Feds have no idea the extent of SNAP fraud, says Iowa official

9/12/2014

DES MOINES, Iowa — The U.S. Department of Agriculture is sure the U.S. Department of Agriculture is doing a great job fighting fraud committed by people receiving benefits in the Supplemental Nutrition Assistance Program.

Wendy Dishman disagrees.

Dishman is the administrator of the Investigative Division of the Iowa Department of Inspections and Appeals, which has been in investigating fraud committed by SNAP recipients in the state ever since the days when the program was known as the Food Stamp Program.

Dishman says the Food and Nutrition Service, the division of USDA that runs SNAP, doesn’t even have reliable data on the extent of fraud committed by recipients.

“There’s a lot of inconsistencies in the data they collect,” Dishman told Iowa Watchdog.

FNS investigates cases of SNAP fraud committed by vendors, but leaves it to the states to investigate fraud by benefit recipients.

In 2013, DIA investigated 2,499 cases of potential fraud by SNAP recipients. In 1,749 of the cases, DIA discovered recipients had either provided incorrect information to the Iowa Department of Human Serives, which administers SNAP benefits in the state, or had committed some form of deliberate fraud.

“If we can’t prove that it was an intentional violation, we turn the information over to DHS, so it can collect the overpayment,” Dishman explained. “If we can prove it was intentional, there’s an administrative hearing process that will result in sanctions.”

Being sanctioned results in the individual losing SNAP benefits either permanently or for a period during determined by the administrative judge.

In particularly egregious cases, criminal prosecutions can occur.

But that’s rare, Dishman said.

“The challenge is having 99 different county attorneys and all of them have different standards. Some of them aren’t interested if the fraud is less than $5,000. Some don’t want to see it if it’s less than $10,000,” Dishman said.

In 2013, 159 Iowa SNAP recipients lost their benefits due to fraud, but none were criminally prosecuted.

The only data FNS has on recipient fraud is what it collects from the states.

A new report from the U.S. Government Accountability Office examining FNS efforts to combat SNAP recipient fraud concludes FNS isn’t doing a good job.

“FNS does not have consistent and reliable data on states’ anti-fraud activities because its reporting guidance lacks specificity,” the report states.

Dishman agrees.

“We don’t ultimately know what’s being reported to FNS by the various states,” she said.

But that doesn’t stop FNS from claiming success.

In response to questions about its collection of data from the states about SNAP fraud, FNS provided Iowa Watchdog with a statement boasting about its success in reducing the percentage of people illegally selling their SNAP benefits.

FNS claims that number has dropped from 4 percent of recipient to 1.3 percent during the past 15 years.

Dishman is aware of the 1.3 percent figure, but she said she doesn’t take it seriously.

“Everybody wonders where the hell they came up it,” she said with a little laugh. “Nobody can explain how they came up with that figure, because what we see is certainly more than that.”

In an email to Iowa Watchdog, FNS spokesperson Jimmie Turner said the figure is an estimate based on the amount of fraud the agency has uncovered among vendors participating in SNAP. Turner did not explain why FNS considers vendor fraud and recipient fraud to be occurring at the same rate.

Asked how common benefit selling — or trafficking, as it is known — is in Iowa, Dishman replied, “That’s the million dollar question.”

“Do we think it’s increased? Absolutely. But can we prove it? We can’t prove it because we don’t have the manpower to do it,” she said.

Despite the fact that the number of SNAP recipients in Iowa grew from 295,106 in 2009 to 420,344 in 2013, there’s been no increase in federal funding for DIA to investigate fraud.

Instead of better funding investigators, FNS is turning to technology to help uncover fraud.

“USDA is working on multiple fronts, harnessing modern technology and identifying promising practices, to root out any fraud and abuse from SNAP,” USDA Undersecretary for Food, Nutrition and Customer Service Kevin Concannon said in a 2013 news release.

Unfortunately, the technology FNS is providing to the states isn’t particularly promising.

FNS is providing states with free software to monitor e-commerce and social media sites to detect anyone offering SNAP benefits for sale.

According to the GAO report, the software “employ(s) Really Simple Syndication (RSS) technology,” which was the cutting edge of technology in 2002.

RSS aggregators are designed to recognize certain keyword and create links to webpages using those keywords.

“Of the 11 states we reviewed, officials from only one selected state (Tennessee) reported that the tool worked well for identifying SNAP recipients attempting to sell their SNAP benefits online,” the GAO reported.

The technology hasn’t proven to be very helpful in Iowa either. Although it has been used for several years, Dishman said, “We’ve received one, maybe two referrals from it.”

“We receive allegations from the general public, from grocery stores and various other places, such as local law enforcement,” Dishman said.

Rather than relying on the 12 year-old technology FNS is so proud of, Dishman said she is attempting to prevent fraud before it can happen by focusing on investigating suspect information provided by applicants for SNAP benefits.

In 2013, DIA investigated 1,277 applicants for SNAP benefits and found incorrect information had been submitted in 899 cases.

“We’ve been working very hard to increase the number of pre-eligibility investigations instead of following the pay-and-chase mode,” Dishman said.

Contact Paul Brennan at pbrennan@watchdog.org. This story originally appeared on Watchdog.org.