00:00Thank you, Ms. Moore. I recognize Mr. Bean of Florida.
00:03Thank you very much, Mr. Chairman. A very good afternoon to you and good afternoon,
00:07Work and Welfare Subcommittee, and a special welcome to our all-star panel. Really appreciate
00:13you being here. In 2023, Chairman Smith and our subcommittees, distinguished sub-chairman,
00:19Mr. LaHood, requested the GAO to conduct a comprehensive review of vulnerabilities in
00:25the TANF program based on state non-assistance spending. GAO's review found multiple areas in
00:32need of improvement and confirms TANF non-assistance, which constitutes 78% of total spending. It lacks
00:40basic financial guardrails, creating an environment ripe for fraud, waste, and abuse. Congress has
00:49work to do. We've got to come together to root that waste, fraud, and abuse out. Every tax dollar
00:55is indeed a precious tax dollar. We've got work to do. TANF's mission of raising people out of
01:02poverty and giving them temporary needy assistance is missing. It's marked. Mr. Bagdolian, in the
01:09report, Additional Actions Needed to Strengthen Fraud Risk Management, GAO shared how HHS identified 21
01:17fraud risk categories, including billing fraud, misuse of award funds, misrepresentation when
01:24applying for TANF. And GAO cites in its report that one instance, employees use TANF funds for resort
01:32vacations, cosmetic surgery, and jewelry. That sounds like waste, fraud, and abuse to me. In fact, I think
01:41that's fraud. They were ordered to pay over 3.7 in restitution. What's your assessment, Mr. Bagdolian,
01:49of HHS existing practices for fraud risk assessments? Is it cutting the mustard? Mr. Bagdolian?
01:55Well, thank you for your question, Mr. Bean. As I mentioned in my opening remarks, they have taken
02:01some steps, but they are far short of where they need to be. I displayed the fraud risk framework,
02:07which is our benchmark, and that requires to have a dedicated entity to run fraud risk management at
02:13any federal agency. 10-4. We've just got work to do. The ball's in our court for Congress to take
02:19action. That's part of it, but also the states need to be involved. That's something HHS did not
02:24consult with its state and local partners to figure out, well, what are the risks in your jurisdictions?
02:3010-4. And I'm sure the states are watching this hearing right now, so they're on notice that
02:36we've got work to do, too. Ms. Lahren, the report titled Child Welfare, State's Use of TANF and Other
02:43Major Federal Funding Sources, the report found that the fiscal year 2024, 46 states use funds,
02:51everybody listening, they use funds, TANF, that were for families and temporary needed assistance.
02:59They use these funds to plug holes in their budget. How about that? That's why Ms. Tenney,
03:05Claudia Tenney on this committee and myself, introduced a bill, Protect TANF Resources for
03:10the Family Act. Can you comment, Ms. Lahren, how states are using TANF to plug holes in their own
03:16budget when it sounds like it's going to hurt the intended target of helping needy families? Is that
03:22true? What say you, Ms. Lahren? Well, one way that they're using it is to plug holes in their child
03:29welfare budget and that money. But not the intended target of TANF, though? Well, the first goal of
03:37TANF is to keep families in their homes so they can be raised by their parents or kin. So prevention
03:43services to prevent children from entering the foster care system, that is an allowable use.
03:5110-4. Thank you so much. Mr. Arkin, states have doubled their TANF unspent balances. They're hoarding
03:56this money. They're not using it for the intent. What's the driver? What's the driver of Mr. Arkin
04:04of the increase in unspent funds? Why are they hoarding this money? Thanks for the question. We
04:09heard a few different things when we talked to states. In particular, the last couple years,
04:15that amount has gone way up during the COVID pandemic where states received a lot of other funds
04:20that because they were more time limited, they would choose to use first. And because there is no limit on
04:26by when you need to spend TANF funds, they were able to hold on to those. There are some
04:30circumstances where we heard states overestimated the needs on the assistance side. And then we
04:37heard also that there were circumstances where some of the subgrantees may not have spent all
04:42the funds they thought they were going to need to spend or hadn't obligated them as quickly as they
04:47would. You would agree that this is something that Congress's committee needs to look at to say
04:51there needs to be a timeline in general, get it out the door. Yeah, I mean, in general,
04:55when we see growing unobligated balances, that can raise questions. Why is this happening? Is this
05:01the best use of funds? Is it being used in the way that is intended? Will a gentleman yield?
05:06Thank you. I would if I had any time left. I yield back. I'm so sorry. Mr. Chairman.
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