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22–990 PDF 2017

SNAP: EXAMINING EFFORTS TO COMBAT FRAUD 

AND IMPROVE PROGRAM INTEGRITY 

JOINT HEARING 

BEFORE THE

SUBCOMMITTEE ON 

GOVERNMENT OPERATIONS 

AND THE

SUBCOMMITTEE ON THE INTERIOR 

OF THE

COMMITTEE ON OVERSIGHT 

AND GOVERNMENT REFORM 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FOURTEENTH CONGRESS 

SECOND SESSION 

JUNE 9, 2016 

Serial No. 114–100 

Printed for the use of the Committee on Oversight and Government Reform 

( 

Available via the World Wide Web: http://www.fdsys.gov 

http://www.house.gov/reform 


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COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM 

JASON CHAFFETZ, Utah, Chairman 

JOHN L. MICA, Florida 

MICHAEL R. TURNER, Ohio 

JOHN J. DUNCAN, JR., Tennessee 

JIM JORDAN, Ohio 

TIM WALBERG, Michigan 

JUSTIN AMASH, Michigan 

PAUL A. GOSAR, Arizona 

SCOTT DESJARLAIS, Tennessee 

TREY GOWDY, South Carolina 

BLAKE FARENTHOLD, Texas 

CYNTHIA M. LUMMIS, Wyoming 

THOMAS MASSIE, Kentucky 

MARK MEADOWS, North Carolina 

RON DESANTIS, Florida 

MICK MULVANEY, South Carolina 

KEN BUCK, Colorado 

MARK WALKER, North Carolina 

ROD BLUM, Iowa 

JODY B. HICE, Georgia 

STEVE RUSSELL, Oklahoma 

EARL L. ‘‘BUDDY’’ CARTER, Georgia 

GLENN GROTHMAN, Wisconsin 

WILL HURD, Texas 

GARY J. PALMER, Alabama 

ELIJAH E. CUMMINGS, Maryland, Ranking 

Minority Member 

CAROLYN B. MALONEY, New York 

ELEANOR HOLMES NORTON, District of 

Columbia 

WM. LACY CLAY, Missouri 

STEPHEN F. LYNCH, Massachusetts 

JIM COOPER, Tennessee 

GERALD E. CONNOLLY, Virginia 

MATT CARTWRIGHT, Pennsylvania 

TAMMY DUCKWORTH, Illinois 

ROBIN L. KELLY, Illinois 

BRENDA L. LAWRENCE, Michigan 

TED LIEU, California 

BONNIE WATSON COLEMAN, New Jersey 

STACEY E. PLASKETT, Virgin Islands 

MARK DeSAULNIER, California 

BRENDAN F. BOYLE, Pennsylvania 

PETER WELCH, Vermont 

MICHELLE LUJAN GRISHAM, New Mexico 

JENNIFER HEMINGWAY, Staff Director 

DAVID RAPALLO, Minority Staff Director 

RYAN HAMBLETON, Senior Professional Staff Member 

KATIE BAILEY, Subcommittee Staff Director, Government Operations 

WILLIE MARX, Clerk 


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SUBCOMMITTEE ON GOVERNMENT OPERATIONS

MARK MEADOWS, North Carolina, Chairman 

JIM JORDAN, Ohio 

TIM WALBERG, Michigan, Vice Chair 

TREY GOWDY, South Carolina 

THOMAS MASSIE, Kentucky 

MICK MULVANEY, South Carolina 

KEN BUCK, Colorado 

EARL L. ‘‘BUDDY’’ CARTER, Georgia 

GLENN GROTHMAN, Wisconsin 

GERALD E. CONNOLLY, Virginia, Ranking 

Minority Member 

CAROLYN B. MALONEY, New York 

ELEANOR HOLMES NORTON, District of 

Columbia 

WM. LACY CLAY, Missouri 

STACEY E. PLASKETT, Virgin Islands 

STEPHEN F. LYNCH, Massachusetts 

SUBCOMMITTEE ON THE INTERIOR

CYNTHIA M. LUMMIS, Wyoming, Chairman 

PAUL A. GOSAR, Arizona 

BLAKE FARENTHOLD, Texas 

KEN BUCK, Colorado, Vice Chair 

STEVE RUSSELL, Oklahoma 

GARY J. PALMER, Alabama 

BRENDA L. LAWRENCE, Michigan, Ranking 

Minority Member 

MATT CARTWRIGHT, Pennsylvania 

STACEY E. PLASKETT, Virgin Islands 


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C O N T E N T S 

Page 

Hearing held on June 9, 2016 ................................................................................. 1 

WITNESSES 

Mr. Kevin Concannon, Under Secretary for Food, Nutrition, and Consumer 

Services, U.S. Department of Agriculture 

Oral Statement ................................................................................................. 5 

Written Statement ............................................................................................ 8 

Ms. Kay Brown, Director, Education, Workforce, and Income Security, U.S. 

Government Accountability Office 

Oral Statement ................................................................................................. 19 

Written Statement ............................................................................................ 21 

Ms. Mary Mayhew, Commissioner, Maine Department of Health and Human 

Services 

Oral Statement ................................................................................................. 43 

Written Statement ............................................................................................ 45 

Mr. Mike Carroll, Secretary, Florida Department of Children and Family 

Services 

Oral Statement ................................................................................................. 59 

Written Statement ............................................................................................ 61 

Ms. Stacy Dean, Vice President for Food Assistance Policy, Center on Budget 

and Policy Priorities 

Oral Statement ................................................................................................. 65 

Written Statement ............................................................................................ 67 

APPENDIX 

April 26, 2016, letter from Connie Derr, Council 18 Exeutive Director, American Federation of State, County, and Municipal Employees, to Bill Ludwig, 

Southwest Regional Director, U.S. Regional Director, Submitted by Rep. 

Lujan Grisham ..................................................................................................... 126 

October 13, 2016, Letter from Kevin W. Concannon, Under Secretary, Food 

Nutrition and Consumer Services, U.S. Department of Agriculture, to 

Chairman Mark Meadows of the Government Operations Subcommittee, 

Submitted by Chairman Meadows ...................................................................... 128 

Florida State Agency Notification of Major Changes in Program, Submitted 

by Chairman Meadows ........................................................................................ 130 


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SNAP: EXAMINING EFFORTS TO COMBAT 

FRAUD AND IMPROVE PROGRAM INTEGRITY 

Thursday, June 9, 2016 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON GOVERNMENT OPERATIONS, JOINT

WITH THE SUBCOMMITTEE ON THE INTERIOR, 

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM, 

Washington, D.C. 

The subcommittees met, pursuant to call, at 2:05 p.m., in Room 

2154, Rayburn House Office Building, Hon. Mark Meadows [chairman of the Subcommittee on Government Operations] presiding. 

Present from Subcommittee on Government Operations: Representatives Meadows, Jordan, Walberg, Massie, Palmer, Carter, 

Grothman, Connolly, Norton, and Plaskett. 

Present from Subcommittee on the Interior: Representatives 

Lummis, Palmer, Lawrence, Cartwright, and Plaskett. 

Also Present: Representative Lujan Grisham. 

Mr. MEADOWS. All right. The Subcommittee on Government Operations and the Subcommittee on the Interior will come to order. 

And without objection, the chair is authorized to declare a recess 

at any time. 

I want to thank you for coming, and I thank my other chairman 

here and ranking members for their willingness to embark on this 

topic. 

For many individuals and families, the SNAP program is a vital 

lifeline to ensure that there is food on the table. And I think we 

can all agree that no one in America should go hungry. While most 

individuals and retailers in the SNAP program are honest participants, unfortunately, some do indeed take advantage of the system. 

We will hear examples today of various ways individuals and retailers commit fraud in trafficking such as swapping SNAP benefits 

for other cash or illegal drugs. There was a raid in the Florida flea 

market just last month that was the largest SNAP trafficking bust 

in the program’s history. And so far 22 owners of SNAP retailers 

at that flea market have been arrested or charged with over $13 

million in fraud just for the past year. 

We will also hear about the connection between SNAP trafficking 

and the ongoing opiod epidemic in Maine and across this country. 

American taxpayers deserve to know that their tax dollars are 

being spent effectively and wisely, and when someone abuses a system, they defraud the American taxpayers. They hurt individuals 

and families that are truly in need. Despite improvements in prior 

years, OMB designated the SNAP program as a high-error program 


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due to the estimated $2.6 billion in improper payments for fiscal 

year 2015. 

So we are here today to examine how the SNAP program can 

better serve families, more efficiently utilize taxpayer dollars, and 

prevent fraud and trafficking of SNAP benefits. Innovative efforts 

to leverage technology and analyze data such as Florida’s identity 

verification process and Maine’s effort to analyze out-of-state SNAP 

usage can provide real helpful insights. 

And so I look forward to hearing from our witnesses about how 

we can improve the SNAP program to better ensure that the right 

benefits get to the families and individuals that need them most. 

Mr. MEADOWS. I now recognize my good friend, the ranking 

member of the Subcommittee on Government Operations, Mr. Connolly, for his opening statement. 

Mr. CONNOLLY. I thank you, Mr. Chairman, and welcome to our 

panel. And I want to thank you for holding this hearing. 

I support the Supplemental Nutrition Assistance Program, which 

I think has proven to be an effectively managed program that does, 

in fact, reduce fraud and misuse. Individual and isolated examples 

of problems notwithstanding, there is very little evidence of widespread SNAP fraud. Actually, the evidence suggests that the Department of Agriculture investigates potential fraud pretty aggressively. State antifraud efforts are also functioning as effectively as 

possible, despite difficulties in conducting fraud investigations due 

to reduced funding and staff levels. Those antifraud efforts are important because SNAP benefits are a vital part of the national safety net. 

SNAP provides people at or below 130 percent of the poverty 

line, which is currently an annual income of $26,100 for a family 

of three—good luck in living on that—$127 a month toward an affordable, adequate diet. About 70 percent of SNAP participants are 

families with children, and 25 percent are in households with seniors and people with disabilities. 

SNAP also protects the overall economy. Because SNAP is an entitlement and provides money to people who need it, they spend it 

directly on food. CBO found that among policies implemented by 

Congress to stimulate economic growth and create jobs during the 

economic recession, SNAP had one of the largest increases in economic activity and employment per budgetary dollars spent. That 

is to say if you want a direct injection into the economy to stimulate, this is a great way to do it. 

According to the Census Bureau, SNAP kept 5 million Americans 

out of poverty during the recession, which followed the 2008 financial crisis. That is an extraordinary number. Since then, SNAP 

spending has fallen—as you would expect as the economy recovers—by 7 percent in 2014, and the Center of Budget and Policy Priorities reports that reduced caseloads will continue in 2016 because 

of the growing and stronger economy. 

I understand the concerns my friends on the other side of the 

aisle to ensure the SNAP program continues to work efficiently, 

and I think we have common ground on that. I too want to eliminate the small percentage of bad actors who misrepresent facts 

about themselves and cheat people in need. 


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In fiscal year 2012, over 100 FNS analysts and investigators 

around the country reviewed more than 15,000 stores and conducted nearly 4,500 undercover investigations. Over the last 10 

years, more than 8,300 retail stores were permanently disqualified 

because of fraud. 

I find the House majority’s recent proposal in the war on poverty 

troubling. The answer to completely eliminating fraud in the SNAP 

program is not by converting it into a block grant program. Actually, block granting step is probably the first step to eliminating 

SNAP. That could be the fate of a number of safety-net programs 

such as child welfare services and elderly services. They were put 

together into the social services block grant. This year, the Republican budget eliminates them. 

I would welcome the opportunity to work with my friends on the 

other side of the aisle to find ways to improve the SNAP program 

seeing as it actually serves more constituents often in their districts, rural districts than actually their Democratic counterparts. 

The absence of widespread fraud and the tiny potential savings 

from SNAP belie the purported interest sometimes in oversight. 

So I look forward to the common ground. We want to make sure 

this program is effective and as clean as possible, but we don’t 

want to harm in the process the people who rely on this program 

and use it to get back up on their feet and become productive citizens. 

With that, I yield back. 

Mr. MEADOWS. I thank the gentleman. 

The chair now recognizes the chairwoman of the Subcommittee 

on Interior, Mrs. Lummis, for her opening statement. 

Mrs. LUMMIS. Thank you, Mr. Chairman. 

I want to waive my opening statement so we can listen to our 

witnesses, and I want to especially thank you all for being here 

today. The representatives and witnesses from Maine and Florida, 

I believe, are particularly to be recognized for traveling all this way 

to provide their guidance and expertise on this subject. Having 

come from the executive branch of State government, I know how 

hard you work, and you are on the frontlines. We really appreciate 

what you do, so thank you for being here today to share your expertise, one and all. 

Thank you, Mr. Chairman. I yield back. 

Mr. MEADOWS. I thank the gentlewoman from Wyoming. 

The chair recognizes the gentlewoman, Mrs. Lummis, for her 

opening statement, the ranking member of the Subcommittee on 

Interior—Lawrence, I am sorry. 

Mrs. LAWRENCE. Sister from another mother. 

[Laughter.] 

Mr. MEADOWS. My apologies. Twins separated at birth. Mrs. 

Lawrence, go ahead. 

Mrs. LUMMIS. Go ahead, sis. Give them a good one. 

[Laughter.] 

Mrs. LAWRENCE. Thank you, Mr. Chairman. I would like to 

thank our witnesses for being here today. 

The Supplemental Nutrition Assistance Program, SNAP, is our 

country’s most effective and important tool for fighting hunger. In 

2015 there were over 45 million SNAP participants. While this 


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number sounds extremely high, the Great Recession drove many to 

depend on SNAP. 

My home State of Michigan was hard-hit by the recession, as 

many of you know, and SNAP was there to help. Michigan received 

over $2.5 billion in SNAP benefits, 198 percent higher than the national average. And 1.6 million residents depend on SNAP benefits 

to survive. 

In my district, 49 percent of SNAP participants were in families 

with children, 27 percent were families with elderly, and 48 were 

working families. Ladies and gentlemen, understand the qualification income levels to receive SNAP, and 49 percent were working 

families. In other words, they were working poor. SNAP is not easy to get. The average monthly benefit is $126 per person. That is less than $32 per person a week. How many of you 

can live on $32 a week to feed yourself? Not a luxury, food is a 

human basic need. 

Recipients must go through a rigorous application process where 

they meet specific qualifications and prove their eligibility. SNAP 

recipients must reapply every 6 to 12 months and inform the State 

of their income changes. There are even minimum periods of disqualifications ranging from 1 to 6 months, which may be increased 

by the State SNAP agencies. States even have the option to disqualify an entire family for up to 180 days if the household head 

fails to comply with work requirements. So a child could be penalized if the parent does not comply. 

I would like to enter into the record the Michigan Department 

of Health and Human Services application booklet, which includes 

the types of forms families must fill out to get public assistance. 

And I want you to look at this. This is what a person is given in 

Michigan, 40 pages they must fill out in order to apply for SNAP. 

The SNAP benefit can only be used to purchase approved foods 

sold by authorized SNAP retailers. There is a restaurant option for 

populations that have difficulty preparing food such as elderly and 

veterans, and in a few States, including California, Arizona, and 

Michigan. 

I feel the allegations of fraud and abuse are overblown. SNAP 

has been one of the lowest fraud rates in any Federal program. Of 

the past several years, USDA has taken aggressive steps to improve SNAP oversight and to work with States in rooting out 

waste. USDA have seen declines in the rate of trafficking from 4 

percent down to a little over 1 percent of benefits in the last 20 

years. While no amount of fraud or waste is acceptable, we must 

not throw out the baby with the water. You would not shut off the 

water for an entire street or entire city if a few households leave 

their hoses on for an entire day. You would not stop buying groceries for your family because the oldest child drank up all of the 

milk or spilled it. 

We should not make the majority suffer for a few bad apples. But 

this is exactly what we are dealing with today. This year, Speaker 

Ryan’s Task Force on Poverty, Opportunity, and Upward Mobility 

is proposing to transfer SNAP into a block grant. The 2017 budget, 

ladies and gentlemen, call on eliminating another block grant of social services for children and elderly. I am worried that some future actions by my colleagues on the other side of the aisle will call 


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for eliminating a block grant that they are now trying to put into 

SNAP. 

And I yield back my time. 

Mr. MEADOWS. I thank the gentlewoman from Michigan, Mrs. 

Lawrence, for her opening statement. 

Mrs. LAWRENCE. Thank you, sir. But my sister and I, we are still 

good. 

Mr. MEADOWS. Well, we appreciate that. 

And I will hold the record open for 5 legislative days for any 

members who would like to submit a written statement. 

I will now recognize our panel of witnesses, and I am pleased to 

welcome Mr. Kevin Concannon, Under Secretary for Food, Nutrition, and Consumer Services at the U.S. Department of Agriculture, welcome; Ms. Kay Brown, director of Education, Workforce, 

and Income Security at the U.S. Government Accountability Office. 

Welcome, Ms. Brown. Ms. Mary Mayhew, commissioner of Maine’s 

Department of Health and Human Services. Thank you, Ms. Mary 

Mayhew for your traveling and your willingness to be here. Mr. 

Mike Carroll, the secretary of the Florida Department of Children 

and Family Services. Thank you, Mr. Carroll, for making the special effort to be here. And Ms. Stacy Dean, vice president for food 

assistance policy at the Center on Budget and Policy Priorities. 

Welcome to you all. And pursuant to committee rules, all witnesses will be sworn in before they testify, so I would ask that you 

please rise and raise your right hand. 

[Witnesses sworn.] 

Mr. MEADOWS. And let the record reflect that all witnesses answered in the affirmative. And in order to allow time for discussion, I would ask that you please limit your oral testimony to 5 

minutes. However, your entire written testimony will be made part 

of the record. 

And I would go ahead and now recognize Mr. Concannon for 5 

minutes. 

WITNESS STATEMENTS 

STATEMENT OF KEVIN CONCANNON 

Mr. CONCANNON. Thank you very much. Chairmen and members 

of the committee, I appreciate the opportunity to explain directly 

FNS’s efforts to assure the integrity of the SNAP program. Integrity is essential to SNAP’s success, and so it’s paramount to me 

personally and to the agency. And as I’ve said many times, we have 

zero tolerance for fraud in SNAP. 

SNAP provides essential food assistance, nutrition education, 

work-support services to 44.3 million low-income individuals. In 

2014, 64 percent of recipients were children, seniors, and those 

with disabilities, and 42 percent lived in a household with earnings. To those who claim that SNAP discourages work, I say that 

the data clearly states otherwise. 

In SNAP, those who can work must register to do so and accept 

a job if offered. This core program requirement cannot be waived 

by a State. In 2015, 13.6 million SNAP recipients were registered 

to work. USDA funds SNAP’s employment and training programs 


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to support States in helping recipients find and keep good-paying 

jobs. 

In 2015, SNAP EBT served more than 1 million recipients. Unfortunately, some State agencies do too little to use the Federal 

funding, technical assistance, and support available. So USDA has 

expanded its capacity to help States meet their E&T responsibilities through the newly established Office of Employment and 

Training, staff of the team with long experience at both the Federal 

and State level. They’re building a more robust foundation of monitor, improve, and promote SNAP EBT. 

I believe strongly that the public’s concern over high SNAP participation must be resolved in the right way, by getting people jobs. 

The wrong way is to reduce cost, is to kick people off SNAP, or 

worse, block grant it, which would also erode the national standards and accountability that helps make SNAP effective. 

Let me turn now to program integrity. USDA’s focus on identifying, penalizing, and excluding those who seek to defraud SNAP 

has reduced trafficking from 4 percent to 1.3 percent over the last 

20 years. While this is real progress when almost $70 billion total 

are involved, there’s no acceptable level of fraud, and complacency 

is never an option. Continuous attention, energy, and diligence are 

required. 

This administration is pursuing an energetic anti-trafficking 

strategy. First, we’ve organized SNAP retailer management into a 

single centralized business structure that targets resources to highrisk areas. Second, we use data analytics to closely track EBT 

transactions and identify stores most likely to traffic. Third, we’ve 

upgraded our alert system with state-of-the-art technology to better 

detect suspicious activity and are strengthening policies to combat 

misuse of benefits and impose stronger penalties against retailers 

who break the rules. Store owners that traffic are disqualified for 

life. 

And on the GAO report, we’re in mutual agreement and support 

both the findings and the recommendations of the GAO audit. 

These efforts bring real results. In 2015, we issued almost 2,700 

sanctions against violating retailers, a 21 percent increase over the 

prior year. More than 1,900 store owners were permanently disqualified for trafficking or falsifying applications, and over 700 are 

sanctioned for other violations. 

We believe that predictive data analytics, combined with related 

information such as excessive requests for card replacements can 

be real game-changers in targeting the most likely trafficking recipients. Unfortunately, very few States really take advantage of 

this option, so there’s much room for improvement. 

While the Federal Government is responsible for controlling retailer trafficking, action against recipient trafficking, the other side 

of the same crime, is a State agency responsibility. States conduct 

investigations of recipient fraud, disqualify violation of SNAP, and 

make claims to recover improperly received benefits. 

That said, I must caution that while some States see photo EBT 

cards as a solution to trafficking, it does not work as well as they 

may think. Let me explain. SNAP is a household benefit, so any 

member of that household may legally use that card. Putting one 

person’s photo on the card simply creates confusion at the point of 


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sale. A card with a photo cannot and will not prevent two bad actors from breaking the law, case-in-point, the 2001 audit in the 

State of Missouri. But it is an option for States, and our main concern is that States that implement photo EBT comply with Federal 

law and regulation. That’s part of our oversight duties. 

One final but very important point I want to make, the majority 

of SNAP recipients honor the rules, play by the rules, as is true 

of the majority of retailers as well. The Nation entrusts USDA and 

our State partners to administer SNAP with accountability and integrity. Americans expect and deserve their government to manage 

hard-earned tax dollars. Without that, we simply cannot sustain 

public confidence. That’s why we are committed to tough action to 

find and punish fraud. 

Thank you. 

[Prepared statement of Mr. Concannon follows:] 


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For Release only by the 

House Oversight and Government Reform Committee 

Statement of Kevin W. Concannon, Under Secretary for the Food, Nutrition and 

Consumer Services Before the House Subcommittees on Government Operations and 

Interior 

June9, 2016 

Thank you to the Chairmen and members of the Subcommittee on Government 

Operations and the Subcommittee on the Interior. I am pleased to share what we are doing at the 

Food and Nutrition Service (FNS) to protect and assure the integrity of the Supplemental 

Nutrition Assistance Program (SNAP). 

SNAP is the cornerstone of our Nation's nutrition assistance safety net -lifting 4.7 

million Americans out of poverty right now, and improving later-life health and economic selfsufficiency for the children it reaches. The program currently provides food assistance, nutrition 

education and work support services to 44.3 million low-income individuals according to the 

most recent month of data. In Fiscal Year (FY) 2014, 64 percent of SNAP recipients were 

children, seniors, and those with disabilities and 42 percent of SNAP participants lived in a 

household with a working adult. In other words, the vast majority of recipients are people who 

already work or, because of age or disability, are not expected to work. Moreover, other Censusbased estimates show that among SNAP households with at least one working-age, non-disabled adult, 

more than 80 percent work in the year before or after receiving SNAP benefits {Rosenbaum 2013). 

SNAP provides critical nutrition assistance to low-income households and ensuring the 

integrity of the program is important to making sure that this assistance remains available to the 

households who need it. The integrity of the program is paramount to me personally, as well as 

to the Agency. When we talk about integrity, we often focus solely on the critical aspects of 

ensuring benefits are issued and used as they were intended, ensuring that fraud and trafficking 

does not take place, and, when it does, that bad actors are held accountable. However, integrity 

also involves ensuring that States administer the Program in accordance with rules and 

regulations. That is our responsibility as the Federal oversight agency. It is in this light that I 

think we need to look carefully at States that assert success simply because their SNAP rolls are 

being reduced. I believe that there are right ways and wrong ways to move recipients off the 

Program. Not processing SNAP applications or application re-certifications timely, or pushing 

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recipients off the Program instead of helping them get jobs, in my view, are examples of the 

wrong ways. Helping them get jobs so they are self-sufficient and need less help is an example 

of the right way. 

As a senior Federal official responsible for this program, and as a former State 

commissioner, I can tell you without reservation that the best way to reduce the number of lowincome people on SNAP is to connect them with better paying jobs and support them with 

employment and training. We have seen this strategy pay off with a recent decline in 

participation, at the same time as our national streak of private sector job creation has cut 

unemployment by more than half to 4.7 percent. Our objective is to reduce the need for SNAP by 

helping adults who are able to work to secure stable, good-paying employment, while at the 

same time ensuring that those who need nutrition assistance- including working families who 

do not earn enough to make ends meet- are able to get it. 

One criticism heard repeatedly in some quarters is that SNAP discourages work. This 

claim does not hold up under close scrutiny. Work is important not only to household economic 

success, but also to the well-being of families more generally. The claim that SNAP does not 

support work reflects more ideology rather than evidence: 

• In contrast to commonly heard rhetoric, SNAP does have work requirements. In general, 

those who are able to work must register to do so, they must accept a job if offered, and they 

may not voluntarily quit or reduce work hours in order to become eligible for or continue 

receiving SNAP. This requirement is not waivable. Those who violate the work 

requirements face sanctions and may be permanently disqualified from SNAP. In FY 2015, 

13.6 million SNAP recipients were registered for work. 

• SNAP's Employment and Training (E&T) program helps participants prepare for and secure 

good paying jobs, serving about 600,000 SNAP participants in FY 2014 and more than 1 

million participants in FY 2015. 

• USDA continues to expand its capacity to administer the SNAP E&T program nationally and 

work with States to strengthen their programs to help more SNAP participants gain skills and 

find work. FNS recently established the Office of Employment and Training to better target 

E&T resources to the most effective strategies. 

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• We are using this new capacity to provide technical assistance to States, create a more robust 

foundation for monitoring the fiscal and operational management of the program, and raise 

awareness of SNAP E&T among our Federal, State, and local human service and workforce 

development partners. 

• States have considerable flexibility in designing locally responsive E&T programs. They may 

target specific populations or geographic areas, operate mandatory or voluntary programs, 

partner with other State or local agencies to provide services, develop third-party 

reimbursement models, and decide which services to offer to E&T participants. 

Unfortunately, State investment in E&T varies greatly despite the availability of Federal 

funding for this purpose. 

• We are working with 10 States to implement the E&T pilot projects authorized by the 2014 

Farm BilL These projects were awarded in March 2015 through a competitive selection, 

along with a rigorous evaluation to determine their effectiveness in helping recipients prepare 

for and secure good paying jobs. We expect, based on a rigorous evaluation of a variety of 

strategies and approaches used in the pilots, to obtain a better understanding of what does and 

does not work to help low income individuals gain skills and credentials, obtain decent 

employment and move towards economic self-sufficiency, and ultimately reduce their need 

for public assistance. 

In addition, able-bodied adults without dependents (ABA WDs) are only eligible for 

SNAP for three months in any three-year period unless they are working or participating in 

qualifying education and training activities. Some have argued that States should end the practice 

of seeking waivers of the ABA WD time limit in areas of high unemployment. The law already 

makes this a State choice. To me, it is unwise to impose time limits in places where ABA WDs 

seeking work are unable to obtain jobs because the economic conditions are particularly difficult. 

Moreover, all States should be utilizing their E&T resources to help ABA WDs prepare for and 

find employment so that these individuals both are able to move toward self-sufficiency and so 

that they can continue receiving SNAP while preparing for employment programs. 

Unfortunately, too many States do not take this responsibility seriously and leave substantial 

E&T resources, including 100 percent Federal funding, unused. This includes states that are reimposing time limits on SNAP for ABA WDS, either because the job market has rebounded or 

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because they have chosen not to seek to continue a waiver even though some areas continue to 

have high unemployment. In either case, ABA WDS are a group with many barriers to 

employment and finding work can be challenging, making it critical that states do all they can to 

help these individuals find work. 

I know that there are States - and you may hear some of this today- that assert they are 

doing a great job administering the program, are having success reducing the rolls, and would 

like USDA to get out of their way so they can do even more moving forward. Over the past 38 

months, SNAP caseloads have begun to fall nationally and in many states. This is as is expected -SNAP is 

designed to expand during recessions and contract as need declines and more people are able to make 

ends meet without SNAP assistance. As the labor market continues to improve, we are starting to see 

reductions in the number of households who need SNAP. At the same time, some states are seeing 

more rapid declines in their caseloads and in some cases this is not due to reductions in need, but states 

that are taking steps to make it harder for households in need to access needed nutrition assistance. 

USDA is committed to ensuring that States operate their SNAP programs consistently with the statute 

and regulations, which are designed to promote program integrity and program access. 

Today I will largely limit my remarks to the importance and activities associated with 

integrity and accountability. But before I do, I would like to make note of the core program 

attributes and the people served by this important nutrition assistance program. 

Studies have shown that participating in SNAP is associated with a significant decrease 

in food insecurity and, in tum, helps to address a range of negative health outcomes that are 

associated with food insecurity. SNAP lifts millions of people out of poverty. Recent Census 

data indicate that 4. 7 million people, including 2.1 million children, were lifted out of poverty 

due to SNAP benefits in 2014. The impact is greatest for the most poor, moving 13 percent of 

participating households from below to above 50 percent of the poverty line as it improves their 

well-being with better access to food resources. The Supplemental Poverty Measure shows that 

SNAP reduced child poverty by almost three percentage points in 20 14-the largest child 

poverty impact of any safety net program other than refundable tax credits. Evidence is clear 

that SNAP benefits increase household expenditures on food and reduce food insecurity. But 

SNAP does not just help relieve short-term hardship. A growing body of high-quality research 

shows SNAP's benefits are especially evident and wide-ranging for those who receive food 

assistance as children; they extend beyond the immediate goal of alleviating hunger and include 

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improvements in short-run health and academic performance as well as in long-run health, 

educational attainment, and economic self-sufficiency. 

SNAP also benefits local businesses and economies through its countercyclical design. 

During economic downturns, every $1 issued in SNAP benefits generates up to $1.80 in 

economic activity. Every time a family or individual uses SNAP benefits to put food on the 

table, it benefits the store and the employees where the purchase was made, the truck driver who 

delivered the food, the warehouses that stored it, the plant that processed it, and the farmer who 

produced the food. In short, SNAP strengthens individuals, their families, and their 

communities. 

It also operates with efficiency. Almost 95 percent of Federal SNAP spending goes 

directly to families to buy food. Most of the rest goes toward the Federal share of State 

administrative costs. Only a small portion goes to Federal administration, including oversight of 

State operations and monitoring of retailers that accept SNAP. Relative to other federal meanstested programs, SNAP spends far less on program administration. 

FNS and our State partners share in the administration of SNAP, including ensuring 

integrity in the program. On the Federal side, we establish rules and regulations, provide 

monitoring and oversight of State administration of the program, pay the full cost of SNAP 

benefits ($69. 7 billion for FY 20 15), and pay approximately half of the expenses incurred by the 

States to administer the program. We also provide technical assistance to States, including 

general guidance associated with the options, of which there are many, available to States 

through regulations and statute. Overall, SNAP is a program that offers a great deal of State 

flexibility and opportunities for State choice through options and waivers. 

USDA takes the lead on the authorization, monitoring and oversight of stores that redeem 

SNAP benefits--over 260,000 stores around the country. On behalf of American taxpayers, we 

work in concert with the Department's Office oflnspector General (OIG) and in close 

coordination with the States that operate the program and others to protect the Federal 

investment in SNAP. We work together to make sure benefits are used as intended-for eligible 

food items. The biggest threat to this aspect of integrity is trafficking-the illegal sale or 

purchase of SNAP benefits for cash. Trafficking involves two parties- both the retailer and the 

participant- and it is not always clear that both parties are fully aware of fraud as it occurs. . 

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FNS has reorganized to put resources at the doorstep of fraud and modernized our efforts using 

data analytics to fight new tactics by those who want to commit fraud. 

Our State agency partners are responsible for investigating participant fraud and 

punishing those found to be trafficking. Punishments can include permanent disqualification and 

even prosecution. According to the latest data available, in FY 2015 when more than 45.7 

million people participated in the program, States conducted approximately 723,000 

investigations resulting in over 46,500 disqualifications for recipient fraud and collected almost 

$86 million in fraud claims from householdsThe statute authorizes State agencies to retain 35 

percent of the amount they collect on fraud claims. We would like to see States focus more on 

the trafficking side as well 

As vital as the program is to so many, and as well as it operates, we can all agree that it 

can do even better, and it is up to all of us, the Federal Government, the States, and the local 

providers to work together to improve it by holding ourselves accountable. Tbis Administration 

is committed to continually improving the integrity of SNAP. USDA has long recognized that 

SNAP cannot succeed without strong public confidence, so good stewardship of tax dollars is 

one of our most important objectives. That is why we continually strive to improve program 

oversight and to identify, penalize, and exclude those who seek to defraud the program. We 

view this as critical to preserving benefits for the vast majority of participants who play by the 

rules and need help to ensure their families have access to adequate and nutritious food. 

With that background on our program, let me now talk about what we have 

accomplished. FNS has succeeded in reducing trafficking from about 4 percent to 1.3 percent 

over the last 20 years. While the trafficking rate is low, and 98.7 percent of the benefits are used 

properly, we continue to focus on this vital area because, when almost $70 billion (in FY 2015) 

in taxpayer supported benefits are involved, continuous attention, energy and diligence is 

required. Among the actions taken in this Administration to improve integrity related to retailer 

trafficking: 

• We have restructured our retailer management functions into a single cohesive, centralized 

retailer management business structure that allows us to better target resources to particular 

bigh-risk areas; 

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• We have used data analytics to examine EBT transactions at stores as well as other retailer 

information, to focus on the stores most likely to traffic; 

• We have upgraded our Anti-fraud Locator Using Electronic Benefit Transfer Retailer 

Transactions (ALERT) system to stay in step with state of the art technology to better detect 

suspicious SNAP redemption activity across the country; 

• FNS implemented policies that combat abuse and the misuse of benefits and impose stronger 

penalties and sanctions against retailers who violate program rules; and 

• We have provided resources to retailers and the public about ways to fight fraud and how to 

report abuses to help stop trafficking. 

I am happy to report that our efforts, particularly those aimed at removing or preventing 

fraudulent retailers or those with other business integrity issues from participating in the 

Program, are working. In FY 2015, we issued sanctions against nearly 2,700 retailers who 

committed violations, reflecting an overall increase of21 percent as compared to FY 2014. 

More than 1,900 stores were permanently disqualified for trafficking or falsifying an application, 

and over 700 stores were sanctioned for other violations such as the sale of ineligible items. Our 

strengthened vetting policies and procedures have increased our ability to prevent the 

authorization of firms that attempt to circumvent SNAP's business integrity rules. In 2015, there 

was a 254 percent increase in stores denied SNAP participation because of problems with 

business integrity of store ownership as compared to 2010. 

Nevertheless, we continue to focus on improvement, particularly in the area of recipient 

trafficking. The General Accountability Office (GAO) released a report a couple of years ago 

titled "Supplemental Nutrition Assistance Program: Enhanced Detection Tools and Reporting 

Could Improve Efforts to Combat Recipient Fraud." As noted in their report, FNS was already 

working to improve tools and technical assistance to States in this area; however, GAO also 

noted more could be done and recommended that FNS reassess current detection tools, reassess 

current financial incentives and issue guidance to assist States further in their efforts to detect 

fraud and report on their efforts. FNS agreed. Indeed, we had already begun the process. 

FNS issued almost $15 million in grants to States to improve detection, investigation and 

prosecution of recipient trafficking. These projects focused on the use of technology and data 

analytics to improve and better track outcomes. 

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• We contracted with one of the nation's premier data analytics consulting firms to 

improve business processes in this area and use cutting edge technology to build a model 

using predictive analytics to help States more effectively identify SNAP recipient 

trafficking. The models use a variety of eligibility and transaction data, including card 

replacement data. 

• FNS has completed studies in seven SNAP State agencies: New York (Onondaga 

County), Pennsylvania, South Carolina, Wisconsin (Milwaukee County), California 

(Sacramento County), and Texas. 

• The preliminary results demonstrated success so this year we added four additional States 

Arizona, District of Columbia, Utah, and Washington to share this proven data analytics 

model. 

Predictive data analytics, when paired with relevant information such as retailer 

disqualifications and excessive requests for card replacements, can be most effective in targeting 

the most likely trafficking participants. Let me highlight a couple of examples of how working 

with States, FNS has helped to reduce trafficking. Texas is a State with strong controls to 

prevent and investigate recipient fraud- the State operates an in-house data analytics program to 

identify and root out potential recipient trafficking. They also have strong business processes 

around their anti-fraud activities and have had significant success in this area. Another State, 

South Carolina, is now converting over 83 percent of its investigations of potential trafficking 

into successful disqualifications. This represents an increase of22 percentage points from the 

State's investigation success rate prior to using FNS's model. Between March 2015, when FNS 

implemented the model, and December 2015, South Carolina disqualified 185 recipients for 

trafficking, representing a cost avoidance of just over $1 million dollars. Unfortunately, few 

States are operating the level of Texas and South Carolina; that is why I believe there is much 

room for States to improve. 

