The Department of Health and Human Services has ordered Delaware to repay nearly $3.7 million after deciding the state incorrectly claimed eligibility for federal funds intended to support low-income families.
The New York Post reported that Alex Adams, assistant secretary at the Administration for Children and Families, sent a letter to Delaware Gov. Matt Meyer, a Democrat, warning that the state must return the money by Jan. 14 or risk future federal block grant funding.
The disputed funds came from the Temporary Assistance for Needy Families contingency fund, which provides added federal support to states in times of economic stress.
TANF provides cash assistance and funding for food, child care, early learning programs, and workforce training for low-income families.
To qualify for contingency funding, states must meet maintenance-of-effort requirements, meaning they must spend a minimum amount of state funds to receive federal matching dollars.
Adams said Delaware certified in September 2023 that it would meet the required spending threshold. Based on that certification, the federal government paid the state $3,668,573 in contingency funds in fiscal year 2024.
A later review by HHS found the certification was inaccurate. According to ACF, Delaware was required to spend $24,826,042 in qualifying state funds during the fiscal year, but reported expenditures of only $21,872,175.
As a result, the state failed to meet the 100% maintenance of effort requirement needed to retain the federal payments.
State budget documents also showed Delaware applied for an additional $4 million TANF contingency grant that carried no required state contribution.
Only 15 states received TANF contingency funding in fiscal 2024, with Delaware serving nearly 7,000 families through the program.
TANF is projected to spend more than $16 billion nationwide this fiscal year and is one of the federal government's largest block grant programs.
The repayment demand comes as HHS has increased its scrutiny of federal welfare and social services programs.
On Jan. 6, HHS froze some ACF funding going to California, Colorado, Illinois, Minnesota, and New York after audits uncovered indications of widespread "fraud and misuse of taxpayer dollars in state-administered programs."
Jim Mishler ✉
Jim Mishler, a seasoned reporter, anchor and news director, has decades of experience covering crime, politics and environmental issues.
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