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8/3/2019 SNAP Waste Abuse Fraud
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Questions? Contact the Texas Food Bank Network at 562-2HUNGER or
The Supplemental Nutrition Assistance Program (SNAP, aka Food Stamps):
A Model in Reducing Waste, Abuse & Fraudi
In the last five years, the number of Texans receiving assistance from SNAP rose by 54%, from 2.4 millionto 3.7 million individualsii. In the same period, national participation grew by 69%, from 26.5 million to
44.7 million individualsiii.
Despite such dramatic growth, USDA has successfully prevented a related rise in program waste, abuse
or fraud. Today SNAP enjoys the highest levels of efficiency, impact and integrity in program history.
Increasing Efficiency, Eliminating Waste
SNAP is one of the most efficient federal programs, with an administration to benefits ratio of
1:20. Ninety-five cents of every program dollar goes to purchase food for hungry individuals. iv
The National Journal praised the administration of SNAP, in particular the introduction of electronic benefit transfer (EBT) cards as “a government reform that worked.” v
The SNAP quality control process required by USDA has been described by former state officials
as “one of the most rigorous that state agencies face.”
Only 3% of SNAP benefits are given to applicants in error, either because they are not eligible or
receive more than the law permits. In nearly all cases, this is the result of human error by the
state agency administering the complex SNAP application, not an attempt by applicants to
mislead.
State agencies also improperly deny 1% of benefits funding to applicants who are eligible,
leading to an actual loss of only 2% of benefits funding (3% overpayments minus 1%
underpayments). This is the highest accuracy rate in program history.
Increasing Impact, Eliminating Abuse
Abuse of the SNAP program is defined as using benefits for purposes other than that for which
they are intended: feeding oneself and one’s family.
The most common form of abuse is trafficking, or trading SNAP benefits for cash. Since the EBT
card has replaced paper coupons in every state, this practice requires both a recipient and food
retailer willing to engage in criminal activity.
USDA uses a finely-tuned algorithm (the ALERT system) to search EBT redemption patterns for
evidence of trafficking, such as redemption of a full month’s benefits in one transaction, or
consecutive transactions in the same amount. Planned upgrades to the ALERT system include
the addition of geo-spatial analysis to predict abuse with historical and regional data.
Stores identified by the ALERT system are placed under surveillance by USDA in coordination
with the state agency. In 2010, USDA pursued nearly 5,000 such investigations vi, many of which
lasted months.
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Questions? Contact the Texas Food Bank Network at 562-2HUNGER or
In the last decade, more than 8,000 retailers were permanently disallowed from participating in
SNAP due to their role in trafficking. There are currently 130,000 authorized retailers
nationwide.
Typically, retailers who engage in trafficking are smaller outlets, such as corner stores. 99.5% of
major grocers have never knowingly engaged in trafficking.
USDA is currently developing even stronger penalties for retailers, and encourages states to
actively pursue recipients who engage in trafficking in addition to retailers. USDA also recently expanded the definition of trafficking to include the rare practice of
“dumping,” wherein a liquid container is bought using SNAP, dumped outside the store and
returned for a small cash deposit. A final rule on this change is expected in early 2012.
Due to efforts like these, SNAP trafficking today accounts for only 1% of benefits funding, down
from 4% in recent years.
Increasing Integrity, Eliminating Fraud
Fraud typically refers to recipient efforts to obtain or sell benefits illegally.
Benefits obtained through application fraud are constrained by the intensive SNAP eligibility
determination process. In Texas this requires an eleven-page application; verification of
immigration status, household expenses, income and assets; an extensive interview with a state
caseworker; and reapplication to confirm eligibility every six months.
The illegal sale of SNAP benefits from one individual to another is monitored using some of the
same electronic methods detailed above, as well as surveillance of social media sites where
sales can be advertised.
New policy guidance from USDA expanded the definition of fraudulent activity to include
“demonstrated intent” to sell benefits online, leading to immediate rejection from the program.
USDA recently reached an agreement with the website Craigslist to ban all such postings.
In FY 2010, these combined tactics resulted in 783,000 criminal cases nationwide, in which
44,000 recipients were barred from the program and $287 million in benefits were recouped.
Waste, abuse and fraud levels in SNAP are extremely low. However, USDA continues to upgrade its
stewardship of this critical nutrition program. Recent efforts to further minimize the problems above
include the promotion of a new toll-free number to report abuse (800-424-9121), published guidance to
help state agencies better coordinate with USDA investigators, and a letter to all governors asking them
to join USDA in making the continued efficiency, impact and integrity of SNAP a top priority.
iUnless otherwise noted, all statistics and claims are attributable to comments made by USDA Under Secretary
Kevin Concannon during an on-the-record media conference call conducted on December 6 th, 2011.ii
Texas Health & Human Services Commission, http://www.hhsc.state.tx.us/research/TANF_FS.asp.iii
USDA, http://www.fns.usda.gov/pd/SNAPsummary.htm.iv
USDA, ibid.v
Hagstrom, J. 2007. “Successes: A Government Reform that Worked,” National Journal.
http://www3.nationaljournal.com/about/njweekly/stories/2007/sotu/sotu03.htmvi
USDA, http://www.fns.usda.gov/cga/FactSheets/Integrity.pdf .
