SUPPLEMENTAL 

NUTRITION ASSISTANCE

PROGRAM

Enhanced Detection Tools 

and Reporting to Combat 

Recipient Fraud Are in 

Development

Statement of Kay E. Brown, Director 

Education, Workforce, and Income Security Issues

Testimony 

Before the Subcommittees on Government 

Operations and the Interior, Committee on 

Oversight and Government Reform, House 

of Representatives

For Release on Delivery 

Expected at 2:00 p.m. ET

Thursday, June 9, 2016

GAO-16-719T

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-16-719T,a testimony before 

the Subcommittees on Government 

Operations and the Interior, Committee on 

Oversight and Government Reform, House of 

Representatives

June 9, 2016

SUPPLEMENTAL NUTRITION ASSISTANCE 

PROGRAM

Enhanced Detection Tools and Reporting to 

Combat Recipient Fraud Are in Development

What GAO Found

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

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

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

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

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

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

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

conducting fraud investigations due to reduced or stagnant staff levels and 

funding despite program growth, and some state officials suggested changing 

the financial incentives structure to help support the costs of investigating 

potential fraud. 

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

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

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

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

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

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

monitor SNAP households that request at least four replaced electronic benefit 

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

same benefit period may not indicate increased risk of trafficking. GAO found 

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

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

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

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

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

GAO identified 39 households that both received multiple replacement cards in 

at least four different monthly benefit periods and engaged in suspicious 

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

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

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

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

resources for conducting investigations. 

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

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

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

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

inconsistent data across states. 

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

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

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

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

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

of the SNAP program. View GAO-16-719T. 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 support program, 

provided about 46 million people with 

$70 billion in benefits. Fraud has been 

a long-standing concern in the 

program, and state agencies are 

responsible for addressing SNAP 

recipient fraud. In 2014, GAO reviewed 

state and federal efforts to combat 

SNAP recipient fraud. 

This testimony summarizes: (1) 

findings from GAO’s 2014 report and 

(2) the steps FNS has taken since then 

to address GAO’s recommendations. 

For its 2014 report, GAO reviewed 

relevant federal laws, regulations, 

guidance, and documents; interviewed 

officials in 11 states; interviewed 

federal officials; tested fraud detection 

tools using fiscal year 2012 program 

data, the most recent available at the 

time of GAO’s report; and monitored 

websites for potential trafficking online. 

Although GAO’s results are not 

generalizable to all states, the selected 

states served about a third of SNAP 

recipient households. For this 

statement, GAO reviewed FNS’s 

actions to date on its 

recommendations.

What GAO Recommends

In 2014, GAO recommended that FNS 

reassess its financial incentives for 

state anti-fraud efforts and tools for 

website monitoring; establish additional 

guidance related to EBT replacement 

card data; and enhance the reliability 

of state reporting. FNS agreed with 

GAO’s recommendations and has 

been taking steps to address them. 

GAO is not making new 

recommendations in this testimony 

statement.
Letter

Page 1 GAO-16-719T 

Chairmen Meadows and Lummis, Ranking Members Connolly and 

Lawrence, and Members of the Subcommittees:

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

combat Supplemental Nutrition Assistance Program (SNAP) recipient 

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

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

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

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

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

establishing the proper agency controls that help ensure SNAP program 

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

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

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

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

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

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

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

electronically monitoring recipient transaction data may provide clues to 

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

emerged as new venues for trafficking benefits.

State and federal governments share responsibility for addressing SNAP 

recipient fraud. State agencies are directly responsible for detecting, 

investigating, and prosecuting recipient fraud and FNS is responsible for 

providing guidance to states and monitoring their activities. FNS has 

traditionally focused on pursuing retailer fraud. We reported on FNS 

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

progress in using electronic data to investigate trafficking.1

To enhance these efforts, FNS implemented most of our 2006 

recommendations, including taking additional steps to target and provide 

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

increase penalties for trafficking; and promoting state efforts to pursue 

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

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

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

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

2006).

Letter
Page 2 GAO-16-719T 

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

transaction data for those requesting multiple benefit card replacements 

and monitoring websites where traffickers may be attempting to buy or 

sell SNAP benefits.

