The Food Stamp Program helps low-income individuals and families obtain a more nutritious diet by supplementing their income with food stamp benefits. The average monthly food stamp benefit was about $70 per person during fiscal year 1997. The program is a federal-state partnership in which the federal government pays the cost of the food stamp benefits and 50 percent of the states’ administrative costs. The U.S. Department of Agriculture’s Food and Nutrition Service (FNS) administers the program at the federal level. The states’ responsibilities include certifying eligible households and calculating and issuing benefits to those who qualify. The Food Stamp Employment and Training Program, which existed prior to the Welfare Reform Act, was established to ensure that all able-bodied recipients registered for employment services as a condition of food stamp eligibility. The program’s role is to provide food stamp recipients with opportunities that will lead to paid employment and decrease dependency on assistance programs. In fiscal year 1997, the states were granted $79 million in federal employment and training funding and spent $73.9 million, or 94 percent of the grant. In the Balanced Budget Act of 1997, the Congress increased grant funding for the Food Stamp Employment and Training Program to a total of $212 million for fiscal year 1998 and specified that 80 percent of the total had to be spent to help able-bodied adults without dependents meet the work requirements. For fiscal year 1999, the Congress provided $115 million in employment and training funding. These funds remain available until expended. Employment programs that the states choose to offer may involve the public and private sectors. For example, Workfare, which qualifies as an employment program under the Welfare Reform Act, requires individuals to work in a public service capacity in exchange for public benefits such as food stamps. Some states also allow participants to meet the work requirements by volunteering at nonprofit organizations. However, under the Welfare Reform Act, job search and job readiness training are specifically excluded as qualifying activities for meeting the act’s work requirements. During April, May, and June 1998, a monthly average of about 514,200 able-bodied adults without dependents received food stamp benefits, according to information from the 42 states providing sufficient data for analysis. These adults represented about 3 percent of the monthly average of 17.5 million food stamp participants in the 42 states during that period. Of the 514,200 individuals, about 58 percent, or 296,400 of the able-bodied adults without dependents were required to meet the work requirements; 40 percent, or 208,200, were exempted from these requirements because they lived in geographic areas that had received waivers; and 2 percent, or 9,600, had been exempted by the states from the work requirements. (See app. I for state-by-state information.) The number of able-bodied adults without dependents receiving food stamp benefits has apparently declined in recent years, as has their share of participation in the program. For example, in 1995, a monthly average of 1.2 million able-bodied adults without dependents in 42 states participated in the Food Stamp Program, compared with the 514,200 individuals who participated in the period we reviewed. In addition, in 1995, 5 percent of food stamp participants were estimated to be able-bodied adults without dependents, compared with the 3 percent we identified through our survey of the states. FNS and state officials accounted for these differences by pointing out that (1) food stamp participation has decreased overall—from about 27 million per month nationwide in 1995 to about 19.5 million in April, May, and June 1998; (2) some able-bodied adults without dependents may have obtained employment and no longer needed food stamps; and (3) others who were terminated from the program may not have realized that they could regain eligibility for food stamp benefits through participation in state-sponsored employment and training programs or Workfare. Also, the states vary in the criteria they use for identifying able-bodied adults subject to the work requirements. During April, May, and June 1998, a monthly average of 23,600 able-bodied adults without dependents filled employment and training and/or Workfare positions in the 24 states that provided sufficient data for analysis. Fifteen of these states offered Workfare positions, 20 offered employment and training positions, and 11 offered both Workfare and employment and training positions. The 23,600 individuals accounted for about half of the 47,000 able-bodied adults without dependents who were offered state-sponsored employment and training assistance and/or Workfare positions. More specifically: Able-bodied adults without dependents filled about 8,000 Workfare positions per month, or 34 percent of the 23,700 Workfare positions offered by the 15 states with Workfare positions; Able-bodied adults without dependents filled about 15,600 employment and training positions per month, or 67 percent of the 23,300 employment and training positions offered by the 20 states. (See app. I for state-by-state information.) These 23,600 individuals accounted for about 17 percent of the 137,200 able-bodied adults without dependents who were subject to the work requirements in those states. Of the remaining 