realized  To ensure that all eligible Coast Guard servicemembers are provided the opportunity to complete the Transition Assistance Program (TAP), we recommend the Commandant of the Coast Guard take the following seven actions: Issue an updated Commandant Instruction that establishes policies and procedures to improve the reliability and completeness of TAP data by including when and by whom data should be recorded and updated  (Recommendation 1) Establish a formal performance goal with a measurable target for participation rates in VOW Act-mandated portions of TAP  (Recommendation 2) Monitor the extent to which Coast Guard servicemembers participate in TAP within prescribed time frames  (Recommendation 3) Monitor the extent to which Coast Guard servicemembers who elect to participate in additional 2-day classes are afforded the opportunity to attend  (Recommendation 4) Issue an updated Commandant Instruction that defines the roles and responsibilities of the personnel who administer the program and ensure servicemembers’ participation  (Recommendation 5) Once reliable data are available by installation or unit, enable unit commanders and the higher-level commanders to whom they report to access TAP performance information specifically for the units they oversee so that they can monitor compliance with all TAP requirements  (Recommendation 6) Once reliable data are available, share TAP information with DOD and other interagency partners, such as data on participation in required TAP courses and additional 2-day classes  (Recommendation 7) We provided a draft of this report to the Departments of Homeland Security, Defense, Education, Labor, and Veterans Affairs, the Office of Personnel Management, and the Small Business Administration for their review and comment  The formal written response of the Department of Homeland Security (DHS) is reproduced in appendix II  In addition, DHS provided technical comments from Coast Guard officials that we incorporated into the report as appropriate  The other agencies did not provide any comments  In its written comments, DHS agreed with all seven of our recommendations  If you or your staff have any questions about this report, please contact me at (202) 512-7215 or brownbarnesc@gao gov  Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report  GAO staff who made key contributions to this report are listed in appendix III  This report examines (1) what is known about the reliability of Transition Assistance Program (TAP) data on participation levels and the factors that affect Coast Guard servicemembers’ participation, and (2) the extent to which the Coast Guard measures TAP performance and monitors key areas of TAP implementation  To address these questions, we surveyed Coast Guard installations with full-time TAP operations; reviewed Coast Guard data on TAP participation for fiscal years 2012 to 2017; visited one Coast Guard installation and interviewed TAP managers from two additional Coast Guard installations selected for diversity in location, among other reasons; and interviewed Coast Guard officials responsible for overseeing TAP implementation for the Coast Guard  We also reviewed relevant federal laws, regulations, policies, documents, and publications  Information in this report is current as of the date GAO received formal agency comments from DHS  Our survey of Coast Guard installations with full-time TAP operations asked about how TAP was being implemented  The survey included questions about the accessibility of TAP components, challenges Coast Guard servicemembers faced in attending the components, and the level of commander support for participation  Our survey targeted front-line TAP managers, who could draw on the expertise of TAP course facilitators, transition counselors, career counselors, and other key TAP staff as necessary  After drafting the survey questions, we pretested them with a TAP manager to ensure (1) the questions were clear and unambiguous, (2) terminology was used correctly, (3) the survey did not place an undue burden on agency officials, (4) the information could feasibly be obtained, and (5) the survey was comprehensive and unbiased  We revised the content and format of the survey based on the feedback we received  We initially sent the survey to TAP managers at all 13 Coast Guard installations at which TAP staff were located  We removed one installation when we later found that the TAP manager position was vacant and revised the total to 12 Coast Guard installations  The survey was accessible online from October 31, 2016, through January 18, 2017, through a secure server that recipients were able to access using unique usernames and passwords  We sent an email announcement to TAP staff at all 13 Coast Guard installations at which TAP staff are located on October 24, 2016  We sent a second email on October 31, 2016 to notify participants the survey was available online, and provided their unique passwords and usernames  We sent two follow-up e-mails (November 14, 2016 and November 28, 2016) to those who had not responded  Finally, we contacted all remaining nonrespondents by telephone starting December 5, 2016  The survey was available online until we reached a 100 percent response rate  To increase our understanding into how TAP was being implemented at installations and supplement our survey findings, we visited one Coast Guard installation and interviewed TAP managers from two additional installations  We selected the installations based on several factors, including the size of the installation, proximity to Department of Defense (DOD) installations, and diverse locations in the United States  (See table 1 ) At Coast Guard Base Elizabeth City in North Carolina, the installation we visited, we interviewed the TAP manager, uniformed career counselors, and senior installation leadership  During our interviews with TAP managers at all three installations, we asked about the extent to which Coast Guard servicemembers participate in TAP’s required and additional 2-day classes, including whether the servicemembers attended classes online or in a classroom setting, challenges to ensuring Coast Guard servicemembers participate in TAP, and the extent to which they monitor Coast Guard servicemembers’ participation in TAP  At Coast Guard Base Elizabeth City, we also interviewed 25 Coast Guard servicemembers (both officers and enlisted personnel) to get their perspective on how well TAP worked and any challenges they had participating  To help guide the interviews with the Coast Guard servicemembers, we asked them to complete a short questionnaire that asked about their experiences with the TAP program  We also interviewed TAP staff at Coast Guard headquarters to learn about TAP policy, monitoring efforts, and performance measures for the service overall  For example, we asked what policies and procedures guide installations’ TAP implementation; what performance measures the Coast Guard uses to monitor TAP; how performance results are reported and shared with different levels of Coast Guard leadership; and to what extent the Coast Guard uses