Section 2025 - Administrative cost-sharing and quality control

7 U.S.C. § 2025

Title 7 Chapter 51 Current through PL 118-3 Last updated: March 29, 2026 View on OLRC →

Sections in this chapter

(a) Subject to subsection (k), the Secretary is authorized to pay to each State agency an amount equal to 50 per centum of all administrative costs involved in each State agency’s operation of the supplemental nutrition assistance program, which costs shall include, but not be limited to, the cost of (1) the certification of applicant households, (2) the acceptance, storage, protection, control, and accounting of benefits after their delivery to receiving points within the State, (3) the issuance of benefits to all eligible households, (4) informational activities relating to the supplemental nutrition assistance program, including those undertaken under section 2020(e)(1)(A) of this title , but not including recruitment activities designed to persuade an individual to apply for program benefits or that promote the program through television, radio, or billboard advertisements, (5) fair hearings, (6) automated data processing and information retrieval systems subject to the conditions set forth in subsection (g), (7) supplemental nutrition assistance program investigations and prosecutions, (8) implementing and operating the immigration status verification system established under section 1137(d) of the Social Security Act ( 42 U.S.C. 1320b–7(d) ), and (9) establishing and operating a longitudinal database in accordance with section 2026(n) of this title : Provided , That the Secretary is authorized at the Secretary’s discretion to pay any State agency administering the supplemental nutrition assistance program on all or part of an Indian reservation under section 2020(d) of this title or in a Native village within the State of Alaska identified in section 1610(b) of title 43 , such amounts for administrative costs as the Secretary determines to be necessary for effective operation of the supplemental nutrition assistance program, as well as to permit each State to retain 35 percent of the value of all funds or allotments recovered or collected pursuant to sections 2015(b) and 2022(c) of this title and 20 percent of the value of any other funds or allotments recovered or collected, except the value of funds or allotments recovered or collected that arise from an error of a State agency. The officials responsible for making determinations of ineligibility under this chapter shall not receive or benefit from revenues retained by the State under the provisions of this subsection.
(b)
- (1) In this subsection, the term “work supplementation or support program” means a program under which, as determined by the Secretary, public assistance (including any benefits provided under a program established by the State and the supplemental nutrition assistance program) is provided to an employer to be used for hiring and employing a public assistance recipient who was not employed by the employer at the time the public assistance recipient entered the program.
- (2) A State agency may elect to use an amount equal to the allotment that would otherwise be issued to a household under the supplemental nutrition assistance program, but for the operation of this subsection, for the purpose of subsidizing or supporting a job under a work supplementation or support program established by the State.
- (3) If a State agency makes an election under paragraph (2) and identifies each household that participates in the supplemental nutrition assistance program that contains an individual who is participating in the work supplementation or support program—
  - (A) the Secretary shall pay to the State agency an amount equal to the value of the allotment that the household would be eligible to receive but for the operation of this subsection;
  - (B) the State agency shall expend the amount received under subparagraph (A) in accordance with the work supplementation or support program in lieu of providing the allotment that the household would receive but for the operation of this subsection;
  - (C) for purposes of—
    - (i) sections 2014 and 2017(a) of this title, the amount received under this subsection shall be excluded from household income and resources; and
    - (ii) section 2017(b) of this title , the amount received under this subsection shall be considered to be the value of an allotment provided to the household; and
  - (D) the household shall not receive an allotment from the State agency for the period during which the member continues to participate in the work supplementation or support program.
- (4) No individual shall be excused, by reason of the fact that a State has a work supplementation or support program, from any work requirement under section 2015(d) of this title , except during the periods in which the individual is employed under the work supplementation or support program.
- (5) A State agency shall provide a description of how the public assistance recipients in the program shall, within a specific period of time, be moved from supplemented or supported employment to employment that is not supplemented or supported.
- (6) A work supplementation or support program shall not displace the employment of individuals who are not supplemented or supported.
(c)
- (1)
  - (A)
    - (i) In carrying out the supplemental nutrition assistance program, the Secretary shall carry out a system that enhances payment accuracy and improves administration by establishing fiscal incentives that require State agencies with high payment error rates to share in the cost of payment error.
    - (ii) The Secretary shall set the tolerance level for excluding small errors for the purposes of this subsection—
      - (I) for fiscal year 2014, at an amount not greater than $37; and
      - (II) for each fiscal year thereafter, the amount specified in subclause (I) adjusted by the percentage by which the thrifty food plan is adjusted under section 2012(u)(4) of this title between June 30, 2013 , and June 30 of the immediately preceding fiscal year.
  - (B)
    - (i) Not later than 180 days after December 20, 2018 , the Secretary shall issue interim final regulations that—
      - (I) ensure that the quality control system established under this subsection produces valid statistical results;
      - (II) provide for oversight of contracts entered into by a State agency for the purpose of improving payment accuracy;
      - (III) ensure the accuracy of data collected under the quality control system established under this subsection; and
      - (IV) for each fiscal year, to the maximum extent practicable, provide for the evaluation of the integrity of the quality control process of not fewer than 2 State agencies, selected in accordance with criteria determined by the Secretary.
