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

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 three States (Texas, Louisiana, and Illinois) showed the States had systems to identify and collect AFDC overpayments but did not refund to the Federal Government its proportionate share of those collections. The three States owed a total of $31 million (Texas $14 million, Louisiana $1 million and Illinois $16 million). In response to our recommendations, Louisiana and Illinois agreed to refund their shares. Texas did not, citing what it called 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 $14 million from Texas.