Report to the Ranking Minority 

Member, Committee on the Budget, 

House of Representatives 

United States Government Accountability Office

GAO

March 2005 MEANS-TESTED 

PROGRAMS 

Information on 

Program Access Can 

Be an Important 

Management Tool 

GAO-05-221 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

www.gao.gov/cgi-bin/getrpt?GAO-05-221.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact David Bellis 

(415)904-2272 or bellisd@gao.gov. 

Highlights of GAO-05-221, a report to the 

Ranking Minority Member, Committee on 

the Budget, House of Representatives 

March 2005

MEANS-TESTED PROGRAMS 

Information on Program Access Can Be 

an Important Management Tool 

For 12 federal programs supporting low-income people, we found that the 

proportion of those eligible who are enrolled varies substantially both 

between and within programs. Among entitlement programs—those 

programs that provide benefits to all applicants that meet program eligibility 

criteria—these rates range from about 50 to more than 70 percent. Among 

non-entitlement programs—those with limited funding—these rates ranged 

from less than 10 percent to more than 50 percent. While it may be neither 

feasible nor desirable for programs to serve 100 percent of those eligible for 

benefits, information on the share of those eligible who are enrolled in 

means-tested programs and on particular recipient groups such as the 

elderly or families with children, can help program managers more 

effectively address issues related to program access. However, participation 

rate estimates must be interpreted carefully because of limitations in the 

data sources and estimation methodologies used to calculate the estimates. 

Many factors influence access to low-income programs—including the type 

of benefits, ease of access, misperceptions about program requirements, and 

application and eligibility verification procedures. These factors can impact 

not only the share of eligible people who participate in low-income 

programs, but other aspects of program access as well, including the 

composition of the program caseload and how programs work together to 

serve low-income individuals and families. 

Federal, state, and local administrators have implemented many strategies to 

achieve the goals of access and integrity, but federal agencies generally put 

more emphasis on tracking information and outcomes related to program 

integrity than program access. To better ensure that program administrators 

achieve program integrity goals, agencies have begun to develop measures to

track and report on program integrity. Federal agencies have developed 

participation rate estimates for several low-income programs, but only 

four—CCDF, food stamps, WIC, and EITC—either currently collect and 

report information on the extent to which they are reaching their target 

populations or plan to do so. Such information can guide administrators in 

setting priorities and targeting scarce resources, even among programs that 

were not intended to serve everyone eligible for program benefits. 

The 12 Federal Means Tested Programs Reviewed 

Source: GAO.

Health and Human Services

Temporary Assistance for Needy Families

Child Care and Development Fund

Head Start

Medicaid

State Children’s Health Insurance Program

·

·

·

·

·

Housing and Urban Development

Housing Choice Vouchers

Public Housing ·

·

Agriculture Department

Food Stamps

Women, Infants, and Children Nutrition ·

·

Internal Revenue Service

· Earned Income Tax Credit

Social Security Administration

· Supplemental Security Income

Education Department

· Earned Income Tax Credit

Federal agencies that administer 

means-tested programs are 

responsible for both ensuring that 

people have appropriate access to 

assistance and ensuring the 

integrity of the programs they 

oversee. To balance these two 

priorities appropriately, it is 

important for agencies to have 

information on program integrity 

and program access. Knowing the 

proportion of the population that 

qualifies for these programs 

relative to the numbers who 

actually participate can help 

ensure that agencies can monitor 

and communicate key information 

on program access. 

To better understand participation 

in low-income programs, this 

report provides information on: 

(1) the proportion of those eligible 

who are participating in 12 selected 

low-income programs; (2) factors 

that influence participation in those 

programs; and (3) strategies used 

by federal, state, and local 

administrators to improve both 

access and integrity, and whether 

agencies monitor access by 

measuring participation rates. 

What GAO Recommends

GAO recommends that the 

Secretaries and Commissioners 

whose programs do not currently 

use participation rate information 

to consider using this information 

in managing their programs. GAO 

makes technical recommendations 

on how the usefulness of these 

measures could be improved. The 

agencies generally agreed with our 

recommendations. 
Page i GAO-05-221 Means-Tested Programs 

Letter 1

Results in Brief 3 

Background 5 

Use of Federal Low-Income Assistance Varies Greatly by Program 

and by Subgroup 11 

Many Factors Influence Participation but Their Impact on 

Entitlement and Non-Entitlement Programs Differs 28 

Program Administrators Have Strategies That Improve Both 

Access and Integrity, but Federal Agencies Have Generally 

Focused More on Measuring Program Integrity Outcomes 35 

Conclusion 47 

Recommendations to Executive Agencies 48 

Agency Comments 50 

Appendix I Objectives, Scope, and Methodology 53 

Appendix II Limitations Affecting Use of Participation and 

Coverage Rates 60 

Appendix III Agency Estimates of Improper Payments for 

Programs Reviewed 65 

Appendix IV Comments from the Department of Education 66 

Appendix V Comments from the Department of Health and 

Human Services 68 

Appendix VI Comments from the Department of the Treasury 78 

Contents 
Page ii GAO-05-221 Means-Tested Programs 

Appendix VII Comments from the Social Security Administration 80 

Appendix VIII GAO Contacts and Staff Acknowledgments 83 

GAO Contacts 83 

Staff Acknowledgments 83 

Related GAO Products 84 

Tables 

Table 1: Fiscal Year 2003 Annual Expenditures and Agencies 

Responsible for Administering 12 Selected Low—Income 

Programs 6 

Table 2: Descriptions of 12 Low-Income Programs 7 

Table 3. Level of Government Responsible for Funding and Design 

of 12 Low-Income Programs 9 

Table 4: Estimated Participation Rates for Entitlement Programs 

for the Most Recent Year Data Were Available 12 

Table 5: Available Subgroup Participation Rate Estimates for 

Entitlement Programs for the Most Recent Year Data Were 

Available 14 

Table 6: Estimated Coverage Rates for Non-Entitlement Programs 

for the Most Recent Year Data Were Available 19 

Table 7: Coverage Rate Estimates for TANF Cash Assistance and 

WIC Subgroups for the Most Recent Year Data Were 

Available 22 

Table 8: Potential Cost of Providing Benefits to Eligible Nonparticipants for the Most Recent Year Data Were Available 26 

Table 9: Status of Agencies Identification of and Reporting on the 

Amounts of Improper Payments by Program 43 

Table 10: Status of Agencies Efforts to Use Information on 

Participation or Coverage Rates in Managing Their 

Programs 45 

Table 11: Summary of Participation and Coverage Rate 

Methodologies 54 

Table 12: Improper Payment Estimates Reported in Agency Fiscal 

Year 2003 Performance and Accountability Reports 65 
Page iii GAO-05-221 Means-Tested Programs 

Figures 

Figure 1: Food Stamp Participation Rate Estimates for Fiscal Years 

1999 to 2002 17 

Figure 2: Head Start Coverage Rate Estimates for 1997 to 2003 24 

Abbreviations

ACF Administration for Children and Families 

CCDF Child Care and Development Fund 

CMS Centers for Medicare & Medicaid Services 

CPS Annual Social and Economic Supplement to the 

 Current Population Survey 

ED Department of Education 

EITC Earned Income Tax Credit 

FNS Food and Nutrition Service 

FRED Fraud Early Detection 

FY fiscal year 

HCV Housing Choice Vouchers 

HHS Department of Health and Human Services 

HIPAA Health Insurance Portability and Accountability Act 

HUD Department of Housing and Urban Development 

IPIA Improper Payments Information Act 

IRS Internal Revenue Service 

NRC National Research Council 

OMB Office of Management and Budget 

PRWORA Personal Responsibility and Work Opportunity 

 Reconciliation Act 

SCHIP State Children’s Health Insurance Program 

SIPP Survey of Income and Program Participation 

SSA Social Security Administration 

SSBG Social Security Block Grant 

SSI Supplemental Security Income program 

TANF Temporary Assistance for Needy Families 

TRIM3 Transfer Income Microsimulation Model, version 3 

USDA Department of Agriculture 

WIC Special Supplemental Nutrition Program for Women 

 Infants, and Children 
Page iv GAO-05-221 Means-Tested Programs 

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reproduce this material separately. 
Page 1 GAO-05-221 Means-Tested Programs 

March 11, 2005 

The Honorable John M. Spratt, Jr. 

Ranking Minority Member 

Committee on the Budget 

House of Representatives 

Dear Mr. Spratt: 

Each year through more than 80 means-tested programs, the federal 

government provides benefits and services to individuals and families with 

low incomes—just 12 of which account for as much as $330 billion in 

annual federal expenditures. As stewards of these funds, federal agencies 

have many roles, among them: to ensure that people have appropriate 

access to this assistance and to ensure the integrity of these programs by 

guarding against improper payments and unqualified participation. These 

responsibilities can be complementary, but they can also be practiced in 

ways that work at cross purposes. Outreach without appropriate 

screening, for example, can result in service to the wrong recipients, but 

cumbersome enrollment procedures can discourage those who qualify 

from applying. To meet requirements related to the Improper Payments 

Information Act of 2002, federal agencies administering these programs 

will be required to institute new steps to assure integrity by annually 

measuring and reporting improper payments. As they step-up efforts to 

ensure integrity, they will be challenged, as well, to ensure appropriate 

access. Without a sense of the proportion of the population that qualifies 

for these programs relative to the numbers who actually participate, 

however, it may be difficult for most agencies to know whether they have 

struck an appropriate balance in the weight of their strategies and whether 

they need to pursue methods that better serve both access and integrity. 

To better understand participation in low-income programs, we have 

agreed to provide you information on: (1) the proportion of those eligible 

who are participating in 12 selected low-income programs; (2) the factors 

that influence participation in those programs; and (3) strategies used by 

federal, state, and local administrators to improve both access and 

integrity, and whether agencies monitor access by measuring participation 

rates. The 12 programs included in this review are among the largest and 

were selected to cover a range of benefits and services aimed at 

supporting needy families and individuals. They include: the Child Care 

and Development Fund (CCDF), the Earned Income Tax Credit (EITC), 

United States Government Accountability Office

Washington, DC 20548 
Page 2 GAO-05-221 Means-Tested Programs 

the Special Supplemental Nutrition Program for Women, Infants, and 

Children (WIC), the Food Stamp Program, the Supplemental Security 

Income program (SSI), the Head Start program, the Pell Grant program, 

the Medicaid program, the State Children’s Health Insurance Program 

(SCHIP), the Temporary Assistance for Needy Families (TANF) program, 

the Housing Choice Voucher (HCV) program, and the public housing 

program. 

To address our research objectives, we compiled estimates of the 

proportion of those eligible who participate in each of the programs for 

the most recent year for which data were available1

 using different 

methodologies. We refer to this proportion as a participation rate when 

discussing entitlement programs and other programs that provide program 

benefits to all eligible applicants: EITC, food stamps, Medicaid, Pell 

Grants, and SSI. We refer to it as a coverage rate when discussing nonentitlement programs that do not necessarily provide benefits to all 

eligible individuals who apply for the program: CCDF, Head Start, Housing 

Choice Vouchers, Public Housing, SCHIP, TANF, and WIC. For seven 

programs, we contracted with the Urban Institute to provide us with 

information about their microsimulation model estimates of participation 

rates.2

 These model estimates are also used to calculate estimates of the 

potential cost of serving eligible nonparticipants in a subset of programs. 

For the remaining programs, we provide participation or coverage rate 

estimates based on administrative and national survey data. We held 

discussions with federal agency officials to discuss the reliability of 

program data used in our estimates, reviewed related documentation, and 

ensured that the agencies conducted tests of the data for omissions and 

errors. In addition, we reviewed literature on factors that influence 

participation in the 12 programs covered by the review and strategies to 

improve program access and program integrity. We surveyed and 

interviewed the federal agencies that administer the 12 programs on 

factors they have identified that influence program participation and on 

 1

The most recent participation rate estimates are available for the years 1999 to 2003 

depending on the program. 

2

The Transfer Income Microsimulation Model (TRIM3), developed by the Urban Institute 

and funded by HHS, uses national survey data from the Annual Social and Economic 

Supplement to the Current Population Survey (CPS), the Survey of Income and Program 

Participation (SIPP), the National Survey of America’s Families, and information on 

eligibility rules to estimate the population eligible for means-tested programs, including 

CCDF, food stamps, Medicaid, SCHIP, SSI, TANF, and WIC. The model estimates the 

amount each individual or household would receive based on their characteristics. 
Page 3 GAO-05-221 Means-Tested Programs 

strategies they have implemented to improve program access and program 

integrity. In addition, we interviewed federal, state, and local program 

administrators of various programs in California, Connecticut, Georgia, 

Maryland, and Minnesota, on factors that affect participation and 

strategies they have employed to address the goals of program access and 

program integrity. These states were chosen on the basis of innovative 

programs and initiatives related to program integrity and program access 

and demographic and geographic diversity. We performed this work 

between November 2003 and January 2005 in accordance with generally 

accepted government auditing standards. See appendix I for additional 

information on scope and methodology. 

For 12 federal programs supporting low-income people, we found that the 

proportion of those eligible who are actually enrolled varies substantially 

both between programs and among subgroups enrolled in a single 

program. Given the differences in the goals, design, administration, and 

funding of the 12 programs, it is not surprising that we found substantial 

variation in these proportions. For entitlement programs—those designed 

to support all those who qualify—the estimated proportion of eligible 

people who were enrolled ranged from about 50 percent to more than 

70 percent. For example, approximately three-quarters of those who were 

eligible took advantage of the Earned Income Tax Credit program in 

1999, the most recent year for which data were available. For nonentitlement programs—those with limited funding and not necessarily 

intended to cover all eligible persons—the estimated proportion of the 

eligible who were enrolled ranged from less than 10 percent to more than 

50 percent. In the Head Start program, for example, funded enrollment 

was sufficient to cover half of all potentially eligible children in 2003. 

Within some programs, we found that some subpopulations were enrolled 

in different proportions than other groups. For example, in the Food 

Stamp Program, the participation rate for families with children was 

higher than the participation rate for other groups. Some evidence shows 

that enrollees tended to be those among the eligible who had greater 

needs—as indicated by the levels of assistance for which they qualified. 

While information on participation rates can help program managers more 

effectively address issues related to program access, several factors must 

be taken into consideration when interpreting this information. For 

example, because of limitations of the data and methodologies used to 

measure rates of participation, we could not make statistically reliable 

comparisons across programs nor could we describe fluctuations over 

time for most programs. 

Results in Brief 
Page 4 GAO-05-221 Means-Tested Programs 

The size and type of program benefits, ease of access, misperceptions 

about program requirements and eligibility verification requirements put 

in place to ensure program integrity can affect program access in both 

entitlement and non-entitlement programs. For example, agency officials 

told us that participation in the WIC program is highest among infants in 

part because infants are eligible for the highest benefits, but that factors 

such as extended office hours can also impact participation. The factors 

we identified can affect several aspects of program access, including not 

only the number of program participants, but also the extent to which 

programs reach the total population eligible for benefits and services, how 

well agencies are allocating resources among targeted subpopulations, 

and, from an agencywide or even governmentwide perspective, how well 

specific means-tested programs complement and interact with programs 

that serve similar populations or provide for similar needs. While concerns 

about the allocation of scarce resources and interactions with other 

programs apply to all low-income programs, they may be of particular 

importance to non-entitlement programs whose participation is limited by 

funding constraints. Participation or coverage rate information can guide 

program administrators in setting priorities and targeting scarce 

resources, even among programs that were not intended to serve everyone 

eligible for program benefits. 

Federal, state, and local administrators have implemented a variety of 

strategies to achieve both program access and program integrity, but 

federal agencies generally put more emphasis on tracking information and 

outcomes related to program integrity than program access. Through 

federal agency surveys and site visits, we identified several strategies 

currently being used that have the potential to achieve two of the 

fundamental goals common to all means-tested programs—program 

access and program integrity. These strategies ranged from innovative use 

of information technology to special outreach programs; some were in use 

nationwide and others were state or local efforts. The initiation and 

control of these strategies is often beyond the direct control of the federal 

agencies managing the programs. However, federal managers do play a 

role in that they encourage and facilitate such strategies, even in the most 

decentralized program, by emphasizing the importance of program access 

and program integrity—even absent specific related laws or regulations 

related to these issues. The Improper Payments Information Act of 2002 

has built upon existing govermentwide efforts to emphasize to federal 

agencies the importance of having an internal control framework to 

address program integrity issues. At the same time, internal controls are 

important management tools to ensure that agencies meet their basic goals 

of reaching eligible families. The federal agencies that oversee these 
Page 5 GAO-05-221 Means-Tested Programs 

entitlement and non-entitlement programs can benefit from having up-todate information on the extent to which their programs reach eligible 

individuals. However, while all of the programs we reviewed have begun 

to take steps to measure the extent of improper payments and all make 

efforts to assess how well their programs are working, only four of the 

programs we covered in this review—CCDF, food stamps, WIC, and 

EITC—either currently collect and report information on the extent to 

which they are reaching their target populations in key performance and 

program reports or plan to do so. 

To better ensure that agencies have information on program access, we 

recommend to the Secretaries and Commissioners whose programs do not 

currently use participation rate information to consider the use of 

participation rate information in managing their programs. We also make 

some technical recommendations on how the usefulness of these 

measures could be improved. The agencies generally agreed with these 

recommendations. 

The federal government funds a wide array of programs intended to 

provide benefits or services to low-income individuals, families, and 

households. The 12 programs included in this review include the largest of 

these programs, Medicaid, as well as some relatively small programs such 

as WIC. The 12 programs are administered by seven different federal 

agencies.3

 Table 1 shows the agencies responsible for each program and 

federal expenditures for fiscal year 2003, the most current year available. 

 3

Two of these agencies, the Centers for Medicare & Medicaid Services and the 

Administration for Children and Families, are part of the Department of Health and Human 

Services. 

