Food Stamp Program: Households Collect Benefits for Persons Disqualified
for Intentional Program Violations (Letter Report, 07/08/1999,
GAO/RCED-99-180).

Congress has expressed a strong desire in recent years to reduce fraud,
waste, and abuse in the Food Stamp Program. Earlier GAO reports found
that millions of dollars in food stamp overpayments in four states were
caused by counting thousands of inmates and deceased individuals as
household members and thousands of individuals as members of recipient
households in more than one state during the same period. (See
GAO/RCED-97-54, Mar. 1997, GAO/RCED-98-53, Feb. 1998, and
GAO/RCED-98-228, Aug. 1998.) This report discusses individuals who were
disqualified from the program for intentionally violating the program's
rules but were included as household members during their
disqualification period. GAO found that more than 3,000 disqualified
individuals in the four states it reviewed were improperly counted as
members in households that received food stamp benefits during 1997.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  RCED-99-180
     TITLE:  Food Stamp Program: Households Collect Benefits for
	     Persons Disqualified for Intentional Program Violations
      DATE:  07/08/1999
   SUBJECT:  Fraud
	     Federal/state relations
	     Program abuses
	     Food relief programs
	     State-administered programs
	     Internal controls
	     Overpayments
	     Data bases
	     Data integrity
IDENTIFIER:  Food Stamp Program
	     HHS Temporary Assistance for Needy Families Program
	     FNS Disqualified Recipient Subsystem
	     FNS Voice Response System
	     FNS Online Query Subsystem
	     California
	     Illinois
	     Louisiana
	     Texas

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    United States General Accounting Office GAO                Report
    to the Chairman, Subcommittee on Department Operations, Oversight,
    Nutrition, and Forestry, Committee on Agriculture, House of
    Representatives July 1999          FOOD STAMP PROGRAM Households
    Collect Benefits for Persons Disqualified for Intentional Program
    Violations GAO/RCED-99-180 GAO    United States General Accounting
    Office Washington, D.C. 20548 Resources, Community, and Economic
    Development Division B-282612 July 8, 1999 The Honorable Bob
    Goodlatte Chairman, Subcommittee on Department Operations,
    Oversight, Nutrition and Forestry Committee on Agriculture House
    of Representatives Dear Mr. Chairman: During numerous hearings
    over the last several years, the Congress has expressed its strong
    desire to reduce the level of fraud, waste, and abuse in the Food
    Stamp Program, which is administered by the U.S. Department of
    Agriculture (USDA). In 1997 and 1998, we reported that millions of
    dollars in food stamp overpayments in four states were caused by
    counting thousands of inmates and deceased individuals as
    household members and by counting thousands of individuals as
    members of recipient households in more than one state during the
    same period.1 In these reports, we identified several actions,
    including the use of automated information, to reduce the level of
    ineligible participation. In response to your request, this report
    focuses on individuals who were disqualified from the program for
    intentionally violating the program's rules but were included as
    household members during their disqualification period, a problem
    referred to as disqualified participation. Individuals are
    disqualified from participation in the program when it is
    determined that they have committed an intentional program
    violation.2 Specifically, we (1) determined for calendar year 1997
    how many individuals were included as members of food stamp
    households in four states while disqualified from the program and
    estimated the value of the benefits that were improperly issued to
    those households and (2) determined why these individuals were
    improperly included in 1Food Stamps: Substantial Overpayments
    Result From Prisoners Counted as Household Members (GAO/RCED-97-
    54, Mar. 10, 1997), Food Stamp Overpayments: Thousands of Deceased
    Individuals Are Being Counted as Household Members (GAO/RCED-98-
    53, Feb. 11, 1998), and Food Stamp Overpayments: Households in
    Different States Collect Benefits for the Same Individuals
    (GAO/RCED-98-228, Aug. 6, 1998). 27 C.F.R. ch. II, part 273.16 (c)
    specifies that a determination of intentional program violation
    can be made when an individual is found to have intentionally (1)
    made a false or misleading statement or misrepresented, concealed,
    or withheld facts or (2) committed any act that constitutes a
    violation of the Food Stamp Act, the Food Stamp Program's
    regulations, or any state statute relating to the use,
    presentation, transfer, acquisition, receipt, or possession of
    food stamp coupons or authorization to participate cards. The four
    procedures for determining intentional program violations are
    discussed in more detail in appendix II. Page 1
    GAO/RCED-99-180 Disqualified Food Stamp Participants B-282612
    households and what actions USDA and state agencies could take to
    detect and prevent disqualified participation. To identify
    disqualified participation, we conducted a computer match
    comparing the calendar year 1997 food stamp rolls of four states
    (California, Illinois, Louisiana, and Texas) with information on
    disqualified individuals contained in USDA's Disqualified
    Recipient Subsystem.3 These four states accounted for about 28
    percent of the nation's participants in the Food Stamp Program and
    were responsible for 19 percent of all active disqualifications
    nationwide in 1997.4 (See app. I.) To ensure the accuracy of our
    analyses, we used only those matches that (1) met the most
    reliable and stringent criteria used by the Social Security
    Administration to verify Social Security numbers and (2)
    identified individuals who were included in households that were
    issued food stamp benefits for the same month(s) that they were
    disqualified from participation. Results in Brief    Over 3,000
    disqualified individuals in the four states we reviewed were
    improperly counted as members in households that received food
    stamp benefits during calendar year 1997. While we cannot estimate
    the potential amount of overpayments received nationwide for
    individuals who participated while disqualified, the households in
    the four states we reviewed improperly collected about $500,000 in
    food stamp benefits. The $500,000 in overpayments, while small in
    relation to the $5.6 billion in food stamps distributed to 6.4
    million individuals in these four states, undermine USDA's
    accomplishments and ongoing efforts to ensure the program's
    integrity. About 70 percent of the disqualified participation we
    identified was attributable to weaknesses in state processes for
    the timely removal of individuals from the food stamp rolls after
    they have been disqualified. About 30 percent of the disqualified
    participation that we identified occurred because the states did
    not check USDA's national database of disqualified individuals to
    determine if household members had been disqualified by another
    state or because of delays in updating information in the
    database. Furthermore, USDA's database is incomplete and contains
    errors; therefore, even if state agencies check the database, they
    may not 3USDA's Disqualified Recipient Subsystem compiles
    nationwide disqualification information collected from the state
    agencies that administer the Food Stamp Program. 4Because
    California does not maintain statewide participation information,
    we used state eligibility information in our match. For
    California, we determined that eligibility for the program is
    representative of actual participation, as described in appendix
    III. Page 2                                   GAO/RCED-99-180
    Disqualified Food Stamp Participants B-282612 receive full and
    accurate disqualification information. We could not estimate,
    however, the amount of additional disqualified participation
    attributable to this problem. USDA could help the states reduce
    disqualified participation by sharing best practices for imposing
    disqualifications promptly and requiring states to check its
    national database of disqualification information for applicants.
