Food stamp fraud rampant: GAO report

Americans receiving food stamps were caught selling and bartering their benefits online for art, housing and cash, according to a new federal report that investigates fraud in the nation’s largest nutrition support program.

Complicating the situation is the fact states around the country are having trouble tracking and prosecuting the crimes because their enforcement budgets have been slashed despite the rapidly-rising number of food stamp recipients, according to the Government Accountability Office report.

Under the Supplemental Nutrition Assistance Program, or SNAP, 47 million people have been awarded $76 billion in benefits. State agencies are responsible for addressing SNAP recipient fraud under the guidance and monitoring of the Food and Nutrition Service.

“Such rapid program growth can increase the potential for fraud unless appropriate agency controls are in place to help minimize these risks,” the investigators said in their report.

The GAO report resulted from a review of 11 state and federal efforts to fight food stamp fraud, effectiveness of certain fraud detection tools and how FNS oversees state anti-fraud efforts.

The report found that “most of the selected states reported difficulties in conducting fraud investigations due to either reduced or maintained staff levels while SNAP recipient numbers greatly increased from fiscal year 2009 through 2013.”

The report also said some of the state officials interviewed suggested “changing the financial incentives structure to help support the costs of investigating potential SNAP fraud.”

As for the actual fraud itself, during a 30-day testing period of the automated tool for e-commerce websites, the GAO report found “28 postings from one popular e-commerce websites that advertised the potential sale of food stamp benefits in exchange for cash.”

The GAO also found limitations on the effectiveness of recommended replacement card data and website monitoring tools for fraud detection.

It also said states have different thresholds for prosecuting food stamp fraud.

In Tennessee, for example, $100 in benefits must be fraudulently obtained before officials will consider prosecuting, but in Texas it is a $5,000 level.

Allegations of fraud and abuse have long-plagued SNAP and have been used by lawmakers in Washington to argue that the program has spiraled out of control.