Background 
Page 6 GAO-05-221 Means-Tested Programs 

Table 1: Fiscal Year 2003 Annual Expenditures and Agencies Responsible for Administering 12 Selected Low—Income 

Programs 

Program Agency 

FY 2003 federal

expendituresa

 (dollars in billions)

CCDF Department of Health and Human Services 

(HHS), Administration for Children and 

Families (ACF) 

$7.3

EITC Department of Treasury, Internal Revenue 

Service (IRS) 

37.9b

Food Stamp Program Department of Agriculture (USDA), Food 

and Nutrition Service (FNS) 

23.9

Head Start HHS/ACF 6.6

Housing Choice Voucher Program Department of Housing and Urban 

Development (HUD), Office of Public and 

Indian Housing 

13.4c

Medicaid HHS, Centers for Medicare & Medicaid 

Services (CMS) 

160.7

Federal Pell Grant Program Department of Education (ED), Office of 

Federal Student Aid 

12.1

Public Housing Program HUD, Office of Public and Indian Housing 7.6d

SCHIP HHS/CMS 4.3

WIC USDA/FNS 4.5

SSI Social Security Administration (SSA) 35.2

TANF HHS/ACF $16.3

Source: Federal agency officials. 

a

This includes the total amount of federal expenditures in fiscal year 2003, which is the most recent 

year for which these data were available. It includes current and prior year federal funds expended in 

fiscal year 2003; it does not include state expenditures. 

b

This includes both credits paid out in refunds and reduced tax liabilities. 

c

This includes funding for the housing choice voucher and moderate rehabilitation programs. 

d

This includes expenditures for the public housing capital fund, the public housing operating fund, and 

revitalization of severely distressed public housing (HOPE VI). 

These programs provide different benefits and services to different target 

populations. Some of the programs provide benefits that phase out 

gradually, so some people may be eligible for a very low benefit. For 

example, in fiscal year 2005, monthly food stamp benefits for a threeperson household can be as low as $1 per month. Other programs, such as 

Medicaid, generally offer comparable benefits to every resident of a state 

who meets eligibility requirements. Table 2 provides a brief description of 

each of the programs covered in this report and the types of benefits 

offered by each program. 
Page 7 GAO-05-221 Means-Tested Programs 

Table 2: Descriptions of 12 Low-Income Programs 

Program Description 

CCDF The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA) authorized 

CCDF to help provide child care to low-income families and to give states more flexibility to design 

child care policies. CCDF is funded through an annual block grant to states and required state funds 

and may also include transfers from TANF. States are permitted to transfer up to 30 percent of their 

TANF block grant to CCDF. Under CCDF, child care services are available to eligible families 

through certificates or contracts with providers, and parents may select any legally operating child 

care provider, including home-based or center-based providers. 

EITC EITC is a refundable federal tax credit available to eligible workers earning relatively low incomes. 

Because the credit is refundable, a person does not need to owe taxes to receive benefits. EITC is 

based on earned income, adjusted gross income, and the presence of qualifying children, if any. 

Under current law, there are three categories of EITC recipients: childless adults, adults with one 

child, and adults with two or more children. 

Food Stamps The Food Stamp Program is the primary source of nutrition assistance for many low-income 

households. It enables eligible low-income households to buy nutritious food with electronic benefit 

cards at authorized retail food stores across the country. State and local welfare offices operate the 

program, and the federal government oversees the state operation of the program. Participants must 

meet income and resource standards and be U.S. citizens or eligible non-citizens, and all able-bodied 

individuals between 16 and 60 without dependents must register for work, take part in an employment 

and training program, or accept or continue suitable employment. Households with incomes are 

expected to spend about 30 percent of their income, after certain deductions, on food. 

Head Start Head Start provides comprehensive developmental services for low-income, pre-school children ages 

3 to 5, and social services for their families. Services can be provided through either a half-day or a 

full-day program. Head Start provides diverse services in four components: education, health, parent 

involvement, and social services. Grants are awarded to about 1,400 local public or private non-profit 

agencies, and the community must contribute about 20 percent of the total cost of a Head Start 

program. 

Housing Choice Vouchers The Housing Choice Voucher program is the federal government’s major program for assisting very 

low-income families, the elderly, and the disabled with their housing needs. HUD gives public housing 

agencies the funds to administer the program. Participants use vouchers to find their own housing, 

including single-family homes, townhouses and apartments. The voucher recipient pays the 

difference between the actual rent charged by the landlord and the amount subsidized by the 

program. Generally, the subsidy allows the tenant to pay no more than 30 percent of adjusted 

monthly income towards the rent and utilities. 

Medicaid Medicaid (title XIX of the Social Security Act) is a federal/state entitlement program that generally 

provides health insurance coverage for low-income families and individuals who are aged or disabled. 

Medicaid is the largest source of funding for medical and health-related services for America’s 

poorest people. Within broad federal guidelines, each state can (1) establish its own eligibility 

standards; (2) determine the type, amount, duration, and scope of services; (3) set the rate of 

payment for services; and (4) administer its own program. Medicaid policies for eligibility, services, 

and payment are complex and vary considerably, even among states of similar size or geographic 

proximity. 

Pell Grant The Pell Grant program provides grants (i.e., aid that does not have to be repaid) to needy 

undergraduates. It is the largest source of grant aid for postsecondary education attendance funded 

by the federal government and provided an estimated $13.1 billion to students in fiscal year 2004. Pell 

Grants are intended to be the foundation for all federal aid awarded to undergraduates and 

constituted an estimated 19 percent of all federally supported aid in fiscal year 2004 that benefited 

postsecondary education students. For fiscal year 2004-2005, grants ranged from $400 to $4,050. 
Page 8 GAO-05-221 Means-Tested Programs 

Program Description 

Public Housing Public housing was established to provide decent and safe rental housing for eligible low-income 

families, the elderly, and persons with disabilities. Public housing comes in all sizes and types, from 

scattered single family houses to high-rise apartments for elderly families. HUD contributes both 

capital and operating funds to local housing agencies that manage the housing for low-income 

residents at rents they can afford. HUD also furnishes technical and professional assistance in 

planning, developing, and managing these developments. 

SCHIP As part of the Balanced Budget Act of 1997, Congress created SCHIP as a federal/state partnership, 

similar to Medicaid, with the goal of expanding health insurance to low-income children—i.e., those 

children whose families earn too much money to be eligible for Medicaid, but not enough money to 

purchase private insurance. States can (1) use SCHIP funds to expand Medicaid eligibility to children 

who previously did not qualify for the program; (2) design a children’s health insurance program 

entirely separate from Medicaid; or (3) combine both the Medicaid and separate program options. 

WIC WIC provides supplemental foods to low-income women, infants, & children up to age 5 who are at 

nutritional risk. The WIC target population consists of low-income, nutritionally at risk: pregnant and 

breastfeeding women; nonbreastfeeding postpartum women; infants (up to 1st birthday), and children 

up to their 5th birthday. It provides supplemental nutritious foods, including infant formula; nutrition 

education and counseling at WIC clinics; and screening and referrals to other health, welfare and 

social services. 

SSI The SSI program, title XVI of the Social Security Act, was enacted in 1972 and implemented in 1974 

to ensure a minimum cash income to all aged, blind, or disabled persons. SSI is provided to eligible 

individuals or couples who have limited income and resources (the countable resource limit is $2,000 

for an individual and $3,000 for a couple). Federal SSI benefits are paid from federal general 

revenues, but many states also supplement payments. 

TANF The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA) replaced 

Aid to Families with Dependent Children (AFDC) with TANF, which marked the end of federal 

entitlement to assistance. TANF ended unlimited matching funding for family cash welfare and 

created fixed-block grants to states. The block grant covers benefits, administrative expenses, and 

services targeted to needy families and gives states great flexibility to design their own TANF 

programs. PRWORA imposed a 5-year limit on TANF cash assistance paid with federal funds and 

required states to achieve minimum participation rates in federally recognized work activities. In 

addition, they must spend a specified amount of state funds on eligible low-income families—at least 

75 percent of the state funds they spent in fiscal year 1994, known as the maintenance-of-effort 

requirement. States may use these funds to pay for separate state programs. 

Source: Federal agency documents. 

The programs covered by this review represent both entitlement and nonentitlement programs; programs that are administered entirely by federal 

agencies and those that are administered through federal partnerships 

with state and/or local agencies; programs that allow substantial state and 

local variation and those that provide uniform benefits throughout the 

country. Table 3 summarizes the level of government with whom 

responsibility for funding and design resides for each of the 

12 programs. 

Program Administration 
Page 9 GAO-05-221 Means-Tested Programs 

Table 3. Level of Government Responsible for Funding and Design of 12 LowIncome Programs 

Program Fundinga

 Designb Entitlement 

EITC Federal Federal Yes 

Food Stamp Program Federal Federal Yes 

Medicaid Federal/state Federal/state Yes 

SSI Federalc Federal Yes 

Pell Grants Federal Federal No 

CCDF Federal/state Federal/state No 

Head Start Federal Federal/local No 

Housing Choice Voucher Federal Federal No 

Public Housing Federal Federal No 

SCHIP Federal/state Federal/state No 

TANF cash assistance Federal/state Federal/state No 

WIC Federal Federal No 

Source: GAO. 

a

Defined as the level of government that supplies the primary source of funding for the support. If 

substantial funding comes from more than one source, we list both sources. Some additional funding 

may come from sources not listed in the table. 

b

Defined as the level of government that is primarily responsible for availability, eligibility, and benefit 

amount determination. 

c

Some states contribute to the SSI program, but state funding is not required and is not provided in all 

states. 

Although state and local agencies responsible for administering several of 

the programs have some control over program design and implementation, 

primary responsibility for setting priorities, guiding policy, and measuring 

performance rests with the federal agencies that oversee the programs. 

The programs covered by this review may have many different goals and 

objectives of varying degrees of importance, but all of these programs—

regardless of size, target population, funding structure, or types of benefits 

offered—were established to assist persons with limited income, and as 

such, all were tasked with the overarching goal of reaching and serving 

those eligible for program benefits or services. Likewise, all means-tested 

programs share the common goal of ensuring that the funds allocated for 

program benefits are provided only to those eligible. 

A key factor in achieving desired program outcomes, including program 

access and program integrity, is the implementation of appropriate 

internal control. As discussed in our prior work on this topic, internal 

control is an integral component of an organization’s management that 

Program Performance 

Management 
Page 10 GAO-05-221 Means-Tested Programs 

provides reasonable assurance that agencies are achieving outcomes 

related to the effectiveness and efficiency of operations and compliance 

with laws and regulations, among other things.4

Federal agencies have several key management tools and program reports 

that they use to provide information about the programs they administer, 

develop policy, help with management decision-making, and help focus 

program administrators at all levels of government on achieving the 

federal agency’s highest priorities. For example, through their strategic 

and annual performance plans and accountability reports, federal agencies 

set program goals, measure program performance against those goals, and 

report publicly on their progress. Some programs also issue annual or 

biennial reports to Congress on specific programs they administer; these 

generally include important program information. 

A number of governmentwide initiatives have resulted in increased 

emphasis by program managers on program integrity issues, including 

OMB guidance, the President’s Management Agenda, GAO’s High-Risk 

series and the Improper Payments Information Act of 2002 (IPIA). The 

IPIA requires the head of each federal agency to annually review all 

programs and activities that the agency administers and to identify all such 

programs and activities that may be susceptible to significant improper 

payments.5

 For each program and activity identified, the agency is required 

to estimate the annual amount of improper payments and submit those 

estimates to Congress before March 31 of the following applicable year. 

OMB guidance then directs federal agencies to include a measure of 

improper payments in their annual Performance and Accountability 

Reports. All 12 programs we reviewed are subject to these requirements. 

 4

See GAO, Standards for Internal Control in the Federal Government, 

GAO/AIMD-00-21.3.1(Washington, D.C.: Nov. 1999). 

5

Improper payments can include both overpayments and underpayments. 
Page 11 GAO-05-221 Means-Tested Programs 

The proportion of those eligible who are actually enrolled in 12 selected 

low-income programs varies substantially both between and within 

programs, but several factors must be considered to understand the 

implications of this information for program access. The estimated 

proportion of eligible people who were enrolled in entitlement programs—

those designed to support all those who apply and qualify—ranged from 

about 50 percent to more than 70 percent. In contrast, the estimated 

proportion of the eligible who were enrolled in non-entitlement 

programs—those with limited funding and not necessarily intended to 

cover all eligible persons—ranged from less than 10 percent to about 

50 percent. Within programs, we found that subpopulations were enrolled 

in different proportions. Some evidence also suggests that enrollees in 

some programs, such as the Food Stamp Program, tend to be those who 

are eligible for larger benefit amounts. 

For four of the five entitlement programs we examined, the proportion of 

eligible people who were enrolled varied from around 50 percent in the 

Food Stamp Program to more than 70 percent in the EITC and SSI 

programs; and within programs, different types of participants, such as 

children or the elderly, were enrolled in varying proportions.6

 

Table 4 provides estimated participation rates for each of these programs, 

expressed in ranges to reflect potential errors in sample survey data. The 

actual participation rates may be outside the range of estimates shown 

because some types of uncertainty in the estimation of participation rates 

cannot be quantified. Estimates for the Food Stamp, Medicaid and SSI 

programs were developed by the Urban Institute under contract with HHS 

and Food Stamp Program estimates were developed by Mathematica 

Policy Research, Inc., under contract with USDA. HHS and USDA are the 

only two agencies to regularly estimate participation rates in low-income 

programs. We estimated the EITC participation rate for 1999. However, we 

were unable to estimate an enrollment rate for the Pell Grant program 

because of concerns about the reliability of some of the data needed to 

estimate the rate. 

 6

While the Pell Grant program is not an entitlement program, we have included it in this 

group because program administrators told us that they manage it to allow all eligible 

people who apply to receive benefits. 

Use of Federal LowIncome Assistance 

Varies Greatly by 

Program and by 

Subgroup 

For Entitlement Programs, 

the Proportion of Those 

Eligible Who Were 

Enrolled Ranged from 

about 50 Percent to More 

Than 70 Percent, but 

Participation Rates Are 

Higher among Some 

Groups 
Page 12 GAO-05-221 Means-Tested Programs 

Table 4: Estimated Participation Rates for Entitlement Programs for the Most 

Recent Year Data Were Available 

Program (year)a

 Eligibility unit 

Participation rate 

estimatesb

(in percent)

EITC (1999) Households 75c

Food Stamp Program (2001): 

HHS/Urban Institute 

(2002): USDA/Mathematica Policy 

Research, Inc. 

Householdsd

Households 

Individuals 

46–48

48e

54f

Medicaid (2000) Individualsg 66–70

Pell Grants Not available Not availableh

SSI (2001) Individuals and married 

couplesi 66–73

Sources: GAO’s analysis of CPS and IRS survey data and data from the Urban Institute’s TRIM3 model and Mathematica Policy 

Research, Inc. 

a

All estimates are for the calendar year indicated in the table, except the food stamp estimates 

created by Mathematica, which are for fiscal year 2002. 

b

This range represents a 95 percent confidence interval based on estimated sampling error in the 

national survey data. This interval does not take into account errors introduced by the modeling 

process or by administrative data. We assessed but did not quantify these errors. 

c

The EITC participation rate shown has a sampling error that does not exceed plus or minus 2.7 

percentage points. The number of eligible tax filers used in this estimate was adjusted to exclude 

those who received EITC benefits in error. The participation rate is a conservative estimate based on 

32 percent of EITC dollars being claimed in error; the IRS estimated between 27 and 32 percent of 

these tax dollars were paid in error in 1999. Because more recent information about EITC payment 

errors is not available, we were unable to provide a more recent estimate. However, Congress has 

enacted new tax laws and the IRS has taken steps to improve compliance. For more details, see 

GAO, Earned Income Tax Credit Participation, GAO-02-290R (Washington, D.C.: Dec. 14, 2001). 

d

While the Urban Institute and Mathematica each generate food stamp participation rate estimates 

using data from the CPS, their estimates differ slightly. The differences arise primarily from 

differences in imputation methodology for data missing from the CPS—such as assets, 

immigration/refugee status, and information on which household members buy and prepare food 

together. 

e,fConfidence intervals are not available. These estimates are from Mathematica Policy Research, 

Inc., Trends in Food Stamp Program Participation Rates: 1999 to 2002. (Washington, D.C.: Sept. 

2004). 

g

Estimates do not include individuals who are institutionalized. Estimates do account for variation in 

state eligibility rules and for people who may be eligible for only part of the year. 

h

We were unable to estimate a participate rate for the Pell Grant program because we were unable to 

assess the reliability of data on the family income of students that did not apply for federal financial 

assistance. 
Page 13 GAO-05-221 Means-Tested Programs 

i

No reliable national survey data exist on individuals who meet the SSI disability criteria. Therefore, 

researchers made assumptions about a person’s disability based on self-reported information on 

inability to work due to illness or other disability, lack of work activity in the prior year, and receipt of 

disability income. Some of those assumed eligible for SSI based on disability may not meet the 

criteria and vice versa. As a result, the models may overestimate or underestimate the number of 

eligible people. This estimate also does not include institutionalized individuals and disabled children. 

These estimates indicate that between half and three quarters of those 

eligible are participating in four of the entitlement programs. Although 

differences in years, data sources, and estimation methodologies make it 

inappropriate to compare participation rates across programs, these 

estimates provide a general sense of the extent to which programs are 

reaching those eligible for benefits. Specifically, we found: 

• For the EITC program, we estimated in prior work that about 

75 percent of eligible households took advantage of this credit in 

1999. This estimate was adjusted to account for tax dollars that were 

distributed in error that year.7

 However, Congress has enacted new tax 

laws and the IRS has taken steps to improve EITC program 

compliance. 

• Two organizations, the Urban Institute and Mathematica Policy 

Research, Inc., have estimated food stamp participation rates using 

different methodologies but both found that about 48 percent of 

eligible households participated in this program in 2001 and 2002, 

respectively. In addition, Mathematica found that 54 percent of eligible 

individuals were enrolled in 2002. 

• An estimated 66 to 70 percent of eligible, noninstitutionalized people 

were enrolled in Medicaid in 2000. This estimate does not include 

institutionalized people, such as those in nursing homes. 

