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States struggling to control fraud in federal food stamp program

An employee of the Market Basket supermarket chain walks down an empty isle Thursday July 24, 2014, in Concord, N.H. Arthur T. Demoulas, the former chief executive of the Market Basket supermarket chain whose ouster has led to employee protests, customer boycotts and empty shelves wants to buy the entire company. He said in a statement Wednesday that he and his side of the family want to buy the 50.5 percent of the company now controlled by relatives who backed his firing last month. (AP Photo) AP Photo

States around the country are finding it more difficult to monitor and prosecute fraudulent efforts to obtain federal food stamp benefits in large part because state enforcement budgets have fallen even as the number of food stamp beneficiaries has increased dramatically.

Another problem cited in a new Government Accountability Office report Thursday is that even when fraud is detected, state prosecutors often decide not to prosecute because of scarce resources. And in some cases where fraud is prosecuted, states are finding that juries are often sympathetic to the food stamp scammer.

Millions of Americans use food stamps, but a new report says states are having trouble finding and prosecuting fraud in that program. (AP Photo)

GAO's report was sent to Sen. Jeff Sessions (R-Ala.), who has long argued that rising participation in the federal food stamp program makes it ripe for fraud, and has said more needs to be done to keep spending under control

GAO's report noted that as of 2013, 47 million people were using benefits provided by the Supplemental Nutrition Assistance Program, informally called the food stamp program, which provided $76 billion in benefits that year. But GAO found that the growth of people using SNAP in the last few years has outpaced the ability of cash-strapped states to control fraud.

"[M]ost of 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," GAO found.

Under the law, states are responsible for detecting and prosecuting food stamp fraud, but GAO said states have had "mixed success." For example, GAO noted that Massachusetts and New Jersey have 498,000 and 432,000 SNAP beneficiaries in their states, respectively. However, while New Jersey has nearly 300 investigators, Massachusetts has just 37.

Some states facing a budget crunch have tried preventive investigations to avoid having to investigate overpayments after the fact. But GAO stressed that most of the 11 states it examined are struggling.

"In general, state officials reported that limits on staffing levels are significant hindrances to their investigations of eligibility fraud and trafficking, with 8 of the 11 states we reviewed reporting inadequate staffing due to attrition, turnover, or lack of funding," it said.

GAO said states have different thresholds for prosecuting SNAP fraud. In Tennessee, for example, $100 in benefits need to be fraudulently obtained before officials will consider prosecuting, but Texas has a $5,000 threshold.

In one North Carolina county and in Texas, some officials said said prosecutors won't pursue any SNAP cases because of limited resources.

According to GAO, prosecutors in Tennessee and Florida said juries are often unwilling to convict people of SNAP fraud "because they may be sympathetic to recipient claims that they do not understand government regulations or are compelled to commit fraud to support their families."

"SNAP officials in North Carolina said they were concerned about losing the deterrent effect of prosecutions due to the unwillingness of the judicial system to undertake SNAP recipient fraud cases," GAO found.

Some states told GAO that one way to boost state enforcement efforts is to provide more financial incentives to find fraud. Today, 35 percent of all recovered overpayments stay with the state, but some states want more.

"Officials in four of the states we reviewed said that their anti-fraud efforts could be enhanced if the percentage of recovered overpayments that states may retain was increased, and officials in three states said that FNS should direct that states apply the retention money to anti-fraud efforts," GAO said.

GAO's report recommended that the government should explore ways that federal incentives might support state-level anti fraud techniques. It also said the government should help states improve their analysis of SNAP transaction data to look for fraud, reassess current monitoring tools, and train people to improve state reports on fraud.

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