USDA is issuing this interim final rule to strengthen and improve the integrity and accuracy of the SNAP Quality Control (QC) system by codifying statutory requirements enacted by the Agriculture Improvement Act of 2018 (2018 Farm Bill) that was signed into law on Dec. 20, 2018.
Background
Pursuant to Section 16 of the Food and Nutrition Act of 2008, as amended (FNA), each state agency is responsible for monitoring and improving its administration of SNAP and providing information from the SNAP quality control (QC) system. For QC reviews, states conduct monthly reviews of a statistically representative sample of households participating in SNAP (active cases) and households for whom participation was denied, terminated, or suspended (negative cases). These reviews measure the accuracy of SNAP eligibility and benefit determinations and ultimately serve as the basis for the SNAP payment error rate (PER), as defined in Section 16(c)(2)(A) of the FNA, and case and procedural error rate (CAPER) 1 , respectively. The results of these reviews provide states with feedback on the state’s administration of the program, including how their chosen policy options, waivers, and business processes affect the accuracy of their eligibility determinations.
SNAP QC has four goals, identified at 7 CFR 275.10(b), which are to provide:
- a systematic method of measuring the accuracy of the SNAP eligibility caseload;
- a basis for determining all SNAP error rates;
- a timely, continuous flow of information on which to base corrective action at all levels of administration; and
- a basis for establishing state agency liability for errors that exceed the National performance measure pursuant to Section 16(c)(1)(C) of the FNA.
Every federal fiscal year (October through September), state agencies conduct QC reviews for two different sampling frames – the active sampling frame and the negative sampling frame. For the active frame, states review a sample of their overall participating SNAP households (those receiving SNAP benefits). This QC review consists of a detailed examination of household non-financial and financial circumstances including income, resources, and deductions to determine whether benefits were accurately authorized by state eligibility offices for cases in the active frame. For the negative frame, reviewers review a statistical sample of cases that were denied, suspended, or terminated to determine not only their accuracy, but also if the state agency followed the correct procedures according to SNAP regulations.
After state agencies submit their completed QC reviews to the federal government, federal staff select and review a sub-sample of cases from the active and negative frames to verify the accuracy of the states’ QC review findings. A regression analysis is then performed utilizing both the federal and state data to calculate national and state error rates. FNS also uses the data gathered through the QC review process for program analysis.
Beginning in calendar year 2015, FNS conducted integrity reviews of all 53 SNAP state agencies nationwide and USDA’s Office of Inspector General (OIG) conducted an audit on the SNAP QC review process 2 . The integrity reviews and the OIG audit found there were integrity issues with the data submitted by state agencies. In short, the majority of states (42 of 53) were underreporting QC errors in the active frame. In response to these findings, FNS undertook significant measures, explained in more detail later in this preamble, to improve training and strengthen controls over the QC process. In some cases, the Department of Justice (DOJ) entered into settlement agreements with states for the underreporting of SNAP QC errors in violation of federal law.
On Dec. 20, 2018, the President signed into law the Agriculture Improvement Act of 2018 (2018 Farm Bill). Section 4013 of the 2018 Farm Bill included requirements to reform the SNAP QC system in order to further improve the integrity of the system and accuracy of the data it produces. These requirements build upon the Departmental and DOJ actions taken to address integrity concerns raised by FNS and OIG reviews.
The 2018 Farm Bill included changes in three sections of the legislation that required SNAP to update its regulations accordingly. Section 4013(a) of the 2018 Farm Bill requires “All [state SNAP] records, and the entire information systems in which records are contained...” be made available for inspection and audit by the Secretary. Section 4013(b) of the 2018 Farm Bill required the Department issue an interim final rule that:
- ensures the QC system produces valid statistical results;
- provides for the oversight of contracts entered into by a state to improve payment accuracy;
- ensures the accuracy of data collected in the QC system; and
- provides for the evaluation of the integrity of the QC process for a minimum of 2 state agencies per fiscal year, to the maximum extent practicable.
The regulations within this rule reflect those requirements.
Dates
- Effective date: Aug. 13, 2021.
- Compliance date: Aug. 13, 2021, except for the Paperwork Reduction Act (PRA) provisions, which are delayed pending approval by the Office of Management and Budget (OMB). The Food and Nutrition Service will publish a document in the Federal Register announcing the compliance date.
- Comment dates: Written comments on this interim final rule must be received on or before Oct. 12, 2021 to be assured of consideration. We will consider comments on the Paperwork Reduction Act that we receive by Oct. 12, 2021.
1In fiscal year 2012, the procedures for reviewing cases in the negative frame, discussed later, changed to include the state’s procedural processes in determining a negative case’s validity. FNS has referred to the negative error rate since then as the case and procedural error rate, or CAPER, to reflect this change.
2 https://www.usda.gov/sites/default/files/27601-0002-41.pdf