SNAP Integrity Efforts Reduce Fraud

WASHINGTON, DC, March 25, 2014 - Agriculture Under Secretary Kevin Concannon today announced significant progress in combating fraud in the Supplemental Nutrition Assistance Program. In the first quarter of fiscal year 2014, the U.S. Department of Agriculture (USDA) took final actions to:

• Impose sanctions, through fines or temporary disqualifications, on 153 stores found violating program rules; and
• Permanently disqualify 257 stores for trafficking SNAP benefits (i.e., exchanging SNAP benefits for cash) or falsifying an application.

“These results demonstrate USDA’s commitment to ensuring food assistance is available for those who need it, while stopping program misuse,” Concannon said. “The SNAP program has a very low rate of fraud, and we are working to drive that rate even lower so every single dollar is being used to help families who truly need support. Our anti-fraud efforts are built on innovative, forward-looking tactics that make use of the best technology to track fraudulent activity and remove bad actors from the program quickly.”

Through technology improvements and anti-fraud efforts, USDA has reduced the rate of SNAP trafficking, which was as high as 4 percent 15 years ago, down to 1.3 percent. Success in this area continues to be the result of intensive work over the past several years to modernize the organizational structure to focus resources on retailer integrity, coupled with improved technology that has enabled USDA to better identify and remove violating stores.

In addition, the Consolidated Appropriations Act of 2014 provides additional funding to intensify integrity efforts. This includes competitive state grants to strengthen program integrity and prevent trafficking by recipients. USDA’s Food and Nutrition Service (FNS) is working to establish the new grant program and plans to open the process for new grant applications later this year.

Over the past several months, USDA has taken numerous steps to better target suspicious activity in high-risk areas and reduce overall fraud:

• FNS awarded a contract to support state anti-fraud efforts by providing technology based consultation services, aiding in the development of a comprehensive fraud prevention plan, for seven state partners California (Los Angeles County only), Kansas, New York (Onondaga County only), Pennsylvania, South Carolina, Texas, and Wisconsin (Milwaukee County only).
• FNS entered into a pilot Memorandum of Understanding (MOU) with the state of Michigan for state investigators to investigate trafficking attempts by clients and unauthorized businesses through social media.
• FNS established a new cooperative agreement with the Ohio Department of Job and Family Services to provide state law enforcement with support in pursuing SNAP recipient and retailer investigations and criminal prosecutions.
• USDA released a re-vamped Fraud and Abuse Poster which makes it clear that buying or selling SNAP or WIC benefits is a federal crime.
• USDA issued a new rule regarding excessive replacement cards (5 or more in 12 months), and encouraged states to send warning letters to recipients. These efforts have led to a 26 percent reduction in excessive card replacements nationwide in FY 2013 compared to the previous year.
• FNS awarded a contract to assess and recommend improvements on how states inform SNAP program participants regarding the appropriate use of benefits and the penalties for misusing them, with an emphasis on properly educating clients on the rule and penalties for trafficking to deter fraud and promote voluntary compliance.

“USDA is working on multiple fronts, harnessing modern technology and identifying promising practices, to root out any fraud and abuse from SNAP. Not only are we focused on removing retailers who ignore the rules, we are actively working with state agencies to identify and remove recipients who misuse their benefits via illegal trafficking—the sale of food benefits for cash,” said Concannon.

SNAP – the nation's first line of defense against hunger – helps put food on the table for millions of low income families and individuals every month. The program has never been more critical to the fight against hunger. SNAP is a vital supplement to the monthly food budget of more than 47 million low-income individuals. Nearly half of SNAP participants are children, and 42 percent of recipients live in households with earnings.

These announcements are part of the Obama Administration's ongoing Campaign to Cut Waste designed to fight fraud and abuse in federal programs. For more information about USDA efforts to combat fraud, visit the Stop SNAP Fraud website at http://www.fns.usda.gov/program-integrity.