• We were unable to estimate Pell Grant participation rates because we 

were unable to assess the reliability of available data on the family 

income of enrolled students who did not apply for federal financial aid. 

• For SSI, an estimated 66 to 73 percent of eligible adult individuals and 

married couples received benefits in 2001. This estimate also does not 

include institutionalized people or disabled children. 

Participation rates also can vary substantially even within a single 

program. Disaggregating program participation rates by targeted 

subpopulations can help us to better understand the implications of 

overall program participation rates. In table 5, we provide participation 

rate estimates for selected subgroups within the four entitlement 

 7

For more details, see GAO, Earned Income Tax Credit Participation, GAO-02-290R 

(Washington, D.C.: Dec. 14, 2001).
Page 14 GAO-05-221 Means-Tested Programs 

programs for which we have participation rate estimates. As in table 4, 

these estimates are expressed in ranges to reflect potential errors that 

result from using sample survey data. (See the footnotes to table 5 for 

more details.) 

Table 5: Available Subgroup Participation Rate Estimates for Entitlement Programs 

for the Most Recent Year Data Were Available 

Program (year)a

 Subgroup 

Participation rate 

estimatesb

(percent)

EITC (1999) All Householdsc 75d

 Households with No children 45e

 Households with 1 Child 96r

 Households with 2 Children 93g

 Households with 3 or More Children 63h

Food Stamps (2001) All Householdsi 46–48

 Households with Children 55–57

 Households with Elderly Members 27–28

Medicaid (2000) All Individualsj 66–70

 Adults 56–64

 Children 74–79

 Elderly 40–43k

SSI (2001) All Individuals and Married Couplesl 66–73

 Elderly 61–68m

Source: GAO’s analysis of CPS and IRS survey data and the Urban Institute’s TRIM3. 

a

All estimates are for the calendar year mentioned. 

b

This range represents a 95 percent confidence interval based on estimated sampling error in the 

national survey data. This interval does not take into account errors introduced by the modeling 

process or by administrative data. We assessed but did not quantify these errors. 

c

The number of eligible tax filers used in these estimates were adjusted to exclude those who 

received EITC benefits in error. The participation rate is a conservative estimate based on 32 percent 

of EITC dollars being claimed in error; the IRS estimated between 27 and 32 percent of EITC dollars 

claimed in 1999 were paid in error. Because more recent information about EITC payment errors is 

not available, we were unable to provide a more recent estimate. However, since 1999, Congress has 

enacted new tax laws and the IRS has taken steps to improve compliance. For more details, see 

GAO, Earned Income Tax Credit Participation, GAO-02-290R (Washington, D.C.: Dec. 14, 2001). 

d

The EITC participation rate for all households has a sampling error that does not exceed plus or 

minus 2.7 percentage points. 

e

The EITC participation rate for households with no children has a sampling error that does not 

exceed plus or minus 3.9 percentage points. 

f

The EITC participation rate for households with one child has a sampling error that does not exceed 

plus or minus 7.7 percentage points. The actual participation rate cannot exceed 100 percent. 
Page 15 GAO-05-221 Means-Tested Programs 

g

The EITC participation rate for households with 2 children has a sampling error that does not exceed 

plus or minus 8.3 percentage points. The actual participation rate cannot exceed 100 percent. 

h

The EITC participation rate for households with 3 or more children has a sampling error that does not 

exceed plus or minus 8.3 percentage points. 

i

Estimates in the table are from the Urban Institute. Mathematica has also estimated participation 

rates for these subgroups and found that about 66 percent of eligible households with children and 28 

percent of those with elderly members participated in fiscal year 2002. While the Urban Institute and 

Mathematica each generate food stamp participation rate estimates using data from the CPS, their 

estimates differ slightly. The differences arise primarily from differences in imputation methodology for 

data missing from the CPS—such as assets, immigration/refugee status, and information on which 

household members buy and prepare food together. 

j

Estimates do not include individuals who are institutionalized. Estimates do account for variation in 

state eligibility rules and for people who may be eligible for only part of the year. 

k

Estimates include those who are dually enrolled in Medicare and Medicaid who thus qualify for the 

full Medicaid benefit and those who only receive Medicaid assistance for their Medicare cost sharing. 

Estimates do not include eligible elderly people who are institutionalized. The participation rate may 

be lower for this group in part because those over the age of 65 may have Medicare coverage. 

l

No reliable national survey data exist on individuals who meet the SSI disability criteria. Therefore, 

researchers made assumptions about a person’s disability based on self-reported information on 

inability to work due to illness or other disability, lack of work activity in the prior year, and receipt of 

disability income. Some of those assumed eligible for SSI based on disability may not meet the 

criteria and vice versa. As a result, the models may overestimate or underestimate the number of 

eligible people. This estimate also does not include institutionalized individuals or disabled children. 

m

Estimates do not include eligible elderly people who are institutionalized. 

As shown, participation in low-income programs varies markedly across 

subgroups. For example, a smaller share of elderly people eligible for low 

income programs tend to participate in the Food Stamps and Medicaid 

programs than among the total eligible population. The elderly may 

participate in the Food Stamp Program at a lower rate than other 

households because most elderly households receive Social Security and 

are eligible for relatively small food stamp benefits. For example, in 2000, 

44 percent of all households with elderly members eligible for food stamps 

were eligible for a monthly benefit of only $10 or less, the minimum 

benefit for households of one or two persons. In comparison, 12 percent of 

households without elderly members eligible for food stamps receive 

benefits that low. Similarly, Medicaid participation among the elderly may 

be low because Medicare also covers many elderly people who are eligible 

for Medicaid. In contrast, families with children tend to participate in food 

stamps, Medicaid, and the EITC at higher than average rates than those 
Page 16 GAO-05-221 Means-Tested Programs 

households without children.8 Although we were unable to disaggregate 

participation rates by geographic area, program participation rates can 

also vary by state or locality. 

Information on trends in program participation rates over time can also 

help in interpreting participation rate estimates, but we were only able to 

provide information on trends in participation for one program. 

Mathematica Policy Research, Inc., estimates food stamp participation 

rates annually under contract with USDA and has taken steps to ensure 

that estimates are comparable over time. As shown in figure 1, food stamp 

participation rates remained fairly stable between fiscal years 1999 and 

2002, declining slightly from 52 percent in fiscal year 1999 to 48 percent in 

fiscal year 2002 among eligible households and 56 percent in fiscal 1999 to 

54 percent in fiscal year 2002 among eligible individuals. 

 8

We estimated a food stamp participation rate for another subgroup, eligible individuals in 

working families, in prior work and found that 52 percent of these individuals were 

enrolled in 2001. See GAO, Food Stamp Program: Steps Have Been Taken to Increase 

Participation of Working Families, but Better Tracking of Efforts Is Needed, GAO-04-346

(Washington, D.C.: Mar. 5, 2004). 
Page 17 GAO-05-221 Means-Tested Programs 

Figure 1: Food Stamp Participation Rate Estimates for Fiscal Years 1999 to 2002 

We were not able to provide information on trends in participation rates 

for the Medicaid and SSI programs because the most recent participation 

rate data available for these programs is not comparable to prior year 

estimates. While prior year estimates are available, because of changes 

from 1 year to the next in the methodology used to estimate participation 

rates, estimates for prior years are not perfectly comparable with the most 

recent estimates and are therefore not shown in this report. The 

participation rate estimate for the EITC was available for only 1 year. 

0

40

45

50

55

60

Percent

Source: Mathematica Policy Research, Inc., Trends in Food Stamp Program Participation Rates: 1999 to 2002. (Washington, D.C.:

Sept. 2004)

Fiscal year

1999 2000 2001 2002

Participation rate for households

Participation rate for individuals
Page 18 GAO-05-221 Means-Tested Programs 

Among the seven non-entitlement programs we reviewed, the share of 

those eligible who participate ranges from less than 10 percent to about 

50 percent. These programs are generally not funded to serve all eligible 

applicants, and many have other design features, such as the prioritization 

of certain subgroups and eligibility criteria specific to a state or locality, 

that would not necessarily allow for all eligible people who apply to 

receive benefits.9

 Consequently, we refer to these estimates as coverage 

rates rather than participation rates. Table 6 provides estimated coverage 

rates for each of these programs, expressed in ranges to reflect potential 

errors in survey data. The actual coverage rates may be within a broader 

range of estimates than shown because other errors that may have 

resulted from calculating these estimates could not be quantified. 

Estimates for the CCDF, SCHIP, and TANF cash assistance programs were 

developed by the Urban Institute under contract with HHS. We also 

include a WIC estimate developed by the National Research Council, and 

another WIC estimate developed by the Urban Institute under contract 

with us. We estimated the Head Start and housing programs using 

administrative and national survey data. 

 9

In recent years WIC has been funded at levels that allow the program to serve all or nearly 

all applicants who have sought services and meet program eligibility criteria. However, 

WIC is a non-entitlement program whose funding is determined annually through the 

congressional appropriations process. In addition, because the SCHIP and TANF programs 

provide grants directly to states and allow states substantial flexibility in determining 

program eligibility and implementation, funding constraints contribute to, but do not 

determine coverage rates to the extent that they do for the remaining programs. 

For Non-Entitlement 

Programs, the Proportion 

of Those Eligible Who 

Were Enrolled Ranged 

from Less Than 10 Percent 

to about 50 Percent 
Page 19 GAO-05-221 Means-Tested Programs 

Table 6: Estimated Coverage Rates for Non-Entitlement Programs for the Most 

Recent Year Data Were Available 

Program (year) Eligibility unit 

Coverage rate

estimates

(percent)a 

CCDF (2001) Childrenb 18—19c

Head Start (2003) Childrend 44—54e

Housing Choice Vouchers (1999) Householdsf 13—15

Public Housing (1999) Householdsg 7—9

SCHIP (2000)h Childreni 44—51

TANF – cash assistance (2001) Familiesj 46—50

WIC (1998): National Research Council 

(2001): Urban Institute 

Individuals 

Infants and Childrenk

51l

51—55m

Source: The Urban Institute’s TRIM3 and GAO’s analysis of data from the CPS and HUD. 

a

This range represents a 95 percent confidence interval based on estimated sampling error in the 

national survey data. This interval does not take into account errors introduced by the modeling 

process or by administrative data. We assessed but did not quantify these errors. 

b

The estimates account for variations in state eligibility criteria and are based on criteria as of October 

2001. Estimates do not account for participation in other programs that provide similar services. 

c

To increase the precision of these estimates, 3 years of CPS data were used to estimate the eligible 

population; other coverage rates and participation rates estimated using TRIM3 only use 1 year of 

data. As a result, the confidence interval based on the sampling error is smaller than for the other 

estimates. 

d

Head Start participation is measured by the number of funded slots, not the number of children in the 

program. Therefore, this estimate may overstate or understate the actual coverage rate because 

more than one child may fill a slot in a year and some slots may go unfilled. Estimates do not account 

for participation in other programs that provide similar services. 

e

The coverage rate does not include enrolled children living above the poverty threshold. Nonpoor 

children can comprise up to 10 percent of Head Start enrollment slots. 

f

HUD’s data on the number of eligible households was based on the American Housing Survey. This 

survey may overestimate household income and underestimate the number of households in poverty. 

These estimates also may include households who do not qualify for the voucher despite their lowincome status. Coverage rates are based on the number of households who successfully leased units 

in 1999. A total of 1,649,645 vouchers were authorized, but some of these were not used partially due 

to voucher-holders’ inability to find housing. Rates reflect only those participating in the Housing 

Choice Voucher program; however, those eligible may also be served by a number of other federal, 

state, and local housing assistance programs. 

g

HUD’s data on the number of eligible households was based on the American Housing Survey. This 

survey may overestimate household income and underestimate the number of households in poverty. 

Income-eligible households may not be eligible for other reasons—for example, local public housing 

authorities may deny assistance to people with habits and practices that may be detrimental to other 

public housing tenants—and the estimate does not account for this. Coverage rates are based on the 

number of public housing units that were leased; a total of 1,235,229 units were available but some 

were unleased for a variety of reasons, such as resident turnover. Rates reflect only those 

participating in the public housing program; however, those eligible may also be served by a number 

of other federal, state, and local housing assistance programs. GAO used an eligible population of 

those who earn less than 80 percent area median income as per the eligibility criteria; however, 

nationally the vast majority of those served by public housing make less than 50 percent of the area 

median income. 
Page 20 GAO-05-221 Means-Tested Programs 

h

A new program established in 1997, SCHIP saw its enrollment increase 75 percent between fiscal 

years 2000 and 2003; a more recent estimate of the SCHIP coverage rate would likely be higher than 

the range shown. In addition, because states’ implementation of their programs varied, awareness of 

SCHIP may lag in states that created their programs more recently. 

i

Estimates account for variation in state eligibility rules, and the estimates are based on state eligibility 

rules in place in 2000. Children who are eligible for Medicaid expansion SCHIP programs and 

separate state SCHIP programs are included in the estimate. Children covered by private and other 

public health insurance such as Medicaid are generally not eligible for SCHIP and are, therefore, not 

included in the denominator for the calculation; to the extent that some are included in the actual 

caseload under “employer buy in” programs, the coverage rate will be slightly overestimated. 

j

Estimates account for variation in state eligibility rules. All units receiving TANF cash assistance are 

included, even though a separate state program might fund their benefits. Families receiving noncash benefits funded by TANF are not included, although an increasing proportion of TANF funds are 

being used to provide non-cash assistance to families. Some families or individuals that may appear 

eligible according to model may not be participating because they have not complied with program 

requirements, such as being involved in work activities. However, those who have reached their state 

or federal TANF time limit are appropriately excluded from eligibility in estimating the coverage rate. 

k

Estimates only include eligible infants and children, even though pregnant, postpartum, and 

breastfeeding women are eligible for this program, because the CPS does not have data to determine 

a woman’s pregnancy status or whether she is breastfeeding. According to the FNS, women account 

for a quarter of WIC participants. 

l

A confidence interval is not available. This estimate is based on data from National Research Council 

of the National Academies, Estimating Eligibility and Participation for the WIC Program (Washington, 

D.C.: Sept. 2003). Estimates include pregnant women, infants, and children. It does not include 

postpartum and breastfeeding women. 

m

Estimates are preliminary because they are partially based on the numbers used to create Medicaid 

participation rates and SCHIP coverage rates. The Medicaid participation rate and SCHIP coverage 

rate for 2001 had not been completed in time to include in this report. 

Generally less than half of those eligible participate in the seven nonentitlement programs. Coverage rates also have limitations such as data 

sources, and estimation methodologies that make it inappropriate to 

compare the estimates across programs. However, they provide a general 

sense of the extent to which these programs are reaching eligible people. 

Specifically, we found: 

• Almost 20 percent of children who meet state-defined eligibility criteria 

are receiving child care services through CCDF.10 This estimate does 

not reflect participation in child care funded by other federal sources. 

HHS estimates that about 26 percent of CCDF-eligible children are 

receiving child care services through either CCDF (including the Child 

Care and Development Block Grant, state CCDF funds or TANF 

 10Under CCDF, states may provide child care subsidies to families with up to 85 percent of 

state median income, if they are working or involved in education or training. States 

determine the income criteria up to this maximum. See GAO, Child Care: Recent State 

Policy Changes Affecting the Availability of Assistance for Low-Income Families, 

GAO-03-588 (Washington, D.C.: May 5, 2003). 
Page 21 GAO-05-221 Means-Tested Programs 

transfers to CCDF), or child care services funded directly through the 

Social Services Block Grant (SSBG), TANF, or TANF state funds.11

• The Head Start program funded enough slots to serve about 44 to 

54 percent of eligible 3- to 4-year-old low-income children in 2003.12

• An estimated 13 to 15 percent of households eligible for Housing 

Choice Vouchers on the basis of income both received a voucher and 

were able to successfully lease a housing unit in 1999, the most recent 

year for which these data were available. In addition, less than 

10 percent of households eligible on the basis of income were served 

through the Public Housing program in 1999. While HCV and public 

housing are the two largest federal housing programs, there are other 

federal, state, and local housing programs from which eligible 

households could receive assistance. HUD estimated that in 1999 about 

a quarter of all households eligible for any kind of housing assistance 

received assistance. 

• In 2000, about 44 to 51 percent of eligible children participated in 

SCHIP. Since 2000, SCHIP enrollment has increased by nearly 3 million 

children, but the impact this has had on the coverage rate is not known 

because information on how the eligible population may have changed 

over this time period is not available. In addition, because states’ 

implementation of their programs varied, awareness of SCHIP may lag 

in states that created their programs more recently. 

• About half of all eligible households receive cash assistance through 

TANF. This estimate does not account for families that receive other 

services, such as transportation and child care, that are offered through 

this program, but who do not receive cash assistance.13

• WIC participation rates were available from two sources. The National 

Research Council using the Survey of Income and Program 

Participation found that 51 percent of eligible infants, children ages 1 to 

4 and pregnant women were enrolled in WIC in 1998. The Urban 

 11HHS does not collect information on the number of children who receive child care 

subsidies through the SSBG, TANF and TANF Maintenance of Effort funding. Therefore, 

the agency estimated the number of children served through those other funding sources 

by dividing the total amount spent on child care services from each source by the average 

cost of serving a child under CCDF. 

12Even so, in some areas, Head Start programs are underenrolled. See GAO, Head Start: 

Better Data and Processes Needed to Monitor Underenrollment, GAO-04-17 (Washington, 

D.C.: Dec. 4, 2003). 

13For more information on those who receive TANF-funded services other than cash 

assistance, see GAO, Welfare Reform: States Provide TANF-Funded Work Support 

Services to Many Low-Income Families Who Do Not Receive Cash Assistance, 

GAO-02-615T (Washington, D.C.: Apr. 10, 2002). 
Page 22 GAO-05-221 Means-Tested Programs 

Institute, using the Current Population Survey, found that about 51 to 

55 percent of eligible infants and children participated in 2001. 

Coverage rates for these programs can also vary substantially by 

subgroup, and they do vary within the TANF and WIC programs, the only 

non-entitlement programs for which we have this information. 

