oversight

Food Stamps: Substantial Overpayments Result From Prisoners Counted as Household Members

Published by the Government Accountability Office on 1997-03-10.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                 United States General Accounting Office

GAO              Report to Congressional Committees




March 1997
                 FOOD STAMPS
                 Substantial
                 Overpayments Result
                 From Prisoners
                 Counted as Household
                 Members




GAO/RCED-97-54
                   United States
GAO                General Accounting Office
                   Washington, D.C. 20548

                   Resources, Community, and
                   Economic Development Division

                   B-275943

                   March 10, 1997

                   Congressional Committees

                   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. In fiscal year 1995, for example, the U.S.
                   Department of Agriculture (USDA) issued over $22 billion in food stamp
                   benefits for about 26 million individuals. In that same year, USDA reported
                   that approximately 15 percent of food stamp cases contained errors
                   resulting in as much as $1.7 billion in overpayments nationwide.

                   In this context, we examined the computerized records of inmates of
                   correctional institutions, who are ineligible for food stamps, to determine
                   whether they were being included as members of households receiving
                   food stamp benefits. The value of food stamp benefits that a household is
                   entitled to receive is partially determined by the number of eligible
                   household members. Prisoners are not to be counted as part of a
                   household when benefits are calculated. We determined (1) how many
                   prisoners were included as members of households that received food
                   stamp benefits (hereafter referred to as prisoner participation) and the
                   estimated value of improper benefits that were issued to the households,
                   (2) how prisoner participation could take place without detection, and
                   (3) whether computer matching can be an effective method for identifying
                   prisoner participation.

                   We conducted a computer match of the 1995 food stamp rolls with state
                   prison data in four states (California, Florida, New York, and Texas)1 and
                   with local jail data in four metropolitan areas (Los Angeles County,
                   California; Dade County, Florida; New York City, New York; and Harris
                   County, Texas).


                   Despite federal regulations prohibiting inmates of correctional institutions
Results in Brief   from participating in the Food Stamp Program, we identified 12,138
                   inmates in the areas we examined who were included in households
                   receiving food stamps. These households improperly collected an
                   estimated $3.5 million in food stamp benefits.


                   1
                    California food stamp data are limited to only those Los Angeles County participants who were on the
                   rolls as of August 1995. We conducted the computer match for the three states and Los Angeles
                   County. Together, these jurisdictions account for 27 percent of food stamp program participants
                   nationwide.



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             Prisoner participation goes undetected because agencies generally do not
             verify the information on household membership provided by food stamp
             applicants. Furthermore, according to officials in USDA’s Food Stamp
             Program, most state or local agencies responsible for administering the
             program do not routinely collect and review lists of individuals
             incarcerated in state and local facilities to determine whether any of these
             individuals are being counted as members of food stamp households.

             Given the program’s reliance on client-provided information, computer
             matching of lists of prisoners and food stamp household members
             provides a straightforward and potentially effective mechanism to
             accurately and independently identify prisoners’ participation. While
             states have implemented various computer matching routines—such as
             the Income and Eligibility Verification System, which compares data on
             welfare clients with data on state and federal wage and benefits—many
             states have not yet implemented a computer matching program to identify
             prisoners participating in the Food Stamp Program.


             The Food Stamp Program is designed to promote the general welfare and
Background   to safeguard the health and well-being of the nation’s population by raising
             the nutrition levels of low-income families. Recipients use their food
             stamp benefits to purchase allowable food products from authorized retail
             food merchants.

             Eligibility for food stamp benefits is determined on a household basis. A
             household can be either an individual or a family or other group that lives
             together and customarily purchases and prepares food in common. The
             value of food stamp benefits for a household is determined by the number
             of eligible household members and their income, adjusted for assets and
             such costs as shelter and utilities. The household’s monthly food stamp
             allotment increases with each additional member, provided income limits
             are not exceeded. Household members who are incarcerated and fed by a
             correctional facility are not eligible for food stamp benefits and are not to
             be included in the household for purposes of calculating the food stamp
             benefit. Households that receive food stamps are required to report
             changes in household membership, such as a member’s incarceration, to
             the administering state or local agency.

