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DLS flags $92 million drop in FIA allowance; DHS pledges fixes for high denial and SNAP error rates
Summary
The Health and Social Services Subcommittee heard DLS analysis that the Family Investment Administration allowance falls $92 million in fiscal 2027 and that denial rates for TDAP and TCA are unusually high; DHS interim secretary Gloria Brown Burnett and FIA officials defended assumptions, disputed some DLS recommendations, and outlined technology, staffing and outreach steps to reduce payment errors and administrative churn.
Tanya Zimmerman, the Department of Legislative Services analyst, told the subcommittee March 2 that the Family Investment Administration (FIA) fiscal 2027 allowance decreases by $92,000,000, or about 3.6 percent, and flagged several program trends that underlie the budget discussion.
"Overall, the budget decreases by $92,000,000 or 3.6%," Zimmerman said as she opened the DLS presentation and walked members through exhibits on application trends, processing times and denial rates. She told the committee that SNAP applications have remained elevated since the end of the recertification extension and were about 18 percent higher than pre‑COVID levels as of December 2025. By contrast, TDAP caseloads have risen sharply — about 57 percent above pre‑COVID levels — and DLS showed denial rates that exceed 75 percent for TDAP and are generally above 70 percent for TCA; SNAP denial rates also climbed and exceeded 40 percent in one month of the data series.
DLS also highlighted fiscal‑closeout and fund‑split concerns. Zimmerman said the 2025 closeout included an administrative oversight tied to Sunbucks administrative funds and showed a discrepancy between reported federal administrative match and the general funds that would be required to match it. DLS recommended deleting some funds tied to the closeout and to proposed appropriations, including a suggestion to reduce federal SNAP funds in the fiscal 2027 allowance by $200 million to align the budget with recent experience.
Interim DHS Secretary Gloria Brown Burnett responded for the department, describing recent modernization work and a multi‑year effort to lower the SNAP payment error rate. "My commitment to you through this transition and beyond is that we will get better every day and deliver for the families we serve," Brown Burnett told the panel. DHS financial and program leadership disputed some DLS conclusions and defended key budget choices: they said their internal review shows matching federal SNAP administrative funds exist through aggregation of sources, that the department used some state funds during the federal shutdown and is pursuing USDA reimbursement, and that retaining federal spending authority can avoid repeated budget churn if economic conditions worsen.
DHS officials described specific steps aimed at reducing payment errors and administrative churn. Augustine, an FIA official, outlined a multi‑pronged approach that includes new technology and training for staff, automation of routine renewals, partnerships with organizations (including Code for America and US Digital Response) to identify high‑risk cases for targeted review, and improved caller identification and scheduling systems to reduce missed interviews. "We are implementing technological tools to better train our staff," Augustine said, and added that automation and targeted casework are intended to free workers to focus on cases most likely to generate payment errors.
Committee members pressed DHS for specifics on the SNAP error rate and whether it can be driven below 10 percent — a threshold that changes the state's share of certain costs under federal HR 1 policy. DHS said it is pursuing a range of operational fixes but could not guarantee the error rate will fall below 10 percent on a defined timetable, given recent federal disruptions and data timing.
On program timing, DLS recommended requiring DHS to provide the October 1 calculation that underlies the statutory TCA benefit adjustment; DHS acknowledged a break from historical practice — moving the TCA effective date to January 1 in recent years — and argued a January implementation reduces retroactive adjustments and operational risk, though DLS asked for an explanation and tighter controls on timing.
DLS also reviewed a voluntary resolution agreement with the U.S. Department of Health and Human Services Office for Civil Rights addressing disability assessments and reasonable accommodations and asked DHS how it will complete outstanding items. DHS said most provisions were completed and two assessment‑tool items remained in progress; DLS sought assurance DHS will avoid noncompliance and meet reporting deadlines.
The subcommittee did not take formal votes at the hearing; members asked DHS to provide additional data on the contract funding mix for an employment and income verification contract, the racial/ethnic breakdown of closures and denials, and follow‑up reports on processing times, denial rates and Sunbucks reconciliation.
What’s next: DHS committed to return with written follow‑ups on matching calculations, the status of USDA reimbursement for state SNAP funds used during the federal shutdown, and additional data on denials and reopenings. The subcommittee also signaled interest in adopting committee narrative and reporting requests recommended by DLS.
