AUGUSTA, Maine — U.S. Department of Agriculture undersecretary Kevin Concannon called on states Tuesday to be more vigilant in rooting out fraud and abuse in the federal food stamp program.
When the U.S. economy began to flounder in late 2007, the number of people who became eligible to receive Supplemental Nutritional Assistance Program funds, commonly known as food stamps, increased dramatically. A record 46 million Americans currently receive benefits.
With that rise, the number of people who have tried to abuse the system also has grown. In a conference call with reporters, Concannon said states need to guard against what is known as “trafficking benefits,” or selling food stamps to others, and other scams such as “dumping,” in which benefit recipients buy beverages that carry a deposit on their containers, dump the liquid and return the empties for cash.
Dale Denno, Maine’s new director of Office of Family Independence, which oversees Maine’s SNAP, said his staff works closely with the USDA but also said Maine has been tracking fraud more vigilantly even before the Agriculture secretary’s directive.
Denno said a task force created by the governor this summer to tackle welfare fraud has been meeting weekly and plans to present a report to Gov. Paul LePage in the coming weeks. He said it likely would contain a number of suggestions for improving a variety of welfare programs, including food stamps.
“Our approach is not to take benefits from those that are generally needy, but to ensure that those who are using the system properly can continue to do so,” Denno said. “Most who apply are honest and entitled to those benefits.”
LePage has said programs such as Medicaid, Temporary Assistance for Needy Families, food stamps and other programs will be targeted and it won’t just be recipients in the hot seat. Providers will be scrutinized as well.
More recently, the governor has proposed random drug testing for welfare recipients, an idea that is likely to face significant opposition if it goes before the Legislature.
Some advocates for low-income Mainers already feel like the governor is using anecdotes to set his policies on welfare reform.
“I think with any program there are going to be some who abuse it. If you look at income tax even, you’ll find abusers,” said Sara Gagne-Holmes, director of Maine Equal Justice Partners. “In the current environment there is too much blaming people and programs for poverty.”
SNAP is funded almost entirely by the federal government, with states responsible only for the administrative costs associated with distributing the benefits.
The federal income eligibility for SNAP benefits is set at 130 percent of the poverty level, but states have flexibility to set rates as high as 200 percent. Maine’s eligibility threshold is 185 percent of the federal poverty level.
Maine’s rate of those who collect food stamps — about 19 percent — is among the highest in the country. The national average is 15 percent.
As of September 2011, nearly 250,000 Mainers received food stamp benefits every month, an increase of about 6 percent from a year ago. The average monthly benefit per person in Maine is about $130.
Since 2000, participation in the food stamp program in Maine has increased 150 percent, according to USDA statistics.
That increase has prompted Concannon, a former commissioner of Maine’s Department of Health and Human Services, to identify three areas for states to target: reducing improper payments and errors, aggressively pursing recipient fraud and combating abuse of benefits.
Already, Concannon said, 98 percent of those receiving SNAP benefits are eligible and payment accuracy is at 95.6 percent. The number of payment errors has been cut in half in 10 years, reducing the amount of improper payments by $2.7 billion.
Increasingly, though, Concannon said some recipients have used Facebook and other social media to sell food stamps for cash, a practice known as trafficking.
Whether or not a transaction takes place, he said the punishment is the same as actually selling the benefits, including disqualification from the food stamp program.
Authorities have made headway in limiting food stamp trafficking. In 1993, the USDA said 4 cents of every dollars was diverted. In 2007, before the recession, that had dropped to about 1 cent of every dollar.
Another targeted area, Concannon said, is reducing the scam known as “dumping,” a phenomenon that has shown up in Maine.
Maine is one of a dozen states that offers bottle deposits and many other states have debated bottle bills in recent months largely as a way to reduce litter and encourage recycling. The USDA is working on a new rule that would remove from the program anyone caught dumping.
Concannon also pointed out that fraud investigations have yielded results. In fiscal year 2010, states conducted 782,945 fraud investigations, resulting in the disqualification of 44,483 individuals and the collection of $67.2 million related to fraud.
Maine has seen two high-profile cases in the last few weeks, one involving a Brunswick woman who received $60,000 worth of food stamps and child care assistance she wasn’t entitled to, and the other involving a couple from South Paris who fraudulently received more than $119,000 in government benefits, including food stamps.