USDA and Other Proposals To Reduce Food Stamp Program Expenditures

GAO discussed its reports offering alternative or additional approaches for saving Food Stamp program money. The Department of Agriculture's (USDA) quality control system measures the types and extent of errors that states make when determining Food Stamp program eligibility. USDA proposed that states with error rates exceeding the 5-percent limit be sanctioned an amount equal to the overissuances. GAO supports the concept of error-rate sanctions because they give states financial incentives to reduce program errors; however, the most significant obstacle to error-rate enforcement is the accuracy of the quality control system and the reliability of the error rates it produces. USDA assessed 26 states a total of $56 million on the basis of their quality control error rates; however, Congress placed a 6-month moratorium on the sanctions and called for an evaluation of the quality control system. Food stamp legislation requires states to recover all benefit overissuances by deducting an amount from the monthly benefits otherwise due the participant. This recoupment process is effective only if collection action is taken soon after the overpayment is identified, since participants leave the program and make recoupment impossible. GAO has recommended that: (1) Congress amend the Food Stamp Act to provide for mandatory recoupment of all overissuances; and (2) USDA require priority processing of claims involving current participants with time-period criteria that would require prompt collection action. Tests are being conducted on the feasibility of federal tax refund offsets to improve recoveries from former participants.