results from TAP participant satisfaction assessments  We also asked whether the Coast Guard plans to shift to DOD’s new TAP-IT Enterprise System and how using the new system could affect its monitoring efforts in the future  In evaluating the Coast Guard’s performance measures, we focused on measures related to servicemembers’ transition experiences before leaving the military  We did not gather information on post-program evaluations and outcomes because they were determined to be outside the scope of this review  We reviewed DHS data on TAP participation for fiscal years 2012 to 2017  To assess the reliability of the Coast Guard’s TAP participation data, we interviewed agency officials knowledgeable about the data  We determined these data were not sufficiently reliable due to limitations with the Coast Guard’s data collection system  Specifically, the system lacks adequate controls to ensure TAP data are complete and accurate  We conducted this performance audit from February 2016 to April 2018 in accordance with generally accepted government auditing standards  Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives  We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives  In addition to the contact named above, Meeta Engle (Assistant Director), Amy MacDonald (Analyst-in-Charge), James Bennett, Holly Dye, David Forgosh, Ying Long, Jonathan McMurray, Jean McSween, Andrew Sherrill, Benjamin Sinoff, and Timothy Young, made significant contributions to this report  Also contributing to this report were Susan Aschoff, Jessie Battle, Ramona Burton, Melinda Cordero, Elizabeth Curda, Dawn Hoff, Ben Licht, Serena Lo, Sheila McCoy, Almeta Spencer, Christopher Schmitt, James Whitcomb, and Jill Yost  Transitioning Veterans: DOD Needs to Improve Performance Reporting and Monitoring for the Transition Assistance Program, GAO-18-23  Washington, D C : November, 8, 2017  Transitioning Veterans: Improvements Needed in DOD’s Performance Reporting and Monitoring of the Transition Assistance Program, GAO-18-225T  Washington, D C : November 8, 2017  Department of Defense: Transition Assistance Program (TAP) for Military Personnel, GAO-16-302R  Washington, D C : December 17, 2015  Veterans’ Employment: Need for Further Workshops Should Be Considered before Making Decisions on Their Future, GAO-15-518  Washington, D C : July 16, 2015  Military and Veteran Support: DOD and VA Programs That Address the Effects of Combat and Transition to Civilian Life, GAO-15-24  Washington, D C : November 7, 2014  Veterans Affairs: Better Understanding Needed to Enhance Services to Veterans Readjusting to Civilian Life, GAO-14-676  Washington, D C : September 10, 2014  Transitioning Veterans: Improved Oversight Needed to Enhance Implementation of Transition Assistance Program, GAO-14-144  Washington, D C : March 5, 2014  Military and Veterans’ Benefits: Enhanced Services Could Improve Transition Assistance for Reserves and National Guard, GAO-05-544  Washington, D C : May 20, 2005  Military and Veterans’ Benefits: Observations on the Transition Assistance Program, GAO-02-914T (July 18, 2002) 

ground_truth: Education provided over $122 billion in grants, loans and work study funds to help students pay for college at about 6,000 schools in fiscal year 2017. Education is responsible for certifying that these schools are eligible for and capable of properly administering federal student aid funds. Schools are required to submit an annual compliance audit that provides information on schools' administrative capability, which Education considers in its school certification decisions. GAO was asked to review Education's process for certifying schools to receive federal student aid. This report examines (1) how Education certifies schools to administer federal student aid and how frequently schools are approved and denied certification; and (2) the role of compliance audits in the certification process and what, if any, steps Education has taken to address the quality of the audit information. GAO analyzed data on school certification outcomes for calendar years 2006-2017 (when GAO determined data were most reliable); reviewed data and reports summarizing Education's reviews of compliance audit quality for fiscal years 2006-2017; reviewed a non-generalizable sample of 21 school certification decisions from fiscal years 2015 and 2016, selected for a mix of decisions, school characteristics, and geographic regions; examined relevant federal laws, regulations, policy manuals and guidance; and interviewed Education officials. The Department of Education (Education) is responsible for evaluating a variety of information to determine whether a postsecondary school should be certified to administer federal student aid programs, and agency data show that it approves most schools that apply. Education procedures instruct regional office staff to review school policies, financial statements, and compliance audits prepared by independent auditors, among other things. Education can certify schools to participate in federal student aid programs for up to 6 years, or it can provisionally certify them for less time if it determines that increased oversight is needed—for example, when a school applies for certification for the first time or when it has met some but not all requirements to be fully certified. In calendar years 2006 through 2017, Education fully or provisionally approved most schools applying for initial or recertification to receive federal student aid (see figure). Note: Schools applying for certification for the first time and approved are placed in provisional certification. In deciding whether to certify schools, Education particularly relies on compliance audits for direct information about how well schools are administering federal student aid, and Education's offices of Federal Student Aid and Inspector General have taken steps to address audit quality. The Inspector General annually selects a sample of compliance audits for quality reviews based on risk factors, such as auditors previously cited for errors. In fiscal years 2006 through 2017, 59 percent of the 739 selected audits received failing scores. Audits that fail must be corrected; if not, the school generally must repay federal student aid covered by the audit. Because higher risk audits are selected for review, Inspector General officials said they cannot assess the overall prevalence of quality problems in compliance audits. These two Education offices have taken steps to improve audit quality. For example, the Inspector General offered additional training to auditors on its revised 2016 audit guide and provided guidance to schools on hiring an auditor, while Federal Student Aid created a working group to strengthen its procedures for addressing poor quality compliance audits. Education's efforts to address audit quality could help ensure that these audits provide reliable information for school certification decisions. GAO is not making recommendations in this report.

prompt_front: You are given two reports by the government agency.



Question: Write a one-page summary of the report 2.

