CHART 1.–PERCENTAGE AND CLASSIFICATION OF IMPROPER DETERMINATIONS DISCLOSED IN STATES' QUALITY CONTROL REVIEWS OF NON-PUBLIC-ASSISTANCE CASES FOR THE 6 MONTHS ENDED JUNE 30, 1974 Alabama 13 1 12 6 13 8 18 20 7 14 13 13 6 3 4 5 5 7 12 1 1 1 2 1 4 7 4 1 2 < 1 low2 2 31 18 28 33 24 27 33 23 29 33 26 34 9 23 22 29 22 22 34 19 32 34 17 29 27 29 24 26 15 33 26 24 32 14 26 17 26 11 12 12 13 9 9 6 12 13 9 18 10 9 6 Kansas 18 19 11 14 15 22 21 17 23 23 32 8 9 22 11 25 15 23 17 5 27 27 22 29 9 20 41 11 10 17 27 23 18 7 16 4 27 20 16 27 15 26 7 8 27 10 5 7 14 14 2 2 2 New Jersey. 8 22 7 18 17 9 13 16 7 14 18 17 10 10 7 22 9 18 5 15 8 4 New Mexico. Overall. 2 2 2 48 39 31 25 26 21 24 33 12 25 25 15 17 3 2 14 2 8 4 Did not report. CHART II.-PERCENTAGE OF SAMPLED PARTICIPATING HOUSEHOLDS CONSIDERED INELIGIBLE AS A RESULT OF STATES' QUALITY CONTROL REVIEWS OF NONPUBLIC-ASSISTANCE CASES January to June July to 1973 January to June 1974 State Alabama 18 19 11 14 15 22 21 17 23 23 32 8 9 22 11 25 15 23 17 5 27 27 22 29 9 20 41 11 10 17 27 23 18 7 16 4 27 20 16 27 15 26 7 8 27 10 5 7 1 Did not report, PROSPECT OF FRAUD Definite client errors made up a small part of the waste situation in the Food Stamp Program. Mr. Samuel Bauer, Director of the County Welfare Department in Cleveland said: I would like to take a minute to comment on a portion of my statement, "to administer the program justly.” This is where I feel a large improvement in the Food Stamp Program can be made. We are facing a situation where the rules and regulations which are continually being added, amended, and deleted are making it increasingly difficult for the low income person to become eligible for food stamps, while at the same time increasing the likelihood of the person not in need to obtain assistance fraudulently. In addition, those same rules and regulations make it increasingly difficult for those of us who administer the program to provide adequate service to those citizens who are in need and eligible. Food stamp regulations question many areas of an individual's financial situation, which is at best marginal in their importance. When the computations are completed, that individual is often found ineligible. Yet another individual applies for assistance and does not mention these areas of his financial situation and is found eligible. Clearly some fraud does exist in the program. The news media has reported many instances where fraud has been exposed by both private and public efforts. The Department of Argiculture has effectively pointed up some of the problems they have encountered. Officials of the Department of Agriculture have testified before Congressional Committees that the food stamp program has almost no incidence of fraud. In June 1973, Assistant Secretary of Agriculture Clayton Yeutter testified before the Senate Select Committee on Nutrition and Human Needs that the food stamp program had been "remarkedly free from fraud.” In the first three quarters of 1973, he said, “the percentage of fraudulently participating households, as related to total participating households, equaled 24 thousandths of one percent. In May 1975, the Agriculture Department, in a report to the Senate Agriculture and Forestry Committee, indicated that the degree of fraud in the program has not increased significantly since the Yeutter testimony. The report stated that during fiscal 1974, claims were made against 17,480 food stamp recipients for bonus coupons that were received in excess of their entitlement. The dollar value of these claims was approximately $3.8 million. In the first two quarters of fiscal 1975, claims were established against 13,952 households for a total dollar value of $2.3 million. The following tables provide a breakdown of these claims by State 322 9 82, 461.75 3,785,50 684 Midwest region-Con. 204.00 Ohio. Louisiana. North Dakota Oklahoma 35, 652.00 Utah. 91,234.00 Alaska. California. Hawaii. 1,068.50 10, 864.00 Grand total 199 786 591 349 918 9 8,748.75 3,155.50 527.00 850.00 486 17 62 1, 867 305, 837.32 CLAIMS AGAINST FOOD STAMP RECIPIENTS, JULY-SEPTEMBER-FISCAL YEAR 1975 CLAIMS AGAINST FOOD STAMP RECIPIENTS, OCTOBER-DECEMBER-FISCAL YEAR 1975 The USDA report continued: Collections received during fiscal year 1974 for application to recipient claims totaled $1,505,253.64. This figure is not directly related to the specific claims established in any given period since collections are, in most cases, made in installments over a period of several years. Collection data for fiscal 1975 is not Tet available. Although most of the claims established against recipients were for suspected fraud, some are the result of collections of over-issuances due to administrative Approximately .08 percent of the average monthly participating caseload was found to be participating on a fraudulent basis in fiscal year 1974. error. PROSECUTION The Food Stamp Act provides a maximum penalty of a $10,000 fine and imprisonment for up to five years for food stamp fraud involving coupons worth $100 or more, which is a felony; for fraud involving coupons worth less than $100, which is a misdemeanor, the maximum penalty is a $5,000 fine and imprisonment for up to one year. Applicants for food stamps must be informed of these penalties during the application process. In its report in response to Senate Resolution 58, the Agriculture Department asked that the misdemeanor fine be reduced from $5,000 to $1,000. This would allow more frequent prosecution because under the reduced penalty, misdemeanor cases could be tried in U.S. Magistrates Courts. Currently, most food stamp fraud prosecutions are tried in State and local courts. The Agriculture Department outlined the status of prosecution to the Senate Agriculture Committee: 57-400-75 |