Food Assistance:

Potential Impacts of Alternative Systems for Delivering Food Stamp Program Benefits

RCED-95-13: Published: Dec 16, 1994. Publicly Released: Jan 17, 1995.

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Pursuant to a congressional request, GAO reviewed how potential alternatives to delivering Food Stamp Program benefits would: (1) affect program administrative costs and program participation; and (2) ensure that program benefits are used for their intended purpose.

GAO found that: (1) although electronic benefits transfer (EBT) and cash-out alternatives have the potential to reduce but not totally eliminate fraud, waste, abuse in the Food Stamp program; (2) neither of the alternatives will reduce benefit overpayments that result from the benefits eligibility determination process; (3) the EBT system will be more costly than the current coupon-based system if it is used solely to distribute food stamp benefits; (4) the cash-out system is the least expensive of the alternative benefit delivery systems; (5) demonstration projects have not been able to show that these alternative systems will increase program participation; (6) the EBT system appears to be superior to the coupon and cash-out systems in ensuring that program benefits are used for food purchases; and (7) the EBT system could be more cost-effective if it is used to deliver a wide variety of federal and state assistance programs and restructure the federal welfare system.

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