SUPPLEMENTAL 

NUTRITION 

ASSISTANCE 

PROGRAM

Policy Changes and 

Calculation Methods Likely 

Affect Improper Payment 

Rates, and USDA Is Taking 

Steps to Help Address 

Recipient Fraud

Statement of Kay E. Brown, Director, Education, 

Workforce and Income Security Issues

Testimony 

Before the Committee on Agriculture, 

House of Representatives

For Release on Delivery 

10:00 a.m. ET

Wednesday, July 6, 2016

GAO-16-708T

United States Government Accountability Office

The electronic version of this testimony was reposted on July 8, 2016, to 

correct the date of the statement that appears on the Highlights page.
United States Government Accountability Office

Highlights of GAO-16-708T, a testimony 

before the Committee on Agriculture, House of 

Representatives

July 6, 2016 

SUPPLEMENTAL NUTRITION ASSISTANCE 

PROGRAM

Policy Changes and Calculation Methods 

Likely Affect Improper Payment Rates, and 

USDA Is Taking Steps to Help Address 

Recipient Fraud 

What GAO Found

Over the last 10 years, the U.S. Department of Agriculture (USDA) has reported 

that improper payment rates for the Supplemental Nutrition Assistance Program 

(SNAP) have ranged from an estimated 5.8 percent to 3.2 percent of all 

payments, likely reflecting, in part, certain policy changes and calculation 

methods. Many factors affect low-income households’ eligibility for SNAP and 

the amount of benefits they receive, creating multiple opportunities for errors in 

the eligibility determination process conducted by states. However, GAO found 

that certain state or federal program changes can affect the likelihood of these 

errors. For example, when states adopted available policy flexibilities that 

simplified or lessened participant reporting requirements, these changes reduced 

the opportunity for error and led to a decline in the improper payment rate, 

according to a USDA study. Conversely, other changes may have led to an 

increase in the improper payment rate. USDA cited the change from only 

counting errors over $50 in the rate to counting all errors over $37 as a key factor 

in an increase in the rate in fiscal year 2014. 

SNAP’s improper payment rate calculation methodology is generally similar to 

that used by other large federal programs for low-income individuals, including 

Medicaid, the Earned Income Tax Credit, and Supplemental Security Income 

(SSI), though some differences may affect the resulting program improper 

payment rates. To generate improper payment rates, all four programs draw 

representative samples of their recipients and report their improper payment

rates at high levels of precision. Yet, some methodological differences among 

the programs likely affect the resulting rates. For example, when there is 

insufficient information to review eligibility and benefit determination for a 

selected case under review, Medicaid counts the full benefit amount as an error, 

SNAP makes an adjustment in the improper payment rate calculation but does 

not include the full benefit amount as an error, and SSI removes such cases 

entirely from the sample.

Fraud is also a key indicator of program integrity, and in 2014, GAO found that 

selected states employed a range of tools to detect potential SNAP recipient 

fraud, though they faced some challenges. Recipient fraud can occur when 

applicants make false or misleading statements to obtain benefits or when 

recipients misuse benefits by exchanging them for cash or non-food goods or 

services. All 11 selected states that GAO reviewed matched information provided 

by SNAP applicants and recipients against various data sources to check for 

accuracy, but efforts varied widely among these states. Some states suggested 

changing the financial incentive structure to promote fraud investigations. Some

states also reported limitations of USDA’s required approach to monitoring 

benefit card replacements, and GAO developed a more targeted approach by 

combining data sources to identify households potentially engaged in trafficking. 

In addition, although USDA had increased its oversight of state anti-fraud 

activities since fiscal year 2011, GAO found that USDA did not have consistent 

and reliable data on states’ activities because its reporting guidance lacked 

specificity. This limited USDA’s ability to monitor states and find more effective

ways to combat recipient fraud.

View GAO-16-708T. For more information, 

contact Kay E. Brown at (202) 512-7215 or 

brownke@gao.gov. 

Why GAO Did This Study

In fiscal year 2015, SNAP, the nation’s 

largest nutrition assistance program, 

provided about 46 million low-income 

people with $70 billion in benefits. 

USDA and the states partner to 

operate the program and address 

issues that affect program integrity, 

including improper payments and 

fraud. 

This testimony summarizes GAO’s 

recently completed work on SNAP 

improper payment rates and GAO’s 

2014 report on recipient fraud. It 

addresses: (1) the effects of SNAP 

policies on the rates; (2) how the 

SNAP improper payment rate 

calculation methodology compares to 

those of other federal programs for 

low-income individuals; and (3) GAO’s 

2014 findings on efforts to combat 

SNAP recipient fraud. GAO reviewed 

relevant federal laws, regulations, 

guidance, documents, and program 

data; interviewed relevant federal 

officials; and gathered information from 

states. For the 2014 report, GAO also 

interviewed officials from 11 states that 

served about a third of all SNAP 

recipient households, though GAO’s 

results are not generalizable to all 

states. This testimony also includes 

USDA’s actions to date on GAO’s 2014 

recommendations.

What GAO Recommends

In 2014, GAO recommended that 

USDA take several steps to improve 

state financial incentives, fraud 

detection tools, and reporting methods. 

USDA agreed with these 

recommendations and has taken some 

steps to address them. GAO is not 

making new recommendations at this 

time.
Letter

Page 1 GAO-16-708T 

Chairman Conaway, Ranking Member Peterson, and Members of the 

Committee:

Thank you for the opportunity to discuss our work on improper payments 

and fraud in the U.S. Department of Agriculture’s (USDA) Supplemental 

Nutrition Assistance Program (SNAP), previously known as the Food 

Stamp Program. During fiscal year 2015, SNAP provided food and 

nutrition assistance to almost 46 million individuals for a total of 

approximately $70 billion in benefits for the year. SNAP benefits are 

provided to low-income households; state agencies administer the 

program to assess applicants’ eligibility and determine benefit amounts. 

Because many factors affect eligibility and benefit determination, there 

are multiple opportunities for errors to occur in this process that may 

result in improper payments. Improper payments are payments to 

individuals that were made in an incorrect amount or should not have 

been made at all, including both overpayments and underpayments. 

Improper payments may be caused by caseworker or participant errors.

The Office of Management and Budget (OMB) has designated SNAP as a 

high-error program due to the estimated dollar amount in improper 

payments. Specifically, for SNAP payments made in fiscal year 2014, 

USDA reported in its fiscal year 2015 agency financial report that $2.6 

billion, or 3.66 percent of all payments were improper.1 Other large 

federal programs for low-income individuals, such as the Earned Income 

Tax Credit (EITC), Medicaid, and Supplemental Security Income (SSI), 

currently report improper payment rates greater than SNAP’s rate.

In addition, while some SNAP participants make unintentional errors that 

result in improper payments, others make intentional errors or misuse 

their benefits, practices which are considered fraud. USDA’s Food and 

Nutrition Service (FNS), in partnership with state agencies, 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 fraud is also committed by retailers approved to accept SNAP 

 1

USDA, Agency Financial Report: Creating a USDA for the 21st Century, Fiscal Year 

2015. 

Letter
Page 2 GAO-16-708T 

benefits who engage in trafficking. State agencies are directly responsible 

for detecting, investigating, and prosecuting recipient fraud, and FNS is 

responsible for pursuing retailer fraud. SNAP fraud committed by 

recipients and retailers undermines the integrity of the program and the 

public’s confidence in the program.

My testimony today summarizes the results of our recently completed 

work on SNAP improper payment rates and our 2014 report on recipient 

fraud. Specifically, I will discuss: (1) the effects of SNAP policies on the 

improper payment rates; (2) how the SNAP improper payment rate 

calculation methodology compares to those of other federal programs for 

low-income individuals; and (3) our 2014 findings on efforts to combat 

SNAP recipient fraud.

For our recently completed work on SNAP improper payment rates, we 

reviewed relevant federal laws and regulations, as well as USDA policy 

memos that provided SNAP policy guidance to states.2 We also reviewed 

state SNAP waivers approved by USDA and state policy options.3 To 

assess change over time, we analyzed states’ adoption of certain options

since 2003 that have the potential to affect a large portion of the eligible 

population.

4 To assess the expected effect of policy changes on the 

SNAP improper payment rate, we reviewed prior GAO work, and FNS 

and USDA Office of Inspector General (OIG) documents, that describe 

the characteristics of policies that may affect the improper payment rate.5

 2

We reviewed SNAP policy guidance issued to states from fiscal year 2006 through fiscal 

year 2015.

3

State policy options are flexibilities set forth in federal law or regulation that permit states 

to use alternative procedures when administering their SNAP program. We reviewed 

USDA’s SNAP Certification Policy Waiver Database (updated as of March 2016) and state 

options identified in USDA’s SNAP State Options Report for September 2013 (a state 

options report with information as of October 2015 was subsequently released, after we 

had completed our review). See Appendix I for more information on state flexibilities.

4

To assess change over time, we also analyzed states’ adoption of certain options from 

May 2003 to September 2013, that have the potential to affect a large portion of the 

eligible population, for example, by affecting reporting requirements or income eligibility 

guidelines. Such options include simplified reporting, broad-based categorical eligibility, 

and the simplified standard utility allowance. 

5

We also reviewed our prior work and USDA reports issued since 2004 that analyzed the 

effect of certain state flexibilities on improper payment rates.
Page 3 GAO-16-708T 

We analyzed which federal and state policy changes had these 

characteristics, and then we assessed the likely cumulative expected 

directional effect of each policy on the improper payment rate. To obtain 

information on states’ opinions regarding SNAP changes and other 

factors that may have affected SNAP improper payment rates, we 

administered a questionnaire by e-mail to state SNAP directors of all 50 

states and the District of Columbia from February through May 2016. 

Where necessary, we followed up with states to clarify their responses 

and obtained a 100 percent response rate. While we did not validate 

specific information administrators reported through our survey, we 

reviewed their responses and conducted follow-up, as necessary, to 

determine that their responses were complete, reasonable, and 

sufficiently reliable for the purposes of this statement.6 To compare 

SNAP’s improper rate calculation methodology to other means-tested 

programs, we selected three federal programs for low-income individuals: 

EITC, Medicaid,7 and SSI. These programs, together with SNAP, 

comprise almost two-thirds of federal low-income obligations, and 

together encompass both state and federally administered programs. Like 

SNAP, these programs are also included in the federal government’s 

Payment Accuracy website’s high improper payment programs list.8 For 

each of the programs, we reviewed the relevant agency financial reports, 

program data, and program documents, as well as relevant OIG reports 

and GAO reports, and we interviewed program officials involved with 

improper payment rate calculation.

