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Agricultural News

USDA Announces New Tactics to Combat Fraud and Enhance SNAP Program

Tue, 06 Dec 2011 12:56:13 CST

USDA Announces New Tactics to Combat Fraud and Enhance SNAP Program USDA Under Secretary Kevin Concannon today announced a new range of aggressive tactics to further improve program integrity of USDA's Supplemental Nutrition Assistance Program (SNAP) formerly known as food stamps. The announcement is part of the Obama Administration's ongoing Campaign to Cut Waste which highlights efforts to root out waste, fraud and abuse so that federal dollars are invested wisely. The tactics announced by USDA underscore an unprecedented approach to combat trafficking the use of SNAP benefits for anything other than the purchase of food from authorized retailers, including the sale or exchange of benefits in SNAP.

"SNAP has never been more important as hardworking families turn to the program for assistance while they get back on their feet," said Concannon. "This Administration is committed to meeting the highest standards when it comes to protecting taxpayer dollars and enhancing the integrity of the program to ensure those dollars are invested wisely so the American people can have confidence in overall program performance as it serves as an important safety net for those in need."

Although the trafficking rate has been driven down significantly over the last two decades from about 4 cents on the dollar in 1993 to about 1 cent in 2006-08 USDA has increased its efforts to reduce trafficking by working with state agencies and state-of-the-art technologies. USDA awarded a ten-year contract to SRA International, Inc. to develop the next generation of its fraud detection system.

Actions USDA announced today to further reduce SNAP fraud include:

-Policy clarification that the "intent to sell" SNAP benefits is a program violation. Some traffickers have advertised their intent to sell benefits on Craigslist, Facebook, and other social media. New USDA guidance makes clear that this action has similar consequences to an intentional program violation, which can include disqualification from SNAP. New guidance to States underscoring their responsibility to use the results of FNS retailer actions to investigate and penalize recipients that may have been involved in trafficking with that retailer. USDA maintains a wealth of data that it expects States to use in their efforts to pursue bad actors who misuse the program.

-New rules that expand and clarify the definition of trafficking to include abuse of container deposits and the sale of benefits. A proposal was published in June for public review and comment a final rule will be published shortly.Stronger sanctions and penalties for retailers to allow USDA to take more aggressive action against those that violate program rules and give responsible retailers a bad name. USDA will publish a proposed rule for public comments in Spring 2012.

-Clear policy guidance on additional steps available to States to combat recipient trafficking. Some States would like to take stronger investigative actions against households that request an excessive amount of replacement benefit cards. USDA is offering examples of what States are currently doing in this area and what is possible within current policy limitations.

-Upgrades and enhancements to USDA's retailer surveillance system technologies to keep pace with new trafficking strategies. USDA is on track to implement these improvements by June 2012.

-Renewed partnership efforts with States to increase and improve our collective efforts against trafficking both from the retailer side and the recipient side. USDA is sharing with States best practices from other states, and listening to what they have to say about possible policy changes that would help in this effort.

-Reengineering FNS retailer management processes to increase efficiency. By coordinating its business processes more effectively, USDA will be better positioned to combat abuse.

USDA is working on behalf of American taxpayers to protect the Federal investment in SNAP and make sure the program is targeted towards those families who need it the most. To further this effort, USDA focuses on three key areas of oversight:

Reducing Improper Payments and Errors: USDA works to make sure that only those families who are actually eligible for the program participate, and that the correct amount of benefits is provided to them. Over the past decade, USDA has made major strides to improve the accuracy of SNAP's eligibility determination and benefit payment systems.

-SNAP's Quality Control (QC) system earns a solid "A" grade. Over 98% of those receiving SNAP benefits are eligible and payment accuracy was 96.19%--a historic high.

-Reducing errors saves valuable resources. Payment errors are less than half what they were ten years ago, which has reduced improper payments by $3.3 billion in 2010.

Pursuing Recipient Fraud: While it occurs relatively infrequently, USDA recognizes that program fraud undermines public confidence in government and the program. This jeopardizes the ability of SNAP to serve over 20 million struggling families who currently need it the most. USDA works through our state partners to investigate recipient fraud and hold bad actors accountable. Recipients who purposely commit fraud to get benefits are subject to disqualification.

-Fraud investigations yield results for taxpayers. In fiscal year 2010, States conducted 847,136 fraud investigations. In fiscal year 2011, States disqualified 44,483 individuals.

Combating Abuse and Misuse of Benefits: The sale/purchase of SNAP benefits for cash is called trafficking, an illegal activity punishable by criminal prosecution. Over the last 15 years, USDA has aggressively implemented a number of measures to reduce the prevalence of trafficking in SNAP from 4 percent down to its current level of 1 percent. USDA also continues to work closely with its state, federal, and retailer partners to investigate and prosecute trafficking.

-Trafficking is not tolerated. In FY 2011, 40 FNS investigators around the country conducted nearly 5,000 undercover investigations.

-Bad actors are removed from the program. Over the last ten years, over 8,300 retail stores were permanently disqualified due to trafficking.

USDA's Food and Nutrition Service administers 15 nutrition assistance programs that in addition to Supplemental Nutrition Assistance Program and National School Lunch Programs, also include the Special Supplemental Nutrition Program for Women, Infants and Children, and the Summer Food Service Program. Taken together, these programs comprise America's nutrition safety net.

Program fraud complaints of any kind may be filed with the USDA Office of Inspector General; contact information can be found by clicking here. Fraud may also be reported to State fraud hotlines which are available by clicking here.



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