Another GAO recommendation was to revise our reporting form for States to provide 

FNS more thorough and complete information on their anti-fraud activities and their results. We 

are doing this and will soon be in a better position to have more accurate information on what 

States are doing, and be able to better analyze trends and returns on investment in State antifraud activities. 

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Finally, GAO also recommended improvements in the area of trafficking through social 

media websites. USDA has indeed focused on enhancing tools to help combat trafficking in this 

area. In 2015, FNS conducted a pilot in Washington to test innovative strategies for 

investigating and preventing trafficking attempts of SNAP benefits through social media 

websites. We are using lessons learned from these pilots to update our guidance to States for 

effectively combatting such attempts, which we expect to release later this year. 

Beyond addressing the efforts discussed in the GAO report, we have gone further to work 

with our State partners on combatting recipient fraud. USDA continues to establish State Law 

Enforcement Bureau agreements with States, harnessing their additional law enforcement 

resources. The 2014 Farm Bill strengthened our ability to use these relationships to maintain 

focus on and expand recipient investigations in States as welL USDA continues to refer clients 

with suspicious transaction patterns at disqualified retailers to States for further investigation and 

encourages States to use that information to investigate and take action against clients believed to 

have trafficked. 

USDA encourages States to take advantage of any tools available that can assist in the 

detection, investigation and prosecution of recipient fraud. We will continue to improve the 

tools available to States, provide technical assistances on how to use these tools, and share 

promising practices. States must pay close attention to recipients who request multiple EBT 

replacement cards. Though there may be a perfectly reasonable explanation, this is an indicator 

of fraud in certain circumstances. In fact, our data analytics project found that in these States, 

excessive card replacement requests is one of the leading indicators of potential trafficking. 

States have the option to call clients into the local office after the fourth request for a 

replacement card before issuing a new one; yet, to date, very few States have taken that option. 

States need to recognize the predictive value of this data and take full advantage of a proven 

successful option that is available to them. 

Client education focused on recipient responsibilities is another strategy States need to 

use to tackle the issue of recipient integrity. FNS recently released an education package to help 

State agencies communicate the rules and the responsibilities involved with the program to 

participating recipients. Education such as this encourages voluntary compliance and prevents 

SNAP trafficking up front. In this area, as with others, States vary in their focus and level of 

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effort. There is room for States to do more education about SNAP rules with participating 

households. 

Finally, I would be remiss if I did not mention the use of a photo on the EBT card. To be 

clear, implementation of a photo on the EBT card is a State option. However, it involves 

complex, legal, operational, and civil rights issues. Experience has taught us, if not well-planned 

and well executed, use of a photo on an EBT card can adversely affect the ability of participants 

to put food on the table. Let me explain: SNAP eligibility is determined for a household, not an 

individual. Any member of the household or authorized representative can use that card to 

redeem benefits according to Federal law. Putting the photo of one individual does not help fight 

fraud, but rather creates confusion at the point of sale. A photo will not prevent two bad actors 

from breaking the law. To that point, a 2001 State audit in Missouri found that the photographs 

on EBT cards did not serve as a fraud deterrent. Missouri subsequently discontinued use of 

photo EBT. Nevertheless, photo EBT remains an option available to States. Therefore, any 

State that chooses to implement such an option must do so in compliance with federal law. In 

fact, ensuring that is part of our oversight responsibility. 

Other Integrity Efforts 

While the instances of cases of duplicate participation (i.e. households simultaneously 

certified for benefits in two states) are low, it is another issue that USDA takes very seriously. 

USDA supported a pilot project in conjunction with OMB's Partnership for Program Integrity 

and Innovation and a five State consortium to develop the National Accuracy Clearinghouse 

(NAC). The NAC established a database pilot to test a shared data clearinghouse that allows the 

pilot States to check in real, or near-real, time whether a SNAP applicant is already receiving 

SNAP benefits in another pilot State. The final report indicates that the NAC reduced duplicate 

participation in all five pilot States, though effectiveness varied by the level of automation each 

State was able to implement. Although duplicate participation is already low, States saw 

significant reductions in duplicate participation from pre-pilot levels. FNS has urged states for a 

number of years to consider data-matching agreements with border States that have mobile 

populations and the pilot reinforces this type of data sharing. Massachusetts and New York are 

examples of States that are already doing this type of match via a low tech data hatching 

approach. Other States could do the same. 

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Conclusion 

Proper stewardship of Federal funds is intrinsically linked to constant and vigilant 

attention to program integrity and proper implementation of our role in oversight and monitoring 

of State program operations. And although the vast majority of those involved with SNAP, 

recipients as well as retailers, are honest and abide by the rules, we cannot accept or tolerate any 

fraud or abuse. The Nation entrusts us- USDA and our partner States-to administer SNAP, a 

program funded by the American taxpayer with accountability and integrity. Americans expect 

and deserve a government that ensures their tax dollars are managed efficiently and with 

integrity. To sustain public confidence in these programs, we must meet this expectation. 

FNS will continue to pay close attention to these issues and to act where we can to reduce 

fraud. We will continue to work with States; encouraging them to do more where they can. It is 

our responsibility. I appreciate the Committee's interest in promoting and improving SNAP 

integrity, and welcome your questions. 

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19 

Mr. MEADOWS. Thank you. 

Ms. Brown, you are recognized for 5 minutes. 

STATEMENT OF KAY BROWN 

Ms. BROWN. Chairman Meadows, Ranking Member Lawrence, 

and members of the subcommittees, I’m pleased to be here today 

to discuss our work on Federal and State efforts to combat fraud 

by SNAP recipients. My remarks are based on our 2014 report with 

updates on USDA actions on our recommendations. 

We studied the efforts of 11 States to prevent recipient fraud and 

detect recipient trafficking. First on preventing recipient fraud, 

States are responsible for investigating possible intentional program violations such as whether applicants have made false or 

misleading statements in order to obtain benefits. All 11 selected 

States were using well-known tools either required or recommended by USDA for detecting fraud. States were operating 

fraud hotlines and comparing information provided by applicants 

with data from various sources to check for accuracy. Some States 

were performing additional checks such as paying private companies for data to confirm the income information provided by applicants. 

However, most of these States reported difficulties in conducting 

fraud investigations in part due to steady or even reduced staffing 

levels at a time when the numbers of SNAP recipients had grown 

significantly. Further, the size, range of duties, and programs covered by the investigative units varied widely by State. We recommended that USDA explore ways that Federal financial incentives could better support cost-effective State fraud prevention efforts. 

Regarding detecting recipient trafficking, concerns had been 

raised that recipients may be trafficking their benefits by exchanging them for cash or goods and services on e-commerce and social 

media sites. In response, USDA recommended States use certain 

free Web-based automated tools to help detect such trafficking. 

However, State officials reported problems with these tools, and 

upon testing them, we found them to be of limited use. In fact, we 

found that manually searching e-commerce Web sites produced 

more positive results than were detected by the automated tools. 

We recommended that USDA reassess its guidance. 

We also reviewed USDA’s guidance to States regarding recipients 

who requested multiple EBT card replacements. This can be but is 

not necessarily an indication of trafficking. We found that States 

had limited success detecting fraud using USDA’s approach. Instead, using data we obtained from three States, we developed a 

more targeted and efficient approach. By combining data sources, 

we identified households that had requested multiple replacement 

cards and, at around the same time, had also made purchases considered to be potential signs of trafficking. This type of approach 

can help identify households at higher risk of trafficking for benefits. And we recommended that USDA revisit its guidance in this 

area. 

Finally, we also studied USDA oversight of State antifraud activities. We reported that USDA had increased its oversight in recent years. It issued new regulations and guidance and commisVerDate Sep 11 2014 14:28 Jan 09, 2017 Jkt 000000 PO 00000 Frm 00025 Fmt 6633 Sfmt 6633 F:\22990.TXT APRIL

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sioned studies on recipient fraud. Also, in fiscal year 2013 for the 

first time, the Department examined all 50 States’ compliance with 

Federal requirements governing SNAP antifraud activities. 

Despite these efforts, we found that USDA did not have consistent and reliable data on States’ activities. Its reporting guidance lacked specificity, and States did not have a uniform understanding of what should be reported. As a result, USDA could not 

compare activities and performance across States. We recommended the Department take steps to enhance the consistency 

among State reports. 

USDA officials agreed with all of our recommendations and are 

taking substantive steps in response. As you have just heard, they 

have made progress in studying improved anti-trafficking approaches, and they have redesigned the forms States used to report 

investigations. However, they have yet to finalize actions that 

would fully address all of our recommendations. Given the significant size of the program, the reality of constrained public resources, and the constant advances in technology, it’s particularly 

important that USDA make every effort to make sure SNAP funds 

are used for their intended purposes. 

This concludes my statement. I’m happy to answer any questions. 

[Prepared statement of Ms. Brown follows:] 


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For Release on Delivery 

Expected at 2:00 p.m. ET 

Thursday, June 9, 2016 

GA0-16-719T 

United States Government Accountability Office 

Testimony 

Before the Subcommittees on Government 

Operations and the Interior, Committee on 

Oversight and Government Reform, House 

of Representatives 

SUPPLEMENTAL 

NUTRITION ASSISTANCE 

PROGRAM 

Enhanced Detection Tools 

and Reporting to Combat 

Recipient Fraud Are in 

Development 

Statement of Kay E. Brown, Director 

Education, Workforce, and Income Security Issues 
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GAO 

Highlights 

Highlights of GAQ~16-719T,a testfm6ny before 

the Subcommittees on Govemment 

OperatiOns and the lnte:rior, Committee on 

Oversight arid G0¥emment Rerorm, House of Repte_sentatives 

Why GAO Did This Study 

In fiscal year2015, SNAP, the natioti's 

largest nutrition supPort program, 

provided about 46 million people with 

$70 billion .in benefits. Fraud has been 

a long-standing concern in !he 

program, and state agencies are 

responsible for addressing SNAP 

recipient fraud. In 2014;'GAO reviewed_ 

state and federal efforts to 'combat 

SNAP reciplentfraud. 

This testimony summarizes' (1) 

findings from GAO's 2014 report and 

(2) the steps FNS has taken si()ce then 

to address GAO's recom11Jendations. 

For its 2014 report, GAO reviewed 

relevant federal laws, regulations, 

guidance. and documents; interviewed 

offfcials in 11 states; interyiewed 

federal officials; tested fraud detection 

tools using fiscal year 2012 program 

data, the most recent_available_ at the 

time of GAO's report: ;:tnd ml)nitored 

websites for potential trafficking online. 

Although GAQ's results are not 

generalizable to all states, the selected 

states served about a third of SNAP 

recipient households. For this 

statement, GAO reviewed FNS's actions to date on its 

recommendations. 

What GAO Recommends 

In 2014, GAO recommended that FNS 

reassess its fincinclal incentives for 

state anti-fraud efforts and tools for website mohitoring; establiSh additional 

guidance related to EBTteplacement 

card data; !ind enhance the reliability 

of state reporting. FNS agreed with 

GAO's recommendations and has 

been taking steps to address them, 

GAO Is not making new 

recommendations in this testimony 

statement 

View GAQ.<16-719T. For more_ information, 

contact Kay E. Brown at (202) 512-7215 Or brownke@gao.gov 

SUPPLEMENTAL NUTRITION ASSISTANCE 

PROGRAM 

Enhanced Detection Tools and Reporting to 

Combat Recipient Fraud Are in Development 

What GAO Found 

In 2014, GAO found that selected states employed a range of tools to detect 

potential Supplemental Nutrition Assistance Program (SNAP) recipient fraud, but 

they faced challenges, including inadequate staffing levels, that limited the 

effectiveness of their actions, and the Food and Nutrition Service (FNS) lacked 

data about the states' efforts. The 11 states GAO studied reported using 

detection tools required or recommended by FNS, among others, to combat 

SNAP recipient fraud. However, 8 of these states reported difficulties in 

conducting fraud investigations due to reduced or stagnant staff levels and 

funding despite program growth, and some state officials suggested changing 

the financial incentives structure to help support the costs of investigating 

potential fraud. 

GAO also found limitations to the effectiveness of website monitoring tools and 

the analysis of card replacement data states used, under the direction of FNS, 

for fraud detection. Specifically, GAO found FNS's recommended website 

monitoring tools to be less effective than manual searches and impractical for 

detecting internet posts indicative of SNAP trafficking-the misuse of program 

benefits to obtain non-food items. Further, although FNS required states to 

monitor SNAP households that request at least four replaced electronic benefit 

transfer (EBT) cards in a year, GAO found that multiple EBT card requests in the 

same benefit period rnay not indicate increased risk of trafficking, GAO found 

that, by adjusting the analysis to focus on SNAP households that both requested 

cards in at least four different monthly benefit periods and engaged in suspicious 

transactions, states could possibly detect potential fraud more accurately. For 

example, in 2014, GAO found that 4,935 SNAP households in Michigan received 

at least 4 replaced EBT cards in a year. However, out of these householders, 

GAO identified 39 households that both received multiple replacement cards in 

at least four different monthly benefit periods and engaged in suspicious 

transactions indicative of SNAP trafficking, resulting in 10 or more trafficking 

flags. GAO reported that this type of targeted analysis may help provide states 

with a starting point for identifying higher priority households for further review, 

which can be particularly helpful given that states had reported having limited 

resources for conducting investigations, 

GAO also found that, despite FNS's increased oversight efforts at that time, it did 

not have consistent and reliable data on states' anti-fraud activities because its 

reporting guidance lacked specificity. For example, the FNS guidance did not 

define the kinds of activities that should be counted as investigations, resulting in 

inconsistent data across states. 

In 2014, GAO recommended, among other things, that FNS reassess current 

financial incentives, detection tools, and guidance to help states better combat 

fraud. As of May 2016, FNS reported progress in studying current anti-fraud 

approaches and developing better data on them, and is in the process of 

developing the final tools and guidance states need to help enhance the integrity 

of the SNAP program. 

-------------United States Government Accountability Office 
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Chairmen Meadows and Lummis, Ranking Members Connolly and 

Lawrence, and Members of the Subcommittees: 

Thank you for the opportunity to discuss our work on states' efforts to 

combat Supplemental Nutrition Assistance Program (SNAP) recipient 

fraud. In fiscal year 2015, the federal government provided more than $70 

billion in benefits to help about 46 million people purchase food through 

SNAP. On average, recipient households received about $258 a month in 

assistance in that year. The U.S. Department of Agriculture's Food and 

Nutrition Service (FNS), in partnership with states, is tasked with 

establishing the proper agency controls that help ensure SNAP program 

funds are used for their intended purpose. However, FNS program 

officials have had long-standing concerns that some recipients can falsify 

information to receive benefits, or misuse their benefits to solicit or obtain 

non-food goods, services and cash-a practice known as trafficking. 

SNAP recipient fraud can undermine the integrity of the program and the 

public's confidence in the program. Technology has provided new 

opportunities to combat as well as commit such fraud. For example, 

electronically monitoring recipient transaction data may provide clues to 

potential SNAP fraud, while a-commerce and social media websites have 

emerged as new venues for trafficking benefits. 

State and federal governments share responsibility for addressing SNAP 

recipient fraud. State agencies are directly responsible for detecting, 

investigating, and prosecuting recipient fraud and FNS is responsible for 

providing guidance to states and monitoring their activities. FNS has 

traditionally focused on pursuing retailer fraud. We reported on FNS 

efforts to combat retailer fraud in 2006 and found that FNS was making 

progress in using electronic data to investigate trafficking.' 

To enhance these efforts, FNS implemented most of our 2006 

recommendations, including taking additional steps to target and provide 

early oversight of retailers most likely to traffic; developing a strategy to 

increase penalties for trafficking; and promoting state efforts to pursue 

recipients suspected of trafficking. Since then, the agency has increased 

its attention to the recipient side of trafficking. For example, in fiscal year 

1 Food Stamp Trafficking: FNS Could Enhance Program Integrity by Better Targeting 

Stores Likely to Traffic and Increasing Penalties, GA0-07 -53 (Washington, D.C.: Oct. 13, 

2006). 

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2012, FNS recommended that states use certain tools, such as analyzing 

transaction data for those requesting multiple benefit card replacements 

and monitoring websites where traffickers may be attempting to buy or 

sell SNAP benefits. 

In 2014, we again reviewed the SNAP program and issued a report on 

recipient fraud and selected states' efforts to combat this type of fraud. 

My testimony today summarizes: (1) the findings in our 2014 report on 

states' efforts to combat SNAP recipient fraud, and (2) the steps FNS has 

taken to address the recommendations in our 2014 report2 

For our 2014 report, we focused on federal and state efforts to combat 

SNAP recipient fraud for fiscal years 2009 to 2014, a period after the 

program received additional funding through the American Recovery and 

Reinvestment Act of 2009 (Recovery Act). 3 We reviewed relevant federal 

laws, regulations, program guidance and reports, and we interviewed 

FNS officials in headquarters and all seven regional offices. We included 

11 states in our review-Florida, Maine, Massachusetts, Michigan, 

Nebraska, New Jersey, North Carolina, Utah, Tennessee, Texas, and 

Wyoming 4 For all11 states, we interviewed knowledgeable state and 

local officials about their recipient anti-fraud work and obtained related 

documentation. We also analyzed fiscal year 2012 replacement card and 

transaction data for households in three of the selected states-Michigan, 

Massachusetts, and Nebraska-to assess the extent to which certain 

analyses could better uncover patterns of potential fraud. Furthermore, 

we monitored popular a-commerce and social media websites for certain 

periods of time to determine how our selected states could use certain 

automated monitoring tools recommended by FNS to detect potential 

2 GAO, Supplemental Nutrition Assistance Program: Enhanced Detection Tools and 

Reporting Could Improve Efforts to Combat Recipient Fraud, GA0..14-641 (Washington, 

D.C.: August 2014) 

3 Pub. L. No.111-5, § 101, 123Stat.115,120. 

4 We chose these states to achieve variation in geographic location, and a mix of high, 

medium and low SNAP payment error rates, percent of the total number of SNAP 

households nationwide, and proportion of recipients whom state officials reported as 

disqualified from the program due to non~compliance. 

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Background 

SNAP fraud. 5 Additionally, we obtained and analyzed documents and 

reports relevant to FNS's program oversight, including their fiscal year 

2013 assessments of state anti-fraud work for all 50 states and the 

District of Columbia6 More detailed information about our objectives, 

scope and methodology can be found in our issued report. For this 

testimony, we conducted follow-up work to obtain information on the 

status of our recommendations from the 2014 report. This involved 

contacting agency officials and obtaining relevant documents. 

We conducted the work on which this statement is based in accordance 

with generally accepted government auditing standards. Those standards 

require that we plan and perform the audit to obtain sufficient, appropriate 

evidence to provide a reasonable basis for our findings and conclusions 

based on our audit objectives. We believe that the evidence we obtained 

provides a reasonable basis for our findings and conclusions based on 

our audit objectives. 

The goal of SNAP, formerly known as the federal Food Stamp Program, 

is to help low-income individuals and households obtain a more nutritious 

diet and help alleviate their hunger. It does so by supplementing their 

income with benefits to purchase allowable food items. The federal 

government pays the full cost of the benefits and shares the responsibility 

and costs of administering the program with the states. Specifically, FNS 

is responsible for promulgating program regulations and ensuring that 

states comply with these regulations by issuing guidance and monitoring 

their state activity. FNS headquarters officials are assisted in this 

oversight work by federal officials in seven regional offices. FNS also 

determines which retailers are eligible to accept SNAP benefits in 

exchange for food and investigates and resolves cases of retailer fraud. 

State officials, on the other hand, are responsible for determining the 

eligibility of individuals and households, calculating the amount of their 

monthly benefits and issuing such benefits on an electronic benefit 

5 "E-commercen websites allow users to advertise the sale of goods and services. "Social 

media" websites allow subscribers to exchange information and ideas with others who 

may or may not subscribe. 

6 All of the data included in our 2014 report were assessed and determined to be 

sufficiently reliable for our purposes. 

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transfer (EST) card in accordance with program rules. States are also 

responsible for investigating possible violations by benefit recipients and 

pursuing and acting on those violations that are deemed intentional. 7 

Trafficking is an intentional program violation that includes acts of fraud, 

such as making false or misleading statements in order to obtain benefits 

and trafficking (i.e., using benefits in unallowable ways, such as by 

exchanging benefits for cash or non-food goods and services or 

attempting to do so). • For example, recipients can traffic benefits by 

selling EST cards to another person, exchanging the EST card and the 

corresponding Personal Identification Number (PIN)9 for cash or non-food 

goods or services (e.g., rent or transportation). These sales can occur in 

person or by posting offers on social media and e-commerce sites. 

Recipients can then contact state agencies to report the sold EST cards 

as lost or stolen and receive new cards which can be used for future 

trafficking transactions, for example, when the benefits are replenished 

the next month. 

According to a September 2012 U.S. Department of Agriculture Office of 

Inspector General (USDA OIG) report, the magnitude of program abuse 

due to recipient fraud is unknown because states do not have uniform 

ways of compiling the data that would provide such information. As a 

result, the USDA OIG recommended that FNS determine the feasibility of 

creating a uniform methodology for states to calculate their recipient fraud 

rate. 1° FNS reported that it took action on this recommendation but 

ultimately determined that it would be infeasible to implement as it would 

require legislative authortty mandating significant state investment of time 

C.F.R. § 273.16. 

8 7 U.S. C.§ 2015(b), 7 C.F.R. § 273.16. Furthermore, under federal law, it is illegal for a 

person to knowingly use, transfer, acquire or possess SNAP benefits in any manner that is 

contrary to the laws and regulations that govern the SNAP program. 7 U.S. C.§ 2024(b). 

The statute applies to program recipients and retailers as we!! as people not participating 

in the program. 

9 Similar to a bank card, for security purposes, SNAP EST cards require a PIN to access 

the benefits associated with the card. 

10 USDA OIG, Analysis of FNS' Supplemental Nutrition Assistance Program Fraud 

Prevention and Detection Efforts. Audit Report 27002-0011-13 (Washington, D.C.: Sept. 

28, 2012}. 

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Selected States 

Faced Challenges in 

Detecting Benefit 

Fraud, and FNS 

Lacked Reliable Data 

about State Efforts 

To Detect Fraud, Selected 

States Employed Tools 

Such As Data Matching, 

Referrals, Analysis of 

Transaction Data, and 

Website Monitoring 

and resources in investigating, prosecuting and reporting fraud beyond 

current requirements. 

In the selected states we reviewed in 2014, officials told us they were 

using well-known tools for detecting potential recipient eligibility fraud, 

such as data matching and referrals obtained through fraud reporting 

hotlines and websiles. Specifically, altha! time, all 11 states that we 

reviewed had fraud hotlines or websites, and all matched information 

about SNAP applicants and recipients against various data sources to 

detect those potentially improperly receiving benefits, as FNS 

recommended or required. (See table 1 .) 

Table 1: Toots Used in 2014 to Detect Potential Supplemental Nutrition Assistance Program (SNAP) Eligibility Fraud 

Federal or Detection tool state Initiative 

eDRSmatch FNS required 

Prisoner match FNS required 

Death match FNS required 

PARIS match FNS 

recommended 

Wage matching State~initiated 

Number of states 

using (out of 11) 

11 

11 

11 

11 

PageS 

Description 

The Food and Nutrition Service (FNS) requires states to check for 

disqualified Individuals ln the Electronic D'1squallfied Recipient System 

(eDRS) when certifying or recertifying them for SNAP 

States must routinely match applicants and recipients against a prisoner 

verification system to prevent receipt of SNAP benefits by incarcerated 

individuals 

States must check SSA's Death Master File to prevent receipt of benefits 

by deceased individuals a 

States provided lists of SNAP recipients for the quarterly PARIS matching, 

and received lists of recipients who were also on the SNAP rolls of another 

state 

These states reported data matching to detect unreported and 

underreported wages (Florida, Maine, Massachusetts, Michigan, North 

Carolina, New Jersey, Tennessee, Texas, Wyoming} 

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Detection tool 

Other data 

matching 

Online data 

search services 

Identity 

verification 

software 

Error-prone 

profile 

Mapping sofu.vare 

Public referrals 

Exchange of 

most recent 

available SNAP 

enrollment data 

Federal or Number of states 

state Initiative using (out of 11) 

State-initiated 6 

State-initiated 

State-initiated 

State-initiated 

State-initiated 

State-initiated 11 

FNS pilot 

Description 

These states verified information provided by applicants/recipients by 

matching with other data sources, such as local jails, schools, and lists of 

lottery winners (Florida, Maine, Michigan, North Carolina, Tennessee, 

Texas) 

Florida and Texas paid a private company for searches of numerous public 

and private databases including vital statistics, current wage and new hire 

data, child support, and residence infonnation based on phone lines and 

motor vehicle registrations 

Florida and Texas used software that required individuals to provide 

infonnation confirming their identities when they set up or access an online 

SNAP account 

Florida provided case workers with a profile for applications that listed 

items to watch for that may indicate applicant fraud 

Michigan used locator software to identify individuals applying for SNAP 

from a computer in another state 

States provided fraud hot lines or online fraud referral 

5 states, including 1 within the scope of our review, were participating in a 

pitot of the exchange of their most recent available SNAP enrollment data 

(Florida)c 

Source GAO analysis of da!afrom selected states I GA0-16-719T 

aThe Death Master File database contains the complete name of the deceased, the Social Security 

Number, birth and death dates, and whether the death report was verified. 

"PARIS is the Public Assistance Reporting Information System administered by the Department of 

Health and Human Services. 

~The remaining states participating in this pilot are Alabama, Georgia, louisiana, and Mississippi 

Beyond the required and recommended data matches, at the time of our 

report, Florida, Texas, Michigan, and one county in North Carolina used 

specialized searches that checked numerous public and private data 

sources, including school enrollment, vehicle registration, vital statistics, 

and credit reports to detect potential fraud prior to providing benefits to 

potential recipients. Florida officials we interviewed shifted the majority of 

their anti-fraud resources to more cost-effective and preventive efforts in 

identifying potential fraud by developing tools geared towards detecting 

eligibility fraud and improper benefit receipt, such as identification 

verification software and profiles that case workers could use to identify 

error-prone applications. These state officials stated that this focus on 

preventive efforts was key to helping them manage recent constraints on 

their investigative budgets. 

To track potential trafficking, officials in the 11 states reported that they 

analyzed patterns of EBT transactions and monitored replacement card 

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data and online postings pursuant to FNS's requirements and guidance. 

(See table 2.) 

Table 2: Tools Used to Detect Potential Supplemental Nutrition Assistance Program (SNAP) Trafficking in 2014 

Federal or 

Detection tool state Initiative 

Monitoring of FNS required 

excessive 

replacement EBT 

cards 

Monitoring of online FNS 

postings recommended 

Analysis of EBT FNS 

transactions data recommended 

# of 11 states 

that reported 

using tool 

11 

11 

Description 

The Food and Nutrition Service (FNS) required states to track recipients 

who have requested 4 or more replacement electronic benefit transfer 

{EBT) cards in a 12-month period. States may send them letters 

explaining the proper use of EST cards and generally must warn them 

that their EBT transactions are being monitored. (all11 states) 

8 states used either automated feeds or manual monitoring to detect 

postings on social media and e~commerce websites by individuals 

seeking to sell SNAP benefits (Florida, Maine, Michigan, New Jersey, 

Tennessee, Texas, Utah, Wyoming) 

All 11 states analyzed EST transaction data for patterns that may 

indicate trafficking. The data analysis efforts varied from state to state. 

Source: GAO analysls of data from selecte<l states.! GA0-16-719T 

In 2014, Most Selected 

States Reported that Their 

Investigations' 

Effectiveness was 

Hindered by Limited 

Staffing and Caseload 

Increases, but Some 

Leveraged Additional 

Resources 

At the time of our 2014 report, most of the selected states reported 

difficulties in conducting fraud investigations due to either reduced or 

stagnant staff levels while SNAP recipient numbers greatly increased 

from fiscal year 2009 through 2013. (See figure 1.) Furthermore, state 

investigators in all 11 states we reviewed were also responsible for 

pursuing fraud in other public assistance programs, such as Medicaid, 

Temporary Assistance for Needy Families and child care and housing 

assistance programs. 

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Figure 1: Number of Supplemental Nutrition Assistance Program (SNAP) Households per Investigator in Selected States, 

Fiscal Years 2009 and 2013 

Florida 

Maine 

Massac-husetts 

Michigan 

Nebraska 

New Jersey 

Tennessee 

Texas 

Utah 

Wyoming 

2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000 

Num~r of households per investigator 

2009 

2013 

Source- GAO alla~&:of information provided by selected st!l!es J GAO.J6.7J9T 

Note: New Jersey provided calendar year information for investigators, Florida lost 27 investigators in 

tate 2009, dropping from 130 to 103. North Carolina was unable to provide the number of 

investigators because some local offices do not have designated fraud investigators. Furthermore, al! 

investigators in the selected states were responsible for pursuing fraud in other public assistance 

programs, and therefore, could be responsible for monitoring a larger population than is mentioned in 

the figure 

However, at the time of our report, some states implemented a strategy to 

leverage their available investigative resources. Specifically, four of the 

states we reviewed-Florida, Massachusetts, Michigan and Nebraskahad implemented and two states-Maine and North Carolina-were in the 

process of implementing state law enforcement bureau (SLEB) 

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agreements. According to FNS officials, the agency was supportive of 

states' efforts to establish these agreements between state SNAP 

agencies and federal, state, and local law enforcement agencies, which 

would enable state SNAP investigators to cooperate in various ways with 

local, state, and federal law enforcement agents, including those within 

the USDA OIG. For example, under these agreements, law enforcement 

agencies can notify the SNAP fraud unit when they arrest someone who 

possesses multiple EBT cards, and SNAP agencies can provide "dummy" 

EBT cards for state and local officers to use in undercover trafficking 

investigations. 11 Officials in one county in Florida told us at the time of 

our report that this type of cooperation allowed local police officers to 

make 100 arrests in its first undercover operation of recipients who were 

allegedly trafficking SNAP benefits. 

At the time of our report, some state officials suggested changing the 

financial incentives structure to help support the costs of investigating 

potential SNAP fraud because some investigative agencies were not 

rewarded for cost-effective, anti-fraud efforts that could prevent ineligible 

people from receiving benefits. According to GAO's Fraud Prevention 

Framework, investigations, although costly and resource-intensive, can 

help deter future fraud and ultimately save money. 12 Officials in one state 

told us that it would help its anti-fraud efforts if FNS would provide 

additional financial incentives for states to prevent potential fraud at the 

time of application beyond what is currently provided for recovered funds. 

Specifically, when fraud by a recipient is discovered, the state may 

generally retain 35 percent of the recovered overpayment, but when a 

11 In most of the 11 states we reviewed, the fraud units were housed in the human 

services department or a state division responsible for program integrity, and investigators 

may be concentrated in the state capital or located around the state. 

12 GAO's Fraud Prevention Framework, developed during previous program audits and 

revised in 2015, emphasizes that comprehensive controls are necessary to minimize 

fraud, waste, and abuse within any federal program. For more information, see A 

Framework for Managing Fraud Risks in Federal Programs, GA0-15-593SP (Washington, 

D.C.: July 2015); Individual Disaster Assistance Programs: Framework for Fraud 

Prevention, Detection and Prosecution, GA0-06-954T (Washington, D.C.: July 12, 2006}; 

Hurricanes Katrina and Rita Disaster Relief: Improper and Potentially Fraudulent 

Individual Assistance Payments Estimated to be between $600 Million and $1.4 Billion, 

GA0-06-844T (Washington, D.C.: June 14, 2006}; and Expedited Assistance for Victims 

of Hurricanes Katrina and Rita: FEMA 's Control Weaknesses Exposed the Government to 

Significant Fraud and Abuse. GA0-06-403T (Washington, D.C .. Feb. 13, 2006}. 

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In 2014, Selected States 

Reported Limited 

Effectiveness in Using 

Automated Monitoring 

Tools for Detecting Online 

Fraud and Replacement 

Card Data as a Detection 

Tool 

state detects potential fraud by an applicant and denies the application, 

there are no payments to recover. 

In our 2014 report, we found that, upon testing, FNS's recommended 

approaches to detecting online fraud were of limited utility and selected 

states had limited success with using FNS's required approach to 

replacement card monitoring. Specifically, we found that FNS provided 

states with guidance on installing free web-based software tools for 

monitoring certain e-commerce and social media websites for online 

sales of SNAP benefits, but some officials from the selected states 

reported problems with these detection tools. 13 According to FNS, these 

tools could automate the searches that states would normally have to 

perform manually on these websites, which states reported as being 

cumbersome and difficult given limited resources. Of the 11 states we 

reviewed, officials from only one reported that the tool worked well for 

identifying SNAP recipients attempting to sell their SNAP benefits online. 

At the time of our review, FNS officials acknowledged that there were 

limitations to the monitoring tools, and stated that they provided these 

tools at the request of states to help with monitoring efforts. 

In 2014, we tested these automated detection tools for certain periods of 

time on selected geographical locations covering our selected states and 

found them to be of limited effectiveness for states' fraud detection 

efforts. For example, our testing of the recommended automated tool for 

monitoring e-commerce websites found that the tool did not detect most 

of the postings found through our manual website searches. Specifically, 

out of 1,180 postings we reviewed manually, we detected 28 postings 

indicative of potential SNAP trafficking. Twenty-one of these 28 postings 

were not detected by FNS's recommended monitoring tool. 14 We also 

found the automated tool for monitoring social media websites to be 

impractical for states' fraud detection efforts, given that, for example, it 

could not be tailored to a specific location. We concluded that this could 

13 The tools employ Really Simple Syndication (RSS) technology, which is designed to 

keep track of frequently~updated content from multiple websites and automatically notify 

users of postings that contain key words, 

14 These postings advertised the potential sale of food stamp benefits in exchange for 

cash, services, or goods. 

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Targeted Analysis of 

Excessive Replacement 

Cards Found Potential 

Recipient Trafficking 

have potentially limited a state's ability to effectively determine whether 

the postings detected were relevant to the state's jurisdiction. 

In 2014, we also reported that FNS required that states examine 

replacement card data as a potential indicator of trafficking, but state 

officials we interviewed reported difficulties using the data as a fraud 

detection tool. In 2014, FNS finalized a rule requiring states to monitor 

replacement card data and send notices to those SNAP households 

requesting excessive replacement cards, defined as at least four cards in 

a 12-month period. Officials we interviewed in the 11 states reviewed 

reported tracking recipients who make excessive requests for 

replacement EBT cards, as required by FNS, but said they had not had 

much success in detecting fraud through that method. Specifically, 

officials in 4 states reported that they had not initiated any trafficking 

investigations as a result of the monitoring, officials in 5 states reported 

low success rates for such investigations, and officials in 1 state reported 

that they had just started tracking the data. Officials in only 1 state 

reported some success using the data to detect potential trafficking. 

Furthermore, officials from 7 of the 11 states we reviewed reported that 

the current detection approach specified by FNS often led them to people 

who had made legitimate requests for replacement cards for reasons 

such as unstable living situations or a misunderstanding of how to use the 

SNAP EBT card. At the time of our report, FNS was aware of states' 

concerns about the effectiveness of this effort, but continued to stress that 

monitoring these data was worthwhile. 

We found that while all of the selected states reported analyzing SNAP 

replacement card data to detect fraud as required by FNS, 15 a more 

targeted approach to analyzing high-risk replacement card data 

potentially offered states a way to better use the data as a fraud detection 

tool. Specifically, we analyzed fiscal year 2012 replacement card data in 

three selected states-Michigan, Massachusetts, and Nebraska-using 

an approach aimed at better identifying SNAP households requesting 

replacement cards that are at higher risk of trafficking benefits. Our 

approach took into account FNS's regulation that defined excessive 

15 In 2014, FNS finalized a rule that requires states to monitor replacement card data and 

send notices to those SNAP households requesting excessive replacement cards, defined 

as at least four cards in a 12-month period. 

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replacement cards as at least four requested in a 12-month period. 

However, we also considered the monthly benefit period of replacement 

card requests by focusing on SNAP households receiving replacement 

cards in four or more unique monthly benefit periods in a year. Based on 

our analysis, we determined that because SNAP benefits are allotted on a 

monthly basis, a recipient who is selling the benefits on their EBT card 

and then requesting a replacement card would generally have only one 

opportunity per month to do so. Thus, if a SNAP recipient was requesting 

a replacement card because they had just sold their EBT card and its 

associated SNAP benefits, it was unlikely that there would be more 

benefits to sell until the next benefit period. As a result, we determined 

that additional replacement card requests in the same benefit period may 

not indicate increased risk of trafficking. 

Using this approach in the three selected states, our 2014 analysis 

reduced the number of households that should be considered for further 

review compared to the FNS requirement that states look at replacement 

cards replaced four or more times in 12 months. We then reviewed fiscal 

year 2012 transaction data for this smaller number of households to 

identify suspicious activity that could indicate trafficking. 16 We identified 

7,537 SNAP recipient households in these three selected states that both 

received replacement cards in four or more monthly benefit periods in 

fiscal year 2012, and made at least one transaction considered to be a 

potential sign of trafficking around the time of the replacement card 

issuance, as shown in the table below. We found that these 7,537 

households made over $26 million in total purchases with SNAP benefits 

during fiscal year 2012. (see table 3.) 