 6

Also, as part of our survey development, we pre-tested the questionnaire with four states 

and had internal and external experts review it, and incorporated comments as 

appropriate.

7

The Department of Health and Human Services (HHS) measures and reports Medicaid 

improper payments in three component areas: fee-for-service claims, managed care, and 

eligibility. For the purposes of this report, we reviewed the eligibility component’s improper 

payment rate methodology. HHS’s Centers for Medicare and Medicaid Services (CMS) 

recently proposed changes to the calculation of Medicaid improper payments rates.

Medicaid/CHIP Program; Medicaid Program and Children’s Health Insurance Program 

(CHIP); Changes to the Medicaid Eligibility Quality Control and Payment Error Rate 

Measurement Programs in Response to the Affordable Care Act., 81 Fed. Reg. 40596 

(proposed June 22, 2016). These proposed changes were outside the scope of our 

review. 

8

We have also included these programs in our prior work that identifies high improper 

payment programs. See, GAO, Fiscal Outlook: Addressing Improper Payments and the 

Tax Gap Would Improve the Government’s Fiscal Position, GAO16-92T, (Washington, 

D.C.: October 1, 2015).
Page 4 GAO-16-708T 

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

SNAP recipient fraud for fiscal years 2009 to 2014.9 We reviewed 

relevant federal laws, regulations, program guidance and reports, and we 

interviewed FNS officials in headquarters and all seven regional offices. 

We also interviewed knowledgeable state and local officials about their 

recipient anti-fraud work and obtained related documentation in 11 

states.10 Further, we took steps to assess the use of monthly benefit data 

and website monitoring tools to detect potential SNAP fraud. More 

detailed information about our objectives, scope, and methodology can be 

found in our issued report. This testimony also includes updates on the 

status of our recommendations from the 2014 report, as of June 2016, 

which were obtained by contacting agency officials and reviewing relevant 

documents.11 We shared a draft of this statement with the relevant 

agencies and incorporated technical comments as appropriate.

The work upon which this statement is based was 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 obtained 

provides a reasonable basis for our findings and conclusions based on 

our audit objectives.

SNAP, formerly known as the federal Food Stamp Program, is intended 

to help low-income individuals and families obtain a better diet by 

supplementing their income with benefits to purchase food. The federal 

government pays the full cost of SNAP benefits and shares the costs of 

 9

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

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

D.C.: August 21, 2014).

10The 11 states in our review were: Florida, Maine, Massachusetts, Michigan, Nebraska, 

New Jersey, North Carolina, Tennessee, Texas, Utah, and Wyoming. The states served 

about a third of all SNAP recipient households, though our results are not generalizable to 

all states. We chose these states to achieve variation in geographic location, and a mix of 

high, medium and low SNAP improper payment 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.

11See GAO, Supplemental Nutrition Assistance Program: Enhanced Detection Tools and 

Reporting to Combat Recipient Fraud Are in Development, GAO-16-719T (Washington, 

D.C.: June 9, 2016.)

Background
Page 5 GAO-16-708T 

administering the program with the states.12 FNS is responsible for 

promulgating program regulations, ensuring that state officials administer 

the program in compliance with program rules, and authorizing and 

monitoring retailers who accept SNAP benefits in exchange for food. The 

states administer the program by determining whether households meet 

the program’s eligibility requirements, calculating the amount of their

monthly benefits, and issuing benefits on Electronic Benefit Transfer 

(EBT) cards, as well as investigating possible program violations by 

benefit recipients.

A household’s eligibility for participation in SNAP is determined based on 

basic, non-financial, program requirements and the income and resources 

of its members. Non-financial program requirements include such things 

as residency and citizenship status. To determine financial eligibility, the 

caseworker first calculates the household’s gross income, which generally 

cannot exceed 130 percent of the federal poverty guidelines (100 percent 

of the poverty guidelines in certain circumstances). Then the caseworker 

determines the household’s net income, which generally cannot exceed 

100 percent of the poverty guidelines. Net income is determined by 

deducting certain expenses from gross income, such as dependent care 

costs, medical expenses, utilities costs, and shelter expenses. 

Information on the household’s resources (such as bank accounts and 

certain vehicles) may also be collected to assess whether these exceed 

defined limits. The net monthly income amount is then used in 

determining the household’s benefit amount, subject to maximum benefit 

limits.13 After eligibility is established, households are certified to receive 

benefits for periods ranging from 1 to 24 months depending upon 

household circumstances. Once the certification period ends, there is a 

recertification process whereby households reapply for benefits, at which 

time eligibility and benefit levels are redetermined.

 12For purposes of SNAP, states include the 50 states, the District of Columbia, Guam, the 

U.S. Virgin Islands, and reservations of Indian tribes who meet the requirements for 

participating as a state agency.

13FNS sets the SNAP maximum monthly benefit by household size. The maximum 

monthly benefit in fiscal year 2016 for a household of three is $511 for the 48 contiguous 

states and the District of Columbia. Guam, the U.S. Virgin Islands, Alaska and Hawaii 

have higher maximum monthly benefit levels.

Determination of Eligibility 

and Benefits
Page 6 GAO-16-708T 

While many of the rules governing SNAP are set at the federal level and 

apply uniformly in all states, states are also allowed flexibility in 

establishing some state-specific policy modifications through the use of 

options and waivers. SNAP’s statutes and regulations provide state 

agencies with various policy options. In contrast, waivers require states to 

obtain FNS’s permission before they are implemented. According to 

USDA, states adopt these flexibilities to better target benefits to those 

most in need, streamline program administration and operations, and 

coordinate SNAP with other programs. For example, one state option 

pertaining to reporting requirements, called simplified reporting, only 

requires households to report changes when their income rises above a 

certain level. In contrast, households for which this option does not apply 

are required to report changes more frequently. Another state option, 

broad-based categorical eligibility (BBCE), allows states to make 

households that receive non-cash services funded by Temporary 

Assistance for Needy Families (TANF), such as a toll-free number to 

obtain program information or an informational brochure, automatically 

eligible for SNAP.14 Through this option, the TANF non-cash service 

income and asset requirements become those relevant for SNAP, which 

we previously reported, resulted in some states effectively removing or 

increasing SNAP asset limits, raising the SNAP gross income limit, and 

removing the SNAP net income limit.15

According to USDA, for the most recent 10 years for which there are 

SNAP improper payment rate estimates available (for benefits paid in 

fiscal years 2005–2014), the national SNAP improper payment rate, 

combining both overpayments and underpayments, has declined or 

stayed the same in all but fiscal year 2014, as shown in figure 1. For 

benefits paid in fiscal year 2014—the most recent year for which data are 

available—the rate increased to 3.66 percent from a low of 3.20 percent 

in fiscal year 2013. State-specific improper payment rates varied among 

 14The TANF block grant, which is administered by HHS, provides federal funding to 

states, which they are required to supplement with their own funds, to provide cash 

assistance and a variety of other benefits and services to meet the needs of low-income 

families with children.

15GAO, Supplemental Nutrition Assistance Program: Improved Oversight of State 

Eligibility Expansions Needed, GAO-12-670 (Washington, D.C.: July 26, 2012).

State Options and Waivers

SNAP Improper Payment 

Rates
Page 7 GAO-16-708T 

states; for example, in fiscal year 2014, states’ improper payment rates 

ranged from 0.42 percent to 7.61 percent.

Figure 1: SNAP U.S. Estimated Improper Payment Rate for Benefits Paid in Fiscal 

Years 2005 – 2014

Note: Improper payment rate estimates shown in this figure for fiscal years 2007- 2014 have a margin 

of error no greater than plus or minus 0.33 percentage points at the 95 percent level of confidence.

Confidence level and margin of error information were not available from USDA’s Performance and 

Accountability Reports for fiscal years 2005 and 2006.

For purposes of government-wide reporting, such as at the federal government’s Payment Accuracy 

website, SNAP’s improper payment rates may be reflected as the fiscal year in which they are 

reported in the USDA agency financial report, not the year in which benefits were paid.

According to USDA, SNAP improper payments are caused by variances 

in any of the key factors involved in determining SNAP eligibility and 

benefit amounts, and household income was the most common primary 

cause of dollar errors; accounting for more than half of the variances for 

improper payments in fiscal year 2013.16 A variance occurs when a 

quality control reviewer finds the incorrect application of policy, the basis 

 16 Fiscal year 2013 is the latest year for which this information is available. Income

variances accounted for 57 percent of improper payment cases, while deduction variances 

accounted for 27 percent, non-financial variances for 14 percent, and income and other 

variances each at 1 percent.
Page 8 GAO-16-708T 

of issuance is incorrect, or there is a difference between the information 

that was used and the information that should have been used to 

determine a household’s monthly SNAP benefit amount. Cases may have 

multiple variances that result in benefit errors. Further, SNAP errors result 

from administrative as well as recipient errors. In fiscal year 2013, USDA 

reported that 62.44 percent of errors were because of administrative 

errors by the state agencies, and 37.27 percent of errors were because of 

recipient errors. Some of the errors may be attributable to recipient fraud; 

however, the magnitude of such program abuse is unknown.

In response to a requirement in federal law, FNS developed its original 

quality control process for SNAP in 1977 to track and measure errors in 

both eligibility and benefit determinations for the program. According to 

FNS officials, each month, a state’s SNAP quality control staff selects for 

review a representative sample of households that received SNAP 

benefits.17 The quality control staff review each sample case, both by 

reviewing the recipient household’s file and contacting the recipient, to 

verify whether the recipient’s eligibility and benefit amount were 

determined correctly. If the reviewer finds that someone was incorrectly 

deemed eligible, the entire amount of the benefit is counted as an error. If 

the reviewer finds that the benefit amount provided to the recipient differs 

from the correct benefit amount by more than a specified dollar amount, 

$37 in fiscal year 2014, the difference between the amount disbursed and 

the correct amount is counted as an error. Cases that are identified as 

“not subject to review” or that the reviewer cannot complete, such as 

those for which the reviewer is unable to establish contact with the 

recipient or verify income information, are removed from the sample. The 

statewide sample is designed to produce a valid statewide improper 

payment rate, which is the sum of the overpayments and underpayments 

 17 Closed cases for which benefits were denied , suspended, or terminated are also 

sampled and reviewed and an error rate is determined for such cases. This error rate is 

termed the Case and Procedural Error Rate (CAPER). This statement focuses on active 

case errors, and not CAPER.

Quality Control System
Page 9 GAO-16-708T 

divided by the value of all payments.18 Some of these erroneous 

payments may be due to fraud, but others may be due to unintentional 

caseworker or participant error.

