Regulation of Retailers Authorized To Accept Food Stamps Should Be Strengthened

CED-78-183: Published: Dec 28, 1978. Publicly Released: Dec 28, 1978.

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The Department of Agriculture's Food and Nutrition Service (FNS) authorizes and regulates retailers who participate in its food stamp program. Approximately 270,000 retailers are authorized to accept food stamps. In fiscal 1977, $8 billion worth of stamps were redeemed by 17 million participants.

Criteria for authorization of retailers are unclear, and authorize such firms as pastry shops, gas stations, and taverns to accept the stamps. If the program is to achieve its objectives, better regulation and surveillance of food retailers will be necessary to encourage recipients to use their increased purchasing power to buy the staple foods needed in their diets.

Recommendation for Executive Action

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The FNS should: establish specific criteria for authorizing retailers; take a series of actions to improve monitoring of retailers and wholesalers and control of the food coupon redemption process; institute guidelines for and improve the monitoring of FNS administrative reviews of penalties against firms violating program regulations; designate additional administrative review officers until cases can be reviewed expeditiously; reduce the compliance branch's work backlog and make the branch responsible for all investigations where criminal prosecution appears unlikely; and, in cooperation with the Attorney General, periodically review the guidelines for referring violators to the Department of Justice to ensure that all cases are handled in a reasonable and timely manner.

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