    This report includes a number of recommendations to the Secretary
    of Agriculture designed to reduce disqualified participation.
    Background    The Food Stamp Program is designed to promote the
    general welfare and to safeguard the health and well-being of the
    nation's population by raising the nutritional levels of low-
    income families. Recipients use their food stamp benefits to
    purchase allowable food products from authorized retail food
    merchants. USDA's Food and Nutrition Service (FNS) manages the
    Food Stamp Program through agreements with state agencies. FNS
    approves the states' plans to operate the program and ensures that
    states administer the program in accordance with regulations. The
    federal government pays all of the costs for benefits and one-half
    of the administrative costs for each state. In fiscal year 1997,
    USDA provided about 23 million participants with over $19.5
    billion in benefits and paid the states, U.S. territories, and the
    District of Columbia about $1.7 billion to administer the program.
    Food stamps are issued to households, which can comprise an
    individual, a family, or any group that lives together and
    customarily purchases and prepares food in common. Households
    applying for benefits must provide information about each
    household member, including Social Security numbers. The value of
    the food stamp benefits for a household depends on the number of
    eligible household members and their income as adjusted for assets
    and such costs as those for shelter and utilities. Therefore, a
    household's monthly food stamp allotment increases with each
    additional member, provided that income limits are not exceeded.
    The national average monthly food stamp benefit for individuals
    was $71.27 in 1997. Eligibility workers in service centers work
    directly with applicants or their representatives to certify
    households' eligibility and determine the amount of benefits at
    the time of the application and at least annually thereafter.
    Generally, the service centers maintain the clients' detailed case
    records, while the computerized eligibility and benefit issuance
    data are maintained at the state or local level. State agencies in
    Illinois, Louisiana, and Texas maintain both types of data, but in
    California, the state agency maintains Page 3
    GAO/RCED-99-180 Disqualified Food Stamp Participants B-282612 the
    information on eligibility, while the counties maintain the
    information on benefit issuance. Each state is required to
    establish a performance-reporting system to monitor its food stamp
    program, including a quality control review process to help ensure
    that benefits are issued only to qualifying households and that
    the amounts of these benefits are correct. Each state is required
    to investigate any case of alleged intentional program violation
    and ensure action if allegations are verified. Federal regulations
    specify that individuals found to have committed an intentional
    program violation shall be ineligible to participate in the
    program for a specified period.5 States have several procedural
    options for determining whether individuals have committed
    intentional program violations, and the extent to which each
    procedure is used can vary widely from state to state. (See app.
    II.) State agencies are responsible for imposing penalties and for
    recovering any food stamp overpayments associated with the
    intentional program violations. The disqualification of an
    individual by one state is valid in all states. Disqualified
    In the four states we reviewed, over 3,000 disqualified
    individuals were Participation Weakens improperly included as
    members of food stamp households in calendar year 1997. These
    households received about $500,000 in food stamp the Program's
    overpayments during the year. Among these individuals were 40
    Integrity                      disqualified participants who had
    been permanently disqualified from the program. While our review
    was limited to identifying disqualified participation in four
    states, we believe it is likely that such participation also
    occurs in other states. Table 1 summarizes the number of
    disqualified participants that we identified in the four states we
    reviewed. 57 C.F.R. ch. II, part 273.16. In addition, the Personal
    Responsibility and Work Opportunity Reconciliation Act of 1996
    doubled the disqualification period for intentional program
    violations from 6 months to 1 year for the first violation, and
    from 1 year to 2 years for the second violation. The penalty for
    the third violation remained the same-permanent disqualification.
    Disqualification penalties can differ in specific cases, such as
    transactions involving food stamp benefits and drugs or firearms,
    and may also be specified by the court for cases that are
    prosecuted. Page 4                                    GAO/RCED-99-
    180 Disqualified Food Stamp Participants B-282612 Table 1: Extent
    of Disqualified Participation, Calendar Year 1997    Dollars in
    thousands Number of         Total months of disqualified
    disqualified                Estimated States examined
    participants            participation          overpayments
    California                                        2,042
    4,839                     $340 Illinois
    505                    1,157                           88
    Louisiana                                            198
    504                           37 Texas
    421                      873                           63 Total
    3,166                     7,373                     $529 Sources:
    For California, the California Department of Public Social
    Services; for Illinois, the Illinois Department of Human Services;
    for Louisiana, the Louisiana Office of Family Support, Department
    of Social Services; and for Texas, the Texas Department of Health
    Services. Overall, about 81 percent of the disqualified
    participants that we identified were members of food stamp
    households in the state that had imposed the disqualification, and
    about 19 percent had been disqualified by a different state.
    However, in some states and in one county, higher proportions of
    the disqualified participants had been disqualified by a different
    state. For example, in Texas, 209 out of 421, or 50 percent, of
    the disqualified participants we identified had been disqualified
    by some other state, yet they accounted for about 59 percent of
    the estimated overpayments because they had participated for a
    somewhat longer period of time. In Louisiana, about 34 percent of
    the disqualified participants had been disqualified by a different
    state, and in California, 38 percent of the disqualified
    participants in Los Angeles County had been disqualified by
    another state. While we focused our analysis on disqualified
    participation in the Food Stamp Program, such participation may be
    indicative of similar problems in other public assistance programs
    administered by the states. In our review of sample case files in
    three of the four states we visited, we found that some
    individuals who were disqualified from the Food Stamp Program were
    also disqualified at the same time, for the same offense, from the
    Temporary Assistance for Needy Families (TANF) program. While our
    match did not include other programs, we believe that if
    individuals were able to obtain food stamp benefits while
    disqualified, they may have obtained the other benefits as well.
