Concluding Observations

FNS and the states have taken actions to reduce fraud, waste, and abuse in the Food Stamp Program. Our past work has found that FNS and the states need to make better use of electronic data to track individuals and storeowners who may be trafficking in food stamp benefits. We also found that financial sanctions and enhanced funding have been at least partially successful in focusing states’ attention on minimizing payment errors. However, this “carrot and stick” approach can accomplish only so much. Food stamp regulations for determining eligibility and benefits are extremely complex and their application is inherently error-prone and costly to administer. Furthermore, this approach, carried to extremes, can create incentives for states to take actions that may inhibit achievement of one of the agency’s basic missions—providing food assistance to those who are in need. For example, increasing the frequency with which recipients must report income changes could decrease errors, but it could also have the unintended effect of discouraging participation by the eligible working poor. This would run counter not only to FNS’ basic mission but also to an overall objective of welfare reform—helping people move successfully from public assistance into the workforce. Simplifying the Food Stamp Program’s rules and regulations offers an opportunity to reduce payment error rates and promote program participation by eligible recipients. FNS has begun to look at options for simplifying requirements for determining benefits. However, in view of the upcoming reauthorization, it is critical that FNS follow through with this process and develop options that strike an appropriate balance between the sometimes competing objectives of ensuring program integrity and encouraging eligible individuals to participate. To be successful, this process must include a continuing dialogue with all appropriate stakeholders, including congressional members and state officials, and must ensure that actions are taken to streamline the program while at the same time improving program integrity.
What GAO Found

The Food and Nutrition Service (FNS) and the states have taken steps to reduce fraud, waste, and abuse in the Food Stamp Program. GAO's past work has found that FNS and the states need to make better use of electronic data to track individuals and storeowners who may be trafficking in food stamps. GAO also found that financial sanctions and enhanced funding have been at least partially successful in focusing states' attention on minimizing payment errors. However this "carrot and stick" approach can accomplish only so much. Food stamp regulations for determining eligibility and benefits are extremely complex and their application is inherently error-prone and costly to administer. Furthermore, this approach, carried to extremes, can create incentives for states to take actions that may inhibit achievement of one of the agency's basic missions--providing food assistance to needy persons. For example, requiring recipients to report income changes more frequently could decrease errors, but it could also have the unintended effect of discouraging participation by the eligible working poor. This would run counter not only to FNS' basic mission but also to an overall objective of welfare reform--helping people move successfully from public assistance into the workforce. Simplifying the Food Stamp Program's rules and regulations could reduce payment error rates and promote program participation by eligible recipients. FNS has begun to look at ways to simplify requirements for determining benefits. However, in view of the upcoming reauthorization, it is critical that FNS follow through with this process and develop options that strike an appropriate balance between the sometimes competing objectives of ensuring program integrity and encouraging eligible individuals to participate. To be successful, this process must include a continuing dialogue with all appropriate stakeholders, including Congress and state officials, and must ensure that steps are taken to streamline the program while at the same time improving program integrity.