             Within USDA, the Food and Consumer Service (FCS) administers the Food
             Stamp Program through agreements with state agencies. FCS is responsible
             for approving state plans for operation and ensuring that the states are



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administering the program in accordance with regulations. States are
required to establish a performance reporting system to monitor the
program, including a quality control review process to help ensure that
benefits are issued only to qualifying households and that the benefit
amounts are correct. State agencies are responsible for imposing penalties
for violations of program requirements and for recovering food stamp
overpayments.2

The program is administered at the local level by either a state agency or a
local welfare agency, depending on the state. In California, county
agencies operate the program at the local level, while in New York State,
districts operate the program. The state agency supervises operations in
both states. In Florida and Texas, state agencies operate the program
through district and regional offices, respectively. Whatever the
administering authority, local service centers work directly with clients to
certify household eligibility and determine benefit amounts at the time of
application and at least annually thereafter.

To identify prisoner participation, we performed a computer match
comparing 1995 food stamp rolls with inmate rolls. To ensure that our
analyses resulted in valid matches, we (1) verified the prisoners’ social
security numbers through the Social Security Administration’s verification
system, (2) used only those matches showing dates of incarceration that
coincided with the dates that food stamp benefits were issued to the
household, and (3) used only those matches showing that the prisoner had
been incarcerated for at least a full month and that sufficient time had
elapsed for the household to notify the state of the change and for the
state to take action.3 The food stamp rolls covered three large states
(Florida, New York, and Texas) and one large county (Los Angeles,
California). (See app. I.) The inmate rolls covered the state prison
population in the four states and the jail population in large metropolitan
areas of each state, that is, Los Angeles County, California; Dade County,
Florida; New York City, New York; and Harris County, Texas. Our detailed
methodology is discussed in appendix II.




2
 The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 doubled the
disqualification period for intentional program violations from 6 months to one year for the first
violation, and from one year to 2 years for the second violation.
3
 Program regulations generally give a household 10 days to notify the state of changes in household
composition and the state 10 days from the date of notification to adjust benefits.



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                                  During calendar year 1995, about $3.5 million in food stamp benefits were
Prisoners Included as             issued on behalf of state prison and county jail inmates claimed as
Household Members                 household members in the locations we examined. (See table 1.) Of this
Cost Millions in                  total, nearly 9,500 state prison inmates included as household members
                                  accounted for an estimated $2.6 million in benefits. About 2,700 county jail
Overpayments                      inmates accounted for over $900,000 in benefits.

Table 1: Months of Prisoner
Participation and Estimated       Dollars in thousands
Overpayments, by Prison or Jail                                                Total inmate         Months of           Estimated
System                            Jurisdiction examined                        participants      participationa     overpayments
                                  State prison system
                                  California b                                           913               2,814                  $194
                                  Florida                                              1,167               4,523                   353
                                  New York                                             1,670               7,445                   587
                                  Texas                                                5,690              20,081                  1,470
                                  County jail system
                                  Los Angelesb                                           277                 494                     34
                                  Dade                                                 1,712               9,450                   738
                                  New York City                                          604               1,700                   134
                                  Harris                                                 105                 267                     19
                                  Total                                               12,138              46,774              $3,529
                                  a
                                   Months of participation is the number of months for which households received benefits while
                                  household members were in prison.
                                  b
                                   Includes only the Los Angeles County food stamp recipients who were on the rolls as of
                                  Aug. 1995.

                                  Sources: For California, California Department of Corrections and Los Angeles County
                                  Department of Public Social Services; for Florida, Florida Department of Corrections and Florida
                                  Department of Health and Rehabilitative Services; for New York State, New York State Department
                                  of Correctional Services and New York State Department of Social Services; for Texas, Texas
                                  Department of Criminal Justice and Texas Department of Health Services; and USDA’s Food and
                                  Consumer Service.



                                  The inmate participants that we identified in our match were members of
                                  households of varying sizes, some with multiple members and some with a
                                  single member—the prisoner was the household. For households with
                                  multiple members, the household continued to receive its monthly
                                  benefits, which were calculated on the presumption that the prisoner was
                                  present in the home. For single-member households, someone other than
                                  the prisoner was issued the benefits. The stamps could have been issued




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                       B-275943




                       either to a person designated as the prisoner’s authorized representative4
                       or to someone who fraudulently represented himself or herself as the
                       prisoner to receive the benefits.