Report 1: To participate in federal student aid programs, postsecondary schools must be 1) certified by Education as eligible to participate in federal student aid programs, 2) accredited by a recognized accrediting agency— generally nongovernmental, nonprofit entities—and 3) authorized by the state in which the school is physically located  (See table 1 ) FSA is responsible for ensuring that schools with access to federal student aid are eligible and capable of properly administering federal student aid funds, according to standards established by Education and authorized by the Higher Education Act  These standards include requirements for schools related to communication, personnel, policies, procedures and reporting, and adequate checks and balances in a system of internal controls, among others  FSA is also responsible for conducting ongoing financial oversight of schools that receive federal student aid  This includes reviewing annual financial statement audits to assess a school’s financial responsibility and providing additional oversight to schools that do not meet financial responsibility standards outlined in the Higher Education Act  Schools that participate in federal student aid programs generally are required to submit annual compliance audits  The compliance audit provides information that FSA can use to assess the school’s administration of federal student aid programs and to identify schools that require additional oversight because they do not fully comply with federal student aid administrative requirements  The OIG is required to assess the quality of school compliance audits and selects a sample to review each year  The OIG reviews the audit documentation to ensure that it supports the auditor’s opinions and that the audit results are reliable  According to agency guidance, FSA staff should refer compliance audits to the OIG for a quality review if they have any concerns about the quality of the audits  Both FSA and OIG officials stated that the OIG has primary responsibility for issues related to audit quality  When a school first applies to be certified to administer federal student aid, FSA will either approve the school for provisional certification— generally for 1 year—or deny certification (see fig  1)  Once a school is approved for initial certification and applies for recertification, FSA will provisionally or fully recertify the school, or deny certification  According to FSA procedures, FSA uses provisional certification for initial, or first time, applicants, as well as schools that are applying for recertification  Provisional certification is the only approval status available to new schools  In addition, FSA may decide to recertify a school provisionally if it determines that a school has not fully complied with federal student aid requirements  FSA prohibits provisionally certified schools from opening new campus locations or offering new programs without approval from FSA, and provisionally certified schools that are denied recertification have a less substantive appeals process than fully certified schools  Further, recertified schools in provisional status are subject to more FSA oversight than schools that are fully certified  FSA procedures allow for some discretion in determining for how long to certify a school  Provisional recertification generally lasts 1 to 3 years, while full recertification generally lasts 4 to 6 years  Education’s FSA regional staff draw information from a variety of sources during the certification process to assess a school’s capability to administer federal student aid  According to FSA documents, regional staff are to review information collected from schools and third parties, such as annual compliance audits conducted by independent auditors, among other information sources  FSA staff responsible for different functional areas, such as financial and compliance audits, accreditation status, and student loan default rates, compile and review information on schools, according to FSA procedures  FSA officials told us that these staff meet to discuss any potential program eligibility issues and to ensure that all information relevant to a school is considered before making a certification decision  FSA’s certification procedures outline some of the key information that regional staff should assess, some of which is relevant to both initial and recertification decisions, and some of which is specific to each type of certification process (see fig  2)  Documents and policies provided by schools: FSA regional staff are directed to review documents submitted by schools, including school catalogs, and certain school policies—such as admissions and student refund policies—that are relevant to assessing administrative capability  Proof of accreditation: School accreditors are responsible for applying and enforcing standards to help ensure that the education offered by schools is of sufficient quality to achieve program objectives  Accreditation of schools, which generally includes a site visit, takes place on a cycle that may range from every few years to as many as 10 years  Proof of state authorization: States are responsible for authorizing schools to offer postsecondary education and respond to student complaints  The process for approving schools varies from state to state and may include on-site visits  Audited financial statements: FSA regional staff are directed to review information in audited financial statements to assess schools’ financial health  Schools are required to have annual audited financial statements issued by an independent certified public accountant or a government auditor  Self-reported school data: FSA regional staff are instructed to review data on continual student enrollment in eligible academic programs and student withdrawal rates  Pre-certification review and school outreach: FSA staff are responsible for contacting school personnel to verify the school’s application information and discuss relevant policies, procedures, and other materials relevant to administering federal student aid  FSA visits to newly certified schools: After schools first apply and are provisionally certified, Education requires FSA regional staff to contact them within 3 months and schedule an on-site school visit  Schools cannot administer federal student aid until they are certified, so FSA has limited information on how newly certified schools are administering federal student aid programs  School visits provide FSA with an opportunity to collect additional information about a provisionally certified school’s ability to administer federal student aid  Some FSA regional staff we interviewed told us that on-site visits to newly certified schools provide valuable first-hand information about whether these schools are administering federal student aid in accordance with program requirements  If FSA regional staff find that a school is having difficulties administering federal student aid, FSA procedures direct regional staff to assist schools by providing clarification and guidance on federal student aid policies, recommending additional training for school officials, and helping schools develop a plan to track and report on their corrective actions, among other things  Compliance audits: FSA staff are directed to review information in compliance audits to determine if schools are complying with specific federal student aid requirements  Generally, compliance audits are required to be conducted annually by an independent auditor, and submitted with the school’s audited financial