Food Stamp Program:

Better Use of Electronic Data Could Result in Disqualifying More Recipients Who Traffic Benefits

RCED-00-61: Published: Mar 7, 2000. Publicly Released: Apr 6, 2000.


Robert E. Robertson
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Pursuant to a congressional request, GAO reviewed the efforts of states and the Food and Nutrition Service (FNS) to reduce Food Stamp trafficking, focusing on the: (1) extent to which the states with statewide electronic benefit transfer (EBT) systems are identifying and disqualifying recipients who engage in trafficking; and (2) actions FNS has taken to encourage the states to identify and disqualify recipients engaged in trafficking.

GAO noted that: (1) of the 29 states with statewide EBT systems, only 4--Florida, Missouri, South Carolina, and Texas--independently and proactively analyzed their electronic databases to identify suspect recipients; (2) a fifth state--Maryland--has used a list of suspected traffickers provided by the Department of Agriculture's Office of Inspector General since 1994 to provide a basis for follow-up investigations; (3) all five of these states invested the resources necessary to investigate suspect recipients, but, for fiscal years 1998 and 1999, only two states--Maryland and Texas--were responsible for about 87 percent of the 6,873 individuals disqualified nationwide from the Food Stamp Program for trafficking benefits; (4) in addition to these five states, nine others investigated suspect recipients--identified primarily by FNS--and disqualified those who engaged in trafficking, albeit to a lesser extent; (5) the remaining 15 of the 29 states did not disqualify any recipient for trafficking during the 2-year period; (6) EBT data have been available since 1993 to analyze and identify trafficking patterns; (7) however, since only five states had statewide EBT systems before 1997, FNS has only recently initiated action to work with the states to ensure that they target recipients likely to be engaged in trafficking--those identified by FNS in its successful cases against storeowners found to have engaged in trafficking; (8) in July 1999, FNS directed its seven regional offices to develop plans to work with the states to identify suspect recipients, investigate the suspects, and to disqualify those engaged in trafficking; (9) as of December 1999, these plans were still in the preliminary stages; (10) FNS will not be able to determine the effectiveness of its recent efforts in reducing the overall level of trafficking because it lacks a current, reliable estimate of the extent of trafficking; (11) such an estimate would also better permit FNS to adhere to the principles of the Government Performance and Results Act of 1993, which state that goals and strategies should be quantifiable and measurable; and (12) FNS could use EBT data to develop such estimates and to target its available resources.

Status Legend:

More Info
  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendation for Executive Action

    Recommendation: To improve the integrity of the Food Stamp Program, the Secretary of Agriculture should direct the Administrator, FNS, to: (1) work with the five states using EBT data to determine the best techniques for using these data to identify suspected recipient traffickers and work with the other states with statewide EBT systems to implement the best techniques, as appropriate; and (2) use EBT data to periodically develop reliable estimates of the extent of trafficking and use these estimates to develop goals and appropriate strategies for reducing trafficking.

    Agency Affected: Department of Agriculture

    Status: Closed - Implemented

    Comments: In July 2000, USDA's Food and Nutrition Service (FNS) issued in the Federal Register a final rule, "Food Stamp Program: Claim Establishment and Collection Standards," that provided increased financial incentives for states to be more aggressive in pursuing recipients who traffic food stamp benefits. FNS is continuing to with work with states to identify and implement techniques for using EBT data to identify recipient trafficking. FNS has also approved state exchange funds allowing states to interact to discuss and exchange best practice methods during on-site visits. With regard to the second part of the recommendation, in July 2000, FNS issued a new estimate of the extent of trafficking in the Food Stamp Program which included an analysis of electronic benefits transfer payments data. Additionally, FNS in May 2001 asked the Economic Resarch Service (ERS) to develop a Statement of Work to develop a data collection and modeling framework for annually measuring and reporting the extent of trafficking nationally. ERS completed the Statement which included two primary deliverables: (1) discussion document outlining technical issues for using EBT data and (2) convening an expert panel to discuss the options for producing an annual tracking report.

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