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

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

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

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

taken to address the recommendations in our 2014 report.2

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

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

program received additional funding through the American Recovery and 

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

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

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

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

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

Wyoming.4 For all 11 states, we interviewed knowledgeable state and 

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

documentation. We also analyzed fiscal year 2012 replacement card and 

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

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

analyses could better uncover patterns of potential fraud. Furthermore, 

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

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

automated monitoring tools recommended by FNS to detect potential 

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

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

D.C.: August 2014)

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

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

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

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

disqualified from the program due to non-compliance.
Page 3 GAO-16-719T 

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

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

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

District of Columbia.6 More detailed information about our objectives, 

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

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

status of our recommendations from the 2014 report. This involved 

contacting agency officials and obtaining relevant documents.

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

with generally accepted government auditing standards. Those standards 

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

evidence to provide a reasonable basis for our findings and conclusions 

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

provides a reasonable basis for our findings and conclusions based on 

our audit objectives.

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

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

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

income with benefits to purchase allowable food items. The federal 

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

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

is responsible for promulgating program regulations and ensuring that 

states comply with these regulations by issuing guidance and monitoring 

their state activity. FNS headquarters officials are assisted in this 

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

determines which retailers are eligible to accept SNAP benefits in 

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

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

eligibility of individuals and households, calculating the amount of their 

monthly benefits and issuing such benefits on an electronic benefit 

 5 “E-commerce” websites allow users to advertise the sale of goods and services. “Social 

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

may or may not subscribe.

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

sufficiently reliable for our purposes.

Background
Page 4 GAO-16-719T 

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

responsible for investigating possible violations by benefit recipients and 

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

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

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

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

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

attempting to do so).8 For example, recipients can traffic benefits by 

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

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

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

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

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

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

trafficking transactions, for example, when the benefits are replenished 

the next month.

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

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

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

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

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

creating a uniform methodology for states to calculate their recipient fraud 

rate.10 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 

 7 7 C.F.R. § 273.16.

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

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

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

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

in the program.

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

the benefits associated with the card.

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

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

28, 2012).
Page 5 GAO-16-719T 

and resources in investigating, prosecuting and reporting fraud beyond 

current requirements.

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

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

such as data matching and referrals obtained through fraud reporting 

hotlines and websites. 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. (See table 1.)

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

Detection tool

Federal or 

state initiative

Number of states 

using (out of 11) Description

eDRS match FNS required 11 The Food and Nutrition Service (FNS) requires states to check for 

disqualified individuals in the Electronic Disqualified Recipient System 

(eDRS) when certifying or recertifying them for SNAP

Prisoner match FNS required 11 States must routinely match applicants and recipients against a prisoner 

verification system to prevent receipt of SNAP benefits by incarcerated 

individuals

Death match FNS required 11 States must check SSA’s Death Master File to prevent receipt of benefits 

by deceased individualsa

PARIS matchb FNS 

recommended

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

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

state

Wage matching State-initiated 9 These states reported data matching to detect unreported and 

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

Carolina, New Jersey, Tennessee, Texas, Wyoming)

Selected States 

Faced Challenges in 

Detecting Benefit 

Fraud, and FNS 

Lacked Reliable Data 

about State Efforts

To Detect Fraud, Selected 

States Employed Tools 

Such As Data Matching, 

Referrals, Analysis of 

Transaction Data, and 

Website Monitoring
Page 6 GAO-16-719T 

Detection tool

Federal or 

state initiative

Number of states 

using (out of 11) Description

Other data 

matching

State-initiated 6 These states verified information provided by applicants/recipients by 

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

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

Texas)

Online data 

search services

State-initiated 2 Florida and Texas paid a private company for searches of numerous public 

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

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

motor vehicle registrations

Identity 

verification 

software

State-initiated 2 Florida and Texas used software that required individuals to provide 

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

SNAP account

Error-prone 

profile

State-initiated 1 Florida provided case workers with a profile for applications that listed 

items to watch for that may indicate applicant fraud

Mapping software State-initiated 1 Michigan used locator software to identify individuals applying for SNAP 

from a computer in another state

Public referrals State-initiated 11 States provided fraud hot lines or online fraud referral

Exchange of 

most recent 

available SNAP 

enrollment data

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

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

(Florida)c

Source: GAO analysis of data from selected states. | GAO-16-719T

a

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

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

b

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

Health and Human Services.

c

The remaining states participating in this pilot are Alabama, Georgia, Louisiana, and Mississippi.