Understanding the extent to which different subgroups are covered by 

non-entitlement programs can be particularly important precisely because 

these programs are not necessarily funded to cover all those eligible. Table 

7 provides coverage rates for groups of people eligible for TANF cash 

assistance and WIC. 

Table 7: Coverage Rate Estimates for TANF Cash Assistance and WIC Subgroups 

for the Most Recent Year Data Were Available 

Program (year) Eligibility units 

Coverage rate 

estimates

(percent)

TANF – cash assistance (2001)a All Families 46—50

 Families with Earnersb 37—44

 Families with No Earnersc 51—56

 Two-Parent Families 31—36

 Families with Immigrants 34—43

WIC (2001)d All Individualse 51—55

 Infants 79—93

 Children Ages 1-4 41—45

Source: GAO analysis of estimates from the Urban Institute’s TRIM3. 

a

Estimates account for variation in state eligibility rules. All units receiving TANF cash assistance are 

included, even though a separate state program might fund their benefits. Some families or 

individuals that may appear eligible according to the model may not be participating because they 

have not complied with program requirements, such as being in involved in work activities. However, 

those who have reached their state or federal TANF time limit are ineligible and are not included, 

unless receiving assistance through a separate state program. 

b,cEstimates only include families with one parent or no parents present. 

d

Estimates are preliminary because they are partially based on the numbers used to create Medicaid 

participation rates and SCHIP coverage rates. The Medicaid participation rate and SCHIP coverage 

rate for 2001 had not been finalized during the time frames of this report. 

e

Estimates only include eligible infants and children, even though pregnant, postpartum, and 

breastfeeding women are eligible for this program, because the CPS does not have data to determine 

a woman’s pregnancy status or whether she is breastfeeding. According to the FNS, women account 

for a quarter of WIC participants. 

As shown, families with no income earners tend to receive TANF cash 

assistance at a higher rate in the TANF program than families with earners 
Page 23 GAO-05-221 Means-Tested Programs 

or two-parent families. The data also suggest that families with immigrants 

have a lower coverage rate than families without immigrants. As noted 

earlier, some families within these subpopulations may be receiving other 

services funded by TANF, although data are not available on this. The 

participation rate among infants eligible for WIC is higher than among 

children ages 1 to 4. 

We were unable to provide estimates of changes in coverage rates over 

time for most of the non-entitlement programs covered in this review, but 

we did find an increase in the coverage rate for the Head Start program 

over the past several years. Since 1997, Head Start coverage rates have 

increased from about 40 percent to 50 percent. However during this time 

period, the coverage rate increased between 2000 and 2001 from about 

50 percent to 58 percent and then gradually declined. The coverage rate 

increased by this amount within 1 year because slots increased by nearly 

40,000 for the Head Start program while the number of children eligible 

decreased by about nearly 130,000. Since 2001 the number of funded Head 

Start slots has increased, but the coverage rate fell because the child 

poverty rate, and thus the number of eligible children, increased. Figure 2 

shows Head Start coverage rate estimates for 1997 to 2003. 
Page 24 GAO-05-221 Means-Tested Programs 

Figure 2: Head Start Coverage Rate Estimates for 1997 to 2003 

0

30

35

40

45

50

55

60

Percent

Source: GAO’s analysis of CPS and HHS data.

Year

1997 1998 1999 2003 2000 2001 2002
Page 25 GAO-05-221 Means-Tested Programs 

Because of changes in the methodology used to estimate coverage rates 

from 1 year to the next, we cannot reliably compare the most recent 

coverage rate estimates for SCHIP and TANF to those of prior years, but 

there is compelling evidence that coverage rates for these two programs 

changed significantly over time. SCHIP was first implemented in 1997 and 

the number of children in the program grew from 660,351 in fiscal year 

1998 to over 3 million in fiscal year 2000. As states continued to reach out 

to eligible children in subsequent years, participation continued to 

increase to nearly 6 million in fiscal year 2003. This eightfold increase in 

the number of children enrolled in SCHIP since fiscal year 1998 almost 

certainly had a significant impact on the coverage rate. Meanwhile, as 

states implemented welfare reforms during the strong economy of the late 

1990s and other changes occurred in programs serving low-income 

families, the number of families receiving TANF cash assistance declined, 

falling by about 50 percent between fiscal years 1997 and 2003.14 This also 

likely had a significant impact on the program coverage rate. HHS has 

reported that about 70 percent of families eligible for TANF cash 

assistance were enrolled in the program in 1997, compared to less than 

50 percent in 2001, but we were unable to quantify how much of this 

change was caused by changes in estimation methodology.15 It is also 

important to note that states’ TANF programs have changed over this time. 

States have more flexibility in the types of non-cash assistance they may 

provide families, and some families eligible for cash assistance may be 

receiving other forms of aid instead. In addition, some families or 

individuals that may appear eligible according to the model may not be 

participating because they have not complied with program requirements, 

such as being involved in work activities. 

 14For more information on recent program changes see GAO, Supports for Low-Income 

Families: States Serve a Broad Range of Families Through a Complex and Changing 

System, GAO-04-256 (Washington, D.C.: Jan 26, 2004). 

15While the exact effect of the methodological changes has not been quantified, Urban Institute staff 

and HHS do not believe that the methodological changes are driving measured changes in 

participation rates. See U.S. Department of Health and Human Services, Indicators of Welfare 

Dependence: Annual Report to Congress, 2004, (Washington, D.C.:2004). 
Page 26 GAO-05-221 Means-Tested Programs 

Our estimates of the costs of providing benefits to eligible non-participants 

show that for some programs, those currently participating in the 

programs are generally eligible for a greater benefit amount than those not 

participating. For these programs, the estimated costs of serving those 

eligible but not currently receiving benefits may be less than one might 

expect based on the participation or coverage rates we estimated. This is 

not surprising, as it makes sense that, for example, a person eligible for a 

$10 food stamp benefit might be more likely to forgo that benefit than a 

person eligible for a $150 benefit. More specifically, Mathematica found 

that the 48 percent of households participating in the Food Stamp Program 

in fiscal year 2001 received about 62 percent of the total amount of 

benefits that would be paid out if all eligible households received benefits. 

As shown in table 8, we were able to estimate the additional cost of 

providing benefits to eligible nonparticipants for 6 of the 12 programs we 

reviewed. These cost estimates take into consideration the characteristics 

of non-participants and the benefits for which they would be eligible but 

do not account for increases in administrative costs that could result from 

participation increases. We were unable to estimate the cost of providing 

benefits to eligible, non-participants in the six other programs—CCDF, 

HCV, Medicaid, Pell Grants, Public Housing, and SCHIP—because we did 

not have enough information to determine how the characteristics of the 

non-participants would have affected the benefit amounts they could have 

received. 

Table 8: Potential Cost of Providing Benefits to Eligible Non-participants for the 

Most Recent Year Data Were Available 

Program (year) 

Potential annual cost

of serving eligible

non-participantsa,b

EITC (1999) $2–3.4c

Food Stamp Program (2001) 8.8–11.5

Head Start (2003) 3.8–5.6d

SSI (2001) 8–9.8

TANF–cash assistance (2001)e 8–9

WIC (2001)f 1.9–2.1

Source: The Urban Institute’s TRIM3 and GAO’s analysis of data from CPS, HHS, and IRS. 

Note: Cost estimates do not include increases in administrative costs associated with greater 

program participation. 

The Estimated Costs of 

Serving Eligible Nonparticipants Show That in 

Some Programs, Those 

Eligible for the Largest 

Benefits Are More Likely 

to be Enrolled 
Page 27 GAO-05-221 Means-Tested Programs 

a

This range represents a 95 percent confidence interval based on estimated sampling error in the 

national survey data. This interval does not take into account errors introduced by the modeling 

process or by administrative data. We assessed but did not quantify these errors. Estimates are 

based on most of the same data used to estimate participation and coverage rate estimates for the 

related programs and, therefore, many of the same data and model limitations apply. 

b

Estimates do not account for policy or economic changes that would occur if participation in these 

programs increased. All estimates are based on the assumption that participation in other programs 

remains constant. 

c

Estimates are from GAO, Earned Income Tax Credit Participation, GAO-02-290R (Washington, D.C.: 

Dec. 14, 2001). 

d

Estimate is based on an average cost per slot multiplied by the number of non-participating eligible 

children. This estimate does not account for local variation in the cost of services, and does not 

account for the possibility of more than one child filling a slot. 

e

Estimates are only for the additional cost of providing TANF cash assistance. The program provides 

other supports, such as child care and transportation, to needy families, and the cost of these 

services would increase the estimate if they were included. 

f

Estimates are only for the additional cost of providing food benefits to infants and children who are 

not enrolled. 

Although Medicaid is by far the largest program we reviewed, developing 

reliable estimates of the costs of serving those eligible but not enrolled in 

the Medicaid program is difficult for a number of reasons. These reasons 

include a lack of information about the health status of eligible nonparticipants, the many variables that affect health care costs, and the 

open-ended nature of health care benefits. 

The costs included in the table do not reflect the total costs that would be 

incurred if all eligible people enrolled in these programs. Probable 

increases in administrative costs that would be incurred are not included, 

and we did not estimate how the cost of goods and services offered 

through the Food Stamp, Head Start, and WIC programs would change if 

more participants were demanding them. However, the costs do include 

some additional costs that would be incurred by states in programs where 

states are required to cover some of the program costs. 

Recognizing the differences in goals, design, administration, and funding 

in the 12 programs, it may be neither feasible nor desirable to provide 

program benefits to all those eligible. Because alternative programs could 

offer the similar benefits and services as the programs we reviewed, some 

of these programs, especially those with limited funding, may be best 

administered by only serving a certain subgroup of their eligible 

population. For example, in localities where school systems offer prekindergarten classes to 4-year-old children, Head Start programs may want 

to focus more on enrolling 3-year-olds from low-income families. Also, 

limited administrative resources may prevent federal, state, and local 
Page 28 GAO-05-221 Means-Tested Programs 

agencies from serving all those eligible. Full participation among eligible 

people also may not be feasible because some choose not to enroll in 

means-tested programs. Given these constraints, some programs may 

focus on targeting their resources to those most in need of program 

services. 

Finally, while participation and coverage rate estimates as well as 

estimates of potential program costs provide important program 

information that can be useful to both policymakers and program 

administrators, these estimates must be interpreted carefully to take into 

consideration such factors as survey data, research methodology, 

timeliness of estimates, and the availability of alternative programs. These 

factors limit our ability to compare rates across programs and would need 

to be considered in efforts to define appropriate or desired participation or 

coverage rate levels. For a detailed discussion of the factors that affect use 

of these estimates, see appendix II. 

Many factors influence access to means-tested programs, including the 

benefits provided by the program, ease of access, misperceptions about 

program requirements, and eligibility verification procedures put in place 

to ensure program integrity, based on our literature review and agency 

interviews. These factors influence participation by affecting the number 

of people who participate in a program as well as the type of people who 

participate. Entitlement programs may focus on addressing factors that 

affect access in order to increase program participation. However, 

because coverage rates in non-entitlement programs are determined 

primarily by funding levels, non-entitlement programs are more likely to 

be concerned about the impact of these factors on other aspects of 

program access, such as the composition of the program caseload and 

how the program interacts with alternative programs that provide similar 

benefits. 

The size and type of program benefits can affect whether or not an 

individual participates in a program. Numerous studies show that the size 

or value of the benefit influences program participation, and this depends 

largely on the structure of program benefits. Some programs, such as the 

Food Stamp Program, determine benefit levels based on income, allowing 

a three-person household to receive as little as $1 per month depending on 

household income. Other programs, such as Medicaid, generally offer 

comparable benefits to every resident of a state who meets eligibility 

requirements. A recent National Bureau of Economic Research study 

Many Factors 

Influence 

Participation but 

Their Impact on 

Entitlement and NonEntitlement Programs 

Differs 

The Size and Type of 

Benefits Can Affect 

Participation 
Page 29 GAO-05-221 Means-Tested Programs 

showed that across a range of programs and within programs, larger 

benefits were associated with higher participation and coverage rates.16 In 

addition, our literature review, site visits, and analysis of participation 

rates for selected programs showed that participation and coverage rates 

tend to be higher among subgroups eligible for larger benefits. For 

example: 

• Elderly individuals are generally eligible for small food stamp benefits; 

their participation rate in the program is lower than for other groups. 

• Families with infants participate in WIC at higher rates than families 

with older children, in part because the value of the WIC voucher is 

greater for families with infants. WIC officials in Connecticut reported 

to us that 10 percent of families stopped participating in the program 

when their youngest child reached age 1.17

• On average, families with children who are eligible for the EITC receive 

a higher EITC benefit than individuals and families without children, 

and they participate at a higher rate. 

The type of benefits offered can also influence whether someone eligible 

for a program participates. Some programs—such as EITC and SSI—offer 

cash benefits while other programs—such as Head Start and Medicaid—

offer direct services, such as educational or health services. Our research 

on participation in low-income programs generally shows that 

participation and coverage rates are higher among programs that provide 

cash benefits than among programs that provide direct services. One 

reason for this difference is the flexibility cash benefits give to individuals. 

Although the recipient may need the services provided by programs in 

which they are enrolled, these types of benefits do not allow individuals to 

shift resources away from program purposes toward what they might 

consider more pressing needs. Our site visits confirmed that the type of 

benefits influence participation and coverage rates. For example, we 

found that: 

 16Currie, Janet, The Take Up of Social Benefits, NBER Working Paper 10488, (Cambridge 

Mass.: National Bureau of Economic Research, May 2004). This study reviews literature on 

participation and coverage rates among social programs in both the United States and the 

United Kingdom. 

17This decline in participation is consistent with national data provided by USDA. 

Nationally, there is about a 30 percent decline in enrollment when the value of a child’s 

benefit decreases. The average benefit declines by about 60 percent after the child’s first 

birthday. 
Page 30 GAO-05-221 Means-Tested Programs 

• SSI recipients who participated in a pilot project that allowed them to 

receive their food stamp allotment in cash expressed a strong 

preference for this over traditional food stamp coupons. 

• Some individuals who need subsidized housing may prefer the Housing 

Choice Voucher program, which allows individuals to choose their 

housing in neighborhoods that offer better educational and 

employment opportunities or choose to remain in a place while paying 

less rent, over the Public Housing program that does not give the 

individuals flexibility to choose where they live. 

Factors that influence the ease with which potential participants can 

access a program—including office hours, program location, and the 

ability of program participants to redeem or use their benefits—can also 

affect the number and groups of people who participate in the programs. 

Several of the programs we reviewed require applicants to visit the 

program office to establish and maintain eligibility. For instance, local 

WIC, TANF, and Food Stamp Program offices typically require face-to-face 

interviews before individuals can receive benefits.18 Those programs that 

keep traditional office hours—8:00 a.m. to 5:00 p.m.—pose a barrier to 

potential applicants who work and would have to take time away from 

their job in order to apply. Studies on child care and WIC programs 

identify traditional office hours as a barrier for working families. Similarly, 

Medicaid officials in California told us that one of their barriers to 

participation is office hours that do not accommodate working families. 

Although many program officials suggested that having flexible office 

hours is important to participants, some offices are challenged to extend 

their operating hours. WIC officials in Connecticut told us that they have 

attempted to promote extended hours and have made some progress; 

however, instituting extended hours remains problematic due to limited 

funding and contracts governing the workforce. 

The location of the program office can also affect participation and 

caseload composition. For many individuals—like the elderly, individuals 

with disabilities, and families living in rural areas—traveling to a program 

office that is outside the limits of their available mode of transportation 

makes it difficult for them to receive needed benefits. The USDA published 

in its National Survey of WIC Participants that one of the top barriers in 

the WIC program is transportation with 30 percent of participants 

reporting that they missed appointments because they lack transportation 

 18Most programs waive the requirement for a face-to-face interview in hardship cases. 

Ease of Access to Program 

Benefits and Services Can 

Influence Participation 
Page 31 GAO-05-221 Means-Tested Programs 

to the office. Studies on the Housing Choice Voucher, child care, Head 

Start, and Food Stamp programs reported similar findings. Many state and 

local officials we visited agreed that transportation is a barrier to 

participation. A TANF, Food Stamp, and Medicaid official in Washington 

County, Maryland, told us that public transportation is limited and getting 

to and from the program offices poses a barrier to participation for many 

individuals, especially those in rural communities. According to officials, 

participants without vehicles have to seek rides from family members or 

acquaintances to access services. For many of these participants being 

seen going to the welfare office is difficult and sometimes stigmatizing. 

Some programs—including child care, Housing Choice Voucher, and 

Medicaid—offer benefits that can be difficult for participants to use, as 

some service providers—landlords, day care workers, or health care 

providers—will not exchange their services for program benefits. For 

example, our prior work found that the proportion of providers who will 

accept child care subsidies varied widely by state, ranging from 23 to 

90 percent. Even in cases where providers accepted subsidies, the number 

of slots for children that used child care subsidies was limited.19

Additionally, several state and local officials suggested that participants 

are sometimes challenged to find health care providers that accept 

Medicaid. According to officials in Chisago County, Minnesota, 

participants have to drive up to 200 miles to visit a dentist that accepts 

Medicaid. 

From our literature review and interviews with program officials, we also 

found that many individuals do not participate in low-income programs 

because they do not know that they are potentially eligible for benefits. 

Numerous studies have documented instances where participation was 

compromised because individuals were unaware of program benefits or 

had misconceptions about eligibility. For example, several EITC, 

Medicaid, Food Stamp, Head Start, and SSI studies indicate that one of the 

primary barriers to participation is that individuals do not know that they 

are eligible for these benefits. For some individuals—like the elderly and 

non-English speakers—this unfamiliarity with program benefits is even 

more widespread, creating a larger barrier to participation and an under 

representation of these individuals in the caseload. Many program officials 

 19GAO, Child Care: States Exercise Flexibility in Setting Reimbursement Rates and 

Providing Access for Low-Income Children, GAO-01-894 (Washington D.C.: Sept. 2002). 

