A federal watchdog reported gaps in fraud risk management for the Temporary Assistance for Needy Families program, a $16.5 billion initiative designed to help low-income families with children.
The Government Accountability Office report suggested stronger oversight and state-level reforms to ensure proper use of the funds. TANF is a federally funded program that provides grants to states that help families with children facing financial hardship.
Ways and Means Committee Chairman Jason Smith, R-Mo., said the Ways and Means Committee, in coordination with the new Trump administration, plans to investigate TANF spending and determine potential reforms to protect the program and ensure its success.
The TANF block grant was created in the 1996 Personal Responsibility and Work Opportunity Reconciliation Act, which President Bill Clinton signed after promising to “end welfare as we know it.”
TANF receives $16.5 billion annually to fund the program. The program has not been reauthorized beyond 2024, but the Congressional Budget Office assumes the funding will continue, assuring funding through 2031 for the program, according to documents.
The Department of Health and Human Services oversees the program.
The exact amount of fraud is largely unknown, however, according to a 2023 congressional investigation, at least $77 million in TANF funds were misused in Mississippi alone, with state officials accused of diverting money.
In April 2024, the U.S. Department of Justice revealed that between June 2022 and February 2024, criminal enterprises “allegedly stole more than $181 million in California public assistance benefits that included TANF cash assistance provided to program beneficiaries through EBT cards.”
HHS completed the first assessment using its Fraud Risk Assessment Portal in July 2024 and identified 21 fraud risks. GAO categorized the risks into nine areas: billing, fraud, conflict of interest, cyber exploits, diversion of funds, misrepresentation, misuse of award funds, personal data theft, skimming, and conspiracy.
Still, GAO said “its assessment wasn’t fully consistent with leading fraud risk management practices” and noted that HHS lacks an established process for conducting regular fraud risk assessments. It also noted that state and local agencies involved in overseeing the program are not involved in the assessment process.
GAO provided seven recommendations to HHS, including clearer fraud risk assessment procedures, better communication with state and local agencies, and improvements to the fraud risk assessment portal. HHS agreed with five recommendations but disagreed on two related to the portal, though GAO has maintained that each recommendation is valid.
Smith blamed the Biden administration for TANF problems.
“GAO’s findings reveal a clear breakdown in HHS’s execution of its oversight responsibilities under President Biden when it comes to curbing the misuse and abuse of TANF non-assistance funding,” he said.
Smith says 78% of TANF spending is used for non-assistance services.
“Fraud is not only a threat to the taxpayer but risks seriously undermining vital services provided to millions of families in poverty,” Smith said.
