Government Operations:

Administrative Expenditures and Federal Matching Rates of Selected Support Programs

GAO-05-839R: Published: Jun 30, 2005. Publicly Released: Jul 28, 2005.

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The federal government spends billions of dollars annually for programs that help low-income families and other individuals. A significant portion of these funds cover administrative costs rather than direct benefits and services. To provide information on how these administrative costs compare across programs and the federal government's role in funding these programs' administrative costs, we examined (1) total funding and the amounts and types of administrative expenditures for selected programs and (2) the federal matching rates for these administrative expenditures.

Total expenditures, including administrative and all other expenditures, for the seven programs in our review ranged from $2.9 billion for Adoption Assistance to $295 billion for Medicaid, including both federal and state expenditures. Total expenditures generally include the costs of direct benefits, such as the costs of food stamps and medical services, as well as all other costs of administering the programs and providing benefits. For each of the programs in our review, both the federal and state governments provide program funding. The federal share of total program expenditures ranged from 53 percent for Foster Care to 91 percent for the Food Stamp Program. The specific types of expenditures that are considered administrative differ considerably across the programs. For example, administrative costs for Foster Care include case planning, recruitment and licensing of foster care homes, and eligibility determination activities, as well as other activities. In contrast, administrative costs for CCDF do not include the costs of providing direct services, such as determining eligibility and placing children in child care. Both federal and state funds are used for administrative expenditures. The federal share of administrative expenditures ranged from 49 percent for the Food Stamp Program to 70 percent for SCHIP. The sharing of administrative costs between the federal and state governments is based largely on federal matching rates, in accordance with federal laws and regulations. The federal matching rate is 50 percent for most administrative expenditures for Medicaid, the Food Stamp Program, Foster Care, and Adoption Assistance, although higher federal matching rates may apply to certain expenses. For CSE, the federal matching rate is 66 percent for most administrative expenditures. For a portion of CCDF administrative expenditures, the federal matching rate varies by state and ranges from 50 percent to 77 percent. For SCHIP, the federal matching rate also varies by state and ranges from 65 percent to about 84 percent. In addition, administrative expenditures in SCHIP and CCDF are capped at 10 percent and 5 percent, respectively, of total expenditures.

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