Policy: Entitlements

Feds award states for making fewest food stamp mistakes

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Watchdog,Watchdog Blog,Michal Conger,Agriculture,Entitlements,Waste and Fraud

An $80 billion price tag gives federal officials an expensive incentive to make sure the food stamp program isn't overpaying — or underpaying — its beneficiaries.

That's why 10 states received a total of $24 million in bonuses last year for wasting the least taxpayer money.

The Supplemental Nutrition Assistance Program, more popularly known as food stamps, is administered by state governments, which are responsible for making sure they don't overpay or underpay people.

As an incentive to protect taxpayer money, the U.S. Department of Agriculture since 2002 has awarded states with the lowest error rates performance bonuses that can top $1 million.The bonuses are based on the number of people enrolled in each state.

Florida's 0.77 percent error rate, the lowest in the country, earned it a hefty $8 million bonus for only misspending $43 million in 2012. The state overpaid less than 1 percent of its beneficiaries, but its 0.59 percent overpayment rate still translated to $33 million that shouldn't have been paid to ineligible beneficiaries, or eligible people who received more than their share.

Illinois got the second highest bonus at $4 million for only overpaying $54 million, while Virginia received $2 million for errors that cost $24.7 million.

Louisiana, South Carolina, Alabama and Wisconsin each received close to $2 million in federal bonuses for incorrect payments of between $22 and $25 million.

Alaska and South Dakota, with fewer people enrolled in SNAP, got smaller bonuses of just under $300,000 in 2012. Alaska spent $2 million on incorrect payments, and South Dakota spent $2.2 million.

Maryland had double the error rate of most other states getting bonuses, with a 3.4 percent error rate that translated to about $37 million in incorrect payments. But the state got a "most improved" bonus of $1.6 million in 2012 for dropping its error rate down from 6 percent in 2011.

Nationwide, SNAP cost almost $80 billion last year, $74 billion of which went to beneficiaries. The national error rate of 3.42 percent is a historical low, but still translated to almost $2 billion wasted on overpayments alone.

A state's error rate is the percentage of overpayments and underpayments it doled out to beneficiaries.

Errors occur when beneficiaries file incorrect information or their state agency incorrectly calculates their benefits, according to a USDA spokesman. Two-thirds of errors are caused by state workers who process information incorrectly, according to a 2010 Government Accountability Office report. Their job is complicated by complex rules, GAO said, and those rules have changed repeatedly since the recession started in 2008.

"As current fiscal stress and looming deficits continue to limit the amount of assistance available to needy families, it is more important than ever that scarce federal dollars are targeted to those who are most in need and that the federal government ensure that every federal dollar is spent as intended," the GAO report said.

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