Millions Could Be Saved by Improving Integrity of the Food Stamp Program's Authorization-To-Participate System

CED-82-34: Published: Jan 29, 1982. Publicly Released: Jan 29, 1982.

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GAO reviewed the Department of Agriculture's (USDA) use of the Authorization-to-Participate (ATP) system, the Food Stamp Program's principal benefit delivery method. The purpose of the review was to make a preliminary assessment of the Food and Nutrition Service's (FNS) efforts to ensure the integrity of the system, which will deliver about $8 billion of the estimated $10.6 billion in food stamp benefits in fiscal year 1982.

GAO found that the ATP system has serious weaknesses. While losses through the system have been reported to be about $12 million annually, the inaccurate and incomplete reconciliation reports submitted by some food stamp agencies and the lack of reconciliation reports by others indicate that actual losses are greater. As a result, FNS does not know the full extent of the losses. Moreover, it has opted to assume the fiscal liability of these losses when, in fact, some could have been prevented by food stamp agencies. FNS has issued regulations requiring the use of photo identification at all food stamp projects. The new regulations also limit ATP card replacements, but duplicate transactions may still occur. GAO found that not all food stamp agencies that have serious ATP problems are required to use photo identification under the current criteria.

Recommendation for Executive Action

  1. Status: Closed - Implemented

    Comments: USDA regulations issued February 15, 1989 include requirements that a state: (1) change its delivery system if FNS determines that program integrity would be improved; (2) account for all issuances through a reconciliation process; and (3) require that photo identification cards be issued to participants by food stamp offices in areas that serve 100,000 or more participants.

    Recommendation: The Secretary of Agriculture should direct the Acting Administrator, FNS, to take specific measures to improve the ATP system's fiscal integrity, including: (1) determining those elements of existing ATP delivery systems, which are most effective in preventing program losses, and direct that the more effective methodologies be used where appropriate; (2) verifying data on the reconciliation reports by reviewing food stamp agencies' ATP issuance and reconciliation systems and records, identifying through these reviews food stamp agencies that may be more likely to have recurring duplicate ATP transactions, and analyzing these weaker systems and requiring the food stamp agencies to correct flaws contributing to program losses; (3) requiring photo identification at all food stamp agencies experiencing significant duplicate ATP transactions but not currently covered by the regulations; (4) enforcing program regulations making states and local food stamp agencies liable for program losses that should have been prevented; and (5) reevaluating the new ATP replacement regulations to determine if weaknesses in the regulations can be eliminated.

    Agency Affected: Department of Agriculture


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