16 Specifically, we analyzed the data for trafficking indicators based on suspicious 

transaction types already used by FNS and state SNAP officials, We tested for six 

different suspicious transaction types, including large-dollar transactions and even-dollar 

transactions. 

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Table 3: GAO's Analysis of SNAP Households Receiving Excessive Replacement 

Cards and Making Transactions Potentially Indicative of Trafficking In Fiscal Year 

2012 

4ormore Replacement Suspicious transactions 

replacement cards in 4 or more and cards in 4 or more 

cards benefit periods benefit periods 

Michigan 8,190 4,935 3,183 

Massachusetts 6,380 4,786 4,008 

Nebraska 697 549 346 

Total 15,267 10,270 7,537 

Source GAO anaiysis of Supplementet Nutnlion Assistance Progra1n (SNAP) transaclion data. I GA0-16-719T 

We also found that by comparing the number of benefit periods with 

replacement cards and the total number of transactions flagged for 

potential trafficking, states may be able to better identify those 

households that may be at higher risk of trafficking. For example, as 

shown in the figure below, while there were 4,935 SNAP households in 

Michigan that received an excessive number of replacement cards, we 

identified just 39 households that received excessive replacement cards 

and made transactions resulting in 1 0 or more trafficking flags. We 

concluded in 2014 that while state SNAP officials may not want to limit 

their investigations to such a small number of households, this type of 

analysis may help provide a starting point for identifying higher priority 

households for further review. Furthermore, we reported that our more 

targeted approach may also be particularly helpful given that states had 

limited resources for conducting investigations. 

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Figure 2: Targeting Potential Supplemental Nutrition Assistance Program (SNAP) Benefit Trafficking Using Replacement Card 

and Transaction Data to Identify Higher Risk Households in Michigan, Fiscal Year 2012 

Michigan SNAP households receiving replacement cards in Fiscal Year 2012 By taking a targeted approach to analyzing replacement card data !n conjunction with related transaction data. 

we Identified those households receiving excessJve replacement cards that may be at hlgher risk of trafficking 

SNAP households receiving 4 or more replacement cards in Fiscal Year 2012 ------

SNAP households with replacement cards in 4 or m-ore monthly benefit periods 

SNAP households with replacement cards in 4 or more benefit pertods 

that also made suspicious transactions, indicating potential trafficking 

In 2014, We Reported that 

FNS Had Increased Its 

Oversight of State AntiFraud Activities but 

Lacked Reliable Data on 

These Efforts 

In 2014, we reported that FNS had increased its oversight of state antifraud activities in recent years by issuing new regulations and guidance, 

conducting state audits, and commissioning studies on recipient fraud 

since fiscal year 2011. For example, in fiscal year 2013, for the first time, 

FNS examined states' compliance with federal requirements governing 

SNAP anti-fraud activities through Recipient Integrity Reviews. These 

assessments included interviews with state officials, observations of state 

hearing proceedings, and case file reviews in all 50 states and the District 

of Columbia. Following these reviews, FNS regional officials issued state 

reports that included findings and, where appropriate, required corrective 

actions. 

Despite these efforts, at the time of our report, FNS did not have 

consistent and reliable data on states' anti-fraud activities because its 

reporting guidance lacked specificity. For example, through our review of 

the 2013 Recipient Integrity Review reports, we also found that FNS had 

a nationwide problem with receiving inaccurate data on state anti-fraud 

activities through the Program and Budget Summary Statement {Form 

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FNS Is Working to 

Address GAO 

Recommendations to 

Enhance Detection 

Tools and Reporting 

FNS-3668). Some federal and state officials we interviewed recognized 

that there was not a consistent understanding of what should be reported 

on the FNS-3668 form because the guidance from FNS was unclear. For 

example, on the form in place during the time of our report, FNS 

instructed states to report investigations for any case in which there was 

suspicion of an intentional program violation before and after eligibility 

determination. According to state and federal officials we interviewed, this 

information did not clearly establish a definition for what action constitutes 

an investigation and should then be reported on this form. 

After reviewing states' reports, we found examples of inconsistencies in 

what states reported as investigations on the FNS-3668 forms. 

Specifically, in fiscal year 2009, one state had about 40,000 recipient 

households, but reported about 50,000 investigations. During the same 

year, another state that provided benefits to a significantly larger 

population (about 1 million recipient households) reported about 43,000 

investigations. Officials from the state that served the smaller population, 

but had the larger number of investigations, explained that they included 

investigative activities such as manually reviewing paper files provided by 

the state's Department of Labor for each SNAP recipient with reported 

wages in the state. Officials from the state that served the larger 

population said that they counted the number of times a potential fraud 

case was actively reviewed by investigators, including interviews with 

witnesses and researching of related client information. Given these 

differences, state officials said that FNS and states were not able to 

compare program integrity performance because there was no 

standardization of data collection across states. 

As a result of our 2014 findings, we made several recommendations, and 

FNS officials agreed with all of these recommendations and are taking 

actions to address them. Specifically, we recommended that the 

Secretary of Agriculture direct the Administrator of FNS to: 

explore ways that federal financial incentives can better support costeffective state anti-fraud activities; 

establish additional guidance to help states analyze SNAP transaction 

data to better identify SNAP recipient households receiving 

replacement cards that are potentially engaging in trafficking, and 

assess whether the use of replacement card benefit periods may 

better focus this analysis on high-risk households potentially engaged 

in trafficking; 

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reassess the effectiveness of the current guidance and tools 

recommended to states for monitoring e-commerce and social media 

websites, and use this information to enhance the effectiveness of the 

current guidance and tools: and 

take steps, such as guidance and training, to enhance the consistency 

of what states report on their anti-fraud activities. 

While FNS agreed with the recommendations and is taking steps to 

address them, it has yet to fully develop the detection tools and improved 

reporting methods that would address these recommendations. 

To explore ways to provide better federal financial incentives, FNS 

reported it published a Request for Information in the Federal Register in 

2014 to solicit state and other stakeholder input on how it could more 

effectively incentivize states to improve overall performance, including in 

the area of program integrity, with new bonus awards. However, more 

recently, FNS officials reported that, based on the feedback from this 

process, they have decided not to pursue bonus awards for anti-fraud and 

program integrity activities at this time. At the time of our 2014 report, 

FNS officials also stated they could not make changes in the state 

retention rate for overpayments without a change to federal law. 

FNS officials reported that they have provided states with technical 

assistance for how to effectively utilize replacement card data as a 

potential indicator of trafficking. Specifically, FNS has worked with seven 

SNAP state agencies: New York (Onondaga County), Pennsylvania, 

South Carolina, Wisconsin (Milwaukee County), California (Los Angeles 

County), Kansas, and Texas to help these states more effectively identify 

SNAP recipient trafficking, using models that incorporate predictive 

analytics. FNS officials stated that the models use a variety of eligibility 

and transaction data, including replacement card data, and have 

demonstrated a significant improvement in effectiveness in these states. 

According to FNS officials, over 90 percent of South Carolina's 

investigations of potential trafficking resulted in disqualifications from 

SNAP, which FNS officials stated is an increase of 29 percent from the 

state's investigation success rate prior to using FNS's model. Based on 

these state results, FNS officials stated that FNS was targeting four 

additional states in fiscal year 2016 for technical assistance in 

implementing the model: Arizona, the District of Columbia, Utah, and 

Washington. Furthermore, as of May 2016, FNS officials had reported 

that FNS is conducting a training program for state technical staff to teach 

them how to build predictive models that incorporate the use of card 

replacement data. 

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FNS officials also reported that they continue to provide technical 

assistance to states on the effective use of social media and e-commerce 

monitoring and have further studied the use of these tools. Most recently, 

FNS officials reported that, in 2016, the agency conducted an analysis to 

evaluate states' current use of social media in their detection of SNAP 

trafficking. Based on the information gained through this analysis, FNS 

officials reported that they plan to determine how best to present further 

guidance to state agencies on using social media to combat trafficking. 

As of May 2016, FNS had also redesigned the form FNS-366B used to 

collect consistent recipient integrity performance information and 

submitted a draft to the Office of Management and Budget (OMB). FNS 

officials anticipate OMB approval of the revised form prior to the end of 

fiscal year 2016, and the form is expected to be implemented in fiscal 

year 2017. FNS reported it published an interim final rule on January 26, 

2016, (effective March 28, 2016), changing the reporting frequency of the 

form from an annual submission based on the state fiscal year to a 

quarterly submission based on the federal fiscal year. To date, FNS 

officials reported that they provided 4 separate trainings to approximately 

400 state agency and FNS regional office personnel, covering the new 

and modified elements of the final draft form and the corresponding 

instructions. 

In conclusion, the challenges that states have faced in financing and 

managing recipient anti-fraud efforts heighten the need for more efficient 

and effective tools for safeguarding SNAP funds. In order to provide 

useful guidance to best guide states in these efforts, FNS officials need 

reliable information on what can currently be done with available federal 

and state resources. As of May 2016, FNS officials have reported 

progress in studying current anti-fraud approaches and developing better 

data on them but are still in the process of developing the final tools and 

guidance for enhancing the integrity of the SNAP program. 

Chairmen Meadows and Lummis, Ranking Members Connolly and 

Lawrence, and Members of the Subcommittees, this completes my 

prepared statement. I would be pleased to respond to any questions you 

may have at this time. 

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GAO Contact and 

Staff 

Acknowledgments 

{100887) 

If you or your staff have any questions about this statement, please 

contact Kay Brown, Director, Education, Workforce, and Income Security 

Issues, at 202-512-7215. Contact points for our Offices of Congressional 

Relations and Public Affairs may be found on the last page of this 

statement. GAO staff who made key contributions to this statement 

include James Bennett, Kate Blumenreich, Alexander Galuten, Danielle 

Giese, Scott Hiromoto, Kathryn Larin, Flavio Martinez, Jessica Orr, 

Deborah Signer, Almeta Spencer and Shana Wallace. 

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43 

Mr. MEADOWS. Thank you, Ms. Brown. 

Ms. Mayhew, you are recognized for 5 minutes, but before you 

start, I wanted to just say it was interesting to hear from your 

Governor about really leaving the home in an unbelievable age of 

11 to go out and—so someone who has experienced poverty firsthand and now has raised to the highest level of the executive government in the State of Maine is a great story about American 

greatness. So, Ms. Mayhew, you are recognized for 5 minutes. 

STATEMENT OF MARY MAYHEW 

Ms. MAYHEW. Thank you, Chairman Meadows and members of 

the subcommittees. I appreciate the invitation to be here today to 

share some of our key welfare reforms that have helped to deter 

fraud, protect benefits for the truly needy, and guard against waste 

of precious taxpayer dollars. 

When Governor LePage took office in 2011, he prioritized reforming Maine’s welfare programs to help lift families and individuals 

out of poverty and away from welfare dependency. Program integrity and accountability are critical to those reforms. There is no 

doubt that fraud exists in these programs, and every dollar that is 

diverted through fraudulent and criminal activity is a dollar taken 

away from a child or a family in need. The programs we have put 

in place to reduce fraud and abuse help to ensure that taxpayer 

dollars are reaching those in need, not fueling criminal activity. 

Our program integrity efforts have focused on data analytics, engagement with law enforcement, and commonsense measures to 

guard against fraud and abuse. I want to share a few of our efforts 

and make some suggestions for further improvements in the SNAP 

program. We have provided a number of recommendations attached 

to my testimony. 

Working with local law enforcement officials, we found regular 

instances of multiple EBT cards recovered in drug busts. In most 

cases, the cards are not issued to the suspects who are holding 

them. We know there is an unfortunate connection between benefits trafficking and the drug trafficking world, but current Federal 

SNAP regulations often create barriers to pursuing these traffickers. FNS rules provide that if someone has the EBT card and 

the PIN, they are considered an authorized user of the card. Regulations should require authorized users to register with the welfare 

agency and be limited to no more than three per case, similar to 

WIC. 

Under Federal law, States have the option of placing photos on 

EBT cards. Maine pursued this option to help address the trafficking in EBT cards for drugs or cash. When someone’s picture is 

on their card, it follows that they are less likely to sell it or trade 

it. Maine’s photo EBT program is voluntary, and we currently have 

about 60,000 cards with photos out of 101,000 SNAP cases. 

While this is a legal option for all States, myriad regulations and 

rules place a chilling effect on States that may be considering 

photos. This basic protection against fraud and abuse should be 

streamlined so States can implement this reform without undue 

burden. It would also be a reasonable step to require States to 

place photos on their EBT cards to deter fraud. 


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44 

In 2011, Maine had more than $15 million in welfare benefits 

spent outside of Maine, including significant amounts in places like 

the Bronx, Brooklyn, Philadelphia, and Worchester, Massachusetts. 

Our drug enforcement agents in Maine have been clear that these 

cities are hubs for heroin trafficking and other drugs which flow up 

the I–95 corridor to Maine. 

Our data system identifies anyone using a Maine EBT card exclusively in another State for 2 consecutive months. We then follow 

up to confirm Maine residency and appropriate use of the benefit. 

Our efforts have reduced out-of-state use, but the data still shows 

uses of SNAP benefits in places all over the country like New York, 

California, and Florida. Federal regulations don’t currently allow 

States to restrict SNAP benefits to certain geographic areas. We 

believe there should be some reasonable restrictions on the mobility of EBT cards. 

Often, what SNAP benefit cards are trafficked, it is in conjunction with a SNAP-approved retailer who’s helping turn the card to 

cash that can be used to purchase things other than food. In a recent Maine case of suspected retailer fraud, a small store with just 

one cash register had SNAP reimbursements totaling nearly that 

of a large local Hannaford grocery store with 18 cash registers. We 

found numerous purchases of $300 and above in this small store 

that had no grocery carts. This same store is suspected of trading 

cash for EBT cards and helping SNAP participants commit tax 

fraud. 

States do not have the authority to remove noncompliant or 

fraudulent stores from SNAP participation. To assist with this 

problem, States should be given the authority to investigate and remove offending retailers similar to WIC. All States should operate 

robust welfare fraud investigation units. To incentivize this, States 

should be allowed to retain 50 percent of funds collected from welfare fraud overpayments instead of the current 35 percent. 

Additionally, Federal rules should require that recipients cooperate with State welfare fraud investigators if there is a credible allegation of fraud or risk losing their benefits. Maine is determined 

to address the issue of fraud and to protect benefits for our neediest residents. States need additional tools. Federal laws and rules 

should allow and encourage States to pursue meaningful program 

integrity efforts without unnecessary barriers. 

Today, policies that combat fraud are too often sacrificed in the 

name of convenient and expeditious access to welfare benefits. We 

hope that Congress and the Federal Government will give serious 

consideration to our suggested reforms and will work to ensure 

that laws and regulations give States a fighting chance against 

fraud and criminal activity. Thank you. 

[Prepared statement of Ms. Mayhew follows:] 


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Statement of 

Mary Mayhew 

Commissioner, Maine Department of Health 

and Human Services 

SNAP: Examining Efforts to Combat Fraud 

and Improve Program Integrity 

The Government Oversight Committee 

Subcommittees for Government Operations 

and The Interior 

June 9, 2016 
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Good afternoon Chairman Meadows, Chairwoman Lummis, Ranking Members Connolly and 

Lawrence and members of the subcommittees on Government Operations and The Interior. My 

name is Mary Mayhew and I serve as the Commissioner of the Department of Health and Human 

Services (DHHS) in Maine for Governor Paul LePage. Maine's DHHS has a budget of$3.4 

billion annually and manages the Medicaid program, Temporary Assistance for Needy Families, 

(TANF), Supplemental Nutritional Assistance Program (SNAP/Food stamps), child welfare, 

child support enforcement, child care subsidy program, mental health and substance abuse 

programs and services, aging and disability services, and public health. I have had the privilege 

to serve in this role since 2011. 

I appreciate the invitation to be here today and I'm grateful for the opportunity to share with you 

some of Maine's key reforms to our welfare programs that have helped to deter fraud, protect 

benefits for the truly needy and secure taxpayers peace of mind that their tax dollars aren't being 

wasted. 

I also want to make some suggestions for ways in which we can work together to combat 

fraudulent benefits schemes that are defrauding taxpayers and hurting the truly needy that rely on 

government assistance. 

I am a product of Maine's true values of a strong work ethic and sacrifice. My father and his six 

siblings were raised by a widowed single mother in the aftermath of the Great Depression. My 

grandmother worked every job imaginable, from paving driveways to planning weddings, to 

provide for her family, and was simultaneously a source of great charity in her town. My 

parents similarly worked tirelessly to support a family of six, my mother was a nurse's aide at the 

local hospital and my father worked at a nearby factory in the small town of Pittsfield, Maine. 

They worked to support our family with basic priorities of food on the table and a roof over our 

heads. And they instilled in me the importance of personal responsibility and the value of work. 

With that as a backdrop, I take seriously my role as Commissioner of Maine's Department of 

Health and Human Services (DHHS) to promote pathways of prosperity that encourage 

independence and self-sufficiency through the support of the safety net programs administered 

by Maine DHHS. When Governor LePage took office in 2011, he was intent on reforming 

Maine's welfare programs to address the serious plight of too many families and individuals 

trapped in welfare dependency. The Governor's focus has been on advancing meaningful 

reforms to transform lives and lift people out of poverty. 

Our approach has been multifaceted but has been rooted in these principles: that safety net 

programs must serve the most vulnerable, help people achieve their dreams of independence, and 

utilize every dollar in support of basic necessities. President Franklin Roosevelt said in his 1935 

State of the Union address: "continued dependence upon relief induces a spiritual disintegration 

fundamentally destructive to the national fiber. To dole our relief in this way is to administer a 

narcotic, a subtle destroyer of the human spirit." We talk about the American dream but then too 

often design welfare programs that trap people in a nightmare of poverty, dependency and 

despair. 

For years Maine DHHS had reeled from one financial crisis to the next focusing on filling budget 

shortfalls and managing in a perpetual state of crisis. We have spent the last five years 

stabilizing the financial foundation, aligning our limited taxpayer resources with core priorities, 

Mary Mayhew Government Oversight Sub-Committee Testimony- June 9, 2016 Page 2 of7 
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and establishing a significant focus on program accountability and performance through data 

analytics. This effort includes making sure that every dollar is spent efficiently, for our most 

vulnerable individuals and families, and for the intended purpose. 

Today I want to focus on our efforts to apply these same principles to our management of the 

welfare programs and specifically food stamps, also known as the Supplemental Nutrition 

Assistance Program (SNAP). We cannot turn a blind eye to the vulnerabilities and susceptibility 

to fraud and abuse within the food stamp program and the destructive nature of that fraud and 

abuse to our mutual goals of helping vulnerable individuals and families with the purchase of 

nutritional food. 

There is no doubt that fraud exists in these programs. Certainly any program of this magnitude is 

susceptible to fraud and abuse and we have a responsibility to protect these programs in support 

of their intended purpose. What we must never forget is that the benefits under discussion today 

are intended for the truly needy- and every dollar that is diverted through fraudulent and 

criminal activity is a dollar taken away from a child in need or a vulnerable adult. 

When a convenience store trades an Electronic Benefits Transfer (EBT) card for cash that is used 

to purchase a pack of cigarettes instead of fresh fruits and vegetables, that represents a child 

going to school hungry. When a drug dealer trades an EBT card for heroin, that represents yet 

another life traveling further down the path of personal destruction and not self-sufficiency. 

Because I also oversee the state's child welfare program, I see as well the destructive impact of 

drugs on our young families where more than 60% of children come into the state's protective 

custody because of parental substance abuse. It is imperative that we take seriously the 

connection between this crisis and the trafficking of EBT cards for drugs and cash. 

States and the federal government should work hand-in-hand to ensure that fraudulent and 

criminal activity is investigated thoroughly and any avenues allowing exploitation of these 

programs are shut down. Just as we work to identify and close breaches used by hackers to steal 

our identities and financial data, a similar approach is vital in protecting welfare programs. It is 

essential that for continuous process improvement we examine all aspects of these programs to 

assess whether it is performing consistent with its stated goals, is financially efficient, and 

compliant with all program integrity requirements. 

When I compare the amount of data analysis we do and are expected to do to prevent against 

fraud and abuse in Medicaid, it is difficult to explain why the same level of public transparency 

and program integrity is not integral to the management of SNAP. We must ask the tough 

questions and find the right answers to keep SNAP clean of criminal activity and exploitation. 

The programs we have put in place to reduce fraud and abuse do not create a heavy burden on 

recipients. Instead, they help to ensure that precious taxpayer dollars are reaching the truly 

needy, not fueling criminal activity or enabling illegal drug buys. 

For background purposes, when Governor LePage took office in January 2011, Maine had a 

record 250,000 people on SNAP with annual expenditures on benefits of $330 million out of a 

population of 1.3 million people. To strengthen the program integrity of SNAP in the best 

interests of protecting this safety net program for its intended purpose and for those eligible, we 

have focused on data analytics, engagement with local law enforcement, common sense 

Mary Mayhew Government Oversight Sub-Committee Testimony- June 9, 2016 Page 3 of7 
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measures to guard against fraud, and areas of federal reform that would support our mutual 

efforts to support this safety net program. 

Authorized Users 

When we dug into the welfare fraud problem what we found was alarming. Working with law 

enforcement officials we found all-too regular instances of multiple EBT cards recovered in drug 

busts. On these occasions police often found five or more EBT cards, none that had been issued 

to the arrested person. 

In a recent case in Maine a 33 year old man was arrested in a drug raid that found crack cocaine, 

guns, cash and 5 EBT cards. The EBT cards were all in the name of someone other than drug 

dealer arrested. One of the cards issued had been re-issued to the recipient 47 times in a span of a 

few years. 

In another similar case last year in Maine a drug felon was accepting SNAP-loaded EBT cards as 

payment for the illicit drug Fentanyl, which is 50 times more potent than heroin and responsible 

for thousands of overdose deaths. 1 

We know there is a very unfortunate and direct counection between benefits trafficking and the 

drug-trafficking world, but federal SNAP regulations often create barriers to pursuing cases 

against these traffickers. FNS rules state categorically that if someone has the EBT card and the 

PIN, FNS considers them an authorized user of the EBT card. 

Law enforcement officials give us examples of persons arrested with drugs and EBT cards who 

tell them they are going grocery shopping for the person whose name is on the card. Because of 

the regulation, there is little we can do to stop that practice. The regulation should be changed to 

require authorized users to register as such with the welfare agency overseeing the program and 

should be limited to no more than three per case at any given time.2 

This is similar to how the Woman, Infants and Children (WIC) program operates currently in 

Maine, which is also administered by Maine DHHS, and is permitted under federal regulation. 

Users of the WIC benefit can have only two "proxies" ala given time who must register with the 

WIC agency. 

Photos on EBT 

Another key strategy in Maine's mission to deter welfare fraud has been to place photos on our 

EBT cards. This is a common sense measure that provides protection against trafficking or theft. 

When someone's picture is on their card, it only follows that they are less likely to sell it for cash 

or trade it for drugs. We have seen the results- while EBT cards still turn up in drug-related 

arrests too often, we don't see EBT cards with photos turning up in those raids. 

In Maine, we run a voluntary program for photo EBT's. We invite individuals to participate by 

having their photo placed on their EBT card. While the program isn't mandatory at this time, we 

have over 59,700 photos for EBT cards out of 101,500 SNAP cases. 

1 http://www.cdc.gov/drugoverdose/data/fentanyl.html 

'Attachment A- Food Stamp Program Problems and Recommendations section 3 on page 2 

Mary Mayhew Government Oversight Sub-Committee Testimony -June 9, 2016 Page4of7 
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Some concerns raised during implementation centered on how this might unduly burden the 

disabled and elderly. However we have learned that the disabled and elderly in particular are 

agreeable to having their photo on their card, recognizing it can help protect their benefit. Of the 

59,000 with a photo, 53% are age 50 and above while 40% of photos are requested by disabled 

persons. 

While it is currently an option for states to place photos on their EBT cards, myriad regulations 

and rules place a chilling effect on states that may be considering the option. This basic 

protection against fraud and abuse should be streamlined so states are able to implement it 

without undue burden. It would be a reasonable program integrity measure to require states to 

place photos on their EBT cards to deter fraud. 3 

EBT Data and Out of State EBT Usage 

Another key to fighting welfare fraud is for states to have an elevated focus on EBT card 

transactional level data. While most states have access to EBT data, many may not regularly 

research that information at the transactional level. This is critically important to fmd red flags 

for fraud. States should operate systems that give them ready access to analyze their data. 

In Maine, we have found that out of state usage of our EBT cards is a major warning sign of 

fraudulent activity. In 2011, Maine had more than $15 million in welfare benefits spent outside 

of Maine, including significant amounts in places like the Bronx, Brooklyn, Philadelphia and 

Worcester, Massachusetts.4 Our Law Enforcement partners informed us these are known drug 

trafficking cities, with heroin and other drugs flowing up the I-95 corridor to Maine. 

Our data analytics software alerts us when someone has used a Maine EBT card exclusively in 

other states for two consecutive months. We then follow up with the client to ensure there is no 

inappropriate use and that they still reside in Maine. By working with this EBT data extensively, 

we cracked down on inappropriate out of state welfare use. As a result, out of state usage of 

Maine EBT cards has been reduced to $8 million a year. 

Unfortunately, the data still shows regular usage of SNAP benefits in places all over the country, 

like Brooklyn, New York, California and the Walt Disney World area of Florida. Federal 

regulations don't currently allow states to restrict SNAP benefits to certain geographic areas. We 

don't believe it is right for Maine SNAP benefits to be spent by someone living outside of Maine 

and we see the connection between interstate usage ofEBT and fraud. We believe there should 

be some reasonable restrictions on the mobility of EBT cards. 5 

Retailer Fraud and Non-compliance 

Often when SNAP benefits cards are trafficked it is in conjunction with a SNAP approved 

vendor who is helping turn the card to cash that can be used to purchase things other than food. 

In some cases, the offending stores are small "convenience" type stores. There are many of these 

stores participating in the SNAP program that may not be meeting the goals of the "nutrition" 

program based on their real food inventories. 

3 Attachment A- Food Stamp Program Problems and Recommendations section 4 on page 3 4 Attachment B-Maine EBT Out-of-State Usage, Maine DHHS 5 Attachment A- Food Stamp Program Problems and Recommendations section 9 on page 5 

Mary Mayhew Government Oversight Sub-Committee Testimony- June 9, 2016 Page 5 of7 
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For example, in one Maine case of suspected retailer fraud this year, a small store with just one 

cash register had SNAP reimbursements totaling nearly that of a large local Hannaford chain 

grocery store with 18 cash registers. We were alerted to the potential fraud because our data 

tracking found numerous instances of $300 and above purchases in this small store that had no 

grocery carts to carry out that amount of produce. The same store is suspected of trading cash for 

EBT cards and helping SNAP participants commit tax fraud. 

The current investigation into that store also revealed extremely low levels of real food items. 

There were recent improvements in the Farm Bill to require a higher minimum of real food items 

in participating stores and we support those changes. 

Retailer Oversight 

In the case that a store is committing fraud or is in non-compliance with food standards, states do 

not have the authority to remove them from SNAP participation. We rely on the federal 

government for that function. The investigator we have in our region does a great job, but we 

know that USDA is resource constrained in our region in terms of investigating and disqualifying 

offending stores. Only 8 stores in Maine have been sanctioned since 2011. 

It would be helpful to give states the ability to investigate and remove offending stores. By 

deputizing state partners in this way, it would increase the capacity to identify stores committing 

fraud and act to remove them from SNAP. States are currently able to remove fraudulent WIC 

vendors from participation and that model should be replicated in SNAP. This may also allow for 

greater frequency in compliance inspections to assist in oversight of SNAP vendors. 6 

Multiple Replacement EBT cards 

We also found that often EBT cards had been reissued to the recipient multiple times in a given 

year, which is a significant red flag for fraud. As in the example cited above, a card that turned 

up in the possession of a drug dealer had been issued to a person 47 times. Federal rules allow 

states to restrict re-issuance of cards to require contact after the fourth card in a year, and Maine 

has recently taken that option. However this should be stricter, allowing intervention after the 

second card in a year and by allowing states to require face-to-face contact in order to receive 

subsequent cards, which can only be required now through an FNS waiver. 7 

State Fraud Investigations 

In 2011, Maine more than doubled our number of welfare fraud investigators, from eight to 

seventeen. By focusing on welfare fraud, Maine has increased the number of referrals for 

prosecution of criminal level fraud from just four the year Governor LePage took over, to more 

than I 00 last year. We think it is prudent for all states to operate a dedicated welfare fraud unit. 

However, states hands are somewhat tied in what can be prosecuted. States can't mandate 

recipients to cooperate with a fraud investigation. The federal government should require that, as 

6 Attachment A- Food Stamp Program Problems and Recommendations sections 7 and 8 on page 4 7 Attachment A- Food Stamp Program Problems and Recommendations section 6 on page 3 

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a condition of eligibility, recipients must cooperate with state welfare fraud investigators if there 

is a credible allegation of fraud or risk losing their benefits. 8 

Also, allowing states to retain 50% of funds collected from welfare fraud overpayments instead 

of the 35% currently allotted in regulation, would increase the incentive to investigate fraud and 

allow for reinvestment into important data mining technology and additional investigators.9 

Conclusion 

Welfare enrollment, particularly in SNAP, has had explosive growth since 2000. SNAP has 

grown from 17 million to 45 million people. 10 Welfare fraud has followed the trend and in Maine 

we've seen a disturbing and strong connection to the drug problem. 

We can't sit idly by as taxpayer funded programs help fuel the drug trade through trafficking or 

divert scarce resources away from hungry children and needy families. We have an obligation to 

deter fraud, protect benefits for the truly needy and secure taxpayer's peace of mind that their 

money isn't being wasted. 

Maine is determined to address the issue of fraud and to protect benefits for the truly needy. I 

believe Maine has been successful in the deliberate and strategic implementation of these 

important safeguards to combat this growing problem. 

States need additional tools to combat this growing problem. Federal laws and rules should allow 

and encourage states to pursue meaningful program integrity efforts without unnecessary 

barriers. Today, policies that combat fraud are too often sacrificed in the name of convenient 

access to welfare benefits. 

We hope that Congress and the federal government will give serious consideration to our 

suggested reforms and will work to ensure that laws and regulations give states a fighting chance 

against fraud and criminal activity. Thank you for the opportunity to appear before you today, 

and for your continued support of the great State of Maine. I look forward to answering your 

questions. 

8 Attachment A- Food Stamp Program Problems and Recommendations section 9 on page 5 9 Attachment A- Food Stamp Program Problems and Recommendations section 14 on page 6 10 http://www.fns.usda.gov/sites/default/files/pd/SNAPsummary.pdf 

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STATEMENT 

SECRETARIES' INNOVATION GROUP 

Endorsed by Members, November 19, 2014 Meeting, Washington DC 

One out of every seven Americans currently receives Food Stamps. The Supplemental Nutrition 

Assistance Program (SNAP), which is known as Food Stamps, has quadrupled in cost since 2001, 

and has doubled in cost since President Obama took office in 2008. States face an uphill battle 

on reforming this program. Federal regulations and laws are not designed to best ensure 

integrity and effectiveness in the program, and the federal administering agency, Food 

Nutrition Service {FNS) puts up roadblocks to reform whenever possible. 

A common sense approach is needed in Washington D.C. to allow states the ability to ensure 

welfare benefits are being used appropriately. Despite intense opposition, States have made 

significant strides in some areas to tackle fraud, waste and abuse in the system. For instance, 

several states have implemented photos on Electronic Benefits Cards (EBT) and are requiring 

working-age, non-disabled adults to meet work requirements. 

Measures underway by states, and the reforms proposed below are aimed at deterring fraud, 

protecting legitimate beneficiaries and securing taxpayer's peace of mind that the Food Stamp 

program is best serving the people of the United States. With the help of reform-minded voices 

in Congress, States can move forward with significant and meaningful reforms to this important 

program. 

FOOD STAMP PROGRAM PROBlEMS AND RECOMMENDED SOlUTIONS 

1) The "Nutrition" program allows the purchase of soda, candy and other harmful products 

PROBlEM: The Supplemental Nutrition Assistance Program is intended to subsidize 

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nutrition for needy families. Instead it is fueling the Obesity problem in America. Too many 

recipients are utilizing their benefit to purchase items that are not only void of nutrition, 

they are damaging to their health. "More than one-third of adults and 17% of youth in the 

United States are obese," according to the Journal of the American Medical Association. 1 

The Obesity epidemic, driven in part by poor choices in Food Stamp purchasing, costs the 

U.S. and states billions of dollars. According to a Health Affairs study, the medical costs 

associated with Obesity are an estimated $147 billion in 2008.2 This massive spending 

certainly includes state's Medicaid programs, which is a major cost driver in state and 

federal budgets. 

Examples of real purchases made in Maine in 2013 with SNAP benefits: 

Multiple Red Bulls 

RockStar Energy Drinks 

1-LB Bag of Reese's Peanut Butter Cups 

3 gallons of Hershey's Ice Cream (one purchase) 

SOLUTION A: Recommend that allowable SNAP purchases mirror allowable purchases in the 

Women, Infants and Children (WIC} program. SNAP purchases should be healthy and 

nutritious choices. 

SOLUTION B: At a minimum, ban the purchase of harmful products with no nutritional value 

that are commonly purchased at "convenience" stores, like energy drinks and other sugarsweetened drinks (Red Bull, RockStar, Mountain Dew) and candy. 

2) Key SNAP purchase data is not available to States 

PROBLEM: Micro-level transaction data which shows how SNAP benefits are being spent is 

not available to the States because the United States Department of Agriculture (USDA) 

Food and Nutrition Service (FNS) does not allow its capture or dissemination. This data 

would provide an objective, measurable picture of where reforms are needed to ensure the 

program is effective in providing essential nutrition for those in need. 

SOLUTION: Require FNS and SNAP-EBT vendors (i.e. Xerox) to capture all SNAP transactionlevel data and make it available to States. Transparency on how SNAP dollars are spent 

(Mountain Dew vs. Milk) is important to inform program officials, legislators and the public 

on what changes are needed in the program to ensure its effectiveness. 

3) EST card traffickers can easily avoid prosecution 

PROBLEM: Electronic Benefit Transfer (EBT) cards are regularly trafficked for cash and illegal 

1 http:/ /jama.jamanetwork.com/article.aspx?articleid=1832542 2 http:/ I content.healthaffairs.org/ content/28/5/w822. full, pdf+html 

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drugs. A suspected trafficker encountered by Law Enforcement might have multiple EBT 

cards on them, or a card that does not have their name or picture. The potential trafficker 

can claim they are authorized by the household to use the card and if the Law Enforcement 

agent cannot contact the household the card was issued to, there is nothing else they can 

do. This issue is often cited by Law Enforcement and Fraud Investigators as the number one 

reason EBT /SNAP traffickers avoid prosecution. 

SOLUTION: Amend 7 CFR 273.2{3) to allow only individuals who have been certified in 

writing as an "Authorized Representative" to possess and use the EBT card for purchases. 

States will collect and retain information on the authorized representative(s) for the case 

and can verify if possession of the EBT card is legitimate. In addition, the number of 

"authorized representatives," that are not part of the household, should be limited to no 

more than three individuals at a given time. 

4) No federal requirement for Photos on EBT cards 

PROBLEM: Photos on EBT cards is permitted by federal law but discouraged by restrictive 

federal rules and in practice by FNS. 

SOLUTION: Require photos on all EBT cards nationwide. Photos on EBT cards deter potential 

criminal activity, allow for quick basic checks of card ownership by law enforcement and 

protect legitimate users against theft. 

5) There is no federal requirement for positive identification and verification 

PROBLEM: Photo ID is permitted by law but discouraged by FNS. The transition to online 

applications, where Photo ID is not a factor, facilitates fraudulent applications. 

SOLUTION: Federally required in-person application meetings with a requirement that a 

valid photo ID is produced to ensure the individual applying is the person they claim to be. 

6) Unlimited replacement cards encourage EBT card trafficking 

PROBLEM: If an EBT card containing a SNAP benefit is trafficked, it is likely the individual will 

request a replacement card in order to facilitate a new illicit transaction the next month 

when the benefits are loaded back on the account. Excessive card replacements are a top 

red-flag indicator of fraud. While states can monitor excessive card replacements, there is 

no restriction on total number of cards issued in a given time period. In addition, federal 

rules do not allow states to charge an individual more than the actual cost of producing a 

replacement EBT card. This doesn't allow states to discourage trafficking or losing EBT cards 

through financial penalty. 

SOLUTION: Restrict the amount of replacement cards an individual can request in a twelvemonth period. Require an individual to have a face-to-face interview with an eligibility 

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specialist far initial replacement request, and with a fraud investigator present to explain 

the reason for more than one card replacement request. No more than two replacement 

cords per 12 month period. 

