Safeguards can stop food program abuse

Thursday, June 28, 2018

More than 800,000 Missourians are recipients of the Supplemental Nutrition Assistance Program (SNAP), including some 75,000 people in 19 Southeast Missouri counties. SNAP, formerly known as the food stamp program, helps families in need put food on their tables through benefits loaded on EBT cards.

As a federal program administered by the Missouri Department of Social Services, SNAP uses both federal and state dollars. This month, I released an audit reviewing the protections in place to safeguard those tax dollars against waste, fraud and abuse.

What I found should concern all Missourians. There were millions of taxpayer dollars in questionable transactions by SNAP cardholders who were deceased, incarcerated or making purchases exclusively out of state -- and Social Services didn't follow up on red flags and important warning signs.

Over an 18-month period, the Department of Social Services received more than 51,000 alerts calling attention to questionable activity. My auditors looked at those alerts and found the majority of them were for recipients using their benefits exclusively out of state.

Missouri borders eight other states -- including four touching southeast Missouri -- and the SNAP program permits some out-of-state use. But the audit uncovered bigger problems that state government is failing to address, including $16 million in purchases made exclusively out of state for 90 consecutive days or more.

This type of activity indicates someone is no longer a Missouri resident and therefore not eligible for benefits through our state. There were even 39 recipients who used their EBT cards exclusively out of state for more than 700 days -- that's nearly two years!

Our data analytics team also found thousands of instances of benefits going to recipients who were deceased or incarcerated. We uncovered more than 3,500 cases of EBT cards being used a month or more after the cardholder had died, with benefits being used in one case some six months after the cardholder's death.

Like death, jail also was not a deterrent to receiving benefits -- we found that 62 cardholders were incarcerated over the entire 18-month period reviewed, but still make $50,000 in purchases. There was even a case in which a recipient completed a recertification interview with a Social Services caseworker -- while the cardholder was incarcerated.

Clearly, the system failed when these abuses were not caught, even with the alerts in place. It failed taxpayers, and it failed the people in need who it is supposed to help.

My audits point out problems. But that's only part of the job in safeguarding taxpayer resources. I also make viable, clear recommendations to correct those problems.

In addition to being a CPA, I'm also a certified fraud examiner. I know that accurate and effective data analysis can play an important role in quickly identifying problems.

Right now, EBT transaction data is often incomplete, invalid or unreliable. That makes it difficult to manage information and identify fraud.

Improvements to the data quality and better accuracy within the system would make it easier to manage information. These changes would make identifying suspicious activity and fraud much simpler, and it would also allow Social Services to better utilize their limited resources and follow up on red flags. In their responses, the department indicated they would take these recommendations seriously -- and they should to ensure they are able to root out bad actors abusing the system.

SNAP is a worthwhile program that helps struggling low-income Missouri families. But when mismanagement leads to waste, fraud and abuse, the program is not serving its purpose -- and taxpayers are footing the bill.

My audits get results, and I've shown there is a way to run this government program more efficiently. It's past time to put these safeguards in place.

Nicole Galloway is the auditor for the State of Missouri.

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