PRESENTED BEFORE THE HOUSE INTERGOVERNMENTAL RELATIONS AND HUMAN RESOURCES SUBCOMMITTEE, TESTIMONY INDICATES THAT LARGE AMOUNTS OF MONEY ARE BEING LOST THROUGH FRAUD AND THEFT ASSOCIATED WITH THE ISSUANCE OF FEDERAL CHECKS AND FOOD STAMPS. TESTIMONY WAS HEARD FROM REPRESENTATIVES OF GOVERNMENT AGENCIES INVOLVED IN THE AUTHORIZATION AND DISBURSEMENT OF CHECKS AND FOLLOWUP ON CLAIMS OF LOST OR STOLEN CHECKS, AND OTHERS DEEMED KNOWLEDGEABLE ABOUT THE EXTENT OF THE PROBLEM AND POSSIBLE REMEDIES. THE TREASURY DEPARTMENT WAS ACCUSED OF GROSS INCOMPETENCE IN ITS FOLLOWUP OF LOST AND STOLEN CHECK CLAIMS, SUCH THAT A HUGE BACKLOG OF UNINVESTIGATED CLAIMS EXISTS. DIRECT DEPOSIT OF GOVERNMENT CHECKS IN REGULAR RECIPIENT ACCOUNTS, IN USE FOR A SMALL PERCENTAGE OF RECIPIENTS ON A VOLUNTARY BASIS, COULD ELIMINATE PROBLEMS OF CHECK THEFT AND LOSS. THE CYCLING OF THE MAILING OF CHECKS WAS ALSO REPORTED TO BE A PLANNED STRATEGY FOR REDUCING BUREAUCRATIC ERRORS IN DISBURSEMENT AND CONFUSING THIEVES ABOUT THE TIMING OF CHECK DELIVERIES TO MAILBOXES. LETTERS AND STATEMENTS BEARING UPON HEARING ISSUES ARE INCLUDED, AND THE APPENDIXES CONTAIN INFORMATION REQUESTED FROM VARIOUS GOVERNMENT AGENCIES. (RCB)