FoodShare: Who’s Minding the Store?

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Apr 18, 2012 No Comments ›› Admin

April 18, 2012

FoodShare is a vital program for low-income people who cannot afford to feed their families. But the program has been plagued with oversight problems.

Past reports include a prisoner incarcerated for almost four years who still received FoodShare benefits with an unknown individual using those benefits. Auditors recently found 334 instances where the FoodShare card was used to make a purchase in Wisconsin on the same day the card was manually entered to make another purchase in another state – including New York, North Carolina and California.

Recent audits by the nonpartisan Legislative Audit Bureau provide insight to what is happening and why. Systems are supposed to be in place to enforce rules and identify fraud. But audits show state officials have not performed routine data matches, checked routine reports or adequately staffed fraud and abuse positions.

Nearly all the money for FoodShare comes from the federal government but the state shares responsibility for oversight of the program. To be eligible for Foodshare, families must meet both financial and non-financial requirements. Federal law prohibits prisoners or those who live outside Wisconsin from receiving benefits.

Every 12 months the state must recertify households to continue to receive benefits. The state must make sure individuals have not gained employment that makes them ineligible or moved out-of-state.

In some cases, people who moved out-of-state had their case closed right away. However many cases remained open for several months, increasing the risk of fraud.

Systems and staff to monitor the program are inadequate. Beginning just last year two staff members were assigned to review cases. With the new staff, fraud detection improved. But those two staff members reviewed less than half of all cases reported by the federal government. State officials told auditors they can’t monitor more cases because of staff shortages.

Another problem is individuals who received benefits but were subsequently imprisoned.

The problem with prisoners receiving benefits and ‘someone else’ using the benefits is not new. Auditors first identified the problem four years ago. The agency responded with the promise of a system of data matches – comparing lists of prisoners to lists of program recipients – every month.

But four years later, despite repeated recommendations from auditors, the routine data matches were not being performed.

Two years ago auditors found 33 individuals who were in prison and still receiving benefits – ten of which had been in prison for over a year. One individual received FoodShare despite being in prison for almost four years. These inmates should have been caught during the routine recertification process. But they were missed.

Again state officials committed to resolving the problem. But a recently released audit shows that did not happen.

Only one time did state officials performed the monthly data matches of prisoners to FoodShare recipients. No regular matches by caseworkers were completed. In the one match that was performed, officials discovered 235 cases of prisoners receiving benefits.

Last fall the Governor created a new position of Inspector General to monitor fraud and abuse. The Department of Health had 19 new positions budgeted to monitor fraud and abuse in public programs. But none are on the job yet. State officials expect the new fraud and abuse monitors will be in place midsummer.

State officials also said regular reports on FoodShare money spent out-of-state are sent out to counties but are not consistently monitored. They expected to resolve this situation with a memo.

The Department has also come under federal scrutiny for privatizing the administration of FoodShare. In a visit a year ago federal officials threatened to withhold federal FoodShare money if the state continued to send so much administration of the program to private contractors. Previous audits exposed problems with the oversight of other contracts administered by the Department of Health.

Many of the problems of fraud and abuse can be resolved through proper administrative oversight. To accomplish this, the state must make an investment in staff. Watchdogs must be well trained, proper procedures must be in place and systems must be evaluated. Program integrity is the result of an investment in staff and structure.

Auditors are continuing their work and expect a comprehensive review of the program integrity issues in the FoodShare program to be released later this year.


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