7) "Convenience stores" need more stringent requirements to participate in SNAP 

PROBLEM: The "convenience store" category of EBT retailers is of particular concern (e.g. 

gas stations, food marts, party stores). The majority of EBT trafficking occurs in these 

venues. These establishments typically do not stock the type of eligible food products that 

satisfy the original intent of the SNAP program. EBT redemptions typically far exceed 

eligible food inventory at these locations. 

SOLUTION A: Amend 7 CFR 278.1{8} - Increase the minimum eligible food inventory 

requirements of the four major food groups to be stocked for sale at convenience store 

category retailers. Current federal requirements of 3 items of each of the four major food 

groups are too minimal. Increasing daily food inventory requirements will require 

convenience store retailers to make an inventory investment to become authorized for EBT 

redemptions. Currently, convenience stores have minimal requirements and investment to 

become authorized. 

An alternative option is to require EBT retailers to submit food inventory records on a 

frequency basis (quarterly or semi-annually) in order to reconcile with EBT 

redemptions. This could serve as a deterrent to trafficking redemptions. This option 

requires increased staffing resources to review inventory records, however. 

SOLUTION 8: Increase financial assurance requirements to participate as an EBT Retailer. 

SOLUTION C: Increase penalties for non-compliance with retailer requirements (monetary 

penalties). 

SOLUTION D: Increase the frequency of compliance inspections at convenience store 

category retailers. 

8) States are unable to prosecute retailer fraud and remove retailers from SNAP 

PROBLEM: The USDA's Office of Inspector General (OIG) has sole responsibility and 

authority over retailer fraud investigations and enforcement in all states. There are very few 

agents assigned to perform this extremely important task. For example, there are just two 

agents covering Maine and they have other responsibilities in the rest of New England. 

There as few as four in the state of Michigan. Additionally, the USDA OIG agents tend to 

focus on larger and more high profile cases, limiting states ability to shut down smaller, 

convenience store type locations with fraudulent activity. 

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SOLUTION: Allow States the opportunity to utilize state DIG's and state fraud investigatory 

entities to investigate and enforce violations on retailer fraud. For instance, Michigan's DHS 

0/G has 133 agents throughout Michigan who work closely with Law Enforcement and the 

Michigan Attorney General's Office. This type of state-based unit is better positioned to 

investigate and enforce EBT retailer trafficking violations in the SNAP program. At a 

minimum, allow for state pilots of this model. 

9) Cooperation with fraud investigators is not mandated by federal regulation 

PROBLEM: Recipients suspected of trafficking typically fail to appear for OIG and fraud 

investigation interviews. Time and resources are wasted in attempts to locate these 

individuals. EBT has allowed recipients mobility without notifying the department of 

address changes, as the EBT benefits are electronically loaded on their EBT card monthly. 

Their location is irrelevant. 

SOLUTION A: Federal requirement that when an individual fails to cooperate with a 

fraud investigation (definition of "cooperate" to be determined), the result is 

immediate case closure and termination of benefits, with potential penalty 

commensurate with actual fraud determination (e.g. suspension of any eligibility for 

a period of time). 

SOLUTION 8: Disallow out-of-state EBT redemptions, OR create limited time period 

exceptions for out-of-state redemptions. Residency requirements are questionable 

for extended periods for out-of-state EBT redemptions. 

10) Federal waivers allow for reduced work requirements and decrease program integrity 

PROBLEM: Several federal waivers of SNAP requirements have allowed States to eliminate 

work requirements, allow individuals with assets to gain benefits and general weakened 

integrity in the program. 

SOLUTION: Recommend eliminating all waivers to move the food assistance program 

toward the original intent of the law. Waivers include but are not limited to the following: 

a. Asset Test- Eliminating the asset test waiver will bring the SNAP program into 

alignment with the Food Stamp Act as it was originally written. 

b. Eligibility- Eliminate all categorical eligibility and simplified reporting waivers. 

The elimination of these waivers will go a long way in improving program 

integrity with the SNAP program. 

c. A BAWD- Eliminating the ABAWD waiver will make participation in employment 

and training a requirement for all able bodied adults without dependents who 

are receiving SNAP benefits. This population is considered to be work ready and 

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should participate in employment and training as a requirement of receiving food 

assistance. 

11) The definition of "Household" is weak and allows duplicate benefit in household 

PROBLEM: Federal rule allows two individuals, living in the same household, to be defined 

as separate "households" if they "purchase and prepare" food separately. This can easily be 

manipulated to produce a dual benefit for a household that does not truly "purchase and 

prepare" their food separately (i.e. 27 year old living with parents claiming to buy and cook 

themselves). 

SOLUTION: Revise language in 7 CFR 273.1 to eliminate the option for separate "purchase 

and prepare" within one household. 

12) "Simplified Reporting" allows for gaps in program integrity 

PROBLEM: Federal rules allow for "simplified reporting" that gives states the option to only 

require individuals on SNAP to report household or income changes at intervals (monthly, 

semi-annually, annually). The intent is to make administration easier, but it creates the 

ability for individuals to go months without reporting a change that could impact their 

benefit. 

SOLUTION: Change federal rules to eliminate the option for states to do "simplified 

reporting" and instead require individuals to report changes in household or income as they 

happen to ensure accurate and up-to-date information related to their case. 

13) SNAP Education funds would be better utilized for employment and training 

PROBLEM: SNAP-Education (SNAP-ED) funds are used for largely ineffective efforts to train 

SNAP recipients on healthy eating. There are limited funds available for state employment 

and training programs. 

SOLUTION: Reallocate federal SNAP-ED funds for employment and training. In addition, 

recommend employment and training is mandatory for all SNAP recipients except for 

elderly, disabled, and children. 

14) Increase financial incentives for States to pursue fraud, waste, and abuse 

PROBLEM: States are only able to retain 35% of funds collected from intentional program 

violations (IPVs) or fraud to reinvest in program integrity efforts. 

SOLUTION: Allow States to retain at least 50% of funds collected from IPVs or fraud to 

reinvest in program integrity efforts. 

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15) Illegal alien families receive an increased benefit because of unreported income 

PROBLEM: Illegal alien families with citizen children obtain a higher benefit than they 

should be eligible for because unreported income of the parent/adult is not counted. In a 

family where all members are citizens, all income is required to be reported and counted. 

SOLUTION: Federal Food Stamp amount for these families should be set at the same level as 

for comparable child-only cases from among citizen families. This would eliminate disparity 

between the two scenarios. As a minimum alternative, the greater of the stated income or 

imputed income should be applied when calculating the benefit. 

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Attachment B 

AK 

AL 

AR 

A2 

CA 

co 

CT 

DC 

DE 

FL 

GA 

GU 

HI 

lA 

10 

IL 

IN 

KS 

KY 

LA 

MA 

MD 

Ml 

MN 

MD 

MS 

MT 

NC 

NO 

NE 

NH 

NJ 

NM 

NV 

NY 

OH 

OK 

OR 

PA 

PR 

Rl 

s 

sc 

50 

TN 

TX 

UR 

us 

UT 

VA 

VI 

VT 

WA 

WI 

wv 

WY 

Out Of State 

*Includes SNAP and TANF 

Maine Welfare/EST* spending out-of-state 2011-2015 

$8 794 

$48,629 

$23,648 

$81,677 

$121,788 

52,219 

$292 398 

$2 252 

$11222 

$842,426 

$126 504 

$169 

$10 621 

$15 261 

$7,599 

$35,819 

$48,510 

$21,304 

$48,714 

$44 737 

$1337,163 

$39 153 

$41,789 

$32,650 

$39,849 

$18,250 

$13,818 

$174,433 

$7,539 

$19,359 

$10,677,609 

$110,594 

$17,081 

$29,746 

$312,449 

$86,963 

$21,727 

$33,324 

$162,273 

$1,450 

$152,129 

$918 

$100,321 

$6,727 

$76,255 

$147,856 

$0 

$17,666 

$17,280 

$130,185 

$2,442 

$100,609 

$43,285 

$18,254 

$30,775 

$4,204 

$15,870,416 

$11,731 $8,845 $6,717 

$45,598 $41,474 $40,255 

$20 608 $15,277 $16 228 

$78,941 $80,436 $87 522 

$140,945 $106,736 $101,214 

$56,857 $51,694 $40,085 

$254,619 $206,680 161,265 

$3,589 $1,712 $2,824 

$19,868 $16,897 $15 711 

$853,575 $805,697 $679,825 

$128,750 $133,116 $99325 

$0 so so $20 441 $12,525 $9,688 

$17 631 $23,380 $19,809 

$6,963 $6,205 $6,231 

$39,590 $33,372 $31,041 

$36,838 $30,642 $36,175 

$21,046 $26,430 $8901 

$40,129 $41,477 $37 208 

$35,201 $49 635 $33,299 

$1,221571 $1,094,048 $869,295 

$45 119 $55,256 $43,448 

$47,561 $40,903 $32,815 

$30 703 $31,524 $31,037 

$43,094 $28,823 $24 366 

$25,736 $15,766 $11,717 

$12,306 $12,269 $5,367 

$185,133 $166,404 $133,679 

$19,358 $26164 $12,914 

$16,608 $15,111 $17,516 

$10,369,588 $9,283,475 $7,007,840 

$101,179 $92,068 $49,463 

$15,275 $15,422 $9,594 

$28,128 $26,696 $22,705 

$306,388 $298,436 $236,205 

$94,899 $96,165 $60,804 

$27,005 $32,451 $17,035 

$35,109 $26,009 $15,355 

$134,747 $137,538 $81,426 

$1,940 $40 $0 

$125,919 $118,795 $84,301 

$1,572 $205 $0 

$112,775 $109,705 $75,754 

$6,130 $5,493 $5,453 

$86,520 $85,954 $74,938 

$130,623 $160,521 $151,664 

$2 so $0 

$19,517 $123 $0 

$17,039 $11,328 $15,068 

$119,753 $113,132 $112,687 

$1,059 $98 $0 

$117,405 $80,330 $65,373 

$41,439 $42,920 $29,160 

$17,244 $14,791 $6,074 

$19,814 $17,603 $10,841 

$11,779 $2,117 $2,681 

$15,422,960 $13,949,913 $10,749,898 

Maine Department of Health and Human Service!> 

June 2016 

$8,846 

$28,982 

$12,531 

$65,783 

$71,445 

$35,307 

$126,840 

$2 810 

$5,766 

$547,120 

$81,070 

$0 

$7,232 

$8,136 

$3,649 

$19 766 

$25,623 

$10,998 

$28,765 

$10,289 

$711,968 

$23,368 

$22 111 

$49,657 

$27,345 

$7,097 

$5,071 

$95,879 

$15,047 

$12,954 

$5,893,567 

$37,171 

$11,928 

$13,978 

$160,980 

$45,954 

$10,991 

$16,245 

$63,003 

$5 

$50,019 

$0 

$73,024 

$4,522 

$49,709 

$107,633 

$0 

$3 

$11,052 

$87,101 

$220 

$45,123 

$29,076 

$11,451 

$10,933 

$1,972 

$8,807,115 

June9, 2016 

$44,933 

$204 938 

$88 291 

$394 360 

$542,129 

$236,163 

$1041801 

$13,186 

$69,464 

$3,728,644 

$568 765 

$169 

$60,507 

$84 217 

$30,647 

$159,588 

$177,788 

$88,679 

$196,293 

~ $163,477 

$78,566 

$48,832 

$755,527 

$81,023 

$81,548 

$43,232,079 

$390,476 

$69,299 

$121,253 

$1,314,457 

$384,785 

$109,209 

$126,042 

$578,987 

$3,435 

$531,163 

$2,696 

$471,580 

$28,326 

$373,376 

$698,298 

$2 

$37,309 

$71,767 

$562,858 

$3,819 

$408,841 

$185,880 

$67,815 

$89,966 

$22,753 

$64,800,302 
60 

Mr. MEADOWS. Thank you, Ms. Mayhew. 

Mr. Carroll, you are recognized for 5 minutes. 

STATEMENT OF MIKE CARROLL 

Mr. CARROLL. Thank you, Chairman Meadows. It’s an honor to 

be here with you today and share some insights from Florida. 

The SNAP eligibility process has changed significantly over the 

past 20 years. Today, Florida is a leader in the modernization of 

our social services system. Virtually every State in the Nation has 

come to Florida to study our model. Today, we receive 93 percent 

of our applications online. Eligibility staff was reduced from 7,000 

to 4,000. Cost-per-eligibility transaction dropped from $30 per application to $7, all while maintaining accuracy rates at or above 99 

percent. All of these are at benchmark levels on a national level. 

Our experience is testament to how government can run an operation that is cost-effective, efficient, and optimizes access to services in a simplified way for customers. 

We do have a new fight on our hands, however, and it’s identity 

theft and EBT trafficking. Our challenge now is to balance the 

need to continue being efficient with the need to maintain the integrity of this program going forward, and I am not talking about 

the individual who may fudge their income or their household composition. We’re talking about major criminal enterprises with ties 

to drug sales, prostitution, and human trafficking. We have to work 

together and we have to work quickly to invest in the right technology, integrate fraud detection in every level of our process, and 

coordinate more effectively a response that’s much more urgent 

than we currently have. 

In Florida, we’ve implemented effective front-end detection systems and commonsense legislation to address obvious fraud and 

abuse at the roots. We banned EBT card transactions at all adult 

entertainment and gambling venues and in the purchase of alcohol, 

we’ve created a fraud reward program, we’ve enhanced criminal 

penalties for fraud, and we’ve revised the definition of EBT trafficking in Florida law to include swapping food benefits for weapons or controlled substances. Last year, our Office of Public Benefits Integrity conducted more than 23,000 investigations, which resulted in cost avoidance of $27.6 million of benefits that would 

have been otherwise administered to folks who were not eligible. 

How can we improve the system? Florida has demonstrated the 

success of advanced technology with our automated identity 

verification tool and the complete automation of the system. We 

think we need to continue to invest in technology like this both at 

the front end and the back end of the system. We also would like 

to work with our Federal partners to build on these capabilities 

and eliminate the one-size-fits-all approach. We have to give States 

the flexibility and the space to implement and execute these programs and policies while still being able to come up with innovative solutions that meets the needs of the citizens in their State. 

We also suggest that we consider changing the current burden of 

proof of recipient fraud from a clear-and-convincing standard to a 

preponderance of the evidence, the same standard that’s used for 

retailer fraud. Right now, it is easier to arrest a recipient than to 

disqualify them from the SNAP program. 


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61 

When it comes to retailer fraud, and this is where we feel a real 

sense of urgency in Florida, we need a much more comprehensive 

and urgent approach. FNS must start immediately suspending a 

SNAP retailer upon a criminal arrest. We need to require that retailers repay trafficked amounts in administrative sanctions that 

rarely happens now. SNAP retailer applications must be scrutinized more closely before vendors become authorized retailers. And 

we have to change the way we provide incentives to States and 

move away from a pay-and-chase model and start focusing on an 

upfront prevention model. 

I do want to talk briefly about the case that you mentioned, Opalocka. It was the largest food stamp trafficking bust in Federal programs history. Twenty-two retailers were arrested. Investigators 

found cash and guns. They found storefronts that were actually 

drug sale operations, human trafficking, and prostitution operations. They found empty storage rooms, rotten produce, empty display boxes, plastic fruit and vegetables on display. One store owner 

was an illegal alien who used someone else’s Social Security number to get FNS authorization. Another owner was here on a work 

permit. Another failed to disclose they were a convicted felon. 

Since 2011 when DCF first reported the fraud, nearly $89 million 

in SNAP transactions have taken place at this location. DCF now 

has to review 41,000 SNAP recipients just since July, and that 

number is growing, to find cases that might rise to the level of 

clear and convincing evidence. And today, we’ve not been able to 

disqualify one SNAP recipient who was involved in that. The trafficking continues. At least eight retailers continue to operate in 

that location. In fact, the 2 weeks following the arrest, they did 

over $163 in EBT redemptions. 

Clearly, we can do better than this. In the State of Florida we’re 

absolutely committed to making sure that folks who are eligible to 

receive these free services receive them in the most accurate and 

timely fashion possible, but we are equally as committed to making 

sure that we maintain the integrity of this program. And we do 

want to work with our Federal partners to make sure that happens. 

[Prepared statement of Mr. Carroll follows:] 


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Statement of Mike Carroll 

Secretary, Florida Department of Children and Families 

"SNAP: Examining Efforts to Combat Fraud and Improve Program Integrity" 

Committee on Oversight and Government Reform 

Subcommittees for Government Operations and The Interior 

june 9, 2016 

Thank you Chairman Meadows, Chairwoman Lummis, Ranking Members Connolly and 

Lawrence, and subcommittee members for inviting me to speak with you today and offer our 

insight from Florida on this important effort to reduce fraud and waste in the public assistance 

system. 

I am proud of what Florida has accomplished, and I have a unique and firsthand perspective on 

it. I started with the Florida Department of Children and Families more than 26 years ago 

helping people with their eligibility applications. Back then, applications were still on paper, 

and filled out with a pencil. 

On the days after it rained, lines would wrap around the building. Applicants had to come in 

sometimes multiple times to provide interviews and ensure their applications were submitted 

correctly. It was, of course, inefficient for everyone involved, but it was the best we could do at 

the time. 

Modernization 

Today, Florida is a leader in the modernization of our social services system, and virtually every 

state in the nation has come to Florida to study our model. Our efforts have led to a nearly 100 

percent accuracy rate on applications, with 93 percent being submitted online, allowing us to 

reduce our eligibility staff from 7,000 to 4,000. Over the years, our cost per eligibility 

transaction has dropped from $30 to $7. Our experience in Florida is a testament to how 

government can run an operation that is cost-effective, efficient and optimizes access to 

services in a simplified way for customers. 

However, we have a new fight on our hands with a growing epidemic of identity theft and 

trafficking. We are not talking about "mom and pop" storefront operations or cottage 

industries. We are talking about major criminal enterprises with ties to other serious and 

dangerous criminal activities including drug sales, prostitution and human trafficking. 

We have to work together and we have to work quickly to invest more in the right technology, 

integrate fraud detection at every level of our process, and coordinate a more effective 

response, one that includes the right funding and flexibility to respond not only to what is 

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happening- as it is happening- on the ground, but also to put us in front in the fight against 

fraud and abuse. Wayne Gretzky said it very well: "A good hockey player plays where the puck 

is. A great hockey player plays where the puck is going to be." 

In Florida, we have implemented effective front-end detection systems and common-sense 

legislation that addresses obvious fraud and abuse at the roots. We have banned EBT card 

transactions at all adult entertainment and gambling venues and in the purchase of alcohol, 

created a fraud reward program, enhanced criminal penalties for fraud, and revised the 

definition of EBT trafficking in Florida law to include swapping food benefits for weapons or 

controlled substances. In addition, our Office of Public Benefits Integrity last year conducted 

more than 23,000 investigations resulting in more than $27.6 million in cost avoidance. 

Florida was the first state in the nation to partner with the Food and Nutrition Service in the 

battle to combat ID theft. That partnership remains critical in shaping Florida's anti-fraud 

efforts, and we want to continue to be a leader in developing new and innovative anti-fraud 

strategies for the nation. 

As we look to ways to improve the fight against public assistance fraud, we have to look at it 

the same you look at improving any system- you have to keep in mind how the system itself is 

evolving. We are in a different place than we were 20 years ago. We are now fully immersed in 

a world of technology, and the landscape changes every day. It presents real challenges, but it 

also offers real possibilities to turn this fight around. We already use it to identify patterns of 

fraud and abuse that previously might have taken years to detect. We have to continue to 

evolve with it and harness its power. If we do not, we will face the unintended consequences 

of increased costs and barriers to access; if we do, we can create a seamless system that moves 

the fight against fraud to the front-end so that we can focus on improving service to those 

clients who depend on this system. 

We think Florida could serve as a laboratory for this kind of innovation and improvement, and 

we encourage and invite you to let us. 

How can we improve the system? 

On a national level, we must tighten the net on fraud throughout the system by providing 

critical support to states. 

1. We must continue to invest in the power of technology. Florida has demonstrated the 

success of advanced technology with our automatic identity verification tool, and we 

want to build on those capabilities. 

2. We must revisit the one-size-fits-all approach in FNS regulations. Fraud trends change 

rapidly, and our response must be equally swift to be effective. 

3. let's remember technology is only one part of the arsenal. We have to take time to 

review and apply what we learn. For example, the current burden of proof for recipient 

fraud is "clear and convincing," which is a higher burden of proof than for retailer fraud. 

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We should reduce the burden of proof for recipient fraud to "preponderance of 

evidence." Right now it is easier to arrest a recipient than to disqualify them from the 

SNAP program. 

When it comes to retailer fraud, we need a bigger army and more cohesive approach. 

1. The U.S. Department of Agriculture's Office of Inspector General has sole authority to 

investigate retailer fraud, yet has 1/lOth of the resources in Florida as the Health and 

Human Services' Office of Inspector General. 

2. FNS needs to immediately suspend a SNAP Authorized Retailer upon criminal arrest. 

3. We need stronger federal policies to require repayment from retailers. Currently, 

retailers rarely are required to repay trafficked amounts in administrative sanctions. We 

need to send a strong message that fraud will not be tolerated. 

4. SNAP retailer applications must be scrutinized more closely. 

What it means to states 

We get bonuses for our accuracy, but we get no reimbursement or incentive for our good work 

of preventing fraud on the front end. Yet, we get 35 cents for every dollar we recover. We are 

literally spending a dollar to chase a dime. 

We agree with the Government Accountability Office's recommendation to at least consider 

financial incentives for states based on fraud deterrence and cost avoidance. We have to 

continue to work together to find new ways to keep that money in the system, and use more 

recovery dollars to ensure the system is working for those who need it. 

Opa Locka 

The largest food stamp trafficking bust in the federal program's history occurred just last month 

at a flea market in South Florida. It was great work, but it also demonstrates how much more 

work we need to do. Operation Stampede so far has resulted in the arrests of 22 owners of 

SNAP authorized retailers and uncovered- just for the past year- $17 million in fraud. 

• Officers found thousands of dollars in cash and guns, storefronts that were actually drug 

sale operations, and human trafficking and prostitution. 

• Also uncovered were empty storage rooms, unsanitary conditions, rotten produce, empty 

display boxes, and even plastic fruit and vegetables on display. 

• One store owner was an illegal alien who used someone else's Social Security Number to 

get FNS authorizaton. Another owner was here on a work permit. And yet another failed to 

disclose they were a convicted felon. 

• Since 2011, there has been nearly $89 million in SNAP transactions at this location. 

• We now have to look at more than 41,000 authorized SNAP recipients just since July- and 

that number is growing- to find cases that might rise to the level of "clear and convincing 

evidence." 

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• And, the trafficking has not stopped. Today, there are at least eight authorized retailers 

with transactions consistent with the pattern of fraudulent activity for which this location is 

now well known. In the first two weeks following the raid, these stores had over $163,000 

in SNAP redemptions involving over 1,100 recipients. 

We urge FNS to take every appropriate action to stop the fraud at this location. While the Opa 

locka Flea Market is not and should not be the poster child of this program, it demonstrates 

why states should have input into retailer authorizations and greater flexibility in responding to 

fraud. 

Close 

We can identify and shut down these violators quickly, efficiently, and effectively- we just 

don't have the authority. We can do it smartly, without added costs, if we could share more of 

the recovery dollars and not just the burden of recovery. With the strong support of Governor 

Rick Scott and the legislature, Florida is committed to ensuring we get the right benefits to the 

families and individuals who need it, but we have to move quickly- and in partnership- to get 

further upstream. let's work together to cut through the red tape and let Florida, and all 

states, be full partners in this fight. Thank you. 

4 
66 

Mr. MEADOWS. Thank you, Mr. Carroll, for your illuminating testimony. 

Ms. Dean, you are recognized for 5 minutes. 

STATEMENT OF STACY DEAN 

Ms. DEAN. Thank you. Chairman Meadows, Ranking Member 

Lawrence, thank you for the invitation to testify today. I’m Stacy 

Dean, vice president for Food Assistance Policy at the Center on 

Budget and Policy Priorities, a nonpartisan policy institute. 

I’m really pleased to have the opportunity to talk to you today 

about program integrity in SNAP. I’ve worked on SNAP for more 

than 20 years, and one of the most rewarding parts of my job is 

to work directly with State officials on improving the program at 

the local level, and that includes policy and operations related to 

program integrity. 

SNAP is the Nation’s most important anti-hunger program. It 

currently helps about 44 million low-income Americans, or 1 in 7 

Americans, to afford a nutritionally adequate diet each day at the 

more than 200,000 retail store outlets that take the benefits. 

Despite its modest benefits which average only $1.41 per person 

per meal, it has powerful short- and long-term impacts. It helps 

family and communities weather tough economic times, it reduces 

poverty and food insecurity, it improves health, and it does support 

work. SNAP’s successes can largely be attributed to its national entitlement structure, it’s relatively uniform eligibility standards, its 

standards for program administration and integrity, and the fact 

that it’s a food-based benefit. 

SNAP does operate with efficiency and has relatively sound program integrity. As I’ve outlined in my testimony and as you heard 

from Under Secretary Concannon, SNAP has a strong track record 

on issuing benefits accurately and identifying and preventing 

fraud. Critics who claim that caseload growth in recent years has 

been driven by waste, fraud, and abuse are just simply incorrect. 

Program integrity has two fundamental components. One is reducing errors, which is ensuring that benefits are issued to the correct people in the correct amount, and most error in the program 

resulting under—around error is a result of human error meaning 

basic mistakes, not fraud. States actually report that the majority 

of error in—that occurs through payment—through payment accuracy measurement is their fault and not clients’. 

By contrast, fraud is when clients or retailers collude to exchange 

benefits for nonfood items or some of the unfortunate activities 

you’ve heard of already today, or intentionally lie to the program 

for personal benefit. Each of these issues, error and fraud, merits 

their own solutions. Identifying and proving a retailer is trafficking 

is quite a different problem than ensuring State workers throughout the country understand program rules and are applying them 

correctly. 

We support the ongoing effort to maintain and improve SNAP’s 

program integrity. As new technology becomes available and as 

awareness of how problems are arising, there will just continue to 

be opportunities to improve SNAP accuracy and prevent fraud, and 

that’s why the most recent farm bill included several new initiatives. 


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67 

We encourage you to assess new ideas against several criteria. 

The first question is always does it work? USDA and States have 

a strong history of testing and trying new ideas to assess impacts 

in order to determine the potential effectiveness nationally, and I 

think the Florida demo is a great example of that. 

This—another question is what’s the scope and scale of the problem under discussion? Some of the most egregious examples of 

fraud are highly isolated incidences. They are completely unacceptable, but they may be so infrequent such that they shouldn’t drive 

the programs fundamental approach to addressing more common 

everyday program integrity issues. Building processes based on the 

assumption that everyone who uses this program is a criminal just 

simply isn’t an effective way to run the program. 

Obviously, we need to look at what are the proposed—or proposed solutions, projected costs, and benefits. I do think it’s important to—even though this seems obvious, when a proposal is promoted as an anti-fraud activity, some are really reluctant to rigorously weigh its benefits and costs out of fear of being perceived as 

soft on fraud. And data-matching, I think, is a very good example. 

High-quality focused matches to test the veracity of client statements against available data is a terrific tool both for access and 

integrity, but expanding matches to—against data that may be 

completely irrelevant to a household’s current circumstances is a 

waste of resources and could undermine integrity. 

Will the proposal have any negative consequences? Any new program integrity proposal needs to consider the implications on access and whether all individuals, particularly individuals with disabilities or other special needs, could navigate them. 

And finally, who’s promoting the change? Often, private vendors 

selling program integrity solutions are some of SNAP’s biggest critics. Their self-interest in promoting the perception of a program in 

crisis really has to be considered. 

Cost, not a lack of interest or new ideas, is often our biggest obstacle to addressing fraud and error. While the Federal Government shares in the cost of administering the program, State budgets are often the limiting factor to ensuring the best systems and 

technology are deployed nationwide. Many States have downsized 

their program operations during the recent recession and have not 

yet rebuilt the capacity to take full advantage of new technology 

options or the staff resources that could improve their efforts. 

So I look forward to the discussion today. Thank you very much. 

[Prepared statement of Ms. Dean follows:] 


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Center on 

Budget 

and Policy 

Priorities 

June 9, 2016 

820 First Street NE, Suite 510 

Washington, DC 20002 

Tel' 202-408-1080 

Fax: 202·408~1056 

center@cbpp.org 

www.cbpp.org 

SNAP: Combating Fraud and Improving Program 

Integrity Without Weakening Success 

Testimony of Stacy Dean, Vice President for Food Assistance Policy, 

Center on Budget and Policy Priorities, 

Before the Subcommittees on Government Operations and the Interior 

of the Committee on Oversight and Government Reform 

U.S. House of Representatives 

Thank you for the opportunity to testify today. I am Stacy Dean, Vice President for Food 

Assistance Policy at the Center on Budget and Policy Priorities, an independent, non-profit, 

nonpartisan policy institute located here in Washington. The Center conducts research and analysis 

on a range of federal and state policy issues affecting low- and moderate-income families. The 

Center's food assistance work focuses on improving the effectiveness of the major federal nutrition 

programs, including the Supplemental Nutrition Assistance Program (SNi\P). I have worked on 

SNAP policy and operations for more than 20 years. Much of my work is providing technical 

assistance to state officials who wish to explore options and policy to improve their program 

operations in order to more efficiently serve eligible households. My team and I also conduct 

research and analysis on SNAP at the national and state levels. The Center on Budget and Policy 

Priorities receives no government funding. 

My testimony today is divided into two sections: 1) SNAP's role in our country as a federal 

nutrition program; and 2) an overview of how SNAP addresses and maintains program integrity. 

I. SNAP Plays a Critical Role in Our Country 

Before turning to today's hearing topic of SNAP's program integrity, I think it is important to 

review some of SNAP's most critical features. The program is a highly effective anti-hunger 

program. Much of the program's success is due to its entitlement structure, its consistent national 

benefit structure, and its food-based benefits. The program also imposes rigorous requirements on 

states and clients to ensure a high degree of program integrity. 

As of February this year, SNAP was helping more than 44 million low-income Americans to 

afford a nutritionally adequate diet by providing them "~th benefits via a debit card that can be used 

only to purchase food. On average, SNAP recipients receive about $1.39 per person per meal in 
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food benefits. One in seven Americans is participating in SNAP - a figure that speaks both to the 

extensive need across our country and to SNAP's important role in addressing it. 

Policymakers created SNAP to help low-income families and individuals purchase an adequate 

diet. It does an admirable job of providing poor households \vith basic nutritional support and has 

largely eliminated severe hunger and malnutrition in the United States. As I will discuss later, it 

accomplishes these critical goals while maintaining sound program integrity. 

When the program was first established, hunger and malnutrition were much more serious 

problems in this country than they are today. A team of Field Foundation-sponsored doctors who 

examined hunger and malnutrition among poor children in the South, Appalachia, and other very 

poor areas in 1967 (before the Food Stamp Program, as SNAP was then named, was widespread in 

these areas) and again in the late 1970s (after the program had been instituted nationwide) found 

marked reductions over this ten-year period in serious nutrition-related problems among children. 

The doctors gave primary credit for this reduction to the Food Stamp Program. Findings such as 

this led then-Senator Robert Dole to describe the Food Stamp Program as the most important 

advance in the nation's social programs since the creation of Social Security. 

Consistent with its original purpose, SNAP continues to provide a basic nutrition benefit to lowincome families, the elderly, and people with disabilities who cannot afford an adequate diet. In 

some ways, particularly in its administration, today's program is stronger than at any previous point. 

By taking advantage of modern technology and business practices, SNAP has become substantially 

more efficient, accurate, and effective. \Vhile many low-income Americans continue to struggle, this 

would be a very different country without SNAP. 

SNAP Protects Families From Hardship and Hunger 

SNAP benefits are an entitlement, which means that anyone who qualifies under the program's 

rules can receive benefits. This is the program's most powerful feature: it enables SNAP to respond 

quickly and effectively to support low-income families and communities during times of economic 

downturn and increased need. Aided by a temporary benefit increase from the 2009 Recovery Act, 

SNAP kept poverty and food insecurity Oack of consistent access to sufficient food) from rising 

during the Great Recession as much as they would have without the program.' 

Enrollment expands when the economy weakens and contracts when the economy recovers. (See 

Figure 1.) As a result, SNAP responds immediately to help families and to bridge temporary periods 

of unemployment. It also can help individual families weather a short-term crisis, such as separation 

or divorce .. A U.S. Department of Agriculture (USDA) study of SNAP participation over the late 

2000s found that slightly more than half of all new entrants to SNAP participated for less than one 

year and then left the program when their immediate need passed. 

1 For example~ Bitler and IIoynes find that post-transfer poverty rate would have :risen by at least one percentage point 

in 2010 without SNAP income, and that SNAP reduced the cyclicality of poverty during the Great Recessionary period. 

Nord and Prell find that food insecurity did not rise for low-income participants likely to receive SNAP as expected 

from late 2008 to late 2009, while it did rise for those with slightly higher incomes. Marianne Bitler and Hilary Hoynes, 

"The More Things Change, the i\Iore '!bey Stay the Same? The Safety Net and Poverty in the Great Recession," Journal 

if Labor Economics, Vol. 34, Issue Sl, 2016. Mark Nord and Mark Prell, "Food Security Improved Following the 2009 

AR.RA Increase in SNAP Benefits," ERR-116, U.S. Department of Agriculture, Economic Research Service, April2011. 

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SNAP's powerful response during the recession is in sharp contrast to that of the cash assistance 

program Temporary Assistance for Needy Families (TANF), whose block grant structure sharply 

limits its ability to expand during economic downturns. TANF enrollment did not rise significantly 

as the number of people in poverty rose during the recession. While the number of unemployed 

doubled in the Great Recession, TANF caseloads rose only modestly, by 13 percent from December 

2007 to December 2009. 

SNAP's ability to serve as an automatic responder is also important when natural disasters strike. 

States can provide emergency SNAP within a matter of days to help disaster victims purchase food. 

In 2014 and 2015, for example, SNAP helped households in the Southeast affected by severe storms 

and flooding and households on the west coast affected by wildfires. 

FIGURE 1 

SNAP Tracks Changes In Share of Population 

That Is Poor or Near-Poor 

25% 

Share of individuals with income at or below 130% of poverty line 

20 

15 

10 

5 

0 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 

SNAP's caseloads grew in recent years primarily because of its role as an automatic stabilizer: 

more households qualified for SNAP because of the recession, and the number of eligible 

households stayed high in the years following the recession because of the slow recovery. During 

the recession, as the official poverty rate rose from 12.5 percent to 15.1 percent, SNAP enrollment 

rose to respond to this increase. Poverty stayed high through 2014 (the most recent year for which 

data are available), at 14.8 percent, and as a result, though SNAP participation has begun to fall, it 

remains high compared to pre-recession levels. 

The Congressional Budget Office (CBO) has confirmed that "the primary reason for the increase 

in the number of participants was the deep recession ... and subsequent slow recovery; there were 

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no significant legislative expansions of eligibility."2 Emerging research on the Great Recession finds 

that indeed, economic factors were the main drivers of SNAP caseload increases during this period, 

explaining between about half and 90 percent of the increase in SNAP caseloads between 2007 and 

2011. One study, which tested different measurements of the economy and SNAP caseloads at the 

state and local levels, found that the economy explained 70 to 90 percent of the increase in 

caseloads; it also found substantial lags - of up to two years - between changes in the economy 

and changes in SNAP participation-' 

Another important factor in rising caseloads during and after the recession is that a larger share of 

eligible households applied for help. Participation rates among eligible people grew from 69 percent 

in 2007 to 83 percent in 2014 (the most recent year available). Several factors likely contributed to 

these rising rates. The widespread and prolonged effects of the recession, particularly the record 

long-term unemployment, may have made it more difficult for family members and communities to 

help people struggling to make ends meet. Households that already were poor became poorer 

during the recession and may have been in greater need of help. In addition, states continued efforts 

begun before the recession to reach more eligible households - particularly working families and 

senior citizens -by simplifying SNAP policies and procedures. 

While SNAP's growth was substantial, SNAP participation and spending have begun to decline as 

the economic recovery has begun to reach low-income SNAP participants. In 2014 and 2015 SNAP 

·cascloads declined in most states; as a result, the national SNAP caseload fell by 2 percent both 

years. Nationally, for the last two and a half years, fewer people have participated in SNAP each 

month than in the same month of the prior year. SNAP caseloads have fallen by more than 3 

million people over the last three years: about 3.2 million fewer people participated in SNAP in 

February 2016 than in February 2013, and about 3.4 million fewer people than in December 2012, 

when participation peaked. The declines have been widespread: 43 states had fewer SNAP 

participants in February 2016 than in February 2013. 

As a result of this caseload decline, spending on SNAP as a share of Gross Domestic Product 

(GDP) fell by 4 percent in 2015. In 2014 it fell by 11 percent, largely due to the expiration of the 

Recovery Act's SNAP benefit increase. CBO predicts that this trend will continue, and that SNAP 

spending as a share of GDP will fall to its 1995levels by 2020. 

