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Audit: Little oversight of food stamps

Published on October 25, 2012 3:01AM

Last changed on November 22, 2012 8:50AM

Agency officials plan to set up system to track, measure fraud


Capital Press

The USDA doesn't have a reliable way to measure food stamp fraud and state agencies often aren't able to fully investigate abuses, according to an internal audit.

In the past five years, the amount of benefits disbursed annually under the Supplemental Nutrition Assistance Program has more than doubled, from about $30 billion to $70 billion, according to USDA data.

The number of recipients has increased by nearly 70 percent, to 44.7 million, in that time, according to the agency's Food and Nutrition Service.

The USDA Office of the Inspector General audited 10 state agencies to review their investigations of SNAP benefit fraud.

Despite the program's burgeoning growth, the state agencies -- which help the federal government administer the program -- haven't increased funding for fraud detection and research, the audit said.

"In fact, FNS officials stated that states face significant resource challenges and are relying on staffing cuts, as well as furloughs, to meet current financial challenges," the audit said.

Auditors also found there isn't a reliable estimate for the amount of benefits misused by recipients because the agency "has not established how states should compile, track and report fraud in a uniform manner."

The FNS estimates retailers annually divert $330 million in benefits in "trafficking" fraud schemes, in which they typically pay cash for SNAP benefits at less than face value and then redeem them to make a profit.

However, the agency's statistical methods for this estimate are skewed or rely on unexplained assumptions, so "therefore, the actual extent of trafficking could be over or underestimated," the audit said.

In response to the audit, FNS officials have agreed to set up a standard system for states to report fraud and to refine its methods of calculating fraud with the help of a newly formed technical working group.

The agency also vowed to require states to use available fraud detection tools, which help prevent benefits from going to disqualified or deceased recipients.


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