    Although the total estimated dollar value of benefit overpayments
    associated with the disqualified participation for the four states
    we reviewed was not large compared with the total amount of food
    stamp Page 5                                    GAO/RCED-99-180
    Disqualified Food Stamp Participants B-282612 benefits issued,
    such participation undermines the program's integrity. The
    importance of the program's integrity was highlighted in the April
    23, 1998, testimony of USDA's Food and Nutrition Service
    Administrator.6 The Administrator stated that "A crucial part of
    the President's and Secretary's commitment to delivering nutrition
    assistance to needy Americans is ensuring that the integrity of
    the Food Stamp Program is protected from those who would abuse the
    program. It is our nation's most important nutrition program, and
    we make protecting its integrity our highest priority." In her
    testimony, the Administrator cited the increase of 12 percent in
    recipients' disqualifications for fraud-from more than 94,000 in
    1996 to almost 106,000 in 1997. The positive impact of such
    efforts is undermined when some of these same individuals who were
    disqualified for fraudulent activities in the program are allowed
    to participate in the program during their disqualification
    period. Improved State          Weaknesses in states' processes
    for imposing disqualifications were Processes and Use of
    responsible for about 70 percent of the disqualified participation
    that we identified, which permitted disqualified individuals to
    continue receiving Complete and            benefits during part or
    all of their disqualification period. Certain Accurate National
    practices, such as the centralization of responsibility for all
    aspects of imposing a disqualification, including the removal of
    the individual from Information Would       the food stamp rolls,
    can help reduce disqualified participation. States' Help Prevent
    failure to check USDA's national database to determine if
    household Disqualified            members had been disqualified by
    another state or delays in updating disqualification information
    accounted for about 30 percent of the Participation
    disqualified participation that we identified. A routine check by
    states of USDA's database to determine the disqualification status
    of household members, as well as quicker access to updated
    disqualification information, would go further to detect and
    prevent disqualified participation. In addition, USDA and the
    states do not effectively oversee and control the submission of
    disqualification information to the database. Although we
    identified and validated the participation of disqualified
    individuals using information in the database, the database is
    incomplete and contains errors; therefore, even if state agencies
    check the database, they may not receive full and accurate
    disqualification information. 6Testimony of Yvette S. Jackson,
    Administrator, Food and Nutrition Service, U.S. Department of
    Agriculture, Before the Senate Committee on Agriculture, Nutrition
    and Forestry (Apr. 23, 1998). Page 6
    GAO/RCED-99-180 Disqualified Food Stamp Participants B-282612
    State Processes for           In the four states we reviewed,
    weaknesses in the different processes that Imposing
    Disqualifications    they used to implement disqualifications and
    remove individuals from the Allow Some Disqualified       food
    stamp rolls allowed some disqualified individuals to participate.
    We Participation to Occur        found that certain state
    practices and procedures seem more effective than others in
    detecting and preventing such ineligible participants and that the
    states we visited have taken or are planning actions to address
    the problems we identified. Individuals are disqualified from
    participation in the program when it is determined that they have
    committed an intentional program violation (IPV). Federal
    regulations require that a disqualified individual be notified of
    the disqualification and that the disqualification begin either at
    the beginning of the month following written notification or, if
    the IPV was determined by a court, on the date specified by the
    court or within 45 days of the court decision if no date was
    specified. State processes for removing disqualified individuals
    from the food stamp rolls differed. Texas has a single Central
    Disqualification Unit for the entire state that (1) receives
    notice that an individual has been determined to have committed an
    IPV, (2) sends notification of disqualification to the individual
    and the eligibility worker, and (3) imposes the disqualification
    by removing the individual from the food stamp rolls. The unit
    also enters the disqualification information into Texas' statewide
    computerized eligibility information system. During the
    disqualification period, local-level eligibility workers cannot
    change the eligibility status of disqualified individuals; only
    the central unit staff can make such changes. If a local
    eligibility worker attempts to access the record of the
    disqualified individual on the automated system, the
    disqualification information appears on screen and the system
    rejects attempts to restore eligibility. On the basis of our
    analysis, disqualified individuals are less likely to continue
    participating under such a centralized system; Texas had a lower
    percentage of in-state disqualified participants (i.e.,
    participants disqualified by Texas but continuing to participate)
    than the other states in our review. According to state officials,
    participation by individuals disqualified by Texas occurred
    primarily because the central unit received late notification of
    an IPV from hearing officers, the courts, or out-of-state
    decisions, resulting in the issuance of benefits in the first
    month of disqualification. As a result of our findings, Texas has
    implemented a policy giving priority to imposing disqualifications
    on individuals who are Page 7                         GAO/RCED-99-
    180 Disqualified Food Stamp Participants B-282612 participating in
    active cases, thus preventing overpayments to the household.7 Like
    Texas, Louisiana has a central unit that is responsible for
    imposing disqualifications; however, the unit does not actually
    remove individuals from the food stamp rolls. The unit sends
    electronic messages through Louisiana's statewide computerized
    eligibility information system to local eligibility workers,
    notifying them that an individual has been disqualified and that
    they must remove the individual from the food stamp rolls. The
    central unit also enters the disqualification information into the
    system; therefore, if a local worker attempts to access the record
    of the disqualified individual, the information appears on screen.
    However, the system does not ensure that the eligibility worker
    will act on the disqualification information or prevent the worker
    from later restoring eligibility for the disqualified individual.
    According to state officials, the central unit does not actually
    remove disqualified individuals from the rolls because the
    coincidental input of changes to a case record from two different
    locations in a day, while unlikely, could cause a problem in the
    case record. A state official stated that participation by
    individuals disqualified by Louisiana primarily occurred because
    local eligibility workers did not take prompt action, or never
    took action, on the disqualification information that they were
    provided. Such delays and oversights can occur for a variety of
    reasons, such as the worker's temporary absence for leave,
    training, or excessive workload. To address these problems,
    Louisiana officials told us that they required staff in each of
    the state's parish offices to evaluate processes for imposing
    disqualifications, and they plan to implement various practices,
    such as increasing supervisory review of eligibility workers'
    disqualification actions. In Illinois, a central unit is notified
    of IPV determinations and is responsible for entering the
    information into a disqualification database on the statewide
    computerized eligibility information system. The central unit
    sends paper notices of IPV determinations to local eligibility
    workers, who are responsible for notifying the individuals of
    their disqualification and removing them from the food stamp
    rolls. The state conducts a monthly match between its database of
    Illinois disqualifications and its food stamp rolls to identify
    disqualifications that have not been imposed or disqualified
    individuals who reapply. We found little disqualification
    documentation in our review of case files, so it was generally not
    possible 7A federal appeals court recently decided that the
    imposition of food stamp disqualification penalties cannot be
    postponed, for example, even if the individual is not currently
    participating in the program. Garcia v. Concannon, 67F.3D 256
    (1995). Page 8                                   GAO/RCED-99-180
    Disqualified Food Stamp Participants B-282612 to ascertain if the
    responsible eligibility worker had received notice of the
    disqualification or what action had been taken. However, in some
    case files, we found notices reminding eligibility workers to
    disqualify participants who had been identified in the monthly
    computer match of disqualified individuals and participants. State
    officials said that participation by individuals who had been
    disqualified by Illinois primarily occurred because local
    eligibility workers did not take prompt action. To address this
    problem, state officials said that they are considering the
    complete centralization of their disqualification process by
    making a single state-level unit responsible for all aspects of