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

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

specialized searches that checked numerous public and private data 

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

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

potential recipients. Florida officials we interviewed shifted the majority of 

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

identifying potential fraud by developing tools geared towards detecting 

eligibility fraud and improper benefit receipt, such as identification 

verification software and profiles that case workers could use to identify 

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

preventive efforts was key to helping them manage recent constraints on 

their investigative budgets.

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

analyzed patterns of EBT transactions and monitored replacement card 
Page 7 GAO-16-719T 

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

(See table 2.)

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

Detection tool

Federal or 

state Initiative

# of 11 states 

that reported 

using tool Description

Monitoring of 

excessive 

replacement EBT 

cards

FNS required 11 The Food and Nutrition Service (FNS) required states to track recipients 

who have requested 4 or more replacement electronic benefit transfer 

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

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

that their EBT transactions are being monitored. (all 11 states)

Monitoring of online 

postings

FNS 

recommended

8 8 states used either automated feeds or manual monitoring to detect 

postings on social media and e-commerce websites by individuals 

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

Tennessee, Texas, Utah, Wyoming)

Analysis of EBT 

transactions data

FNS 

recommended

11 All 11 states analyzed EBT transaction data for patterns that may 

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

Source: GAO analysis of data from selected states. | GAO-16-719T

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

difficulties in conducting fraud investigations due to either reduced or 

stagnant staff levels while SNAP recipient numbers greatly increased 

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

investigators in all 11 states we reviewed were also responsible for 

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

Temporary Assistance for Needy Families and child care and housing 

assistance programs.

In 2014, Most Selected 

States Reported that Their 

Investigations’

Effectiveness was 

Hindered by Limited

Staffing and Caseload 

Increases, but Some 

Leveraged Additional 

Resources
Page 8 GAO-16-719T 

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

Fiscal Years 2009 and 2013

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

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

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

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

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

the figure.

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

leverage their available investigative resources. Specifically, four of the 

states we reviewed—Florida, Massachusetts, Michigan and Nebraska—

had implemented and two states—Maine and North Carolina—were in the 

process of implementing state law enforcement bureau (SLEB) 
Page 9 GAO-16-719T 

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

states’ efforts to establish these agreements between state SNAP 

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

would enable state SNAP investigators to cooperate in various ways with 

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

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

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

possesses multiple EBT cards, and SNAP agencies can provide “dummy”

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

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

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

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

allegedly trafficking SNAP benefits.

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

financial incentives structure to help support the costs of investigating 

potential SNAP fraud because some investigative agencies were not 

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

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

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

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

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

additional financial incentives for states to prevent potential fraud at the 

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

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

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

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

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

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

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

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

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

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

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

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

Hurricanes Katrina and Rita Disaster Relief: Improper and Potentially Fraudulent 

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

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

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

Significant Fraud and Abuse, GAO-06-403T (Washington, D.C.: Feb. 13, 2006).
Page 10 GAO-16-719T 

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

there are no payments to recover.

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

approaches to detecting online fraud were of limited utility and selected 

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

replacement card monitoring. Specifically, we found that FNS provided 

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

monitoring certain e-commerce and social media websites for online 

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

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

tools could automate the searches that states would normally have to 

perform manually on these websites, which states reported as being 

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

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

identifying SNAP recipients attempting to sell their SNAP benefits online. 

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

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

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

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

time on selected geographical locations covering our selected states and 

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

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

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

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

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

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

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

found the automated tool for monitoring social media websites to be 

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

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

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

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

users of postings that contain key words.

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

cash, services, or goods.

In 2014, Selected States 

Reported Limited 

Effectiveness in Using 

Automated Monitoring 

Tools for Detecting Online 

Fraud and Replacement 

Card Data as a Detection 

Tool
Page 11 GAO-16-719T 

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

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

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

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

officials we interviewed reported difficulties using the data as a fraud 

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

replacement card data and send notices to those SNAP households 

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

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

reported tracking recipients who make excessive requests for 

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

much success in detecting fraud through that method. Specifically, 

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

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

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

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

reported some success using the data to detect potential trafficking. 

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

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

who had made legitimate requests for replacement cards for reasons 

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

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

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

monitoring these data was worthwhile.