    - (ii) In accordance with the nonprocurement debarment procedures under part 417 of title 2, Code of Federal Regulations, or successor regulations, the Secretary shall debar any person that, in carrying out the quality control system established under this subsection, knowingly submits, or causes to be submitted, false information to the Secretary.
  - (C) With respect to fiscal year 2004 and any fiscal year thereafter for which the Secretary determines that, for the second or subsequent consecutive fiscal year, a 95 percent statistical probability exists that the payment error rate of a State agency exceeds 105 percent of the national performance measure for payment error rates announced under paragraph (6), the Secretary shall establish an amount for which the State agency may be liable (referred to in this paragraph as the “liability amount”) that is equal to the product obtained by multiplying—
    - (i) the value of all allotments issued by the State agency in the fiscal year;
    - (ii) the difference between—
      - (I) the payment error rate of the State agency; and
      - (II) 6 percent; and
    - (iii) 10 percent.
  - (D) With respect to the liability amount established for a State agency under subparagraph (C) for any fiscal year, the Secretary shall—
    - (i)
      - (I) require that a portion, not to exceed 50 percent, of the liability amount established for the fiscal year be used by the State agency for new investment, approved by the Secretary, to improve administration by the State agency of the supplemental nutrition assistance program (referred to in this paragraph as the “new investment amount”), which new investment amount shall not be matched by Federal funds;
      - (II) designate a portion, not to exceed 50 percent, of the amount established for the fiscal year for payment to the Secretary in accordance with subparagraph (E) (referred to in this paragraph as the “at-risk amount”); or
      - (III) take any combination of the actions described in subclauses (I) and (II); or
    - (ii) make the determinations described in clause (i) and enter into a settlement with the State agency, only with respect to any new investment amount, before the end of the fiscal year in which the liability amount is determined under subparagraph (C).
  - (E)
    - (i) A State agency shall pay to the Secretary the at-risk amount designated under subparagraph (D)(i)(II) for any fiscal year in accordance with clause (ii), if, with respect to the immediately following fiscal year, a liability amount has been established for the State agency under subparagraph (C).
    - (ii)
      - (I) In the case of a State agency required to pay an at-risk amount under clause (i), as soon as practicable after completion of all administrative and judicial reviews with respect to that requirement to pay, the chief executive officer of the State shall remit to the Secretary the at-risk amount required to be paid.
      - (II)
  - (F)
    - (i) In the case of a State agency that fails to comply with a requirement for new investment under subparagraph (D)(i)(I) or clause (iii)(I), the Secretary may reduce any amount due to the State agency under any other provision of this section by the portion of the liability amount that has not been used in accordance with that requirement.
    - (ii) If a State agency begins required new investment under subparagraph (D)(i)(I), the State agency appeals the liability amount of the State agency, and the determination by the Secretary of the liability amount is reduced to $0 on administrative or judicial review, the Secretary shall pay to the State agency an amount equal to 50 percent of the new investment amount that was included in the liability amount subject to the appeal.
    - (iii) If a State agency does not begin required new investment under subparagraph (D)(i)(I), the State agency appeals the liability amount of the State agency, and the determination by the Secretary of the liability amount is wholly upheld on administrative or judicial review, the Secretary shall—
      - (I) require all or any portion of the new investment amount to be used by the State agency for new investment, approved by the Secretary, to improve administration by the State agency of the supplemental nutrition assistance program, which amount shall not be matched by Federal funds; and
      - (II) require payment of any remaining portion of the new investment amount in accordance with subparagraph (E)(ii).
    - (iv) The Secretary shall promulgate regulations regarding obligations of the Secretary and the State agency in a case in which the State agency appeals the liability amount of the State agency and neither the Secretary nor the State agency wholly prevails.
  - (G) The Secretary shall foster management improvements by the States by requiring State agencies, other than State agencies with payment error rates of less than 6 percent, to develop and implement corrective action plans to reduce payment errors.
- (2) As used in this section—
  - (A) the term “payment error rate” means the sum of the point estimates of an overpayment error rate and an underpayment error rate determined by the Secretary from data collected in a probability sample of participating households;
  - (B) the term “overpayment error rate” means the percentage of the value of all allotments issued in a fiscal year by a State agency that are either—
    - (i) issued to households that fail to meet basic program eligibility requirements; or
    - (ii) overissued to eligible households; and
  - (C) the term “underpayment error rate” means the ratio of the value of allotments underissued to recipient households to the total value of allotments issued in a fiscal year by a State agency.
- (3) The following errors may be measured for management purposes but shall not be included in the payment error rate:
  - (A) Any errors resulting in the application of new regulations promulgated under this chapter during the first 120 days from the required implementation date for such regulations.
  - (B) Errors resulting from the use by a State agency of correctly processed information concerning households or individuals received from Federal agencies or from actions based on policy information approved or disseminated, in writing, by the Secretary or the Secretary’s designee.