    imposing disqualifications. In California, responsibility for
    disqualifying individuals is delegated to individual counties, and
    the state agency is notified of a disqualification only after it
    is imposed, so that the information can be reported to USDA. Like
    all California counties, Orange County and Los Angeles County,
    operate independently of each other, with their own procedures and
    separate computerized information systems, but they impose
    disqualifications similarly. In each, the county fraud unit
    participates in the IPV process and notifies the eligibility
    worker responsible for the active case to send a disqualification
    notice and to remove the individual from the food stamp rolls. In
    these counties, our review of case file records and discussions
    with officials indicated that eligibility workers did not impose
    disqualifications on time for a variety of reasons, such as
    getting notification of a disqualification after the specified
    start date, and that local workers sometimes reinstated the
    disqualified individual to eligibility before the end of the
    disqualification period. According to an Orange County official,
    the agency has taken action to address these issues by, for
    example, altering its computerized eligibility system to inhibit
    workers from restoring eligibility before the end of the
    disqualification period. Disqualified Participation    About 30
    percent of the disqualified participation we identified in four
    Also Occurs Because           states was attributable to states'
    not checking USDA's Disqualified States Do Not Check
    Recipient Subsystem (DRS) to determine the disqualification status
    of USDA's Database               applicants or to delays in
    obtaining updated DRS disqualification data. While states are not
    required to check the DRS to determine the disqualification status
    of applicants, states are mandated to check the DRS to determine
    the proper length of the disqualification penalty. However, some
    states are not meeting this requirement. The DRS is a national
    database of currently and previously disqualified food stamp
    recipients. It contains identification information on disqualified
    Page 9                         GAO/RCED-99-180 Disqualified Food
    Stamp Participants B-282612 individuals, including their name,
    Social Security number, and date of birth, along with
    disqualification information, such as the decision and start dates
    of disqualification, the length of penalty, previous
    disqualifications, and the state that imposed the
    disqualification. States are required to provide monthly updates
    of new disqualifications, changes to prior data submitted, and
    deletions to the DRS. After the DRS is updated on the 25th of each
    month, the updated information is made available to states. States
    can either receive disqualification information files directly
    from the USDA computer or obtain tapes through the mail. The
    disqualification information files are available to states in
    three formats: a file of the most recent update, a file of all
    currently active disqualifications, or a file of the entire DRS
    database. States can use these files to update or maintain a copy
    of the DRS on their own computerized information systems or to
    match them against their food stamp rolls. Most states do not
    routinely check the DRS database to determine the disqualification
    status of applicants or household members, but they are not
    required to do so. According to FNS' records, of the 50 states and
    2 U.S. territories participating in the program, along with the
    District of Columbia, 34 are provided with a file of DRS
    disqualification information monthly. While FNS' records do not
    indicate how the states use that information, FNS regional office
    officials told us that just 22 states routinely check the DRS
    disqualification data for new applicants. Among the four states we
    visited, California was the only state that used the DRS
    disqualification information to screen food stamp applicants in
    1997. Our analysis indicates that California's percentage of out-
    of-state disqualified participants was lower than that of any of
    the other states in our review. Instead of collecting statewide
    disqualification information and making it available to
    eligibility workers through a computerized system, as the other
    states we visited do, California maintains a copy of the entire
    DRS database that is updated monthly. The DRS database is compared
    with the applicant information submitted by counties for the
    nightly computerized state income and eligibility verification
    process. Disqualified applicants are reported to the responsible
    county eligibility workers, who are then responsible for denying
    eligibility. According to state officials, the use of the DRS
    helps prevent participation by individuals disqualified in other
    states, but the lag in updating the DRS data can allow some
    disqualified participants to apply and participate before the data
    are available on California's system. A state official estimated
    that it takes between 30 and 60 days from the date when an IPV
    determination is made by a county until the information is
    available on the state's copy of the DRS Page 10
    GAO/RCED-99-180 Disqualified Food Stamp Participants B-282612
    database. This is reflected in our findings in Los Angeles County,
    where 43 percent of the disqualified participants that we
    identified had been disqualified in a different county. Despite
    the applicant check process, which uses the DRS data, disqualified
    participants were subsequently able to participate in Los Angeles
    County during their disqualification period for various reasons,
    including the delay in getting updated information into the
    database. The other three states in our review did not use the DRS
    database information for various reasons. Texas officials said
    that their automated system checks applicants against the state's
    own disqualification database and that it is not productive to
    also check the DRS. However, we found that 209 out of 421 matches,
    or 50 percent of the disqualified participants we identified in
    Texas, were individuals who had been disqualified by different
    states. Many of these ineligible individuals could have been
    prevented from participating or could have been identified earlier
    if Texas had checked the national DRS. Illinois officials told us
    they did not have the technical capability to use the DRS when it
    was first made available and, instead, used their own database of
    Illinois' disqualified individuals for applicant checks. However,
    the officials stated that they intend to begin checking the DRS in
    the future. Louisiana officials stated that they did not have the
    computer resources to use the DRS data until early 1998, when the
    state began a monthly match of its food stamp rolls with the DRS
    file of current disqualifications. In the 12 months between March
    1998 and February 1999, they identified and removed from their
    food stamp rolls 107 disqualified participants from other states.
    FNS agreed to require states to check the DRS for applicants and
    recipients more than 3 years ago in response to the USDA Inspector
    General's recommendations. The Inspector General, reporting on its
    review of the implementation of the DRS, recommended that FNS
    develop procedures that require all state agencies to compare
    their databases with the national database and use the results to
    determine applicants' eligibility or whether current participants
    were disqualified elsewhere. Concurring, FNS stated that a
    regulation to require applicant or case load matches was currently
    being drafted. FNS estimated that the proposed rule would be
    published in the Federal Register in November 1996. FNS officials
    stated that the regulation has not been published because of other
    regulatory priorities within the Food Stamp Program. FNS now plans
    to publish the proposed rule by July 1, 2000. Page 11
    GAO/RCED-99-180 Disqualified Food Stamp Participants B-282612
    While not required to check the DRS for the disqualification
    status of applicants or household members, states are required to
    use the DRS when determining the length of disqualification
    penalty for an IPV. As noted earlier in this report, the length of
    the penalty is based on the number of prior violations. To assist
    the states in meeting the requirement, FNS established telephonic
    access to the DRS through a Voice Response Unit. The unit allows
    state workers to directly access the DRS database and, by entering
    a Social Security number, determine if an individual has any prior
    violations, thus determining the length of penalty for a new
    violation. However, the Voice Response Unit is relatively slow, is
    not designed to process a large amount of calls, and is not
    appropriate for application or recertification checks. Some state
    and county agencies are not complying with FNS' regulation that
    requires them to use the DRS to determine the length of the
    disqualification penalty for an IPV. We found that in California,
    Los Angeles and Orange counties do not use the Voice Response
    Unit, nor do they use a microfiche of the DRS that the state
    provides them with quarterly, to identify prior violations when
    determining disqualification penalty periods. Instead, they check
    their own disqualification databases and determine the penalty
    length on the basis of the number of prior disqualifications
    within the county. Similarly, Illinois determines the length of
    penalty by consulting its own database of state disqualifications
    rather than checking the DRS. According to FNS officials, New
    Jersey, Rhode Island, and the territory of Guam also do not check
    the DRS to determine the length of the disqualification penalty.