                       Food stamp benefits are issued either as coupons or via electronic benefit
                       transfer systems. For coupons, issuance procedures require that the client
                       presents various items of identification, such as Food Stamp Program
                       cards bearing the client’s signatures, in order to pick up food stamps from
                       a service center or other outlet. A small number of clients receive their
                       coupons through the mail. Under electronic benefit transfer systems, the
                       state agency issues access cards (similar to credit cards) and personal
                       identification numbers to clients who obtain benefits through point-of-sale
                       terminals in stores. However, the effectiveness of the issuance procedures
                       to ensure that only eligible participants receive benefits depends on how
                       rigorously the procedures are implemented by the responsible staff.


                       Prisoners are able to participate in the Food Stamp Program because local
Lack of Verification   welfare agencies seldom verify the composition of a household. Instead,
Allows Prisoner        most agencies rely on food stamp applicants to provide accurate
Participation to Go    household information and to report subsequent changes, such as the
                       incarceration of a household member. Most agencies do not, for example,
Undetected             routinely compare lists of prison or jail inmates with lists of household
                       members.

                       In general, the Food Stamp Program has to balance the issues of client
                       convenience, administrative simplicity, and payment accuracy;
                       consequently, controls over such eligibility factors as household
                       composition are not rigorous. A household that wishes to receive benefits
                       must present an application listing members and provide information
                       about their income and other eligibility factors. Caseworkers review this
                       information, interview a household representative, and certify eligibility.5
                       In addition, they recertify the household at least annually. However, at no
                       time are all household members required to appear and present
                       identification. Furthermore, clients are responsible for identifying changes
                       in household composition.6

                       4
                        All food stamp clients have the right when they apply to specify an authorized representative to act on
                       the their behalf, including receiving their stamps.
                       5
                        Sometimes the caseworker fills out the application on the basis of the interview.
                       6
                        Almost all households in California must submit monthly change reports. Households in Florida and
                       Texas are required to report changes in circumstances, including changes in household composition,
                       within 10 days of becoming aware of the change. Households with earned income in New York State
                       must report changes quarterly; all others must report within 10 days of a change.



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According to FCS’ 1995 quality control review, which identified error rates
for each state by reviewing a random sample of cases, client errors or
misrepresentations contributed significantly to incorrect benefits,
particularly when an overpayment occurred. FCS reported that
overpayments occurred in about 15 percent of the cases reviewed
nationwide and that 62 percent of the dollar value of overpayments was
attributable to inaccuracies in client-provided information.

Nevertheless, FCS’ regulations do not require verification of client-provided
information on household composition, unless the caseworker deems the
information “questionable.” The regulations allow each state agency to
develop guidance for identifying questionable information. In the states we
visited, the guidance defined questionable information as applicants’
statements that were contradictory or did not agree with information that
was in the case record or otherwise available to the caseworker.

When the caseworkers in the states we visited suspected fraudulent
information, they could refer the application to investigators before
granting aid. Investigators in each state told us that they attempted to
verify questionable information on household composition by visiting
homes and making collateral contacts to confirm information with friends,
neighbors, or landlords. According to the investigators, these techniques
were hit-or-miss, time-consuming, and costly undertakings, and provided
information that was only as reliable as its source. Furthermore,
investigative resources were generally very limited; for example, the
Miami area, which contains about 26 percent of Florida’s food stamp
recipients, had just one field investigator to conduct household visits.

Some agencies have employed computer matching as a means of
identifying ineligible recipients, such as prisoners, but the practice does
not appear to be widespread. According to FCS, four states (Florida,
Massachusetts, Missouri, and New York) currently perform a monthly
computer match between state prisons’ inmate records and food stamp
rolls; two states were in the process of developing such a match; and one
state performed an annual match. FCS’ regional offices identified only one
local agency that compared food stamp recipients with county jail
inmates. However, our discussions with officials in the states we visited
indicated that the actual number of local agencies conducting such
matches was larger. For example, in California, the state agency reported
that 14 of the state’s 58 county agencies collected and reviewed data on
local jails’ inmates at least once a week.




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                         Of the states we visited, Florida and New York operated matching
                         programs, Texas was in the process of establishing a program, and
                         California had plans to implement a program at some future date. While
                         Florida and New York conduct routine matching programs, we identified
                         prisoner participation in the Food Stamp Program in these states because
                         (1) our matches covered a time period not covered by the states’ matches
                         and (2) we used prisoners’ social security numbers, which were verified by
                         the Social Security Administration, a step the states had not taken.