Misperceptions about 

Program Requirements 

Discourage Some 

Individuals from 

Participating 
Page 32 GAO-05-221 Means-Tested Programs 

we visited agreed and explained that individuals also have misconceptions 

about program eligibility. For example, some individuals do not believe 

that they are eligible for benefits because they are employed while others 

do not want to be attached to the perceived stigma associated with the 

programs. In Los Angeles, Medicaid officials noted that rumors circulated 

about the eligibility criteria for Medicaid prevent many potential recipients 

from applying for the program. Particularly in non-English speaking 

communities, information about social services is often received through 

word of mouth; thus, when incorrect information circulates, it can have a 

significant impact on participation. 

Eligibility verification requirements—rules put in place to improve 

program integrity by ensuring that only those eligible for program benefits 

receive them—can also affect the overall number and characteristics of 

people who participate in the program. Each low-income program in this 

study has a set of verification requirements that individuals must complete 

to establish and maintain eligibility. Common requirements among the 

programs include completing application forms and providing necessary 

documentation. In addition, some programs require applicants to take 

additional steps, such as attending face-to-face interviews, documenting 

parental or spousal assets, or participating in orientation classes. 

According to our literature review, the complexity of verification 

requirements can impact the number of enrollees, especially for 

individuals with mental disabilities or who are homeless. One WIC study 

reviewed participation rate differences among states and found that states 

that required applicants to provide proof of income (before it was 

federally mandated) and had stricter program rules had lower program 

participation than states that did not require income documentation.20

Additionally, another study examined EITC participation rates across 

states and found that differences in participation rates are due in part to 

the applicant having help completing the complex tax forms.21 Many state 

and local officials agree that strict and/or complicated verification 

requirements can decrease participation, particularly among certain 

groups of people. For example, we found: 

 20M. Bitler, J. Currie, and J. Scholz, WIC Eligibility and Participation, Institute for 

Research on Poverty Discussion Paper 1255-02 (Madison, WI: Institute for Research on 

Poverty, June 2002, revised March 2003). 

21SB/SE Research, Participation in the Earned Income Tax Credit Program for Tax Year 

1996 (Greensboro, N.C.: January 2002). 

Application Process and 

Eligibility Verification 

Requirements to Ensure 

Program Integrity Can 

Have an Effect on 

Participation 
Page 33 GAO-05-221 Means-Tested Programs 

• According to officials, the Pell Grant application is very long and 

complicated and can be difficult for students and their parents to 

complete. Staff from an organization in St. Paul, Minnesota, dedicated 

to assisting low-income students to access higher education told us 

that many low-income students in the area would not be able to 

complete the forms correctly without their assistance. 

• CCDF Officials in Connecticut and Georgia told us that the application 

process can be complex and difficult for applicants and, as a result, 

many applicants submit their applications late or incomplete. Because 

there is very high demand for child care subsidies, these families are 

often denied benefits or removed from the waiting list. 

• Local SSI officials told us that participants face many life changes such 

as frequent hospitalization and institutionalization, moving into 

different family households, and changes in the hours that they work. 

To remain eligible for program benefits, SSI recipients must report 

these types of changes within 10 days from the end of the month of the 

change. 

Finally, while each program has its own set of verification requirements, 

these requirements become even more challenging when participants are 

applying or maintaining eligibility for multiple programs. Program officials 

in Maryland told us that one of the biggest barriers to accessing multiple 

means-tested programs is the many different eligibility criteria and 

reporting requirements of the various programs. According to state 

officials in Maryland, the TANF and Food Stamp Programs are relatively 

well aligned, but Medicaid has not coordinated as much with the other 

programs. According to officials, this can be problematic because a 

participant who is turned down for one program might assume that he or 

she is ineligible for other low-income programs and may fail to apply for 

benefits for which they are eligible. 

Factors that influence participation also impact other aspects of program 

access such as targeting and program interactions among all low-income 

programs, but particularly among non-entitlement programs whose 

enrollment levels are determined largely by funding levels. The nonentitlement programs covered in this review—CCDF, Head Start, Housing 

Choice Vouchers, Public Housing, SCHIP, and TANF—have funding 

limitations that could restrict the total number of people who could 

potentially participate in the programs and, as a result, coverage rates for 

these programs may be determined, at least in part, by funding. However, 

among programs that allow states substantial flexibility in determining 

program eligibility and implementation such as CCDF, SCHIP, and TANF, 

Factors That Influence 

Participation Rates Can 

also Impact Other Aspects 

of Program Access Such 

As Targeting and Program 

Interactions 
Page 34 GAO-05-221 Means-Tested Programs 

funding constraints contribute to, but do not determine coverage rates to 

the extent that they do for programs that allow less state and local 

flexibility. Given funding constraints for non-entitlement programs, 

agencies are challenged to allocate scarce resources appropriately by 

targeting their benefits to specific groups of people and planning 

strategically to ensure that the program complements a broader range of 

programs administered by the same agency or that provide similar services 

or benefits to the program’s eligible population. 

Because factors that influence participation often affect the composition 

of a program’s caseload, some agencies that administer programs with 

limited funding have put measures in place to ensure that their caseloads 

reflect program priorities—whether that involves targeting certain groups 

or ensuring that benefits do not disproportionately favor or exclude 

certain subpopulations. For example, although the public housing program 

generally does not target benefits to households with the lowest incomes, 

it allows priority to be given to elderly and disabled recipients. Agency 

officials reported that they track participation of these groups to ensure 

that their share of the total caseload does not change dramatically from 

1 year to the next. Similarly, state child care officials told us that funds are 

generally provided to recipients based on priority groups that favor 

families receiving public assistance and those with the greatest financial 

need. 

Additionally, many agencies are cognizant of how their programs interact 

with and complement other programs that serve the same population. For 

example, some child care programs pair with half-day Head Start 

programs to provide continuous care to children of working parents; 

Medicaid and SCHIP programs within some states coordinate their 

enrollment processes to facilitate access to health insurance for 

individuals in the state; and between 1998 and 2003, HUD responded to a 

decrease in the number of public housing units available for low-income 

households by increasing resources available through its voucher program 

to maintain coverage for families. Likewise, in allocating TANF resources, 

programs often coordinate with local workforce development agencies, 

child care programs, and other programs that provide similar services to 

best meet the needs of their clients without duplicating an existing effort. 

In these ways, programs acknowledge and respond to access issues and 

ways in which factors affect access other than participation levels and 

rates. 
Page 35 GAO-05-221 Means-Tested Programs 

Program administrators have implemented many strategies to achieve 

desired program outcomes, including those related to program access and 

program integrity, but while agencies have generally taken steps to 

monitor and disseminate information on program integrity, few track and 

report on the extent to which they are serving their eligible populations. 

The programs we reviewed have many goals and objectives of varying 

degrees of importance to the agencies that administer them, among them 

program access and program integrity. Strategies implemented at the 

federal, state, and local level to address these two issues include 

information systems, data sharing, and technological innovation, changes 

to the application and eligibility verification process, and outreach and 

coordination with other programs. Although federal agencies do not have 

direct control over many of the strategies we identified—including those 

mandated by law and those initiated at the state and local level—federal 

managers can play a role in encouraging and facilitating such strategies by 

emphasizing program access and program integrity as federal agency 

priorities. In response to the Improper Payments Information Act of 2002, 

all of the federal agencies we reviewed have taken at least some steps to 

identify and begin reporting information to Congress and others on the 

extent of improper payments. We also found, however, that for several of 

the programs we reviewed, federal agencies have not taken steps to 

identify and use participation or coverage rate information in managing 

their programs. Having up-to-date information on the extent to which their 

programs reach eligible individuals can help agencies plan strategically, 

set priorities, and ensure that agencies are reaching eligible families. 

The state, local and federal program officials we spoke with identified 

several strategies that they believe may improve either of the two 

objectives—program access or program integrity—without harming, and 

in many cases improving, the other. As mentioned, some efforts to 

increase program integrity and prevent fraud, such as increasing the 

amount of eligibility verification required, may actually hurt access to the 

program by deterring even those eligible from applying. However, program 

administrators told us of several strategies that increase access while 

maintaining and even improving integrity. The complementary strategies 

we identified are enabled by information systems, data sharing, and 

technological innovations, changes in the application and eligibility 

verification process, and outreach and coordination with other programs. 

Improved information systems, sharing of data between programs, and use 

of new technologies can help programs to better verify eligibility and make 

the application process more efficient and less error prone. These 

strategies can improve integrity not only by preventing outright abuse of 

Program 

Administrators Have 

Strategies That 

Improve Both Access 

and Integrity, but 

Federal Agencies 

Have Generally 

Focused More on 

Measuring Program 

Integrity Outcomes 

Programs Have Found 

Ways to Improve Access 

by Reducing the Burden on 

Applicants While at the 

Same Time Improving 

Program Integrity 

Information Systems, Data 

Sharing, and Technological 

Innovation 
Page 36 GAO-05-221 Means-Tested Programs 

programs, but also by reducing chances for client or caseworker error or 

misunderstanding. They can also help programs reach out to populations 

who may face barriers. One strategy involves sharing verified eligibility 

information about applicants across programs. Data sharing prevents 

applicants from having to submit identical verification to multiple 

programs for which they may be eligible, and it can also speed up the 

sometimes-lengthy application process. In addition, data sharing allows 

programs to check the veracity of information they receive from 

applicants with other databases. 

In Minnesota, WIC caseworkers are able at the time of application to 

determine participant eligibility by accessing basic eligibility information 

via technology systems from other means-tested programs, such as 

Medicaid, food stamps and TANF. SSI administrators told us that during 

the application interview, income data is entered in their computer system. 

This information is then checked with a number of other databases 

including those of the IRS, the Department of Veterans Affairs, and the 

state Civil Service Administration to quickly verify earnings and other 

eligibility requirements and inconsistencies are flagged. Similarly, Georgia 

has an interactive computer system that aggregates client information for 

TANF, Medicaid, and the Food Stamp Program and calculates benefits for 

all three programs. Additionally, when clients need to make a change in 

their eligibility information, these data are automatically changed for all 

three programs, so that clients can receive the appropriate level of benefits 

based on their most current eligibility information. Furthermore, the data 

reliability matches may include information from the Department of Labor 

wage match, SSI benefits, prison information, and information on a 

person’s death. If any of the matched information conflicts with the 

information provided by the client, a caseworker is to ask additional 

questions of the client. In all these ways, caseworkers can accelerate the 

application process while capitalizing on verified eligibility information 

already provided to other programs. 

Some administrators told us that such data sharing, however, can be 

complicated by concerns over ensuring privacy and by insufficient 

technological capacity. Local program administrators told us that 

eligibility data for Medicaid and SCHIP is tightly controlled because of 

Health Insurance Portability and Accountability Act (HIPAA)—a law that 

limits access to an individual’s health information—but that its data might 

be shared, if warranted, with proper consent. Data sharing can be impeded 

by technological limitations, such as computer systems that cannot 

communicate directly with other systems over the Internet or some other 

network, or a lack of software needed to translate information into 
Page 37 GAO-05-221 Means-Tested Programs 

formats that other computers can understand. Our prior work on data 

sharing identifies strategies agencies have implemented to address 

concerns about privacy and technological capacity issues.22

Some agency officials told us of ways in which on-line applications can 

improve both access and integrity. As stated, program integrity is 

compromised not only by willful misrepresentation, but also by applicant 

and caseworker error. Web-based or partially web-based applications can 

automatically check that all required fields are completed before an 

application is submitted for review and automatically calculate benefits 

thereby reducing error. Moreover, having the option of an on-line 

application can increase access to those who are eligible for benefits but 

who may have difficulty physically getting to program offices. Minnesota 

has instituted an on-line interactive application for Medicaid that program 

administrators believe will make the application process easier for both 

participants and caseworkers. In addition to making the process easier, 

the system will also check verification information with a variety of other 

data sources and thus reduce the likelihood of errors as well. In this way, a 

potentially burdensome application process becomes simpler, more 

accessible, and less error prone. Similarly, eight states accept food stamp 

applications through the Internet. Of course, this strategy is less viable or 

effective where access to computers is limited or where the on-line 

environment cannot be adequately secured. 

Program administrators told us about several changes in the application 

and eligibility verification process that have improved their ability to 

promote access and ensure integrity. Efforts to increase the accuracy of 

eligibility and benefit determination can increase access by reducing the 

number of applicants who were incorrectly denied benefits or whose 

benefit determinations resulted in underpayments. For example, 

streamlining or simplifying the application and providing applications in 

other languages can increase access, but also promote program integrity 

by reducing errors or misunderstanding in the application process. 

Simplifying applications by clarifying confusing wording and removing 

redundant questions as well as providing applications in an applicant’s 

native language can reduce the possibility of these types of errors. 

According to federal officials, most states use a simplified application 

 22See GAO, The Challenge of Data Sharing: Results of a GAO-Sponsored Symposium on 

Benefit and Loan Programs, GAO-01-67 (Washington, D.C.: Oct. 20, 2000), and GAO, 

Benefit and Loan Programs: Improved Data Sharing Could Enhance Program Integrity, 

GAO/HEHS-00-19 (Washington, D.C.: Sept. 13, 2000). 

Application and Eligibility 

Verification Process Changes 
Page 38 GAO-05-221 Means-Tested Programs 

form for the SCHIP program to remove application barriers for families. 

For example, the SCHIP program applications in both Connecticut and 

California have been reduced from 17 and 27 pages respectively to only 

4 pages each without sacrificing required information, according to state 

officials. In many cases, the SCHIP streamlined application forms caused 

corresponding changes in state Medicaid applications as well. In addition, 

many of the program administrators with whom we spoke told us that 

their applications and forms were available in many languages. For 

example, the Minnesota Department of Revenue now has state EITC tax 

forms and fact sheets directing them to the federal EITC in eleven 

languages. 

Another way in which programs can streamline the application process is 

through categorical eligibility with other programs, which can be set at the 

federal or state level depending on the program. Categorical eligibility, 

also known as adjunctive eligibility, allows an individual who has been 

found eligible for one program to be automatically granted eligibility for 

another program, typically one with less stringent eligibility criteria. For 

example, if an individual is receiving SSI, federal legislation generally 

requires that that person be automatically eligible for Medicaid.23 Similarly, 

if a pregnant woman is receiving Food Stamps, Medicaid, or TANF, then 

she automatically qualifies for WIC benefits—and thus does not need to 

provide income verification once again when applying for the program. 

States also have flexibility to grant automatic eligibility for other 

programs. A state WIC program, for example, may grant automatic 

eligibility for families receiving Free and Reduced Price School lunches. 

These adjunctive or automatic eligibility policies allow ultimately for 

simpler applications, which may enhance access and reduce error. In fact, 

federal administrators at USDA noted that adjunctive eligibility is one of 

the most important tools now used to address program integrity and 

access issues in a way that cuts across programs. 

The provision of more comprehensive in-person assistance in filling out 

applications can encourage a candidate eligible for benefits to complete an 

otherwise lengthy, complicated, or intimidating application process. Such 

personal assistance can also prevent errors that result from 

 23Individuals receiving SSI are assured eligibility for Medicaid in 39 states and the District 

of Columbia. The remaining 11 states may use different or more restrictive standards for 

disability, income or assets; thus, SSI beneficiaries in these 11 states may not have assured 

eligibility for Medicaid. These 11 states are known as 209(b) states based on section 209(b) 

of the Social Security Amendments of 1972. 
Page 39 GAO-05-221 Means-Tested Programs 

misunderstanding of application questions or requirements or even fraud 

by reminding applicants in person that fraudulent claims are punishable by 

law. For example, to increase access to the program, California program 

officials told us that the SCHIP program developed a training process that 

certified staff from other entities, such as schools and community-based 

organizations, as “application assistants.” These “application assistants” 

are also trained to recognize when applicants seem to be submitting false 

information and are prohibited from assisting families who have 

previously been found to have committed fraud. In a Maryland SSA office, 

SSI program administrators told us that they had abbreviated their 

application form so that most information is now collected in an interview. 

This process helps improve access for those with limited literacy or those 

who may be discouraged by a long paper application. Officials also noted 

that this process helps program integrity because the interviews allow 

caseworkers the opportunity to remind clients that fraudulent claims are 

punishable by law. Similarly, EITC officials in Minnesota told us that free 

tax preparation assistance could make the process less complicated for 

filers and could also cut down on fraud from tax preparers. As one official 

explained, many low-income families live near a high concentration of 

paid tax preparers, who have incentives to fraudulently file for a high 

credit. While more in depth application assistance has these benefits, it 

can pose challenges to programs in ensuring the quality of the assistance 

offered and it can be costly. According to California SCHIP officials, 

funding to train “application assistants” for the SCHIP program in 

California was ended in May 2002 due to budget constraints. 

Lastly, some policies put in place to prevent fraud at the time of 

application can also help with program access. Connecticut Department of 

Social Services has begun a fraud prevention program, termed FRED 

(Fraud Early Detection), which was instituted to address an increase in 

the amount of fraud and error detected in the program. The purpose of 

FRED is to identify potential fraud cases before benefits are paid out to 

prevent improper payments rather than identifying fraud after the 

payments have been made. Under FRED, cases that meet 1 of 12 risk 

criteria are to be referred to a fraud investigator who is to visit the home 

within 10 days of the referral. While the investigator is visiting the home, 

he/she is to interview the client about aspects of the risk criteria, and 

make a recommendation regarding eligibility. While the primary purpose 

of the visit is to prevent fraud, in practice investigators have found that 

their role is also to explain the eligibility criteria more clearly to applicants 

and to explain what steps they need to take in order to be eligible for 

program benefits. In addition, investigators are trained to provide 

additional information to the family on other resources available to them 
Page 40 GAO-05-221 Means-Tested Programs 

and to assist them with referrals, thereby increasing access to an array of 

related social services. 

Targeted outreach to populations that might have more barriers to 

accessing the program has the potential to increase access without 

necessarily compromising integrity. Many program officials we spoke with 

told us that they had outreach strategies to reach out to populations—such 

as rural-dwellers, the elderly, or those with limited English proficiency—

that have had trouble accessing the program. Such strategies include 

information sessions or pamphlets in ethnic community centers or 

partnering with advocacy groups. In addition, cross agency referrals for 

applicants already found to be eligible and more overall agency 

coordination can improve access without sacrificing integrity. 