- (4) The Secretary may require a State agency to report any factors that the Secretary considers necessary, including providing access to applicable State records and the entire information systems in which the records are contained, to determine a State agency’s payment error rate, liability amount or new investment amount under paragraph (1), or performance under the performance measures under subsection (d). If a State agency fails to meet the reporting requirements established by the Secretary, the Secretary shall base the determination on all pertinent information available to the Secretary.
- (5) To facilitate the implementation of this subsection, each State agency shall expeditiously submit to the Secretary data concerning the operations of the State agency in each fiscal year sufficient for the Secretary to establish the State agency’s payment error rate, liability amount or new investment amount under paragraph (1), or performance under the performance measures under subsection (d). The Secretary shall initiate efforts to collect the amount owed by the State agency as a claim established under paragraph (1) for a fiscal year, subject to the conclusion of any formal or informal appeal procedure and administrative or judicial review under section 2023 of this title (as provided for in paragraph (7)), before the end of the fiscal year following such fiscal year.
- (6)
  - (A) At the time the Secretary makes the notification to State agencies of their error rates, the Secretary shall also announce a national performance measure that shall be the sum of the products of each State agency’s error rate as developed for the notifications under paragraph (8) times that State agency’s proportion of the total value of national allotments issued for the fiscal year using the most recent issuance data available at the time of the notifications issued pursuant to paragraph (8).
  - (B) Where a State fails to meet reporting requirements pursuant to paragraph (4), the Secretary may use another measure of a State’s error developed pursuant to paragraph (5), to develop the national performance measure.
  - (C) The announced national performance measure shall be used in determining the liability amount of a State under paragraph (1)(C) for the fiscal year whose error rates are being announced under paragraph (8).
  - (D) The national performance measure announced under this paragraph shall not be subject to administrative or judicial review.
- (7)
  - (A) Except as provided in subparagraphs (B) and (C), if the Secretary asserts a financial claim against or establishes a liability amount with respect to a State agency under paragraph (1), the State may seek administrative and judicial review of the action pursuant to section 2023 of this title .
  - (B) With respect to any fiscal year, a determination of the payment error rate of a State agency or a determination whether the payment error rate exceeds 105 percent of the national performance measure for payment error rates shall be subject to administrative or judicial review only if the Secretary establishes a liability amount with respect to the fiscal year under paragraph (1)(C).
  - (C) An action by the Secretary under subparagraph (D) or (F)(iii) of paragraph (1) shall not be subject to administrative or judicial review.
- (8)
  - (A) This paragraph applies to the determination of whether a payment is due by a State agency for a fiscal year under paragraph (1).
  - (B) Not later than the first May 31 after the end of the fiscal year referred to in subparagraph (A), the case review and all arbitrations of State-Federal difference cases shall be completed.
  - (C) Not later than the first June 30 after the end of the fiscal year referred to in subparagraph (A), the Secretary shall—
    - (i) determine final error rates, the national average payment error rate, and the amounts of payment claimed against State agencies or liability amount established with respect to State agencies;
    - (ii) notify State agencies of the payment claims or liability amounts; and
    - (iii) provide a copy of the document providing notification under clause (ii) to the chief executive officer and the legislature of the State.
  - (D) A State agency desiring to appeal a payment claim or liability amount determined under subparagraph (C) shall submit to an administrative law judge—
    - (i) a notice of appeal, not later than 10 days after receiving a notice of the claim or liability amount; and
    - (ii) evidence in support of the appeal of the State agency, not later than 60 days after receiving a notice of the claim or liability amount.
  - (E) Not later than 60 days after a State agency submits evidence in support of the appeal, the Secretary shall submit responsive evidence to the administrative law judge to the extent such evidence exists.
  - (F) Not later than 30 days after the Secretary submits responsive evidence, the State agency shall submit rebuttal evidence to the administrative law judge to the extent such evidence exists.
  - (G) The administrative law judge, after an evidentiary hearing, shall decide the appeal—
    - (i) not later than 60 days after receipt of rebuttal evidence submitted by the State agency; or
    - (ii) if the State agency does not submit rebuttal evidence, not later than 90 days after the State agency submits the notice of appeal and evidence in support of the appeal.
  - (H) In considering a claim or liability amount under this paragraph, the administrative law judge shall consider all grounds for denying the claim or liability amount, in whole or in part, including the contention of a State agency that the claim or liability amount should be waived, in whole or in part, for good cause.
  - (I) The deadlines in subparagraphs (D), (E), (F), and (G) shall be extended by the administrative law judge for cause shown.
- (9) As used in this subsection, the term “good cause” includes—
  - (A) a natural disaster or civil disorder that adversely affects supplemental nutrition assistance program operations;
  - (B) a strike by employees of a State agency who are necessary for the determination of eligibility and processing of case changes under the supplemental nutrition assistance program;
  - (C) a significant growth in the caseload under the supplemental nutrition assistance program in a State prior to or during a fiscal year, such as a 15 percent growth in caseload;
  - (D) a change in the supplemental nutrition assistance program or other Federal or State program that has a substantial adverse impact on the management of the supplemental nutrition assistance program of a State; and
  - (E) a significant circumstance beyond the control of the State agency.