statements  Program reviews: FSA regional staff are also responsible for conducting program reviews, usually on site, which evaluate school compliance with federal requirements and can provide more in-depth information on schools than compliance audits, according to some FSA staff we interviewed  Generally, FSA selects schools for program reviews that it considers to be at risk for noncompliance, according to Education documents  FSA conducts approximately 250 to 300 program reviews per year, according to FSA documentation  FSA staff from all four of our selected regional offices told us they consider results from any recent program review in decisions about recertification and noted that such information, when available, is valuable for assessing schools’ administrative capability  Education data: FSA regional office staff are also directed to review data on student loan default rates  From calendar years 2006 through 2017, FSA approved most schools applying for certification to receive federal student aid, according to Education data  From 2006 through 2017, FSA approved 89 percent of schools new to administering federal student aid for provisional certification and denied 11 percent of schools overall (see fig  3)  Denial rates for initial certification were 11 percent for public and for-profit schools and 14 percent for nonprofit schools  For more information on 2006-2017 school certification outcomes by year, see appendix I  FSA regional staff responsible for reviewing school applications told us that schools are denied initial certification for issues such as a lack of accreditation, not offering eligible programs for federal student aid, or not meeting other statutory eligibility requirements  For example, FSA staff said that for-profit and vocational schools that apply for initial certification are required to provide an eligible program continuously for 2 years prior to their initial application  FSA staff may also advise schools that do not meet basic eligibility requirements not to apply, which could result in fewer initial certification denials overall  In addition, FSA staff said they often work with schools to address compliance problems, for example, by providing guidance on revising school policies that do not meet requirements, so that the schools are able to meet FSA’s certification requirements  From 2006 through 2017, 76 percent of schools applying for recertification were fully recertified, 21 percent were provisionally recertified, and 3 percent were denied recertification  Sixty-six percent of for-profit schools were fully recertified, 28 percent were provisionally recertified, and 6 percent were denied  In comparison, 86 percent of public schools were fully recertified, 14 percent were provisionally recertified, and fewer than 1 percent were denied  Nonprofit schools had rates similar to public schools, with 80 percent fully recertified, 18 percent provisionally recertified, and 2 percent denied (see fig 4)  FSA staff from all four of our selected regional offices told us that they typically deny recertification when a school no longer meets eligibility requirements, such as losing accreditation, or when there is significant evidence of serious issues or massive wrongdoing, such as fraud  For example, managers in one regional office told us they denied recertification for a school because they had evidence that the school was accepting students without valid high school diplomas and referring them to diploma mills to boost enrollment  Staff in two FSA regional offices told us that they can also choose to fully recertify a school for shorter periods of time if they uncover issues related to administrative capability  For example, one regional staff member told us that when they found a school’s default rate for one federal student loan program had been high for the prior 3 years, the regional office decided to shorten the school’s full recertification period from 6 to 4 years, to allow FSA staff to review the school again sooner  FSA staff from all four of our selected regional offices told us that they provisionally certify schools for a variety of reasons, including when a school submits a late compliance audit or when a recent compliance audit indicates that a school could potentially have significant problems  Generally, schools in provisional certification status are subject to additional monitoring by FSA compared to schools that have been fully certified  For example, Education officials said that if they have concerns about a provisionally certified school’s student withdrawal rate, they can add provisional conditions requiring the school to submit monthly enrollment rosters for review  Staff in two FSA regional offices told us that in other cases, if they have concerns about how a school is administering federal student aid or suspected fraud, they can put a school on provisional status and conduct a program review to collect more detailed information on compliance with federal requirements  Education data also show that most schools remain in provisional status the first time they are recertified—62 percent from 2006 to 2017  In contrast, FSA staff fully recertified over three-quarters of schools that applied for recertification a second time during the same time period (see table 2)  For more information on first and second recertification outcomes by school sector, see appendix II  We found that FSA generally relies on compliance audits as the only annual on-site review to determine how schools applying for recertification administer federal student aid  The audits provide direct information collected by independent auditors from school visits and file reviews examining how schools administer federal student aid and comply with program requirements  For example, OIG audit guidance directs auditors to check whether schools are distributing federal student aid to eligible students and accurately calculating student loan amounts  FSA officials and staff from all four of our selected regional offices said that compliance audits are a key source of information they use to assess a school’s administrative capability  Officials from Education’s OIG said that the quality of information in compliance audits varies substantially and depends on the auditor  The OIG has found quality problems in some of the compliance audits it selects—based on auditor and school risk factors—for its annual quality control reviews  Because the OIG selects higher risk audits to review, its reviews are more likely to detect problems, and OIG officials said they cannot make any conclusions about the overall prevalence of quality problems in compliance audits  However, our analysis of OIG quality review data found that of the 739 compliance audits reviewed by the OIG from fiscal years 2006 through 2017, the OIG passed 23 percent (173) and failed 59 percent (436)  An additional 18 percent (130) passed with deficiencies  For example, across the 41 compliance audits it reviewed in fiscal year 2016, the OIG identified 264 quality deficiencies with the auditor’s work, according to our analysis of quality reviews provided by the OIG  The most frequently cited issues in these 41 audits were: reporting (24 audits), such as lack of evidence that the auditor tested whether the school correctly reported student enrollment status; student eligibility (20 audits), such as lack of evidence that the auditor verified student school attendance; and administrative capability (19 audits), such as lack of evidence that the auditor determined whether the accreditor