                         Although computer matching of inmate data is not used often, our test in
Computer Matching        four states demonstrates that it can be a useful technique for identifying
Represents a             households that improperly include prisoners as members. A study by an
Potentially Effective    FCS contractor of other computerized information verification processes in
                         place at state agencies demonstrated that such matches are cost-effective,
Tool for Detecting       particularly when properly targeted.7 Ongoing and developing state
Prisoner Participation   matching programs could benefit from use of targeted matching and from
                         sharing experiences.

                         Officials in the four states we visited viewed the matching of prisoner data
                         with food stamp data as a fairly straightforward, effective process. These
                         officials said that they did not encounter or foresee any privacy issues that
                         precluded such matching. Furthermore, while they were unable to provide
                         detailed cost or savings information regarding their prison match
                         programs, the two states we visited that had implemented such programs
                         believed that they were beneficial. New York State did not track
                         implementation costs but calculated savings in the Food Stamp Program
                         of over $900,000 from August 1995 to April 1996. Because Florida was
                         legislatively mandated to implement computer prison matches, the cost of
                         implementation was not a major concern and therefore was not tracked.
                         Florida has yet to calculate savings in the Food Stamp Program.

                         Although detailed data supporting the cost-effectiveness of a computer
                         prison match is not available from the states we visited, strong evidence
                         exists that such a match, particularly when properly targeted, is
                         cost-effective. The Income and Eligibility Verification System (IEVS)
                         compares wage, benefit, and other payment information reported by food
                         stamp clients with records in six databases, including those maintained by
                         the Social Security Administration, the Internal Revenue Service, and state
                         unemployment insurance agencies. After this matching program was

                         7
                         The Income and Eligibility Verification System (IEVS) Targeting Demonstration, Findings and
                         Guidelines for State Food Stamp IEVS Programs, Final Report, USDA, Food and Consumer Service,
                         Office of Analysis and Evaluation, Apr. 1, 1995.



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implemented, some caseworkers charged that much of the information
provided in the IEVS matches did not lead to savings in the Food Stamp
Program. The problems most often cited were (1) out-of-date information,
(2) lack of agreement in the time periods covered by data sources, and
(3) duplicate data.

In response, in 1991, FCS engaged a contractor to evaluate the
cost-effectiveness of the IEVS system in two sample states, Arizona and
Michigan. Various targeting criteria, such as beneficiaries over a specific
age or matches when specific dollar thresholds were exceeded, were used
to select cases for follow-up. All of the targeted IEVS matching programs
reviewed in the study were found to be cost-effective. The study
determined that the largest cost of the IEVS matching program is the time
spent by caseworkers on follow-ups, approximately $5 to $7 per follow-up.
Data-processing costs averaged 2 cents per case, and Arizona spent
approximately $104,000 to develop its software. Every match had a
cost-effectiveness ratio (program savings compared with the costs of the
match, targeting, follow-up and claims collection) greater than 1,
indicating that every dollar spent on IEVS returned more than a dollar in
savings to the program. In addition, each match was found to have positive
net savings for the program, with the more narrowly targeted matches
yielding the largest net savings, since they focused follow-up actions on
the more egregious situations.

The states we visited were implementing their prison matches in a manner
that was very similar to that reported in the study. Matches were sent to
local offices, where caseworkers, specialists, clerical staff, and fraud
investigators could participate in the process. The case file information
was reviewed, the client was contacted, and the discrepancy was verified
or refuted. If the discrepancy was verified, the client’s eligibility and
benefits were redetermined and, as appropriate, overpayments could be
recovered and fraud investigations conducted.

Our test showed that developing the computer programs to identify
prisoner participation did not require a large investment of a
programmer’s time. Our programmer required an average of about 20 days
to develop a series of substantially different programs for each state. The
20 days included time to become familiar with the data as well as to write,
test, and execute the programs. State programmers may require less time
because they are already familiar with the food stamp data.