SNAP Lessens the Extent and Severity of Poverty and Unemployment 

SNAP targets benefits on those most in need and least able to afford an adequate diet. Its benefit 

formula considers a household's income level as well as its essential expenses, such as rent, 

medicine, and child care. Although a family's total income is the most important factor affecting its 

2 Congressional Budget Office, "The Supplemental Nutrition Assistance Program," April2012, 

htt;p: // www.cbo.gov /sites/ default I files I cbofiles /attachments I 04-19-SNAP.pdf. 

3 Bitler and Haynes, op. cit.; Peter Ganong and Jeffrey B. Liebman, "The Decline, Rebound, and Further Rise in SNA .. P 

Enrollment: Disentangling Business Cycle Fluctuations and Policy Changes," National Bureau of Economic Research, 

Working Paper 19363, August 2013, htt;p://www.nber.org/papers/w19363.pdf?new window=l:James P. Ziliak, "Why 

Arc So l<.!any Americans on Food Stamps?" in J. Bartfeld et aL, editors, SNAP Afatters: How Food Stamps Affect Health and 

lVei/ BeiNg, Stanford University Press, 20 15; and Jacob Alex Klerman and Caroline Danielson. "Can the Economy 

Explain the Explosion in the Supplemental Nutrition Assistance Program? An Assessment of the Local-level 

Approach," American Journal if Agn.m!tura! Economics, 2016. 

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ability to purchase food, it is not the only factor. For example, a family spending two-thirds of its 

income on rent and utilities will have less money to buy food than a family that has tbe same income 

but lives in public or subsidized housing. 

While the targeting of benefits adds some 

complexity to the program and is an area where 

states sometimes seek to simplify, it helps 

ensure that SNAP provides the most assistance 

to the poorest families with the greatest needs. 

This makes SNAP a powerful tool in fighting 

poverty. A CBPP analysis using the 

government's Supplemental Poverty Measure, 

which counts SNAP as income, and that 

corrects for underreporting of public benefits in 

survey data, found that SNAP kept 10.3 million 

people out of poverty in 2012, including 4.9 

million children. SNAP lifted 2.1 million 

children above 50 percent of the poverty line in 

2012, more than any other benefit program. 

SNAP is also effective in reducing extreme 

poverty. A recent study by the National 

Poverty Center estimated the number of U.S. 

households living on less than $2 per person per 

day, a classification of poverty that the World 

Bank uses for developing nations. The study 

found that counting SNAP benefits as income 

FIGURE 2 

SNAP Cuts Extreme Poverty 

Almost In Half 

Number of households with children, in 2011, 

living on $2 or less per person per day 

Counting cash 

income only 

Counting cash 

income plus SNAP 

cut the number of extremely poor households in 2011 by nearly half (from 1.6 million to 857,000-

see Figure 2). 

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SNAP is able to achieve these results because 

it is so targeted at very low-income households. 

Roughly 93 percent of SNAP benefits goes to 

households with incomes below the poverty 

line, and 58 percent goes to households with 

incomes below half of the poverty line (about 

$10,045 for a family of three in 2016). (See 

Figure 3.) 

By providing low-income families with more 

income to purchase food than their limited 

budgets otherwise would allow, SNAP also 

reduces the burden of food insecurity for 

families. A study that compared SNAP 

participant households before and after six 

months of participating in SNAP found that 

SNAP reduced food insecurity by up to ten 

Two-Fifths of SNAP Households 

Are Below Half the Poverty Line 

Below 50% 

of poverty 

51-100% 

101-130% 

Greater 

than 130% 

percentage points, or 17 percent, and also reduced "very low food security," wbich occurs when one 

or more household members have to skip meals or otherwise eat less because they lack money, by 

about six percentage points. 

During the deep recession and still-incomplete recovery, SNAP has become increasingly valuable 

for the long-term unemployed as it is one of the few resources available for jobless workers who 

have exhausted their unemployment benefits. Long-term unemployment bit record hlghs in the 

recession and remains unusually high; in May 2016, about a quarter (25.1 percent) of the nation's 7.4 

million unemployed workers had been looking for work for 27 weeks or longer. That's much hlgher 

than it's ever been (in data back to 1948) when overall unemployment has been so low. 

SNAP also protects the economy as a whole by helping to maintain overall demand for food 

during slow economic periods. Tn fact, SNAP benefits are one of the fastest, most effective forms 

of economic stimulus because they get money into the economy quickly. Moody's Analytics 

estimates that in a weak economy, every $1 increase in SNAP benefits generates about $1.70 in 

economic activity (i.e., increase in economic activity and employment per budgetary dollar spent), 

and is one of the most effective forms of stimulus among a broad range of policies for stimulating 

economic growth and creating jobs in a weak economy. 

SNAP Improves Long-term Health and Self-sufficiency 

Wbile reducing hunger and food insecurity and lifting millions out of poverty in the short run, 

SNAP also brings important long-run benefits. 

A recent study published in the American Economic Review examined what happened when the 

government introduced food stamps in the 1960s and early 1970s and concluded that cbildrcn who 

had access to food stamps in early cbildhood and whose mothers had access during their pregnancy 

had better health outcomes as adults years later, compared with cbildren born at the same time in 

counties that had not yet implemented the program. Along with lower rates of "metabolic 

syndrome" (obesity, bigh blood pressure, heart disease, and <liabetes), adults who had access to food 

stamps as young cbildren reported better health, and women who had access to food stamps as 

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young children reported improved economic self-sufficiency (as measured by employment, income, 

poverty statns, high school graduation, and program participation).' (See Figure 4.) 

4 Hilary W. I-!0)11es, Diane Whitmore Schanzenbach, and Douglas Almond, "Long Run Impacts of Childhood Access to 

the Safety Net," American Economic Review, 106(4): 903-93, April 2016. 

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FIGURE 4 

Children With Access to SNAP 

Fare Better Years Later 

Percentage-point change in outcomes for adults 

who received SNAP as children, compared to 

adults who did not receive SNAP as children 

Stunted 

growth 

Heart 

disease 

18% 

-16% 

Obesity High school 

completion 

Supporting and Encouraging Work 

In addition to acting as a safety net for people who are elderly, disabled, or temporarily 

unemployed, SNAP is designed to supplement the wages oflow-income \Vorkers. 

The number of SNAP households that have earnings while participating in SNAP has more than 

tripled- from about 2 million in 2000 to about 7 million in 2014. The share of SNAP families that 

are working while receiving SNAP assistance has also been rising- while only about 28 percent of 

SNAP families with an able-bodied adnlt had earnings in 1990, 57 percent of those families were 

working in 2014. (See Pigure 5.) 

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FIGURE 5 

SNAP Work Rates Have Risen. Especially 

Among Households With Children and Adults 

Who Could Be Expected to Work 

Share of households with earnings 

-SNAP households 

with children 

SNAP households - All SNAP households 

with children 

60% 

50 

40 

30 

20 

10 

and non-elderly, 

non-disabled adult 

~ ~ ~ % ~ oo m ~ ~ m ~ ~ '14 

The SNAP benefit formula contains an important work incentive. For every additional dollar a 

SNAP recipient earns, her benefits decline by only 24 to 36 cents- much less than in most other 

programs. Families that receive SNAP thus have a strong incentive to work longer hours or to 

search for better-paying employment. States further support work through the SNAP Employment 

and Training program, which funds training and work activities for unemployed adults who receive 

SNAP. 

Most SNAP recipients who can work do so. Among SNAP households with at least one 

working-age, non-disabled adult, more than half work while receiving SNAP - and more than 80 

percent work in the year prior to or the year after receiving SNAP. The rates are even higher for 

families with children. (See Figure 6.) (About two-thirds of SNAP recipients are not expected to 

work, primarily because tbey are children, elderly, or disabled.) 

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r:GURE 6 

SNAP Households with Working-Age 

Non-Disabled Adults Have High Work Rates 

Work participation during the previous and following year for households 

that received SNAP in a typical month 

SNAP households Families with children 

87% 

Employed in month of SNAP receipt Employed within a year 

:''' 

---·----

II. SNAP Prioritizes Program Integrity 

\v'hile SNAP's primary purpose is to help struggling households afford a basic diet, the program 

cannot achieve its goal without maintaining strong program integrity. USDA and states take their 

roles as stewards of public funds seriously and emphasize program integrity throughout program 

operations. Moreover, the authorizing committees have mandated in SNAP some of the most 

rigorous program integrity standards and systems of any federal program. They provide oversight of 

the program's accuracy and fraud detection and prevention systems. These strong systems ensure a 

high degree of integrity and accuracy in the program. 

SNAP's eligibility assessment and standards for review arc robust. States determine SNAP 

eligibility and benefits based on an assessment of a household's current income, certain deductible 

expenses, and household characteristics. When a household applies for SNAP it must report its 

income and other relevant information; a state eligibility worker interviews a household member and 

verifies the accuracy of the information using third-party data matches, paper documentation from 

the household, and/ or by contacting a knowledgeable party, such as an employer or landlord. 

Households must reapply for benefits periodically, usually every six or 12 months, and between 

reapplications must report income changes that would affect their eligibility. This is generally a 

more robust assessment of financial need that other programs employ. 

SNAP has numerous measures to ensure the accurate assessment of household eligibility during 

the eligibility process, through ongoing checks and reassessment of eligibility. The same is true with 

respect to the proper use of benefits, an area of fraud prevention and detection where USDA also 

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plays a significant role. These measures are designed to detect and prevent the occurrence of honest 

mistakes, careless errors, systemic mistakes, and the less frequent problem of intentional fraud. 

They include extensive requirements that households applying for or seeking to continue receiving 

SNAP prove their eligibility, sophisticated computer matches to detect unreported earnings, a 

Quality Control (QC) system that is the most rigorous of any public benefit program, and 

administrative and criminal enforcement mechanisms. My experience with SNAP program integrity 

issues is primarily in the area of program policy and state operations: the eligibility process, ongoing 

eligibility checks via third-party data matching, coordinating SNAP with other programs, and quality 

control. I will review several of the key program integrity measures in the program. 

Strong Eligibility and Payment Accuracy Backed Up by Quality Control System 

SNAP has long had one of the most rigorous payment error measurement systems of any public 

benefit program. \'Vhen, under the leadership of this Committee, Congress enacted the Improper 

Payments Act in the early 2000s to establish a framework for federal agencies to reduce improper 

payments, SNAP was among the few programs to already meet the Act's high standards. Each year 

states take a representative sample of SNAP cases (totaling about 50,000 cases nationally) and 

thoroughly review the accuracy of thcir eligibility and benefit decisions. Federal officials re-review a 

subsample of the cases to ensure accuracy in the error rates. States are subject to fiscal penalties if 

their error rates are persistendy higher than the national average. 

The percentage of SNAP benefit dollars issued to ineligible households or to eligible households 

in excessive amounts fell for seven consecutive years and stayed low in 2014 at 2.96 percent, USDA 

data show. The underpayment error rate also stayed low at 0.69 percent. The combined payment 

error rate - that is, the sum of the overpayment and underpayment error rates -was 3.66 percent, 

low by historical standards.5 Less than 1 percent of SNAP benefits go to households that are 

ineligible. (See Figure 7 .) 

If one subtracts underpayments (which reduce federal costs) from overpayments, the net loss to 

the government in :FY2014 from errors was 2.27 percent of benefits. 

In comparison, the Internal Revenue Service (IRS) estimates an average tax noncompliance rate of 

18.3 percent for tax years 2008 through 2010 (the most recendy studied years). This represents a 

$458 billion loss to the federal government in one year. Underreporting of business income alone 

cost the federal government an average of$125 billion per year between 2008 and 2010, and 

nonfarm sole proprietors underreport thcir income by 63 percent_G 

5 See the fiscal year 2014 error rates: !u:w://www.fns.usda.gov/snap/quality-control. 

6 For both SNAP and taxes the figures represent gross estimates (i.e.) before SNAP households repay overpayments, 

taxpayers make voluntary late payments, or consideration of IRS enforcement activities.) The net costs are somewhat 

lower. See: Internal Revenue Service, "Tax Gap for Tax Year 2008-2010, Overview," .April28, 2016, 

https: //www.irs.gov /PUP /newsroom/!J!X%20gap%20estimates%20for"6>202008%20through%202010.pdf. 

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FIGURE 7 

SNAP Error Rates Near All-Time Lows 

Fiscal years 1990-2014 

10% 

8 Overpayment rate 

Underpayment rate 

6 

4 

2 

0 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 

Source; Quality Control Branch, U.S, Food and Nutrltlon Ser..rlceThe overwhelming majority of SNAP errors that do occur result from mistakes by recipients, 

eligibility workers, data entry clerks, or computer programmers, not dishonesty or fraud by 

recipients. In addition, states have reported that almost 60 percent of the dollar value of 

overpayments and almost 90 percent of the dollar value of underpayments were their fault, rather 

than recipients.' Much of the rest of overpayments resulted from innocent errors by households 

facing a program with complex rules. 

It should be noted that an overpayment is counted in a state's error rate whether or not the 

overpaid benefits are collected back from households. In fiscal year 2014, states collected about 

$340 million in overissued benefits. 7 

Finally, it cannot be overstated how much emphasis on achieving and maintaining low payment 

error rates pervades SNAP's operational culture. USDA and the states, which administer SNAP 

under federal guidelines, monitor SNAP error rates throughout the year and share best practices. A 

significant number of federal and state personnel are assigned to program integrity.' The error rate 

is the major performance measure for accountability at state and local SNAP offices and even for 

individual SNAP state eligibility workers and policy officials. 

The impact of operational or policy decisions on state error rates is almost always a consideration 

as to whether a state adopts a change. In the past, fear of high error rates has sometimes driven 

7 SNAP State Activity Report, Fiscal Year 2014, p. 36. http://www.fns.usda.gov/sites/default/files/snap/2014-SNAPRetailer-Management-Annual-Report.pdf 

8 SNAP benefits are federally funded. States and the federal government share S).!AP's administrative costs, including 

certifying eligibility, issuing benefits, and ensuring program integrity. 

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states to adopt policies that deterred access. This was most pronounced in the late 1990s when the 

share of households with earnings on SNAP began to rise (as a result of the strong economy and 

policies enacted in welfare reform). Low-income earners often experience sharp fluctuations in their 

monthly income, making household income difficult to predict accurately for SNAP benefit 

calculations. Some states instituted administrative practices designed to reduce errors that had the 

unintended effect of making it harder for many working-poor parents to participate, largely by 

requiring them to take too much time off from work for repeated visits to SNAP offices at frequent 

intervals, such as every 90 days, to reapply for benefits. 

This prompted many analysts and state policy officials from across the political spectrum to call 

for reforms to policy and quality control that would improve access to SNAP for low-income 

working families, and led both the Clinton and the Bush administrations to act to address this 

problem. There was bipartisan consensus that having a policy under which a family needed to be on 

welfare to receive food stamps, and faced significant difficulty receiving food stamp assistance if it 

left welfare for work at low wages, would reduce incentives to work and was contrary to welfare 

reform goals. Congress enacted significant, although relatively modest, changes in 2002 and 2008 to 

modify program rules that would lessen barriers to SNAP participation among the working poor 

without compromising program integrity. 

High Improper Benefit Denials Raise Concerns 

Through the SNAP QC system, USDA and states also monitor "case and procedural error rates" 

(CAPERs), which measure whether the state properly denied, suspended, or terminated SNAP 

benefits to certain households and properly notified those households of its decision. 9 USDA and 

states implemented new procedures for these error rates in 2012, which now hold states more 

accountable for the timeliness, accuracy, and clarity of the notices states send to households 

regarding their decisions. This improvement is important so that eligible households who are denied 

have the specific information necessary to clarify their circumstances or provide missing 

documentation. 

For example, prior to these changes, one state's notice informed denied households that the 

household was denied eligibility because "You did not do what you needed to do to meet all of the program 

rules, according to the code of regulations. " 10 Reading such a notice, a household would have no way of 

knowing why it was determined ineligible for the program. This undermines the purpose of the 

notice, which is to provide sufficient information regarding the reasons why a household was denied 

so that an eligible household can appeal an incorrect decision or provide new information to reverse 

the decision (i.e., due process). Today, such a notice would be an improperly denied case because it 

does not adequately inform the household of the reason its application was denied (such as that it 

did not provide a particular pay stub or missed a scheduled interview). 

9 The CAPER, which replaced what was known as the unegative error rate,u is separate from the underpayment error 

rate, which covers cases where states provided some benefits but not as much as the household should have received 

under SNAP rules. 

1° FNS Guide to Improving Notices of Adverse Action, http: //www.fns.usda.gov /sites I dcfault/flles/snap/FNSNotice-Improvement-Guidance.pdf. 

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Nationally, in 2014 over one-quarter of states' actions to deny or terminate SNAP benefits were 

found to be improper. Eight states' CAPERs approached or exceeded 50 percent." The CAPER is 

not direcdy comparable to the overpayment and underpayment error rates. It is based on a separate 

state sample of denials, suspensions, and terminations, and the review of the state's decision is not as 

rigorous as for the payment errors. USDA does not assess or report whether the household was 

ineligible for a reason other than the reason given by the state or the amount of benefits that 

improperly denied households should have received. Also, states are not penalized for persistendy 

high CAPERs (though they can receive a performance bonus for low or improving CAPERs, as 

discussed below). We anticipate that, as states reconsider and redesign their denial procedures, 

adjust to the new measurement regime, and improve their notices, the CAPER rate will improve. 

SNAP Provides for a Strong Anti-Fraud System 

Fraud, while relatively rare, is taken seriously in the program. Within the SNAP context, fraud is 

defined to mean occurrences where: 

• SNAP benefits are exchanged for cash. This is called trafficking and it is against the law. 

Trafficking involves two parties- typically a household and a SNAP retailer. 

• A household intentionally lies to the state to qualifY for benefits or to get more benefits than 

they are supposed to receive. 

• A retailer has been disqualified from the program for past abuse and lies on the application to 

get into the program again. 

States and USDA each play a role in pursuing these different kinds of fraud, dedicating significant 

resources and staff to pursing allegations of fraud and rooting it out when found. My testimony will 

briefly cover two of these issues: household fraud and trafficking. 

Household Fraud 

As with payment accuracy, SNAP's rigorous application process and eligibility review serves as the 

first line of fraud prevention. The program's design is based on a robust review of current 

household income and circumstances, setting a serious tone and make it difficult for an individual to 

casually lie in order to get benefits. The application process requires an interview with a caseworker 

and demands that, in addition to mandated verification (and often third-party data checks), any 

questionable information provided by the applicant be verified. For example, if an individual claims 

that its rent is $1,000 a month but it has no income, there is a question about how the household is 

affording its rent. If a caseworker were to accept such a statement without probing, the case could 

be in error - because the client was either confused about what counts as income (i.e., not counting 

support from a friend or family member) or did not tell the whole truth about its situation. The 

caseworker should follow up on this information at the interview and require additional verification 

from the individual before he or she is approved. States can set their own fllters on what provokes 

further follow-up based on individual circumstances. 

t1 The eight states are Arizona, Colorado, Georgia, Guam, New Jersey, New :r..Iexico, Nevada, and North Carolina. 

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Caseworkers feel appropriate pressure to ensure benefits are issued accurately. There is the 

formal QC review process, and many states do quality and accuracy reviews of staff work at the line 

manager level. Managers will review a certain number of cases from each worker each monthgenerally focusing on less experienced workers. This provides another spot check for quality and 

fraud detection as well as keeping managers informed of which areas of the program roles and 

processes might need additional training. 

In addition to requiring applicants to provide verification, state agencies run database checks to 

match the information provided by applicants. For example if an application lists Social Security as 

a source of income, the eligibility worker reviev;,~ng the case would check with the Social Security 

Administration to verify the amount of the monthly payment. In many instances the database 

checks provide real-time data, meaning that a caseworker can reconcile information discrepancies on 

the application while talking with the applicant. An area for program improvement would be for 

Congress to consider providing all states with this capacity. 

Once a household is determined eligible for the program, it has to remain eligible to continue to 

participate. It must report changes that would make it income-ineligible. And many states run 

third-party matches throughout a household's eligibility cycle to continue to check that external 

information confirms the household's circumstances. For example, Congress has mandated that 

states check with prison records and state vital statistics to ensure that no member of a SNAP 

household continues to receive benefits during incarceration or after death. 

When a caseworker suspects that a client is not telling the truth and is seeking to deceive the 

program, the case is referred to the state's fraud unit. Member of the public and other state agencies 

may similarly report any suspected fraud. Most states prominently display fraud hotlines on their 

main webpages or take other steps to make it easy for the public to report fraud. 12 

States must have fraud investigative units or staff so that allegations of fraud by the public or 

other agencies or referrals from eligibility caseworkers can be assessed. \\!hen referrals arc made to 

the fraud unit, fraud investigators review whether the case is worthy of pursuit. If so, they 

investigate to determine whether the individual committed fraud. Many investigations do not result 

in a fraud finding. Out of the over 640,000 fraud investigations in fiscal year 2014, 54 percent of the 

cases were determined to not be fraud. 13 When the fraud investigators gather enough evidence to 

make a case that fraud has occurred, there is typically a hearing where the facts are reviewed and 

clients have an opportunity to dispute the allegations. This process is in place so that those who 

have committed fraud are disqualified from the program, while innocent participants who made 

unknowing mistakes are not. 

If found guilty of fraud, a person loses SNAP eligibility. In addition, states pursue the improperly 

issued benefits for repayment via SNAP's claims process. States are eligible to retain a share of misissued benefits that they collect as an incentive for them to pursue the claims. 

12 USDA also has a fraud hotline that the public can use to report suspected fraud to the agency. 

13 SNAP State Activity Report Fiscal Year 2014. 

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Fraud Violation 

First fraud/intentional program violation 

Second fraud/intentional program violation 

Third fraud/intentional program violation 

False statement with respect to identity or 

place or residence in order to receive multiple 

SNAP benefit simultaneously 

Penalty 

12-month disqualification period 

24-month disqualification period 

Permanent disqualification from SNAP 

10-year disqualification period 

In fiscal year 2014, 45,000 individuals were disqualified from SNAP for fraud, up slightly from 

43,000 in fiscal year 2013." 

Trafficking 

• Another area of program integrity in which SNAP has a strong systems and has made 

considerable improvements is trafficking, or the sale of SNAP benefits for cash, which 

violates federal law. USDA has cut trafficking by three-quarters over the past 15 years. About 

1 percent of SNAP benefits now are trafficked." 

• A key tool in reducing trafficking has been the replacement of food stamp coupons with 

electronic debit cards like the ATM cards that most Americans carry in their wallets, which 

recipients can use in the supermarket checkout line only to purchase food. 

• Sophisticated computer programs monitor SNAP transactions for patterns that may suggest 

abuse; federal and state law enforcement agencies are then alerted and investigate. Retailers or 

SNAP recipients who defraud SNAP by trading their benefit cards for money or 

misrepresenting their circumstances could face criminal penalties. 

• Over the years, USDA has sanctioned thousands of retail stores for not following federal 

requirements. In fiscal year 2015, USDA permanently disqualified over 1,900 SNAP retailers 

for program violations and imposed sanctions, through fines or temporary disqualifications, 

on another 800 stores. 16 

USDA also partners with state SNAP agencies to combat trafficking. In2014, USDA provided 

over $5 million to states to use technology to identify possible fraudulent activity and to increase the 

number of trafficking investigations. The 2014 Farm Bill provided $7.5 million for states to create 

or improve technology systems designed to prevent, detect, and prosecute trafficking. USDA 

recently awarded such grants to five states. 17 

H SNAP State Activity Report Fiscal Year 2014, p. 2. 

15 U.S. Department of Agriculture, "The Extent of Trafficking in the Supplemental Nutrition Assistance Program: 2009-

2011 ," "~ ugust 2013, http: I /www. fns.usda.gov I extent -trafficking-supplemental~nutrition-assistance-program-2009-2011-

august-2013. 

16 USDA, "SNAP Retailer Management Annual Report, 2014, http:l/www.fns.usda.guv/sites/default/fdes/snap/2014-

SNAP-Retailer-l\!anagement-Annuai-Report.pdf 

17 http: //www.fns.usda.gov /snap /fy2015-snap-recipient -integrity-information -technology-grant -summaries 

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SNAP Administration Is Efficient 

Finally, it is worth noting that SNAP is able to accomplish these results with low administrative 

overhead. About 93 percent of federal SNAP spending goes to providing benefits to households for 

purchasing food. (See Figure 8.) Of the remaining 7 percent, about 6 percent was used for state 

administrative costs, including eligibility determinations, employment and training and nutrition 

education for SNAP households, and anti-fraud activities. Less than 1 percent went to federal 

administrative costs. In addition to SNAP, the SNAP budget funds $2.4 billion in other food 

assistance programs, including a block grant for food assistance in Puerto Rico and American 

Samoa, commodity purchases for the Emergency Food Assistance Program (which helps food 

pantries and soup kitchens across the country), and commodities for the Food Distribution Program 

on Indian Reservations. 

93 Percent of Federal SNAP Spending Is for Food 

Federal share········ ·-·-·-·· 

of state 

administration 

6.3% 

:-·············-······ Federa I 

administrative 

costs 

0.6% 

What Else Can Be Done to Enhance Program Integrity? 

\'Ve support the ongoing effort to work to maintain and improve SNAP's program integrity. As 

new technology becomes available and as awareness of how problems arise improves, there will 

continue to be opportunities to improve SNAP accuracy and prevent fraud. And, with respect to 

fraud, while a relatively small problem, it's an ever-changing concern. Criminals are adaptable, and 

the government's response to them must also remain nimble and responsive to current patterns of 

fraud. 

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Often, our biggest obstacle to helping states implement new measures that would increase the 

accuracy of benefit issuance is cost. Modernized eligibility systems, access to useful third-party data 

and the appropriate level of staff to process cases with a high degree of accuracy can be costly for 

states. While the federal government shares in the costs of administering the program, state budgets 

are the limiting factor to ensuring the best systems and technology are deployed throughout the 

program. Many states downsized their program operations during the recent recession and have not 

yet rebuilt the capacity necessary to take full advantage of new options and technology. 

As the Committee considers new ideas to improve program integrity in SNAP or any other major 

benefits program, we encourage you to assess whether new ideas are worthy of consideration against 

several criteria. 

• What is the scope and scale of the problem under discussion? Some of the most 

egregious examples of fraud are highly isolated incidences of criminal activity. To be sure, 

they are completely unacceptable, but they may be so infrequent that they should not drive the 

program's fundamental approach to addressing more common, everyday program integrity 

issues. In the case of error, scope and scale also matter. States may fail to act on data 

showing that some individuals arc no longer eligible for the program. It's useful to assess the 

problem and the possible solutions, based on whether the problem involves, for example, 40 

or 4,000 individuals. Neither is acceptable, but each situation would likely warrant a different 

level of response. Often auditors or reviewers give the same headline to each type of 

problem, which can distort the response. 

• What are the projected costs and benefits associated with the proposed solution? It's 

always sensible to review project costs and savings related to proposed activities. We find, 

however, that when a proposal is promoted as an anti-fraud activity, some are reluctant to 

weigh the pros and cons out of fear of being perceived as soft on fraud. A good example in 

recent years would be the debate around the value of data matching. A few states have 

dramatically increased their matching with third-party data sets to check the information 

households provide on their applications. As a general rule, this is a solid practice so long as 

the data sets offer relevant current information and the state has the resources to sift and sort 

through data matching results. But, if a state matches a household's income and 

circumstances from today (when it is in need of SNAP) with income data from six months 

ago (when the honsehold didn't need SNAP), the two will not align. That does not mean that 

the client provided incorrect or fraudulent information on its application. More low-cost 

matching that just asks clients to resolve or workers to sort through bad matches appears to 

be a waste of time and resources that can cost much more than it saves and can divert state 

agency staff from more cost-effective program integrity interventions. Smart, well-timed 

matching, i.e., matching with higher-quality data provided via real-time access to those data 

while workers are talking to clients, can be extremely effective even thougb it might cost more 

in the short run. 

• Will the proposal have any negative consequences, for example, would it reduce 

access to the program by eligible people? Earlier in my testimony, I outlined an example 

from the late 1990s where the program's rules and focus on payment accuracy resulted in 

making it harder for eligible working-poor families to participate. Balance always has to be 

sought between reasonable controls and access to vital help for very vulnerable households. 

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• Who is promoting the change? Often private vendors selling program integrity solutions 

are some of the biggest critics of the program. Their self- interest in promoting problems in 

the program (or a perception of a program in crisis) must be considered. 

\'Ve offer the following suggestions as areas that Congress might want to consider to enhance 

SNAP's program integrity. 

• A federal investment to allow states to upgrade their state information technology systems to 

ensure that caseworkers can access other government databases, i.e., Social Security, 

Department of Motor Vehicles, or other programs, in real time at their desks while working 

on adjudicating eligibility or talking to clients. All states have access to the required 

information, but for some it can be often on a delayed basis. This means that an eligibility 

caseworker might make a query and get the match back days later. That undermines their 

ability to work efficiently and to engage clients directly when there is a discrepancy. Federal 

matching funds are available to states to build this capacity, but not all have taken advantage 

of it. Perhaps USDA could consider procuring this tool for states. 

• USDA could provide more assistance to states in assessing when errors arise because SNAP 

rules are out of synch with those for other major federal benefits programs, particularly 

Medicaid. In over 40 states, SNAP and Medicaid are co-administered. Their statutory rules, 

while similar, differ in some respects. Clients, caseworkers, and even state systems can 

confuse the requirements of one program for another. Historically, the Department of Health 

and Human Services and USDA have not done enough to identify these issues on their own 

or to engage with states on the problems and potential solutions. Many of the small vexing 

errors that arise as a result of these disconnects have solutions within the federal rules or 

within the flexibility afforded states. The federal agencies have recently started to understand 

their role in creating confusion across the various health and human services programs and 

have started to engage states on options to harmonize federal rules. They can do more. 

• A joint federal-state effort to share effective methods of identifying cases that contain fraud or 

that are guilty of trafficking after a more in-depth investigation. This is true for both 

individuals and retailers. Similarly, Congress may wish to review whether USDA needs more 

resources or authority to remove such stores from the program more quickly. 

• USDA is undertaking a review of the quality control review process based on 

recommendations by the Office of Inspector General. That effort may result in 

recommendations that require new authority or resources to enhance the quality of the 

system. 

Not All Proposals Promoted in the Name of Program Integrity Are Effective 

SNAP benefits are issued to eligible household on debit cards, commonly referred to as electronic 

benefit transfer (EB1) cards. Federal law provides states with the option to require a photo of one 

or more adult household members on the EBT. Proponents of the option claim it reduces the 

selling or stealing of cards because retail clerks would catch individuals using a stolen card at the 

checkout line. However, a recent report from the Urban Institute found that "photo EBT cards are 

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not a cost-effective approach to combat trafficking."18 The Urban Institute report found that the 

option is costly and unnecessary. There is no evidence that requiring photos would be responsive to 

the issue of stolen cards; EBT cards use a Personal Identification Number (PIN), just like an ATM 

card, making it difficult for someone to steal the card and use it without permission. Moreover: 

• Trafficking is at a record low in the program and often involves an unscrupulous retailer who 

is unlikely to be deterred by a photo on the EBT card. 

• States have other options to improve program integrity, including procedures for replacing 

cards that are reported lost or stolen and EBT transaction monitoring. 

• A photo EBT requirement can be costly to administer. Photo equipment must be readily 

accessible for all participants and EBT vendor contracts must be revised. Several states 

considering this policy abandoned it after comparing the costs and benefits. 

The two states that have most recently implemented the option, Maine and Massachusetts, have 

experienced significant implementation problems that provoked intensive scrutiny from USDA. 

The problems in these states led USDA to propose regulations governing the option. Comments 

submitted by SNAP participants in Massachusetts and Maine, as well as community organizations 

and retailers, detail numerous examples of people confused about the policy and deterred from 

participating. Their concerns can be summarized as: 

• Photo EBT can prevent some SNAP participants from using their benefits. While the 

"head of the household" is the state agency's key contact, all household members are entitled 

to purchase food with SNAP benefits. In both states that have photo EBT, household 

members such as children, spouses, or seniors have been wrongly denied use of their cards at 

the grocery store checkout line because they were not the individual pictured on the 

card. One SNAP participant reported "a traumatic experience trying to use my family's EBT 

card when shopping for food." 19 

• Individuals with disabilities can face serious challenges with photo EBT 

requirements. Many SNAP participants who are unable to get to the store due to a physical 

condition or who require help in managing their finances due to a mental impairment often 

rely upon others, known as "authorized representatives," to buy food for them. Photo EBT 

requirements make it harder for friends, family members, and volunteers to assist individuals 

with severe needs. Moreover, individuals with disabilities may not be able to go to the office, 

themselves, to provide a photo. 

• Photo EBT proposals do not require photos of all members, leaving retailers with no 

way of knowing who is authorized to use the card. Retailers are not required to know all 

eligible users of a card and they do not have means, aside from the PIN, to ensure an 

individual is an authorized user of the ca.rd. This renders the photo irrelevant (albeit costly). 

But, some retailers or retailer staff may believe that because the photo is there that they must 

18 Gregory l\1ills, "Assessing the Merits of Photo EBT Cards in SNAP," Urban Institute, March 2015, 

http://www.urban.org/publications/200159.html. 

19 Comment submitted by Vicky K. on Photo Electronic Benefit Transfer (EBT) Card Implementation Requirements, 

RIN 0584-AE45. 

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demand additional identification from SNAP shoppers. Such an experience can create a 

negative experience for customers, souring their view of a particular retailer. 

• Retailers may not understand state photo EBT rules as the retailers are authorized by 

USDA, not the state. Retailers have not been subject to state-imposed SNAP requirements 

and may not know what their responsibilities are regarding photo EBT. SNAP households 

shop across state lines, and retailers were confused about whether one state's limits must be 

imposed by retailers operating in another state. 

The evidence suggests that this option does not meet any of the assessment outlined earlier in my 

testimony. States considering a photo EBT requirement can learn from Missouri's earlier experience 

with trying a photo EBT requirement. After reviewing the state's requirement to place a photo on 

EBT cards, the state auditor found the photographs useless for fraud or identification and the state 

wisely discontinued the policy. 

Conclusion 

SNAP is a highly effective anti-hunger program. Much of the program's success is due to its 

entidement structure, a consistent national benefit structure, and its food-based benefits. The 

program also imposes rigorous requirements on states and clients to ensure a high degree of 

program integrity. We look forward on working with Congress to ensure the program's ongoing 

success. 

21 
89 

Mr. MEADOWS. Thank you, Ms. Dean. 

The chair recognizes the vice chair of the Subcommittee on Government Operations, the gentleman from Michigan, Mr. Walberg. 

Mr. WALBERG. Thank you, Mr. Chairman, and thanks to the 

panel for being here. 

This week, my colleagues on the Republican side of the aisle 

began unveiling a policy, as was mentioned earlier, an agenda that 

is intended to tackle some of our country’s biggest challenges. The 

first plank of our initiative looks at ways to address poverty, and 

SNAP is a key part of our safety net to serve and support the most 

vulnerable and make sure that that is the population we really and 

intentionally meet the needs of. 

Our initiative is aimed at lifting people out of poverty and onto 

the ladder of opportunity, and so, Commissioner Mayhew, I was especially struck in your testimony, your personal testimony, about 

the lessons your family passed on to you about the value of hard 

work, depression-era, not you —— 

Ms. MAYHEW. Thank you. 

Mr. WALBERG.—though my parents had the same story, but they 

were the ones in the depression era, so I came from that. And they 

had similar lessons, again, from that experience that I think have 

benefited me well and apparently you also. 

If you would be so good, Commissioner Mayhew, as to talk in 

more detail about the Federal SNAP regulations that create barriers, as you mentioned, barriers to your efforts to pursue those 

who traffic in benefits. Give us some more insight on that. 

Ms. MAYHEW. Thank you. I appreciate the opportunity to elaborate. Certainly, we care deeply. The Governor cares deeply about 

the success of these safety net programs. And it is critical that we 

are constantly evaluating whether or not our limited resources are 

being used effectively to support vulnerable individuals and families. 

I also have the privilege of overseeing our child welfare agency, 

and I want to make a point and a connection about what we are 

seeing in terms of the challenges and truly destruction of our families when 60 percent of the children today who are coming into protective custody are doing so as a result of parental substance 

abuse. We know we have a serious challenge in our State with 

drugs, with substance abuse, and certainly, as I mentioned in my 

testimony, we know there’s a connection with trafficking and EBT 

cards for drugs and for cash. 

So as we look at ways in which to deter, we do feel strongly that 

the opportunity to use photos on EBT cards, we’ve been very clear 

that the photo on the EBT card is to discourage fraud, that when 

we speak and work with local drug enforcement agents and they 

tell us about the number of EBT cards that they are confiscating 

from drug raids, and since we have implemented photos, they have 

not confiscated an EBT card with a photo on it. 

The challenge has been, as we have implemented, we’ve received 

numerous concerns and communications from the USDA regarding 

our implementation of this federally permitted option. And again, 

we’ve done it on a voluntary basis. 