    As a result, each of these state and county agencies may not
    always be assigning the proper length of penalty for the
    disqualifications that they impose. To replace the aging and
    inefficient Voice Response Unit, FNS is developing another method
    for states to query the DRS that is capable of accommodating
    routine applicant checks by states. This new system, known as the
    Online Query Subsystem, will allow eligibility workers to directly
    access the DRS and perform multiple queries, including checking to
    determine the disqualification status of applicants or recipients,
    through the Internet. According to FNS officials, the on-line
    system will not require any programming or maintenance by the
    states-only computers with Internet access. The officials stated
    that the system will provide information more quickly than the
    Voice Response Unit and allow access to updated DRS records sooner
    than is available through a direct transfer of files or a tape.
    FNS plans a phased implementation period, bringing several states
    on-line at a time, starting in December 1999. Page 12
    GAO/RCED-99-180 Disqualified Food Stamp Participants B-282612 FNS
    is also studying the feasibility of a national food stamp
    participation database, which could provide another way for USDA
    to provide the states with information on disqualified
    individuals. In 1998, we recommended that FNS conduct a study to
    consider establishing a central system to help insure that
    individuals participating in the Food Stamp Program are not
    improperly included as a household member in more than one state
    concurrently.8 FNS agreed with this recommendation, and the
    Congress approved funding for a feasibility study. Public Law 105-
    379, dated November 12, 1998, states that "the Secretary of
    Agriculture shall conduct a study of options for the design,
    development, implementation, and operation of a national database
    to track participation in Federal means-tested public assistance
    programs." The creation of such a database provides the
    opportunity for FNS to match nationwide program participation with
    disqualification information and provide the states with the
    results for action. FNS has 1 year to complete the study and
    report the results to the Congress. The Integrity of the DRS
    Although we were able to identify and validate the participation
    of Data Can Be Improved to      disqualified individuals using the
    DRS information, the database is Enhance Its Effectiveness
    incomplete and contains errors, which could allow disqualified
    individuals to participate or could result in states' imposition
    of incorrect lengths for disqualification penalties. For example,
    we found that the disqualification data from three states-
    Michigan, Washington, and Arkansas-were not entered into the DRS
    for a 6-month period between August 1, 1998, and January 31, 1999.
    Michigan and Washington State officials attributed the lack of
    reporting to computer problems that prevented them from submitting
    information to the DRS, and an Arkansas official stated that the
    state transmitted its data to the DRS monthly but did not know
    whether the transmissions had been successful. An FNS official
    stated that the agency is working with Arkansas State officials to
    resolve the problem. Furthermore, during that same 6-month period,
    states sent in large numbers of disqualification records that were
    rejected as "fatal errors" by DRS data checks designed to keep
    faulty information from entering the system. For example, of the
    18,351 records sent by Oregon, 14,386, or 78 percent, were
    rejected, while South Dakota sent 3,408 records, but only 12 were
    accepted into the DRS. According to FNS officials, the number of
    rejected records is large because the states resubmitted the same
    erroneous records month after month without correction. FNS has no
    8Food Stamp Overpayments: Households in Different States Collect
    Benefits for the Same Individuals (GAO/RCED-98-228, Aug. 6, 1998).
    Page 13                                GAO/RCED-99-180
    Disqualified Food Stamp Participants B-282612 controls to ensure
    that the data are corrected and resubmitted; instead, it relies
    completely on the states to correct and resubmit disqualification
    data. If the states do not resubmit the data, the DRS
    disqualification database is incomplete. Among the four states in
    our review, California, Illinois, and Louisiana officials told us
    that they take action to review DRS' error messages and resubmit
    corrections; Texas does not. Finally, in many cases, state
    information is not reaching the DRS within the required time
    frame. States are required to submit disqualification information
    so that the FNS receives it no later than 30 days after the
    disqualification takes effect. Yet, of the disqualifications that
    were active during any part of 1997, 41 percent, or 49,826 out of
    118,921, were received more than 30 days after they took effect.
    In addition to being incomplete, the DRS database also contains
    errors. For example, in Texas, we compared the start dates on
    disqualification documentation found in case files with the start
    dates in the DRS and determined that the DRS start dates were 1
    month earlier than the actual disqualification start dates. In
    response to our request, officials in Texas traced the problem to
    an error in the program it uses to create the disqualification
    update file it sends to the DRS and plans to take corrective
    action. Texas officials also found a Year 2000-related problem
    involving the date-of-birth field. As a result of this problem,
    Texas did not report a large number of disqualifications to the
    DRS from August 1998 to January 1999. The officials told us that
    this problem has been corrected and that they plan to submit the
    missing data. The DRS' data checks on information submitted by
    states do allow some erroneous records to be accepted into the
    database with a "warning" message sent back saying that the
    records contained an error or unusual circumstance. Some examples
    of what triggers a warning message are invalid gender codes and
    duplicate disqualification numbers (i.e., an individual has more
    than one "first" disqualification). According to FNS records, a
    large number of warning messages were sent to states from August
    1, 1998, to January 31, 1999. Of the 119,088 records accepted into
    the DRS, 83,975, or 71 percent, were accepted with a warning
    message. An FNS official attributed many of these 83,975 warning
    messages to certain states that submit their entire database every
    month, which causes the system to detect duplicates and generate
    warning messages. He stated that the newly submitted duplicate
    records simply overwrite the existing records. Page 14
    GAO/RCED-99-180 Disqualified Food Stamp Participants B-282612
    While some of these errors would have little consequence to states
    using the information to identify disqualified participants,
    others, such as those involving the dates or numbers of
    disqualifications, could make the information difficult to use if
    not corrected. For example, our analysis of the disqualifications
    in the DRS database that were active during 1997 found 5,960
    individuals with two or more "first" disqualifications, 1,399
    individuals with two or more "second" disqualifications, and 123
    individuals with two or more "third" disqualifications. Since the
    length of a new disqualification is based on the number of prior
    disqualifications, such erroneous and conflicting information
    could make it difficult for states to properly determine
    disqualification penalties. FNS officials were unaware of many of
    the data problems that we identified during our review. FNS
    delegates to its regional offices responsibility for ensuring that
    states comply with the DRS requirements, but regional officials we
    spoke to were also generally unaware of the problems we
    identified. For example, regional officials were not aware that