had been notified about a change in school ownership within 10 days  FSA officials also identified quality issues with the compliance audits of some schools  FSA headquarters officials and staff we interviewed in several regional offices said they have seen schools with significant program review findings that had not been identified in annual compliance audits  FSA staff said they have referred some compliance audits to the OIG for quality reviews when they have had questions about the thoroughness of an audit  We also found a couple of examples in our review of school certification documents in which the findings identified in a school’s compliance audit were different from the findings identified by FSA in a program review of the same school covering the same time period  In one case, FSA staff said they probably would have fully recertified the school if they had relied solely on the compliance audit  Instead, they used the program review to determine that the school should be provisionally recertified  Compliance audits and program review findings are based on a sample of student records, and FSA staff said some differences in findings might be explained by differences in the records reviewed  FSA and OIG officials cited several issues that can affect the quality of compliance audits  FSA and OIG officials we interviewed said that some auditors conducting compliance audits have insufficient training in federal student aid, which contributes to audit quality problems  OIG staff also said that even if an auditor meets the general training hour requirements for auditors, the training content may not be relevant for federal student aid audits  In addition, FSA and OIG officials said some schools— particularly smaller schools—tend to hire less experienced auditors in order to save money, often resulting in poor quality audits  FSA officials in most selected regional offices said that additional training on federal student aid for auditors who are new to or unfamiliar with federal student aid could help improve audit quality  FSA and the OIG recently have taken steps to address audit quality and the information available to FSA staff when making certification decisions  These efforts include: Training for auditors: The OIG has taken steps to enhance training offered to auditors of schools’ administration of federal student aid and is exploring opportunities to provide additional training  In December 2017, the OIG and the American Institute of Certified Public Accountants cosponsored training for auditors on the OIG’s 2016 revised guide for audits of for-profit schools, and other topics related to auditing federal student aid  The training included discussion of common audit quality issues and areas of highest risk  According to an OIG official, about 200 auditors attended, and after the event, the American Institute of Certified Public Accountants and the OIG posted a recording of the training to their websites to make it available to additional auditors  In addition, OIG officials said they maintain an email account—listed on the OIG website—through which auditors can ask questions and receive responses  In March 2018, the OIG posted frequently asked questions and answers to the website  Timeliness of OIG quality reviews: Both FSA and OIG officials said that the OIG has recently renewed efforts to issue compliance audit quality reviews more quickly, after several years in which staffing shortages and other issues led to some delayed quality reviews  Guidance to schools on selecting an auditor: OIG officials said that at the 2017 FSA training conference for school financial aid staff, they presented to more than 400 participants about factors schools should consider when hiring an auditor  For example, they suggested that schools verify the licenses of certified public accountants, ask about the types of engagements an auditing firm has conducted, request and check references, check for any actions that may have been taken against a firm, and ask whether the auditor has been subject to a previous review by the OIG or another agency  FSA officials said they expected to invite the OIG to present at future FSA conferences, and OIG officials said they were seeking additional opportunities to share information on auditor selection with schools, including a planned presentation to an association of postsecondary schools  FSA working group: FSA recently established a working group to update its guidance to FSA staff on how to coordinate with the OIG to address compliance audits with quality problems  Among other topics, the working group has consulted with the OIG about how schools are made aware of the OIG’s findings regarding the quality of their audits  FSA officials said that OIG officials have provided input and feedback on FSA’s proposed changes to the guidance  Audit guide revisions: In addition, OIG and FSA staff told us they expected the OIG’s 2016 revisions to the for-profit school audit guide to improve the quality of compliance audits for those schools  They said that because the revised guide clarified some issues that were confusing to auditors in the previous guide issued in 2000, auditors might be better able to implement the guidance  The audit guide revisions include more testing and reporting requirements, clarified procedures, and guidance on issues such as fraud reporting and coordinating financial and compliance audits  The 2016 revisions first applied to audits for fiscal years beginning after June 30, 2016, and FSA began receiving those audits at the end of 2017  In addition, although the OIG’s 2016 revisions only apply to audits of for-profit schools, FSA officials said they planned to establish a working group to consider improvements to audit guidance for public and nonprofit schools  FSA and OIG efforts to address audit quality could help ensure that compliance audits provide accurate and reliable information on school administrative capability for Education’s recertification decisions  We provided a draft of this report to Education for review and comment  Education’s Office of Inspector General provided technical comments, which we considered and incorporated as appropriate  Education did not provide other comments on the report  We are sending copies of this report to the appropriate congressional committees; the Secretary of Education; and other interested parties  In addition, the report is available at no charge on the GAO website at http://www gao gov  If you or your staff have any questions about this report, please contact me at (617) 788-0534 or emreyarrasm@gao gov  Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report  GAO staff who made key contributions to this report are listed in appendix III  In addition to the contact named above, Michelle St  Pierre (Assistant Director), Kristy Kennedy (Analyst-in-Charge), Edward Bodine, Marissa Jones, and Mark Ward made significant contributions  Also contributing to this report were Susan Aschoff, Deborah Bland, Nagla’a El-Hodiri, Monika Gomez, Sheila R  McCoy, Jessica Orr, Mimi Nguyen, John Mingus, Rhiannon Patterson, Monica Savoy, Benjamin Sinoff, and Rosemary Torres Lerma 


