The states, and in rare instances nonprofits, administer the program. The Feds occasionally do audits to see what's happening but the states are the responsible parties as they actually cut the checks.

If this were actually federal program like Social security it would be much easier to efficiently administer, but we had all the states rights folks - that reads republicans - who were adamant they would not allow such programs unless the states were in charge. So we have 50 different ways to do this and not enough oversight at any level. (When I was a Federal auditor we were so understaffed we didn’t look at 90% of all the funds spent. We would only go out if we were sure there was at least $5 million at risk and clear indication of problems. Is it any surprise this happens?

You want to stop this kind of waste? Triple the size of the GAO and you will get your money back with big dividends. They can always find all the waste you can imagine in defense programs.