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                                        As in the IEVS study, we used some targeting criteria to enhance the
                                        effectiveness of the matching process. Before using the inmate data, we
                                        sent the information to the Social Security Administration for verification
                                        of the prisoners’ social security numbers (the identifier common to all
                                        major federal databases on individuals) to ensure that our cases did not
                                        include incorrect numbers that would render the match invalid. None of
                                        the states we visited with computer matching programs submitted inmate
                                        social security numbers to the Social Security Administration for
                                        verification. (The agency performs this service for government customers
                                        at no charge.) We matched only those social security numbers that had
                                        been verified by the Social Security Administration. (See app. III.) The
                                        majority of the inmate participants we identified in our match occurred as
                                        a result of the verification process. (See table 2.)

Table 2: Total Prisoner Participation
and Participants Identified From                                                               Participants              Percentage of
Corrected Social Security Numbers                                                           identified from                participants
Provided by the Social Security                                        Total inmate              corrected              identified from
Administration                          State prison system            participants               numbers           corrected numbers
                                        Californiaa                               913                    348                         38.1
                                        Florida                                 1,167                    283                         24.3
                                        New York                                1,670                    746                         44.7
                                        Texas                                   5,690                  4,473                         78.6
                                        Total                                   9,440                  5,850                         62.0
                                        a
                                         Includes only the Los Angeles County food stamp recipients who were on the rolls as of
                                        Aug. 1995.

                                        Sources: For California, California Department of Corrections and Los Angeles County
                                        Department of Public Social Services; for Florida, Florida Department of Corrections and Florida
                                        Department of Health and Rehabilitative Services; for New York State, New York State Department
                                        of Correctional Services and New York State Department of Social Services; and for Texas, Texas
                                        Department of Criminal Justice and Texas Department of Health Services.



                                        By selecting only prisoners (1) whose dates of incarceration matched the
                                        dates that food stamp benefits were issued to their household and (2) who
                                        had been incarcerated at least a full month, we avoided some of the pitfalls
                                        that have been or could be encountered by states implementing matching
                                        programs. For example, case analysts in Florida told us that they could not
                                        take any action on many of their matches because the prisoners had been
                                        incarcerated for only a few days or benefits had not actually been issued
                                        to the household during the period the prisoner was incarcerated. In other
                                        cases, an unverified social security number in the prison records resulted
                                        in a match with an eligible food stamp recipient. Our analysis of results
                                        reported from Florida’s match of June 1996 for Dade County indicates that



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                  of 674 matches, 423 resulted in no action taken by the caseworker; for 41
                  matches, the record did not indicate any review. On the positive side, 210
                  matches resulted in a case closure (household dropped from Food Stamp
                  Program), removal of the participant from a case (individual dropped from
                  household membership and benefits recalculated), a referral for fraud, or
                  some combination of those actions. Florida officials acknowledged
                  weaknesses in their matching process and stated that they intend to
                  review and improve the process to better identify cases for which
                  caseworkers could take action.

                  The states we visited that had or were developing matches were acting
                  with little or no knowledge of the matching efforts of other states. As a
                  result, each state started without any information, rather than building on
                  the experiences of others. Thus, any cost or time savings that could have
                  arisen from the sharing of information were not realized.


                  The participation of ineligible individuals undermines the credibility of the
Conclusions       Food Stamp Program and results in overpayments. Conventional methods
                  state agencies have used to verify the membership of food stamp
                  households have not prevented households from including ineligible
                  individuals, such as inmates in local jails and state prisons. Prisoners’
                  participation in the Food Stamp Program resulted in overpayments of
                  $3.5 million for the locations where we conducted matches. A computer
                  match of data on states’ food stamp participants and verified inmates
                  could be a cost-effective method for identifying a prisoner’s participation
                  in a food stamp household and thus provide the evidence needed to
                  remove the prisoner from the calculation of a household’s eligibility and
                  benefits. Some states have recognized that matching is a cost-effective
                  way to reduce overpayments. Sharing of information on effective matching
                  practices, such as methods of targeting the most productive cases, would
                  benefit states.


                  To identify state and county prisoners who are included as members of
Recommendations   households receiving food stamps, we recommend that the Secretary of
                  Agriculture actively encourage states to implement periodic computer
                  matches of data on state and local prison inmates with data on
                  participants in the Food Stamp Program. To facilitate this effort, we
                  recommend that the Secretary of Agriculture direct FCS to (1) collect from
                  the states that conduct matches information on the policies and
                  procedures used to implement their matches and (2) evaluate, summarize,



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                  and disseminate to the states the policies and procedures that represent
                  best practices, such as the verification of prisoners’ social security
                  numbers with the Social Security Administration.


