Food Assistance:

Computerized Information Matching Could Reduce Fraud and Abuse in the Food Stamp Program

T-RCED-98-254: Published: Aug 5, 1998. Publicly Released: Aug 5, 1998.

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GAO discussed its observations on reducing fraud and abuse in the Food Stamp Program, focusing on: (1) an overview of the scope of fraud and abuse in the program; (2) the ways computerized information can be used to identify and reduce it; and (3) the potential of the House Committee on Agriculture, Subcommittee on Department Operations, Nutrition and Foreign Agriculture Chairman's draft legislation to reduce fraud and abuse in the program.

GAO noted that: (1) fraud and abuse in the Food Stamp Program generally occurs in the form of either overpayments to food stamp recipients or trafficking; (2) overpayments occur when ineligible persons are provided food stamps, as well as when eligible persons are provided more than they are entitled to receive; (3) overpayments are caused by inadvertent and intentional errors made by recipients and errors made by state caseworkers; (4) for 1997, overpayments totalled about $1.4 billion, or about 7 percent of the food stamp benefits issued that year; (5) errors also result in underpayments; in fiscal year 1997, such underpayments totalled about $509 million; (6) with regard to trafficking, the Department of Agriculture (USDA) estimated that in 1993 (the latest year of available data) about $815 million in food stamps, approximately 4 percent of the food stamps issued, were traded for cash at retail stores; (7) no one knows the extent of trafficking between individuals before the food stamps are redeemed at authorized retailers; (8) while USDA has reduced the overpayment rate in recent years, further reductions could result if the food stamp rolls were matched against computerized information held by various sources in order to identify ineligible participants; (9) computer matching can provide a cost-effective mechanism to accurately and independently accomplish this; (10) some states already conduct data-matching programs, such as matches with the rolls of other states to find participants receiving duplicate benefits; (11) by taking a leading role in promoting the use and sharing of information among federal and state agencies, USDA can enhance the states' effectiveness in identifying ineligible participants and reducing overpayments; (12) the Chairman's draft legislation would establish a computerized matching process that is intended to prevent inappropriate payments to food stamp households that include deceased individuals as members; (13) the draft legislation's objectives are in line with the intent of recommendations in GAO's February 1998 report on payments to these households; and (14) more specifically, the draft legislation requires state agencies to provide information regarding individuals who receive food stamp benefits to the Social Security Administration (SSA) and requires SSA to notify the state agencies of individuals who are deceased.

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