Report 2:  FNS has taken steps to increase federal support of states’ SNAP E&T programs by increasing the number of federal staff responsible for SNAP E&T and providing additional technical assistance to states  Specifically, FNS officials said that in 2014, they created the Office of Employment and Training to provide support and oversight for the SNAP E&T program and expanded SNAP E&T staff in FNS headquarters from one to five fulltime employees  FNS has also taken steps to increase technical assistance to states  For example, they have developed tools, including the SNAP E&T Operations Handbook, intended to help states implement and grow their program, and by adding a dedicated SNAP E&T official in each of FNS’s seven regional offices  According to FNS, regional officials have targeted technical assistance to states on, for example, developing third-party partnerships, and they have emphasized evidence-based approaches to administering the program, such as providing skills-based training for in-demand occupations  FNS officials rely on various information sources to oversee states’ SNAP E&T programs, including participant outcome data reported by states for the first time in January 2018  For example, FNS officials conduct management evaluation reviews of states, annually review states’ SNAP E&T plans for compliance, and collect data from states on program participation and expenditures  In addition, as of January 2018, FNS has begun receiving new data on SNAP E&T program participants and outcomes from states  These data include employment outcomes, such as the number of SNAP E&T participants in unsubsidized employment after participation in the program, and participant characteristics, such as the number of participants entering the program with a high school degree or equivalent  FNS officials said that although states generally submitted the new data on time, states experienced challenges that likely affected the accuracy of the data  For example, some states needed to manually collect data on participant characteristics due to the limited capacity of their data systems  Further, according to FNS officials, some states did not correctly interpret certain reporting definitions or time periods  To address these challenges, FNS officials have been providing technical assistance to states to help them refine their participant and outcome data reports  Officials told us that they expect the states to submit revised reports by May 2018; we will examine these data and related issues in our ongoing work  FNS and the states partner to address issues that affect program integrity, including improper payments and fraud, and FNS has taken some steps to address challenges in these areas, but concerns remain  For example, regarding SNAP recipient and retailer fraud, FNS has taken some steps to address challenges identified in our 2006 and 2014 reports related to fraud committed by SNAP recipients and authorized retailers, but more remains to be done  We currently have ongoing work to assess the steps FNS and states have taken to address our recommendations related to recipient and retailer fraud and other program vulnerabilities  In 2016, we reviewed SNAP improper payment rates and found that states’ adoption of program flexibilities and changes in federal SNAP policy in the previous decade, as well as improper payment rate calculation methods, likely affected these rates  For example, when states adopted available SNAP policy flexibilities that simplified or lessened participant reporting requirements, these changes reduced the opportunity for error and led to a decline in the improper payment rate, according to a USDA study  In addition, we found that the methodology SNAP used to calculate its improper payment rate was generally similar to the methodologies used for other large federal programs for low- income individuals, including Medicaid, Earned Income Tax Credit, and Supplemental Security Income  However, we also found that some of the procedural and methodological differences in the rate calculation among these programs likely affected the resulting improper payment rates, such as how cases with insufficient information or certain kinds of errors were factored into the improper payment rate  In 2014, USDA identified SNAP improper payment data quality issues in some states and has since been working with the states to improve improper payment estimates  Although USDA reported national SNAP improper payment estimates for benefits paid through fiscal year 2014, USDA did not report a national SNAP improper payment estimate for benefits paid in fiscal years 2015 or 2016  In response to a report from USDA’s Office of Inspector General that identified concerns in the application of SNAP’s quality control process, which is used to identify improper payments, USDA began a review of state quality control systems in all states in 2014  According to USDA, due to the data quality issues uncovered in 42 of 53 states during the reviews, the improper payment rates for those states could not be validated, and the department was unable to calculate a national improper payment rate for benefits paid in fiscal year 2015  To address the data quality concerns, USDA updated guidance, provided training to relevant state and federal staff, and worked with states to update their procedures to ensure consistency with federal guidelines  According to USDA, the department also required individual states to develop corrective action plans to address issues identified and monitored progress to ensure states took identified actions  On June 30, 2017, USDA notified the states that the department would not release a national SNAP improper payment rate for benefits paid in fiscal year 2016 and remained focused on conducting the fiscal year 2017 review  FNS has increased its oversight of state anti-fraud activities in recent years by developing new guidance and providing training and technical assistance to states on detecting fraud by SNAP recipients and reporting on anti-fraud activities to FNS  In 2014, we reported on 11 selected states’ efforts to combat SNAP recipient fraud and made several recommendations to FNS to address the challenges states faced  We found that FNS and states faced challenges in the following areas: Guidance on use of data tools to detect fraud: States faced challenges using FNS-recommended data tools to detect fraud, and FNS is in the process of developing improved guidance to address this concern  Specifically, FNS’s guidance on the use of EBT transaction data to uncover potential patterns of benefit trafficking lacked the specificity states needed to uncover such activity, and we recommended FNS develop additional guidance  Since then, FNS contracted with a private consulting firm to provide 10 states with technical assistance in recipient fraud prevention and detection, which included exploring the use of data analytics to analyze and interpret eligibility and transaction data to identify patterns or trends and create models that incorporate predictive analytics  FNS officials also recently told us that the agency is developing a SNAP Fraud Framework to provide guidance to states on improving fraud prevention and detection  FNS officials anticipated releasing the framework in mid- 2018  Tools for monitoring e-commerce websites: We also found FNS- recommended tools for automatically monitoring potential SNAP trafficking on e-commerce websites to be of limited use and less effective than manual searches, and FNS has developed but not finalized guidance on using such tools  We recommended that FNS reassess the effectiveness of its current guidance and tools for states to monitor e-commerce and social media websites  In August 2017, FNS officials told us that they had developed revised guidance for states on using social media in detection of SNAP trafficking  According to FNS, the guidance will be incorporated into the SNAP Fraud Framework  