Many agency officials with whom we spoke told us that they coordinated 

with other programs to reach potential clients. In Maryland, the 

Department of Social Services invites the Volunteer Income Tax 

Assistance program to work out of its office, so that those low-income 

earners already in contact with social services can have better access to 

the EITC. Some offices in California participate in an open door policy 

program in which clients can access any social service program through 

referrals at any state government office they walk in to. Some program 

administrators told us that program co-location can help increase access. 

This happens when an individual applying for one program in an office is 

referred to and immediately serviced by another program in that same 

location. Some examples we found had Food Stamps located in TANF 

offices and a WIC clinic collocated with the state Children’s Health 

Insurance Program. 

Outreach and Coordination 

with Other Programs 
Page 41 GAO-05-221 Means-Tested Programs 

All of the programs we reviewed emphasize both program access and 

program integrity, and as we have described, many federal, state, and local 

program administrators have implemented strategies intended to achieve 

access and integrity goals. However, not all agencies responsible for 

administering these programs have established management practices, in 

keeping with standards of internal control, that will consistently guide 

them in achieving these outcomes. Among the standards that are 

particularly relevant for agencies responsible for administering meanstested programs are:24

• establishing and maintaining a control environment, a culture of 

accountability that sets a positive and supportive attitude toward 

achieving management objectives; 

• monitoring program performance over time; and 

• recording and communicating relevant, reliable, and useful information 

to management and others who need it to carry out their internal 

control and operational responsibilities. 

To achieve desired program outcomes and safeguard federal funds, these 

standards should be part of an agency’s operational and management 

practices. While the agencies we reviewed have taken steps to establish 

internal controls for improper payments and program integrity, not all 

have established similar controls for achieving desired program access 

outcomes. 

There are many ways in which federal agencies can establish a culture of 

accountability, one that “sets the tone” for program administrators at all 

levels of government to emphasize certain priorities. One way to do this is 

to monitor progress toward achieving desired program outcomes, and 

another is to effectively communicate program information in a broad 

sense, with information flowing down, across, and up the organization. 

Depending on the program, some aspects of an achievement-oriented 

environment are codified in laws, regulations, and federal policies. For 

example, the Improper Payments Information Act of 2002 requires those 

programs and activities susceptible to significant erroneous payments to 

calculate annual improper payment estimates and sets statistical sampling 

confidence and precision levels for estimating those payments. 

 24See GAO, Standards for Internal Control in the Federal Government, 

GAO/AIMD-00-21.3.1 (Washington D.C.: Nov. 1999), and GAO, Internal Control 

Management and Evaluation Tool, GAO-01-1008G (Washington, D.C.: Aug. 2001). 

Federal Agencies Have 

Taken Steps to Track 

Improper Payments, but 

Few Estimate Program 

Participation or Coverage 

Rates to Monitor Program 

Access 
Page 42 GAO-05-221 Means-Tested Programs 

As shown in table 9, some of the federal agencies covered by this review 

have already begun to monitor improper payments for the programs they 

administer and, as directed by OMB guidance, communicate this 

information by including a measure of improper payments in their annual 

Performance and Accountability Reports.25 Including measures of 

improper payments in agency annual performance plans and 

accountability reports is one way to provide officials with important 

information on areas of success and areas that need improvement and to 

send a signal to all working on agency programs that the measured goal is 

a priority. (For information on the amounts of improper payments 

reported by agencies, see app.III.) To varying degrees, the other agencies 

included in this review have begun taking steps to identify and report on 

improper payments as well. While agencies are taking steps, much remains 

to be accomplished before a comprehensive picture is available of the 

amount of improper payments for these programs.26

 25Agency focus on program integrity might also be encouraged by other agency- specific 

OMB guidance, the Presidents Management Agenda as well as the GAO’s High-Risk 

series—all strategies that encourage or require agencies to focus on integrity. 

26For more information on the implementation of the IPIA governmentwide, see GAO, 

Financial Management: Fiscal Year 2003 Performance Accountability Reports Provide 

Limited Information on Governmentwide Improper Payments, GAO-04-613T

(Washington, D.C.: Apr. 15, 2004). 
Page 43 GAO-05-221 Means-Tested Programs 

Table 9: Status of Agencies Identification of and Reporting on the Amounts of Improper Payments by Program 

Source: GAO survey of federal agencies and interviews with agency officials and agency performance and accountability reports. 

a

ACF has estimated the percentage of “over-income” families served by Head Start in excess of the 

10 percent allowed by regulation. 

b

CMS has a performance goal in its annual performance plan related to a pilot project to develop 

payment error rates for both SCHIP and Medicaid. 

While an internal control framework is emerging for addressing financial 

program integrity issues, few of the agencies responsible for administering 

the programs we reviewed have established a similar framework for 

achieving desired program access outcomes, although they have 

implemented numerous strategies to increase program participation. The 

12 programs we reviewed have numerous program goals and objectives of 

varying degrees of importance to the agencies that administer them. 

Because the most fundamental purpose of these programs is to serve lowincome individuals and families, all track measures that provide some 

information about program participation and access. For example: 

• All of agencies responsible for administering the programs we 

reviewed track the number of people participating in their programs. 

• Some federal agencies—such as HUD—measure the extent to which 

program participants redeem or use benefits provided to them. 

• Others use other measures related to access. CMS tracks the number of 

individuals who are uninsured each year. 

Agency Program 

Subject to 

the IPIA? 

Agency included improper 

payment information in fiscal 

year 2004 annual performance 

and accountability report 

If not, has the agency reported 

taking some steps to identify 

and monitor the amount of 

improper payments? 

USDA Food Stamps Yes Yes 

 WIC Yes No Yes 

HHS/ACF TANF Yes No Yes 

 CCDF Yes No Yes 

 Head Start Yes Noa Yes 

IRS EITC Yes Yes 

HHS/CMSb Medicaid Yes No Yes 

 SCHIP Yes No Yes 

SSA SSI Yes Yes 

ED Pell Grant Yes Yes 

HUD Public Housing Yes Yes 

 Housing Choice 

Voucher 

Yes Yes 
Page 44 GAO-05-221 Means-Tested Programs 

• Many agencies track participants and participant outcomes through 

program effectiveness studies.27

Through these efforts, agencies have demonstrated their concern about 

program access, yet, the ways in which most of these agencies measure 

program participation do not inform administrators about the extent to 

which they are meeting overall need and therefore do not provide all the 

information they need to monitor access. As discussed above, access 

encompasses not only the number of program participants, but also the 

extent to which programs reach the total population eligible for benefits 

and services, how well agencies are allocating resources among targeted 

subpopulations, and, from an agencywide or even governmentwide 

perspective, how well specific means-tested programs complement and 

interact with programs that serve similar populations or provide for 

similar needs. While concerns about the allocation of scarce resources and 

interactions with other programs apply to all low-income programs, they 

may be of particular importance to non-entitlement programs whose 

participation is limited by funding constraints. Participation or coverage 

rate information can guide program administrators in setting priorities and 

targeting scarce resources, even among programs that were not intended 

to serve everyone eligible for program benefits. 

As shown in table 10, only one of the agencies we reviewed, USDA, 

regularly estimates participation rates for the programs it administers and 

communicates and disseminates information on these rates in a way that 

promotes a culture of accountability supportive of achieving program 

access outcomes. USDA has been estimating participation rates annually 

for the Food Stamp Program since 1975. The agency uses this information 

to get a better understanding of how well they are reaching certain priority 

subpopulations such as the working poor, single-parent families with 

children, and SSI recipients; and to identify states in need of outreach 

assistance. In addition, USDA has established a performance goal to 

increase participation rates in the Food Stamp Program and reports food 

stamp participation rates in its annual performance report.28 In these 

 27Studies on program effectiveness typically do not provide information on the number or 

characteristics of those eligible but not participating in low-income programs. 

28USDA also provides performance bonuses to reward states for their performance in 

administering the Food Stamp Program. Awards focus on payment error rates, negative 

error rates, participant access rates, and timeliness of application processing. 
Page 45 GAO-05-221 Means-Tested Programs 

ways, the agency uses this information for program management 

purposes. 

Table 10: Status of Agencies Efforts to Use Information on Participation or Coverage Rates in Managing Their Programs 

Agency Program 

Does the agency 

estimate a 

participation or 

coverage rate? 

If so, does the agency 

use this rate information 

as a performance 

measure? 

If the agency estimates a 

participation or coverage rate, 

does it include rate information 

in their performance report or 

other key program report?a

 

USDA Food Stamps Yes Yes Yes 

 WIC Yes No Yesb

HHS/ACF TANF Yes No Noc

 CCDF Yes No Yesd

 Head Start Yes No No 

IRS EITC Yese No Nof

HHS/ CMS Medicaid No 

 S-CHIP No 

SSA SSI Nog 

ED Pell Grant Noh

HUD Public Housing Noi 

 Housing Choice 

Voucher 

No 

Source: GAO survey of federal agencies, agency annual performance plans. 

a

Key program reports include routine reports that agencies must prepare for Congress for the purpose 

of providing updated information on the status of the programs they administer. 

b

USDA’s methodology for calculating the WIC coverage rate is being revised. The agency has not yet 

started reporting in its annual program reports but it has plans to do so. 

c

HHS includes a TANF coverage rate as part of their Indicators of Welfare Dependence report. 

d

CCDF has published a coverage rate for child care in their Biennial Report to the Congress, which 

includes SSBG and TANF funds. 

e

IRS has calculated a participation rate for the EITC, but only for selected years. 

f

IRS has plans to use a participation rate as part of their Strategic Plan. 

g

SSA has calculated a participation rate for the years 1991-1996, but only for a subpopulation of 

those participating in SSI. 

h

ED has calculated a take-up rate, which is the share of those who applied and were found eligible for 

a Pell Grant who actually received a grant. 

i

HUD has calculated a voucher utilization rate for the housing choice voucher program, and tracks the 

occupancy rates of public housing authorities. 
Page 46 GAO-05-221 Means-Tested Programs 

USDA has taken steps to develop a reliable participation rate measure for 

the WIC program and plans to estimate the WIC participation rate 

annually. Because the WIC program is not an entitlement and participation 

is determined by the appropriated funds, FNS officials told us they do not 

plan to establish a performance goal related to the WIC participation rate. 

However, officials told us that they do think it is important to monitor and 

report on the WIC participation rate for policy, planning, and budgeting 

purposes, and the agency plans to use these data in managing the program 

by highlighting the measure in the program’s budget reports and its annual 

report to Congress. 

HHS plays a key role in estimating participation rates for several meanstested programs. Since 1973, HHS’s Office of the Assistant Secretary for 

Planning and Evaluation has funded TRIM3 for the purposes of policy 

development, analysis, and research on such topics as the interactive 

effects of programs serving low-income families. The Welfare Indicators 

Act of 1994,29 requires HHS to submit annual reports to Congress on 

welfare receipt in the United States and key indicators and predictors of 

welfare dependence. These reports, produced annually since 1997, include 

participation and coverage rates from TRIM3 for TANF (and its 

predecessor program, Aid to Families With Dependent Children), SSI, and 

food stamps. 

HHS includes CCDF coverage rates30 in the biennial congressional report 

and plans to include a performance measure related to participation rates 

in its annual performance reports starting in fiscal year 2006. However, 

HHS generally does not use participation rate estimates it has available 

from TRIM3 in managing its other programs by highlighting the 

information in its annual performance plans or congressionally mandated 

program reports. For example, TANF participation rates are not included 

in the agency’s TANF Annual Report to Congress and Medicaid and SCHIP 

participation and coverage rates are not included in any of the other 

congressionally mandated reports disseminated by CMS, the agency that 

administers these programs. 

Only one of the other agencies we reviewed, the IRS, has plans to estimate 

and report on participation rates for the programs they administer. IRS 

 29Pub. L. No. 103-432 (1994). 

30CCDF’s coverage rate also includes an estimate of the children served through the TANF 

block grant and the Social Services Block Grant. 
Page 47 GAO-05-221 Means-Tested Programs 

plans to begin estimating the participation rate in the EITC program on an 

annual basis starting in fiscal year 2005 and to use the EITC participation 

rate as a performance measure in its annual performance report. However, 

the other agencies we reviewed, including SSA, HUD, and ED, do not 

estimate participation or coverage rates for the SSI, Housing Choice 

Voucher, Public housing, or Pell Grant programs and reported no plans to 

do so.31

There are several reasons agency officials cited for not collecting 

participation rate information. For some programs, information on certain 

eligibility criteria can be difficult or costly to obtain. For example, reliable 

data on the disability status of children who do not receive SSI is not 

readily available from national survey data. We were unable to provide a 

participation rate estimate for this group for this reason. Absent a 

legislative or other mandate to estimate participation and coverage rates, 

agency officials may not consider conducting such estimates a priority. 

However, some agency officials that do not regularly estimate 

participation or coverage rates indicated they would find such estimates 

useful. For example, HUD officials indicated that the agency finds its 

estimates of worst case housing needs, which include some coverage rate 

measures for all housing programs, useful for policy and planning 

purposes. Similarly, while Head Start officials do not publish or report 

coverage rate estimates in any agency documents, they indicated that they 

occasionally estimate participation rates informally for internal use in 

policy, planning, and budgeting. 

Federal agencies responsible for administering means-tested programs are 

charged with ensuring that those eligible for program benefits and services 

are able to access them and with ensuring prudent oversight of taxpayer 

dollars by maintaining program integrity, including preventing improper 

payments. Program administrators may find it challenging to achieve these 

 31ED monitors the share of student financial aid applicants found eligible for a Pell Grant 

who receive a grant. We would refer to this as a “take-up” rate rather than a participation 

rate as we have defined it, because it does not provide information on individuals who are 

eligible but do not complete an application. Similarly, HUD monitors the utilization rate in 

its housing choice voucher program. This measure tracks the extent to which voucher 

recipients are able to redeem their benefits by leasing apartments. Like the Pell Grant 

“take-up” rate, this rate provides program managers with important information they need 

to manage their programs, but it does not provide them with a sense of the extent to which 

their programs are reaching all eligible households and is, therefore, not comparable to a 

participation or coverage rate for monitoring program access. 

Conclusion 
Page 48 GAO-05-221 Means-Tested Programs 

goals in part because they may conflict—ensuring program integrity can 

potentially come at the expense of program access. While we identified a 

number of strategies that have been implemented by federal, state, and 

local agencies that could potentially achieve both of these goals, unless 

agencies track progress toward meeting these goals in a way that signals 

to program administrators at all levels of government that both access and 

integrity are federal priorities, there is a risk that one of the goals may be 

compromised. Estimating participation rates for means-tested programs is 

difficult—and more difficult for some than for others—and cannot be 

considered “an exact science.” Nevertheless, when done rigorously—in a 

way that ensures that estimates are comparable over time and quantifies 

the errors that result from the estimation methodology—these estimates 

can provide a basic understanding of the extent to which needy 

populations are being served by federal programs and can be a key 

component of a federal agency’s efforts to establish a culture of 

accountability that emphasizes the importance of program access. Federal 

agencies responsible for administering only four of the programs we 

covered in this review—CCDF, food stamps, WIC, and EITC—either 

currently collect and report information on the extent to which they are 

reaching their target populations in key performance and program reports 

or plan to do so. As a result, the federal agencies that administer the other 

nine programs covered by this review may lack data that could inform 

their budgetary and programmatic decisions, assist them in ensuring that 

their programs are coordinated with and appropriately complement other 

programs available to their target populations, help them to manage their 

programs effectively, and enable them to provide policymakers with the 

information they need to make decisions. 

As the department moves forward with participation rate estimates for the 

WIC program, we recommend that the Secretary: 

1. take steps to clarify to users the limitations of the estimates; and 

2. comparability between estimates by reanalyzing data as estimation 

methodologies change, so that consistent methods are applied over 

time. 

Recommendations to 

Executive Agencies 

Recommendations to the 

Secretary of the 

Department of Agriculture 
Page 49 GAO-05-221 Means-Tested Programs 

To help ensure that agencies have information on program access, we 

recommend that the Secretaries of Education and HUD study the 

feasibility of calculating participation or coverage rates and including 

them in key program management reports. 

We recommend that the Secretary of HHS consider making some 

improvements to the participation and coverage rate information 

produced for the CCDF, Medicaid, SCHIP, and TANF programs, such as: 

1. quantifying errors that result from calculating these estimates to help 

users better understand the accuracy of the data; and 

2. ensuring, to the extent possible, that estimates are comparable over 

time. 

We also recommend that the Secretary include participation and coverage 

rate estimates in key program reports for these four programs. 

We also recommend that the Secretary study the feasibility of estimating 

the coverage rate for the Head Start program on a regular basis and to 

include these estimates in key Head Start program reports. 

As the IRS moves forward on developing participation rate estimates to 

use as a program performance measure for the Earned Income Tax Credit, 

we recommend that the Commissioner of the Internal Revenue Service 

take steps to quantify errors that may result from estimating these 

participation rates to help users better understand the accuracy of the data 

and ensure that estimates will be comparable over time. 

To help ensure that the agency has information on program access, we 

recommend that the Commissioner consider the feasibility of providing 

participation rate information (from the existing source or another source) 

in SSA program management reports. 

Recommendation to the 

Secretaries of the 

Department of Education 

and the Department of 

Housing and Urban 

Development 

Recommendations to the 

Secretary of the 

Department of Health and 

Human Services 

Recommendation to the 

Commissioner of the 

Internal Revenue Service 

Recommendation to the 

Commissioner of the 

Social Security 

Administration 
Page 50 GAO-05-221 Means-Tested Programs 

We provided drafts of this report to and received comments from the 

Departments of Agriculture, Education, Health and Human Services, and 

Housing and Urban Development; the Internal Revenue Service; and the 

Social Security Administration. They generally agreed with our 

conclusions and recommendations. Agency written comments appear in 

appendixes IV through VII. 

On February 3, 2005, we met with FNS officials to discuss their comments. 

The officials said they agreed with our conclusions and recommendations. 

