Electronic Benefits Transfer

Use of Biometrics to Deter Fraud in the Nationwide EBT Program Gao ID: OSI-95-20 September 29, 1995

The National Performance Review recommended in 1993 that the federal government consider paying individuals by using electronic rather than paper means. In 1994, a task force composed of representatives from various federal agencies estimated that more than $110 billion in annual cash benefits and food assistance could be delivered with electronic benefits transfer (EBT), including food stamps, social security, and federal pensions. EBT is already assisting the Agriculture Department by providing data that can be used to target stores trafficking in food stamps. However, EBT alone has not effectively deterred fraud in the delivery of food stamp benefits. An EBT program without the enhanced security of biometric verification--an automated method to measure a physical characteristic or personal trait--raises a genuine concern about the potential for increased program costs and losses. GAO believes that fingerprint verification is the biometric option that offers the greater potential for reducing fraud in EBT systems. Although development of an EBT system with biometric safeguards would be more expensive, largely because of purchasing hardware and software, and would take longer to implement nationwide, such system enhancement is needed to ensure that the future system is practical and not beset by fraud.

GAO found that: (1) some states and localities have used biometrics to deter fraud in their welfare benefit programs and have realized major cost savings by requiring program applicants to submit to electronic fingerprinting during enrollment; (2) electronic fingerprinting may be the most viable option for deterring fraud in an EBT environment, since it has been universally accepted and has proven to be reliable; (3) fingerprinting benefit applicants during enrollment would eliminate losses related to duplicate benefits payments; (4) fingerprint verification during benefit disbursement would directly link withdrawals to recipients and help resolve potential losses and increased costs; and (5) the use of biometrics in an EBT environment should be tested before nationwide expansion of the EBT program.


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