    the three states previously mentioned had not input data to the
    DRS for 6 months. FNS ultimately holds the states responsible for
    ensuring that the data they submit to the DRS is complete, on
    time, and accurate. Conclusions    The inclusion of disqualified
    individuals in households receiving food stamp benefits
    compromises the integrity of the Food Stamp Program and results in
    overpayments. The four states we reviewed have processes in place
    to help ensure that their own disqualifications are imposed;
    however, certain practices, such as centralizing disqualification
    responsibilities, are more effective in ensuring that
    disqualifications are implemented promptly so that overpayments do
    not occur. While some states currently use national
    disqualification information obtained from the DRS to ensure that
    individuals disqualified by other states do not participate in
    their programs, the current effort by FNS to offer
    disqualification information through an on-line query system will
    provide states with a quicker means to access more timely data. A
    match between a national food stamp participation database,
    currently under a feasibility study, and the DRS database, is
    another means by which FNS could notify states of disqualified
    participants. However, for the DRS data to be most useful to
    states, FNS must take actions to ensure that they are complete, up
    to date, and accurate. Page 15                       GAO/RCED-99-
    180 Disqualified Food Stamp Participants B-282612 Recommendations
    to      In order to ensure the integrity of the Food Stamp Program
    by preventing the Secretary of        disqualified participation
    without imposing significant additional program costs to achieve
    this goal, we recommend that the Secretary of Agriculture
    Agriculture             direct the Administrator of FNS to *
    collect, analyze, and disseminate state agencies' "best practices"
    to help ensure timely action on disqualifications; * require
    states to use the national database to determine the
    disqualification status of applicants, using the method that each
    deems most appropriate to its circumstances; * consider, as part
    of its study on the feasibility of creating a national database to
    track participation in federal means-tested public assistance
    programs, a process for periodically matching the disqualification
    database and disseminating the resulting matches to the states;
    and * take actions to ensure that states provide the DRS with
    disqualification information in a consistent and timely manner,
    that the data in the DRS are accurate, and that sufficient
    controls are in place to ensure the accuracy of data submitted to
    the database. Agency Comments         We provided USDA with a copy
    of this report for review and comment. FNS, in commenting on the
    draft report for USDA, stated that the Service appreciated our
    work and substantially agreed with our findings. In commenting on
    our recommendation to collect, analyze, and disseminate state
    agencies' "best practices," FNS stated that resource constraints
    prohibit a formal "best practices" survey but that the Service
    will share, informally through regional offices, information about
    any state's DRS operations that FNS believes will be of benefit to
    other states. Regarding the recommendation to require states to
    use the national database to determine the disqualification status
    of applicants, FNS reiterated its commitment to publishing a
    proposed regulation by July 1, 2000, requiring states to use the
    national disqualification database to determine the
    disqualification status of applicants and/or recipients. To
    address the recommendation to consider the periodic matching of
    disqualification data in its study of the feasibility of a
    national participation database, FNS stated that its study would
    address whether it is feasible in a national database context for
    states to access and share disqualification data. Finally, in
    response to the recommendation to take actions to ensure that the
    DRS data are timely and accurate, FNS will more closely monitor
    states' data transmission reports and follow up with states Page
    16                        GAO/RCED-99-180 Disqualified Food Stamp
    Participants B-282612 whenever data are not timely transmitted,
    when the number of records transmitted appears low, or whenever a
    significant number of records are rejected or accepted with
    warnings. FNS' comments are provided in appendix IV. We also
    provided California, Illinois, Louisiana, and Texas State
    officials with excerpts from the draft report for their review and
    comment. The state officials substantially agreed with our
    findings and provided technical and clarifying comments that we
    incorporated into the report as appropriate. We conducted our work
    from August 1998 through April 1999 in accordance with generally
    accepted government auditing standards. Our detailed methodology
    is presented in appendix III. As agreed with your office, unless
    you publicly announce its contents earlier, we plan no further
    distribution of this report for 30 days. At that time, copies of
    this report will be sent to the Honorable Dan Glickman, Secretary
    of Agriculture; the Honorable Jacob J. Lew, Director, Office of
    Management and Budget; and other interested parties. We will make
    copies available to others on request. If you have any questions
    about this report, please contact me at (202) 512-5138. Major
    contributors to this report are listed in appendix V. Sincerely
    yours, Robert E. Robertson Associate Director, Food and
    Agriculture Issues Page 17                         GAO/RCED-99-180
    Disqualified Food Stamp Participants Contents Letter
    1 Appendix I
    20 Information on Food Stamp Program Participants and Benefits in
    Four States Appendix II
    21 Information on the Procedures and Criteria Used by States to
    Determine Intentional Program Violations Appendix III
    24 Objectives, Scope, and Methodology Appendix IV
    28 Comments From the Food and Nutrition Service, U.S. Department
    of Agriculture Page 18      GAO/RCED-99-180 Disqualified Food
    Stamp Participants Contents Appendix V
    31 GAO Contacts and Staff Acknowledgments Tables
    Table 1: Extent of Disqualified Participation, Calendar Year 1997
    5 Table I.1: The Food Stamp Program's Participants, Benefits, and
    20 Average Monthly Benefit per Participant by State, Fiscal Year
    1997 Table I.2: Number and Percentage of Active Disqualifications
    by                  20 State, Calendar Year 1997 Table II.1:
    Number of States Using Each Determination
    22 Procedure, Fiscal Year 1997 Table II.2: Percentage of
    Determinations by Procedure for Four                   22 States,
    Fiscal Year 1997 Abbreviations DRS          Disqualified Recipient
    Subsystem FNS          Food and Nutrition Service GAO
    General Accounting Office IPV          intentional program
    violation TANF         Temporary Assistance for Needy Families
    USDA         U.S. Department of Agriculture Page 19
    GAO/RCED-99-180 Disqualified Food Stamp Participants Appendix I
    Information on Food Stamp Program Participants and Benefits in
    Four States In fiscal year 1997, California, Illinois, Louisiana,
    and Texas accounted for about 28 percent of Food Stamp Program
    participants nationwide and 29 percent of benefits issued, as
    shown in table I.1. Table I.1: The Food Stamp Program's
    Participants, Benefits, and Average    Costs and participants in
    millions Monthly Benefit per Participant by
    Average monthly State, Fiscal Year 1997
    Food stamp               benefit per State
    State participants                   benefits          participant
    California                                       2.8
    $2,372              $70.21 Illinois
    1.0                      933                76.28 Louisiana
    0.6                      512                74.18 Texas
    2.0                     1,765               72.30 Total
    6.4                    $5,582 Program total
    22.9                 $19,548                $71.27 Source: U.S.