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

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

targeted approach to analyzing high-risk replacement card data 

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

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

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

an approach aimed at better identifying SNAP households requesting 

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

approach took into account FNS’s regulation that defined excessive 

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

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

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

Targeted Analysis of 

Excessive Replacement 

Cards Found Potential 

Recipient Trafficking
Page 12 GAO-16-719T 

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

However, we also considered the monthly benefit period of replacement 

card requests by focusing on SNAP households receiving replacement 

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

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

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

and then requesting a replacement card would generally have only one 

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

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

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

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

that additional replacement card requests in the same benefit period may 

not indicate increased risk of trafficking.

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

reduced the number of households that should be considered for further 

review compared to the FNS requirement that states look at replacement 

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

year 2012 transaction data for this smaller number of households to 

identify suspicious activity that could indicate trafficking.16 We identified 

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

received replacement cards in four or more monthly benefit periods in 

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

potential sign of trafficking around the time of the replacement card 

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

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

during fiscal year 2012. (see table 3.)

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

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

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

transactions. 
Page 13 GAO-16-719T 

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

Cards and Making Transactions Potentially Indicative of Trafficking in Fiscal Year 

2012

4 or more 

replacement 

cards

Replacement 

cards in 4 or more 

benefit periods

Suspicious transactions 

and cards in 4 or more 

benefit periods

Michigan 8,190 4,935 3,183

Massachusetts 6,380 4,786 4,008

Nebraska 697 549 346

Total 15,267 10,270 7,537

Source: GAO analysis of Supplemental Nutrition Assistance Program (SNAP) transaction data. | GAO-16-719T

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

replacement cards and the total number of transactions flagged for 

potential trafficking, states may be able to better identify those 

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

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

Michigan that received an excessive number of replacement cards, we

identified just 39 households that received excessive replacement cards 

and made transactions resulting in 10 or more trafficking flags. We 

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

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

analysis may help provide a starting point for identifying higher priority 

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

targeted approach may also be particularly helpful given that states had 

limited resources for conducting investigations.
Page 14 GAO-16-719T 

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

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

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

conducting state audits, and commissioning studies on recipient fraud 

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

FNS examined states’ compliance with federal requirements governing 

SNAP anti-fraud activities through Recipient Integrity Reviews. These 

assessments included interviews with state officials, observations of state 

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

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

reports that included findings and, where appropriate, required corrective 

actions.

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

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

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

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

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

activities through the Program and Budget Summary Statement (Form 

In 2014, We Reported that 

FNS Had Increased Its 

Oversight of State AntiFraud Activities but 

Lacked Reliable Data on 

These Efforts
Page 15 GAO-16-719T 

FNS-366B). Some federal and state officials we interviewed recognized 

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

on the FNS-366B form because the guidance from FNS was unclear. For 

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

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

suspicion of an intentional program violation before and after eligibility 

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

information did not clearly establish a definition for what action constitutes 

an investigation and should then be reported on this form.

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

what states reported as investigations on the FNS-366B forms. 

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

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

year, another state that provided benefits to a significantly larger 

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

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

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

investigative activities such as manually reviewing paper files provided by 

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

wages in the state. Officials from the state that served the larger 

population said that they counted the number of times a potential fraud 

case was actively reviewed by investigators, including interviews with 

witnesses and researching of related client information. Given these 

differences, state officials said that FNS and states were not able to 

compare program integrity performance because there was no 

standardization of data collection across states.

As a result of our 2014 findings, we made several recommendations, and 

FNS officials agreed with all of these recommendations and are taking 

actions to address them. Specifically, we recommended that the 

Secretary of Agriculture direct the Administrator of FNS to:

• explore ways that federal financial incentives can better support costeffective state anti-fraud activities;

• establish additional guidance to help states analyze SNAP transaction 

data to better identify SNAP recipient households receiving 

replacement cards that are potentially engaging in trafficking, and 

assess whether the use of replacement card benefit periods may 

better focus this analysis on high-risk households potentially engaged 

in trafficking;

FNS Is Working to 

Address GAO 

Recommendations to 

Enhance Detection 

Tools and Reporting
Page 16 GAO-16-719T 

• reassess the effectiveness of the current guidance and tools 

recommended to states for monitoring e-commerce and social media 

websites, and use this information to enhance the effectiveness of the 

current guidance and tools; and

• take steps, such as guidance and training, to enhance the consistency 

of what states report on their anti-fraud activities.