Mr. WALBERG. I was going to bring that up again. I think you 

mentioned it was voluntary. 


AKING-6430 with DISTILLER
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Ms. MAYHEW. It is voluntary. Okay. We certainly offer to individuals the ability to put their photo on the EBT card —— 

Mr. WALBERG. So what is the problem the Federal Government 

is giving on that then if —— 

Ms. MAYHEW. They have raised a number of barriers. When we 

first decided that we were going to implement, we had provided a 

number of documents to the USDA to provide all of the background 

to how we intended to implement responding to all of their questions. We were told to stop, to not go forward. We felt very strongly, the Governor felt very strongly that, again, this is federally permitted, that we had addressed the questions that had been asked 

of us, provided detailed plans of how we were operationalizing this 

and again felt strongly that this was a significant tool. 

More recently, we have developed a partnership with our Bureau 

of Motor Vehicles to more conveniently access the driver’s license 

photos. We are getting authorized consent from each of the individuals to use their driver’s license photo, and we recently received 

another letter telling us to basically cease-and-desist between two 

State agencies that have agreed to do this, and we now have the 

USDA asking us to stop. 

Mr. WALBERG. To not do it even though you were permitted to 

do it by law? 

Ms. MAYHEW. We are. And again —— 

Mr. CONCANNON. They must do it, though, within the framework 

of Federal law and regulations, and that was the issue in Maine. 

Mr. WALBERG. Well, I guess that is —— 

Mr. CONCANNON. Poorly implemented, and I want 

Mr. WALBERG. Excuse me. Excuse me. 

Mr. CONCANNON.—the record to show that. 

Mr. WALBERG. Excuse me. Excuse me. I was asking Ms. Mayhew. 

I would like a full or description then if I could, Mr. Chairman, of 

what the pushback was. It indicated in the constraints of the law 

itself, but what were you violating according to them? 

Ms. MAYHEW. We have not—in all of the letters and the backand-forth we have not seen any verified, documented issues where 

we have poorly implemented or—you know, we can make a lot of 

these issues complicated. I oversee a large State agency. I know 

how quickly government can make things complicated. We are trying to protect this safety net program. We see the trafficking in 

these cards that is taking away a vital resource for a vulnerable 

child, from a family, and we have identified this as a meaningful 

tool to discourage trafficking. 

It has felt as though—you know, and I struggle a little bit with 

hearing that it’s an option and then hearing all of the reasons why 

they don’t believe that it’s an effective tool. So it does feel as 

though we’re constantly receiving all of the reasons why we can’t 

move forward. And this is an option that we have elected to pursue. We have done it in consultation with the USDA. We have responded to their questions. We have met with their staff. This 

dates back to the spring of 2014 that we have been working with 

the USDA, responding to their questions, but we want to do it in 

partnership with the shared goals. 

Mr. WALBERG. I appreciate that. My time is expired, but, Mr. 

Chairman, I appreciate you giving me that extra time because it 


AKING-6430 with DISTILLER
91 

is frustrating to hear of a State that is attempting to do something 

that seems to be having some positive impact, trying to do an option that they have available from Federal Government, continually push back. And again the perspective seems to have come already even in testimony that while it is an option, yet the feds 

don’t want it to be an option. So I hope we get further information 

as we move along, but thank you. 

Mr. CONCANNON. Mr. Chairman, I’d like the opportunity to respond —— 

Mr. MEADOWS. Hold on just a second. 

Mr. CONCANNON.—to some of that. 

Mr. MEADOWS. We are going to go to the ranking member real 

quickly, and he probably will give you a chance to respond. If not, 

when I get my time, I will, okay? 

Mr. CONNOLLY. Mr. Concannon, we just heard the State of 

Maine, my goodness, all they are trying to do is make sure there 

is not fraud and trafficking, and they are trying to do the right 

thing while preserving the program and the benefits and the safety 

net. And Ms. Mayhew runs a big program in a small State and a 

big bad Federal Government is just apparently, for no reason whatsoever, preventing them from doing this commonsense thing. You 

weren’t given an opportunity to respond. I want to give you that 

opportunity. 

Mr. CONCANNON. I very much appreciate that. And just incidentally for the record, I’m a legal resident of the State of Maine, very 

familiar with what goes on —— 

Mr. CONNOLLY. You sound it. 

Mr. CONCANNON.—in that State and ran this very same department for a number of years. So it’s not news to me. First of all, 

it is an option to the State. We want the State, if States so elect, 

to adopt it, perfectly fine, but it has to be done in ways in which, 

for example, Maine, the business community was advised and 

trained on what to expect. There was a lot of confusion right at the 

outset by various—some other people in the retail business in 

Maine. They felt they were not really adequately trained, addressed about it. Consumers were confused about it. Was it—we 

sent people up to a regional office. They were unclear whether it 

was an option or mandatory. So we simply want it done properly. 

We’re not opposed to it. So some of what I’ve heard today, you 

know, really greatly overstating some of these things. 

Mr. CONNOLLY. So there is another side to the story? 

Mr. CONCANNON. There’s a considerable other side to the story. 

Mr. CONNOLLY. And did at any point your office of the Federal 

Government preclude Maine from pursuing this option? 

Mr. CONCANNON. No, we did not. 

Mr. CONNOLLY. Did you advise them they should not use the option even though —— 

Mr. CONCANNON. We did not. 

Mr. CONNOLLY.—it is an option? 

Mr. CONCANNON. We asked them, though, before they proceeded 

to make sure that they had done their training and so on, and they 

insisted on going ahead. 

Mr. CONNOLLY. Okay. 

Mr. CONCANNON. And so we had a problem. 


AKING-6430 with DISTILLER
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Mr. CONNOLLY. Let the record show, Mr. Chairman, that we had 

contradictory testimony in that matter. Apparently, there is another side to the story. 

Mr. CONNOLLY. Ms. Dean, what would happen if we took this 

program and just made it a block grant? What is wrong with that? 

Ms. DEAN. Well —— 

Mr. CONNOLLY. Please, please microphone. 

Ms. DEAN. Thank you. I think the single most powerful element 

of the program is its entitlement structure. It responds to increased 

need whether that’s at the national level when we have the kind 

of significant and deep recession that we had several years ago, the 

State level due to a downturn, or a community or even an individual family household level. When folks, when their income goes 

down, they can apply for benefits, and the program is available 

—— 

Mr. CONNOLLY. Why couldn’t they do that if it were a block grant 

program so that Ms. Mayhew or Mr. Carroll could manage it and 

decide —— 

Ms. DEAN. Across the board —— 

Mr. CONNOLLY.—who qualifies? 

Ms. DEAN.—block grants come with capped funding and that 

funding —— 

Mr. CONNOLLY. With what? 

Ms. DEAN. Capped funding, fixed capped funding that does not 

increase every year. 

Mr. CONNOLLY. Oh, so the fine print in block granting is we also 

cut the program? 

Ms. DEAN. Absolutely, both in terms of —— 

Mr. CONNOLLY. Ah. 

Ms. DEAN.—erosion due to inflation, not responding to need, and 

—— 

Mr. CONNOLLY. Well, let me ask a different question because, you 

know, I come from northern Virginia, and while we love all Virginians and we love our General Assembly, we do tremble when 

our fate is in the hands of Richmond. And we sometimes describe 

Richmond as 300 years away. And when someone wants to block 

grant something or give the authority to regulate to Richmond 

rather than directly to the recipients, say, in my corner of the 

world, northern Virginia, we get nervous because formulas change 

and urban and suburban populations often end up paying a price. 

Now, if we block grant this program, could it also affect who receives benefits, not only the finite amount but could we find that 

States start finagling with who qualifies and who might receive 

what benefits? 

Ms. DEAN. Absolutely. I don’t actually think you even need to describe it as finagling. 

Mr. CONNOLLY. I can’t hear you. 

Ms. DEAN. Yes, you don’t need to describe it as finagling. States 

would—typically, under a block grant they’re given the authority 

and power to set eligibility rules and standards. 

Mr. CONNOLLY. Which is different than the current—the status 

quo today? 

Ms. DEAN. Yes, it’s a national program. 


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Mr. CONNOLLY. So the feds under the national program decide 

who is entitled and who qualifies? 

Ms. DEAN. Yes, the Congress sets the rules. 

Mr. CONNOLLY. Right. And so if we block grant it, that transfers 

that right and that authority to the States? 

Ms. DEAN. Yes, it does. 

Mr. CONNOLLY. And that is a mixed bag from a recipient’s point 

of view? 

Ms. DEAN. Yes, it is, and we’ve seen it be a mixed bag under cash 

assistance. Flexibility allows States to try and test new things, 

some of which can be terrific positive innovations, but the other— 

the incredible downside with flexibility is the fact that States have 

balanced budget requirements, and frequently, when they face a 

test against their budget, they need resources, say, because they’ve 

had a downturn. We’ve seen them turn to block grants as a way 

to divert funds from those—that core purpose, which in the case of 

SNAP is food, to other purposes to meet their shortfalls. 

Mr. CONNOLLY. Thank you. Votes have been called, and I thank 

your indulgence, Mr. Chairman. 

Mr. MEADOWS. I thank the gentleman. They have called votes, 

which is an unfortunate aspect for each one of you. Unfortunately, 

it looks like we have got three votes. I don’t anticipate that we will 

be back before 3:30, so that will give you—you know, you can go 

get coffee, do whatever you need to do, but we will stand in recess 

until 3:30. 

[Recess.] 

Mr. MEADOWS. The joint committee will reconvene. Thank you all 

for your patience. We apologize. They were actually swearing in a 

new Member, so it took a little longer than normal. We are now 

up to an official 435 and so—the chair recognizes the gentleman 

from Alabama, Mr. Palmer, for 5 minutes. 

Mr. PALMER. Thank you, Mr. Chairman. I want to go back to a 

couple of things that were brought up earlier. 

Mr. Concannon, in your written testimony you say that 42 percent of SNAP benefits lived in a household with working adults. 

Can you positively affirm that the working adult in the household 

is the SNAP participant? That is a yes or no. 

Mr. CONCANNON. The earnings —— 

Mr. PALMER. No, sir. Let me rephrase it. 

Mr. CONCANNON. Okay. 

Mr. PALMER. Can you positively affirm that the working adult in 

those households is the SNAP participant? It is a yes or no. 

Mr. CONCANNON. Yes. 

Mr. PALMER. You can positively affirm that? I find that answer 

—— 

Mr. CONCANNON. Yes, because anybody living in the household, 

their income is included in the SNAP benefit. 

Mr. PALMER. Well, it doesn’t indicate that the income is from 

that participant because it could be another adult in the household. 

And I bring this up because —— 

Mr. CONCANNON. Anybody in the household is included in the 

benefit. 


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Mr. PALMER. Excuse me. Your own information says that in 2013 

three-quarters had no earned income meaning they were not working at all. That is from USDA. That is your number. 

Mr. CONCANNON. I’m not sure what number you’re referring to. 

Mr. PALMER. I am referring to the food and nutrition service 

characteristics of supplemental nutrition assistance program households, fiscal year 2013, U.S. Department of Agriculture. 

Mr. CONCANNON. Yes. So your—if you’re talking about children, 

for example, almost half of the folks on food stamps are children, 

then seniors and people with disabilities —— 

Mr. PALMER. No, I am talking about —— 

Mr. CONCANNON.—and parents working for —— 

Mr. PALMER.—you said —— 

Mr. CONCANNON.—very young children. 

Mr. PALMER.—42 percent of SNAP participants lived in a household with a working adult, and then your 2013 report says that 75 

percent had no earned income, and I just want to point out that 

inconsistency for the record. 

Ms. Mayhew —— 

Mr. CONCANNON. I would be happy to provide you with clarification. 

Mr. PALMER.—you may be aware that in some—I beg your pardon? 

Mr. CONCANNON. We’d be happy to provide you with clarification 

on that in writing. 

Mr. PALMER. I would appreciate that, and I believe the committee would, too. 

Mr. PALMER. Ms. Mayhew, earlier when Mr. Concannon indicated that he had run the Maine program, it appeared that you 

wanted to make a clarification. Would you like to do that now? 

Ms. MAYHEW. No, I appreciate —— 

Mr. PALMER. Would you turn on your —— 

Ms. MAYHEW.—Mr. Concannon’s response. Clearly he was a commissioner of the—of a Department of Human Services. Since that 

time, the agency has certainly changed somewhat. It merged. It 

created a much larger agency. But certainly I appreciate the history that Mr. Concannon has particularly with this program in 

Maine. Thank you. 

Mr. PALMER. I appreciate that. I am staying with you, and we 

touched on this a little bit before we had to break away. Do you 

believe there is a growing epidemic of SNAP benefits exchanging 

their cards for drugs? 

Ms. MAYHEW. I do. And it is—certainly as we look across all of 

our programs within the Department and our desire to evaluate holistically our efforts to improve the lives of the individuals that 

we’re serving, and certainly as I said, both looking at these welfare 

programs and their support of vulnerable families in my oversight 

of child welfare, I am incredibly concerned about the impact of drug 

abuse in Maine and the role that EBT cards are playing, being 

trafficked in for drugs and certainly for cash. 

Mr. PALMER. This past February, my own State of Alabama 

started to allow individuals with previous drug convictions to be eligible for benefits such as food stamps, and it is coming at a time 

when Alabama’s monthly average SNAP enrollment has almost 20 


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percent more Alabama enrollees than we have in K through 12 

public education system. So we are giving out food stamps, SNAP 

benefits faster than we are educating children to prepare them to 

join our workforce. Why shouldn’t we be able to require drug testing in the program to ensure that taxpayer money is going toward 

the recipients it was intended, and why should the State be obligated to fund those programs if the individual engaging in activity 

that is harmful to them is not conducive to their reintegration into 

society? 

Ms. MAYHEW. Congressman, we support drug testing. We have 

worked to increase drug testing in Maine. We have been met with 

resistance. We share your observations that these safety net programs are in fact intended to certainly help individuals out of poverty onto that pathway of prosperity and employment and that any 

amount of substance abuse is detracting from their ability to succeed and to be self-sufficient and again on that pathway to employment. It is clearly counterproductive to those goals. 

Mr. PALMER. Mr. Chairman, with the indulgence of the committee and the chair if I may, I would like to make one other point 

and that is in regard to Ms. Dean’s comment that we went through 

a recession and apparently believes that our economy has recovered. I would wonder if our economy has recovered why there are 

almost 5 times as many people on food stamps as there were in 

2008 and three times as many as in 2009. I yield back. 

Mr. MEADOWS. I thank the gentleman. 

The chair recognizes the gentlewoman from the District of Columbia, Ms. Eleanor Holmes Norton, for 5 minutes. 

Ms. NORTON. I just want to mention that the issues you are running into with drug testing is we can’t just drug-test people. There 

has to be some predicate laid in a constitutional system to doing 

that, and that is why I think courts have cast some doubt on doing 

drug testing as drug testing. 

I do want to note, especially the GAO report where no new recommendations were made, I put them in that the program is making some progress. And I note that the GAO report does note some 

continuing challenges, and the first one it notes is inadequate staffing levels. You know, if we want more of something, then we have 

to do more of something else. 

So I want to congratulate all of you involved in the program for 

what you have been able to do at a time of sequestration with what 

resources you have. Congress is quick to chastise programs for 

what they haven’t done but offers very little self-criticism of what 

its obligation is, so I do want that for the record to be known. 

I also want to say for the record some of us have a tradition of 

trying to live for a week on SNAP benefits. All I can tell you, it 

took me close to starvation when I tried to adhere to it for a full 

week, so I am pretty convinced that they are not extravagant rewards here for needing what we used to call food stamps. 

I was interested in this very low fraud rate because it is among 

the lowest if not the lowest in the Federal Government. You might 

expect it to be the highest given what we have just gone through 

in the Great Recession and the like. And so I am trying to get to 

the bottom of what is left. I am not sure anybody can get it to zero, 

and I compliment you for trying to do that. 


AKING-6430 with DISTILLER
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But I want to know if the main part of SNAP’s improper payments are administrative or are they fraud? 

Mr. CONCANNON. If I may, Congresswoman, on the improper payment rate for the SNAP program, this refers to when consumers 

come into the program, 60 percent of that problem are mistakes 

made by State or county —— 

Ms. NORTON. So give me examples of the kind of mistakes in the 

course —— 

Mr. CONCANNON. Well, they may not correctly record the income 

of the consumer. Forty percent is on a—the mistake is made by the 

consumer, occasionally deliberately but often it may be, hey, I 

didn’t properly report my income or my spouse or somebody else 

considered in the household had some part-time income. So—but 

60 percent of it is a State mistake. 

When we look at improper payments, the chair referenced the $2 

billion or so estimate. That’s the combined underpayment as well 

as overpayment because about two-thirds of it is an overpayment 

on the part of the State, but about one-third of it is we underpay 

consumers based on the—and the convention has been the requirement—this used to drive me crazy when I was a State director— 

we have to count both of them as though they were aggregated together. 

Ms. NORTON. I don’t know why you have to count both numbers. 

They are not the same numbers. I tell you one thing, if you are 

undercounting, you never get that money back, so I don’t even understand how it helps us to understand what is happening to say 

lob it all together, who cares? But that —— 

Mr. MEADOWS. Will the gentlewoman yield for just a second? I 

will be glad to work with her on that particular issue. 

Ms. NORTON. I thank the chairman very much for his intervention, and he is in a position to do it. I know he means it when he 

says it, my good friend. 

I understand when you see this low level, wow, that the program 

has very strict eligibility requirements and a rigorous application 

process. You know, people don’t like what you have to go through 

to apply for anything in government, but is that the case? And how 

do you facilitate people getting their benefits when the eligibility 

requirements are so strict and apparently adhered to? 

Mr. CONCANNON. Well, I might point out something that was referenced earlier to the deep recession we have just come through. 

Prior to that deep recession, again, I spent 25 years as a State director in different States. Across the country, typically, about half 

of the people who are eligible for the program were receiving it. 

They met the income eligibility, they were citizens of the United 

States who are here legally. Only about half were receiving it. 

During the deep recession, more people came forward but also 

States on a bipartisan basis, Democrats and Republican Governors, 

simplified the process still within the law. And now, about estimated 85 percent of people who meet the eligibility requirements 

receive the benefit. 

Ms. NORTON. Well, it took a recession to do it but I congratulate 

you for bringing forward people who are hungry and apparently 

needed the program all along. 


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Look, I don’t see a lot to complain about in this program with 

your low eligibility rate, with the GAO who loves to tell people 

what they are doing wrong, saying they don’t have any current recommendations at this time, so you deserve the commendation of 

the committee as well. 

Thank you very much, Mr. Chairman. 

Mr. MEADOWS. I thank you. 

The chair recognizes the gentleman from Wisconsin, Mr. 

Grothman, for 5 minutes. 

Mr. GROTHMAN. Thanks much. I think we are eventually going 

to call on Ms. Mayhew to ask questions, but I will just make a little comment first. I think there is probably no program in my district that people come up and talk to me about more. People are 

aware almost anywhere that they sell food stamps or whatever, 

SNAP, for 50 cents on the dollar, and of course if you needed every 

dollar on food, you wouldn’t be selling your food for 50 cents on the 

dollar, so that by itself indicates that there is—you know, people 

are getting these things who don’t need them at all. 

You know, I know somebody whose sister runs a grocery store, 

and she says you can tell just by what is in the cart who has got 

the SNAP and who is paying their money, and I think that is routine, which also shows there is something fundamentally wrong 

program. It is one of many welfare-related programs that our employers attribute to having a hard time getting employees to work 

because of course the more you work, the more you lose the benefits. 

And finally, it is something more and or we are hearing over 

time that discourages people from raising children in wedlock because, of course, if you raise children in wedlock, like many other 

welfare benefits, you lose your SNAP. I think that is probably, of 

all the bad things about the program, the worst. It is one more inducement to raise children out of wedlock, which is unfortunate. 

But we are going to start with Ms. Mayhew. Could you comment 

on after you went through the wonderful things you did are SNAP 

benefits still being sold for 50 cents on the dollar in Maine? What 

is the going rate as far as you know? 

Ms. MAYHEW. Well, certainly, we have, as I indicated, partnered 

with local law enforcement to both train them on the misuse of 

EBT cards to provide assistance with them. We certainly continue 

to have cases where EBT cards are trafficked in. It’s unfortunate 

for the Congressman from Alabama. There was a very high-profile 

case about a year ago where—very similar to what you are describing, rampant trafficking and EBT cards selling at 50 cents on the 

dollar, significant engagement with retailers. 

I think, you know, certainly, we all have shared the same goals 

of improving the integrity of this program. There are need—there 

was a need for additional fraud investigators. For the New England 

region there’s one fraud investigator for the USDA. I mean, I think 

that alone would indicate that we’re under-resourced. 

Mr. GROTHMAN. Right. I will just give you the question. In Maine 

what is the going rate for SNAP right now? Are they selling it for 

50 cents on the dollar, 60 cents on the dollar? What is the going 

rate? 


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Ms. MAYHEW. I honestly can’t comment on—I think that just varies on the individual who’s trying to get cash. 

Mr. GROTHMAN. Okay. Well, I will ask Ms. Dean. Do you live 

here in the Washington, D.C., area? 

Ms. DEAN. I do. 

Mr. GROTHMAN. When you ask your local —— 

Mr. MEADOWS. Put your mic on, please. 

Mr. GROTHMAN. What is the going rate for SNAP benefits in the 

Washington, D.C., area? 

Ms. DEAN. I’m not sure that that—like Commissioner Mayhew, 

I don’t think that there is a common understanding or a shared understanding of it. It is a very rare occurrence. 

Mr. GROTHMAN. Wait a minute. Whenever I talk to people in the 

food stores or people of the class that good food share, they don’t 

think it is uncommon. They tell me about these 50-cents-on-the-dollar sales all the time. In Florida, Mr. Carroll, what is the going 

rate for SNAP in Florida? 

Mr. CARROLL. I can’t answer that definitively. I will tell you what 

made the Opa-locka flea market so popular to draw folks not only 

from Florida but around the Nation was they were purchasing food 

stamps at 80 cents on the dollar. And we know that because on 

several of the stores that were rated, they actually—it was like a 

sale sign that you go in and you would see all the things and then 

you would see the 20 percent off sale. It was right on the registers, 

how much $30 would be converted into, how much $600 would be 

converted into, so it was right there. Folks saw it. It was posted. 

Mr. GROTHMAN. Okay. Mr. Concannon, when you get out and 

talk to people in the underclass, what are they selling their SNAP 

benefits for? 

Mr. CONCANNON. I travel across the country, including Florida, 

Maine, I was in Michigan earlier this week. As has already been 

noted, it is a rarity. I want to be very clear on that, that there are 

44 million people in the country. The vast majority of them abide 

by the rules. Just as there are 260,000 authorized retailers, most 

of them abide by the rules, but we have a proposal out these days 

to strengthen the requirements for convenience stores. That’s 

where much of this happens. 

I do want to make a comment on something you mentioned because I think it’s a misunderstanding. One, there is no penalty in 

the SNAP program if you’re married or not married. If you live in 

the same household with somebody, you share the meal, we count 

that whether you’re married or not, so there is not a marriage penalty. And I just want to be clear about that because when that’s 

expressed, people don’t understand that. They think, hey, that’s a 

problem. 

Mr. GROTHMAN. No. No, no, no. 

Mr. CONCANNON. It’s not part of the SNAP program. 

Mr. GROTHMAN. No, can I finish up because he is just saying 

something I don’t think is true or he is —— 

Mr. MEADOWS. Well, we will save that for a second round —— 

Mr. GROTHMAN. Okay. 

Mr. MEADOWS.—if we can at this —— 

Mr. GROTHMAN. You want to give me a second round. 


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Mr. MEADOWS. Okay. So the chair recognizes the gentlewoman 

from Michigan, Mrs. Lawrence, for 5 minutes. 

Mrs. LAWRENCE. Thank you, sir. SNAP provides critical support 

to people seeking to enter into the workforce by providing services 

to people who are looking for employment or training to become 

self-sufficient in contrast to the stereotype that if you are on SNAP, 

you are at home not working. 

Mr. Dean, some critics of SNAP believe that participation in 

SNAP discourages work, yet your testimony states that the SNAP 

participants want to work and do work. Can you explain in more 

detail how SNAP helps people when they are unemployed and how 

it helps to support and encourage work? I am sorry, I am sorry. 

Mrs. Dean, I am sorry. 

Ms. DEAN. That’s all right. Well, first of all, one of the core elements of the program that allows participants who aren’t working 

to obtain and maintain a job is that the eligibility limits, while restrictive, are set significantly higher than, say, a cash—the cashassistance programs most States offer. So participants who are not 

working can get a job, their benefits are reduced, but they can 

maintain eligibility. 

There’s also an earnings disregard built in the program so that 

income coming from work is treated more favorably than income, 

say, from Social Security or other unearned sources. 

We see a significant share of participants working. If you look at 

working-age adults who aren’t disabled, over half of them are working, and if you look at the year before or the year after a typical 

month of receipt, that goes to above 80 percent. 

The bottom line is that you cannot—it is nearly impossible to be 

poor in this country and not be working. There’s very limited forms 

of assistance available to struggling unemployed families. The unemployment insurance program is an open door for low-income 

workers who are in and out of the workforce. TANF cash assistance 

is incredibly restrictive. SNAP is the benefit that is available to all 

low-income individuals, nonworking and working like. 

Mrs. LAWRENCE. I just can’t pass up an opportunity to make a 

statement here. There are many who debate Planned Parenthood 

and contraceptives and say that the life of a child is precious. How 

can we debate that once a child is born that we would not ensure 

that the child would not be hungry? In America, SNAP program 

feeds poverty, those who cannot provide, those who are working 

poor so that they can have food. 

And I continue to say food is not a luxury, it is a human basic 

need. And so it troubles me when you have this conflict of philosophies. Once a child is born in this world and they are in America, 

we don’t have a choice of whether we are born or not, we are born, 

and that in America this program, SNAP, says that if you are in 

America, you will be able to get food to eat so that you can live. 

Just one last point, Ms. Dean. Many States have suspended the 

limited due to high unemployment rates during this recent recession, but that is now changing. I understand that some States are 

kicking hundreds of thousands of people off SNAP this year. Can 

you discuss why this is happening in some States and not in others? 


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Ms. DEAN. Sure. The 1996 welfare law included a provision that 

limited SNAP to 3 months out of every 36 months, so 3 months out 

of every 3 years, for childless adults unless they are working 20 

hours a week. It’s a little bit more complicated, but that’s the gist. 

States have the ability—and this—there’s no obligation on the 

State to offer a job slot or test the individual’s willingness to work. 

It is truly a time limit in most States that apply the rule. 

States have the ability to waive that rule in periods or in areas 

of high unemployment, and during the recession, virtually every 

State availed themselves of that opportunity to suspend the time 

limit so that food assistance could go to unemployed needy people. 

As the unemployment rate has fallen, areas no longer qualify, 

and this year happens to be a year where over 20 States had to 

re-implement the rule either because of their unemployment rates 

or they chose to, and as a result, we estimate a minimum of halfa-million people were removed from the program in April and May 

of this year. And we’ll see data to confirm that in a month or so. 

Mrs. LAWRENCE. Thank you. In closing, I just want to say that 

the SNAP program, 1 percent fraud, I wish I could sit and look 

every Federal agency in the eye and say that your fraud or your 

mismanagement is at 1 percent of everything that you do. I don’t 

want any fraud, but I want to applaud this team and individuals 

who are in this program knowing that you are there to feed people 

in America. In today’s world there are Americans who are going 

hungry every day. 

Mr. MEADOWS. I thank the gentlewoman. 

The chair recognizes the gentleman from Ohio, Mr. Jordan, for 

5 minutes. 

Mr. JORDAN. Thank you, Mr. Chairman, for having this hearing 

and for our witnesses and the chairman for his work in this area, 

extensive work in this area. 

Mr. Concannon, how much money is spent annually on the food 

stamp program both—well, how much is spent annually? 

Mr. CONCANNON. Total expenditure including administration, 

$75 billion. 

Mr. JORDAN. Seventy-five billion dollars. You know what it was 

8 years ago? 

Mr. CONCANNON. No, I do not. 

Mr. JORDAN. The chart I am looking at says it was less than half 

of that. 

Mr. CONCANNON. Well, that was before the —— 

Mr. JORDAN. Thirty-seven —— 

Mr. CONCANNON. That was before the deep recession the country 

went through, so I’m not surprised by that. 

Mr. JORDAN. A lot of people would say we were in a recession in 

’07 and ’08. I am looking at that, so 2008—well, even if you go 

2009, it is 50 percent greater, more than 50 percent greater. It was 

$53 billion just a few years ago. 

How many people are getting this benefit today? 

Mr. CONCANNON. Forty-four point three million people receive 

the benefit each month. 

Mr. JORDAN. And do you know how many of that 44.3 million are 

able-bodied adults? 


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Mr. CONCANNON. Yes, we can give you that. I know that just 

under half are children, another 10 percent are people with disabilities, another close to 10 percent are seniors, some adults, but we 

can give you the actual percentage, a very small percentage —— 

Mr. JORDAN. So half —— 

Mr. CONCANNON.—of them. 

Mr. JORDAN.—are kids, 10 percent are individuals with disabilities, 10 percent are seniors, so is that 30 percent are —— 

Mr. CONCANNON. No, it isn’t 30 percent. It’s another—it’s about 

10 percent are adults without dependents, able-bodied adults without dependents. 

Mr. JORDAN. So over 4 million? 

Mr. CONCANNON. Correct, in that range. 

Mr. JORDAN. Okay. And, Ms. Mayhew, my understanding is you 

have taken that population you just talked about, at least the ones 

who live in the State of Maine, and you have put back in place a 

work requirement for able-bodied adults, able-bodied adults, I assume, with no dependents, is that accurate? 

Ms. MAYHEW. Yes. We’re talking —— 

Mr. JORDAN. Okay. And what has been your experience with that 

program? 

Ms. MAYHEW. So these are individuals between the ages of 18 

and 49 not disabled, no dependents. And we reinstated the work 

requirements from the 1996 reforms. We did —— 

Mr. JORDAN. Exactly the same requirements that were working 

fine back then —— 

Ms. MAYHEW. Correct. 

Mr. JORDAN.—20 hours a week, got some work requirements, 20 

hours a month or —— 

Ms. MAYHEW. Twenty hours a —— 

Mr. JORDAN. Twenty hours a week, excuse me. That is right. 

Ms. MAYHEW. But there are other options. It’s 20 hours a week 

or—working or being in a vocational training program —— 

Mr. JORDAN. Got you. 

Ms. MAYHEW.—or volunteering one hour a day. 

Mr. JORDAN. So some options. All right. And what happened 

when you did that? 

Ms. MAYHEW. When we did that, we also reached out to all of 

these individuals through our Department of Labor career centers 

to offer them slots in programs to help them with work skills development, resume writing, opportunities to identify employment. We 

made over 12,000 phone calls to that population. 

Mr. JORDAN. Hold on one second. Back up a second. What was 

the number in Maine when you—able-bodied adults 18 to 49 in the 

program? What was that number? 

Ms. MAYHEW. Fifteen thousand. 

Mr. JORDAN. Fifteen thousand. What is the number—and you 

have implemented this program now several months? 

Ms. MAYHEW. We implemented that in the—October 1, 2014. 

Mr. JORDAN. Okay. So a year-and-a-half. And what have you 

seen happen? Is it 12,000 you said? 

Ms. MAYHEW. Yes. The vast majority did not come forward to 

demonstrate and comply —— 

Mr. JORDAN. So they are no longer in the program? 


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Ms. MAYHEW. They’re no longer in the program, but what is 

more important —— 

Mr. JORDAN. No, I am asking, is that—I would view that as a 

good thing. My guess is what happened is they said, you know 

what, if I got to do all this job training, job requirement, da, da, 

da, why don’t I just get a job? 

Ms. MAYHEW. Exactly. 

Mr. JORDAN. Imagine that. 

Ms. MAYHEW. And then we looked at their wages —— 

Mr. JORDAN. Right. And that is a good thing, wouldn’t you say? 

Ms. MAYHEW. Yes. 

Mr. JORDAN. Yes. 

Ms. MAYHEW. And their wages have increased by over 114 percent from prior —— 

Mr. JORDAN. So you followed them up? 

Ms. MAYHEW.—to implementing—yes, we did. 

Mr. JORDAN. And, Ms. Dean, is that not a good thing? 

Ms. DEAN. Is it a good—I think the question is what’s the 

counterfactual? How many of them would have gone and gotten 

jobs anyway because we know that there’s a high —— 

Mr. JORDAN. But they did get a job so that is a good thing and 

they are no longer living off the taxpayer —— 

Ms. DEAN. But there’s —— 

Mr. JORDAN.—so it is good for the taxpayer and it is good for the 

individual, and you are somehow implying in questions I have 

heard from the other side somehow that is not a good thing? 

Ms. DEAN. There’s also a group of people who lost food assistance 

without a job. That’s —— 

Mr. JORDAN. Ms. Mayhew, what is that number? 

Ms. MAYHEW. I’m sorry, what was the comment? Which —— 

Mr. JORDAN. She is saying that there is some of that 12,000 who 

are no longer getting food stamps who didn’t get a job. Do you 

know what that number is? 

Ms. MAYHEW. We can get you that —— 

Mr. JORDAN. But the point is they can still get food stamps if 

they are willing to do the three options you gave them, correct? 

Ms. MAYHEW. Correct. 

Mr. JORDAN. Okay. Ms. Dean, how is that negative? 

Ms. DEAN. I think there are many parts of the country where 

there are not —— 

Mr. JORDAN. In—okay. 

Ms. DEAN.—part- to full-time jobs available. 

Mr. JORDAN. I am asking you about Maine. I am asking you 

about Maine because Maine has done it. That is the one experiment we have that I think is working win-win-win. Either they can 

do the job training, which is going to help them long-term to stay 

on food stamps or they can do what most people did in Maine and 

say, you know what, I don’t want to do that. I am just going to get 

a real job, right? And if they decide to opt out and can’t get a job, 

they can always come back and go to one of those three options. 

So tell me what is negative about that. That seems to be helping 

that individual who was in the system get to a better position in 

life, and just as importantly, help treat taxpayers with the respect 


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they deserve so someone is not living off their tax dollars who is 

able-bodied. Why is that wrong? 

Ms. DEAN. Representative Jordan, you’re not characterizing the 

rule correctly across the country. States are not —— 

Mr. JORDAN. I am talking about the State of Maine. 

Ms. DEAN. I cannot speak to whether Maine genuinely offered 

every single individual—whether a slot was available for them to 

participate in and whether those individuals were appropriately 

screened. Commissioner Mayhew can best do that. But the problem 

is that across the country that’s not happening. It’s operating as a 

time limit, so individuals living in high unemployment areas or individuals who face barriers to work. For example, in Florida there 

were disabled veterans who didn’t have 100 percent disability rating who were terminated from the program. They were not exempted. 

Work requirement is —— 

Mr. JORDAN. Well, wait, wait, wait —— 

Ms. DEAN. Work requirement is very different than —— 

Mr. JORDAN. We just heard that this was not about people with— 

there is a big difference between able-bodied individuals between 

18 and 49 with no dependents and someone with a disability and 

someone with children and some who is a senior. There is a big difference. If I could, Mr. Chairman, one last question. 

What is the number today, Ms. Mayhew, that is in that category 

in Maine? What is the number? It was 12,000. What is the number 

today? 

Ms. MAYHEW. It is less than —— 

Mr. MEADOWS. Your mic, please. 

Ms. MAYHEW. We can get you the final number, but obviously 

—— 

Mr. JORDAN. Less than what? 

Ms. MAYHEW. Less than 1,000 individuals. 

Mr. MEADOWS. Okay. 

Mr. JORDAN. That is unbelievable. Thank you, Mr. Chairman. 

Mr. MEADOWS. I thank the gentleman. 

The chair recognizes the gentleman from Pennsylvania, Mr. 

Cartwright, for a generous 5 minutes. 

Mr. CARTWRIGHT. I thank the generous chairman. Mr. Chairman, 

our colleague from Wisconsin just lately made a comment to the effect that the current SNAP program, the food stamps program has 

the effect of encouraging women to bear children out of wedlock. 

And to respond to that, I would like to recognize and yield to the 

gentlelady from the District of Columbia for 30 seconds. 

Ms. NORTON. Well, first of all, I think that the error rate speaks 

for itself and answers much that was raised in that regard. 

And I must say, at a time when we have reduced among poor 

people as well as middle-class people the birth rate, it is inconceivable to me that somebody says, you know what, why don’t I go out 

and get pregnant so I can get some food stamps. 

I yield back to the gentleman. 

Mr. CARTWRIGHT. Mr. Chairman, I would like to thank you for 

holding this hearing today. It is shameful when women and families go hungry in the United States of America, and I will not be 

part of a system that forwards the chance that we will have that 


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in this country. I strongly support the food stamp program, SNAP, 

among other food assistance programs for this reason, and I would 

like to thank the witnesses for their work to relieve hunger in this 

country. 

I would like to also point out two numbers related to fraud and 

waste in the SNAP program that have been touched upon here. In 

2014 less than 3 percent of SNAP benefits had error associated 

with them, and the trafficking rate is down to 1 percent. And it occurs to me that the SNAP program is improving at its good job of 

ensuring the limited resources it is given are being used properly. 

We can and should do more to relieve hunger. 

That is why I am reintroducing the SNAP Healthy Incentives 

Act, and this expands a pilot program nationwide in which SNAP 

participants receive a 30-cent rebate for every SNAP dollar they 

spend on fruits and vegetables. Now, this pilot program proved to 

be successful, and it proved a 25 percent increase in the consumption of healthy foods. 

Now, Under Secretary Concannon, can you tell us a little bit 

more about the types of people who are aided by the SNAP program? 

Mr. CONCANNON. Thank you very much for the question. Thank 

you for introducing that act, the health incentive pilot was highly 

success. And early this week I was in Michigan. I’ve seen firsthand 

discussions with community leaders around the country on the impact of SNAP now. 

As has been mentioned earlier, nearly half of the recipients on 

SNAP—it’s 48 percent plus—are children, another 10 percent are 

people with disabilities, another seniors and other parents looking 

after young children. But I also want to emphasize again something that’s been mentioned already. Forty-two percent, two out of 

every five persons living in a SNAP household, at least one of the 

adults is in—currently in the workforce. And that income is counted in the benefit. 

And to me, the—that’s the highest rate of people working in the 

history of the program and it, to me, reflects the fact that across 

the country more and more people are getting part-time jobs or 

they’re struggling with low wages that still qualify them for the 

benefit. So I think that’s something that ought to be really more 

fully discussed by Congress now. There’s—say what can we do 

about that? 

In places across the country, economists tell us the recession is 

over for many but it’s not over for tens of millions of people in 

places like Maine to be perfectly frank or just about any State in 

the country. And so the program has very much become a supplement. That is by intent to—for wages and health for families. 

And I think it gets very stereotyped in some quarters I think 

very unfairly. There’s a very low fraud rate, there’s a very low rate 

of misuse of the funds. We don’t tolerate it. But poor income people, whether they’re from Florida, Maine, or any other State 

shouldn’t be painted as though they are among that small minority 

who are misusing the program. That’s not the history of the program across the country. 

Mr. CARTWRIGHT. Thank you, Mr. Concannon. 


AKING-6430 with DISTILLER
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And, Ms. Dean, I wanted to also thank you for your testimony 

today and all of your work in your adult life in support of nutrition 

assistance. 

You know, Republicans in the House are proposing turning 

SNAP into a block grant and eliminating the social services block 

grant, and I wanted to get your input on the wisdom of that approach and whether you think it would do anything to eliminate 

the low percentages of errors and fraud that we’re hearing about 

today. 

Ms. DEAN. Just very briefly, we think it would be very ill-advised, and the experience and history of block grants would suggest 

that converting SNAP into a block grant would increase hunger 

and hardship amongst low-income Americans because less food assistance would be available to them over time. 

It’s also highly likely, as you’re pointing out, that error and fraud 

would become a more serious issue because you would start to have 

50—well, in SNAP there are 53 States, Ms. Plaskett representing 

one of them, 53 States with different rules, different criteria, and 

lots of complexity and duplication on which stores to bring into the 

program and how to administer and ensure that everyone is adhering to the rules. 

Mr. CARTWRIGHT. Thank you. And, Mr. Chairman, I yield back 

to you in your generosity. 

Mr. MEADOWS. I thank the gentleman from Pennsylvania. 

The chair recognizes himself for a series of questions. 

We talked a lot about fraud rates and what it is and what it is 

not, and yet I hear a lot of testimony that shows a lot of ambiguity 

in that area. So, Ms. Brown, let me come to you. Do we really know 

what the fraud rate is? Do we have good data? 

Ms. BROWN. Well, the rates that we’re hearing about with fraud 

I believe are the trafficking rates for retailers. That’s the —— 

Mr. MEADOWS. Right, and —— 

Ms. BROWN.—1 percent —— 

Mr. MEADOWS.—those are 3 years old, aren’t they? 

Ms. BROWN. Yes, there’s—they—there’ve been—a number of 

questions have been raised about the estimate, but I don’t want to 

underplay the fact that it’s very difficult estimate to make. 

Mr. MEADOWS. So to suggest that that 1 percent or 2 percent is 

accurate would be very difficult with any degree of certainty to ascertain that based on the reporting and the way that we track 

fraud and abuse at this point —— 

Ms. BROWN. In —— 

Mr. MEADOWS.—is that correct? 

Ms. BROWN. In—yes, and it doesn’t include what—we don’t really 

know what the rate of trafficking or fraud is for the—on the recipient side. So —— 

Mr. MEADOWS. Right. 

Ms. BROWN.—you know, the question—put percentages that we 

talked about with the 60 percent that’s the fault of the States when 

they’re making mistakes and the third—one-third that’s the problems with the recipients, some of that can be intentional error that 

would be fraud, and then in addition to that, once they receive the 

benefits, if they traffic, that would be fraud. 


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Mr. MEADOWS. Right. And so that number and being able to do 

that—Mr. Concannon, I will come to you. Hold on just a second. 

You are always ready to jump in. I can see your rebuttal. I tell you, 

it is—but as we look at that, I will come—because here’s my concern. When we talk about fraud—and for me I want make sure 

that every single person that deserves the benefit and is starving 

gets the benefit. But the bad actors, I want to make sure they go 

home and they go home for good. 

And so if anything is said here is when we—it is not just about 

fraud and abuse for an individual. It is taking away finances from 

those that are deserving. And that can be a bipartisan issue. I 

mean, if we put forth that any saving from fraud actually went to 

increase the benefits for some of the others that are receiving it, 

we would find some real uniform bipartisan support for that. So I 

guess, Ms. Brown, we need to do a better job, so how can we do 

that? 

And let me come to you, Mr. Carroll, because one of the things 

that you said really concerned me. We have got a flea market 

where there was trafficking going on, and there have been no arrests for fraud at that particular point? We have not been able to 

prove it? Did I hear you correctly? 

Mr. CARROLL. No, there —— 

Mr. MEADOWS. You need your mic. 

Mr. CARROLL. There have been arrests. What we have not—the 

process involves—it’s a pretty complex process, but our investigation into that flea market began in 2011 when we saw —— 

Mr. MEADOWS. And you were doing it from the recipient side, not 

from the —— 

Mr. CARROLL. We were doing it from —— 

Mr. MEADOWS.—retailer side, is that correct? 

Mr. CARROLL.—recipient side where we got information that food 

stamp cards kept coming back to us in the mail, the EBT cards. 

We checked up on it. That address didn’t exist. We did some further exploration and we found out that that was probably identity 

theft. We then tracked where that card was used, and it led to the 

flea market, so we started surveilling that flea market, and at that 

time in 2011 there were five authorized vendors. It took 2 years, 

but after 2 years, two of those five authorized vendors were arrested. But within a matter of days, the three vendors that were 

left absorbed that business because business continued to grow at 

that flea market. 

Now, at that flea market we have 48 authorized vendors with 

four more pending, and that flea market has done $79 million 

worth of business. Now, to put that in perspective, they have done 

more business than the six super box stores that are within a 5- 

mile radius of them combined. They have done more business in 

that flea market during that time period than the 16 major supermarkets that are in a 5-mile radius combined. So to say that our 

fraud rate is 1 percent I think is underestimated. 

But here’s what concerns me about this, and this is what I think 

confuses folks because I think your point is well made. I’m not here 

to demean recipients of public assistance. I strongly support public 

assistance programs, and we do that in Florida. We have done everything in Florida to make it easier for folks who are eligible to 


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apply. We’ve gone to an electronic system. Folks don’t have to take 

off from work. They apply online. 

Even the automated identification system, it wasn’t made to keep 

people out of the system. It was made to—so that we didn’t have 

to bring people into the office because if we could authorize—if we 

could authenticate your identification without you coming into the 

office and taking time out of work, why not do that? That’s why 

we did it. 

And so we have done everything we could to make it easier to 

apply. Since 2008, the number of recipients in Florida has gone 

from 1.3 million to—we have currently 3.3 million recipients on 

food stamps in Florida, and our food stamp redemption numbers 

have gone from 2.8 to 5.6. So to say that our concern around fraud 

is about some—somehow pointed at trying to demean folks who are 

on public assistance or to limit access I think is misguided. 

I do think the numbers that you talked about are difficult to 

come by. I think with the automated system in Florida, we do a 

better job of preventing what I would call recipient fraud in terms 

of—because what we used to battle years ago was folks coming in 

and quite frankly not being truthful about their situation. We see 

less of this. 

This is not—in Florida, this is not about the folks who walk 

through our door and apply for assistance. It is not about how they 

use their food stamp card. I wish my family ate healthier. I wish 

I didn’t put so many Mountain Dews in the carriage, okay? And I 

think the more we put together legislation like that, we just go 

down rabbit holes and we spend administrative cost chasing after 

things we shouldn’t chase after. 

But I will tell you there is an element that is organized that is— 

where their intent is to defraud, and it starts with folks who come 

into the system and get benefits and they’re not who they purport 

to be. Part of this—the authentication process identified 2,800 people, for instance, last year that applied that were dead, another 

2,800 people that applied that were incarcerated. Without doing 

the things that we did from an electronic standpoint, we would 

have never been able to prevent that. We can now. 

But our big challenge now is with authorized vendors. The number of folks who were authorized—and I understand—I don’t—I am 

not here to impede small business. We want to grow small business, but we have got to make sure that when we are—it’s got to 

be more than taking a snapshot of the front of a store, putting a 

driver’s license together, sending it in, and asking that I be an authorized vendor. And we have to do some work around is that a 

real legitimate business because some of these businesses that 

we’re authorizing as retailers are not legitimate businesses. 

And I do agree with Secretary Concannon that the overwhelming 

amount of people on food stamps are there rightly so and are using 

their benefits appropriately, overwhelmingly, but I will tell you 

that small percentage, when you look at a program like ours that 

does $5.6 billion worth of business, even a small percentage is in 

the hundreds of millions of dollars, and it grows a stigma for the 

rest of the folks who are out there who need these benefits, who 

need the hand up, and who we’re trying to provide these assistance—this assistance for. 


AKING-6430 with DISTILLER
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Mr. MEADOWS. And that is precisely why we are having this 

hearing because it shouldn’t be a stigma that everybody is cheating 

the system. And sometimes that gets a default. That is where we 

run. I appreciate your heart. 

Mr. Concannon, I gave you your rebuttal time. I am way over. 

You go ahead, and then I am going to recognize the gentlewoman 

from the Virgin Islands. Go ahead. 

Mr. CONCANNON. Thank you, Mr. Chair. I’ll try to be brief. I just 

wanted to mention the way we derive that figure of 1.3 percent. 

When we take a small store out of the program, and last year, it 

was like 2,300 stores—most of the trafficking, by the way, happens 

in small stores. Supermarket chains won’t tolerate it, Walmart, 

Hannaford Brothers up in Maine, they’re not going to tolerate that. 

So when we take a small store out, we ascribe 90 percent of the 

annual use of food stamp benefits or SNAP benefits in that store 

as though it were trafficking. And if it’s a larger store, we ascribe 

40 percent. That’s how we get to the 1.3 percent. If anything, it’s 

a conservative estimate, so I want to be clear on that. We’re not 

just counting —— 

Mr. MEADOWS. Well —— 

Mr. CONCANNON.—you know, individuals. So with that, point 

one. Point two, we currently have proposed strengthening the requirement especially for these small stores because I fully agree 

with Mr. Carroll that some stores are in the program that absolutely shouldn’t be. That’s where we have our problems. 

Mr. MEADOWS. Well, we will get —— 

Mr. CONCANNON. We’re getting pushback on that issue. 

Mr. MEADOWS. We will get to that. 

Mr. CONCANNON. Okay. 

Mr. MEADOWS. We will get to that because that is one of the 

areas that honestly I want to drill down on on exactly what we are 

doing there. Let me tell you my concern with what just said. You 

only know what you know, and so fraud is only to the point of 

where you actually have inspectors going out. I would assume you 

have a limitation on the number of people who can actually follow 

that or are you fully staffed—you have got as many people as you 

ever would want? 

Mr. CONCANNON. Interestingly enough —— 

Mr. MEADOWS. Yes or no, as many people as —— 

Mr. CONCANNON. Most of our fraud is coming from data analytics. It’s not coming from —— 

Mr. MEADOWS. That is not the question. Do you have as many 

people inspecting as you really need? 

Mr. CONCANNON. We can never say we have enough. 

Mr. MEADOWS. All right. Thank you. I thought that would be the 

answer. 

The gentlewoman from the Virgin Islands is recognized. 

Ms. PLASKETT. Thank you. Good afternoon. 

And I guess if you don’t have as many as you need and this committee is concerned with you stopping fraud, they will be very helpful to increasing the budget for the SNAP program so that you can 

have the funding to be able to enforce it, because although I think 

the chairman is sincere and, you know, is one of the people who 

is concerned about the right individuals having this, my concern is 


AKING-6430 with DISTILLER
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that I don’t think everybody on his side really thinks that way as 

well. 

I sit on the House Committee on Agriculture and I sit on the 

Subcommittee on Nutrition, and in the last 17 months we have had 

14 hearings on SNAP, 14 hearings on SNAP. And the purposes of 

those hearings is in my mind being to say why SNAP should be cut 

back, why it is not effective, why we need to stop this, why we need 

to stop feeding the people that we are feeding. Why do we need to 

stop feeding people? I mean, my mother would lose her mind if you 

denied someone a plate of food because it was painful for you to 

give it up. 

This program, we say, is about lifting people out of poverty, and 

I think the indictment is on us as a body, this Congress, who has 

not lifted enough people fast enough as we should. And in turn 

what is happening I think more often than not is that we have 

these hearings to indict the people who are recipients of SNAP program, the recipients of those individuals who are still living in poverty. 

So we have said that SNAP is a program that we would like to 

focus quite a bit of our time on for the abuse and the fraud that 

it has. From the statistics it seems that there is only 1 percent of 

the 45 million recipients and 1 percent of the money that is going 

is going for trafficking. Would we like to see that those numbers 

are corrected? Of course. But we need the funding to be able to do 

that because are we going to take the funding out of the people 

that are receiving the money or are we going to add additional 

funding for the administrative portion? That is the question that 

I would like to pose on the other side. 

You know, and one of the other issues that I am very certain 

about is it seems that the legislative proposals are really to eliminate the ability of States and territories to request waivers from 

the strict work requirements already contained in the SNAP laws. 

And the reason that is a concern is that because there is a chronic 

rate of high unemployment rate in many of these areas. 

We talked about people going to convenience stores rather than 

going to the big box or the grocery stores. More often not it is because they can’t afford to drive to those other places because they 

live in food deserts. And, you know, it is not that people don’t want 

to work but there are no jobs for them to work. And are we going 

to keep these time restrictions and cut out the waivers for this so 

that people now don’t have a meal? 

The majority of people who are on SNAP are not able-bodied individuals. They are women and children and elderly people who 

cannot work. 

Ms. Dean, do you think elimination of work waivers, especially 

in high areas of unemployment, would impact—how would that impact on those places that have unemployment? 

Ms. DEAN. Well, I think the Virgin Islands would be a good example. Currently, the Islands waive the time limit so the time limit 

is not in effect. If it were to elect to drop it, given your relatively 

high unemployment, the shutdown of certain businesses in recent 

years, that would mean that there are individuals willing to work 

who cannot find work. 


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There are also individuals working less than 20 hours, say, 18 

hours, who would lose the food assistance as a wage supplement 

to them. So it just means increased hunger and hardship, more demand on local charities. It’s ill-advised given that there is this terrific program available to help feed people that supports and encourages work. 

Ms. PLASKETT. Now, when you are a recipient of SNAP and you 

have the EBT card, can you buy every piece of grocery or every 

need in your household from that? 

Ms. DEAN. The benefits are based on a food plan called the 

thrifty food plan, and it is meant theoretically for someone with 

perfect information in an extreme environment to be able to purchase enough. But we believe and actually have a paper coming out 

next week that suggests that it really is insufficient to purchase a 

healthy diet. 

Ms. PLASKETT. So what are the things that you would not be able 

to purchase? 

Ms. DEAN. Well, the—I think there are tradeoffs. Fresh fruits 

and vegetables, whether you can buy foods with sufficient—low levels of sodium versus highly processed foods. A lot of participants 

substitute in starches versus protein and, as I said, fruits and vegetables. 

That having been said, SNAP participants do purchase very consistent with how the average American purchases. They do an incredible job with the benefits that they have, but we think they’d 

do much better if they had sufficient resources. 

Ms. PLASKETT. A woman who is a single parent and has a child, 

have you ever seen instances—because I know I have—of that individual, as my colleague talked about, using the SNAP money to 

purchase other things, to use it to buy diapers or to use it to buy 

things that are necessities that we have not as a country been able 

to supply them the resources to be able to take care of? Have you 

seen some of the fraud based on that? 

Ms. DEAN. To be clear, that is also not legal and it is unacceptable, but yes, some mothers with young children face extraordinary 

choices, just extraordinary choices, and taking care of their children, as you’re, I think, trying to illustrate with the question, is always going to come first. 

Ms. PLASKETT. Okay. Thank you. Thank you for the additional 

time. 

Mr. MEADOWS. The chair recognizes the gentlewoman from New 

Mexico, Ms. Lujan Grisham. 

Ms. LUJAN GRISHAM. Thank you, Mr. Chairman, and thank you 

very much for this hearing. 

And frankly, I agree with my Democratic colleagues in recognizing that the SNAP program as a policy is a very important policy to protect seniors and children and families in poverty and folks 

in the military with a focus on making sure that they don’t go hungry. And like many of my colleagues on this committee, I want to 

make sure that we address the fraud issues and we also, as Ms. 

Plaskett, my colleague from the Virgin Islands just identified, that 

there are issues that we need to address that don’t meet the requirements of the program but still shine a light on the extraordinary circumstances that so many of these families face. 


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And I want to point out that even when we have fraud where 

someone is selling their food stamp benefit, they are in collusion 

with the grocery store in the private sector, and so we really need 

to be thinking about that. And I want everyone to know, and I 

think they do, that SNAP I think is one of the most important policies and programs in this country and that I believe, based on the 

evidence that I have seen, that generally speaking it has a very low 

fraud rate, and I think that that is a remarkable standard. What 

I wish for every program is that there was a zero fraud rate. 

But I do want to talk about the integrity of the program as a 

whole, and I am very, very concerned about that on two levels. I 

have very deep concerns about the integrity of the SNAP program 

in my State in New Mexico. I believe that these problems are clearly being caused by the way the State is administering the program 

and the fact that I don’t believe that the Federal Government has 

been providing sufficient oversight, and the results are that many 

eligible New Mexicans who need emergency benefits are not getting 

them, and the overall result of course is that they are going hungry, which is why New Mexico has some of the hungriest children 

and families in the country still. 

Now, Mr. Concannon, in your testimony you are very clear that 

FNS needs to take a look—and I think I am quoting you—look 

carefully at States that are pushing recipients off SNAP programs 

or are not processing SNAP applications or application re-certifications in a timely manner. And I know that you are aware that 

the State of New Mexico has been doing just that because we are 

in court, we have sent you letters, we have asked you to do an investigation. We have been very involved. 

And that these New Mexico advocates that you and I have personally spoken about have been raising this issue in fact with your 

office for years. In fact, our office received a formal letter in April 

from the American Federation of State, County, and Municipal Employees, which represents many of the State employees involved in 

this issue who administer the SNAP program. And, Mr. Chairman, 

I ask for unanimous consent to enter the letter into the record. 

Mr. MEADOWS. Without objection, so ordered. 

Ms. LUJAN GRISHAM. I was pretty sure that was going to occur. 

Thank you, sir. 

Now, these employees, as you know, allege that the State has 

failed to provide training and staff support and all true, so that 

what is occurring in New Mexico is that in order to meet the time 

request to deal with emergency applications, they are adding assets 

to falsify those applications so that people don’t get the benefit that 

they deserve and need, and that is a very serious integrity program. 

But just as terrible and heinous as that is that current court 

records indicate that that has been going on since 2003. So in addition to the years that I have been asking the Department to look 

at this and in addition to the April letter where I asked for an investigation, it looks as if the Department has had information 

about this very issue since 2003. And we can see that one of those 

results is the hungriest State in the country. 

Now, the most disturbing thing to me—I just want to repeat 

this—isn’t these lapse of audits and integrity and issues between 


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the Federal Government and State government. The most egregious issue here is that I have vulnerable families that aren’t getting the support that they deserve it. 

And according to AFSCME, there is a pattern and practice of 

adding these assets that should have been counted as income or 

adding assets in order absolutely to prevent people in our State 

who are eligible for being eligible. 

So basically the State is lying to you, Mr. Concannon, and it is 

also clear to me that we have not been holding them accountable 

since at least July of 2014. Now, I need to understand why your 

office didn’t know about these violations since 2003 and hasn’t responded to us and others when you had clear knowledge of what 

is going on. So before the AFSCME letter, given all these issues, 

why didn’t your office take—and then after, why didn’t your office 

take immediate action? 

Mr. MEADOWS. The gentlewoman’s time is expired, but please answer the question. 

Mr. CONCANNON. Well, thank you very much for the question. 

Let me just, in support of the Congresswoman’s concerns, confirm 

that I believe New Mexico is probably the most fouled up SNAP 

system in the United States right now and has been, unfortunately, 

I think for years. There is a major Federal lawsuit that’s been underway there for many, many years, and I think even the courts 

have been less than successful in getting the State to really fully 

respond. 

We have been engaged with the State offering them additional 

support, offering them additional technical assistance just as—we 

also are in receipt of that letter from AFSCME —— 

Ms. LUJAN GRISHAM. And I am out of time —— 

Mr. CONCANNON.—on the 26th —— 

Ms. LUJAN GRISHAM.—Mr. Chairman. I know that you are really 

patient with me, but you know what, giving them technical assistance when they are lying to you, they are cheating the beneficiaries, they are not protecting the beneficiaries, they are in Federal court, this requires investigatory action and audits, which is 

exactly what this entire committee wants for all of these —— 

Mr. CONCANNON. It is being investigated —— 

Ms. LUJAN GRISHAM.—programs. 

Mr. CONCANNON.—right now by the inspector general of —— 

Ms. LUJAN GRISHAM. Because in a letter from your office, we 

don’t have that. They are being investigated for this issue? 

Mr. CONCANNON. The—since that letter from AFSCME, the 

State—the State IG in New Mexico is investigating that—those 

claims. We also had a visit to several of their offices in May. We 

did not identify that in our management review of those two offices, but I—the State inspector general is currently investigating 

the State for those very claims. 

Ms. LUJAN GRISHAM. As I yield back my time, and the chairman 

is being very generous, what I have in writing from your office, sir, 

is that you are going to hold beneficiaries accountable for overpayments and that there is not an ongoing investigation about this 

issue. So I am very happy to hear that what we have in writing 

is incorrect, and I am expecting you to put in writing your statements today so we get this rectified. 


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I yield back, Mr. Chairman. 

Mr. MEADOWS. All right. So let me follow up on the gentlewoman’s—while she is closest to this particular issue and I think 

that this is really why we have Maine and Florida here today is 

that we have a Representative from New Mexico that is up close 

and personal with a particular problem. So, Mr. Concannon, do I 

have your assurance that you will report back to this committee 

with a plan of action of how to address her concern within the next 

14 days? 

Mr. CONCANNON. Yes, you do, but I —— 

Mr. MEADOWS. Just —— 

Mr. CONCANNON.—do want to be clear. The problem is on the 

part of the State agency —— 

Mr. MEADOWS. I didn’t ask you —— 

Mr. CONCANNON.—not consumers. 

Mr. MEADOWS. Well, so you don’t have any involvement whatsoever? 

Mr. CONCANNON. No, we have involvement. 

Mr. MEADOWS. Okay. Well, then —— 

Mr. CONCANNON. I’m just saying that it’s the State agency that 

is at fault here, not the consumers —— 

Mr. MEADOWS. Okay. 

Mr. CONCANNON.—of the SNAP program —— 

Mr. MEADOWS. I understand. You made your point. 

Mr. CONCANNON.—in New Mexico. 

Mr. MEADOWS. She has made the point, but what she also said 

is that you haven’t been forthcoming in following up with her, and 

what I am saying is from the other side of the aisle, that is inexcusable —— 

Mr. CONCANNON. Well —— 

Mr. MEADOWS.—wouldn’t you agree? 

Mr. CONCANNON.—I don’t accept that claim. 

Mr. MEADOWS. Okay. 

Mr. CONCANNON. I don’t accept that, that we are not —— 

Mr. MEADOWS. Well, I —— 

Mr. CONCANNON.—forthcoming. 

Mr. MEADOWS. The gentlewoman has yielded back, so let me go 

ahead and recognize myself for a series of questions because, Mr. 

Concannon, you come and you are very quick to point at Maine and 

suggest that what they are doing is not adequate from a standpoint 

of the way that they are conducting it. And that was really early 

on. You were very quick to do that. But yet when my good friend 

and the gentlewoman from New Mexico points out a problem where 

you have not even respond properly, you are not willing to take and 

accept responsibility. I think that that is a double standard, 

wouldn’t you? 

Mr. CONCANNON. No, it’s not a double standard. I haven’t said 

we haven’t responded. I’ve said we’ve been doing evaluations of 

New Mexico. We’re not happy with their performance. 

Mr. MEADOWS. But there is no investigation —— 

Mr. CONCANNON.—We have offered them —— 

Mr. MEADOWS.—going on at this point? 

Mr. CONCANNON. Yes, there is, the inspector general —— 

Mr. MEADOWS. By the State —— 


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Mr. CONCANNON.—of the State. 

Mr. MEADOWS. By the State. By the OIG of the Federal Government for USAID —— 

Mr. CONCANNON. I can’t —— 

Mr. MEADOWS.—or USDA, is there any —— 

Mr. CONCANNON. I can’t speak for the OIG because I don’t —— 

Mr. MEADOWS. Would you —— 

Mr. CONCANNON. I know they’re aware of it —— 

Mr. MEADOWS. Would you recommend —— 

Mr. CONCANNON.—but I can’t tell you what they are —— 

Mr. MEADOWS. Would you recommend that there would be a Federal investigation? 

Mr. CONCANNON. I’d be happy to. 

Mr. MEADOWS. All right. 

Ms. LUJAN GRISHAM. Thank you. 

Mr. MEADOWS. All right. So let me go on a little bit further. Ms. 

Mayhew, one of the things that I was perplexed by is a started 

looking at statistics of SNAP use by Maine recipients in other 

States other than Maine. And by the list that I got, it looks like 

they are using all over the country, indeed all over the world, and 

yet it comes from your State. Would you say your State is atypical? 

Is it unique that you have a lot of SNAP travelers? 

Ms. MAYHEW. Maine is not unique. 

Mr. MEADOWS. Okay. So if it is not unique, I guess one of the 

questions I have is in just looking at one of the numbers that 

popped out happened to be in Mr. Carroll’s State. And so I have 

got Maine recipients who are getting SNAP benefits that traveled 

apparently to Florida, and over the last 5 years, there has been 

over $3,700,000 and change benefits from Maine that get used in 

Florida. Is that correct, Ms. Mayhew? 

Ms. MAYHEW. That is correct. 

Mr. MEADOWS. So how do you stop that? I mean, are they just 

traveling? So is this somebody that just happens to travel with 

SNAP benefits and go down there or are they going to the flea market where Mr. Carroll is doing—and cashing it in? I guess I am 

very concerned in that he is doing a great job and even I guess, 

Mr. Concannon, you would recommend that Florida is doing a job? 

In fact, there is a bonus—didn’t you all get a bonus for good—have 

you all paid that bonus? 

Mr. CONCANNON. No, we have not paid the bonus —— 

Mr. MEADOWS. And why not? 

Mr. CONCANNON.—since 2015. No. 

Mr. MEADOWS. Why have you not paid the bonus? 

Mr. CONCANNON. Because we have some concerns about the —— 

Mr. MEADOWS. Well, you just said he did a good job. 

Mr. CONCANNON. Well, no —— 

Mr. MEADOWS. You can’t have it both ways. 

Mr. CONCANNON.—Florida is doing a good job, but I’m not —— 

Mr. MEADOWS. Well, that’s Florida. 

Mr. CONCANNON. That’s—I’m not translating that —— 

Mr. MEADOWS. I am talking about the $7 million —— 

Mr. CONCANNON.—to whether we should pay the bonuses. 


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Mr. MEADOWS. So why are you holding up the $7 million payment on someone who is recognized as doing a great job? Why 

would you be holding that up? 

Mr. CONCANNON. Because I want to make sure that what we are 

getting are valid reports from States across the country. 

Mr. MEADOWS. So you are holding up his to make sure that you 

get valid reports from everybody else? 

Mr. CONCANNON. I’m holding all of them up. 

Mr. MEADOWS. Okay. When can we expect a response on his 

bonus money? And he didn’t ask me to ask this, by the way. So 

when can we expect you to get it resolved? 

Mr. CONCANNON. As soon as I’m satisfied and others —— 

Mr. MEADOWS. How many days? 

Mr. CONCANNON.—are satisfied—no, it’s not a matter of days because —— 

Mr. MEADOWS. Well, you are going to give me —— 

Mr. CONCANNON.—I want to be —— 

Mr. MEADOWS.—some days. When will you report back this committee? Thirty days, is that enough to evaluate it? 

Mr. CONCANNON. No, it may take longer than that because we’re 

in the middle of investigating that right across the country right 

now, not just in Florida, in States right across —— 

Mr. MEADOWS. So you are saying you don’t owe it to Florida? Is 

that what you are saying? 

Mr. CONCANNON. I’m not sure if we do. 

Mr. MEADOWS. All right. You have 30 days to address that issue 

and make a compelling case on why you’re not paying it to them 

to this committee. Are you willing to accept that, to make a compelling case? 

Mr. CONCANNON. I’m willing to report back to the committee 

within 30 days, but I’m not sure whether the matter will be resolved —— 

Mr. MEADOWS. Mr. Concannon, let me just tell you what concerns me is that you supposedly have the answers for all food 

stamp ailments, and yet what I am seeing are experts here that 

are on the ground that in my opinion know a lot more about what 

is going on in their States than you do, and now you are going to 

hold it up because Mr. Carroll has supposedly done a great job. You 

just admitted it under sworn testimony, and yet you are saying you 

are not going to give him a bonus for good performance? 

Mr. CONCANNON. I said he’s doing a good job. I didn’t say he deserves a bonus —— 

Mr. MEADOWS. Well, let me just tell you —— 

Mr. CONCANNON.—so —— 

Mr. MEADOWS.—this will not be the last hearing then, and we 

will have you back. If you are going to report back in 30 days, I 

would appreciate that. 

Mr. MEADOWS. Ms. Mayhew, let me come to you. Why do you 

think there is so much use of Maine’s SNAP benefits across the 

country? 

Ms. MAYHEW. Well, certainly, as I indicated in our testimony 

there are no Federal SNAP regulations that would restrict the mobility of that benefit. We have concerns about—around that. Now, 

certainly States have access to EBT card transactional data. We 


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have invested in effort software applications to analyze that EBT 

card transactional data to look at that out-of-state use. 

We’ve established triggers when a card is used for a prolonged 

period of time, 2 months or more out of State, that is a red flag 

that certainly the individual may no longer be a resident of the 

State, but it may also be an indicator of other activity that’s not 

consistent with the requirements of the program. That is an effort 

that we certainly believe all States need to be using, data analytics 

and tools, to analyze out-of-state transactions. 

Mr. MEADOWS. So I show that there has been $64 million worth 

of Maine benefits used in other States. Is that correct? 

Ms. MAYHEW. That is correct. And certainly this is across the 

country and including St. John and Las Vegas and California there 

have been Maine EBT cards used. Now, that is both food stamps 

but would also include other benefits on the card, including TANF. 

Mr. MEADOWS. All right. So as we look at that, Ms. Brown, from 

a GAO perspective, that type of tool that allows us to track those 

benefits and where they are being used and perhaps allow for better fraud prevention, is that a tool that you have or is that a tool 

that we could use, as Maine has used it, to give us a better picture 

of potential—and I say potential—fraud? 

Ms. BROWN. Well, the issue of people using their benefits in 

other States has been something that’s come up many times both 

whether there were questions of fraud but also whether there are 

questions that recipients are applying for and receiving benefits 

from multiple States. And we do have and are looking right now 

at some data-sharing applications that would shed some light on 

whether they were actually receiving benefits from multiple States. 

And USDA has activity in that area, too. 

I don’t know of anything —— 

Mr. MEADOWS. So could we get a report like this for every single 

State where we see the benefits that are being used in other 

States? Is that something that is easy for you to do, GAO to do? 

Ms. BROWN. I’m not sure if it’s easy for GAO to do it. We —— 

Mr. MEADOWS. How about you at USDA, Mr. Concannon? Can 

you get us that? 

Mr. CONCANNON. We could certainly on SNAP, on food stamp 

benefits. As the commissioner mentioned, those benefits you’re 

talking about in those several States include other functions that 

are on that same EBT card, so I’d caution against that. The majority —— 

Mr. MEADOWS. What do you mean —— 

Mr. CONCANNON.—of out-of-state benefits for Maine are actually 

—— 

Mr. MEADOWS. You can’t get the information? 

Mr. CONCANNON. We can give you the information for SNAP, not 

for —— 

Mr. MEADOWS. For TANF? 

Mr. CONCANNON.—the TANF or for child support, as the case in 

many States, too. 

Mr. MEADOWS. All right. Mr. Carroll is wanting to weigh in. I 

saw the pencil go up. 

Mr. CARROLL. I do. And I’m glad that Ms. Brown brought this up. 

We’re in a collaboration right now with five southern States that 


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border us so that we electronically up front when somebody applies 

for assistance can ping our data off of their data to make sure that 

they’re not concurrently receiving assistance in two States. That’s 

a pilot program we’ve been working with our Federal partners on 

doing that, and it’s—quite frankly, it’s worked quite well. 

I hear there’s another 15 States going to come in on that, and 

we hope at some point that all 50 States are up on it so at least 

we can stop folks from receiving in multiple States. 

The issue that we have with folks using food stamps in other 

States, it’s like everything we deal with, it’s complex. You’ve got to 

peel the onion back because in Florida when you look at the panhandle, it’s usual for somebody to cross the border and use it at— 

the nearest grocery store may be in Alabama if you live in Pensacola. It may be in Georgia. It may be in Louisiana. So we see some 

of that. But I can tell you, to have folks from 6 or 10 or 12 States 

visiting the Opa-locka flea market, if you’ve walked through the 

Opa-locka flea market, that is not a tourist destination. So there’s 

something going on there. 

And what we don’t know is I don’t think that folks physically 

came here from Maine to use their card or to sell their card here. 

I suspect it was more related to—we have ID thieves in southern 

Florida that we know are now applying for assistance in Missouri, 

that now are applying for assistance in New York. They’ll probably 

apply for assistance in Maine because there’s no way these folks 

are physically coming to Florida to go to the Opa-locka flea market. 

Mr. MEADOWS. Yes, I have been there. I can assure you, you 

have got to be going there to get there so —— 

Mr. CARROLL. Right. 

Mr. MEADOWS.—I mean, as we look at that—Mr. Carroll, let me 

point out one thing, and, Mr. Concannon, I want to come back to 

you because I mentioned bonus things and it was really just a footnote. I want to make sure, Mr. Carroll, you have not asked me to 

address that, and I want you to hear that, Mr. Concannon. The relationship between the two of you I think is a very good one. It is 

one that I want to continue to support and applaud. And so my 

interaction here is more of frustration out of trying to make sure 

that we don’t create a disincentive for good performance. And when 

you have someone who is performing well, I want to make sure 

that the compensation is there. 

And the other aspect, Mr. Concannon, and I will close with part 

of this, if you are asking the States to really look and police the 

recipients, would it not be prudent to allow them to police the retailers as well? And I am not asking for—you can comment on that 

if you would like. 

Mr. CONCANNON. Yes, I can comment on it because we have 

given—for example, Maine, we entered into a—what we call a 

SLEB agreement. We have one in Florida as well where we allow 

them to—the police agencies to—if you suspect something is going 

on, I’m aware that we have an agreement currently out on the 

West Coast with a State that States can come forward, one, report 

to us that they’re—here’s my complaint in all of this. I am confident we’re going after stores across the country. I’m a lot less confident that States, with due respect, are going after the individuals 


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who are using places like that Opa-locka market or whatever it’s 

called. And we have urged States —— 

Mr. MEADOWS. You butchered that —— 

Mr. CONCANNON.—to take a store out —— 

Mr. MEADOWS.—but that is okay. 

Mr. CONCANNON. We—okay. Well, when we take a store out, I 

have urged States—these people have been at meetings when I’ve 

said to them look at the redemption history in the previous 3, 6 

months and you will see by—based on the amounts of redemption, 

the time of day, where people are from, you will identify, and yet 

it’s a handful. 