                  We provided copies of a draft of this report to FCS for review and
Agency Comments   comment. In commenting on the draft report, FCS agreed with the report’s
                  findings, conclusions, and recommendations. These comments, which
                  appear as appendix IV, contained suggestions regarding the phrasing used
                  in the report that we incorporated as appropriate.


                  We conducted our work from March 1996 through February 1997 in
                  accordance with generally accepted government auditing standards. Our
                  detailed methodology is presented in appendix II.

                  We are providing copies of this report to appropriate congressional
                  committees, interested Members of Congress, and other interested parties.
                  We will also 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.




                  Robert A. Robinson
                  Director, Food and
                    Agriculture Issues




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List of Addressees

The Honorable Richard G. Lugar
Chairman
The Honorable Tom Harkin
Ranking Minority Member
Committee on Agriculture, Nutrition,
  and Forestry
United States Senate

The Honorable Thad Cochran
Chairman
The Honorable Dale Bumpers
Ranking Minority Member
Subcommittee on Agriculture, Rural Development,
  FDA, and Related Agencies
Committee on Appropriations
United States Senate

The Honorable Robert F. (Bob) Smith
Chairman
The Honorable Charles W. Stenholm
Ranking Minority Member
Committee on Agriculture
House of Representatives

The Honorable Joe Skeen
Chairman
The Honorable Marcy Kaptur
Ranking Minority Member
Subcommittee on Agriculture, Rural Development,
  FDA, and Related Agencies
Committee on Appropriations
House of Representatives




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Page 13   GAO/RCED-97-54 Prisoner Participation in Food Stamp Program
Contents



Letter                                                                                                 1


Appendix I                                                                                            16

Information on the
Cost of Food Stamp
Benefits and State
Prison Population
Appendix II                                                                                           17

Objectives, Scope,
and Methodology
Appendix III                                                                                          20

Social Security
Administration’s
Verification Process
Significantly
Increased the Number
of Valid SSNs
Appendix IV                                                                                           21

Comments From the
U.S. Department of
Agriculture
Appendix V                                                                                            23

Major Contributors to
This Report
Tables                  Table 1: Months of Prisoner Participation and Estimated                        4
                          Overpayments, by Prison or Jail System




                        Page 14               GAO/RCED-97-54 Prisoner Participation in Food Stamp Program
Contents




Table 2: Total Prisoner Participation and Participants Identified              9
  From Corrected Social Security Numbers Provided by the Social
  Security Administration
Table I.1: 1995 Food Stamp Program Benefit Cost and State                     16
  Prison Population for Selected Locations
Table III.1: Results of the EVS’ Social Security Number                       20
  Validation, by State




Abbreviations

EVS        Enumeration Verification System
FCS        Food and Consumer Service
IEVS       Income Eligibility Verification System
SSN        Social Security Number
USDA       U.S. Department of Agriculture


Page 15               GAO/RCED-97-54 Prisoner Participation in Food Stamp Program
Appendix I

Information on the Cost of Food Stamp
Benefits and State Prison Population

                                     Nationwide, California, Florida, New York, and Texas represent almost
                                     36 percent of the cost of Food Stamp Program benefits and approximately
                                     39 percent of the states’ prison population. The prison data in this table
                                     are based on the prison population as of June 30, 1995.

Table I.1: 1995 Food Stamp Program
Benefit Cost and State Prison        Location                           Food stamp benefit cost          State prison population
Population for Selected Locations    California                                    $2,472,936,680                          131,342
                                     Florida                                         1,307,134,257                          61,992
                                     New York                                        2,065,406,076                          68,526
                                     Texas                                           2,246,359,764                         127,092
                                     Total                                         $8,091,836,777                          388,952
                                     U.S. total                                   $22,766,109,338                        1,004,608
                                     Sources: U.S. Department of Agriculture’s Food and Consumer Service and the Department of
                                     Justice.