FNS regional offices are to approve the states’ sampling plans, validate 

the states’ samples, and review a subsample of the states’ reviews to 

ensure accuracy. They also are to handle informal resolution discussions 

with states regarding disputes resulting from differences between the 

state and FNS reviews. Disputes that are not resolved informally can be 

appealed to FNS for arbitration. According to FNS officials, upon the 

completion of this process, the improper payment rates are adjusted to 

reflect the final results. FNS makes a further adjustment of a state’s error 

rate if more than two percent of the state’s cases selected for review 

could not be completed. FNS then combines the adjusted states’

improper payment rates, weighting each state’s improper payment rate by 

its actual caseload, to determine a national improper payment rate.

Once the federal adjustments are made to states’ error rates, FNS 

imposes penalties or provides bonuses to certain states based on various 

measures related to states’ payment accuracy and other measures.19

In 2015, USDA began a review of state quality control systems in all 

states in response to a report from its OIG that identified concerns in the 

application of the quality control process. On June 24, 2016, USDA 

notified the states that it had completed reviews in 33 states and 

expected to complete the remaining reviews no later than December 31, 

2016, at which time it would release a national error rate for payments 

made in fiscal year 2015. In its letter to state officials, USDA explained 

that the ongoing review is looking at both intentional and unintentional 

 18However, in an OIG report published in September 2015, the OIG noted that the 

application of the methodology for estimating FNS’ SNAP improper payment rate needed 

improvement. The OIG found that states weakened the quality control process by using 

third-party consultants and error review committees to mitigate individual quality controlidentified errors, rather than improve eligibility determinations; and quality control staff also 

treated error cases non-uniformly. The OIG concluded that FNS’ quality control process 

may have understated SNAP’s improper payment rate. USDA, Office of Inspector 

General, FNS Quality Control Process for SNAP Error Rate, September, 2015.

19In addition to payment accuracy measures, bonuses are given for states’ rates of 

improper denials, suspensions, and terminations; states’ level of program access; and 

states’ application processing timeliness.
Page 10 GAO-16-708T 

non-compliance in the quality control process by states, such as 

misinterpreting FNS requirements or providing inadequate oversight of 

the quality control review process itself. States will receive a written report 

documenting any violations and outlining required corrective action steps, 

according to USDA. The effect of these ongoing reviews on the SNAP 

error rates is unknown at this time.

FNS and state agencies are both responsible for addressing SNAP fraud. 

Acts of SNAP fraud include recipients making false or misleading 

statements in order to obtain benefits, as well as recipients and retailers 

engaging in SNAP trafficking—using benefits in unallowable ways, such 

as by exchanging benefits for cash or non-food goods and services, or 

attempting to do so. State agencies are directly responsible for detecting, 

investigating, and prosecuting recipient fraud, and FNS is responsible for 

providing guidance and monitoring these state activities. FNS also 

investigates and resolves cases of retailer fraud.

According to a September 2012 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.20 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. FNS reported that it took action on this 

recommendation, but ultimately determined that it would be infeasible to 

implement as it would require legislative authority mandating significant 

state investment of time and resources in investigating, prosecuting and 

reporting fraud beyond current requirements.

We have reported that Medicaid, SSI, and the EITC, together with SNAP, 

comprise almost two-thirds of federal low-income obligations.21 These 

programs for low-income individuals, along with SNAP, are included in 

 20 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).

21See GAO, Federal Low-Income Programs: Multiple Programs Target Diverse 

Populations and Needs, GAO-15-516 (Washington, D.C.: July 30, 2015).

SNAP Fraud

Other Federal Programs 

for Low-Income Individuals
Page 11 GAO-16-708T 

the federal government’s Payment Accuracy website list of programs with 

high improper payments reported to OMB.

• Medicaid is administered by the Department of Health and Human 

Services’ (HHS) Centers for Medicare & Medicaid Services (CMS) in 

partnership with the states, and it finances health insurance coverage 

for certain low-income individuals, children, and families. The 

Medicaid program also provides long-term care services and support 

to individuals who meet certain financial and functional criteria. HHS

measures and reports Medicaid improper payments in three 

component areas: fee-for-service claims, managed care, and 

eligibility. For the purposes of this statement, we reviewed the 

eligibility component’s improper payment rate.22

• SSI, administered by the Social Security Administration (SSA), 

provides monthly cash assistance benefits to elderly individuals, as 

well as blind or disabled adults and children, who have limited income 

and resources.

• EITC, administered by the Internal Revenue Service (IRS), provides a 

tax credit to low income Americans who work and claim the EITC on 

their tax returns. Because the EITC is a refundable tax credit, the 

amount claimed by the taxpayer as a refund can exceed the 

taxpayer’s income tax liability.

 22CMS recently proposed changes to the calculation of Medicaid improper payment rates. 

Medicaid/CHIP Program; Medicaid Program and Children’s Health Insurance Program 

(CHIP); Changes to the Medicaid Eligibility Quality Control and Payment Error Rate 

Measurement Programs in Response to the Affordable Care Act., 81 Fed. Reg. 40596 

(proposed June 22, 2016). These proposed changes were outside the scope of our 

review.

States’ Adoption of 

Program Flexibilities 

and Changes in 

Federal Policy Likely 

Affected Payment 

Errors
Page 12 GAO-16-708T 

The majority of state SNAP policy flexibilities allowed under federal 

statutes and regulations, likely reduced payment errors by simplifying 

program requirements or modifying procedures, based on our review of 

these policies.23 For example, flexibilities that simplified program 

requirements allowed states to require less information from applicants 

and participants for eligibility and benefit determination, resulting in less 

processing for caseworkers and reduced opportunities for participants 

and caseworkers to make errors. State flexibilities that simplified program 

policies or procedures therefore may have contributed to decreases in the 

SNAP improper payment rate, though the rate was likely affected by 

additional factors as well, such as changes in the number of SNAP 

applicants and participants and state staffing levels.

24 Further, the state 

flexibilities likely had other effects on the program, according to USDA 

officials, because states adopt flexibilities to better target benefits to those 

most in need, streamline program administration and operations, and 

coordinate SNAP with other programs. As shown in figure 2, of the 33 

state flexibilities we reviewed, 17 likely reduced the potential for error.25

We previously reported that the anticipated effect on the state SNAP 

improper payment rate was a key factor in states’ decisions to adopt 

 23 To assess the expected effect of policy changes on the SNAP improper payment rate, 

we reviewed prior GAO work and FNS and OIG documents that describe the 

characteristics of policies that may affect the improper payment rate. We analyzed which 

federal and state policy changes had these characteristics, and then we assessed the 

likely cumulative expected directional effect of each policy on the improper payment. We 

did not analyze federal or state laws or regulations, and all descriptions and analysis of 

the various policy flexibilities are based on the documents and research we reviewed. See 

appendix I for further information.

24 For example, in our 2016 survey of the 50 states and the District of Columbia, several 

states mentioned that rising caseloads accompanied by decreased staffing increased 

payment error rates when asked what factors, aside from federal or state policy changes, 

had affected their SNAP payment error rates in the last five years.

25 These 22 options and 11 waivers come from USDA’s most recent state options report 

(current as of September 2013) and USDA’s SNAP Certification Policy Waiver Database 

(updated as of March 2016). We excluded options and waivers that had been adopted by 

fewer than 5 states at the time of our review; this meant that we excluded no options and 

12 waivers. See appendix I for more information on our analysis. 

States’ Adoption of Certain 

Program Flexibilities Likely 

Reduced Payment Errors, 

Due in Part to Simplified 

Program Requirements
Page 13 GAO-16-708T 

certain policy options, such as those that simplified participant reporting 

requirements or eased the calculation of benefit amounts.26

Figure 2: The Potential Effect of 33 State Flexibilities on the Likelihood of SNAP 

Payment Errors

Note: The 33 state flexibilities include 22 options in USDA’s state options report (11th edition) and 11 

waivers in USDA’s waivers database (current as of March 2016) adopted by 5 or more states.

Of the 17 flexibilities that potentially reduced the likelihood of SNAP 

payment errors, 11 simplified program requirements and 6 modified 

procedures for receiving and processing information.

 26See GAO, Food Stamp Program: Farm Bill Options Ease Administrative Burden, but 

Opportunities Exist to Streamline Participant Reporting Rules among Programs, 

GAO-04-916 (Washington, D.C.: September 16, 2004).
Page 14 GAO-16-708T 

Figure 3: Analysis of 17 Flexibilities that Potentially Reduced the Likelihood of 

SNAP Payment Errors

The 11 flexibilities that simplified program requirements generally resulted 

in reduced opportunities for participants and caseworkers to make errors, 

and the effect of these flexibilities on the improper payment rate likely 

increased over time as greater numbers of states adopted some of them. 

Two of the eleven options we reviewed simplified participant reporting 

requirements, and six flexibilities simplified or standardized calculations 

used to determine household eligibility and benefit amounts, including 

self-employment income, medical and utility costs, income of those 

transitioning off TANF, and hours worked by college students. In addition, 

two flexibilities eliminated program requirements and another increased 

the alignment of SNAP program rules with other programs administered 

by states that serve a similar population.27 Over time, we found that 

increasing numbers of states adopted two policy options that have the 

potential to affect a large portion of the eligible population, thus potentially 

 27 Many SNAP participants receive benefits from other federal programs, such as 

Medicaid or TANF. In many states, SNAP is administered out of a local assistance office 

that offers benefits from these other assistance programs as well. SNAP participants may 

provide necessary information to only one caseworker who determines eligibility and 

benefits for all of these programs, or they may work with several caseworkers that 

administer benefits for different programs.
Page 15 GAO-16-708T 

increasing their effect on the improper payment rate. Specifically, as of 

February 2003, 25 states had adopted simplified reporting requirements 

for some or all eligible households and 16 states had adopted simplified 

utility calculations. However, by September of 2013, the numbers of 

states that had adopted these options increased to 53 and 47, 

respectively.28 See table 1 for examples of flexibilities that simplified 

program requirements and our assessment of how they reduced the 

likelihood of error.

Table 1: Examples of the Flexibilities That Potentially Reduced the Likelihood of Errors by Simplifying SNAP Program 

Requirements 

Option/Waiver Description GAO Assessmenta

Simplified Reporting 

option

Requires participants to report only if their income 

rises above 130 percent of the federal poverty 

guidelines, instead of requiring a variety of changes 

to be reported, including household composition, 

income, and expenses.