(d)
- (1)
  - (A) With respect to fiscal years 2003 and 2004, the Secretary shall establish, in guidance issued to State agencies not later than October 1, 2002 —
    - (i) performance criteria relating to—
      - (I) actions taken to correct errors, reduce rates of error, and improve eligibility determinations; and
      - (II) other indicators of effective administration determined by the Secretary; and
    - (ii) standards for high and most improved performance to be used in awarding performance bonus payments under subparagraph (B)(ii).
  - (B) With respect to each of fiscal years 2003 and 2004, the Secretary shall—
    - (i) measure the performance of each State agency with respect to the criteria established under subparagraph (A)(i); and
    - (ii) subject to paragraph (3), award performance bonus payments in the following fiscal year, in a total amount of $48,000,000 for each fiscal year, to State agencies that meet standards for high or most improved performance established by the Secretary under subparagraph (A)(ii).
- (2)
  - (A) With respect to fiscal year 2005 through fiscal year 2017, the Secretary shall—
    - (i) establish, by regulation, performance criteria relating to—
      - (I) actions taken to correct errors, reduce rates of error, and improve eligibility determinations; and
      - (II) other indicators of effective administration determined by the Secretary;
    - (ii) establish, by regulation, standards for high and most improved performance to be used in awarding performance bonus payments under subparagraph (B)(ii); and
    - (iii) before issuing proposed regulations to carry out clauses (i) and (ii), solicit ideas for performance criteria and standards for high and most improved performance from State agencies and organizations that represent State interests.
  - (B) With respect to fiscal year 2005 through fiscal year 2017, the Secretary shall—
    - (i) measure the performance of each State agency with respect to the criteria established under subparagraph (A)(i); and
    - (ii) subject to paragraph (3), award performance bonus payments in the following fiscal year, in a total amount of $48,000,000 for each fiscal year, to State agencies that meet standards for high or most improved performance established by the Secretary under subparagraph (A)(ii).
- (3) A State agency shall not be eligible for a performance bonus payment with respect to any fiscal year for which the State agency has a liability amount established under subsection (c)(1)(C).
- (4) A determination by the Secretary whether, and in what amount, to award a performance bonus payment under this subsection shall not be subject to administrative or judicial review.
- (5) A State agency may use a performance bonus payment received under this subsection only to carry out the program established under this chapter, including investments in—
  - (A) technology;
  - (B) improvements in administration and distribution; and
  - (C) actions to prevent fraud, waste, and abuse.
- (6)
  - (A) With respect to fiscal year 2018 and each fiscal year thereafter, the Secretary shall establish, by regulation, performance criteria relating to—
    - (i) actions taken to correct errors, reduce rates of error, and improve eligibility determinations; and
    - (ii) other indicators of effective administration determined by the Secretary.
  - (B) The Secretary shall not award performance bonus payments to State agencies in fiscal year 2019 for fiscal year 2018 performance.
(e) The Secretary and State agencies shall (1) require, as a condition of eligibility for participation in the supplemental nutrition assistance program, that each household member furnish to the State agency their social security account number (or numbers, if they have more than one number), and (2) use such account numbers in the administration of the supplemental nutrition assistance program. The Secretary and State agencies shall have access to the information regarding individual supplemental nutrition assistance program applicants and participants who receive benefits under title XVI of the Social Security Act [ 42 U.S.C. 1381 et seq.] that has been provided to the Commissioner of Social Security, but only to the extent that the Secretary and the Commissioner of Social Security determine necessary for purposes of determining or auditing a household’s eligibility to receive assistance or the amount thereof under the supplemental nutrition assistance program, or verifying information related thereto.
(f) Notwithstanding any other provision of law, counsel may be employed and counsel fees, court costs, bail, and other expenses incidental to the defense of officers and employees of the Department of Agriculture may be paid in judicial or administrative proceedings to which such officers and employees have been made parties and that arise directly out of their performance of duties under this chapter.
(g)
- (1) Except as provided in paragraph (2), the Secretary is authorized to pay to each State agency the amount provided under subsection (a)(6) for the costs incurred by the State agency in the—
  - (A) planning, design, development, or installation of 1 or more automatic data processing and information retrieval systems that the Secretary determines—
    - (i) would assist in meeting the requirements of this chapter;
    - (ii) meet such conditions as the Secretary prescribes;
    - (iii) are likely to provide more efficient and effective administration of the supplemental nutrition assistance program;
    - (iv) would be compatible with other systems used in the administration of State programs, including the program funded under part A of title IV of the Social Security Act ( 42 U.S.C. 601 et seq.);
    - (v) would be tested adequately before and after implementation, including a requirement that—
      - (I) such testing shall be accomplished through pilot projects in limited areas for major systems changes (as determined under rules promulgated by the Secretary);
      - (II) each pilot project described in subclause (I) that is carried out before the implementation of a system shall be conducted in a live-production environment; and
      - (III) the data resulting from each pilot project carried out under this clause shall be thoroughly evaluated before the Secretary approves the system to be implemented more broadly;
    - (vi) would be operated in accordance with an adequate plan for—
      - (I) continuous updating to reflect changed policy and circumstances; and
      - (II) testing the effect of the system on access for eligible households and on payment accuracy; and
    - (vii) would be accessible by the Secretary for inspection and audit under section 2020(a)(3)(B) of this title ; and
  - (B) operation of 1 or more automatic data processing and information retrieval systems that the Secretary determines may continue to be operated in accordance with clauses (i) through (vii) of subparagraph (A).
- (2) The Secretary shall not make payments to a State agency under paragraph (1) to the extent that the State agency—
  - (A) is reimbursed for the costs under any other Federal program; or
  - (B) uses the systems for purposes not connected with the supplemental nutrition assistance program.
(h)
- (1)
  - (A) To carry out employment and training programs, the Secretary shall reserve for allocation to State agencies, to remain available for 24 months, from funds made available for each fiscal year under section 2027(a)(1) of this title , $103,900,000 for each fiscal year.
  - (B) Funds made available under subparagraph (A) shall be made available to and reallocated among State agencies under a reasonable formula that—
    - (i) is determined and adjusted by the Secretary; and
    - (ii) takes into account the number of individuals who are not exempt from the work requirement under section 2015( o ) of this title.
  - (C)
    - (i) If a State agency will not expend all of the funds allocated to the State agency for a fiscal year under subparagraph (B), the Secretary, subject to clauses (ii) through (v), shall reallocate the unexpended funds to other States (during the fiscal year or the subsequent fiscal year) as the Secretary considers appropriate and equitable.
    - (ii) The Secretary shall collect such information as the Secretary determines to be necessary about the expenditures and anticipated expenditures by the State agencies of the funds initially allocated to the State agencies under subparagraph (A) to make reallocations of unexpended funds under clause (i) within a timeframe that allows each State agency to which funds are reallocated at least 270 days to expend the reallocated funds.
    - (iii) The Secretary shall ensure that all State agencies have an opportunity to obtain reallocated funds.
    - (iv) The Secretary shall reallocate funds under this subparagraph as follows:
      - (I)
      - (II) Not less than 30 percent shall be reallocated to State agencies requesting such funds to implement or continue employment and training programs and activities under section 2015(d)(4)(B)(i) of this title that the Secretary determines have the most demonstrable impact on the ability of participants to find and retain employment that leads to increased household income and reduced reliance on public assistance, including programs and activities that are targeted to—
      - (III) The Secretary shall reallocate any remaining funds available under this subparagraph, to State agencies requesting such funds to use for employment and training programs and activities that the Secretary determines have the most demonstrable impact on the ability of participants to find and retain employment that leads to increased household income and reduced reliance on public assistance under section 2015(d)(4)(B)(i) of this title .
    - (v) In reallocating funds under this subparagraph, a State agency that receives reallocated funds under clause (iv)(I) may also be considered for reallocated funding under clause (iv)(II).
  - (D) Notwithstanding subparagraph (B), the Secretary shall ensure that each State agency operating an employment and training program shall receive not less than $100,000 for each fiscal year.
  - (E)
    - (i) In addition to the allocations under subparagraph (A), from funds made available under section 2027(a)(1) of this title , the Secretary shall allocate not more than $20,000,000 for each fiscal year to reimburse a State agency that is eligible under clause (ii) for the costs incurred in serving members of households receiving supplemental nutrition assistance program benefits who—
      - (I) are not eligible for an exception under section 2015( o )(3) of this title; and
      - (II) are placed in and comply with a program described in subparagraph (B) or (C) of section 2015( o )(2) of this title.
    - (ii) To be eligible for an additional allocation under clause (i), a State agency shall make and comply with a commitment to offer a position in a program described in subparagraph (B) or (C) of section 2015( o )(2) of this title to each applicant or recipient who—
      - (I) is in the last month of the 3-month period described in section 2015( o )(2) of this title;
      - (II) is not eligible for an exception under section 2015( o )(3) of this title;
      - (III) is not eligible for a waiver under section 2015( o )(4) of this title; and
      - (IV) is not exempt under section 2015( o )(6) of this title.
  - (F)
    - (i)
      - (I) The Secretary shall carry out pilot projects under which State agencies shall enter into cooperative agreements with the Secretary to develop and test methods, including operating work programs with certain features comparable to the program of block grants to States for temporary assistance for needy families established under part A of title IV of the Social Security Act ( 42 U.S.C. 601 et seq.), for employment and training programs and services to raise the number of work registrants under section 2015(d) of this title who obtain unsubsidized employment, increase the earned income of the registrants, and reduce the reliance of the registrants on public assistance, so as to reduce the need for supplemental nutrition assistance benefits.
      - (II) Pilot projects shall—
    - (ii)
      - (I) The Secretary shall select pilot projects under this subparagraph in accordance with the criteria established under this clause and additional criteria established by the Secretary.
      - (II) To be eligible to participate in a pilot project, a State agency shall—
      - (III) In selecting pilot projects, the Secretary shall—
    - (iii)
      - (I) The Secretary shall establish and implement a process to terminate a pilot project for which the State has failed to meet the criteria described in clause (ii) or other criteria established by the Secretary.
      - (II) The process shall include a reasonable time period, not to exceed 180 days, for State agencies found noncompliant to correct the noncompliance.
    - (iv) Allowable programs and services carried out under this subparagraph shall include those programs and services authorized under this chapter and employment and training activities authorized under the program of block grants to States for temporary assistance for needy families established under part A of title IV of the Social Security Act ( 42 U.S.C. 601 et seq.), including:
      - (I) Employment in the public or private sector that is not subsidized by any public program.
      - (II) Employment in the private sector for which the employer receives a subsidy from public funds to offset all or a part of the wages and costs of employing an adult.
      - (III) Employment in the public sector for which the employer receives a subsidy from public funds to offset all or a part of the wages and costs of employing an adult.
      - (IV) A work activity that—
      - (V) Training in the public or private sector that—
      - (VI) Job search, obtaining employment, or preparation to seek or obtain employment, including—
      - (VII) Structured programs and embedded activities—
      - (VIII) Career and technical training programs that are—
      - (IX) Training or education for job skills that are—
      - (X) Education that is—
      - (XI) In the case of an adult who has not completed secondary school or received a certificate of general equivalence, regular attendance that is—
      - (XII) Providing child care to enable another recipient of public benefits to participate in a community service program that—
    - (v) Subject to clause (vi), no work registrant shall be eligible to participate in the supplemental nutrition assistance program if the individual refuses without good cause to participate in an employment and training program under this subparagraph, to the extent required by the State agency.
    - (vi)
      - (I) Employment and training activities under this subparagraph shall be considered to be carried out under section 2015(d) of this title , including for the purpose of satisfying any conditions of participation and duration of ineligibility.
      - (II) The Secretary shall establish standards for employment activities described in subclauses (I), (II), and (III) of clause (iv) that ensure that failure to work for reasons beyond the control of an individual, such as involuntary reduction in hours of employment, shall not result in ineligibility.
      - (III) Before assigning a work registrant to mandatory employment and training activities, a State agency shall—
    - (vii)
      - (I)
      - (II) Not later than December 31, 2015 , and each December 31 thereafter until the completion of the last evaluation under subclause (I), the Secretary shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate and share broadly, including by posting on the Internet website of the Department of Agriculture, a report that includes a description of—
    - (viii)
      - (I) Subject to subclause (II), from amounts made available under section 2027(a)(1) of this title , the Secretary shall use to carry out this subparagraph—
      - (II)
      - (III) Funds made available under subclause (I) shall remain available through September 30, 2018 .
    - (ix)
      - (I) Funds made available under this subparagraph for pilot projects shall be used only for—
      - (II) Funds made available under this subparagraph shall be used only to supplement, not to supplant, non-Federal funds used for existing employment and training activities or services.
      - (III) In carrying out pilot projects, States may contribute additional funds obtained from other sources, including Federal, State, or private funds, on the condition that the use of the contributions is permissible under Federal law.
- (2) If, in carrying out such program during such fiscal year, a State agency incurs costs that exceed the amount allocated to the State agency under paragraph (1), the Secretary shall pay such State agency an amount equal to 50 per centum of such additional costs, subject to the first limitation in paragraph (3), including the costs for case management and casework to facilitate the transition from economic dependency to self-sufficiency through work.
- (3) The Secretary shall also reimburse each State agency in an amount equal to 50 per centum of the total amount of payments made or costs incurred by the State agency in connection with transportation costs and other expenses reasonably necessary and directly related to participation in an employment and training program under section 2015(d)(4) of this title or a pilot project under paragraph (1)(F), except that the amount of the reimbursement for dependent care expenses shall not exceed an amount equal to the payment made under section 2015(d)(4)(I)(i)(II) of this title but not more than the applicable local market rate, and such reimbursement shall not be made out of funds allocated under paragraph (1).
- (4) Funds provided to a State agency under this subsection may be used only for operating an employment and training program under section 2015(d)(4) of this title or a pilot project under paragraph (1)(F), and may not be used for carrying out other provisions of this chapter.
- (5)
  - (A) The Secretary shall monitor the employment and training programs carried out by State agencies under section 2015(d)(4) of this title and assess the effectiveness of the programs in—
    - (i) preparing members of households participating in the supplemental nutrition assistance program for employment, including the acquisition of basic skills necessary for employment; and
    - (ii) increasing the number of household members who obtain and retain employment subsequent to participation in the employment and training programs.
  - (B)
    - (i) The Secretary, in consultation with the Secretary of Labor, shall develop State reporting measures that identify improvements in the skills, training, education, or work experience of members of households participating in the supplemental nutrition assistance program.
    - (ii) Measures shall—
      - (I) be based on common measures of performance for Federal workforce training programs; and
      - (II) include additional indicators that reflect the challenges facing the types of members of households participating in the supplemental nutrition assistance program who participate in a specific employment and training component.
    - (iii) The Secretary shall require that each State employment and training plan submitted under section 2020(e)(19) of this title identifies appropriate reporting measures for each proposed component that serves a threshold number of participants determined by the Secretary of at least 100 people a year.
    - (iv) Reporting measures described in clause (iii) may include—
      - (I) the percentage and number of program participants who received employment and training services and are in unsubsidized employment subsequent to the receipt of those services;
      - (II) the percentage and number of program participants who obtain a recognized credential, including a registered apprenticeship, or a regular secondary school diploma or its recognized equivalent, while participating in, or within 1 year after receiving, employment and training services;
      - (III) the percentage and number of program participants who are in an education or training program that is intended to lead to a recognized credential, including a registered apprenticeship or on-the-job training program, a regular secondary school diploma or its recognized equivalent, or unsubsidized employment;
      - (IV) subject to terms and conditions established by the Secretary, measures developed by each State agency to assess the skills acquisition of employment and training program participants that reflect the goals of the specific employment and training program components of the State agency, which may include, at a minimum—
      - (V) other indicators approved by the Secretary.
    - (v) The State agency may report relevant data from a workforce partnership carried out under section 2015(d)(4)(N) of this title to demonstrate the number of program participants served by the workforce partnership.
  - (C) The Secretary shall assess State employment and training programs on a periodic basis to ensure—
    - (i) compliance with Federal employment and training program rules and regulations;
    - (ii) that program activities are appropriate to meet the needs of the individuals referred by the State agency to an employment and training program component;
    - (iii) that reporting measures are appropriate to identify improvements in skills, training, work and experience for participants in an employment and training program component; and
    - (iv) for States receiving additional allocations under paragraph (1)(E), any information the Secretary may require to evaluate the compliance of the State agency with paragraph (1), which may include—
      - (I) a report for each fiscal year of the number of individuals in the State who meet the conditions of paragraph (1)(E)(ii), the number of individuals the State agency offers a position in a program described in subparagraph (B) or (C) of section 2015( o )(2) of this title, and the number who participate in such a program;
      - (II) a description of the types of employment and training programs the State agency uses to comply with paragraph (1)(E) and the availability of those programs throughout the State; and
      - (III) any additional information the Secretary determines to be appropriate.
  - (D) Each State agency shall annually prepare and submit to the Secretary a report on the State employment and training program that includes, using measures identified under subparagraph (B), the numbers of supplemental nutrition assistance program participants who have gained skills, training, work, or experience that will increase the ability of the participants to obtain regular employment.
  - (E) Subject to terms and conditions established by the Secretary, if the Secretary determines that the performance of a State agency with respect to employment and training outcomes is inadequate, the Secretary may require the State agency to make modifications to the State employment and training plan to improve the outcomes.
  - (F) Subject to terms and conditions established by the Secretary, not later than October 1, 2016 , and not less frequently than once every 5 years thereafter, the Secretary shall conduct a study to review existing practice and research to identify employment and training program components and practices that—
    - (i) effectively assist members of households participating in the supplemental nutrition assistance program in gaining skills, training, work, or experience that will increase the ability of the participants to obtain regular employment; and
    - (ii) are best integrated with statewide workforce development systems.
(i)
- (1) The Department of Agriculture may use quality control information made available under this section to determine which project areas have payment error rates (as defined in subsection (d)(1)) that impair the integrity of the supplemental nutrition assistance program.
- (2) The Secretary may require a State agency to carry out new or modified procedures for the certification of households in areas identified under paragraph (1) if the Secretary determines such procedures would improve the integrity of the supplemental nutrition assistance program and be cost effective.
(j) Not later than 180 days after September 19, 1988 , and annually thereafter, the Secretary shall publish instructional materials specifically designed to be used by the State agency to provide intensive training to State agency personnel who undertake the certification of households that include a member who engages in farming.
(k)
- (1) In this subsection:
  - (A) The term “AFDC program” means the program of aid to families with dependent children established under part A of title IV of the Social Security Act ( 42 U.S.C. 601 et seq. (as in effect, with respect to a State, during the base period for that State)).
  - (B) The term “base period” means the period used to determine the amount of the State family assistance grant for a State under section 403 of the Social Security Act ( 42 U.S.C. 603 ).
  - (C) The term “medicaid program” means the program of medical assistance under a State plan or under a waiver of the plan under title XIX of the Social Security Act ( 42 U.S.C. 1396 et seq.).
