Fraud is a deliberate action that breaks federal and/or state laws, not unintentional mistakes. Certain acts, such as trafficking SNAP benefits, are always considered fraud; other acts, such as duplicate enrollment, may be the result of either error or fraud depending on the circumstances of the case.

SNAP frauds are comparatively rare, according to available data and reports. There is no single gauge that reflects all the forms of fraud in SNAP. There are some frequently cited procedures that describe some parts of the issue

The official Congressional Research Service report on the errors and frauds in The Food Stamp program, updated in September 2018 highlighted the following facts about the fraudulent practices in the program.

Frauds in SNAP

The Supplemental Nutrition Assistance Program (SNAP) commonly known as Food Stamps,  is the nation’s principal food aid initiative, assisting over 42 million people (with a federal cost of around $68 Billion per month in the year 2017). The program is managed together with state agencies, which take care of most recipient functions, while the Department of Agriculture’s Food and Nutrition Service (USDA-FNS) watch over the states and handles most retailer functions.

In a program of these proportions with various stakeholders, detecting, preventing, and addressing fraud and deception is complicated. Food Stamp program is usually been reauthorized in a farm bill roughly every five years; this happened last time in 2014.

Policymakers have long been struggling in dropping interested in dropping fraudulent practices and refining payment precision. Provisions associated with these objectives have been included in last farm bill reauthorizations.

There are four main types of inaccuracy and misconduct in SNAP:

  1. Trafficking SNAP benefits: It is the unlawful sale of SNAP benefits in exchange for cash or controlled substances (firearms or explosives etc) and it can entail both retailers and beneficiaries of the program. This is considered as one of the most serious forms of SNAP fraud that diverts federal funds from the intended purpose.
  2. Retailer application fraud: This practice generally relates to an illegal effort by a store owner to participate in SNAP when that particular store or owner is not eligible for that service. To obtain SNAP authorization, applicant retailers must meet certain requirements, including stocking and business integrity standards. Avoiding disqualification during the application’s review process can be a potential source of fraud. Another kind of this fraud entails a store owner attempting to prevent ineligibility from SNAP by engaging in a supposed sale or transfer of ownership; after which the new purported owner applies to participate in SNAP, claiming that the former disqualified owners are no longer connected with the store
  3. Errors and fraud by households applying for SNAP benefits: In addition to the above, errors and fraud can take place during the evaluation of qualification and benefit sum for beneficiaries resulting in wrong payments. These could be either deliberate or unintended violation of program rules.
  4. Errors and Fraud by state agencies:—this can either be any intentional effort by state employees or state officials to illicitly produce and benefit from SNAP overpayments to favor the applicant. If a state agency commits mistakes it results in inaccurate payments; the debate of agency fraud mainly centered on certain states’ Quality Control (QC) misconduct.

Measures to Control the Fraud

USDA-FNS has specific laws to correct the mentioned frauds and has taken a number of measures to guard the very occurrence of these above particular practices.

  1. In case a retailer accepts or redeems SNAP benefits in violation of the Food and Nutrition Act of 2008 (FNA), that retailer may be forced to pay back the amount that they criminally transferred. USDA-FNS also has the authority to publicly reveal the store and owner name for disqualified retailers. Retailers engaged in trafficking can be criminally charged and reprimanded with fines up to $250,000 and detention up to 20 years.
  2. In the case of falsification of retailer’s application then the retailer’s application is to be denied for a period ranging between three years to a permanent disqualification depending on the severity of fraud.
  3. SNAP certification is the procedure of determination of applicant’s eligibility to receive food stamp support. It is one of the chief responsibilities of state agencies (with federal oversight). Under-issuance or over-issuance of SNAP benefits can be the possible Errors (i.e., recipient errors and agency errors) that take place during this process.
  4. Agency errors generally occur due to the fact potential human error, and training and supervision of eligibility workers is the primary measure of diminishing them.

On top of the above corrective measures, USDA works to assure that only those households receive the SNAP benefits who are qualified for that and correct amounts are provided to those recipients. Over the last many years USDA has initiated major steps to improve the service quality of this program vital for the poor and vulnerable masses. make sure that only those families who are actually eligible for the program participants, and that the correct amount of benefits is provided to them.

Consequently, over 99 percent of SNAP beneficiaries, crosschecked by SNAP’s Quality Control (QC) system, proved to be eligible. At the same time, the payment accuracy was found 96 percent.

The precious resources coming from the taxpayers’ hard earned money were saved and now payments errors are half the numbers they were a decade ago.

Through Stronger Rules and strict oversight by the federal government USDA requires state agencies involved in the SNAP program have a foolproof system of verification of documents and electronic data including the Social Security Master Death File, Social Security’s Prisoner Verification System, and FNS’s Electronic Disqualified Recipient System, prior to recommending individuals for the benefits to prevent ineligible people receive benefits aimed to help the poorest.

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