Staff levels: During the time of our 2014 work, most of our 11 selected states reported difficulties conducting fraud investigations due to reduced or stagnant staff levels while numbers of SNAP recipients had greatly increased, but FNS decided not to make changes to address this issue  Specifically, 8 of the 11 states we reviewed reported inadequate staffing due to attrition, turnover, or lack of funding  Some states suggested changing the financial incentive structure to promote fraud investigations because agencies were not rewarded for cost-effective, anti-fraud efforts that could prevent ineligible people from receiving benefits  Specifically, when fraud by a SNAP recipient is discovered, a state may generally retain 35 percent of any recovered overpayments  However, there are no recovered funds when a state detects potential fraud by an applicant and denies the application  To help address states’ concerns about resources needed to conduct investigations, we recommended in our 2014 report that FNS explore ways that federal financial incentives could be used to better support cost-effective anti-fraud strategies  FNS reported that it took some steps to explore alternative financial incentives, through a review of responses to a Request for Information in the Federal Register  However, FNS decided not to pursue bonus awards for anti-fraud and program integrity activities  Given that FNS has not made changes in this area, state SNAP fraud agencies may continue to report resource concerns in addressing fraud  Reporting guidance: We also found that FNS did not have consistent and reliable data on states’ activities because of unclear reporting guidance, and FNS has since revised its data collection form and provided training on the changes  To improve FNS’s ability to monitor states and obtain information about more efficient and effective ways to combat recipient fraud, we recommended in 2014 that FNS take steps, such as providing guidance and training, to enhance the consistency of what states report on their anti-fraud activities  In response, FNS revised the form used to collect recipient integrity information and changed the reporting frequency from annual to quarterly, effective fiscal year 2017  FNS officials also reported providing training to approximately 400 state agency and FNS regional office personnel on the updates to the form and related instructions  In our ongoing work, we are further reviewing states’ use of data analytics to identify SNAP recipient fraud, including that which may be occurring during out-of-state transactions  Because transactions that may appear suspicious—such as those made out-of-state—may in fact be legitimate, states may use data analytic techniques to include additional factors that may help them better target their efforts to identify potential fraud  However, states may have different levels of capacity for using data analytics to detect fraud  We are examining how 7 selected states are using data analytics and identifying the advantages and challenges states have experienced in doing so  We are also assessing FNS’s efforts to assist states in implementing GAO’s leading practices for data analytics outlined in GAO’s Framework for Managing Fraud Risks in Federal Programs outlined in GAO’s Framework for Managing Fraud Risks in Federal Programs  In addition, we are conducting our own analysis of EBT out-of-state SNAP transaction data  We expect to report on our findings later this year  FNS has taken some steps to prevent, detect, and respond to retailers who traffic SNAP benefits since our last report on the issue in 2006, but trafficking continues to be a problem  For example, in February 2018, a federal jury convicted a grocery store operator in Baltimore on charges of wire fraud in connection with a scheme to traffic more than $1 6 million in SNAP benefits for food sales that never occurred  The grocery store operator paid cash for SNAP benefits, typically paying the recipient half the value of the benefits and keeping the other half for himself  In our 2006 report, we found that SNAP was vulnerable to retailer trafficking in several areas, including: Requirements for food that retailers must stock to participate in SNAP: In 2006, we found that FNS had minimal requirements for the amounts of food that retailers must stock, which could allow retailers more likely to traffic into the program, although the agency has since taken steps to increase these requirements  In our 2006 report, FNS officials said that they authorized stores with limited food stock to provide access to food in low-income areas where large grocery stores were scarce  At that time, retailers were generally required to stock a minimum of 12 food items (at least 3 varieties of 4 staple food categories, such as fruits and vegetables), but FNS rules did not specify how many items of each variety would constitute sufficient stock  FNS officials told us that a retailer that only carries small quantities of food, such as a few cans of one kind of vegetable, may intend to traffic  In 2016, FNS promulgated a final rule increasing food stock requirements  FNS officials told us that these new rules are designed to encourage stores to provide more healthy food options for recipients and discourage trafficking  According to FNS, retailers are now generally required to stock at least 36 food items (a certain variety and quantity of staple foods in each of the 4 staple food categories)  Focus on high-risk retailers: We also found in 2006 that FNS had not conducted analyses to identify characteristics of retailers at high risk of trafficking and to target its resources—a shortcoming FNS has since taken some steps to address  For example, we reported that some stores may be at risk of trafficking because one or more previous owners had been found trafficking at the same location  However, FNS did not have a system in place to ensure that these retailers were quickly targeted for heightened attention  In addition, once a store was authorized to participate in the program, FNS staff typically would not inspect the store again until it applied for reauthorization 5 years later  We recommended that FNS identify the stores most likely to traffic and provide earlier, more targeted oversight to those stores  In 2009, FNS began establishing risk levels for each authorized retailer, identifying high-risk stores as those with a prior permanent disqualification at that location or a nearby location  In 2013, FNS required all high-risk retailers to go through reauthorization and to provide additional documentation regarding store ownership  That same year, FNS also consolidated its retailer management functions, including those for authorizing stores and analyzing EBT transaction data, into a single national structure known as the Retailer Operations Division  FNS officials told us that this structure enables the agency to identify and deploy their investigative resources to the areas of highest risk nationally, rather than within a given region  Penalties to deter retailer trafficking: We also found in our 2006 report that FNS’s penalties for retailer trafficking may be insufficient to deter traffickers, and since then, FNS has proposed—but not finalized—rules to increase them  FNS imposes administrative penalties for retailer trafficking—generally a permanent disqualification from the program or a monetary penalty  FNS relies on the USDA Office of Inspector General (OIG) and other law enforcement entities to conduct investigations that can lead to criminal