Government Watchdog Findings: Temporary Assistance for Needy Families (TANF) Program In Need of Reform, Better State Accountability, and Fraud Protection

House Subcommittee on Work and Welfare

2025-04-08

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Source: Congress.gov

Summary

The meeting addressed the Temporary Assistance for Needy Families (TANF) program, focusing on its effectiveness, accountability, and the need for modernization and reform [ 00:01:54-00:04:20 ] . Discussions highlighted findings from Government Accountability Office (GAO) reports concerning program oversight, state spending patterns, and fraud risks . Witnesses provided insights into current challenges and offered recommendations for improving the program's integrity and impact on vulnerable families [ 01:38:20-01:38:47 ]

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Incomplete Data and Oversight Deficiencies

GAO reports identified significant issues with state reporting on TANF expenditures, particularly regarding non-assistance spending . Many states failed to include required narratives or detailed information on how non-assistance funds were utilized, making it difficult for the Department of Health and Human Services (HHS) to conduct adequate oversight . Furthermore, 37 states had TANF deficiencies, with 22 having material weaknesses, some of which remained unresolved for over a decade . HHS was found to have insufficient audit resolution procedures and frequently issued management decisions late, hindering timely corrective actions by states . It was also noted that HHS lacked statutory authority to collect information needed for estimating improper payments or robust reporting on non-assistance services, prompting calls for legislative changes [ 01:42:11 ]

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Persistent Fraud Risks and Weak Fraud Management

The TANF program, with over $30 billion in annual combined spending, is identified as highly susceptible to fraud, exacerbated by opportunistic and tech-savvy fraudsters . Notable large-scale fraud examples include over $77 million misspent in Mississippi and approximately $200 million stolen in California through EBT card skimming . While HHS has taken some steps to identify fraud risks, it falls short in five fundamental areas of fraud risk management, such as lacking formal procedures for regular assessments and failing to involve key stakeholders [ 02:12:08 ]

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. These shortcomings undermine HHS's capacity to effectively manage fraud risks, leading to recommendations for decisive action and timely implementation of fraud prevention strategies .

Essential Support for Families and Local Services

Despite challenges, TANF serves as a critical lifeline for low-income families, supporting essential services such as child care, employment training, and child welfare [ 01:38:47 ]

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. States like Ohio utilize TANF funds for prevention, retention, and contingency programs, providing assistance for car repair, fuel, rent, and short-term training to help individuals maintain employment [ 01:38:59 ]

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[ 02:04:34 ]

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. TANF also significantly contributes to federal child welfare spending, covering costs not eligible for other reimbursements and supporting kinship caregivers . Concerns were raised that potential cuts to TANF and the Social Services Block Grant could severely impact the ability to serve these vulnerable populations, including seniors and children .

Divided Views on Reform and Administrative Actions

There were stark partisan divisions regarding the motivations and implications of TANF reform efforts [ 00:06:02-00:06:09 ] . Some members asserted that Republican-led reform efforts were a "preemptive justification" for cuts aimed at funding tax breaks for the wealthy, potentially harming struggling families [ 00:06:09 ] [ 00:06:32 ] . Strong criticism was leveled against the Trump administration for allegedly firing HHS staff, including the TANF policy division, and canceling TANF pilot programs, which critics argued undermined program integrity and the ability to implement improvements [ 00:06:23 ] [ 01:56:16 ]

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. Conversely, others emphasized the need for modernizing TANF, improving accountability, and rooting out waste, fraud, and abuse to ensure funds are spent intentionally and strategically [ 00:03:13 ] [ 00:03:55 ] .

Tone of the Meeting

The meeting began with a formal and professional tone, as witnesses presented factual information and data from GAO reports [ 00:21:12-00:21:18 ]

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. However, it quickly shifted to a highly contentious and partisan exchange, particularly during the opening statements and questioning from some members [ 00:06:02-00:06:09 ] . Democratic members expressed frustration and anger, accusing Republicans of ulterior motives for reform, such as justifying cuts to social programs [ 00:06:02 ] . They also condemned the alleged administrative actions, including staff firings and pilot cancellations, as detrimental to the program's effectiveness [ 00:06:16 ] [ 01:56:16 ]

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. Republican members maintained a focus on accountability, efficiency, and combating waste, fraud, and abuse within the TANF program [ 00:03:13 ] . The overall tone was therefore sharply divided, reflecting deep disagreements on the program's future and the motivations behind proposed changes.

