Food Assistance

GAO testified that electronic benefit transfers could reduce fraud and abuse in the Food Stamp Program, particularly counterfeiting and mail theft. It is doubtful, however, that this technology would have a large impact on fraud and abuse that occur when recipients apply for food stamp coupons and states make eligibility decisions. Further, although the technology could potentially reduce the sale or trading of food stamps, the amount of the reduction is unclear. If electronic benefit transfer systems are put in place solely to distribute food stamp benefits, they could be more costly to the federal government than the current coupon-based system; the technology becomes more cost-effective when used in conjunction with other government assistance programs, such as Aid to Families With Dependent Children. Several states have already moved in this direction. The federal government is likely to benefit most if it uses the technology to deliver multiple program benefits rather than food stamps alone.