Results in participants reporting fewer changes and 

reduces the amount of paperwork that caseworkers 

must process.b In 2005, USDA estimated that simplified 

reporting reduced the improper payment rate by 1.2 to 

1.5 percentage points.c

Simplified Income and 

Resources option

Excludes certain types of income and resources 

from SNAP eligibility and benefit determination 

requirements that are excluded under state TANF or 

Medicaid policy.

Increases uniformity in requirements across several 

programs for low-income individuals, which SNAP 

recipients may simultaneously receive and which are 

administered by the same caseworkers in some states. 

Therefore, this reduces program complexity and the 

potential for confusion by participants and caseworkers.

Standard Medical 

Deduction waiver

Establishes a standard medical deduction in lieu of 

calculating actual medical expenses for individuals 

who are disabled or elderly.

Eliminates the need for participants to provide proof of 

all medical expenses and streamlines eligibility and 

benefit determination procedures for caseworkers by 

reducing the amount of information to be verified and 

documented.

Source: GAO analysis of information in USDA’s 2013 State Options report, USDA’s SNAP Certification Policy Waiver Database (updated as of March 2016), and other FNS documents. |GAO-16-708T

a

Flexibilities may have had multiple characteristics that suggested opposite effects; in those instances 

we selected what we considered to be the over-riding or primary effect.

b

Whether the caseworker needs to process a change, which the caseworker comes to know about 

but that the participant was not required to report, depends on whether the state has a policy to act on 

all changes.

c

See U.S. Department of Agriculture, Food and Nutrition Service, The Effect of Simplified Reporting 

on Food Stamp Payment Accuracy, October 2005.

 28 The FNS state option reports include state agencies for all 50 states, the District of 

Columbia, Guam, and the U.S. Virgin Islands.
Page 16 GAO-16-708T 

Instead of simplifying program requirements, six state policy options and 

waivers we reviewed allowed for modified procedures for receiving and 

processing information that likely reduced SNAP payment errors. For 

example, an option that allowed states to use online SNAP applications 

likely made information easier to document, retrieve, and process, 

thereby reducing opportunities for caseworker error. Another option that 

enabled states to set up call centers likely helped participants report 

changes more easily, potentially contributing to fewer unreported 

changes. However, questions have been raised about the effect of these 

approaches.29,

30 Further, two waivers provided states with procedural 

flexibilities intended to reduce the likelihood of participants having their 

case closed because of a delay in submitting paperwork and then having 

to re-apply. 

While our analysis suggests that the majority of state policy flexibilities 

potentially reduced the likelihood of errors, 3 of the 33 flexibilities we 

reviewed likely increased it, and the remaining 13 likely had a mixed or 

minimal to no effect.

• The three options that we assessed as having potentially increased 

the likelihood of payment errors increased the number of calculations 

caseworkers needed to do or added a step to the eligibility 

determination process. For example, two options increased the 

conditions for which a participant could be disqualified, such as for 

lack of cooperation with a child support enforcement agency. This 

 29Diminished face-to-face contact may increase the potential for recipient fraud, potentially 

increasing errors and negatively affecting program integrity. 

30In a recently finalized rule, FNS identified changes in operation that potentially increase 

the difficulty of households reporting required information (which could include 

implementation of a SNAP call center or online change reporting) as major changes in the 

operation of a SNAP program and has required that such changes be evaluated to assess 

the impact of the changes on the payment error rate, among other things. Supplemental 

Nutrition Assistance Program: Review of Major Changes in Program Design and 

Management Evaluation Systems, 81 Fed. Reg. 2725 (Jan. 19, 2016).
Page 17 GAO-16-708T 

added a step for staff to determine whether an applicant or participant 

met these conditions, thereby increasing the opportunity for error.31

• Four options had characteristics that we assessed as having the 

potential to both increase and decrease the likelihood of payment 

errors. For example, the BBCE state option may have decreased 

improper payment rates in states that adopted it and, in effect, 

eliminated SNAP asset limits, as determining household assets can 

be a cause of error. In these states, participants no longer needed to 

provide documentation of assets, and caseworkers no longer needed 

to verify these amounts. At the same time, as we previously reported, 

because BBCE allowed some states to, in effect, increase the SNAP 

gross income limit, the policy may have resulted in greater numbers of 

households with earned income participating in SNAP.32 According to 

USDA’s data on causes of error, determining household income is the 

most common cause of error when determining benefit amounts. 

Seven states had BBCE policies in fiscal year 2006, versus 42 states 

in fiscal year 2015. Thus the impact of this option on payment errors 

may have increased over the last 10 years, although the overall 

direction of this option’s effect on the improper payment rate is 

unclear.

• The nine options and waivers that we assessed as not having affected 

the likelihood of payment errors changed SNAP eligibility or 

administrative procedures without introducing significant simplification 

or complexity. For example, one option allowed states to count child 

support payments as an income exclusion rather than a deduction 

when determining the payer’s eligibility and benefits. While this option 

changed the eligibility determination process, the applicant needed to 

provide the same information, and the caseworker needed to process 

it. Another example is a waiver that allowed states to issue electronic 

notices to clients who elect to receive notices via email rather than 

paper mail.

 31Note that cases that were incorrectly terminated would be considered in the rate for 

improper denials, suspensions, and terminations. The active case improper payment rate, 

which is the focus of this report, would have been affected by instances where the 

household should have been disqualified but was mistakenly allowed to remain on the 

program.

32GAO, Supplemental Nutrition Assistance Program: Improved Oversight of State 

Eligibility Expansions Needed, GAO 12-670, (Washington, D.C.: July 26, 2012).
Page 18 GAO-16-708T 

While there were many federal SNAP policy changes in the last 10 years, 

we found that few likely affected improper payment rates, based on our 

analysis of FNS documents. Those that likely did (1) made changes to the 

dollar threshold below which an error is excluded from the improper 

payment rate calculation, (2) excluded certain income and resources for 

eligibility and benefit determination purposes, and (3) required certain 

types of data matching.

• Federal policy changes in the SNAP error tolerance threshold, or the 

dollar threshold below which an error is excluded from the SNAP error 

rate calculation, likely had a direct effect on the error rate.33 During 

the last 10 years, the threshold has been changed several times 

through federal statute and regulations, and FNS attributed the 2014 

increase in the SNAP error rate to a decrease in the error tolerance 

threshold from $50 to $37.34

• Some federal policy changes that resulted in fewer sources of income 

and resources being considered during the eligibility and benefit 

determination process may have also affected the likelihood of errors. 

These changes reduced participant reporting requirements and 

caseworker verification requirements, but they also may have 

increased confusion regarding what sources of income and resources 

to report.35

 33 For example, when the error tolerance threshold was $50 for part of fiscal year 2009 

and from fiscal year 2012 to fiscal year 2013, a household that received a monthly benefit 

amount found to be $40 in error was not counted as an error when calculating the error 

rate. However, in fiscal year 2014, when the error tolerance threshold was $37, a $40 

error was counted as an error when calculating the error rate.

34 FNS has also previously linked these two factors. FNS estimated that the increase in 

the threshold from $25 to $50 for 6 months in fiscal year 2009, decreased the error rate for 

that year by 15 percent. However, error tolerance threshold changes do not always track 

with the overall error rate changes, likely because there are many factors affecting error 

rates simultaneously.

35For example, in 2009, legislation was enacted requiring that additional unemployment 

compensation payments should be excluded from consideration as income and resources 

for purposes of SNAP eligibility and benefit determination. However, because only the 

supplemental $25 unemployment compensation payment (and not the regular 

unemployment compensation payment) was excluded, this supplemental payment needed 

to be separated from other unemployment compensation received when calculating 

income for SNAP, potentially increasing confusion and opportunities for error.

Federal Policy Changes 

That Likely Affected the 

Improper Payment Rate 

Changed Which Errors Are 

Counted as Improper 

Payments
Page 19 GAO-16-708T 

• A federal policy change that increased requirements for data matching 

may have reduced the likelihood of errors by improving the accuracy 

of eligibility and benefit determination, but the quality and timeliness of 

the data may have mitigated that effect, according to our analysis and 

prior work.36

SNAP and other large federal programs for low-income individuals, such 

as Medicaid, EITC, and SSI, report improper payment rates, as shown in 

table 2. There are some similarities to how these improper payment rates 

are calculated by the agencies overseeing these programs, though there 

are also certain differences in these programs’ improper payment rate 

calculations that may affect the resulting rates.37 However, the extent of 

the effect of these differences on the programs’ rate is unknown, in part 

because, as previously noted, programs’ rates are likely affected by many 

additional factors, such as changes in numbers of applicants and 

participants, staffing, and program policy.

 36 For example, in 2012, FNS began requiring states to conduct a data match to check 

whether a person applying in one state was disqualified in another state, so that the 

receiving state could impose appropriate penalties. The required match would help ensure 

that clients who are supposed to be disqualified for a certain period or permanently are not 

granted benefits, reducing opportunities for improper payments. However, we reported in 

2014 that the quality and timeliness of the data were impeding the effectiveness of this 

data match, thereby mitigating the effect of this policy change on the improper payment 

rate. See GAO-14-641.

37Although we selected EITC, Medicaid, and SSI to compare to SNAP, other federal 

programs that provide benefits to low-income individuals have still different approaches to 

estimating their improper payments. For example, other USDA programs, such as the 

National School Lunch program and the Special Supplemental Nutrition Program for 

Women, Infants, and Children (WIC), rely on periodic nationally representative studies to 

produce improper payment rate estimates. 

SNAP’s Improper 

Payment Rate 

Calculation 

Methodology Is 

Similar to Those of 

Medicaid, EITC, and 

SSI, although Some 

Differences May 

Affect the Resulting 

Rates
Page 20 GAO-16-708T 

Table 2: Estimated Improper Payment Rates Reported in Fiscal Year 2015 Agency 

Financial Reports for SNAP, Medicaid, EITC, and SSI 

Program Improper Payment Rates

Supplemental Nutrition Assistance 

Program (SNAP) 3.7%

Medicaid (eligibility component) 3.1%a

Earned Income Tax Credit (EITC)b 23.8%

Supplemental Security Income (SSI) 8.5%

Source: Relevant federal agencies. | GAO-16-708T

Note: SNAP and SSI rates are reported at a 95 percent confidence level and EITC and Medicaid 

rates are reported at 90 percent confidence levels and all estimates are reported within plus or minus 

2.5 percentage points. Improper payment rates reported in the fiscal year 2015 agency financial 

reports may pertain to a different period in which benefits were paid, for example the SNAP improper 

payment rate is for benefits paid in fiscal year 2014.

a

The overall Medicaid improper payment rate was 9.8 percent , which combines component improper 

payment rates for eligibility, fee-for-service, and managed care.

b

For EITC, this accounts for improper payments net of erroneous payments recovered.

