Food Stamp Program

During the last six years, the Agriculture Department's (USDA) Food and Nutrition Service and the courts have assessed or levied about $78 million in financial penalties and interest against storeowners for violations of the food stamp program. About 13 percent of the total penalties have been collected. Penalties outstanding at the end of the year more than doubled from 1993 to 1998--from $12.3 million to $28.2 million. GAO reviewed 259 USDA undercover investigations of food stamp violations and found that the Food and Nutrition Service almost always assessed financial penalties against storeowners when warranted. Other storeowners who may have violated program regulations and could have been penalized, however, were not identified. The agency is not effectively using data on the electronic redemption of food stamp benefits to identify these storeowners. Agency officials attribute the small percentage of debt collected to difficulties in collecting this type of debt, including problems in locating debtors and their refusal to pay. Weaknesses in the agency's debt collection procedures and practices, however, have also contributed to low collections.

GAO noted that: (1) over the past 6 years, FNS and the courts have assessed or levied about $78 million in financial penalties and interest against storeowners for violating Food Stamp Program Regulations; (2) the penalties and interest are recorded as debts in FNS' accounting records; (3) during this period, FNS and the courts collected $11.5 million, or about 13 percent of the total penalties, and FNS reduced the amount owed by storeowners by about $49 million, or about 55 percent, through waivers, adjustments, or write-offs; (4) the dollar amount of penalty debt outstanding at the end of the year more than doubled, from $12.3 million in 1993 to $28.2 million in 1998; (5) in 7 FNS field offices, GAO reviewed 259 Department of Agriculture undercover investigations that identified program violations, and GAO found that FNS almost always assessed financial penalties against storeowners when warranted; (6) however, other storeowners who may have violated program regulations and could have been penalized were not identified; (7) FNS is not effectively using data on the electronic redemption of food stamp benefits to identify these storeowners; (8) FNS officials noted that the small percentage of debt collected reflected, in part, the difficulties involved in collecting this type of debt, including problems in locating debtors and their refusal to pay; (9) however, weaknesses in FNS' debt collection procedures and practices also have contributed to low collections; (10) FNS has not aggressively collected debt, consistently assessed interest on unpaid debt, and written off uncollectible debt in a timely manner; (11) FNS has not yet referred any delinquent debt to the Department of the Treasury, which could deduct the debt from any future federal payments due the storeowners; (12) FNS expects to soon be in a position to make such referrals as it completes the implementation of the provisions of the Debt Collection Improvement Act of 1996; and (13) this law makes the Treasury primarily responsible for collecting debts delinquent for over 180 days.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

Director: Team: Phone: