everyone involved, but they have rejected our plan claiming that "Federal regulations" would not allow such progressiveness. Wisconsin is convinced that the previous experience of public assistance program should be enough evidence to deter USDA from attempting to make eligibility determination difficult and, subsequently a roadblock to eligible people utilizing the program. All that you really accomplish by such a course of action is large scale error in the entire process and a subsequent destruction of public confidence in the program.

Secretary Schmidt has made a very important point in that we need standards of eligibility for all assistance programs. Attached to this paper is a quality control report for the food stamp program from the State of Kentucky. It is my understanding that Kentucky has fewer errors than most States. However, as you can see by the error rates on the attached tables, out of every 10 cases which are worked, there are approximately 5 incorrect in some manner or other. The reasons for this are very obvious: (1) a complex system of regulations must be applied in hundreds of field offices by thousands of people; (2) the food stamp worker under present regulations has to predict income and expenses for the food stamp applicant household. This is an impossible task to ask of anyone. For these and other reasons, I have raised in my report, I would certainly recommend that this committee standardize the food stamp program regulations with all other Federal welfare programs. This position has been expressed by Mr. Schmidt and many other States, including Kentucky, to our Senators and Congressmen, and also to the U.S. Department of Agriculture.

Before I give you my concluding remarks, I would like to make one additional comment on behalf of Senate bill 2871. As you gentlemen know, Senate bill 2871 provides that the school lunch program be continued by the U.S. Department of Agriculture. Speaking for Wendell Butler, Kentucky's Commissioner of Agriculture, we would certainly like to see the school lunch program continue. The present funds available to schools and institutions provided by county, city, and State taxation are not capable of meeting operating expenses. Should the school lunch program cease to exist, enumerable needy and hungry children would have to be denied free breakfast and lunches in the schools. This would represent a large number of children in Kentucky. Due to a lack of financial resources and adequate training in preparation of nutritious meals in the homes, the only nutritional meals that many can obtain are the free school lunches. To deny these children the right to a well-balanced meal in their diet is to encourage malnutrition and physical maladies which in many cases place these children in the welfare role in later years. I urge you to continue the school lunch program.

In closing: I am sure that many witnesses before this committee have argued, with some justification, that since the Federal Government pays 100 percent of the cost of the food stamps themselves, which in Kentucky amounts to over $80 million per year, the State should bear the major portion or possibly even the full costs associated with the administration of the program at the State level.

We in Kentucky cannot and do not argue against that point of view, except to the extent that Federal regulations associated with the program constrain the State from maximizing the efficiency and accuracy of the food stamp administration at the State level. During recent years, Federal regulations have drastically increased the food stamp roles and therefore have directly increased the administrative costs associated with the program. A major portion of these costs have been borne by State governments without the States having any capability of controlling or even foreseeing these Federal regulations and policies. They have also had no way to influence or even to foresee the direct cost implications the program changes will have on the States. In Kentucky when the food stamp program is statewide, we will have over 500,000 people or a little less than one-sixth of our total population receiving food stamps. In some counties in eastern Kentucky, over 50 percent of the population are. food stamp recipients. Obviously, State revenues in a State like Kentucky are strictly limited and significantly burdened by administrative costs associated with a program which involves such a large portion of our population. Without additional matching moneys, we will be unable to hire additional employees to efficiently handle the food stamp recipients in our State.

The increases in administrative expenditures incurred by the Commonwealth over the past 6 years show the tremendous revenue burdens which have been encountered by Kentucky because of the liberalization of the food stamp regulations by the Federal Government.

As you can see the percentage of State costs jumped greatly in fiscal year 1972-73 because of national eligibility guidelines which were put into effect by the Federal Government in 1972. As I have stated before, States cannot continue to bear this financial burden alone.

