Missouri faces a $1,725,250 penalty from the federal government after the Department of Social Services’ error rate for food stamp payments exceeded six percent. This error rate reflects how often the department distributes incorrect benefit amounts to recipients. Our state’s error rate has been higher than the national average since 2008, but the penalty was triggered after it reached 7.18% in 2012.
DSS officials testified at the recent Improving Government Responsiveness and Efficiency Interim Committee hearing that the department is trying to avoid half the penalty cost by investing in changes to improve its performance and reduce the payment error rate.
The department has implemented a variety of tactics to increase payment accuracy, including soliciting advice from the USDA and revising the review process to gather more accurate information on participants’ eligibility. Currently Missouri’s 2013 error rate is 2.39%, a considerable improvement over last year’s performance.
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Undetected fraudulent payments, however, cannot be factored into the error rate. Federal guidelines allow EBT cards to be used in any state and by anyone, as long as the food is bought for the intended recipient. These rules make food stamp fraud nearly impossible to detect and investigate. Even if a transaction raises a red flag, DSS will not shut off benefits until an investigation is performed. This “pay and chase” approach forces taxpayers to fund the fraudulent purchases, the investigation process, and the cost of trying to recoup improper payments.
DSS investigates cases of suspected fraud as they are brought to the department’s attention. If you believe that someone is misusing benefits you can call the state welfare fraud hotline at (877) 770-8055 or the federal hotline at (800) 424-9121.