prosecutions  In our 2006 report, we recommended that FNS develop a strategy to increase penalties for trafficking  The Food, Conservation, and Energy Act of 2008 (known as the 2008 Farm Bill) gave USDA authority to impose higher monetary penalties, and the authority to impose both a monetary penalty and program disqualification on retailers found to have violated relevant law or regulations (which includes those found to have trafficked)  In 2012, FNS proposed regulatory changes to implement these authorities  However, FNS has not finalized these rules, and as of fall 2017, the rules were considered “inactive ” In our ongoing work, we are continuing to assess FNS’s efforts to prevent, detect, and respond to retailer trafficking, as well as examining what is known about the extent of retailer trafficking nationwide  As part of this work, we are continuing to review FNS’s response to our prior recommendations, as well as related recommendations made by USDA’s OIG  We are also studying FNS’s periodic estimates of the rate of retailer trafficking, expressed as the dollar value and percentage of all SNAP benefits that were trafficked and the percentage of retailers involved  These data suggest an increase in the estimated rate of retailer trafficking since our 2006 report  However, we and others, including a group of experts convened by FNS, have identified some limitations with the retailer trafficking estimates  For example, the trafficking rate is calculated based on a sample of retailers that FNS considers most likely to traffic  Although FNS adjusts the data to better represent the broader population of authorized retailers, it is uncertain whether the resulting estimates accurately reflect the extent of trafficking nationwide  We are reviewing these limitations and FNS’s efforts to address them in our ongoing work  Chairman Jordan, Chairman Palmer, Ranking Member Krishnamoorthi, Ranking Member Raskin, and Members of the Subcommittees, this completes my prepared statement  I would be pleased to respond to any questions that you may have at this time  If you or your staff have any questions about this testimony, please contact Kathryn Larin, Director, Education, Workforce, and Income Security Issues at (202) 512-7215 or LarinK@gao gov  Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this statement  GAO staff who made key contributions to this testimony include Rachael Chamberlin, Celina Davidson, Swati Deo, Rachel Frisk, Alexander Galuten, Danielle Giese, Kristen Jones, Morgan Jones, Lara Laufer, Monica Savoy, and Kelly Snow  This is a work of the U S  government and is not subject to copyright protection in the United States  The published product may be reproduced and distributed in its entirety without further permission from GAO  However, because this work may contain copyrighted images or other material, permission from the copyright holder may be necessary if you wish to reproduce this material separately 

ground_truth: SNAP is the largest federally funded nutrition assistance program. In fiscal year 2017, it provided about $63 billion in benefits. USDA and the states jointly administer SNAP and partner to address issues that affect program integrity, including improper payments and fraud. GAO has previously reported on various aspects of SNAP, including state SNAP E&T programs, improper payment rates, recipient fraud, and retailer trafficking. This testimony discusses GAO's prior and ongoing work on (1) SNAP E&T programs, including program participants, design, and USDA oversight, and (2) USDA's efforts to address SNAP program integrity, including improper payments, as well as recipient and retailer fraud. As part of its ongoing work on SNAP E&T programs, GAO analyzed E&T expenditures and participation data from fiscal years 2007 through 2016, the most recent data available; reviewed relevant research from USDA; and interviewed USDA and selected state and local officials. The prior work discussed in this testimony is based on four GAO products on E&T programs (GAO-03-388), improper payments (GAO-16-708T), recipient fraud (GAO-14-641), and retailer trafficking (GAO-07-53). Information on the scope and methodology of our prior work is available in each product. Overseen by the U.S. Department of Agriculture (USDA) and administered by states, Supplemental Nutrition Assistance Program (SNAP) Employment and Training (E&T) programs served about 0.5 percent of the approximately 43.5 million SNAP recipients in an average month of fiscal year 2016, according to the most recent USDA data available. These programs are generally designed to help SNAP recipients increase their ability to obtain regular employment through services such as job search and training. Some recipients may be required to participate. According to USDA, about 14 percent of SNAP recipients were subject to work requirements in an average month of fiscal year 2016, while others, such as children and the elderly, were generally exempt from these requirements. States have flexibility in how they design their E&T programs. Over the last several years, states have 1) increasingly moved away from programs that mandate participation, 2) focused on serving able-bodied adults without dependents whose benefits are generally time-limited unless they comply with work requirements, and 3) partnered with state and local organizations to deliver services. USDA has taken steps to increase support and oversight of SNAP E&T since 2014, including collecting new data on participant outcomes from states. GAO has ongoing work reviewing SNAP E&T programs, including USDA oversight. USDA and the states partner to address issues that affect program integrity, including improper payments and fraud, and USDA has taken some steps to address challenges in these areas, but issues remain. Improper Payments. In 2016, GAO reviewed SNAP improper payment rates and found that states' adoption of program flexibilities and changes in federal SNAP policy in the previous decade, as well as improper payment rate calculation methods, likely affected these rates. Although USDA reported improper payment estimates for SNAP in previous years, USDA did not report an estimate for benefits paid in fiscal years 2015 or 2016 due to data quality issues in some states. USDA has since been working with the states to improve improper payment estimates for the fiscal year 2017 review. Recipient Fraud. In 2014, GAO made recommendations to USDA to address challenges states faced in combatting recipient fraud. For example, GAO found that USDA's guidance on the use of transaction data to uncover potential trafficking lacked specificity and recommended USDA develop additional guidance. Since then, USDA has provided technical assistance to some states, including on the use of data analytics. GAO has ongoing work reviewing states' use of data analytics to identify SNAP recipient fraud. Retailer Trafficking. In 2006, GAO identified several ways in which SNAP was vulnerable to retailer trafficking—a practice involving the exchange of benefits for cash or non-food items. For example, USDA had not conducted analyses to identify high-risk retailers and target its resources. Since then, USDA has established risk levels for retailers based on various factors. GAO has ongoing work assessing how USDA prevents, detects, and responds to retailer trafficking and reviewing the usefulness of USDA's estimates of the extent of SNAP retailer trafficking. GAO is not making new recommendations. USDA generally concurred with GAO's prior recommendations.