Summary: Pursuant to a legislative requirement, GAO reviewed the Food Stamp Program's progress in achieving cost neutrality in Washington under its Family Independence Program (FIP), focusing on the: (1) methods for establishing the amount of benefit and administrative costs that Washington would have incurred for food stamps in the absence of FIP; and (2) accuracy of the data and the methods used to calculate cost neutrality each quarter.
GAO found that: (1) several problems existed with the state's methodology for estimating the benefit cost of the Food Stamp Program; (2) the state needed to consider alternative methodologies that did not establish a statewide cost ceiling; (3) data gathering and reporting were erroneous for calculations of ceiling amounts and cost neutrality for the first 3 quarters of FIP operations; (4) Washington submitted a proposed method for calculating the programs' administrative cost-neutral ceiling, which included a number of questionable assumptions; (5) Washington had not received a response regarding its May 1988 or August 1989 proposed administrative methodology; and (6) several problems existed with the calculations used to determine the ceiling amount under the proposed administrative cost method.