Participants

Transcript

state audit findings that have gone unaddressed over multiple years.  An absence of meaningful performance metrics and increasing state use of TANF for child welfare with few accountability measures.  TANF was created nearly 30 years ago as part of the historic Republican-led welfare reforms of 1996.  Thanks to work requirements and time limits, basic assistance caseloads have declined.   allowing states to shift TANF spending to non-assistance.  The problem is that TANF has not been reauthorized since 2005, but continues to receive funding on autopilot.  Congress must revisit the program.   not only to modernize TANF as part of a comprehensive reauthorization, but to make necessary reforms to recognize the shift to non-assistant spending to improve accountability.  My belief is that we need to reclaim TANF for work, do a better job of targeting funding towards the more vulnerable families, to the most vulnerable families,   and restore the program to its original roots.  I know many of my colleagues on this subcommittee share these views and have introduced legislation to make some of these changes.  On its current path, TANF is failing beneficiaries who need economic security, and it's also failing taxpayers whose money should be spent intentionally and strategically to support work.  By modernizing the program while ensuring that it continues to serve those   who rely on it, we can reduce dependency and empower Americans to uplift themselves.  I'm honored to have our guests here today and look forward to your testimony.  And with that, I'm pleased to recognize the gentleman from Illinois, the ranking member, and my friend, Representative Davis, for his opening statement.
Thank you very much, Mr. Chairman, and I want to thank you for this hearing.  I also want to thank all of our witnesses for coming and sharing with us.   I greatly appreciate our subcommittee's bipartisan work on home visiting and child welfare in particular.  But I can't sit here this afternoon and pretend that this hearing   is anything but a preemptive justification to support cuts that will keep struggling families struggling and secure the wealthiest and most secure people in our country.  Nor can I ignore that our Republican partners remained silent while Secretary Kennedy took Elon Musk's chainsaw   to the Department of Health and Human Services put in implementation of all our work at risk.  If our goal is truly to discuss TANF reform, why do my Republican colleagues continue promising deep cuts in TANF and similar programs like the Social Services Block Grant to pay for tax giveaways to the wealthy?   Cutting TANF funding will cut child care, child welfare services, and help for struggling parents, making the lives of children and families worse, not better.  If the goal is to make TANF accountable, I urge my colleagues to support the bill Representative Chu and I introduced   give HHS the tools they need to penalize states for gross malfeasance.  State accountability was left out of the original law by design of its Republican drafters, and only Congress can fix that.
If accountability is important, I urge my colleagues to join me in calling on President Trump   to withdraw his nomination of Thomas March Bell for HHS Inspector General, given that he was fired from a previous job for mishandling taxpayer dollars.  Focusing on the minutia of TANF policy seemed to sidestep our subcommittee's obligation to ask more important questions.  Are families better off than they were four months ago?   And will the Republican Congress provide the supports Americans need to survive the recession and harm caused by the Trump policies?  Unfortunately, the answer is a resounding no.  The Trump tariff tax is making the cost of basic necessities like food, housing, and utilities spike, while savings and retirement balances have plummeted   by trillions of dollars, while retirees fear their survival as President Trump and Elon Musk work to dismantle the Social Security Administration.  I appreciate the work of the experts here before us, and I thank you.  But focusing on narrow process issues   Instead of protecting the people we represent from cruel and chaotic policies, it's like focusing on the details of a fire truck while the house burns down.  Seniors, children, and families need us to act to protect them.  I thank you, Mr. Chairman, and yield back.
Thank you, Mr. Davis.  I will now introduce our witnesses.  I'll go from my left to right.  First is Jeffrey Arkin, is the director of the GAO Strategic Issues Team.  Next is Kathy Lahren, who is the director of the GAO Education Workforce and Income Security Team.   Next, James Dalkin is the Director of the GAO Financial Management and Assurance Team.  Next is Seto Bagdoyan is the Director of the GAO Forensic Audits and Investigative Services Team.  And lastly, is Roxanne Summerlett, who is the Director of the Marion County Department of Job and Family Services in Marion, Ohio.  We'll first start with you, Mr. Arkin, and you're now recognized for five minutes for your opening statement.

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