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Appendix II

Objectives, Scope, and Methodology


                  In response to the Congress’ strong interest in reducing the level of fraud,
                  waste, and abuse in the Food Stamp Program, we reviewed food stamp
                  beneficiaries to determine whether prisoners, who are not eligible for food
                  stamps, were inappropriately included as members of households
                  receiving food stamps. Specifically, we determined (1) how many
                  prisoners were included as members of households that received food
                  stamp benefits and the estimated value of improper benefits that were
                  issued to the households, (2) how prisoner participation could take place
                  without detection, and (3) whether computer matching can be an effective
                  method for identifying prisoner participation.

                  To determine if inmates of correctional facilities were included as
                  members of households that received food stamp benefits, and the
                  estimated value of benefits that were issued to the households, we
                  matched the food stamp records and state prison records of the four states
                  with the largest Food Stamp Program benefits and the largest state prison
                  populations. We also matched food stamp records and jail records in four
                  metropolitan areas. Specifically:

              •   The Florida, New York, and Texas state welfare agencies provided us with
                  computer files containing information on all members of households and
                  the amount of household food stamp benefits issued during 1995. In
                  California, this information is maintained only at the county level, so we
                  obtained information only for Los Angeles County beneficiaries, who
                  account for approximately one-third of the benefits California issues. The
                  data provided personal identifiers, including name, social security number
                  (SSN), date of birth, gender, and the months in which food stamp benefits
                  had been issued to the household of which each individual was a member.
                  The state agencies had verified the SSNs for the data on food stamp
                  beneficiaries through the Social Security Administration’s Enumeration
                  Verification System (EVS).
              •   The state prison system in each state provided us with computer data on
                  all prisoners incarcerated in a state facility for all or any part of 1995. The
                  data provided the same personal identifiers as we obtained for food stamp
                  beneficiaries and listed the admission and release dates for each period of
                  incarceration during the year. To expedite the delivery of data, New York
                  State simply listed each full month that a prisoner was incarcerated rather
                  than providing specific dates. We verified the prisoners’ SSNs through the
                  Social Security Administration’s verification system.
              •   Four large metropolitan county or local jail systems gave us permission to
                  use data they had previously provided on our review of erroneous




                  Page 17                 GAO/RCED-97-54 Prisoner Participation in Food Stamp Program
Appendix II
Objectives, Scope, and Methodology




Supplemental Security Income payments to prisoners.1 The systems,
including one from each state in our review, were Los Angeles County,
California; Dade County, Florida; New York City, New York; and Harris
County, Texas. The local jail system data included all prisoners who were
incarcerated as of specific dates—these dates were selected by the jail
systems and were based on their available resources. The jail systems
provided available personal identifiers, as listed above, and the date of
incarceration. The jail inmates’ SSNs had been verified by the Social
Security Administration’s verification system during our previous review.

We matched the verified SSNs of prisoners in each state or local prison
with the verified SSNs in the states’ records of membership in food stamp
households. For those prisoners identified as members of households, we
determined the periods in which food stamp issuance and incarceration
coincided. We estimated the dollar value of food stamps issued to
households with participating prisoner members by applying the state’s
average monthly issuance per individual recipient from 1995 to each
period where incarceration and issuance coincided. Food stamp benefits
are calculated for households, not for individuals. As such, it is difficult to
determine the exact value of benefits issued to a prisoner participating in a
household, unless he or she is the only member of a household. Even then,
the amount will vary from individual to individual, depending on factors
such as income, assets, and the cost of shelter. Therefore, we relied on the
average monthly benefit issuance per person in the locations we reviewed,
which ranged from a high of $78.84 in New York State to a low of $68.89 in
Los Angeles County.

In recognition of the notification and processing time frames that allow 10
days for clients to report household changes and 10 days for the state
agency to take action, we did not consider any issuance in the month of
incarceration to be an overpayment. Furthermore, if a prisoner was
admitted on or after the tenth day of the month, we did not consider
issuance in the following month to be an overpayment. We prorated the
average monthly issuance to determine the overpayment for days
incarcerated in the month of discharge.

Because of the quality control program operated by USDA’s Food and
Consumer Service (FCS) and the states’ ongoing quality assurance efforts,
we accepted the computerized food stamp data as reliable. The prison
data, such as dates of incarceration and release, would have been very


1
 Supplemental Security Income: SSA Efforts Fall Short in Correcting Erroneous Payments to Prisoners
(GAO/HEHS-96-152, Aug. 30, 1996).