The methodology that SNAP uses to calculate its improper payment rate 

is generally similar to the methodologies used for other large federal 

programs for low-income individuals, specifically Medicaid,38 EITC, and 

SSI. The federal agencies overseeing each of these programs provide 

guidance on improper payment rate calculation to those administering the 

program—state officials for SNAP and Medicaid, and federal officials for 

EITC and SSI. To calculate their improper payment rates, all four 

programs use similar sampling methods, draw samples generally 

representative of their recipients, and report their improper payment rates 

at similar levels of precision. (See table 3.) For example, each program 

employs a probability sampling methodology, based on a form of random 

selection, to select which cases they will review to determine the improper 

payment rate. Further, the programs generally draw samples from all 

individuals receiving program benefits. We also found that all four 

 38 We previously reviewed the methodology for estimating a national improper payment 

rate for Medicaid and found it to be statistically sound. See, GAO, Medicaid: 

Enhancements Needed for Improper Payments Reporting and Related Corrective Action 

Monitoring, GAO-13-229 (Washington, D.C.: March 29, 2013).

SNAP’s Improper Payment

Rate Calculation, Including 

How Cases are Chosen 

for Review, is Similar to 

Other Selected Programs
Page 21 GAO-16-708T 

programs estimate their improper payment rates with high levels of 

precision.39

Table 3: SNAP, Medicaid, EITC, and SSI Employ Similar Sampling Methodology 

Factors For Their Reviews to Determine Improper Payment Rates

Sampling Methodology 

Factors Approach Employed 

Statistical Method Probability sampling

Sample Selection Stratifies or allows for stratification

Sample Representation All recipients in active cases generally represented

Estimate Precision Reports estimates at high levels of precision

Source: GAO analysis. | GAO-16-708T

We found differences between SNAP and Medicaid, EITC, and SSI in 

how reviews are conducted to determine improper payments and how 

cases are factored into the improper payment rate calculation. Some of 

the procedural and methodological differences in the improper payment 

rate calculation among these programs likely affect the resulting improper 

payment rates.

There are some differences between how reviews are conducted to 

determine improper payments in SNAP and the three other federal 

programs for low-income individuals we reviewed, such as the reporting 

time frame, federal or state involvement in the review, and the extent of 

the review. (See table 4.)

 39 In its improper payments guidance, the Office of Management and Budget (OMB) 

recommends that agencies report improper payment rates at 90 percent confidence 

interval of plus or minus 2.5 percent or 95 percent confidence interval of plus or minus 3 

percent.

Several Differences 

among the Selected 

Programs, Including How 

Cases Are Factored into 

the Improper Payment 

Rate Calculation, Likely 

Affect the Resulting 

Improper Payment Rates

How Case Reviews Are 

Conducted
Page 22 GAO-16-708T 

Table 4: Key Aspects of How Reviews Are Conducted to Determine Improper Payments in SNAP and Select Other Federal 

Programs for Low-Income Individuals (EITC, Medicaid, and SSI)

Program 

Time frame of improper payments reported in 

agency financial reports Review levels Extent of review

Supplemental Nutrition 

Assistance Program (SNAP)

Benefits that were paid in the prior year. Two levels of review 

(state & federal) 

Contact the recipient

Medicaid Benefits paid in the prior three years; reviewing 

benefits paid in one-third of states each year.

State review only Rely on case file, but 

permitted to contact 

the recipient

Earned Income Tax Credit 

(EITC)

Credits allowed in the tax year four years prior.a Federal review only Contact the recipient

Supplemental Security Income 

(SSI) 

Benefits that were paid in the prior year. Federal review onlyb Contact the recipient

Source: GAO analysis. | GAO-16-708T

a

The EITC improper payment rate is determined from previously reviewed returns from the most 

recent year from which compliance information is available and that rate is used for the current year. 

For the improper payment dollar amount, the improper payment rate is multiplied by the amount of 

EITC claims in the current year, less the amount of revenue recovered or protected.

b

According to SSA officials, the initial federal SSI case reviews are subject to a secondary SSI review 

to ensure consistency. For the second review, 5 percent of cases initially reviewed are randomly 

selected, as well as all cases with payment errors.

SNAP, Medicaid, EITC, and SSI differ in the time frames relied on to 

determine improper payment rate estimates reported in the same year. 

Specifically, SNAP and SSI report each year’s improper payment rate 

based on reviews of benefits paid in the prior year, whereas Medicaid 

relies on multiple years of data and EITC uses older prior year data. For 

example, SNAP and SSI improper payment rates reported in their fiscal 

year 2015 agency financial reports were for reviews of benefits that were 

paid in fiscal year 2014. In contrast, Medicaid’s annual improper payment 

rate stems from a three-year rolling rate of state estimates. Each year, 

one-third of the states produce an improper payment rate estimate for 

Medicaid; and thus, the nationwide fiscal year improper payment rate 

reported in the fiscal year 2015 agency financial report included reviews 

of benefit payments in fiscal years 2012, 2013, and 2014. EITC estimates 

the amount of improper payments in a current year, using an improper 

payment rate based on reviews done for tax returns filed four years prior. 

For example, the EITC improper payment rate of 23.8 percent, reported in 

the Department of Treasury fiscal year 2015 agency financial report is 

from the review of 2011 tax returns.

The programs we reviewed also differed in the levels of government 

involved in the case reviews, as well as whether a secondary review is 

conducted for verification. Although they are both state-administered, 
Page 23 GAO-16-708T 

SNAP and Medicaid differ in that both state and federal officials review 

cases for SNAP, but according to Department of Health and Human 

Services (HHS) officials, states alone review cases for Medicaid. 

Specifically, for SNAP, federal officials review a subsample of cases to 

verify the accuracy of state reviews, and if differences are found, the 

state’s improper payment rate is adjusted. According to federal officials, 

states are not involved in SSI and EITC reviews because these programs 

are federally-administered. However, according to SSA, there is a 

secondary review of SSI cases for consistency at the federal level,40 while 

according to IRS, for EITC there is no systematic secondary review. 

When the SSI consistency review finding differs from the initial review 

finding, the case payment amount is adjusted and included in the 

improper payment rate computation.

The extent to which officials review information beyond what is in the 

recipient’s case file also differs between the programs we selected, such 

as with Medicaid, which may affect improper payment rates. For example, 

SNAP reviewers must contact recipients to obtain information to 

independently determine eligibility and benefit amounts, while according 

to HHS officials, Medicaid reviews can be conducted from information 

solely in the case file. While this can result in SNAP reviewers finding 

additional information not included in the case file that was necessary to 

determine whether the benefit amount was correct, it can also result in 

reviewers not being able to complete the review if they cannot make 

contact with the recipient. Like SNAP, the SSI and EITC reviewers also 

generally contact recipients.41

Differences in how cases are factored into the improper payment rate 

calculation also exist among SNAP and the other federal programs for 

low-income individuals we reviewed, which likely affect the resulting 

improper payment rates. These differences relate to how cases with 

 40According to SSA officials, the SSI consistency reviews are done on five percent of 

reviewed cases, selected at random, as well as all cases with payment errors.

41EITC reviewers check the accuracy of the taxpayer’s eligibility and the amount claimed 

on tax returns and not the accuracy of a determination made by a caseworker from a 

client’s application. Tax credit recipients self-certify their eligibility and claim and do not 

need to meet with caseworkers, nor submit up-front documentation as is required with 

other programs.

Cases Factored into the 

Improper Payment Rate 

Calculation
Page 24 GAO-16-708T 

insufficient information and those found to have certain kinds of errors are 

factored into the improper payment rate.42 (See table 5.)

Table 5: Key Aspects of How Cases Are Factored into the Improper Payment Rate 

Calculation for SNAP and Select Other Federal Programs for Low-Income 

Individuals (Medicaid, EITC, and SSI)

Program 

Treatment of cases for which 

review cannot be completeda

Errors excluded from the 

improper payment rate 

calculation

Supplemental 

Nutrition Assistance 

Program (SNAP)

Dropped from sample, but an 

adjustment is made

Case errors below $37 (in 

fiscal year 2014)c

Errors caused by a policy 

change in the 120 days after 

implementation

Medicaid Full benefit amount counted as 

error

None

Earned Income Tax 

Credit (EITC)

If taxpayer does not respond, 

remains in sample, but an 

adjustment is made.b

If taxpayer responds, but is 

unable to provide documentation, 

the full benefit amount is counted 

as error

None

Supplemental 

Security Income 

(SSI) 

Dropped from sample Errors caused by a policy 

change in the 6 months after 

implementation

Source: GAO analysis. | GAO-16-708T

a

A case review cannot be completed when an agency’s review is unable to discern whether a 

payment was proper because of insufficient or lack of documentation.

b

According to IRS officials, such cases are considered non-response cases and an adjustment is 

made to the improper payment rate calculation assuming that such cases have the same ratio of 

compliance to non-compliance characteristics as taxpayers who participate in the audits.

c

SNAP has an error reporting threshold, which is the dollar amount beneath which a case error is not 

included in the error rate.

 42Another difference across the four programs relates to adjustments that are made to the 

improper payment rate to account for improper payments that are recovered from the 

recipient by the federal agency. Unlike SNAP, Medicaid, and SSI, the EITC includes 

recovered overclaims in its rate calculation, according to federal officials. If IRS reviews of 

EITC cases, for which the credit has already been paid, determine that IRS should reduce 

or deny the EITC claim, the IRS must recover the amount that was previously paid. The 

amount of such overclaims that are recovered is subtracted from the amount of the 

overclaims determined by a reviewer, reducing the amount of improper payment used in 

computing the error rate.
Page 25 GAO-16-708T 

For some cases, the reviewer may have insufficient information to assess 

the accuracy of the eligibility and benefit determination, and the programs 

we reviewed treated these cases somewhat differently in the improper 

payment rate calculation. For example, according to FNS officials, for 

SNAP, these cases are removed from the sample so that neither the 

benefit payments or any potential dollar error amounts are factored into 

the improper payment rate calculation, though the rate calculation may be 

adjusted depending on the proportion of reviewed cases in this 

category.43 According to SSA, such cases are removed from the SSI 

improper payment rate calculation, and no adjustment is made to the 

improper payment rate. In contrast, according to HHS officials, in 

Medicaid cases where there is insufficient information to make an error 

determination, the full benefit amount is counted as an error in the 

improper payment rate calculation. EITC policy on incomplete cases 

varies depending on whether contact is made with the taxpayer. 