They stated that they recognize the importance of tracking both program 

access and program integrity and their ongoing efforts to estimate 

participation rates in the food stamp program reflect their commitment to 

balancing the goals of access and integrity. They stated that as they move 

forward in developing a participation rate estimate for the WIC program, 

they plan to take steps to clarify to users the limitations of the estimates 

and to ensure that the estimates will be comparable over time. Agency 

officials also provided technical comments, which we incorporated in the 

report where appropriate. 

The Department of Education agreed that data sources now available 

would not provide sufficient information to develop a reliable 

participation rate estimate for the Pell Grant program. However, the 

department cited a study currently being conducted by the National 

Center for Education Statistics that will determine the feasibility of 

implementing a system of collecting data on all postsecondary students. 

This study will also provide information that could be used to examine the 

feasibility of estimating participation rates for the Pell Grant program. 

The Department of Health and Human Services provided comments 

related to each of the five programs under its jurisdiction. The department 

noted that it has taken steps to measure program access in the TANF, 

CCDF, Medicaid, and SCHIP programs through their funding of TRIM3, 

although they do not always report these estimates in key program 

reports. With regard to CCDF, HHS recognized the importance of coupling 

efforts to control improper payments with efforts to provide effective 

service delivery, and therefore access. The department noted that it has 

recently established a performance measure related to coverage rates for 

the CCDF program. We incorporated this information into the report. HHS 

also thought that we overstated the differences between CCDF and TANF 

in the impact of state flexibility on coverage rates so we changed that 

section of the report. With regard to TANF, HHS raised the concern that 

increasing coverage rates may conflict with other TANF program goals 

and consequently, coverage rates are not an appropriate performance 

Agency Comments 
Page 51 GAO-05-221 Means-Tested Programs 

measure for the TANF program. We recognize that increasing the coverage 

rate is not an explicit goal of TANF and believe this concern is consistent 

with the report’s conclusion that increasing program access may not be 

feasible or desirable for some programs. Nevertheless, we continue to 

believe that including program participation and coverage rates in key 

program reports can help inform policymakers and program 

administrators at all levels of government and assist them making 

budgetary and programmatic decisions. In its discussion of SCHIP and 

Medicaid, HHS indicated that the report reinforced the agency’s approach 

to promoting both access and integrity. The department noted that CMS is 

working to improve its coverage rate estimates for SCHIP and meanwhile, 

it continues to measure progress toward increasing coverage among 

children under 200 percent of poverty, a proxy for the program coverage 

rate. 

HHS also highlighted several other issues that we believe are already 

sufficiently discussed in the report. These include the fact that not all 

those eligible and not participating need program services; that some 

programs allow states considerable flexibility in implementing programs 

and determining eligibility; that participation or coverage rates can be 

challenging to estimate accurately; and that uncertainties and limitations 

surrounding participation and coverage rate estimates should be made 

clear to users of this information. HHS also reiterated some of the 

limitations of our cost estimates and our Head Start coverage rate 

estimates. Agency officials also provided technical comments, which we 

incorporated in the report where appropriate. 

Department of Housing and Urban Development officials provided us with 

technical comments, which we incorporated in the report where 

appropriate. 

The Internal Revenue Service agreed with our conclusions and 

recommendation. The IRS recognizes the interactions between efforts to 

improve program access and those intended to improve program integrity, 

and as part of their efforts to utilize a balanced approach that emphasizes 

both goals, the IRS has recently established the EITC participation rate as 

a GPRA measure. As it moves forward in developing the EITC 

participation rate, the IRS plans to take steps to quantify errors that may 

result from estimating these participation rates to help users better 

understand the accuracy of the data and ensure that estimates will be 

comparable over time. Agency officials also provided technical comments, 

which we incorporated in the report where appropriate. 
Page 52 GAO-05-221 Means-Tested Programs 

The Social Security Administration agreed with our conclusions and 

recommendation. The agency noted that it has considered the feasibility of 

estimating participation rates in the past and has calculated participation 

rates among the elderly. However, the agency also noted that limitations of 

the national survey data make such estimates challenging for the SSI 

program. The agency agreed that estimating participation rates on a 

regular basis could provide an important management tool. 

As agreed with your office, unless you publicly announce its contents 

earlier, we plan no further distribution of this report until 30 days after its 

issue date. At that time we will send copies of this report to the Secretaries 

of the Departments of Agriculture, Education, Health and Human Services, 

and Housing and Urban Development; the Commissioners of the Internal 

Revenue Service and the Social Security Administration; relevant 

congressional committees; and others who are interested. Copies will be 

made available to others upon request, and this report will also be 

available on GAO’s Web site at http://www.gao.gov.

If you or your staff have any questions about this report, please contact me 

on (415) 904-2272. Additional GAO contacts and acknowledgments are 

listed in appendix VIII. 

Sincerely, 

David Bellis, Director 

Education, Workforce, and Income Security 
Appendix I: Objectives, Scope, and 

Methodology 

Page 53 GAO-05-221 Means-Tested Programs 

We designed our study to provide information on (1) the proportion of 

those eligible who are participating in 12 selected low-income programs; 

(2) the factors that influence participation in those programs; and 

(3) strategies used by federal, state, and local administrators to improve 

both access and integrity, and whether agencies monitor access by 

measuring participation rates. To obtain information on these issues, we 

compiled estimates of participation and coverage rates for each of the 

programs covered by the review for the most recent year for which data 

were available, we reviewed literature on participation in programs for 

low-income people, and we gathered information directly from both 

federal program officials and state and local administrators. To determine 

the completeness and accuracy of data obtained from various sources, we 

took several steps, described below, to assess the data and determined 

that the data were sufficiently reliable for use in this report. 

We performed this work between November 2003 and January 2005 in 

accordance with generally accepted government auditing standards. 

To obtain information on the proportion of those eligible who are 

participating in 12 selected low-income programs, we used information 

developed by the Urban Institute under contract with HHS about the 

participation and coverage rates they estimated for 7 programs—CCDF, 

Medicaid, TANF, food stamps, SCHIP, SSI, and WIC. Also, we estimated 

the coverage rates for the Head Start program using administrative data 

and CPS data and for the Housing Choice Voucher and Public Housing 

programs using data from a HUD report on worst case housing needs in 

1999. The participation rate estimate for the EITC program was from our 

previous work. In addition, we performed a literature review to obtain 

information about program participation and coverage rates that were 

estimated by other organizations. When possible, we obtained rates from 

1997 to the most recent year available, but as mentioned in the report, we 

did not present many estimates of rates prior to the most recent year 

available because changes in methodologies did not allow us to determine 

whether changes in the rates over time were actual changes in 

participation rates or resulted from changes to the estimation 

methodology. We were unable to provide a Pell Grant program 

participation rate because we were unable to assess the reliability of 

available data on the family income of students who did not apply for 

federal financial assistance, which is necessary for determining program 

eligibility. Table 11 summarizes the methodologies used to calculate 

participation and coverage rates for the 12 programs covered in this 

review. 

Appendix I: Objectives, Scope, and 

Methodology 

Participation and Coverage 

Rates 
Appendix I: Objectives, Scope, and 

Methodology 

Page 54 GAO-05-221 Means-Tested Programs 

Table 11: Summary of Participation and Coverage Rate Methodologies 

Program 

Participation or coverage rate 

methodology Data source 

SSI, Medicaid, CCDF, 

TANF, SCHIP, WIC 

Estimate of recipients as a percentage 

of potentially eligible 

The Urban Institute Transfer Income Microsimulation model, 

version 3 (TRIM3), developed under contract with HHS. 

Food Stamp Program Estimate of recipients as a percentage 

of potentially eligible 

TRIM3; Mathematica Policy Research, Inc., microsimulation 

model developed under contract with USDA. 

EITC Estimate of eligible recipients as 

percentage of potentially eligible 

GAO estimate based on administrative and CPS data and 

compliance information provided by IRS, see GAO, Earned 

Income Tax Credit Participation, GAO-02-290R (Washington, 

D.C.: Dec. 14, 2001). 

Housing Choice Voucher, 

public housing 

Estimate of eligible recipients as 

percent of potentially eligible 

GAO estimate based on administrative data and data from the 

HUD 1999 worst case needs report. 

Head Start Estimate of number of funded slots as 

a percentage of 3- and 4-year-old 

children in families below poverty 

GAO estimate based on administrative and national survey data 

from the U.S. Census Bureau’s Annual Social and Economic 

Supplement to the Current Population Survey (CPS). 

Source: GAO. 

Note: Some participation and coverage rate estimates are based on the average monthly number of 

recipients and people who are eligible for a program while others are based on the total number of 

recipients and people who are eligible at any point in the year. The participation and coverage rate for 

any program will differ by whether average monthly or total numbers are used. 

The Urban Institute estimated participation and coverage rates for CCDF, 

Medicaid, TANF, food stamps, SCHIP, SSI, and WIC under a contract with 

the Department of Health and Human Services (HHS). In order to evaluate 

the reliability of these data and to determine whether it met our standards 

for reporting quantitative information, we contracted with the Urban 

Institute to obtain additional information about these estimates and the 

methodologies used to calculate them, including the Transfer Income 

Model, version 3 (TRIM3). 

The TRIM3 microsimulation model was used to determine the number of 

people who would be eligible for a program if they applied. This model 

simulates the process that a caseworker would undergo to determine 

eligibility by reviewing individual or household characteristics such as 

household composition, income, disability, and other factors as 

appropriate for the programs. TRIM3 primarily relies on the Census 

Bureau’s Annual Social and Economic Supplement to the Current 

Population Survey to estimate the eligible population. For some programs, 

this data source does not include all information needed to determine a 

person’s or household’s eligibility. For example, the data do not include 

information on the value of certain assets that might be considered during 

eligibility determination for some programs. In these instances, the Urban 

Institute researchers used TRIM3 to assign eligibility-related 

Participation and Coverage 

Rates Estimated by The Urban 

Institute 
Appendix I: Objectives, Scope, and 

Methodology 

Page 55 GAO-05-221 Means-Tested Programs 

characteristics to individuals included in the CPS who they believed were 

likely to have them, a process referred to as imputation. The estimates of 

the eligible population were used as the denominators of the participation 

and coverage rates, and administrative data on the number of participants 

were generally used as the numerator. In general, groups excluded from 

the TRIM3 eligibility estimate used for the denominator (such as those 

who are institutionalized) were also excluded from the administrative data 

used for the numerator. 

The CPS data limitations and the process of assigning characteristics may 

have resulted in errors in the estimates of the eligible population and, 

therefore, the participation and coverage rates for seven programs. These 

include sampling error, non-sampling error, error related to the imputation 

process, and error related to program implementation. GAO statisticians 

and social science analysts reviewed the Urban Institute’s TRIM3 technical 

documentation, interviewed the Urban Institute researchers, requested 

additional TRIM3 calculations from the Urban Institute, and reviewed 

available academic and government literature on the sources of error in 

microsimulation models of low-income program participation to 

determine what errors existed. Although there are several types of 

potential errors, not all the errors could be quantified. 

• The CPS, like all sample surveys, is subject to sampling error. This 

error reflects the difference between (1) the results that are obtained 

from the members of the sample that are actually surveyed and (2) the 

results that would be obtained if each member of the population were 

surveyed. We contracted with the Urban Institute to calculate the 

sampling error of CPS data used in TRIM3, and we verified that they 

used the appropriate procedures to make these calculations. We used 

the estimates of sampling error provided by the Urban Institute to 

calculate a range for the most recent TRIM3 estimates at the 

95 percent confidence level, and these ranges are presented in the 

report. However, the ranges underestimate the total error in 

TRIM3 estimates. 

• The CPS data used in TRIM3 are also subject to non-sampling error that 

has not been quantified. These errors can occur if survey respondents 

have difficulty interpreting a particular question, lack information 

necessary to answer a question, are uncomfortable with accurately 

reporting certain sensitive information, or do not answer certain 

questions, among other factors that affect data collection and 

measurement. Such non-sampling errors are likely to have affected 

variables that are used by TRIM3, such as labor force participation for 
Appendix I: Objectives, Scope, and 

Methodology 

Page 56 GAO-05-221 Means-Tested Programs 

example. According to a 2002 Census Bureau report, the 1996 CPS 

covers a smaller proportion of the Black population (84 percent) than it 

does of the White population (94 percent). The Census Bureau reported 

that this low coverage rate biases labor force estimates, because those 

who are left out of the sampling frame are quite different from those 

who are included in it. Yet, the full extent of non-sampling error in the 

CPS is unknown. 

• The process of assigning characteristics when CPS data are not 

available—the imputation process—also can produce error. In most 

instances, efforts were not made to quantify the error associated with 

these imputed data. However, a National Research Council (NRC) 

panel attempted to quantify such error when reviewing methods for 

estimating participation rates for WIC and found that estimates can 

vary noticeably depending on whether imputed or reported monthly 

income data are used to determine eligibility. During this review, the 

NRC panel compared TRIM-adjusted CPS data, in which monthly 

income is imputed on the basis of annual income, and Survey of 

Income and Program Participation (SIPP) data, in which monthly 

income is collected directly from survey respondents. 

• Specification error can result when the variables in a microsimulation 

model incorrectly represent the process for determining program 

eligibility that actually occurs between caseworkers and applicants. 

For example, in its TANF module, TRIM3 does not consider certain 

aspects of program eligibility, including specific work requirements, 

behavioral requirements such as school attendance and immunizations, 

and sanctions from failing to comply with work rules or child support 

rules. These exclusions could cause TRIM3 to overestimate eligibility 

and therefore underestimate participation and coverage rates. 

Similarly, while several means-tested programs base their eligibility on 

the federal poverty guidelines, there is no universal administrative 

definition of “family,” or “household” that is valid for all programs that 

use the poverty guidelines. To the extent that federal programs use 

administrative definitions that differ somewhat from the statistical 

definitions used by the CPS, estimates of the eligible population could 

be affected. 

We estimated the participation and coverage rates for the Head Start, 

Housing Choice Vouchers, Public Housing, and EITC (in prior work). 

These estimates are also limited by the data sources and assumptions of 

who may be eligible for these programs. The EITC and Head Start rates 

were estimated using the CPS and, therefore, estimates are subject to 

sampling and non-sampling errors mentioned earlier. In addition, because 

Participation and Coverage 

Rates We Estimated 
Appendix I: Objectives, Scope, and 

Methodology 

Page 57 GAO-05-221 Means-Tested Programs 

the CPS did not have complete information to determine who may be 

eligible for the EITC, we made assumptions about whether children were 

in a household long enough for them to be counted as a member for tax 

purposes. We also assumed that the lack of data on certain assets would 

not significantly affect participation rate estimates.1

 For Head Start, the 

administrative data did not allow us to determine the number of children 

who are actually served in the program. The data were only on the number 

of program slots funded, and more than one child can be served with each 

slot over the course of a program year if there is turnover in participation. 

However, for the purposes of calculating Head Start coverage rates, we 

assumed that only one child filled a slot. 

We used a HUD report on the households with worst case housing needs 

in 1999 and administrative data to estimate the Housing Choice Vouchers 

and Public Housing coverage rates. HUD used data from the American 

Housing Survey in this report.2

 We assessed the reliability of the survey 

data and determined that the data were sufficiently reliable for use in this 

report. In conducting this assessment, we reviewed Bureau of the Census 

studies on the survey. Census reported that the American Housing Survey 

underestimates income and overestimates poverty for households, 

variables used to determine the number of people with housing needs. We 

were unable to quantify the error this may have produced in the estimates. 

We determined that the administrative data used to estimate participation 

and coverage rates were reasonably reliable for this purpose. As a part of 

this assessment, we reviewed the data on the number of participants and 

we discussed this information with federal agency officials. However, with 

the exception of the EITC data, we did not adjust the number of 

participants to account for those who may have received program benefits 

and/or services in error. As a result, the administrative data could have 

produced errors in the estimates due to potential inaccuracies in reporting 

the number of eligible participants. 

 1

For more details, see GAO, Earned Income Tax Credit Participation, GAO-02-290R

(Washington, D.C.: Dec. 14, 2001). 

2

For more details, see U.S. Department of Housing and Urban Development, Trends in 

Worst Case Needs for Housings, 1979-1999: A Report to Congress on Worst Case Housing 

Needs (Washington, D.C.: December 2003). 

Reliability of Administrative 

Data 
Appendix I: Objectives, Scope, and 

Methodology 

Page 58 GAO-05-221 Means-Tested Programs 

To obtain the estimated cost of providing benefits to those eligible and not 

participating in the Food Stamp Program, SSI, TANF cash assistance and 

WIC, we contracted with the Urban Institute to provide us with these 

estimates. The organization used the TRIM3 model to estimate the total 

benefit amount for eligible non-participants, and these estimates were 

based on the amount that each individual or household would receive 

based on their characteristics. These estimates have similar limitations as 

their related participation and coverage rates, and not all of their errors 

could be quantified. 

The EITC cost estimate was based on our prior work,3

 but the Head Start 

cost estimates were done during the course of this project. We estimated 

the potential costs for Head Start using administrative data on the average 

cost per slot and the number of eligible non-participating children we 

estimated using the CPS. We assume that only one child would be served 

with a slot, even though in actuality more one than can. We also did not 

account for variation in program cost at the local level, and we did not 

account for variation in local eligibility criteria. 

All of the estimates have two major limitations. We did not include the 

administrative costs of serving the non-participants; this would increase 

the cost estimates for all programs. For some programs, federal, state, and 

local governments would share these administrative costs. We also did not 

factor in policy or economic changes that may occur if participation 

increased in these programs. In addition, for all programs, we calculated 

the estimates for each program individually and we did not account for 

how changes in the participation for one program could influence benefit 

amounts in another. 

We were unable to estimate the cost of serving eligible, non-participants in 

the five other programs—CCDF, HCV, Medicaid, Pell Grants, Public 

Housing, and SCHIP—because we did not have enough information to 

determine how the characteristics of the non-participants would have 

affected the benefit amounts they could have received. 

 3

For more details, see GAO, Earned Income Tax Credit Participation, GAO-02-290R

(Washington, D.C.: Dec. 14, 2001). 

