Missouri auditor criticizes food stamp fraud investigations

JEFFERSON CITY, Mo. -- An audit has found multiple problems with how Missouri tracks fraud within a program providing food aid for low-income families.

Auditor Nicole Galloway released a report Tuesday that found flaws in how the Department of Social Services kept track of data between 2015 and 2016, making it difficult for the department to know whether fraud occurs within the Supplemental Nutrition Assistance Program (SNAP), commonly known as food stamps.

The report flagged millions of dollars spent exclusively out-of-state and thousands spent by people who were apparently dead or incarcerated, transactions that were often not properly reviewed.

On a scale of "excellent," "good," "fair," or "poor," the audit says that the department's system for detecting fraud was "fair."

"This audit found hundreds of thousands of SNAP transactions that raised red flags, but were not seriously investigated," Galloway said in a statement. "Misuse or abuse of these benefits means that taxpayer dollars are wasted and resources are not going to Missouri families in need."

Rebecca Woelfel, spokeswoman for the Department of Social Services, wrote in an email the department was working to improve several areas cited in the report, and said their system for evaluating out-of-state transactions was reformed this year.

The SNAP program was established in the 1960s to help poor families buy food. Missouri doled out more than $2.4 billion between 2015 and 2016 to hundreds of thousands of recipients. On average, a Missouri household received about $260 a month, according to the report.

The program produces large amounts of data, and the auditor's office found a litany of issues with how that data was collected, organized and reviewed by the department and eFunds Corp., the company hired to manage it.

The audit flagged more than $16 million spent only out-of-state for 90 days or more. Benefit money can legally be spent outside Missouri, and there are legitimate reasons to do so.

Jeanette Mott Oxford, executive director of the progressive advocacy group Empower Missouri, pointed out Missouri borders eight other states.

"The best store to buy what they need, whether it's a coat or groceries, may actually be across the state line," she said.

Recipients must live in the state to remain eligible, however, and hundreds of people were spending money exclusively in California, Texas, Florida and other areas far from Missouri. Even then, the audit noted people have to travel for a variety of reasons, including military service.

Yet many of those cases were not investigated quickly, or at all. During one 18-month stretch, the department received more than 51,000 alerts of suspicious activity. But of all the investigations the department opened during those years -- 5,705 -- only five were instigated by an alert or a report.

Part of the reason was the alerts did not identify the person who triggered it, meaning a large amount of time had to be spent just determining who the recipient was. The report said the department has asked eFunds Corp. to improve its alert system, but noted the request was part of "a long list of other outstanding requests."

The audit also noted the department was paying eFunds $10,000 a month for services it was not using.