Temporary Assistance for Needy Families: Additional Actions Needed to Strengthen Fraud Risk Management

Fast Facts

The Temporary Assistance for Needy Families program provides billions of dollars annually to support low-income families and communities. Concerns have been raised about program funds being fraudulently misused or diverted.

In 2024, the Department of Health and Human Services assessed fraud risks in the program. But its assessment wasn't fully consistent with leading fraud risk management practices. Also, HHS doesn't have a formal plan to regularly do these assessments or coordinate with the state and local agencies that administer the program to learn about fraud risks they've identified.

Our recommendations address these issues and more.

Highlights

What GAO Found

In July 2024, the U.S. Department of Health and Human Services (HHS) completed its first Temporary Assistance for Needy Families (TANF) fraud risk assessment using its Fraud Risk Assessment Portal. It identified and assessed 21 fraud risks. GAO categorized these 21 fraud risks into nine broad categories.

Categories Describing the Temporary Assistance for Needy Families (TANF) Fraud Risks Identified and Assessed by the U.S. Department of Health and Human Services

However, HHS's process for assessing risks is not fully consistent with leading practices for fraud risk management, as outlined below.

Lack of clear guidance or procedures on planning and conducting regular TANF fraud risk assessments. HHS has not established clear guidance or procedures related to planning and conducting regular TANF fraud risk assessments. Specifically, HHS does not have clear and finalized guidance to ensure these assessments occur regularly. Also, HHS does not have standard procedures for conducting TANF fraud risk assessments.

Relevant state or local stakeholders not involved in the TANF fraud risk assessment process. HHS did not engage directly with state and local TANF agencies, or their respective Offices of Inspectors General or auditors, to identify TANF fraud risks while conducting the program's fraud risk assessment. According to HHS officials, their ability to require these stakeholders to provide information on TANF fraud risks is limited. The Social Security Act prohibits oversight activities of state TANF programs beyond what is explicitly outlined in law. However, HHS is not prohibited from requesting input from stakeholders.

Likelihood, impact, and tolerance of identified fraud risks, and additional risks are not assessed or determined. HHS's Fraud Risk Assessment Portal—used to conduct the assessments—is not designed to assess the likelihood or impact or determine tolerance of fraud risks identified. Additionally, the portal is not designed to assess additional fraud risks facing a program, such as TANF.

Having a process for assessing fraud risks that is fully consistent with leading practices can help HHS ensure that its managers are aware of evolving fraud risks and are efficiently and effectively managing them.

Why GAO Did This Study

Since 1996, the TANF block grant has provided $16.5 billion annually in federal funding to states to help support low-income families and address community needs. Recent information from state auditors and the U.S. Department of Justice highlight concerns about whether vulnerabilities in TANF create opportunities for program participants and others to misuse or divert funds.

GAO was asked to review TANF spending. This report examines the extent to which HHS identified and assessed TANF fraud risks. It is part of a series of reports reviewing TANF, see GAO-25-107235 .

GAO reviewed HHS's fraud risk assessment for TANF and related policies, plans, and methodologies. GAO also interviewed HHS officials. GAO compared this information against leading practices for fraud risk management. GAO independently identified TANF fraud risks by reviewing court cases; state single audit reports; and prior GAO reports. GAO also interviewed state and local officials, including auditors, from eight states selected based on geography and variation in poverty level.

Recommendations

GAO is making seven recommendations to HHS, including to develop clear guidance and standard procedures for regular risk assessments, communicate with state and local stakeholders, and improve the Fraud Risk Assessment Portal design. HHS concurred with five recommendations and did not fully concur with two on the portal. GAO maintains these are valid, as discussed in the report.

Recommendations for Executive Action

Agency Affected	Recommendation	Status
Department of Health and Human Services	The Secretary of HHS should finalize its key guidance documents on fraud risk management—the Fraud Risk Management Implementation Plan and the Fraud Risk Assessment Portal Methodology—and clearly establish a process for conducting fraud risk assessments for HHS programs, including TANF, at regular intervals and when there are changes to the program or its operating environment. (Recommendation 1)	Open When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Department of Health and Human Services	The Secretary of HHS should develop and document standard operating procedures for conducting regular fraud risk assessments tailored to TANF. This should include the roles and responsibilities of HHS entities involved in the process. (Recommendation 2)	Open When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Department of Health and Human Services	The Secretary of HHS should develop a process for direct and regular communication with state and local agencies, and their respective OIGs or auditors, about TANF fraud risks that includes an approach for soliciting information from these entities and document this process in its standard operating procedures for conducting fraud risk assessments tailored to TANF. (Recommendation 3)	Open When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Department of Health and Human Services	The Secretary of HHS should update the design of HHS's Fraud Risk Assessment Portal to have the functionality to allow users to assess the likelihood and impact of each fraud risk identified in a program, such as TANF; determine the related fraud risk tolerance; and include those results in the portal as part of their fraud risk assessments. (Recommendation 4)	Open When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Department of Health and Human Services	As part of finalizing HHS's key guidance documents on fraud risk management, the Secretary of HHS should require users to assess the likelihood and impact of each fraud risk identified in a program, such as TANF; determine the related fraud risk tolerance; and include those results in the Fraud Risk Assessment Portal as part of their fraud risk assessments. (Recommendation 5)	Open When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Department of Health and Human Services	The Secretary of HHS should update the design of HHS's Fraud Risk Assessment Portal to have the functionality to allow for the regular assessment of any additional fraud risks facing TANF, including those identified by GAO. (Recommendation 6)	Open When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Department of Health and Human Services	As part of finalizing HHS's key guidance documents on fraud risk management, the Secretary of HHS should require users to regularly assess any additional fraud risks facing TANF. (Recommendation 7)	Open When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.