WELFARE AUTHORITIES' RECENT EXAMINATION OF THE SYSTEM HAS REVEALED AN ENTRENCHED BUREAUCRACY SO COMPLEX AND INEFFICIENT THAT IT SEEMS TO INVITE CHEATING AND OTHER ABUSES. EXCESSIVE RED TAPE, INEPT MANAGEMENT, POORLY TRAINED FRONT LINE PERSONNEL, AND CARELESS INVESTIGATIVE POLICIES ARE COSTING TAXPAYERS BILLIONS OF DOLLARS EVERY YEAR. COMMON PRACTICES INCLUDE ACCEPTING AID APPLICATIONS WITHOUT DEMANDING ADEQUATE IDENTIFICATION, CONTINUING PAYMENTS LONG AFTER THEY SHOULD HAVE BEEN STOPPED, AND FAILING TO INVESTIGATE FOR POSSIBLE FRAUD INVOLVING REPLACEMENT OF LOST OR STOLEN WELFARE CHECKS. THE WELFARE BUREAUCRACY INCLUDES 381,000 PEOPLE. TOTAL WELFARE COSTS DOUBLED BETWEEN 1972 AND 1977. AN ESTIMATED $4 BILLION IS PAID OUT ERRONEOUSLY EACH YEAR, USUALLY DUE TO BUREAUCRATIC BUNGLING RATHER THAN TO FRAUD. SOCIAL CASEWORKERS ARE INADEQUATELY TRAINED, POORLY PAID, AND OVERWORKED. SUPERVISION IS RARELY ADEQUATE. THE POLICY ROLES OF THE FEDERAL GOVERNMENT, STATE GOVERNMENTS, AND THE COURTS IN THE WELFARE SYSTEM ARE UNCLEAR. PAPERWORK REQUIRED IS ENORMOUS, ESPECIALLY FOR THE AID TO FAMILIES WITH DEPENDENT CHILDREN PROGRAM. ERRORS CAN BE PREVENTED AND CHEATERS CAUGHT, HOWEVER, BY USE OF SUCH TECHNIQUES AS COMPUTER MATCHING OF WELFARE ROLLS WITH PUBLIC AND PRIVATE EMPLOYMENT ROLLS OR SOCIAL SECURITY ROLLS; COMPUTER AUDITS OF MEDICAID CLAIMS; AND MORE FREQUENT CHECKS OF RECIPIENTS' STATUS. SIMPLER REGULATIONS, MODERN MANAGEMENT METHODS, NEW TECHNOLOGY, AND BETTER-TRAINED WORKERS SHOULD IMPROVE THE WELFARE SYSTEM BUT IMPROVEMENTS MAY NOT BE RAPID ENOUGH TO SATISFY TAXPAYERS. A PHOTOGRAPH, DIAGRAMS, AND COMPARATIVE STATISTICS FROM NEW YORK AND CALIFORNIA WELFARE PROGRAMS ARE INCLUDED. (CFW)