NCJ Number
89237
Date Published
1983
Length
67 pages
Annotation
Data from the Seattle and Denver areas indicate that increased fraud and abuse control efforts are cost-effective in reducing grant overpayment in programs of Aid to Families with Dependent Children (AFDC).
Abstract
The research is based on information on AFDC recipients' income and family structure collected independently of the AFDC system. Estimates of individual family grant overpayments were produced by comparing the grant amounts calculated using data reported to the experimenters with the grant calculated using parallel data that the same household reported to the AFDC program. Overpayments were found to result from misreporting of household size and composition and from income underreporting. These inaccurate reports of household status may reflect errors or deliberate fraud and abuse; however, mere errors would seem as likely to result in grant underpayments as overpayments. The combined effects result in average monthly overpayments ranging between $31 in Seattle for a family with a single female head of household partially reporting earnings to $324 in Denver for a two-parent family reporting zero income to AFDC while actually working. The ratio of overpaid cases to the number of investigations in the same month yielded a measure of the probability of being investigated, and the ratio of the number of investigations initiated to the number of cases referred to the prosecutor produced a measure of the conditional probability that an investigated case would be referred to the prosecutor's office. The consistency and strength of the negative association between grant overpayments and efforts to investigate and prosecute those receiving overpayments is the major finding. The control efforts more than recouped the additional costs of the controls in reductions in overpayments. The appendixes contain an example of AFDC standards of assistance and definitions of variables and data. Tabular data are provided. (Author summary modified)