Attachment I shows the percent increase in administrative costs in Kentucky by fiscal year. This attachment shows the number of families and persons added to the roles of the food stamp program as a direct result of liberalized regulations which went into effect January 1, 1974. The percent of increase in the number of persons participating in the food stamp program which can be directly attributed to Federal regulations instituted in January is 5.8 percent. Since there will be an adjustment in the regulations again July 1, I appeal to you to provide additional administrative moneys. [The attachments to Mrs. Hucker's statement follow:]

FOOD STAMP ADMINISTRATIVE EXPENDITURES, COMMONWEALTH OF KENTUCKY, DEPARTMENT FOR HUMAN

Fiscal year

1961-62.

1962-63.

1963-64.

1964-65

1965-66.

1966-67

1967-68.

1968-69.

1969-70

1970-71.

1971-72.

1972-73.

June 1970

December 1970.

June 1971.

December 1971.

June 1972..

December 1972.

June 1973..

December 1973.

OUTLAY OF USDA FOOD STAMP COUPONS BY FISCAL YEAR IN KENTUCKY

To: Gail S. Huecker, Commissioner, Bureau for Social Insurance. From: Roy Butler, Deputy Commissioner, Office of Research, Program Analysis and Statistics.

Subject: Food Stamp Quality Control Status Report and Control Charts. Statistical control charts and a Status Report are attached showing the cumulative results of the Food Stamp Quality Control system for the JulyDecember 1973 sampling period as of the end of February 1974.

The control charts represent a technique of maintaining surveillance of FSQC findings and provide an early reliable indication of whether a program is functioning within acceptable tolerance limitations under Federal guidelines.

The statistical control charts are constructed on the basis of absolute quantities represented on the base line by the total number of cases reviewed and on the ordinate by the number of ineligible cases or cases with an incorrect basis of issuance at a given point in time. The charts by their design compensate for sample size or reliability regardless of the number of sample cases involved. The bottom line on the charts represents the established tolerance limitations on the levels of ineligible cases or incorrect basis of issuance. This represents levels below which it may not be feasible or, from a cost benefit standpoint, profitable to continue efforts to further reduce the level of ineligibility or incorrect basis of issuance. The upper control limit or line represents the basic tolerance limitations plus the probable sampling error which may be expected with any given set of data.

Five charts are attached representing the status of the Food Stamp caseload with respect to ineligibility, overcharges, undercharges, overissuances and underissuances. In addition, one chart representing the level of invalid decisions on negative actions (denials and discontinuances) is included.

FOOD STAMP QUALITY CONTROL-STATUS IN CURRENT REPORTING PERIOD, JULY-DECEMBER 1973 [State: Kentucky; report for the month of February 1974]

10. Sample size required for reporting period.

Cumulative number (including current month) of:

11. Sample case actions selected.

a. Cases listed in error (not covered by quality control system)..

i. Nonreviewable reason for discontinuance, PA household..

ii. Improper discontinuances in the last 15 days of the certification
period...

b. Case reviews not completed for other reasons..

i. Death.

ii. Moved out of state..

iii. Unable to locate.

iv. Unwilling to give information..

v. Other.

12. Case action reviews completed.

13. Correct decisions.

14. Case actions with:

Incorrect reason for denial or termination.

Requirement for 15-day notice not followed..

1,304

14

69

15

4

41

9

719

313

43.5

205

28.5

39

5.4

145

20. 2

Mrs. HUECKER. We appreciate the opportunity to make this presentation. And will be willing to answer any questions that might be asked.

Senator ALLEN. Thank you very much, Mrs. Huecker.

Senator Huddleston.

Senator HUDDLESTON. Mrs. Huecker, do you have a suggested percentage for Federal participation in administrative costs?

Mrs. HUECKER. We support Senator McGovern's bill which indicates a 622 percent ratio and matching.

Senator HUDDLESTON. What changes in Federal regulation or law might you suggest to substantially reduce the cost burden in the States in administering the program?

Mrs. HUECKER. When we speak of change, I think we speak at the Federal level. The Department of Agriculture and those representatives of HEW who deal with title 19 and the public assistance programs should gather together to send out like rules rather than make income allowances, which are different in the various programs, and if we could have uniformity in this one area alone we would have a better shot at training our staff and not have to have a skilled staff in food stamps and a skilled staff in medical assistance and a skilled staff in varying programs.