Improved Collections Can Reduce Federal and District Government Food Stamp Program Costs

GGD-81-31: Published: Apr 3, 1981. Publicly Released: Apr 3, 1981.

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GAO studied collection procedures for amounts owed to the District of Columbia by food stamp vendors for cash and food stamp shortages and by recipients who were overissued stamps.

The District has collected a minimal amount due from food stamp vendors and recipients. Inadequate collection efforts, lack of systems for identifying improper issuances and for monitoring collection efforts, and poor controls over recipient participation cards contributed to the problem. As a result, District and Department of Agriculture costs were unnecessarily increased. The District was not claiming all reimbursable costs incurred in administering the program. Amounts owed by recipients may be written off as uncollectible after required collection efforts have been exhausted. There are no criteria, however, to provide guidance concerning maximum timeframes within which various processing steps should be accomplished, and there is no reporting system to monitor the progress of claims processing or highlight problem claims. The District has not identified and attempted to collect overissuances resulting from duplicate redemptions or from redemptions of expired, altered, and unsigned participation cards. The District's participation card system does not provide control over the cards, results in increased costs, and does not safeguard the cards to prevent unauthorized use. Transaction cards which have been returned by vendors were improperly filed and stored without adequate physical control to prevent reintroducing the cards into the system.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Mayor should require the Director of DHS to remind issuers that they are liable and will not be paid fees for improper issuances.

    Agency Affected: District of Columbia

  2. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Mayor should instruct the Director of DHS to adopt a policy to consistently offset shortages against transaction fees earned by the vendors.

    Agency Affected: District of Columbia

  3. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Mayor should instruct the Director of DHS to investigate all shortages and institute recovery actions when District employees are determined responsible.

    Agency Affected: District of Columbia

  4. Status: Closed - Not Implemented

    Comments: Work was completed over 3 years ago. Much that was recommended has been implemented and verified. Since completion of this work, major reorganizations and personnel changes have occurred directly affecting the administration of the program. Only a full-scale review would allow GAO to ascertain if the current status and staffing is not available, nor will be, to do the job.

    Recommendation: The Mayor should instruct the Director of DHS to establish maximum time frames within which certain claim processing steps must be accomplished.

    Agency Affected: District of Columbia

  5. Status: Closed - Not Implemented

    Comments: Work was completed over 3 years ago. Much that was recommended has been implemented and verified. Since completion of the work, major reorganizations and personnel changes have occurred, directly affecting the administration of the program. Only a full-scale review would allow GAO to ascertain if the current status and staffing is not available, nor will be, to do the job.

    Recommendation: The Mayor should instruct the Director of DHS to terminate the vendor's participation in the program after taking steps to minimize impact on food stamp recipients served by the vendor if he is unable to reach such agreements with a private vendor within a reasonable period of time.

    Agency Affected: District of Columbia

  6. Status: Closed - Not Implemented

    Comments: Work was completed over 3 years ago. Much that was recommended has been implemented and verified. Since completion of this work, major reorgaizations and personnel changes have occurred, directly affecting the administration of the program. Only a full-scale review would allow GAO to ascertain if the current status and staffing is not available, nor will be, to do the job.

    Recommendation: The Mayor should instruct the Director of DHS to establish a policy and procedures for initiating and settling claims for food stamp shortages incurred at District agency issuing outlets.

    Agency Affected: District of Columbia

  7. Status: Closed - Not Implemented

    Comments: DHS believes that the agencies will not participate if the recommendation is implemented.

    Recommendation: The Mayor should instruct the Director of DHS to include offsetting agency food stamp shortages against moneys due that agency by DHS for operating such outlets.

    Agency Affected: District of Columbia

  8. Status: Closed - Not Implemented

    Comments: DHS feels that only the vendor should submit claims.

    Recommendation: The Mayor should instruct the Director of DHS to establish a procedure to submit claims for unpaid shortages to vendor insurance companies where appropriate.

    Agency Affected: District of Columbia

  9. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Mayor should require the Director of DHS to establish a system to record and control serial numbers of participation cards received, distributed, and used.

    Agency Affected: District of Columbia

  10. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Mayor should instruct the Directors of DHS and the Department of Housing and Community Services (DHCD) to finalize the agreement under which DHCD issues food stamps at its locations to enable DHS to recover reimbursable administrative costs from the Department of Agriculture.

    Agency Affected: District of Columbia

  11. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Mayor should require the Director of DHS to devise a system that will ensure that all voided cards are rendered unusable, are appropriately recorded, and are destroyed within established timeframes.

    Agency Affected: District of Columbia

  12. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Mayor should require the Director of DHS to reemphasize to issuers and personnel working in the Food Stamp Program the importance of ensuring that participation cards presented for redemption have not expired, have not been altered, and have been signed by eligible recipients.

    Agency Affected: District of Columbia

  13. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Mayor should require the Director of DHS to establish a system to sample redeemed participation cards to evaluate the extent of compliance with program requirements concerning expired, altered, and unsigned cards. As appropriate, redemption of expired, altered, and unsigned cards should be considered as unauthorized issuances for which issuers are liable for the value of the stamps and any fees paid.

    Agency Affected: District of Columbia

  14. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Mayor should require the Director of DHS to ensure that the Office of Fair Hearings expedites food stamp fraud hearings and reports on the status of all food stamp fraud cases until the backlog has been eliminated.

    Agency Affected: District of Columbia

  15. Status: Closed - Not Implemented

    Comments: DHS does not consider personal visits appropriate.

    Recommendation: The Mayor should instruct the Director of DHS to expand collection efforts for large outstanding amounts to include personal contacts with recipients who do not respond to inquiries concerning food stamp overissuances or do not execute or comply with repayment agreements.

    Agency Affected: District of Columbia

  16. Status: Closed - Not Implemented

    Comments: Work was completed over 3 years ago. Much that was recommended has been implemented and verified. Since completion of the work, major reorganizations and personnel changes have occurred, directly affecting the administration of the program. Only a full-scale review would allow GAO to ascertain if the current status and staffing is not available, nor will be, to do the job.

    Recommendation: The Mayor should instruct the Director of DHS to require that the proposed computerized report on claims be modified to show the status of each claim, the length of time the claim was in each status, and whether the claim was progressing in accordance with established timeframes.

    Agency Affected: District of Columbia

  17. Status: Closed - Not Implemented

    Comments: Work was completed over 3 years ago. Much that was recommended has been implemented and verified. Since completion of the work, major reorganizations and personnel changes have occurred, directly affecting the administration of the program. Only a full-scale review would allow GAO to ascertain if the current status and staffing is not available, nor will be, to do the job.

    Recommendation: The Mayor should require the Director of DHS to revise the filing system for transacted cards so that they are accessible by serial or case number and provide secured storage to prevent their reintroduction into the system.

    Agency Affected: District of Columbia

  18. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Mayor should require the Director of the Department of Human Services (DHS) to establish controls over unused cards in the hands of the computer operators.

    Agency Affected: District of Columbia

  19. Status: Closed - Not Implemented

    Comments: Work was completed over 3 years ago. Much that was recommended has been implemented and verified. Since completion of the work, major reorganizations and personnel changes have occurred, directly affecting the administration of the program. Only a full-scale review would allow GAO to ascertain if the current status and staffing is not available, nor will be, to do the job.

    Recommendation: The Mayor should instruct the Director of DHS to execute food stamp contracts with all vendors and obtain documentation that vendors have secured insurance and bonding coverage required by their contracts.

    Agency Affected: District of Columbia

 

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