Department of Human Services
High Balances on Supplemental Nutrition Assistance Program Accounts
Investigation Report Summary
Approved for Public Release
In November of 2013, the
Pennsylvania Office of Inspector General (OIG) initiated an investigation concerning
allegations of high balances on certain Supplemental Nutrition Assistance
Program (SNAP) accounts administered through the Pennsylvania Department of
Human Services (DHS), formerly known as the Department of Public Welfare. This issue was featured in “Target 11” news
report by WPXI in Pittsburgh, Pennsylvania, on November 4, 2013. In December of 2013, OIG provided DHS with a
summary of its findings and recommendations to that date. OIG next focused the second part of its
investigation on twenty (20) individuals who at the time had the highest SNAP
balances. This part of the investigation
also focused on determining whether any fraud was being committed. In August of 2014, OIG completed its
investigation and provided its findings and additional recommendations to DHS.
DHS issues monthly SNAP benefits to assist
qualified low-income households and individuals with purchasing food. SNAP is commonly referred to as the “food
stamp program.” SNAP is a Federal
program administered through DHS.
Individuals who qualify for SNAP benefits are issued an Electronic
Benefits Transfer (EBT) card, which allows the user to make food purchases at
stores authorized by the United States Department of Agriculture, Food and Nutrition
Service (FNS) to participate as authorized SNAP retailers.
The Federal Food Stamp Act and
associated regulations and certification policy (the Act) do not require an
individual or household to completely spend SNAP benefits allotments in order
to maintain eligibility. If a SNAP
benefits account is not used for three months, the state is allowed to “flag” the
account as dormant. The account may then
be expunged based on guidelines established by the state. However, SNAP benefits must again be made
available upon reapplication or re-contact by the individual or household. It is not appropriate to terminate benefits
simply because they have not been used.
There is no requirement that the allotment must be spent monthly, over
any other period, or at all.
OIG focused its investigation on SNAP
benefit accounts with balances between $5,000 and $45,000. OIG reviewed records related to the 20
accounts with the highest SNAP balances within that category and the associated
SNAP benefits recipients.
The investigation revealed evidence of potential fraud regarding six individuals or households. One individual, with a SNAP balance of $19,000, was receiving benefits from other Federal and State programs. The individual was also allowing other SNAP recipients to use the individual's address to obtain benefits. In five other cases, OIG discovered evidence that the applicants may not have reported income sources on their SNAP benefit applications.
OIG determined the remaining cases
with high balances were not appropriately followed by DHS caseworkers, but no
fraud was immediately revealed.
Conclusion and Recommendations
Although Federal regulations do not
require households to spend their monthly allotments, nor do they consider any
stored-up benefits as resources or income, OIG alerted DHS to the fact that
individuals who have attested to the need of government aid because of their
“limited food purchasing power” continue to receive aid when they have
accumulated a large SNAP funds balance. The
procedure with regards to high SNAP balances encourages waste.
Further, through its investigation, OIG
was able to conclude that of the accounts reviewed, six of the individuals or
households were suspected of committing fraud and several other accounts have
high SNAP balances that could result in the waste of public resources.
OIG recommended that DHS should:
Federal approval to place a limit on the amount of SNAP benefits that may be accumulated,
and to recover any monies over the limit amount;
accounts with high balances to determine other sources of income or resources
the recipients may be using;
review the circumstances of any SNAP account with a high balance;
the six accounts of suspected fraud, calculate overpayments where resources
were not reported, and report these cases to OIG’s Bureau of Fraud Prevention
and Prosecution; and,
on the high-balance accounts to determine whether waste may be occurring and whether
SNAP benefits are being used appropriately.
DHS regularly reviews accounts with
high SNAP balances and reports information evidencing potential fraud to OIG’s
Bureau of Fraud Prevention and Prosecution (BFPP). Pursuant to a Memorandum of Understanding
between DHS and OIG, BFPP is responsible for investigating and prosecuting
public assistance benefits fraud and conducting collection activities for DHS. This partnership helps ensure that public
assistance benefits are distributed fairly and equitably, and that the
integrity of the Commonwealth’s public assistance programs is maintained.
Between July 1, 2013 and June 30, 2014,
BFPP effectively collected and realized a savings of an excess of $22.4 million
of public funds through its investigative and prosecutorial activities.
In addition to receiving reports from DHS, BFPP also receives and
investigates reports of public benefits fraud from the public. Information regarding potential fraud can be
made to OIG’s toll-free fraud tipline at 1-800-932-0582, on OIG’s website www.oig.pa.gov, or by mail to: Office
of Inspector General, 555 Walnut Street, 7th Floor, Harrisburg, PA 17101. OIG will accept anonymous complaints of fraud.