Food Stamp Automation:

Some Benefits Achieved; Federal Incentive Funding No Longer Needed

RCED-90-9: Published: Jan 24, 1990. Publicly Released: Feb 7, 1990.

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Pursuant to a congressional request, GAO reviewed Food Stamp Program automation costs and benefits in selected state-wide and locally administered programs, focusing on: (1) whether automation helped state agencies to improve program administration and reduce errors; (2) automation costs; and (3) the continued need for federal automation incentives.

GAO found that: (1) Food Stamp Program automation generally improved application processing and policy implementation; (2) although automation eliminated certain program errors, it did not always achieve anticipated reductions in staff, paperwork, processing time, and errors; (3) state agencies did not accurately maintain automatic data processing (ADP) equipment inventories and accounting records; (4) the Food and Nutrition Service's (FNS) funding oversight and cost monitoring of states' ADP development and operation were inadequate; and (5) all of the state agencies had automated the Food Stamp Program to some degree, largely because legislation increased the rate of federal cost-sharing for ADP development from 50 percent to 75 percent.

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

    Matter for Congressional Consideration

    Matter: Since all of the state agencies have automated to some extent, thereby accomplishing the objective set forth by the originating committee, the legislation for 75-percent funding, Congress should amend the 1980 Amendments to the Food Stamp Act of 1977 to discontinue the 75-percent level of federal funding to plan, design, develop, and install ADP and information retrieval systems to administer the Food Stamp Program.

    Status: Closed - Implemented

    Comments: Congress reduced funding for food stamp automation to 63 percent in the 1990 farm bill.

    Recommendations for Executive Action

    Recommendation: To help ensure good internal controls over the Food Stamp Program's automated systems development, operations costs, and equipment inventories, the Secretary of Agriculture should direct the Administrator, FNS, to amend Service Handbook 103 to require post-installation reviews to be performed as soon as the state agency's automated system becomes operational and require that the reviews include: (1) reconciliation of state agency expenditures with each approved ADP request for funding; and (2) reconciliation of state agency equipment purchased, pursuant to the approved ADP request for funding, with state agency property records.

    Agency Affected: Department of Agriculture

    Status: Closed - Implemented

    Comments: FNS Handbook 901, issued May 15, 1992, incorporated the recommended changes.

    Recommendation: To help ensure good internal controls over the Food Stamp Program's automated systems development, operations costs, and equipment inventories, the Secretary of Agriculture should direct the Administrator, FNS, to amend the Service Food Stamp Program budgeting process to require state agencies to: (1) account for total expenditures for each FNS-approved request for ADP development funding; and (2) account annually for all ADP-related equipment purchased pursuant to each FNS-approved request for ADP development funding.

    Agency Affected: Department of Agriculture

    Status: Closed - Not Implemented

    Comments: USDA has implemented the recommended change to account for total expenditures for each FNS-approved request. However, USDA has not taken action on accounting annually for all ADP equipment purchased pursuant to each request funded. No further action on this recommendation is planned by FNS.

    Recommendation: To help ensure good internal controls over the Food Stamp Program's automated systems development, operations costs, and equipment inventories, the Secretary of Agriculture should direct the Administrator, FNS, to amend the FNS regional operating procedures to require FNS officials to monitor agency quarterly claims for federal reimbursement to ensure that state agencies do not exceed the approved ADP funding level.

    Agency Affected: Department of Agriculture

    Status: Closed - Implemented

    Comments: USDA issued revised regulations in February 1990 and has provided additional guidance to its regional offices to monitor quarterly claims for federal reimbursements.

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