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Auditor Yost, legislators announce legislation to curb fraud in Supplemental Nutrition Assistance Program
Auditor Yost explains proposed legislation to curb fraud in Ohio's Supplemental Nutrition
Assistance Program during a press conference on Feb. 8, 2017.
Columbus – In an effort to curb fraud in Ohio’s Supplemental Nutrition Assistance Program (SNAP), Auditor of State Dave Yost, Rep. Tim Schaffer and Sen. Matt Huffman announced new legislation to require photos of many recipients on the state’s SNAP Electronic Benefit Transfer (EBT) cards.
Last June, an audit of Ohio’s $2.5 billion SNAP program, commonly known as the food stamp program, found system weaknesses that allow for benefits of a deceased person to be claimed, excessive account balances, questionable out-of-state transactions and other instances of potential fraud.
“The problems we found in that audit were very concerning, not only to me but to Ohio lawmakers as well,” said Auditor Yost, who was joined at the announcement by Senate President Larry Obhof. “Clearly, it suggested there is fraud occurring in this program. The error rate for the food stamp program in Ohio is almost 5 percent – which is too high. Today we are taking steps to address the issue with new legislation.”
During a news conference held today in the Ohio Statehouse, Yost said the bills Schaffer (R-Lancaster) and Huffman (R-Lima) plan to introduce will include:
- Photo identification: On the front of each EBT card, a color photograph of at least one member of the household to whom the card is issued;
- Telephone number and website: On the back of the card, a telephone number and website where suspected fraud can be reported;
- Exemptions: The new requirements will not apply to adult household members who are age 60 or older; are blind; have a disability; are a victim of domestic violence, have religious objections to being photographed or if the household does not include any adult members.
“I’m looking forward to working with Auditor Yost to address inefficiencies in the SNAP program while also ensuring that benefits are getting to those who need them,” Rep. Schaffer said, whose legislation was introduced today. “No one will lose their benefits under this legislation, and it will help ensure that their benefits are not being abused by others through fraud or theft.”
Said Sen. Huffman: “It is a reprehensible act to steal money and goods from the poorest of the poor. I look forward to working with the Auditor and Representative Schaffer to create a common sense, simple solution to protect the benefits of Ohio’s neediest families.”
The legislation is an outgrowth of Auditor Yost’s testimony before the U.S. House Committee on Agriculture, during which he suggested adding photographs of recipients to their cards would help deter fraud.
“The time to tighten this program is now,” Auditor Yost said. “We have enough evidence proving that taking action is overdue. I am grateful for Rep. Schaffer and Sen. Huffman’s interest and action in strengthening Ohio’s SNAP program so we can ensure that available resources are going to those who need them most.”
SNAP is a federal program created to help low-income families and individuals purchase food for an adequate diet. Recipients receive about $1.39 per person per meal in food benefits. During fiscal year 2016, Ohio averaged 1.6 million SNAP participants per month out of 11.5 million residents. (See Attachment A, B) In Ohio, SNAP is administered by the Ohio Department of Job and Family Services (ODJFS).
As part of the June 2015 audit, state auditors examined transactions occurring during the first six months of 2015 and found weaknesses and anomalies indicating potential fraud. Among the audit findings:
- High-risk retailers and recipients – Using system data, the state generated seven reports that identified retailers and recipients that were flagged as very high risk for fraud. More than 151,000 recipients were identified on multiple reports;
- Excessive balances – The most a recipient can receive per month is $1,169 (for a family of eight), however balances exceeding the minimum allowance totaled $1.2 million. More than 170 recipients had balances on their EBT cards exceeding $5,000 and one exceeded a balance of $20,000;
- Unusual activity – Auditors found frequent transactions in the same amount, frequent manual card entry, even-dollar transactions at small retailers, repeated replacement of benefits cards, consecutive transactions in a one-hour period and excessive attempts to type in a PIN;
- Benefits for deceased – Auditors found 36 instances where recipients were issued $24,406 in benefits more than a year after their death, with $13,598 spent in nine cases;
- Even-dollar transactions – Even-dollar transactions exceeding $100 and amounting to more than $28.5 million were occurring at 3,200 retailers;
- Out-of-state spending – More than $28.7 million in SNAP funds were spent outside of Ohio by 118,316 recipients. Auditors said excessive use of cards out of state could indicate either the recipient does not live in Ohio, is receiving benefits in more than one state, or is selling their card and benefits. When not considering states bordering Ohio, the states with the most Ohio SNAP card activity include Florida, Georgia, Minnesota, Texas and Tennessee. Auditors have suggested further investigation is needed in this area;
- Other findings – 12 instances were identified where the same individual had multiple accounts; there are excessive instances where cards are accessed through manual entry instead of swiping suggesting multiple users could be using the same account number; more than 96,000 recipients used their monthly benefit amount in a single transaction. The total of those purchases was $25.4 million; ODJFS has set four as the number of allotted PIN attempts before the card is automatically locked out – a deterrent to prevent use of lost cards. Auditors found that more than 800 recipient cards had more than four PIN attempts, including 28 cards with 10 and one with 35.
The audit was the second audit of Ohio’s SNAP program. In 2011, auditors found excessive cards being reissued, leading Auditor Yost to request that vendors provide additional data collection to better audit SNAP in the future. Eleven other states have conducted comprehensive audits with findings similar to Ohio. Also, ODJFS officials implemented a 10-county pilot program designed to help identify fraud. Success of that pilot will determine if the program is implemented in all 88 Ohio counties.
- More information including a list of frequently asked questions and a county map of SNAP participants is available here.
- Click here to watch a video of Auditor Yost testifying before Congress on the concept of adding a photo to EBT cards.
- Click here to watch a video of the June 2015 news conference.
- Click here to watch a video of today’s news conference.
The Auditor of State’s office, one of five independently elected statewide offices in Ohio, is responsible for auditing more than 5,900 state and local government agencies. Under the direction of Auditor Dave Yost, the office also provides financial services to local governments, investigates and prevents fraud in public agencies and promotes transparency in government.
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