Federal law also allows certain households to be deemed categorically  eligible for SNAP. According to  FNS, BBCE policies make most, if not all, households that apply for  SNAP categorically eligible because they receive a TANF-funded non- cash service, such as an informational brochure or toll-free number. In addition, CBO estimates include assumptions about the share of  these households that exceed federal asset limits. Households eligible under BBCE with incomes over the federal limits had  characteristics that were generally similar to all other SNAP households;  however, they were more likely to be working or receiving unemployment  benefits (see table 2). Available data suggest few households that qualified for SNAP under  BBCE likely had assets that would have exceeded federal asset limits. However, other national data sources suggest the  number is relatively small. State Eligibility Changes Increased Benefit Costs Somewhat, but Their Effect on Administrative Costs Is Unclear

		Benefit Costs Increased Less Than 1 Percent

Although SNAP households that had incomes over the federal limits  made up an estimated 2.6 percent of the SNAP caseload in fiscal year  2010, this group received an estimated 0.7 percent of all SNAP benefits. These benefits totaled an estimated $38.3 million a month, or  approximately $460 million annually. For example, because household benefits are  primarily determined based on each household’s monthly income,  increases in the poverty and unemployment rates likely correlate with  increases in the average benefit provided to households. Although BBCE may impact SNAP  benefit costs because the policy both expands who is eligible for the  program and streamlines the process for receiving benefits, state and  local officials we met with consistently indicated that they did not think  BBCE had a significant impact on benefits. State Eligibility Changes May Negatively Affect Program Integrity

		Payment Errors May Be Negatively Affected

In recent years, the SNAP payment error rate declined to an historic low  while multiple program changes occurred, including BBCE, but evidence  suggests that factors other than BBCE may have played a larger role in  the decline. Further, both our analysis of USDA data and our discussions with SNAP  staff suggest that BBCE may, in fact, contribute to more payment errors. However, because a  state can certify families receiving $0 in SNAP benefits as eligible in its  SNAP data system, it can directly certify children in such families for free  school meals, even though they do not receive SNAP benefits. While  the federal gross income-eligibility limit for SNAP aligns with that of the  school meals programs—providing free meal benefits to children in  households at or below 130 percent of the federal poverty guidelines— the programs no longer align in states with BBCE policies that have  raised the SNAP gross income limit. While USDA has issued guidance to states in this area, its guidance  relies on TANF reporting requirements that do not exist. While USDA touted BBCE as  a way to improve program integrity and administrative efficiency, state  adoption of BBCE has created unintended consequences that may  weaken both SNAP and related programs’ integrity and introduce  inequities. Finally, USDA’s guidance on  SNAP reporting requirements has resulted in lower-income households  eligible under federal SNAP rules having to do more to retain their  benefits than higher-income SNAP households eligible solely because of  states’ BBCE policies. Recommendations for Executive Action

To improve SNAP program integrity and oversight, we are recommending  that the Secretary of Agriculture require FNS to take several actions:
Review state procedures for implementing BBCE, specifically those in  place for providing the relevant TANF-funded service to all SNAP  applicants deemed eligible under BBCE, as well as ensuring the  relevant service is funded with TANF dollars. Appendix I: Objectives, Scope, and Methodology

	U.S. Department of Agriculture (USDA) Data Analysis

		Quality Control Data

To determine the prevalence and characteristics of households deemed  eligible under states’ broad-based categorical eligibility (BBCE) policies  that had incomes over the federal Supplemental Nutrition Assistance  Program (SNAP) eligibility limits in fiscal years 2008 and 2010, we  analyzed the Food and Nutrition Service’s (FNS) quality control (QC)  system data of active SNAP cases. Specifically, we analyzed data on average monthly  SNAP participation in recent years obtained from USDA reports. In  addition, we obtained data on total benefit costs and the average monthly  SNAP benefits per household from USDA’s Web site and the annual  SNAP State Activity Reports for fiscal years 2001-2011, as well as data  on the proportion of households receiving the maximum SNAP benefit  from the annual Characteristics of SNAP Households reports for fiscal  years 2001-2010. Site Visits

To better understand the effects of state BBCE policies on SNAP, as well  as other factors impacting SNAP, we conducted site visits to 5 states and  18 local offices responsible for administering SNAP in those states,  during January and February 2012. Temporary Assistance for Needy Families: Implications of Caseload and  Program Changes for Families and Program Monitoring. GAO-10-346.
Why GAO Did This Study

Over the last 10 years, participation in the U.S. Department of Agricultures (USDA) SNAP, previously known as the Food Stamp Program, has more than doubled, and costs have quadrupled. Since 1999, USDA has allowed states to expand SNAP eligibility by adopting BBCE policies, which make households that receive services funded by Temporary Assistance for Needy Families, such as a toll-free number or brochure, categorically eligible for SNAP. Under BBCE policies, states are able to increase federal SNAP limits on household income and remove limits on assets. Although USDA has encouraged states to adopt BBCE to improve SNAP access and administration, little is known about the effects of these policies. GAO was asked to assess: (1) To what extent are households that would otherwise be ineligible for SNAP deemed eligible for the program under BBCE? (2) What effect has BBCE had on program costs? (3) What are the program integrity implications of BBCE? GAO analyzed data from USDA, selected states, and other national sources; conducted site visits to 5 states; and interviewed federal, state, and local officials, as well as others with knowledge of SNAP.

What GAO Found

In fiscal year 2010, GAO estimates that 2.6 percent (473,000) of households that received Supplemental Nutrition Assistance Program (SNAP) benefits would not have been eligible for the program without broad-based categorical eligibility (BBCE) because their incomes were over the federal SNAP eligibility limits. The characteristics of these households were generally similar to other SNAP households, although they were more likely to work or receive unemployment benefits. BBCE removes asset limits in most states, and while reliable data on participants assets are not available, other data suggest few likely had assets over these limits. Although BBCE contributed to recent increases in SNAP participation, other factors, notably the recent recession, had a greater effect.
GAO estimates that BBCE increased SNAP benefit costs, which are borne by the federal government, by less than 1 percent in fiscal year 2010. In that year, total SNAP benefits provided to households that, without BBCE, would not have been eligible for the program because their incomes were over the federal SNAP eligibility limits were an estimated $38 million monthly or about $460 million for the year. These households received an estimated average monthly SNAP benefit of $81 compared to $293 for other households. BBCEs effect on SNAP administrative costs, which are shared by the federal and state governments, is unclear, in part because of other recent changes that affect this spending, such as state budget and staffing reductions in the recent recession.
BBCE has potentially had a negative effect on SNAP program integrity. In recent years, the SNAP payment error rate declined to an historic low, but evidence suggests the decline is primarily due to changes other than BBCE. While BBCE may improve administrative efficiency, both national data and discussions with local staff suggest BBCE may also be associated with more errors. In addition, BBCE has led to unintended consequences for SNAP and related programs. For example, in implementing BBCE, some states are designating SNAP applicants as categorically eligible without providing them with the service required to make this determination. Further, likely because they are unaware of recent USDA guidance, some states certify children for free school meals when their households are determined eligible for SNAP, even though they do not receive SNAP benefitsa result more common in states with BBCE. Finally, because of federal guidance on BBCE, rules for reporting changes in household circumstances now differ by household income level and may leave higher income households without reporting requirements for several months.

What GAO Recommends

GAO recommends that USDA review state procedures for implementing BBCE, disseminate guidance to states on certifying SNAP households as eligible for school meals, and revisit its guidance on SNAP reporting requirements to ensure they address all households. USDA generally agreed with GAOs recommendations.