    Department of Agriculture's Food and Nutrition Service. These four
    states accounted for approximately 19 percent of all the
    disqualifications that were in effect during any part of calendar
    year 1997, as shown in table I.2. Table I.2: Number and Percentage
    of Active Disqualifications by State,
    Number of active Percentage of total active Calendar Year 1997
    State                                         disqualifications
    disqualifications California
    8,318                                7 Illinois
    2,548                                2 Louisiana
    3,295                                3 Texas
    8,152                                7 Total
    22,313                                19 Program total
    118,921                               100 Source: U.S. Department
    of Agriculture's Food and Nutrition Service. Page 20
    GAO/RCED-99-180 Disqualified Food Stamp Participants Appendix II
    Information on the Procedures and Criteria Used by States to
    Determine Intentional Program Violations Food stamp regulations
    require that a state agency pursue administrative disqualification
    or referral for prosecution when it has sufficient documentary
    evidence to substantiate that a participant has intentionally
    violated the program's regulations. Intentional program violations
    include (1) making a false or misleading statement or
    misrepresenting, concealing, or withholding facts and (2)
    disobeying the Food Stamp Act, Program Regulations, or any state
    statute relating to the use, presentation, transfer, acquisistion,
    receipt, or possession of food stamp coupons or authorization-to-
    participate cards. Food stamp regulations specify four procedures
    that states may use to determine intentional program violations. *
    Administrative disqualification hearings, which provide
    individuals suspected of an intentional program violation the
    opportunity to present evidence to a hearing officer, who then
    renders a ruling as to whether an intentional program violation
    was committed. * Waived hearings, which allow individuals to waive
    their right to an administrative disqualification hearing and
    accept the disqualification penalty. * Court referrals, which
    allow the state to refer appropriate cases for prosecution by a
    federal or state court and impose a disqualification penalty if
    the individual is found guilty of an intentional program
    violation.1 * Deferred adjudication, through which, states can
    allow accused individuals to sign disqualification consent
    agreements to avoid prosecution and accept the disqualification
    penalty. States are required to establish a system for conducting
    administrative disqualification hearings. However, FNS may exempt
    a state from this requirement if the state agency has already
    entered into an agreement with the state's attorney general's
    office or county prosecutors for the prosecution of intentional
    program violation cases. Waived hearings and deferred adjudication
    procedures are optional for states. During fiscal year 1997, at
    least 46 of the 53 participating states used administrative
    disqualification hearings, waived hearings, and court 1Food stamp
    regulations require states that are exempted from conducting
    administrative hearings to refer cases for prosecution in
    accordance with an agreement with prosecutors or state law. The
    agreement must include the understanding that prosecution will be
    pursued in cases where appropriate. The agreement must include
    information on how and under what circumstances cases will be
    accepted for possible prosecution and any other criteria set by
    the prosecutor for accepting cases for prosecution, such as a
    minimum amount of overissuance that resulted from the intentional
    program violation. Page 21
    GAO/RCED-99-180 Disqualified Food Stamp Participants Appendix II
    Information on the Procedures and Criteria Used by States to
    Determine Intentional Program Violations referrals; just over half
    used deferred adjudication procedures.2 (See table II.1.) Most
    states used three or all four procedures to disqualify individuals
    from the program; a few use only one or two procedures, such as
    Delaware, which relied entirely on court referrals to disqualify
    individuals during fiscal year 1997. Table II.1: Number of States
    Using Each Determination Procedure, Fiscal    Procedure
    Number of states using procedure Year 1997
    Administrative disqualification hearings
    47 Waived hearings
    46 Court referrals
    47 Deferred adjudication
    28 Source: U.S. Department of Agriculture's Food and Nutrition
    Service. The four states in our review-California, Illinois,
    Louisiana, and Texas-differed in the procedures each used to
    determine intentional program violations. (See table II.2.)
    Illinois, Louisiana, and Texas used administrative
    disqualification hearings or waived hearings for most of their
    disqualifications, while California primarily used court referrals
    or deferred adjudication. Table II.2: Percentage of Determinations
    by Procedure for Four                           Administrative
    States, Fiscal Year 1997
    disqualification               Waived
    Deferred State                           hearings
    hearings Court referrals              adjudication California
    2                    0                  86                   12
    Illinois                              47                   47
    7                       0 Louisiana                             54
    39                     5                       2 Texas
    42                   39                   11
    8 Note: Rows may not add up to 100 percent because of rounding.
    Source: U.S. Department of Agriculture's Food and Nutrition
    Service. Because federal regulations allow prosecutors to
    establish criteria for accepting cases for prosecution in their
    agreements with state agencies, we found that the criteria
    differed from state to state, and even from county to county
    within states. According to state agency officials, Louisiana
    prosecutors accept cases if the overissuance involved is greater
    than $1,000 or particularly flagrant, and Texas prosecutors accept
    cases involving overissuances in excess of $1,500. According to
    agency officials 2For convenience, we used the term "states" to
    include the District of Columbia and the territories of Guam and
    the Virgin Islands. Page 22
    GAO/RCED-99-180 Disqualified Food Stamp Participants Appendix II
    Information on the Procedures and Criteria Used by States to
    Determine Intentional Program Violations in Illinois, the level of
    overpayment required to prosecute an intentional program violation
    case varies from county to county-from a low of about $3,500 to a
    high of $10,000 in the Cook County (Chicago) area. Similarly,
    agency officials in California told us that the Los Angeles County
    prosecution threshold is $2,000, while the threshold in
    neighboring Orange County is $1,000 or lower if the intentional
    program violation is particularly blatant or by a repeat offender.
    Page 23                            GAO/RCED-99-180 Disqualified
    Food Stamp Participants Appendix III Objectives, Scope, and
    Methodology To determine how many individuals were included as
    members of food stamp households while disqualified from the Food
    Stamp Program and to estimate the value of the benefits that were
    improperly issued to those households, we matched the food stamp
    records of four selected states against the U.S. Department of
    Agriculture's (USDA) Disqualified Recipient Subsystem (DRS)
    database of individuals disqualified from the Food Stamp Program.
    California, Illinois, and Texas were among the top five states in
    participation and benefit issuance in fiscal year 1997; Louisiana
    provides balance as a smaller state that disqualifies individuals
    roughly in proportion to its participation rate. We obtained state
    and USDA data as follows: * State welfare agencies in Illinois,
    Louisiana, and Texas provided us with computer files containing
    information on all members of households and the amount of food
    stamp benefits issued to those households during calendar year
    1997. The data provided personal identifiers, including name,
    Social Security number, date of birth, gender, and the months in
    which food stamp benefits had been issued to the household while
    each individual was a member. The state agencies had verified the
    Social Security numbers for the data on food stamp beneficiaries
    through Social Security Administration's Enumeration Verification
    System. * In California, where issuance data are maintained at the
    county level, we used the state's eligibility information in lieu
    of the issuance data for our match. The data provided the same
    personal identifiers as provided by the other states and the
    months of eligibility for each individual. On the basis of our
    analysis of two counties, we determined that eligibility was
    predictive of participation.1 * USDA provided us with a copy of
    its DRS database, which contains information on individuals
    disqualified by all states, districts, and territories. The data
    provided the same personal identifiers as obtained for food stamp
    beneficiaries and listed the start date and length of
    disqualification in months for each individual. We matched the
    verified Social Security numbers of members of food stamp
    households in each state with those of individuals who were
    disqualified for any period during calendar year 1997. For those
    1In a match between state eligibility information and the Los
    Angeles County and Orange County, California, food stamp issuance
    information for calendar year 1996, we found that more than 89 and
    75 percent of the eligible individuals participated, respectively.
