Reviews of Four States' Systems and Procedures for Recovering and Refunding Overpayments Made Under the Aid to Families with Dependent Children Program

(New York - A-, Iowa - A-07-02-03012, Missouri - A-07-02-03014, and Utah - A-08-02-03004)

EXECUTIVE SUMMARY:

States are required to pursue and recover overpayments made prior to October 1, 1996 under the Aid to Families with Dependent Children (AFDC) program and return the Federal share to the Federal Government. Reviews in four States (New York, Iowa, Missouri, and Utah) showed the States generally had systems to identify and collect AFDC overpayments but did not refund to the Federal Government its proportionate share of those collections. The four States owed a total of $39.8 million (New York $33.6 million, Iowa $1.6 million, Missouri $3.2 million and Utah $1.4 million). In response to our recommendations, New York and Utah agreed to refund their shares. Iowa and Missouri did not, asserting they had acted in good faith and citing what they believe to be contradictory guidelines from the Administration for Children and Families (ACF). However, the regulations are clear on what was required of the States. The ACF should pursue collection of the amounts owed by Iowa and Missouri.