Specifically, if the taxpayer responds to the audit inquiry, but is unable to 

provide the required documentation, the full amount of the credit is 

considered to be in error. However, according to IRS officials, if the 

taxpayer cannot be reached to participate in the audit, the case is not 

completed, and an adjustment is made to the improper payment rate 

calculation.44

Generally, unlike the other federal programs for low-income individuals 

we reviewed, SNAP excludes certain errors from its improper payment 

rate calculation. For example, as previously noted, SNAP excludes errors 

below a specific dollar threshold from its error rate calculation, while 

according to federal officials, the other programs we selected did not 

exclude identified errors below a specific dollar threshold.45 FNS’s data on 

payment errors suggests that the threshold has a direct effect on the 

 43Under federal regulations, FNS makes an adjustment to a state’s error rate if more than 

two percent of the state’s cases selected for review could not be completed, such as when 

the reviewer could not contact a recipient or the household refused to cooperate. See 7 

C.F.R. § 275.23(b)(2)(iii).

44According to IRS officials, such cases are considered non-response cases and an 

adjustment is made to the improper payment rate calculation assuming that such cases 

have the same ratio of compliance to non-compliance characteristics as taxpayers who 

participate in the audits.

45As previously noted, the fiscal year 2014 threshold below which SNAP improper 

payments were not included in the error rate, based on SNAP law, was $37.
Page 26 GAO-16-708T 

SNAP error rate. Specifically, in our analysis of FNS’s quality control data 

for fiscal year 2013, we found that 31 percent of all cases reviewed had 

errors that were below the threshold, 6 percent had errors that exceeded 

the threshold, and 64 percent had no errors.46 Further, the reviewed 

cases determined to have errors below the threshold—which were not 

included as errors in the error rate calculation—accounted for 38 percent 

of all SNAP dollars paid in error. In addition, for SNAP, errors are not 

included in the rate calculation if they are related to recent program 

changes; within 120 days.47 Similarly, according to SSA officials, such 

errors are not included in the SSI rate calculation if they are found to have 

occurred within 6 months of a change.48 According to federal officials, 

neither Medicaid nor EITC has such a provision.

Another difference between SNAP and the other programs we reviewed 

relates to bonuses to reduce error rates. Specifically, SNAP provides 

states with financial bonuses and sanctions to reduce or maintain low 

error rates, a policy which differs from Medicaid, EITC, and SSI. 49 For 

fiscal year 2014 state improper payments, FNS selected 10 states to 

share $24 million in bonuses for best payment accuracy and most 

improved payment accuracy.50 This policy differs from the other programs 

we reviewed likely due, in part, to differences in program structure. For 

 46Percentages exceed 100 percent due to rounding.

47Under SNAP, errors resulting from the application of new SNAP regulations or 

implementing memorandum of changes in federal law are generally to be excluded from 

the error rate if they are within 120 days of the required implementation date. See 7 

U.S.C. § 2025(c)(3)(a) and 7 C.F.R. § 275.12(d)(2)(vii).

48According to SSA officials, errors caused by significant program changes are not 

included in the SSI rate calculation if they are found to have occurred within 6 months of 

the change; however, they stated that there have not been significant changes that would 

invoke this provision since 2005. 

49See 7 U.S.C. § 2025 and 7 C.F.R. §§ 275.23-275.24.

50In a June 24, 2016 letter to states, USDA said that it will complete a thorough review of 

quality control systems in all states before making decisions about the disbursement of the 

payment accuracy bonuses. These payments had not been made, because of FNS 

concerns about the integrity of the state data, based on FNS reviews. The USDA OIG had 

previously found that states had used practices to weaken the quality control review 

process, including the use of third-party consultants and error review committees to 

mitigate individual errors identified by reviewers. See, USDA, Office of Inspector General, 

FNS Quality Control Process for SNAP Error Rate, Audit Report 27601-0002-41, 

September, 2015.
Page 27 GAO-16-708T 

example, according to Medicaid federal officials, states have an inherent 

incentive to reduce Medicaid improper payments because they share in 

Medicaid program costs. Further, given that SSI and EITC are federally 

administered programs, they have no state-based incentives.51

Despite differences among some federal programs’ improper payment 

rate calculations, federal agencies are generally required to comply with 

relevant federal laws governing the estimation of improper payment rates. 

We are currently assessing the SNAP improper payment rate calculation 

in light of these laws and the relevant OMB implementing guidance and 

plan to report on these findings in the future.

Fraud is a key indicator of program integrity and FNS and state agencies 

partner to address it. As previously noted, improper payments made to 

SNAP households may be caused by caseworker or recipient errors, and 

intentional errors made by recipients are considered fraud, as are other 

recipient and retailer actions that qualify as misuse of benefits. FNS and 

the states work together to address SNAP recipient fraud, employing 

various tools that are specifically targeted at detecting recipient fraud. 

These tools have evolved over time with changes to the SNAP program 

and the ways in which SNAP recipient fraud occur.

In 2014, we reported that selected states said they employed a range of 

tools to detect potential SNAP recipient eligibility fraud, such as data 

matching and referrals obtained through fraud reporting hotlines and 

websites.52 Specifically, at that 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. For example, all 11 states reported matching recipient data 

against prisoner and death files. In addition, we found that four of the 

states we reviewed used additional specialized searches to check 

numerous public and private data sources, including school enrollment, 

 51However, according to SSA officials, the agency uses its annual performance appraisals 

to hold SSI managers, supervisors, and field office employees accountable for reducing 

improper payments.

52See GAO-14-641. 

States and FNS Have 

Taken Steps to 

Address SNAP 

Recipient Fraud That 

May Help Address 

Identified Challenges
Page 28 GAO-16-708T 

vehicle registration, vital statistics, and credit reports, to detect potential 

fraud prior to providing benefits to potential recipients.

To address recipient trafficking of benefits—the exchange of benefits for 

cash or non-food goods or services, in 2014, officials in the 11 selected 

states reported that they took various actions recommended or required 

by FNS. For example, all 11 states reported tracking recipients who 

requested 4 or more replacement electronic benefit transfer (EBT) cards 

in a 12-month period. States issue an eligible household’s monthly SNAP 

benefits on an EBT card, and recipients use the cards to purchase 

allowable food items at authorized retailers. FNS has required that states 

track recipients who request multiple EBT replacement cards because 

some recipients who have trafficked their benefits contact state agencies 

to report their sold cards as lost or stolen and receive new, replacement 

cards, which they then use for future transactions. For recipients identified 

through such tracking, states generally must warn them that the 

purchases they are making with their SNAP benefits through their EBT 

transactions, are being monitored. All 11 states also reported reviewing 

EBT transactions in an attempt to uncover patterns that may indicate 

trafficking, as recommended by FNS, though these efforts varied by state. 

For example, while Florida officials reported that they routinely review 

EBT transaction data for suspicious patterns, Texas officials reported that 

they only review transactions for individuals or households after they have 

been referred to them because of potential fraud. Further, 8 of the 11 

states reported using either automated tools or manual monitoring to 

detect postings on social media and e-commerce websites by individuals 

seeking to sell SNAP benefits, as recommended by FNS.

However, we also reported in 2014 that these states noted that 

inadequate staffing levels limited the effectiveness of their actions to 

detect recipient fraud, though some states were exploring ways to 

address this issue. Among the 11 selected states, there was wide 

variation in the number of staff available to investigate potential SNAP 

recipient fraud, and investigators each had additional responsibilities 

unrelated to SNAP fraud investigations. Further, 8 of the 11 selected 

states reported difficulties in conducting fraud investigations due to either 

reduced or maintained staff levels, while SNAP recipient numbers greatly 

increased from fiscal year 2009 through 2013. To help address this issue, 

6 of the states reported that they had implemented or were in the process 

of implementing state law enforcement bureau (SLEB) agreements at the 

time of our 2014 report. These agreements enable state SNAP 

investigators to cooperate in various ways with local, state, and federal 

law enforcement agents, including those within the USDA OIG. For 
Page 29 GAO-16-708T 

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. Some 

states also suggested changing the financial incentive structure to 

promote fraud investigations. To help address the increased caseloads 

and the resources needed to conduct investigations, we recommended 

that USDA explore ways that federal financial incentives could be used to 

better support cost-effective anti-fraud strategies. At this time, FNS has 

decided not to pursue bonus awards for anti-fraud and program integrity 

activities.

Also in 2014, some states reported that limitations of FNS’s required 

approach to monitoring replacement card data also challenged their 

efforts to combat recipient fraud. Specifically, at the time of our review, 

four states reported that they had not initiated any trafficking 

investigations as a result of the EBT replacement card data monitoring 

required by FNS, and five states reported a low success rate for such 

investigations. Through our own analysis of replacement card data 

combined with EBT transaction data that suggested trafficking, we found 

indicators of potential SNAP trafficking in households with excessive 

replacement cards, suggesting that a more targeted approach than that 

required by FNS may improve states’ efforts to identify recipient 

trafficking. As a result of these findings in 2014, we recommended that 

FNS 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 

how to better focus this analysis on high-risk households potentially 

engaged in trafficking. In response, FNS officials reported that they have 

provided some states with technical assistance on how to effectively 

utilize replacement card data as a potential indicator of trafficking and 

have plans to expand their assistance to states in this area. Specifically, 

FNS has worked with seven states to help them 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. 

FNS officials also stated that they are providing four additional states with 

technical assistance in fiscal year 2016, and FNS is currently conducting 

a training program for state staff to teach them how to build predictive 

models that incorporate the use of card replacement data.
Page 30 GAO-16-708T 

Further, although an FNS-recommended automated tool for monitoring 

potential SNAP trafficking on e-commerce websites was intended to 

replace the need for states to perform manual searches on these 

websites, we found the tool to be of limited use. Specifically, our testing 

found that manual searches returned more postings indicative of potential 

SNAP trafficking than the automated tool, and that most of the postings 

detected through manual searches were not detected by the automated 

tool. As a result, in 2014 we recommended that FNS reassess the 

effectiveness of the current guidance and tools recommended to states 

for monitoring e-commerce and social media websites, FNS officials 

reported that they continue to provide technical assistance to states on 

the effective use of social media and e-commerce monitoring. FNS 

officials also reported that the agency conducted an analysis in 2016 to 

evaluate states’ current use of social media in their detection of SNAP 

trafficking, and they plan to use information from that analysis to 

determine how best to present further guidance to state agencies on 

using social media to combat trafficking.