    Using Orange County's issuance information for calendar year 1997,
    we found that more than 74 percent of the eligible individuals
    participated. On the basis of the 1996 results and the similarity
    of Orange County's 1996 and 1997 results, we believe that
    eligibility is predictive of issuance. Page 24
    GAO/RCED-99-180 Disqualified Food Stamp Participants Appendix III
    Objectives, Scope, and Methodology disqualified individuals
    identified as members of households, we determined the months in
    which food stamp issuance occurred after the date of
    disqualification and prior to the end of the disqualification
    period. We estimated the dollar value of food stamps issued to
    households with disqualified members by applying the state's
    average monthly issuance per individual recipient from 1997 to
    each period in which issuance occurred. Food stamp benefits are
    calculated for households-not for individuals. Thus, it is
    difficult to determine the exact value of benefits issued to an
    individual included in a household, unless he or she is the only
    member of a household. Even then, the amount will vary from
    individual to individual, on the basis of such factors as income,
    assets, and the cost of shelter. Therefore, we relied on the
    average monthly benefit issued per person in the locations we
    reviewed, which ranged from a high of $76 in Illinois to a low of
    $70 in California. We realize that the actual issuance may be
    higher or lower than our estimates; for example, the maximum
    issuance to single-member households who are included in our
    findings was $120 in fiscal year 1997. Our estimates are intended
    to show the general magnitude of the problem and cannot be used to
    estimate potential overpayments nationwide because our methodology
    was not designed for that purpose. We considered every month of
    issuance to households that included disqualified members to be an
    overpayment, in keeping with food stamp regulations (7 C.F.R. ch.
    II, part 273.16), which specify that disqualifications be imposed
    beginning with the first month that follows the date that the
    household member receives written notification of the hearing
    decision. According to regulations (7 C.F.R. ch. II, part
    273.13(b)(7)), there is no requirement to allow additional time
    for notifying the household of an adverse action when a member is
    disqualified for an intentional program violation. Because of the
    quality control program operated by the Food and Nutrition Service
    and the states' ongoing quality assurance efforts, we accepted
    their computerized food stamp data identifying participants as
    reliable. To provide additional confidence in the data's accuracy,
    we reviewed a limited number of food stamp case files at social
    service centers in five large metropolitan areas: Los Angeles
    County and Orange County, California; Cook County, Illinois;
    Orleans Parish, Louisiana; and Bexar County, Texas. We compared
    the name, Social Security number, and date of birth of each
    individual in the computerized food stamp rolls with information
    in the relevant case files and found no significant differences.
    To further verify participation in the household, we reviewed Page
    25                               GAO/RCED-99-180 Disqualified Food
    Stamp Participants Appendix III Objectives, Scope, and Methodology
    copies of available documents in the case files, such as birth
    certificates, drivers' licenses, and Social Security cards. We
    also verified the periods of participation by reviewing approved
    applications, when available; however, many case files did not
    contain complete information. The Food and Nutrition Service has
    not conducted a comprehensive data assessment of the DRS because
    the agency's resources were committed to implementing and
    maintaining the system. Therefore, to determine the reliability of
    the disqualification data relevant to our review of four states,
    we reviewed a limited number of case files at the five social
    service centers mentioned previously to verify the disqualified
    individual's name, Social Security number, date of birth,
    disqualification start date, and length of disqualification. To
    supplement the case file information, we also obtained
    disqualification information from various other state agency
    sources, including centralized disqualification or fraud units,
    and from computerized state records. We found no significant
    differences, with the exception of DRS start dates for Texas
    disqualifications, which were off by 1 month because of a computer
    programming error by the state agency. To determine why
    disqualified individuals were improperly included in households
    and identify actions that USDA and state agencies can take to
    detect and prevent disqualified participation, we contacted state
    agency officials in Sacramento, California; Springfield, Illinois;
    Baton Rouge, Louisiana; and Austin, Texas, to discuss and review
    policy and procedures for disqualifying individuals and removing
    them from the food stamp rolls. We discussed the process for
    verifying applicants' data, as well as methods of fraud detection,
    computerized data-matching, and quality control and assurance,
    with state officials. In the five large metropolitan areas that we
    selected for review, we discussed local processes for ensuring
    that disqualified individuals are removed from the food stamp
    rolls. We discussed with state and local officials ways that their
    processes could be changed and improved to better detect and
    prevent disqualified participation. To determine how USDA can help
    states detect and prevent disqualified participation, we contacted
    USDA officials to determine what disqualification information is
    available to states, how that information is made available to
    states, and what states are receiving the information. To address
    data integrity issues that we identified during our review, we
    analyzed a computerized copy of the DRS database and other
    documentation that USDA provided us with to determine the
    timeliness, accuracy, and completeness of the data and discussed
    our findings with Page 26                               GAO/RCED-
    99-180 Disqualified Food Stamp Participants Appendix III
    Objectives, Scope, and Methodology USDA. We discussed with USDA
    officials the methods for ensuring that reliable disqualification
    data are readily available to states and that disqualified
    individuals do not participate in the program. Page 27
    GAO/RCED-99-180 Disqualified Food Stamp Participants Appendix IV
    Comments From the Food and Nutrition Service, U.S. Department of
    Agriculture Page 28      GAO/RCED-99-180 Disqualified Food Stamp
    Participants Appendix IV Comments From the Food and Nutrition
    Service, U.S. Department of Agriculture Page 29
    GAO/RCED-99-180 Disqualified Food Stamp Participants Appendix IV
    Comments From the Food and Nutrition Service, U.S. Department of
    Agriculture Page 30                            GAO/RCED-99-180
    Disqualified Food Stamp Participants Appendix V GAO Contacts and
    Staff Acknowledgments Robert Robertson (202) 512-5138 Keith Oleson
    (415) 904-2218 Acknowledgments    In addition to those named
    above, Brad Dobbins, Leo Acosta, Rod Moore, Donald Ficklin, Jerry
    Hall, Jonathan Silverman, and Oliver Easterwood made key
    contributions to this report. (150082)           Page 31
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