Food Assistance: Reducing Food Stamp Benefit Overpayments and Trafficking

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Report Type	Reports and Testimonies
Report Date	June 23, 1995
Report No.	RCED-95-198
Subject	Electronic benefits transfers Eligibility criteria Federal/state relations Overpayments Program abuses Retail facilities Welfare benefits Welfare recipients AFDC Aid to Families with Dependent Children Program FCS State Exchange Program Store Tracking and Redemption System Florida FNS Income and Eligibility Verification System Food Stamp Program Project Recall Louisiana Massachusetts Administrative errors

Summary:

The Agriculture Department's (USDA) Food Stamp Program is one of the nation's largest welfare programs, providing about $24 billion in food stamps to more than 27 million recipients during fiscal year 1994. Errors in determining recipients' eligibility and benefit levels generate nearly $2 billion in benefit overpayments each year. Complex regulations governing the program and differences in eligibility and benefit determination criteria between the Food Stamp and the Aid to Families With Dependent Children Programs appear to be the main sources of state caseworker errors. Some errors also result from Food Stamp recipients' inadvertently or fraudulently providing inaccurate income information that affects their benefit levels. Despite the lack of complete data, illegal trafficking in food stamps appears to be pervasive, with coupons often traded as a second currency. GAO believes that aggressive on-site monitoring, greater enforcement, and stiffer penalties are needed to reduce the number of retailers that traffic in food stamps.

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Food Assistance: Reducing Food Stamp Benefit Overpayments and Trafficking