In 2014, we also found that FNS had increased its oversight of state antifraud activities by issuing new regulations and guidance, conducting state 

audits, and commissioning studies on recipient fraud since fiscal year 

2011.53 Despite these efforts, we found that FNS did not have consistent 

and reliable data on states’ anti-fraud activities because its reporting 

guidance lacked specificity. For example, FNS’s guidance did not define 

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

data that were not comparable across states. This limited USDA’s ability 

to monitor states and find more effective ways to combat recipient fraud. 

To improve FNS’s ability to monitor states and obtain information about 

more efficient and effective ways to combat recipient fraud, we 

recommended in 2014 that FNS take steps, such as guidance and 

training, to enhance the consistency of what states report on their antifraud activities. As of May 2016, FNS reported that it had redesigned the 

form used to collect consistent recipient integrity performance information 

and expect it to be implemented in fiscal year 2017, pending approval 

from OMB.54 FNS also published an interim final rule on January 26, 2016 

(effective March 28, 2016) that increased the frequency with which states 

 53See GAO-14-641.

54See GAO-16-719T.
Page 31 GAO-16-708T 

are required to submit the form to FNS from annually to quarterly.55 As of 

June 2016, FNS officials reported that they had provided four 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.

Chairman Conaway, Ranking Member Peterson, and Members of the 

Committee, this completes my prepared statement. I would be pleased to 

respond to any questions you may have at this time.

For questions about this statement please contact Kay E. Brown at 

(202)512-7215 or brownke@gao.gov. 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 testimony 

include Rachel Frisk, Alexander Galuten, Kathryn O’Dea Lamas, Jean 

McSween, Daniel Meyer, and Srinidhi Vijaykumar.

 55 SNAP Requirement for National Directory of New Hires Employment Verification and 

Annual Program Activity Reporting, 81 Fed. Reg. 4159.

GAO Contact and 

Staff 

Acknowledgments
Appendix I: GAO Analysis of the Effect of State 

Policy Flexibilities on SNAP Payment Errors

Page 32 GAO-16-708T 

We used a multi-step approach to assess the expected effect of each of 

the 33 state policy flexibilities we identified on the SNAP improper 

payment rate.1 First, we reviewed prior GAO work, and FNS and USDA 

Office of Inspector General (OIG) documents, that describe the 

characteristics of policies that may affect the SNAP improper payment 

rate. See table 6 for a description of the policy characteristics we 

identified and the expected effect of those characteristics on the likelihood 

of errors. We then obtained a description of each state policy flexibility 

using the 2013 USDA State Options report, the 2016 USDA waivers 

database, and other FNS documents. 2 We analyzed which federal and

state policy changes had the identified characteristics, and then we 

assessed the likely cumulative expected directional effect of each policy 

on the improper payment rate, depending on whether the policy change 

simplified or complicated program rules or increased or decreased 

caseworker paperwork, among other characteristics. For flexibilities that 

had multiple characteristics with potentially opposite effects on the 

likelihood of errors, we selected what we considered to be the primary 

effect, based on a review by two analysts. However, for some policies, we 

were unable to determine the primary effect and therefore categorized 

those policies as having a mixed effect—essentially, these policies had 

characteristics that suggested they both increased and decreased the 

likelihood of errors.

 1

These 22 options and 11 waivers come from USDA’s most recent state options report 

(current as of September 2013) and USDA’s waivers database (current as of March 

2016). We excluded options and waivers that had been adopted by fewer than 5 states at 

the time of our review; this meant that we excluded no options and 12 waivers.

2

In conducting this analysis, we did not analyze federal or state laws or regulations, and 

all descriptions and analysis of the various policy flexibilities are based on the documents 

and research we reviewed.

Appendix I: GAO Analysis of the Effect of 

State Policy Flexibilities on SNAP Payment 

Errors
Appendix I: GAO Analysis of the Effect of State 

Policy Flexibilities on SNAP Payment Errors

Page 33 GAO-16-708T 

Table 6: Characteristics of State Policy Flexibilities GAO Examined and How They 

Might Potentially Affect Supplemental Nutrition Assistance Program (SNAP) 

Payment Errors

Factor Characteristic

Effect on Likelihood of 

Errors

Program rules Simplify ↓

Complicate ↑

Requirements for participants 

to provide information

Less ↓

More ↑

Caseworker paperwork Less ↓

More ↑

Characteristics of eligible 

population

Less error-prone ↓

More error-prone ↑

Others, such as program 

administration or procedures

Simplify ↓

Complicate ↑

Source: GAO. | GAO-16-708T

Note: We did not review program laws and regulations, but we identified when descriptions of 

flexibilities addressed similarities across programs. Greater similarity in program rules decreases 

household and caseworker confusion, as caseworkers may be responsible for determining eligibility 

for multiple programs.

We grouped the 33 state policy flexibilities into four categories, those that: 

potentially reduced the likelihood of errors; potentially increased the 

likelihood of errors; likely had a mixed effect; or likely had no effect. 

Tables 7, 8, 9, and 10 divide the policy flexibilities into these categories, 

describe each, and provide our assessment of each flexibility’s likely 

effect on errors.

Table 7: Seventeen Options and Waivers That Potentially Reduce the Likelihood of Supplemental Nutrition Assistance 

Program (SNAP) Payment Errors

Option/Waiver Description Explanationa

Flexibilities that simplified program requirements

Simplified Reporting 

option

Requires participants to report only if their income 

rises above 130 percent of the federal poverty 

guidelines, instead of requiring a variety of changes 

to be reported, including household composition, 

income, and expenses.

Results in participants reporting fewer changes and 

reduces the amount of paperwork that caseworkers 

must processb

. In 2005, USDA estimated that simplified 

reporting could have reduced the improper payment 

rate by 1.2 to 1.5 percentage points.c

Simplified Reporting –

Certification Length 

option

Requires participants to submit a periodic report 

with household information at set intervals instead 

of requiring changes be reported within 10 days of 

their occurrence.

Results in participants reporting changes less 

frequently and reduces the amount of paperwork that 

caseworkers must process. 
Appendix I: GAO Analysis of the Effect of State 

Policy Flexibilities on SNAP Payment Errors

Page 34 GAO-16-708T 

Simplified Income and 

Resources option

Excludes certain types of income and resources 

from SNAP eligibility and benefit determination 

requirements that are excluded under state TANF or 

Medicaid policy.

Increases uniformity in requirements across multiple 

programs for low-income individuals, which SNAP 

recipients may simultaneously receive and which are 

administered by the same caseworkers in some states. 

Therefore, this reduces program complexity and the 

potential for confusion by participants and caseworkers.

Simplified SelfEmployment 

Determination option

Simplifies the method for determining the cost of 

doing business in cases where an applicant is selfemployed.

Results in participants having to provide less 

documentation and simplifies paperwork for 

caseworkers. 

Standard Medical 

Deductions waiver

Establishes a standard medical deduction in lieu of 

calculating actual medical expenses for individuals 

who are disabled or elderly.

Eliminates the need for participants to provide proof of 

all medical expenses and streamlines eligibility and 

benefit determination procedures for caseworkers by 

reducing the amount of information to be verified and 

documented.

Standard Homeless 

Housing Cost option

States can use a standard deduction from income of 

$143 per month for homeless households with 

some shelter expenses.

Eliminates the need for participants to provide proof of 

all shelter expenses, which streamlines eligibility and 

benefit determination procedures for caseworkers by 

reducing the amount of information to be verified and 

documented.

Standard Utility 

Allowances (SUAs) 

option

Establishes a standard utility allowance in-lieu of 

using actual utility expenses. States that further 

make the SUA mandatory for all households opt out 

of the requirement to prorate SUAs for households 

that share living space. These states are also 

required to use a SUA that includes the heating and 

cooling costs of public housing residents with 

shared meters that are charged only for excess 

utility costs.

Eliminates the need for participants to provide proof of 

all utility expenses and streamlines eligibility and benefit 

determination procedures by reducing the amount of 

information caseworkers need to verify and document.

Further, reduces the likelihood of a calculation error 

because the caseworker no longer has to prorate 

certain cases.

Transitional Benefits 

option

Establishes a set benefit amount for families 

transitioning off TANF, or other state-funded cash 

assistance, eliminating participant reporting 

requirements and reducing caseworker processing 

during the transition period.

Reduces participant reporting burden and reduces 

caseworker paperwork requirements at a time when the 

household’s situation may be particularly subject to 

fluctuation.

Averaging Student 

Hours waiver

Students enrolled at least half-time in an institution 

of higher education, are ineligible to participate 

unless they meet at least one of several criteria. 

One criterion allows students to participate if they 

are employed for a minimum of 20 hours a week.

The waiver allows state agencies to average the 

number of hours worked over a month in 

determining compliance with the student work 

requirement.

Reduces caseworker burden associated with needing 

to confirm the exact number of employment hours each 

week.

Interest Income 

Verification waiver

Enables state agencies to waive verification of 

income from interest and dividends if less than a 

certain amount.

Reduces the amount of verification the participant 

needs to supply and the amount of information the 

caseworker needs to verify.

Recertification 

Interview for Elderly or 

Disabled Individuals 

with No Earned 

Income waiver

Allows the state to waive the recertification interview 

for households in which all adult members are 

elderly or disabled and have no earned income.

Reduces the frequency with which recertification 

interviews need to happen, thus reducing the 

opportunity for the caseworker to discover changes in 

circumstances that would need to be documented and 

verified. 

Flexibilities that modified procedures for receiving and processing information
Appendix I: GAO Analysis of the Effect of State 

Policy Flexibilities on SNAP Payment Errors

Page 35 GAO-16-708T 

Online Applications 

and Case 

Management 

Allows SNAP applicants to apply for benefits online. 

Many state websites also allow clients to view 

information about their case or report changes in 

factors that affect eligibility or benefit levels.

May ease the completion of paperwork for the 

participant and the caseworker. Participants can 

complete applications and submit paperwork online. For 

the caseworker, information provided on-line may be 

easier to document, retrieve, and process.

Call Centers Allows states to reduce the time local offices spend 

answering phone calls concerning general SNAP 

information and application and benefit status, 

conducting certification interviews, handling 

customer complaints, and processing changes. In 

some states, call centers go beyond these functions 

to directly certify and re‐certify households.

May ease participant reporting of required household 

changes. May also reduce burden on local offices.

Modernization 

Initiatives

Allows states to take modernization initiatives which 

include a range of innovative managerial and 

technology solutions to increase efficiency.

May simplify program administration, for example, 

through specialization of caseworker tasks, as this 

enables staff to focus on certain aspects of the eligibility 

process, thus increasing efficiency and potentially 

reducing errors. 

