Food Assistance:

Efforts To Control Fraud and Abuse in the WIC Program Can Be Strengthened

RCED-99-224: Published: Aug 30, 1999. Publicly Released: Aug 30, 1999.

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GAO examined fraud and abuse in the Department of Agriculture's (USDA) Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), focusing on: (1) what is known about the amount of fraud and abuse in the program, including the levels of fraud and abuse being detected by the state and local agencies responsible for administering WIC; and (2) the efforts taken to prevent and detect fraud and abuse and barriers to these efforts.

GAO noted that: (1) USDA has no recent estimates on the overall levels of vendor, participant, or employee fraud and abuse occurring in the WIC program; (2) the Department has some information on that portion of fraud and abuse detected by state agencies; (3) in estimating the extent of WIC fraud and abuse, USDA has relied on two studies, completed in 1988 and 1991, that provide information on some types of vendor and participant fraud and abuse; (4) USDA is updating these two studies and expects to have this information late in 2000 for vendors and late in 1999 for participants; (5) regarding fraud and abuse that has been detected, USDA collects information on an annual basis from state WIC agencies on vendors but not on participants or employees; (6) while this information is limited, it is valuable because it helps USDA monitor states' efforts to detect vendor fraud and abuse; (7) at the state and local levels, according to GAO's survey, agencies reported detecting higher levels of vendor fraud than of participant and employee fraud; (8) the number of vendors identified as committing fraud or abuse in a 2-year period--October 1, 1996, through September 30, 1998--represents about 9 percent of all vendors in the WIC program as of September 30, 1998; (9) in comparison, the number of participants identified as committing fraud or abuse of a serious nature during this 2-year period represented an estimated .14 percent of the average monthly number of participants in fiscal year 1998; (10) very little employee fraud or abuse was reported; (11) WIC agencies use a variety of strategies to prevent and detect vendor, participant, and employee fraud and abuse; (12) regarding vendors, states differ in the management procedures they use to control fraud and abuse, including the methods they use to limit the number of vendors they authorize to participate in WIC and the amount and type of vendor monitoring they perform; (13) with respect to participants, state and local agencies use a variety of strategies, ranging from educating participants on program rules and regulations to using a computer system to verify that a participant is eligible on the basis of participation in another program; (14) agency officials identified several barriers to preventing and detecting fraud and abuse; and (15) these barriers include a lack of: (a) federal criteria to evaluate whether a state has authorized an appropriate number of vendors given the resources available to manage vendors; (b) information on participant fraud and abuse being detected; and (c) policies or procedures regarding potential employee conflict-of-interest situations.

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

    Recommendations for Executive Action

    Recommendation: To enhance USDA's ability to improve program integrity and encourage better efforts to prevent and detect fraud and abuse by state and local WIC agencies, the Secretary of Agriculture should direct the Administrator, Food and Nutrition Service (FNS), to amend the regulations on vendor management to ensure that the states limit their authorized vendors to a number they can effectively manage and issue guidance to the states on the specific criteria FNS will use to assess their compliance with the regulations and the actions they would need to take if FNS determines that they have authorized more vendors than they can effectively manage.

    Agency Affected: Department of Agriculture

    Status: Closed - Implemented

    Comments: In its final Food Delivery Systems rule published on December 29, 2000, USDA adopted strong mandatory selection criteria and retained the State agency option to establish criteria to limit the number of vendors authorized. This action is sufficient to address the recommendation.

    Recommendation: To enhance USDA's ability to improve program integrity and encourage better efforts to prevent and detect fraud and abuse by state and local WIC agencies, the Secretary of Agriculture should direct the Administrator, FNS, to work with the state WIC agencies and the National Association of WIC Directors to develop and implement cost-effective strategies for the states to use in collecting and maintaining information on cases of participant fraud and abuse, which would be periodically reported to FNS. Such information should include the nature of the fraud detected and the associated dollar losses.

    Agency Affected: Department of Agriculture

    Status: Closed - Implemented

    Comments: In December 2001, FNS presented a proposed plan of action for collection of participant fraud and abuse data to state representatives of the National Association of WIC Directors. FNS proposed that states report the recommended data along with other data submitted annually in "The Integrity Profile" (TIP). TIP contains data on states' efforts to monitor vendors, and on general program integrity measures. FNS has contracted to develop an automated system to collect the TIP data. FNS estimates that the states will begin using the new system to collect fraud and abuse data in October 2004. Fiscal year 2004 data will be reported to FNS in February 2006.

    Recommendation: To enhance USDA's ability to improve program integrity and encourage better efforts to prevent and detect fraud and abuse by state and local WIC agencies, the Secretary of Agriculture should direct the Administrator, FNS, to require state agencies to have a policy and procedures for addressing employee conflicts of interest.

    Agency Affected: Department of Agriculture

    Status: Closed - Implemented

    Comments: A proposed rule entitled "Miscellaneous Provisions" contains a provision to ensure that no conflicts of interest exist regarding state and local agency employees. The proposed rule was published on December 2, 2002. FNS is currently analyzing comments received on the proposed rule. FNS expects to publish the rule in final by September 30, 2003.

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