113,600, some may have been within the 3-month time frame for receiving food stamp benefits while not working, others may have met these requirements by finding jobs or Workfare positions on their own, and some may not have met the work requirements, thereby forfeiting their food stamp benefits. FNS and state officials said they could not yet explain the limited participation in employment and training and Workfare programs, but FNS officials and some states are trying to develop information on the reasons for low participation. In addition, some suggested that able-bodied adults without dependents participated to a limited extent in employment and training programs and Workfare because they (1) participate sporadically in the Food Stamp Program, (2) prefer not to work, or (3) believe that the relatively low value of food stamp benefits is not enough of an incentive to meet the work requirements. With only 3 months remaining in fiscal year 1998, the states were spending at a rate that would result in the use of significantly less grant funds for food stamp employment and training recipients than authorized. For the first three quarters of the fiscal year, through June 30, 1998, the states spent only 28.4 percent, or $60.2 million, of the $212 million in grants, according to FNS data. The rate of spending varied widely by state, ranging from 75 percent, or about $230,000 of the $307,000 authorized for South Dakota, to less than 1 percent, or $109,000 of the $13.4 million authorized for Michigan. Twenty-five of the states spent less than 20 percent of their grant funds, 17 spent between 20 and 49 percent, and 9 spent 50 percent or more. Also, according to preliminary fourth-quarter financial data reported to FNS, 43 states spent about $72 million, or 41 percent of the grant funds available to them for fiscal year 1998. (See app. II.) To better understand why the states were spending less of their grant funds than authorized, we interviewed food stamp directors and employment and training officials in 10 geographically dispersed states.In general, according to these officials, grant spending has been significantly less than authorized because (1) some states had a limited number of able-bodied adults without dependents who were required to work, (2) some states needed time to refocus their programs on able-bodied adults without dependents, and (3) some states reported that it was difficult to serve clients in sparsely populated areas because of transportation problems or the lack of appropriate jobs. When asked whether spending would change in fiscal year 1999, state officials had differing expectations. Officials from 4 of the 10 states—Georgia, Iowa, Ohio, and West Virginia—said that they anticipate spending about the same or less, and Pennsylvania officials were unsure whether spending would change. In contrast, officials from five states—Illinois, Michigan, Rhode Island, Texas, and Washington—anticipate increases in spending, mostly because of the improvements they have made to their employment and training programs. In discussing the rate of grant spending, officials of five states—Georgia, Pennsylvania, Washington, Texas, and West Virginia—said that the requirement to spend 80 percent of funds on able-bodied adults without dependents had caused them to decrease employment and training services to other food stamp participants. For fiscal year 1998, a maximum of 20 percent of the available grant funds—$42 million—was available for employment and training activities for other food stamp recipients, while $79 million had been provided for employment and training activities for all food stamp recipients in fiscal year 1997. State officials explained that prior to fiscal year 1998, most employment and training funds had been spent for food stamp participants who were not able-bodied adults without dependents. With the shift in funds to able-bodied adults without dependents, less has remained for the other food stamp recipients, who typically had constituted the majority of the employment and training participants in the past. Nevertheless, some of those not served by Food Stamp Employment and Training Programs may be eligible to receive employment and training through other federal and state programs. We provided USDA’s Food and Nutrition Service with a copy of a draft of this report for review and comment. We met with Food and Nutrition Service officials, who provided comments from the Food and Nutrition Service’s Office of General Counsel and the Director, Program Analysis Division, Office of Food Stamp Programs. The Food and Nutrition Service generally agreed with the contents of the report and provided technical and clarifying comments that we incorporated into the report as appropriate. To obtain information on the numbers of able-bodied adults without dependents who are receiving food stamps benefits, are required to meet work requirements, are exempted from the work requirements, and are participating in qualifying employment and training and/or Workfare programs, we surveyed the states and the District of Columbia. The survey data covered the months of April, May, and June 1998. We used the participation data for these months to estimate average monthly participation in the program. All states and the District of Columbia responded to our faxed questionnaire, and we contacted state officials as needed to verify their responses. Eighty-eight percent