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Concannon: USDA Cracking Down on SNAP Fraud

Today, 46 million Americans in need get help putting nutritious food on the table through the Supplemental Nutrition Assistance Program. About half of those receiving benefits are children, an additional 8 percent are age 60 or older and 20 percent of SNAP households contain a person with disabilities.

With the recent economic downturn, many individuals and families turned to SNAP for the first time in their lives.

SNAP is the nation’s first line of defense against hunger. But hand in hand with this mission is our responsibility to ensure program integrity. While fraud is a relatively limited problem in SNAP — the trafficking rate is down to 1 cent on the dollar from 4 cents in the 1990s — no level of fraud is tolerated. Americans expect and deserve a government that ensures their hard-earned tax dollars are managed wisely.

One of the first actions the Obama administration undertook in 2009 was establishing the Campaign to Cut Waste, rooting out fraud and abuse in federal programs including SNAP, commonly known as food stamps. We have made significant progress identifying and eliminating fraudulent retailers from SNAP.

In 2011, our surveillance and investigations to find bad actors and remove them from the program continued full steam ahead. We reviewed more than 15,000 stores and permanently disqualified more than 1,200 for program violations. The fiscal 2012 first-quarter results built on that success: placing sanctions, through fines or temporary disqualifications, on more than 225 stores found violating program rules and permanently disqualifying more than 350 stores for trafficking SNAP benefits.

The USDA recently advanced that strategy even further by strengthening anti-fraud efforts in the retailer application process. A small number of previously disqualified owners have managed to find their way back into the program by falsifying information in their applications. To prevent such actions, the USDA has applied new measures to toughen the program, including:

• Increasing documentation requirements for high-risk stores applying to redeem SNAP benefits to better verify their identity and assure their business integrity,

• Verifying high-risk stores to confirm application information. Store owners found to have falsified information with the intent to hide ownership or past violations will be charged, disqualified and may be liable for a $10,000 fine or imprisonment for as long as five years, or both.

• Continuing to notify state departments and federal agency partners about violators to better protect our public programs. This includes information on program recipients with suspicious transactions at stores known to be trafficking.

In addition, the USDA is improving the ability to detect suspicious patterns of activity by using state-of-the-art technology to analyze how and where people are using their SNAP benefits all across the country.

As is required in cybersecurity, we must stay vigilant to remain ahead of the curve in fighting SNAP fraud. While the vast majority of participants and retailers abide by the rules, a few bad actors are always looking for ways to exploit the program. So we work on continually updating our anti-fraud efforts.

Our next generation retailer monitoring system, currently under development with plans to launch later this year, will make us even better at identifying potential fraud.

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