Mr. MEADOWS. Okay. 

Mr. CONCANNON. I think in Maine last year, the year before, two 

people were taken out of the program for trafficking —— 

Mr. MEADOWS. Okay. Mr. Concannon —— 

Mr. CONCANNON.—so there’s not much —— 

Mr. MEADOWS.—let me —— 

Mr. CONCANNON.—going on in this department. 

Mr. MEADOWS. Let me tell you, it is harder to go after the recipient and it is very easy for you to make statements about recipients 

when that is not under that purview when actually the retailers 

are under your purview right now. And here is what I am saying— 

and I will come to you, Mr. Carroll, because I think you wanted 

to—what I am saying is maybe let’s look at a pilot and give all authority for policing the retailer to the States and maybe let’s do it 

in two or three States. 

You know, part of the farm bill actually asked for you to come 

up with some pilots on fraud, and have you done any of those pilots? 

Mr. CONCANNON. Yes, we’ve actually —— 

Mr. MEADOWS. Your mic, please. Your mic, your mic. 

Mr. CONCANNON. We’ve made grants to these States, Maine including —— 

Mr. MEADOWS. No, no, no, no, no. 

Mr. CONCANNON. Yes, we have. 

Mr. MEADOWS. So in what form did you do a pilot because I 

haven’t seen any results or even start of a pilot —— 

Mr. CONCANNON. No, they have started. 

Mr. MEADOWS.—in your other sworn testimony —— 

Mr. CONCANNON. They have started. 

Mr. MEADOWS.—so you may want to check with your staff behind 

it. What kind of pilots —— 

Mr. CONCANNON. No, we have —— 

Mr. MEADOWS.—have you done? 

Mr. CONCANNON. We have made grants to these States —— 

Mr. MEADOWS. That is not what I asked. The farm bill —— 

Mr. CONCANNON. Okay. Some of the —— 

Mr. MEADOWS.—was very specific. It said for you to set up pilots 

to do that. I voted for the farm bill, and so I know that it’s there. 

Mr. CONCANNON. Terrific. 

Mr. MEADOWS.—there. So have you —— 

Mr. CONCANNON. Great. 

Mr. MEADOWS.—done any pilots? 

Mr. CONCANNON. Yes, we have. 


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Mr. MEADOWS. In what States? 

Mr. CONCANNON. There are a list of them here. We’ll give you a 

number—Maine is one of them on case management, for example, 

where we’ve given Maine money, and there are some other examples —— 

Mr. MEADOWS. Mr. Carroll —— 

Mr. CONCANNON.—on that line. 

Mr. MEADOWS. Mr. Carroll, you—let me —— 

Mr. CONCANNON. SLEB agreements with a number of States as 

well —— 

Mr. MEADOWS. What is that? 

Mr. CONCANNON.—so yes. We’ll give you the list of States and 

what they’re doing. 

Mr. MEADOWS. Mr. Carroll, is what we are talking about, does 

that go far enough to solve your flea market problem? 

Mr. CARROLL. No. And, first of all, I want to say to Under Secretary Concannon that when we have partnered and they have 

gone after vendors, we’d have a very strong partnership. What I’m 

worried about is even using their definition of a high-risk vendor, 

we have over 16,000 authorized retailers in the State of Florida. 

Based on the definition that classifies some of those vendors as 

high-risk, 13,000 of our vendors are high-risk. 

And if you use the statistic out of FNS in terms of what percentage of those might potentially be actively engaging in this activity, 

it would be about 2,300. FNS and the State of Florida gets to about 

100 of these establishments, investigations per year. So based on 

that, it would take us 23 years to get through that population. We 

—— 

Mr. MEADOWS. All right. So your—hold on. Your sworn testimony 

here today is that based on the potential for fraud in Florida of 

2,300 retailers with the way that we are going after those, it would 

take 23 years —— 

Mr. CARROLL. Correct. 

Mr. MEADOWS.—to evaluate all of those? 

Mr. CARROLL. With the current—the way we do investigations, 

the current staff available to those folks —— 

Mr. MEADOWS. That is unacceptable. I am just telling you that 

is unacceptable. And so I am going to go ahead and come to the 

gentleman from Wisconsin, Mr. Grothman, for his second round, 

and we’ll close up. 

Mr. GROTHMAN. Well, thank you. A couple things. First of all, I 

want to respond to something one of the other Congressmen said 

where he I think intentionally mischaracterized what I said or lied 

about what I said. With regard to my exchange with Mr. 

Concannon, the question is when you have so many programs, the 

benefits of which disappear when you marry somebody with an average income, the question is whether it affects people’s decision as 

to whether or not to get married. And when you add up the Medicaid and the SNAP and the low-income housing and the Pell 

grants and the disability for kids, you can wind up with huge 

amounts of money. 

So I think what I said was completely mischaracterized, but I 

will ask Mr. Concannon again because I think you gave me a 

wrong answer as well. There is a marriage penalty, I believe, assoVerDate Sep 11 2014 14:28 Jan 09, 2017 Jkt 000000 PO 00000 Frm 00125 Fmt 6633 Sfmt 6633 F:\22990.TXT APRIL

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ciated with SNAP. And you sit there and shake your head on that. 

But if you marry someone who moves in with you and they are 

making, let’s say, $40,000 a year, isn’t it true that if the person 

who initially has some benefits that you will lose your SNAP benefits, as well as many other benefits which you are entitled to by 

your classification of being low income because no longer you and 

the father of the child are considered low income? Isn’t that true, 

Mr. Concannon? 

Mr. CONCANNON. No. What’s true is this. If somebody moves in 

with you, whether they are married or not, their income is counted 

in the SNAP program —— 

Mr. GROTHMAN. That’s exactly right —— 

Mr. CONCANNON.—period. 

Mr. GROTHMAN.—Mr. Concannon. That’s exactly right. So first of 

all, assuming you catch somebody has moved in, which a lot of 

times is not—I’d argue most times is not—but if you decide to move 

in with the father of your children and the father of your children 

is making $40,000 a year, will you not lose the SNAP benefit? 

Mr. CONCANNON. Yes. 

Mr. GROTHMAN. That is what we call a marriage penalty. Very 

good. 

Now, a question for Mr. Carroll, and Congressman Meadows 

dealt with this a little bit, but we are going to talk a little bit more 

about the National Accuracy Clearinghouse, right? And that was a 

very successful program, correct? 

Mr. CARROLL. Well, it’s a pilot —— 

Mr. GROTHMAN. It is a pilot but —— 

Mr. CARROLL. Yes. 

Mr. GROTHMAN.—would you say you discovered people who were 

getting SNAP benefits in more than one State or trying to get 

SNAP benefits in more than one State? 

Mr. CARROLL. Yes. 

Mr. GROTHMAN. A substantial number, right? 

Mr. CARROLL. I’d have to get back to you the number. I don’t 

have that number, but there is an active number, sure. 

Mr. GROTHMAN. Somebody here put down on this thing they gave 

me currently Florida averages 162 matches a day. Is that possible? 

Mr. CARROLL. That’s correct. 

Mr. GROTHMAN. Okay. I guess I would call that a successful pilot 

program. 

I will ask Mr. Concannon what you have learned from that pilot 

program and whether you think it would be a good idea to follow 

up with that pilot program all over the country. 

Mr. CONCANNON. Yes, I do. I support the program and I—again, 

when I meet with commissioners, I tell them do data matches with 

other States. You can do it in batch. You don’t have to do it exactly 

the way that was structured. The beauty of that particular pilot 

was it was real-time so they could identify people. But there are 

ways to identify people trying to enroll in other States by even 

doing simple match processing matches, and I highly supported 

that. 

Mr. GROTHMAN. And will the program—you think the program 

will be expanded nationwide? 


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Mr. CONCANNON. That I don’t know at this time. If States come 

forward and say we want to do it, we’re certainly interested in it. 

Mr. GROTHMAN. Okay. I will just give you one more question because you really didn’t answer before or I will give it to any of you, 

and I always wonder about this. Like I said, I get around my district, I even talk to people here in Washington, but certainly, you 

know, in Wisconsin we have big cities, we have little cities. Wherever I go, people are selling their SNAP benefits at 50 cents on the 

dollar. 

Now, that indicates to me that they must be getting food from 

somewhere else or that maybe they don’t need the benefits. I would 

strongly encourage you who are not familiar with that to get out 

a little bit more and talk to people in the real world and, you know, 

deal with people in that income class and see how much SNAP 

benefits are being sold for in your area. 

But could anybody give me a reason as to why, if we have this 

huge food crisis in our country, people are selling their benefits for 

50 cents on the dollar? Mr. Carroll? 

Mr. CARROLL. I’d like to take that question. What we find the 

highest profile of somebody who’s likely to engage in that type activity is—we go back to that able-bodied—it’s usually a single adult 

that doesn’t have kids because we very seldom—unless it’s identity 

fraud where it’s not the person it’s purported to be, we very seldom 

come across a mom unless there’s a serious other issue like a drug 

addiction or something—but we very seldom come across a mom 

who is going to sell the lifeblood of that family for—no matter how 

much. 

So—and this is why I want to focus on the vendor rather than 

the recipient because if you’re a recipient and those able-bodied 

folks make—or get about $111 a month or $114 a month. If you 

get 50 cents on the dollar, you’re talking about they get maybe $60, 

but if you’re a vendor in Opa-locka and you multiply that over and 

over, all of a sudden you get $7 million worth of redemptions off 

an EBT card that you’re keeping 20 percent of with no overhead. 

And so I agree it’s an issue. I don’t think that families that are 

on assistance are selling their food stamps like that. I do think that 

some of this becomes urban legend because we don’t do a good job 

at curtailing it so it’s difficult to put a number on it. But if we don’t 

go after the vendor side of this, we’re never going to stop it. 

Our focus is on the recipient side, and Under Secretary 

Concannon talked about how States don’t go after the recipients. 

The difference of going after a recipient, you can go after a retail 

vendor and you can have preponderance of the evidence and you 

can use the EBT transactions to shut them down. Because we have 

a clear-and-convincing standard, I can bring that standard in. And 

most of the time when we get it, by the way, it has been under investigation for a number of years. It took 7 months to go through 

a disqualification. So when we get a lot of the transactions that are 

given to us, a lot of them are a year, 2 years old, we have to rerun more current transactions. 

But with a clear-and-convincing standard, we then have to prove 

they had the intent to commit fraud, and short of having a witness 

that saw them do it or having some type of admission from the person that they in fact, misused their food stamps, it’s very difficult 


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to overcome that hurdle, which is why we asked to have that 

standard reduced to the same as retail merchants where it’s preponderance of the evidence because then we can do exactly what 

Under Secretary Concannon said and use the EBT usage data to 

begin taking some of these people off the rolls. 

Right now, they refer to us—because of the vendors—they shut 

down on average about 21,000. We have 41,000 folks that we’re 

looking at just in the Opa-locka area. That’s 62,000 folks. I don’t 

have enough folks to investigate at the level of investigation you 

need to disqualify 62,000 folks. I just don’t. We’ve got to stop this 

at the vendor level, and we’ve got to reduce the standard on the 

recipient level. 

Mr. GROTHMAN. May I have another question? 

Mr. MEADOWS. Last question and then you are out of time. 

Mr. GROTHMAN. You gave yourself —— 

Mr. MEADOWS. Yes —— 

Mr. GROTHMAN.—15 minutes. 

Mr. MEADOWS.—it is part of being a chairman. 

Mr. GROTHMAN. Wisconsin we have PIN numbers. They have 

PIN numbers nationwide. Is that a nationwide thing now? 

Mr. CONCANNON. Yes. 

Mr. GROTHMAN. Okay. And how about photo ID, photo on the 

card? Do you think we should be doing that, everybody have a 

photo on the card? 

Mr. CARROLL. This is where Maine and Florida differ a little bit. 

We looked into putting photos on the card, and the initial up-front 

cost would be about $450,000 and then $1 per card, and with 3.3 

million recipients, the cost of instituting that would be costly. 

But what we don’t think would—this is why I think we need to 

target our prevention efforts. Most of the folks that are trafficking 

in EBT cards, there’s a willing vendor who is openly breaking the 

law and buying these food stamp cards illegally. They’re going to 

continue to do that whether there’s a picture on it or not. For the 

vendors in big-box stores like you work at a Walmart and all of a 

sudden somebody hands you a card. If you checked the ID and it 

happens to be dad but mom is on the card, then what happens in 

that grocery line? We don’t know. So we don’t think it’s a bad idea 

but it has to be fleshed out a lot further than that before we go 

down that road. 

We think you get a bigger bang for the buck in strengthening the 

data analytics portion of this looking at transaction history with 

vendors, and we think you get a bigger bang for the buck looking 

at folks coming through the front door, how they’re using their 

EBT card and drilling down into that stuff to begin to prevent it. 

I do think—and I think Secretary Mayhew alluded to this—that 

the fact anecdotally there’s been less cards collected because I do 

think it would be a deterrent to folks who don’t want it traded because their picture is on it. But the people that we see in Florida 

are intent. They could—I’m talking about a small segment that’s 

accounting for a big chunk of this fraud. These folks are criminals. 

They don’t care whose picture is on it. They’re going to sell and 

they’re going to traffic in that EBT card. 

Mr. MEADOWS. I thank the gentleman. I thank each of you for 

your testimony. Let me clear up two or three little leftover items. 


AKING-6430 with DISTILLER
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So, Mr. Carroll, is it my understanding that you believe that you 

need more authority as it relates to retailers to be able to go after 

those bad actors in terms of retailers and transfer some of that authority from USDA to the State to allow you to prosecute the fraud 

and abuse? Is that correct? 

Mr. CARROLL. That is correct. 

Mr. MEADOWS. All right. And so if we gave you that, you believe 

that we would be able to not only make a more focused approach 

on those that are fraudulently trying to game the system without 

affecting those that Ms. Dean so eloquently put, the real people 

who need the benefits, that you can go after those bad guys if you 

had that authority, is that correct? 

Mr. CARROLL. Absolutely. 

Mr. MEADOWS. All right. Mr. Concannon, let me come back to 

you. I mentioned pilots and I mentioned the 2014 farm bill. The 

kind of pilot that I want to see is to give the kind of authority that 

we just talked about with Mr. Carroll. It would be great if we took 

Ms. Mayhew, Mr. Carroll, and maybe somebody out West, you get 

North, South, and you get the West where you have three States 

that you give that authority, essentially give all of that authority 

to those States to be able to do that so that we can monitor, to 

have Ms. Brown, to have USDA monitor that to see if it is making 

a big difference. It may not. 

But here is what I am saying. As someone who will advocate on 

behalf of a new farm bill that is, as you know, already in the 

works, that the Ag Committee and that committee is doing a yeoman’s job to do a great job to make sure that we have a good farm 

bill going forward. 

I want to give them the tools coming out of Oversight and from 

GAO and the others to say here is how we define the argument, 

because if not, the argument is always going to be is that there is 

somebody gaming the system. And what I want to do is narrow 

that to the ones who are gaming it and let’s get them, and the ones 

who really need the help, that we actually look at increasing the 

ability to help those that are truly starving in our communities. 

Does that make sense to you? 

Mr. CONCANNON. I’m with you totally on that. 

Mr. MEADOWS. So are you willing to get back to this committee 

and maybe look at amore defined pilot program? And obviously, we 

would not be the only committee, but from an oversight standpoint, 

it would be ours. But the other is obviously work with the chairman of the Ag Committee to look at three pilots. I would suggest 

two that are here today and another one out West. I can tell that 

you are not buying into that, but as long as we get three States, 

as long as we get three States to give them that authority where 

we allow Ms. Brown to look at those numbers, are you willing to 

commit to do that today? 

Mr. CONCANNON. I’m certainly willing to work with you and with 

the committee on it. I want to make sure that what we can do is 

going to be legally okay by the Office of General Counsel —— 

Mr. MEADOWS. Well, going after fraud is legal. 

Mr. CONCANNON. No, no—but they may say to us, look, you have 

that responsibility. You can’t turn it over completely to the State. 

Mr. MEADOWS. Okay. If it needs a —— 


AKING-6430 with DISTILLER
124 

Mr. CONCANNON. Now, we may be able to give them more authority. 

Mr. MEADOWS. So if it needs a legislative fix, I think you have 

that in the 2014 farm bill the way that it was worded, maybe not, 

but if you need a legislative fix, if you will get your folks to get 

with us, we will work in a bipartisan way to step up that kind of 

thing so that Mr. Carroll doesn’t have to try to track down 42,000 

people individually and come up with probable cause later. Does 

that make sense? 

Mr. CONCANNON. Yes, but I think the point, though, he’s making 

that the evidence standard is still a higher one. That hasn’t solved 

that issue. 

Mr. MEADOWS. But that is a different thing. 

Mr. CONCANNON. That hasn’t solved that. 

Mr. MEADOWS. If you give him the ability to go after retailers, 

some of the evidence standards are not as problematic because the 

timing of that and the ability to tie the two together where it is 

not you coming in on one—it allows him to do that. The time gap 

is certainly very different. Does that make sense? 

Mr. CONCANNON. It could. It could. We’re doing variations on 

that with a Western State right now, so we’ll have to see whether 

that works. 

Mr. MEADOWS. Okay. All right. So can you in the next 120 days 

get me an updated report on the trafficking because it is 3 years 

old, the 2015 report. Can you —— 

Mr. CONCANNON. We —— 

Mr. MEADOWS. You said you were working on it already. 

Mr. CONCANNON. They are working on an update of that —— 

Mr. MEADOWS. So what is a reasonable —— 

Mr. CONCANNON.—right now. I don’t know what —— 

Mr. MEADOWS.—time? If 120 days is not reasonable, what is reasonable? 

Mr. CONCANNON. End of calendar year this year because that’s— 

it’s very complicated, but end of calendar year, December. 

Mr. MEADOWS. It is so complicated to figure out trafficking that 

it is going to take 6 months? 

Mr. CONCANNON. They are currently working on it right now, but 

they have just advised me, the people who are working on it, that 

we won’t have it until the end of the calendar year. 

Mr. MEADOWS. So we will have the 2015 report in 2017? 

Mr. CONCANNON. Two thousand twelve to fourteen is the current 

time period they’re working on. 

Mr. MEADOWS. All right. But can you include 2015 in that? 

Mr. CONCANNON. I think they’re already working on it so I don’t 

think I can. 

Mr. MEADOWS. So you can’t include that? She is shaking her 

head no, you are saying yes. 

Mr. CONCANNON. Well, they are the researchers so —— 

Mr. MEADOWS. So we will have—let me make sure I understand. 

We are going to have 2012 through 2014 but no information on 

2015 trafficking by the end of the year, is that correct? 

Mr. CONCANNON. Correct. 

Mr. MEADOWS. Okay. We will follow up with you on that. 


AKING-6430 with DISTILLER
125 

And my final issue is more of a comment, and it gets to something that you talked about earlier. You talked about a rule about 

addressing the retailers. There is a very big difference between 

going after fraud with retailers than telling them what they have 

to stock on a shelf. And you conflate the two, and I am here to tell 

you that I am going to be looking at that very closely. I want your 

first priority to be fraud. That is what the farm bill talked about. 

And what you are suggesting in your rules is something that perhaps is other than that, and I want to make sure that we are clear 

that I want you to focus and have your priority on fraud versus on 

what goes on a shelf. 

Mr. CONCANNON. Well, actually, the farm bill authorized depth 

of stock is the term —— 

Mr. MEADOWS. It did —— 

Mr. CONCANNON. So it isn’t just —— 

Mr. MEADOWS. But I think —— 

Mr. CONCANNON.—on fraud. It’s to improve —— 

Mr. MEADOWS. But I am telling you that —— 

Mr. CONCANNON.—the —— 

Mr. MEADOWS.—priority is fraud first. 

Mr. CONCANNON. Okay. 

Mr. MEADOWS. The depth of stock and where you are going with 

it I think you will find a very—your interpretation of what I voted 

on is very different than what I voted on. And I will yield back. 

And with that, I want to thank all of you for your time, and if 

there is no further business, this joint committee stands adjourned. 

[Whereupon, at 5:20 p.m., the subcommittees were adjourned.] 


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APPENDIX 

MATERIAL SUBMITTED FOR THE HEARING RECORD


AKING-6430 with DISTILLER
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WE MAKI! NEW MEXICO HAPPI!N 

www.afscme IS.org 

April26, 2016 

Bill Ludwig 

Southwest Regional Director 

United States Department of Agriculture 

1100 Commerce St. Room SSS 

Dallas, TX 75242-980 

Mr. Ludwig: 

The purpose ofthis letter is to request, on behalf of our members, that the U.S. Department of Agriculture 

immediately investigate reports from employees of the New Mexico Human Services Department's 

Income Support Division (lSD) about systemic errors in administering the Supplemental Nutrition 

Assistance Program (SNAP). 

The American Federation of State, County and Municipal Employees (AFSCME) is the exclusive 

representative for 15,000 public employees throughout New Mexico. AFSCME represents the 

employees who work for lSD, which administers the SNAP program in the state. 

lSD caseworkers in New Mexico have an increasingly difficult job keeping up with the demand for SNAP 

assistance in our state. Our members report that the job of a caseworker has become insurmountably 

difficult in the last few years because of ISD's systemic failure to provide clear and comprehensive policy 

directives and training to staff, problems with New Me11ico's Information Technology (IT) system, and a 

severe lack of program accountability. Workers report that there is a statewide policy and practice of 

adding false asset information to casefiles not processed timely for SNAP, thereby preventing them from 

appearing untimely in data reported to the USDA. AFSCME members employed at ISO request that the 

Food and Nutrition Service investigate these problems to the greatest extent possible. 

Unclear Po!icy Directives and Inadeonate Staff Training 

Instead of having one central worker manual like other states, ISO provides policies and procedures to 

employees through a variety of sources: the New Mexico Administrative Code (NMAC), General 

Information Memorandums (Gis), Manual Revision Forms (MRs), and Interim Policy and Procedures 

(IPPs). Caseworkers access Gls, MRs and IPPs through a central shared drive that is not indexed. ISO is 

constantly issuing new Gls, MRs and IPPs, making it impossible for workers to keep up with current ISO 

policy, and sometimes new Gls, MRs and IPPs conflict with the NMAC or old policies that were never 

rescinded. When major policies do change, workers are not receiving adequate or timely training. For 

example, when the state implemented the three-month time limit for ABA WDs on January I, 2016, many 

staff were not trained until after the rule went into effect. A lack of clear directives, policies, and trainings 

results in caseworkers being unable to effectively provide benefits to eligible New Me11icans. 

IT Errors 

In the fall of2013,1SO obtained a new computer eligibility system- ASPEN. Our members report that 

the implementation of this IT system has been disastrous and has resulted in thousands of eligible New 

Me11icans being denied food assistance. For the last two years, workers have encountered a variety of 

ASPEN IT problems that have prevented them from certifYing benefits and which have caused improper 

1202 Penn1ylvonio St. NE • Albuquerque, NM 87110 

505.266.250.5 OHite • 505.266.2404 Fall • www.ofsc.me18.org 

American Federation of Stale, County and Municipal Employees, AFL•CIO 
129 


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SNAP overpayments. When caseworkers encounter an ASPEN IT problem that prevents them from 

processing a case, they have to submit a help-desk ticket to have the issue resolved. There is no deadline 

for when the help desk has to respond to a help-desk ticket. and workers report waiting weeks for a 

response. When lSD discovers that an ASPEN problem is system-wide, workers have to do time· 

consuming workarounds in each individual case until lSD can get ASPEN reprogrammed. For example, 

households eligible for SNAP that previously had an Intentional Program Violation (IPV) have their 

benefits inexplicably terminated by ASPEN evecy month. Once a worker is aware of the problem, usually 

after the household's benefits have been terminated, the worker must set a timer to be reminded to 

manually issue benefits each month. This will continue until the ASPEN system is fixed. 

Jmproper Procep!ag or Expedited SNAP 

Our members are primarily concerned about SNAP program accountability and ensuring that low-income 

New Mexicans receive the benefits they are entitled to. Several of our members who work in different 

lSD offices across New Mexico report that New Mexico lSD has a statewide practice of adding false 

information about household asset information to cases so that they do not appear eligible for expedited 

SNAP. Statewide, supervisors have a policy that any case that is late for processing and eligible for 

expedited SNAP cannot be processed by a caseworker and must be sent to a manager. Managers and 

supervisors have a pattern and practice of either adding asset information that should be counted as 

income or simply adding assets with no basis in the casefile whatsoever. Workers report that the addition 

of assets makes the case appear that it is not eligible for expedited processing, even though the family did 

not report assets on the original application or at any time thereafter. Workers report that the case notes 

were altered by management to avoid violating the time frames of the court order for expedited SNAP 

processing. An example is attached to this Jetter. The cases are returned to frontline workers after 

managers have added the new asset information to finish processing. 

We have confirmed that this practice is occurring in offices in Roosevelt County, Taos County, and Doila 

Ana County. Unfortunately, our members who work for lSD are vecy fearful of retaliation for reporting 

this information. There are several lSD employees who have agreed to come forward and talk to the 

USDA about ISD's expedite SNAP processing praetices and their name and contact information can be 

obtained through AFSCME Legal Counsel, Shane Youtz, (505) 244-1200. We look forward to USDA's 

response regarding these important issues. 

In response to the administrative failings and reports of directives to falsity case information, we request 

that the USDA's Food and Nutrition Service launch an immediate and thorough investigation into !SO's 

SNAP application processing. 

ConnieDerr 

r/~ 

AFSCME Council 18 Executive Director 

via Email to 

cc: Bill Ludwig- William.Ludwjg@fns.usda.gov 

Dwight Curdup- Dwjght.cruduo@fns.usda.gov 

Audrey Rowe- Audrcy.rowe@fns.usdl!.gov 

Jessica Shahin-Jessica.shahin@fns.usda.gov 
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USDA 

~::zc= 

United States Department of Agriculture 

OCT 1 a 201S 

The Honorable Mark Meadows 

Chairman 

Office of the Secretary 

Washington, D.C. 20250 

Subcommittee on Government Operations 

Committee on Oversight and Govenunent Refonn 

U.S. House of Representatives 

2157 Rayburn House Ofticc Building 

Washington, D.C. 20515 

Dear Chainnan Meadows: 

During the Joint Subcommittee hearing of Government Operations and The Interior titled, 

"SNAP: Examining Efforts to Combat Fraud and Improve Program Integrity", conducted on 

June 9, 2016. you requested that the U.S. Department of Agriculture (USDA) explain why 

payment accuracy bonuses are not being distributed to Florida and to other States. This letter 

responds to your request. USDA shares your commitment to ensuring that States are rewarded 

for good pcrfonuance in the program, and takes the responsibility for oversight of the 

Supplemental Nutrition Assistance Program (SNAP) very seriously. 

Payment accuracy bonuses calculated through the quality control (QC) system are based on 

payment enm rates by State agencies administering SNAP occurring during a year. As you may 

know, on June 24, 2016. USDA sent a letter to all State agencies outlining QC procedures tor 

fiscal years (FY) 2015 m1d 2016. In that letter, USDA outlined the reasons for questioning the 

payment error rates reported by States agencies for FY 2015 and 2016, and the consequent 

changes to normal QC procedures that USDA must temporarily adopt. The concerns related to 

State agency reported eiTor rates include findings of State non-cqmpliance with QC procedures 

among almost all of the States that have been reviewed to date. The findings include cases of 

both intentional and unintentional non-compliance, and possibly fraud in some cases. However, 

regardless of the intentionality of the noncompliance with agency regulations, USDA believes 

that strong measures are necessary to coiTect the non-compliance issues. 

Performance bonuses for payment enor rates have been on hold since USDA identified the 

potential scope of the non-compliance through audits of each State's QC review process (which 

revtOals the a1111ual error rate). To date, all State reviews have been completed. USDA's Food 

and Nutrition Service (FNS) is in the process of finalizing the reports and transmitting them to 

the Stales. This was dontO to ensure that bonuses are paid only to States that have legitimately 

earned them. 

An Equal Opportunity Employer 
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The Honorable Mark Meadows 

Page 2 

In addition, the Department of J\L5tice (DOJ) requested that USDA continue to withhold payment 

accuracy bonuses as they conduct an investigation into possible false claims by State agencies. 

The request by DOJ says in relevant part: 

" ... we understand that FNS is auditing the QC review process of each State agency, and 

is deciding how to administer error rate liabilities and bonuses. We understand that due 

to this ongoing review by FNS, certain bonus funds for FY 2013-2015 are being held and 

have not been paid by FNS. 

While we understand that decisions as to how to operate the program, including whether 

to pay perfom1ance bonuses, are the province ofFNS, and that FNS takes into account 

many considerations in making these decisions, we write to contlrm that if FNS were to 

pay any performance bonuses to States that FNS has determined introduced bias 

[noncompliance] into their quality control processes during these years, it could 

materially and negatively impact our ongoing investigation and our ability to return any 

wrongfully obtained funds to FNS for these and other years." 

USDA will continue to withhold performance bonuses until USDA has completed its thorough 

analysis of each State Agency's QC system and until such time as DOJ has either completed 

their investigation or agreed that release of the bonuses would not harm their investigation. . 

USDA remains committed to appropriate oversight of SNAP. If you have any further questions, 

please contact Todd Batta, Assistant Secretary for Congressional Relations, at (202) 720-7095. 

Sincerely, 

Kevin 

k~~ W. Concatmon 

Under Secretary 

rood, Nutrition, and Consumer Services 
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STATE AGENCY NOTIFICATION OF MAJOR CHANGES IN PROGRAM 

I. Summary of Change 

!he: major change ckscribcd in this notification meets the criteria dclincd in CFR 272.15(2)(ii) 

<md (h) invoh ing increased rclianc<: on an automated systc:m and a change in the functions 

cutTcntly assigned to SNAP personnel. 

Anticipated Implementation Date of Change: 71212018 

State: FL 

Region: SERO 

II. Description of Major Change in SNAP and its Expected Impact 

provide the required information below describing the change and/or its expected impact 

A. Description: 

Florida \\Otlld like to revise the way it assigns and routes applications f\1r SNAP in order to 

idcntil~ potentially fhmdulcnt applications imolving identity tbd1:. The Department of 

Children & Families (DCF) is requesting funding from the State Legislature to implement a 

''rules engine" on the front end of its online application system, which would score incoming 

applications using a set of proven fraud prone profiles so that high risk applications can be 

assigned to spccializ.cd investigative skilled staii The rules engine would use data l!·om the 

application, the automated customer authentication/identity verilication process, as well as 

other availahlc public and pri\·atc sector data sources that have been verifiably determined to 

highl\ indicati\c of fraud and/or identity theft to derive the risk score. Low risk 

applications \\otild continue to he assigned to regular Economic Self~Surt!ciency (ESS) 

eligibility v\orkcrs. The high risk applications would be "triagccr· by an investigative group 

of eligibility workers vv ho vv ill review the risk indicators, fi.Jilow up\\ ith the client and then 

either process the application for benefits or li.>rward it l(Jr investigation li.lr potential fraud, 

!he concept is to change from a pay-and-chase model of benefit recovery to a preventive 

model of stopping lhmd hcfbre SNI'vP benel!ts are approved. 
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B. Consultation or Public Comment about Planned Change: 

Consultation has bc:cn limited to executive leadership within DCF but will expand to the 

CioYernor's omce. L~gislature, and public stakeholders as the request for funding moves 

through the Legislative Budget Request (LBR) process. 

C. Scope of Change: 

scope will be limited to a pilot (e.g .. Central 

implemented statewide. 

but 

D. Implementation Schedule: 

2016 

October 14.2016 

January 2017 

2017 

March 7. 2017 

May 2017 

l\1ay-Junc 20!7 

July 2017 

Nnvcmbcr20l7 

December 20 l 

Jammr: 2ou; 

February J unc 2018 

2018 

October L 2018 

Prepare and submit Notilkation to FNS 

Submit documentation to support the LBR process 

Obtain FNS approval for Major Change 

Governor submits recommended budget to Legislature 

Legislative session begins 

Legislature passes FY 2017-18 budget 

Prepare procurement documents 

procurement process 

Complete procurement 

Lxccut'~ contract and bcgi n 

Requirements definition 

Design, build. conl1gurc. and test 

nn·Mocmnl change management plan 

Measure results and 

Statewide implementation 

E. Effect on Applicants and/or Participants: 

llw change would result in litstcr eligibility determination tiw legitimate applicants liJr 

bcnclits and assurance that bcnclits will be provided to only those who arc truly in need. 

F. Effect on Caseworkers: 

The role oCESS workers will be bifurcat<:d. One group vvill continue to pcrtbnn 

duties. and another group will be trained to review !]·aud indicators and detnmine 

whether benefits should be approved or if a lraud is warranted. This is a 
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signi I! cant change for FSS workers; thcrcf(lrc, live months have hcen included in the 

schedule for change management including communication and 

G, Administrative Cost: 

The costs associated with the are not yet known, The may he built inhouse or may be provided by a vendor using a web service, on premise equipment or the 

cloud. Lach of these involves a different cost model. The DCF is in the process of 

cost estimates for each of the but it is not availabk at this time. 

No additional starr arc to be needed for maintenance of the solution. 

Ongoing technology costs an.: expected to be f'nnded 50-50% with stale and federal dollars. 

H. Monitoring: 

Baseline metrics including but not limited to the 

closely monitored the of the 

will he documented and then 

assistance appli<:ations received 

"lumber and% scored as low risk 

b. Number and 'Yo scored as medium risk 

c. Number and% scored as risk 

2. Percentage for !(Jod assistance ""'ccsst"' within time standard 

3. Average number of days to process by program type 

4. Percentage of applications fi:n· food assistance benefits determined accurately 

5. Number and% of medium and high risk forwarded for investigation 

6. Number and % 

cost avoidance 

7. Number ofli·aud 

I. Impact(s) of the Change on State Automated SNAP System(s): 

The ACCESS Management System will be modillcd to receive lhm1 the lhmd risk 

rules and incoming lO one oflVvO onnn;m·iol•'WOrk streams. 

J. Backup Plans: 

is l(mnd to have had the major LSS 

or the pmgram measures in CFR 272.15(a)(3)(ii), the processes and risk rules ·will be 

<ldjusted the process to achieve an "new normal" t(Jr the application 

and enhanced front-end fraud detection system. The system must be designed to not 

as business processes and warrant it, but also to remain current with 
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fraud indicators which chang~ often and 

determined it negative impacts service delivery. 

The tool v\Ottlclncccl an ·on1o±r svvitch if 

K. Impact(s) of the Change on Error Rates: 

The is expected lo h<we on the State ·s payment error Of and CAPER 

because this additional tool will assist in catching identity thieves that 

tould be benefits in error. 

No is expected in the f()r the State· s payment error or 

CAPER rates. 

L. Impact(s) of the Change on Program Access: 

The change will not be '·visible'" to and will have no 

initial or rcccrtitlcation ofbcnelits. !"here should be no change in the criteria or level of 

documentation that will have to as part of the determination 

Sec above response to H. [br 

M. Impact(s) of the Change on Application Processing Timeliness and on Timeliness of 

Recertification Actions: 

The goal is t\1 the for 

\vhi le maintaining national benchmark status [(Jr accurate and 

determination. In fact, the project should reduce the time to approve bcnel!ts J(Jr 

See above response to H. Jhr J(w determining impact. 

N. Impact(s) of the Change on Vulnerable Populations: 

or the processes listed (obtaining SN/\P inf(mnation, an initial application. providing 

\crillcation. being interviewed, reporting cbangcs. or reapplying). only the department's 

internal processes fi.1r verilication and interviews arc expected to be a!Tcctcd. \lone oCthc 

noted vulm:rablc (households with elderly. disabled, homeless. or non-English 

individuals and/or households in rural areas or on an Indian rescrYntion) arc 

expected to be by the change. In 1ttcl. the only is that they arc 

workers 

fltstcr and with greater care. 
136 

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llcstribc the mctboJolog:, used to determine the projcdcd impact(s). 

Describe the procedures the State will put in place to minimize the burdens on any oCthe 

above-defined vulnerable populations. 

0. Impact(s) of the Change on Customer Service: 

anticipated impact on customer service is cxpcct<:d to be impron~d. The time to process 

lrm risk applications is expected to decrease. The medium and high risk applications 

capmrcd immc·diatcly and will be either processed quicker when risk assessment is 

determined by specialized stali and/or thctl will be thwarted. The availability of the risk 

f1ags will help workers hone-in on the areas in question and allow for quick resolution. 

Applications subject to investigation will either be cleared for approval or denied hcnclits as 

a!ltmed per SNAP policy v\ithin the current l 0 day time period. 

rim eli ness of application processing will be carefully monitored. See above response to I L 

\1onitoring for methodology l(lr determining impact. 

P. Additional Information: 

Provide any additional information ofvvhich the State \\ishcs to make FNS aware. 

Signature of requesting official: 

Print Name: Click here 10 mter lex/. 

Title: Click here to enter /ext. 

State Agency Contact 

Name: Click here to enter name. 

E-mail Address: ('lick here to enter e-mail address. 

Telephone Number: Click here 1o enrer !elephone numhcr.