Document Imaging Allows states to use document imaging to scan 

paper documents and convert them to digital 

images that are stored in an electronic format.

May simplify program administration by making 

applicant documentation electronically available, thus 

easing the certification process

Early Denial Waivers FNS regulations allow households 30 days to 

provide verification prior to denying the household’s 

application, in cases of missing documentation. 

Under the waiver, state agencies may deny an 

application if the applicant fails to provide 

verification within 10 days of the state agency’s 

request. However, the client still has the right to 

provide the information by the 30th day and if she or 

he does so, the application must not be denied.

May help households avoid a disruption in benefits due 

to missing paperwork. Thus, this may prevent 

applicants from having to re-apply, which introduces 

more opportunities for error, than if the households had 

provided necessary verifications to continue their 

benefits.

Reinstatement waiver Allows states to reinstate recently ineligible 

households without requiring a new application if 

the household provides verification required to 

reestablish eligibility during the calendar month 

following the effective date of closure.

May prevent applicants from having to re-apply, 

reducing application volume and the opportunity for 

participant or caseworker error.

Source: GAO analysis of information in USDA’s 2013 State Options report, USDA’s SNAP Certification Policy Waiver Database (updated as of March 2016), and other FNS documents. | GAO-16-708T

Note: In conducting this analysis, we did not analyze federal or state laws or regulations, and all 

descriptions and analysis of the various policy flexibilities are based on the documents and research 

we reviewed.

a

Flexibilities may have had multiple characteristics that suggested opposite effects; in those instances 

we selected what we considered to be the over-riding or primary effect.

b

Whether the caseworker needs to process a change, which the caseworker comes to know about 

but that the participant was not required to report, depends on whether the state has a policy to act on 

all changes.

c

See U.S. Department of Agriculture, Food and Nutrition Service, The Effect of Simplified Reporting 

on Food Stamp Payment Accuracy, October 2005.
Appendix I: GAO Analysis of the Effect of State 

Policy Flexibilities on SNAP Payment Errors

Page 36 GAO-16-708T 

Table 8: Three Options That Potentially Increase the Likelihood of Supplemental Nutrition Assistance Program (SNAP) Errors

Option/Waiver Description Explanationa

Comparable 

Disqualification option 

Can disqualify SNAP applicants or recipients who 

fail to perform actions required by other federal, 

state, or local means tested public assistance 

programs. A state agency has the option to select 

the types of disqualifications within a program that 

it wants to impose on SNAP recipients.

Adds a step for caseworkers to determine whether 

disqualifications in other programs are to be imposed 

for SNAP.

Child Support-Related 

Disqualification option

Can disqualify individuals who fail to cooperate with 

child support enforcement agencies, who are in 

arrears in court‐ordered child support payments, or 

both.

Adds a step for caseworkers to determine whether an 

applicant or participant met these conditions, thereby 

increasing the opportunity for error.

Simplified Deduction 

Determination option

Averages expenses that are billed more or less 

often than on a monthly basis. For example, if a 

household receives a single bill in February which 

covers a 3-month period, the bill may be averaged 

over February, March, and April. Conversely, a 

one-time only expense can be averaged over the 

entire certification period in which they are billed.

Requires an additional calculation to average a bill 

across several months instead of counting the bill in 

the month it was due. 

Source: GAO analysis of information in USDA’s 2013 State Options report, USDA’s SNAP Certification Policy Waiver Database (updated as of March 2016), and other FNS documents. | GAO-16-708T

Note: In conducting this analysis, we did not analyze federal or state laws or regulations, and all 

descriptions and analysis of the various policy flexibilities are based on the documents and research 

we reviewed.

a

Flexibilities may have had multiple characteristics that suggested opposite effects; in those instances 

we selected what we considered to be the over-riding or primary effect.

Table 9: Four Options That Likely Have a Mixed Effect on Supplemental Nutrition Assistance Program (SNAP) Payment Errors

Option/Waiver Description Explanation

Simplified Reporting 

– Action on Change 

option

State agencies can act on all changes reported during 

the certification period, or to act only on certain 

changes. This option allows States that have 

combined SNAP/Temporary Assistance for Needy 

Families (TANF) programs to more seamlessly 

integrate. It avoids a situation where the TANF 

program has acted on a change, but SNAP has not, 

and decreases caseworker burden by aligning the 

programs.

If a state chooses to act on all changes, then 

caseworkers may have to process more household 

changes. However, this option could also lead to less 

participant and caseworker confusion due to aligned 

program requirements.

Ineligible NonCitizens Income and 

Deductions option

Although ineligible non-citizens cannot receive SNAP 

benefits, their income is relevant to the SNAP 

determinations for other eligible individuals who live in 

their household. States have various options for 

counting the income and deductions of ineligible noncitizens, including to prorate these amounts.

If the state chooses to prorate income, this adds 

another step to the eligibility determination process, 

increasing program complexity. However, according to 

FNS, prorating for all ineligible non-citizens (as 

opposed to only for some) may simplify program 

administration because of uniform eligibility rules.
Appendix I: GAO Analysis of the Effect of State 

Policy Flexibilities on SNAP Payment Errors

Page 37 GAO-16-708T 

Broad Based 

Categorical Eligibility 

(BBCE) option

BBCE makes households categorically eligible for 

SNAP because they qualify for a non‐cash TANF or 

state funded benefit, such as a pamphlet or 800 

number.

In states that adopted BBCE and, in effect, eliminated 

SNAP asset limits, participants no longer need to 

provide documentation of assets and caseworkers no 

longer needed to verify these amounts. At the same 

time, in states that adopted BBCE and, in effect, 

increased the SNAP gross income limit, it may result in 

greater numbers of households with earned income 

participating in SNAP. According to USDA’s data on 

causes of error, income is the most common cause of 

error when determining benefit amounts. 

Drug Felony 

Disqualification 

option

Federal law permanently disqualifies people from 

SNAP participation if they have been convicted of a 

state or federal felony offense, based on behavior 

which occurred after August 22, 1996, involving the 

possession, use or distribution of a controlled 

substance. State legislatures can opt out of the 

penalty entirely or choose to impose less severe 

restrictions through a modified ban.

The effect of this option on the likelihood of errors 

depends on whether a modified ban or no ban is 

adopted. Under a modified ban, the level of case 

complexity appears to be similar to what it would be 

under a lifetime ban, as the caseworker would still 

need to delve into the participant’s criminal justice 

background to ascertain what crime was committed. 

However, in a state with no ban, case complexity would 

be eased, as the caseworker would no longer need to 

research the client’s criminal justice background.

Source: GAO analysis of information in USDA’s 2013 State Options report, USDA’s SNAP Certification Policy Waiver Database (updated as of March 2016), and other FNS documents. | GAO-16-708T

Note: In conducting this analysis, we did not analyze federal or state laws or regulations, and all 

descriptions and analysis of the various policy flexibilities are based on the documents and research 

we reviewed.

Table 10: Nine Options and Waivers That Likely Have No Effect on Supplemental Nutrition Assistance Program (SNAP) 

Payment Errors

Option/Waiver Description Explanation

Child Support Expense 

Income Exclusion option

Treats legally obligated child support payments 

made to non‐household members as income 

exclusion rather than a deduction. This option 

helps to encourage payment of child support by 

excluding the amount paid from being considered 

part of the payer’s gross income.

Has no effect on the amount of information 

participants need to provide nor does it change 

case processing, as a household’s child support 

payment still needs to be assessed, verified, and 

documented.

Work Requirements and 

Disqualification option

Individuals who fail to comply with SNAP work 

requirements without good cause are ineligible for 

program benefits and disqualified from SNAP for 

certain periods of time, depending on how many 

prior instances of non‐compliance there have 

been. The law gives states the options to 1) set 

disqualification periods longer than these minimum 

mandatory periods, 2) make the disqualification 

permanent upon the third occurrence, and 3) 

sanction the entire household if the head of 

household fails to comply with work requirements.

Does not change case processing, as

caseworkers still have to undertake the 

disqualification/sanction process. 
Appendix I: GAO Analysis of the Effect of State 

Policy Flexibilities on SNAP Payment Errors

Page 38 GAO-16-708T 

Option/Waiver Description Explanation

Names for SNAP option As of Oct. 1, 2008, the name for the Food Stamp 

Program changed to Supplemental Nutrition 

Assistance Program (SNAP). At the state level, 

state agencies may adopt the new program name 

SNAP, continue to refer to their program as the 

Food Stamp Program, or choose an alternate 

name.

Has no effect on the likelihood of errors.

Electronic Notices waiver Allows the states to issue electronic notices to 

clients who elect to receive notices via email rather 

than paper mail.

Affects the method of communication with the 

client, not program requirements. Has no effect on 

the amount of information participants need to 

provide, nor does it change case processing.

Not Pay for Postage for 

Change Reports waiver

Waives the use of postage paid envelopes for 

change report forms.

Has no effect on the information that participants 

need to report and the caseworkers need to verify. 

Postpone Expedited Service 

Interviews waiver

Allows the state to postpone the certification 

interview for certain expedited service households 

for up to 2 months, provided that household 

identity is verified and staff have attempted to 

contact the household for interview.

Delays the information participants need to report 

and that caseworkers need to verify; thus it does 

not ease program requirements but rather 

changes the timeframes. If a case were selected 

for quality control review and the interview had not 

yet been completed due to the waiver, differences 

in the quality control determined benefit amount 

and the actual amount that were discovered 

through an interview would not be considered an 

error because of the existence of the waiver.

Provide Paper Copy of 

Online Application waiver

Allows the state to waive its obligation to provide a 

copy of the online application information to clients 

who do not request a copy.

Has no effect on the likelihood of errors.

Telephone Interview In-Lieu 

of Face-to-Face Interview 

waiver

Enables states to allow interviews via telephone in 

lieu of a face-to-face interview without the need to 

document client hardship.

Has no effect on the amount of information 

participants need to provide, nor does it change 

case processing. FNS has reported that it found 

little evidence that the likelihood of errors was 

affected by the interview method. 

On-Demand Interview waiver Allows the state to waive interview scheduling 

requirements, allowing clients the option to call the 

state to complete the interview during business 

hours within a certain time period.

Has no effect on the amount of information 

participants need to provide, nor does it change 

case processing.

Source: GAO analysis of information in USDA’s 2013 State Options report, USDA’s SNAP Certification Policy Waiver Database (updated as of March 2016), and other FNS documents. | GAO-16-708T

Note: In conducting this analysis, we did not analyze federal or state laws or regulations, and all 

descriptions and analysis of the various policy flexibilities are based on the documents and research 

we reviewed.

(100346)
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