Cost Estimates 
Appendix I: Objectives, Scope, and 

Methodology 

Page 59 GAO-05-221 Means-Tested Programs 

To obtain information about factors that affect participation and strategies 

to improve access and integrity for the 12 selected programs, we 

conducted a literature review, obtained documentation from federal 

officials, interviewed federal officials and interviewed state and local 

officials in California, Connecticut, Georgia, Maryland, and Minnesota. The 

literature review consisted of studies on factors that affect participation 

and program integrity issues that we found through searches of the 

Internet and social science research databases and recommendations from 

federal agency officials. Among the documentation we reviewed for this 

objective were the available fiscal year 2004 and 2005 annual plans for 

each program and agency reports to Congress to determine whether the 

relevant agencies had stated measures for program integrity and access 

outcomes. We selected states to visit primarily based on their innovative 

practices to address barriers to participation for multiple programs we 

reviewed. We obtained information on innovative practices from federal 

officials, federal agency publications and a database on state and local 

initiatives complied by the Administration for Children and Families and 

several non-profit, non-partisan agencies. We also considered state efforts 

to ensure program integrity, program aspects that may create barriers to 

access and demographic and geographic diversity in making our selection. 

We were not able to address all the programs we reviewed during every 

site visit, and information from these site visits cannot be generalized to all 

states and localities and to all programs we reviewed. In addition, we did 

not assess the effectiveness of the strategies we presented. 

Factors That Affect 

Participation and 

Strategies to Improve 

Access and Integrity 
Appendix II: Limitations Affecting Use of 

Participation and Coverage Rates 

Page 60 GAO-05-221 Means-Tested Programs 

While participation and coverage rate estimates provide important 

program information that can be useful to both policymakers and program 

administrators, these estimates must be interpreted carefully to take into 

consideration such factors as survey data, research methodology, 

timeliness of estimates and the availability of alternative programs. These 

factors limit our ability to compare rates across programs and must be 

considered in efforts to define appropriate or desired participation or 

coverage rate levels. 

There are two national household level surveys conducted by the Census 

Bureau that can be used to estimate the total number of people eligible for 

low-income programs, the Annual Social and Economic Supplement to the 

Current Population Survey (CPS) and the Survey of Income and Program 

Participation (SIPP) and each has advantages and disadvantages. The CPS 

is the larger of the two surveys and data from this survey are available 

annually for the prior year. In addition, it has detailed information about 

income, household composition, labor force participation, and receipt of 

many federal benefits, but it does not include all the information that may 

be needed to determine program eligibility. For example: 

• Although the value of assets such as automobiles and savings accounts 

are considered when determining financial eligibility for some of 

programs we reviewed, the CPS does not collect some of these data. 

• The CPS also omits institutionalized individuals, some of whom may be 

eligible for Medicaid and SSI. 

Researchers at the Urban Institute and Mathematica told us that, while 

they were aware of these disadvantages, they continue to use CPS data in 

their calculations because of the relatively large sample size and because 

the CPS is conducted annually, which makes it a good source for yearly 

snapshots of participation. To compensate for the limitations in the data, 

researchers either make assumptions and assign information needed to 

determine eligibility, such as asset values, to individuals in order to 

determine their program eligibility or they omit certain subpopulations 

such as institutionalized individuals or pregnant and postpartum women 

from their participation rate estimates. 

The SIPP is a smaller survey than the CPS, but because it was designed 

specifically to better measure low-income program participation, it has 

some advantages over the CPS. Specifically, it includes more detailed 

information about individual characteristics, monthly labor force activity, 

monthly income, and household assets that factor in program eligibility 

Appendix II: Limitations Affecting Use of 

Participation and Coverage Rates 

Limitations of National 

Survey Data 
Appendix II: Limitations Affecting Use of 

Participation and Coverage Rates 

Page 61 GAO-05-221 Means-Tested Programs 

determinations.1 However, the SIPP is designed as a panel study (following 

the same individuals for 21⁄2 to 4 years) and thus may be more suited for 

use in examining detailed characteristics of participants and reasons for 

movement into and out of social programs. In addition, the sample faces 

attrition over the survey period, and some data needed to determine 

eligibility are available only for a limited number of years. The National 

Research Council used the SIPP to estimate WIC participation rates. This 

estimate included pregnant women in addition to infants and children, but 

by 2003 when this estimate was published, the most recent estimate they 

could create using SIPP was for 1998. 

There are some low-income programs for which neither the CPS nor the 

SIPP provide sufficient information to estimate participation rates. For 

example, to estimate the proportion of enrolled students eligible for a Pell 

Grant would require information on student enrollment status in addition 

to family income information. The National Center for Education Statistics 

within the Department of Education conducts a survey, the National 

Postsecondary Student Aid Study, that includes both student enrollment 

and family income information. However, concerns have been raised 

about the reliability of the family income data for students who did not 

apply for federal financial assistance. We were unable to assess the 

reliability of this data element and thus were unable to determine whether 

the data were sufficiently reliable for our purposes. As a result, we did not 

estimate a participation rate for this program. 

Because no existing national data provide every piece of information 

needed to determine the exact size of the eligible population for lowincome programs, all participation rate estimates involve certain 

assumptions and generalizations. These assumptions can create errors 

that are difficult or impossible to quantify. Consequently, the margins of 

error we present, which only capture errors that result from sampling, 

could understate the true range within which participation rate estimates 

are most likely to fall. 

One way to better understand how these estimates are affected by the 

research methodology is to compare them to alternative participation rate 

estimates that have been calculated using different assumptions. While the 

 1

The SIPP collects a detailed inventory of real and financial assets once a year and 

conducts more frequent measures of assets relevant for assistance programs. 

Errors from Research 

Methodology 
Appendix II: Limitations Affecting Use of 

Participation and Coverage Rates 

Page 62 GAO-05-221 Means-Tested Programs 

Urban Institute and Mathematica Policy Research, Inc., both estimate food 

stamp participation rates based on CPS data, they use slightly different 

assumptions to estimate the eligible population. For example, because the 

CPS does not include information on which household members purchase 

and prepare food together, model estimates had to make assumptions 

about household food preparation habits. Despite differences in 

assumptions, the participation rates estimated by the Urban Institute and 

Mathematica were very similar. 

The most recent participation rate data available varies by program, and 

all estimates are at least 3 years old. As a result, changes in legislation, 

state policy, program administration, the national economy, and other 

factors that may have influenced the participation rate over the past few 

years are not reflected in these estimates. 

• The EITC participation rate estimate is based, in part, on an estimated 

32 percent of EITC claims being made in error in 1999. Since that time, 

Congress has enacted new tax laws and the IRS has taken steps to 

improve compliance. 

• The total number of people receiving food stamps and Medicaid fell 

after passage of the Personal Responsibility and Work Opportunity 

Reconciliation Act of 1996 when participation in these programs was 

“de-linked” from participation in TANF. Since 2000, however, states 

have implemented policies to ensure that those eligible for food stamps 

and Medicaid continue to receive benefits when they leave TANF. 

• Since 2000, the national economy has emerged from a recession, but 

economic growth, until recently, has been slow and uneven and 

marked by slow job growth. Economic conditions have historically 

been correlated with low-income program participation. 

None of these factors are reflected in the numbers we presented in this 

report. 

When interpreting the participation and coverage rate estimates we 

provided, it is important to keep in mind that those eligible but not 

participating in the programs we reviewed may not be living without 

assistance; many could be receiving assistance from alternative programs. 

In some cases, people could be eligible for more than one program we 

reviewed and able to receive similar services from these programs. Those 

eligible could also have access to state and local programs that address 

Years for Which Estimates 

Are Available 

Availability of Alternative 

Programs 
Appendix II: Limitations Affecting Use of 

Participation and Coverage Rates 

Page 63 GAO-05-221 Means-Tested Programs 

similar needs. This is particularly relevant for the non-entitlement 

programs covered by our review. 

The coverage rates we provide for the two housing programs in this 

review are calculated in isolation, and as a result, some of the households 

that appear eligible but not participating in the Public Housing program 

are receiving Housing Choice Vouchers (HCV), and vice versa. In addition, 

while HCV and public housing are two of the largest federal housing 

programs, there are several other federal, state, and local housing 

programs from which eligible households could receive assistance. HUD 

estimated that in 1999 about a quarter of all households eligible for any 

kind of housing assistance received assistance. 

The availability of alternative programs could also affect coverage rates 

for CCDF and Head Start. For example, state-financed pre-school 

programs provide child care and educational development services for 

many 4-year-olds who appear eligible but are not enrolled in Head Start. 

Children could be eligible for both programs but only receiving services in 

one, but this would not be reflected in program coverage rate estimates. 

HHS officials have recognized that other federal programs, such as TANF 

and Social Services Block Grant (SSBG), also provide child care to 

children eligible for CCDF. Because the CCDF participation rate does not 

reflect these additional sources of federal child care funds, HHS has 

produced a different coverage rate, estimating that about 26 percent of 

CCDF-eligible children were receiving child care services through one of 

four federal funding streams—CCDF, SSBG, TANF, and TANF state funds 

in 2001.2

State and localities are able to set the eligibility criteria for some of these 

programs, and the cost estimates do not account for the policy changes 

agencies may make if the current criteria resulted in increased 

participation. For example, if states found that current eligibility limits 

may result in increased TANF participation, they may change eligibility 

criteria or benefit levels to ensure state costs do not increase. Either of 

these changes may reduce the total additional costs. 

 2

HHS does not collect information on the number of children who receive child care 

subsidies through the SSBG, TANF and TANF Maintenance of Effort funding. Therefore, 

the agency estimated the number of children served through those other funding source by 

dividing the total amount spent on child care services from each source by the typical cost 

of serving a child under CCDF. 

Cost Considerations 
Appendix II: Limitations Affecting Use of 

Participation and Coverage Rates 

Page 64 GAO-05-221 Means-Tested Programs 

All cost estimates were calculated individually and, therefore, do not 

account for how participation changes in one program may influence 

benefit amounts in another. For example, Food Stamp Program costs may 

not be as high if participation in the SSI program increased because some 

eligible non-participants would qualify for lower food stamp benefits due 

to the cash assistance. Also, as mentioned earlier, other federal, state, and 

local programs may provide similar benefits that non-participants could be 

receiving, and, therefore, they may not need or want the benefits from the 

programs we covered. For example, food stamp eligible non-participants 

with short-term nutritional needs may decide to receive assistance through 

food banks. In addition, the TANF estimate we provide is only the cost of 

providing cash assistance to eligible people who are not participating; this 

program offers other supports to needy families, such as transportation to 

work and child care, that is funded by the federal and state government. 
Appendix III: Agency Estimates of Improper 

Payments for Programs Reviewed 

Page 65 GAO-05-221 Means-Tested Programs 

Table 12: Improper Payment Estimates Reported in Agency Fiscal Year 2003 Performance and 

Accountability Reports 

Agency Program 

Reported amount of improper 

payments

USDA Food Stamp Program $1,507,000,000

 WIC NA

HHS/ACF TANF NA

 CCDF NA

 Head Start NA

IRS EITC 10,500,000,000

HHS/CMS Medicaid NA

 SCHIP NA

SSA SSI 2,740,000,000

Education Pell Grant 377,500,000

HUD Public Housing 650,000,000

 Housing Choice Voucher 

(Tenant- and Project-Based) $1,877,000,000

Source: GAO, Financial Management: Fiscal Year 2003 Performance Accountability Reports Provide Limited Information on Governmentwide Improper 

Payments, GAO-04-631T (Washington, D.C.: Apr. 15, 2004). Data from this report were based on agency fiscal year 2003 Performance and Accountability 

Reports. 

Appendix III: Agency Estimates of Improper 

Payments for Programs Reviewed 
Appendix IV: Comments from the Department 

of Education 

Page 66 GAO-05-221 Means-Tested Programs 

Appendix IV: Comments from the 

Department of Education 
Appendix IV: Comments from the Department 

of Education 

Page 67 GAO-05-221 Means-Tested Programs 
Appendix V: Comments from the Department 

of Health and Human Services 

Page 68 GAO-05-221 Means-Tested Programs 

Appendix V: Comments from the Department 

of Health and Human Services 
Appendix V: Comments from the Department 

of Health and Human Services 

Page 69 GAO-05-221 Means-Tested Programs 
Appendix V: Comments from the Department 

of Health and Human Services 

Page 70 GAO-05-221 Means-Tested Programs 
Appendix V: Comments from the Department 

of Health and Human Services 

Page 71 GAO-05-221 Means-Tested Programs 
Appendix V: Comments from the Department 

of Health and Human Services 

Page 72 GAO-05-221 Means-Tested Programs 
Appendix V: Comments from the Department 

of Health and Human Services 

Page 73 GAO-05-221 Means-Tested Programs 
Appendix V: Comments from the Department 

of Health and Human Services 

Page 74 GAO-05-221 Means-Tested Programs 
Appendix V: Comments from the Department 

of Health and Human Services 

Page 75 GAO-05-221 Means-Tested Programs 
Appendix V: Comments from the Department 

of Health and Human Services 

Page 76 GAO-05-221 Means-Tested Programs 
Appendix V: Comments from the Department 

of Health and Human Services 

Page 77 GAO-05-221 Means-Tested Programs 
Appendix VI: Comments from the Department of the 

Treasury 

Page 78 GAO-05-221 Means-Tested Programs 

Appendix VI: Comments from the 

Department of the Treasury 
Appendix VI: Comments from the Department of the 

Treasury 

Page 79 GAO-05-221 Means-Tested Programs 
Appendix VII: Comments from the Social 

Security Administration 

Page 80 GAO-05-221 Means-Tested Programs 

Appendix VII: Comments from the Social 

Security Administration 
Appendix VII: Comments from the Social 

Security Administration 

Page 81 GAO-05-221 Means-Tested Programs 
Appendix VII: Comments from the Social 

Security Administration 

Page 82 GAO-05-221 Means-Tested Programs 
Appendix VIII: GAO Contacts and Staff 

Acknowledgments 

Page 83 GAO-05-221 Means-Tested Programs 

Gale Harris (202) 512-7235, harrisg@gao.gov 

Kathryn Larin (202) 512-5045, larink@gao.gov 

Carolyn Blocker, Cheri Harrington, Danielle Giese, Amanda Mackison, and 

Kim Siegal also made significant contributions to this report. Jay Smale, 

Mark Braza, Doug Sloane, Ed Nannenhorn, and Beverly Ross provided 

technical assistance in developing and evaluating the reliability of 

participation rate and potential program cost estimates; Lise Levie 

provided key technical assistance; and Johnnie Barnes, Carrie Watkins, 

and Charles Wilson provided information on the two housing programs 

covered in the report. 

Appendix VIII: GAO Contacts and Staff 

Acknowledgments 

GAO Contacts 

Staff 

Acknowledgments 
Related GAO Products 

Page 84 GAO-05-221 Means-Tested Programs 

Food Stamp Program: Farm Bill Options Ease Administrative Burden, 

but Opportunities Exist to Streamline Participant Reporting Rules 

among Programs. GAO-04-916. Washington, D.C.: September 16, 2004. 

Food Stamp Program: Steps Have Been Taken to Increase Participation 

of Working Families, but Better Tracking of Efforts Is Needed. 

GAO-04-346. Washington, D.C.: March 5, 2004. 

SSA Disability Decision Making: Additional Steps Needed to Ensure 

Accuracy and Fairness of Decisions at the Hearing Level. GAO-04-14. 

Washington, D.C.: November 12, 2003. 

Federal Student Aid: Expanding Eligibility for Less Than Halftime 

Students Could Increase Program Costs, but Benefits Uncertain. 

GAO-03-905. Washington, D.C.: September 10, 2003. 

Social Security Disability: Reviews of Beneficiaries’ Disability Status 

Require Continued Attention to Improve Service Delivery. GAO-03-1027T. 

Washington, D.C.: July 24, 2003. 

Welfare Reform: States Provide TANF-Funded Work Support Services to 

Many Low-Income Families Who Do Not Receive Cash Assistance. 

GAO-02-615T. Washington, D.C.: April 10, 2002. 

Food Stamp Program: States’ Use of Options and Waivers to Improve 

Program Administration and Promote Access. GAO-02-409. Washington, 

D.C.: February 22, 2002. 

Medicaid and SCHIP: States’ Enrollment and Payment Policies Can 

Affect Children’s Access to Care. GAO-01-883. Washington, D.C.: 

September 10, 2001. 

Food Stamp Program: Program Integrity and Participation Challenges. 

GAO-01-881T. Washington, D.C.: June 27, 2001. 

Medicaid and SCHIP: Comparisons of Outreach, Enrollment Practices, 

and Benefits. HEHS-00-86. Washington, D.C.: April 14, 2000. 

Medicaid Enrollment: Amid Declines, State Efforts to Ensure Coverage 

after Welfare Reform Vary. HEHS-99-163. Washington, D.C.: September 10, 

1999. 

Related GAO Products 
Related GAO Products 

Page 85 GAO-05-221 Means-Tested Programs 

Food Stamp Program: Various Factors Have Led to Declining 

Participation. RCED-99-185. Washington, D.C.: July 2, 1999. 

Medicaid: Demographics of Nonenrolled Children Suggest State Outreach 

Strategies. HEHS-98-93. Washington, D.C.: March 20, 1998. 

(130336) 
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E-mail: fraudnet@gao.gov

Automated answering system: (800) 424-5454 or (202) 512-7470 

Gloria Jarmon, Managing Director, JarmonG@gao.gov (202) 512-4400 

U.S. Government Accountability Office, 441 G Street NW, Room 7125 

Washington, D.C. 20548 

Paul Anderson, Managing Director, AndersonP1@gao.gov (202) 512-4800 

U.S. Government Accountability Office, 441 G Street NW, Room 7149 

Washington, D.C. 20548 

GAO’s Mission 

Obtaining Copies of 

GAO Reports and 

Testimony 

Order by Mail or Phone 

To Report Fraud, 

Waste, and Abuse in 

Federal Programs 

Congressional 

Relations 

Public Affairs 

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