While FNS agreed with the recommendations and is taking steps to 

address them, it has yet to fully develop the detection tools and improved 

reporting methods that would address these recommendations.

To explore ways to provide better federal financial incentives, FNS 

reported it published a Request for Information in the Federal Register in 

2014 to solicit state and other stakeholder input on how it could more 

effectively incentivize states to improve overall performance, including in 

the area of program integrity, with new bonus awards. However, more 

recently, FNS officials reported that, based on the feedback from this 

process, they have decided not to pursue bonus awards for anti-fraud and 

program integrity activities at this time. At the time of our 2014 report, 

FNS officials also stated they could not make changes in the state

retention rate for overpayments without a change to federal law.

FNS officials reported that they have provided states with technical 

assistance for how to effectively utilize replacement card data as a 

potential indicator of trafficking. Specifically, FNS has worked with seven 

SNAP state agencies: New York (Onondaga County), Pennsylvania, 

South Carolina, Wisconsin (Milwaukee County), California (Los Angeles 

County), Kansas, and Texas to help these states more effectively identify 

SNAP recipient trafficking, using models that incorporate predictive 

analytics. FNS officials stated that the models use a variety of eligibility 

and transaction data, including replacement card data, and have 

demonstrated a significant improvement in effectiveness in these states. 

According to FNS officials, over 90 percent of South Carolina’s 

investigations of potential trafficking resulted in disqualifications from 

SNAP, which FNS officials stated is an increase of 29 percent from the 

state’s investigation success rate prior to using FNS’s model. Based on 

these state results, FNS officials stated that FNS was targeting four 

additional states in fiscal year 2016 for technical assistance in 

implementing the model: Arizona, the District of Columbia, Utah, and 

Washington. Furthermore, as of May 2016, FNS officials had reported

that FNS is conducting a training program for state technical staff to teach 

them how to build predictive models that incorporate the use of card 

replacement data.
Page 17 GAO-16-719T 

FNS officials also reported that they continue to provide technical 

assistance to states on the effective use of social media and e-commerce 

monitoring and have further studied the use of these tools. Most recently, 

FNS officials reported that, in 2016, the agency conducted an analysis to 

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

trafficking. Based on the information gained through this analysis, FNS 

officials reported that they plan to determine how best to present further 

guidance to state agencies on using social media to combat trafficking.

As of May 2016, FNS had also redesigned the form FNS-366B used to 

collect consistent recipient integrity performance information and 

submitted a draft to the Office of Management and Budget (OMB). FNS 

officials anticipate OMB approval of the revised form prior to the end of 

fiscal year 2016, and the form is expected to be implemented in fiscal 

year 2017. FNS reported it published an interim final rule on January 26, 

2016, (effective March 28, 2016), changing the reporting frequency of the 

form from an annual submission based on the state fiscal year to a 

quarterly submission based on the federal fiscal year. To date, FNS 

officials reported that they provided 4 separate trainings to approximately 

400 state agency and FNS regional office personnel, covering the new 

and modified elements of the final draft form and the corresponding 

instructions.

- - - - -

In conclusion, the challenges that states have faced in financing and 

managing recipient anti-fraud efforts heighten the need for more efficient 

and effective tools for safeguarding SNAP funds. In order to provide 

useful guidance to best guide states in these efforts, FNS officials need 

reliable information on what can currently be done with available federal 

and state resources. As of May 2016, FNS officials have reported 

progress in studying current anti-fraud approaches and developing better 

data on them but are still in the process of developing the final tools and 

guidance for enhancing the integrity of the SNAP program.

Chairmen Meadows and Lummis, Ranking Members Connolly and 

Lawrence, and Members of the Subcommittees, this completes my 

prepared statement. I would be pleased to respond to any questions you 

may have at this time.
Page 18 GAO-16-719T 

If you or your staff have any questions about this statement, please 

contact Kay Brown, Director, Education, Workforce, and Income Security

Issues, at 202-512-7215. Contact points for our Offices of Congressional 

Relations and Public Affairs may be found on the last page of this 

statement. GAO staff who made key contributions to this statement 

include James Bennett, Kate Blumenreich, Alexander Galuten, Danielle 

Giese, Scott Hiromoto, Kathryn Larin, Flavio Martinez, Jessica Orr, 

Deborah Signer, Almeta Spencer and Shana Wallace.

GAO Contact and 

Staff 

Acknowledgments

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