of the responses provided by 41 states and the District of Columbia were based on estimates and the remaining on data in state records. According to the state officials who provided estimates, their information systems were in the process of being revised and they plan to have actual data for fiscal year 1999. To obtain information on state spending of federal grants for employment and training programs, we obtained FNS’ grant funding data reported by the states and the District of Columbia for the first three quarters of fiscal 1998, the latest data that were available as of November 1998. We subsequently obtained preliminary financial data for the fourth quarter of fiscal year 1998, which are subject to change after financial reconciliation. To supplement these data, we interviewed state food stamp directors or employment and training officials in 10 geographically dispersed states, including Georgia, Illinois, Iowa, Michigan, Ohio, Pennsylvania, Rhode Island, Texas, Washington, and West Virginia. We performed our work in accordance with generally accepted government auditing standards from July through November 1998. As agreed with your office, unless you publicly announce its contents earlier, we plan no further distribution of this report until 30 days from the date of this letter. At that time, we will send copies of this report to the appropriate Senate and House Committees; interested Members of Congress; the Secretary of Agriculture; the Administrator of FNS; the Director, Office of Management and Budget; and other interested parties. We will also make copies available to others upon request. Please call me at (202) 512-5138 if you or your staff have any questions about this report. Major contributors to this report are listed in appendix III. (continued) Average number of food stamp participants (by individual) in April, May, and June 1998 per Food and Nutrition Service’s (FNS) data. This option in the Food Stamp Program not exercised by the state. Data insufficient for analysis. Percent of fiscal year 1998 grant funds expended(continued) Numbers may not add due to rounding. Charles M. Adams, Assistant Director Patricia A. Yorkman, Project Leader Alice G. Feldesman Erin K. Barlow Nancy Bowser Carol Herrnstadt Shulman The first copy of each GAO report and testimony is free. Additional copies are $2 each. Orders should be sent to the following address, accompanied by a check or money order made out to the Superintendent of Documents, when necessary. VISA and MasterCard credit cards are accepted, also. Orders for 100 or more copies to be mailed to a single address are discounted 25 percent. U.S. General Accounting Office P.O. Box 37050 Washington, DC 20013 Room 1100 700 4th St. NW (corner of 4th and G Sts. NW) U.S. General Accounting Office Washington, DC Orders may also be placed by calling (202) 512-6000 or by using fax number (202) 512-6061, or TDD (202) 512-2537. 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Summary: Pursuant to a congressional request, GAO provided information on: (1) the number of able-bodied adults without dependents who are receiving food stamp benefits, the number who are required to meet the work requirements, and the number who are exempted from the requirements; (2) the number of able-bodied adults without dependents participating in qualifying employment and training or Workfare programs; and (3) the amounts of federal grant funds that states spent through the first three quarters of fiscal year 1998 for employment and training or workfare programs for food stamp recipients. GAO noted that: (1) in the 42 states providing sufficient data for analysis, a monthly average of about 514,200 able-bodied adults without dependents received food stamp benefits during April, May, and June 1998; (2) about 58 percent of these individuals were required to meet the work requirements, another 40 percent were not required to work because they lived in areas that were considered to have high unemployment or an insufficient number of jobs, and 2 percent had been exempted by the states from the work requirements; (3) in the 24 states providing sufficient data for analysis, a monthly average of 23,600 able-bodied adults without dependents filled state-sponsored employment and training or workfare positions; (4) these participants represented about 17 percent of the able-bodied adults without dependents who were required to work in those states to receive food stamp benefits; (5) these individuals also accounted for nearly half of the able-bodied adults without dependents who were offered employment and training assistance or workfare positions by these states; (6) as of June 30, 1998, all the states had spent only about 28 percent, or $60.2 million, of the $212 million available for state employment and training programs for food stamp recipients; (7) according to preliminary fourth-quarter financial data, 43 states had spent about $72 million, or 41 percent of the grant funds available to them for fiscal year 1998; and (8) according to federal and state officials, the low percentage of spending for food stamp employment and training programs occurred primarily because: (a) fewer able-bodied adults without dependents were required to work than anticipated and fewer than anticipated accepted this assistance; and (b) some states needed more time to refocus their food stamp employment and training programs to target these individuals.