Five HEW secretaries, from the late sixties through 1979, struggled to implement "quality control" in the Aid to Families with Dependent Children program. This quality control aimed to reduce financially and politically costly errors in payments to welfare recipients, on both the state and county level. Part A of this case examines the conflicts within the department; the department's inconsistent efforts to improve performance through regulation and sanctions; the increasing role of the courts and legal advisers in the administrative decisions and processes involved; and ultimately congressional intervention. Part B surveys the efforts of two states, California and Illinois, in response to federal and state pressure to reduce payment errors. The case reviews the history of each state, with particular attention to reform techniques, and the response to federal intervention.
This case intends to illustrate the operational and hierarchical problems of "indirect management" by federal officials, when the delivery of programs is essentially state, local or character. While Part A shows the federal perspective, Part B provides students--particularly mid--career federal officials--a perspective on the state officials with whom they must work.