September 9, 2014

Government looks to counter SNAP recipient fraud

Print
The Supplemental Nutrition Assistance Program is the country’s largest nutrition-support program, last year serving about 47 million Americans at a cost of about $76 billion.

Robert Holly/Midwest Center for Investigative Reporting

The Supplemental Nutrition Assistance Program is the country’s largest nutrition-support program, last year serving about 47 million Americans at a cost of about $76 billion.

By Robert Holly/Midwest Center for Investigative Reporting — Champaign County has seen a 40 percent increase in the number of households on the federal food stamp program since July 2010 – an increase that has followed national trends.

There were just over 13,800 low-income Champaign County households enrolled in the program in July, according to state data.

In July 2010, there were 9,850 enrolled households.

The nutrition program – better known simply as “SNAP” – serves tens of millions of low-income people by giving them money to buy groceries.

A new government report, however, recently found that the program is rife with fraud, as it handed out about $2.6 billion in wrongful payments last year.

The Supplemental Nutrition Assistance Program is the country’s largest nutrition-support program, according to the Government Accountability Office report. Last year alone, the program provided food to about 47 million Americans, though at a cost of about $76 billion in benefits.

The typical recipient household receives about $275 a month in assistance.

SNAP accounts for about 80 percent of the new Farm Bill’s total funding. This year, the program will cost more than $79 billion, according to Congressional Budget Office projections.

Throughout the next decade, the program will cost more than $750 billion.

The accountability office reported that more than three out of every 100 SNAP benefit packages delivered to recipients were flawed because of administrative errors, recipient mistakes or malicious frauds.

The Office of Management and Budget designated SNAP a high-error program because of the estimated improper payments last year.

“Fraud, including trafficking – the misuse of program benefits to obtain non-food items – has been a long-standing concern,” the accountability office report stated.

Part of the wrongful payment problem stems from the fact the program, administered by the U.S. Department of Agriculture’s Food and Nutrition Service, has rapidly expanded in recent years.

Compared to 2009, SNAP serves 40 percent more people. It has increased its payouts by more than 50 percent.

Recipients, retailers both guilty of fraud

Fraud, or trafficking, can occur in two basic ways.

In one way, retailers can fraudulently swap nutrition benefits for cash.

For example, a retailer can allow a recipient to charge $100 to his or her SNAP benefit package, then pay the recipient $50 cash. The Food and Nutrition Service calculated that retailer trafficking resulted in $858 million in wrongful payments from 2009 to 2011.

Alternatively, recipients can sell their benefits to other individuals in exchange for money, non-food items or services.

While the size of the program has increased rapidly, oversight funds have remained relatively unchanged. In some cases, oversight staffing levels have even decreased.

Nonetheless, Kevin Concannon – agricultural undersecretary for the department of agriculture – said that the department is working on new ways, including better relying on modern technology, to combat SNAP fraud.

“USDA is working on multiple fronts, harnessing modern technology and identifying promising practices, to root out any fraud and abuse from SNAP,” he said in a news release.

In addition to the USDA’s efforts, some members of Congress have drafted legislation aimed at reducing SNAP fraud.

In February, Representative Matt Salmon (R-Ariz.) helped introduce the SNAP Verify Act of 2014, cosponsored by 24 other members of Congress.

Under the act, SNAP recipients would be required to present “photographic verification when using an electronic benefit card for a SNAP purchase.”

A review of congressional records, however, shows that the SNAP Verify Act of 2014 has apparently died in committee. The U.S. House of Representatives has taken no legislative action on the act since it was referred to the House Subcommittee on Department Operations, Oversight and Nutrition.

During its investigation, the Government Accountability Office – a body tasked with sniffing out federal waste and abuse – closely looked at SNAP activity in a sample of 11 states. The states included Florida, Maine, Massachusetts, Michigan, Nebraska, New Jersey, North Carolina, Utah, Tennessee, Texas and Wyoming. As a group, the states serve about a third of all SNAP recipients.

The U.S. Department of Agriculture’s Office of Inspector General issued a report on SNAP fraud with similar findings last year.