- (2) Not later than 180 days after June 23, 1998 , the Secretary of Health and Human Services, in consultation with the Secretary of Agriculture and the States, shall, with respect to the base period for each State, determine—
  - (A) the annualized amount the State received under section 403(a)(3) of the Social Security Act ( 42 U.S.C. 603(a)(3) (as in effect during the base period)) for administrative costs common to determining the eligibility of individuals, families, and households eligible or applying for the AFDC program and the supplemental nutrition assistance program, the AFDC program and the medicaid program, and the AFDC program, the supplemental nutrition assistance program, and the medicaid program that were allocated to the AFDC program; and
  - (B) the annualized amount the State would have received under section 403(a)(3) of the Social Security Act ( 42 U.S.C. 603(a)(3) (as so in effect)), section 1903(a)(7) of the Social Security Act ( 42 U.S.C. 1396b(a)(7) (as so in effect)), and subsection (a) of this section (as so in effect), for administrative costs common to determining the eligibility of individuals, families, and households eligible or applying for the AFDC program and the supplemental nutrition assistance program, the AFDC program and the medicaid program, and the AFDC program, the supplemental nutrition assistance program, and the medicaid program, if those costs had been allocated equally among such programs for which the individual, family, or household was eligible or applied for.
- (3)
  - (A) Notwithstanding any other provision of this section, the Secretary shall reduce, for each fiscal year, the amount paid under subsection (a) to each State by an amount equal to the amount determined for the supplemental nutrition assistance program under paragraph (2)(B). The Secretary shall, to the extent practicable, make the reductions required by this paragraph on a quarterly basis.
  - (B) If the Secretary of Health and Human Services does not make the determinations required by paragraph (2) by September 30, 1999 —
    - (i) during the fiscal year in which the determinations are made, the Secretary shall reduce the amount paid under subsection (a) to each State by an amount equal to the sum of the amounts determined for the supplemental nutrition assistance program under paragraph (2)(B) for fiscal year 1999 through the fiscal year during which the determinations are made; and
    - (ii) for each subsequent fiscal year, subparagraph (A) applies.
- (4)
  - (A) Not later than 5 days after the date on which the Secretary of Health and Human Services makes any determination required by paragraph (2) with respect to a State, the Secretary shall notify the chief executive officer of the State of the determination.
  - (B)
    - (i) Not later than 60 days after the date on which a State receives notice under subparagraph (A) of a determination, the State may appeal the determination, in whole or in part, to an administrative law judge of the Department of Health and Human Services by filing an appeal with the administrative law judge.
    - (ii) The administrative law judge shall consider an appeal filed by a State under clause (i) on the basis of such documentation as the State may submit and as the administrative law judge may require to support the final decision of the administrative law judge.
    - (iii) In deciding whether to uphold a determination, in whole or in part, the administrative law judge shall conduct a thorough review of the issues and take into account all relevant evidence.
    - (iv) Not later than 60 days after the date on which the record is closed, the administrative law judge shall—
      - (I) make a final decision with respect to an appeal filed under clause (i); and
      - (II) notify the chief executive officer of the State of the decision.
  - (C)
    - (i) Not later than 30 days after the date on which a State receives notice under subparagraph (B) of a final decision, the State may appeal the decision, in whole or in part, to the Departmental Appeals Board established in the Department of Health and Human Services (referred to in this paragraph as the “Board”) by filing an appeal with the Board.
    - (ii) The Board shall review the decision on the record.
    - (iii) Not later than 60 days after the date on which the appeal is filed, the Board shall—
      - (I) make a final decision with respect to an appeal filed under clause (i); and
      - (II) notify the chief executive officer of the State of the decision.
  - (D) The determinations of the Secretary of Health and Human Services under paragraph (2), and a final decision of the administrative law judge or Board under subparagraphs (B) and (C), respectively, shall not be subject to judicial review.
  - (E) The pendency of an appeal under this paragraph shall not affect the requirement that the Secretary reduce payments in accordance with paragraph (3).
- (5)
  - (A) No funds or expenditures described in subparagraph (B) may be used to pay for costs—
    - (i) eligible for reimbursement under subsection (a) (or costs that would have been eligible for reimbursement but for this subsection); and
    - (ii) allocated for reimbursement to the supplemental nutrition assistance program under a plan submitted by a State to the Secretary of Health and Human Services to allocate administrative costs for public assistance programs.
  - (B) Subparagraph (A) applies to—
    - (i) funds made available to carry out part A of title IV, or title XX, of the Social Security Act ( 42 U.S.C. 601 et seq., 1397 et seq.);
    - (ii) expenditures made as qualified State expenditures (as defined in section 409(a)(7)(B) of that Act ( 42 U.S.C. 609(a)(7)(B) ));
    - (iii) any other Federal funds (except funds provided under subsection (a)); and
    - (iv) any other State funds that are—
      - (I) expended as a condition of receiving Federal funds; or
      - (II) used to match Federal funds under a Federal program other than the supplemental nutrition assistance program.

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§ 2025. Administrative cost-sharing and quality control

Change History