Page 18                       GAO/RCED-97-54 Prisoner Participation in Food Stamp Program
Appendix II
Objectives, Scope, and Methodology




difficult to verify within the time frames of this audit because these data
are sensitive, dispersed within the states, or not available in hard copy.
State prison officials attested to the reliability of the admission and release
data. They said that because these data are critically important, they are
under the constant scrutiny of the courts, law enforcement authorities,
and inmates. In our previous study of prisoners receiving supplemental
security income, we verified a random sample of jail data and found the
data reliable.

To determine why prisoner participation was not detected, we asked FCS
to identify state or local agencies that collect prison data and compare that
data with data on food stamp recipients to identify prisoner participation.
To discuss and review policy and procedures for verifying applicant data
and any subsequent changes, we visited state agency officials in
Sacramento, California; Tallahassee, Florida; Albany, New York; and
Austin, Texas. We discussed fraud detection programs, quality control and
assurance efforts, and methods of food stamp issuance with state officials.
In addition, we visited social service administrative and service centers in
the four large metropolitan areas we selected for review. At each location
we observed and discussed the food stamp application, data verification,
certification and recertification process. We discussed local fraud
detection efforts and observed the food stamp issuance process.

To determine whether computer matching can be an effective method for
identifying prisoner participation, we discussed with agency officials in
each of the states we visited the cost, quality, savings, and barriers to
matching inmate data with state food stamp data. At the social service
centers we visited, we discussed the quality of the matches and observed
the follow-up process. To identify the effort associated with data matching
to identify prisoner participation, we identified the time used by our
programmer to develop and implement the match programs and reviewed
a cost study performed for FCS regarding similar matching routines.




Page 19                    GAO/RCED-97-54 Prisoner Participation in Food Stamp Program
Appendix III

Social Security Administration’s Verification
Process Significantly Increased the Number
of Valid SSNs
                                          Verification of prisoners’ SSNs by the Social Security Administration’s EVS
                                          significantly increased the number of valid SSNs that we could use in our
                                          matches. The state prison systems provided us with available SSNs for all
                                          prisoners incarcerated in a state facility for all or any part of 1995.
                                          Therefore, this table contains more prisoner data than table I.1, which
                                          contains data from one point in time. As shown in table III.1, over
                                          60 percent of 522,525 prisoner SSNs were validated as accurate and usable
                                          as submitted. EVS identified an additional 120,525 valid SSNs for prisoners
                                          by comparing submitted prison data (SSN if available, date of birth, name,
                                          and gender) against information contained in Social Security
                                          Administration records. This comparison yielded numbers not contained
                                          in the prison records, corrected transposition errors, and substituted
                                          correct numbers for invalid numbers. Because of the Social Security
                                          Administration’s confidence in, and the historical reliability of the EVS
                                          process, we accepted these additional validated SSNs for use in our match
                                          process. Similarly, the SSNs for local jail prisoners had been validated
                                          through EVS.

Table III.1: Results of the EVS’ Social
Security Number Validation, by State      SSN validation
                                          status                      California         Florida       New York         Texas         Total
                                          Correct as
                                          submitted                     110,013           60,774          51,287        97,765     319,839
                                          Correct SSN
                                          identified                     41,496           12,536          20,880        45,613     120,525
                                          Subtotal                      151,509           73,310          72,167      143,378      440,364
                                          Not validated                  34,828            8,924          20,612        17,797       82,161
                                          Total                         186,337           82,234          92,779      161,175      522,525
                                          Sources: California Department of Corrections, Florida Department of Corrections, New York State
                                          Department of Correctional Services, Texas Department of Criminal Justice, and the Social
                                          Security Administration.




                                          Page 20                       GAO/RCED-97-54 Prisoner Participation in Food Stamp Program
Appendix IV

Comments From the U.S. Department of
Agriculture




              Page 21   GAO/RCED-97-54 Prisoner Participation in Food Stamp Program
Appendix IV
Comments From the U.S. Department of
Agriculture




Page 22                  GAO/RCED-97-54 Prisoner Participation in Food Stamp Program
Appendix V

Major Contributors to This Report


               Keith Oleson, Assistant Director
               David Moreno, Project Leader
               Brad Dobbins
               Don Ficklin
               Jon Silverman




(150259)       Page 23               GAO/RCED-97-54 Prisoner Participation in Food Stamp Program
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