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USDA Takes Next Step Towards Limiting SNAP Fraud

Data sharing program with states another step to reducing fraud

Published on: Mar 22, 2013

Agriculture Undersecretary for Food, Nutrition and Consumer Services Kevin Concannon this week announced a new federal-state partnership targeting recipient fraud in the Supplemental Nutrition Assistance Program. USDA will share its extensive experience in monitoring retailer fraud to help states develop a more robust set of tools to identify suspicious activity and improve tactics to catch recipients that attempt to commit SNAP fraud.

By law, USDA is responsible for overseeing the more than 250,000 retailers that redeem SNAP benefits nationwide, while states are responsible for identifying and pursuing fraudulent activity by recipients.

As part of the new efforts, USDA signed data-sharing Memorandums of Understanding with Maryland and Virginia. USDA will use data collected under these unprecedented MOUs and other information-sharing agreements to develop an enhanced monitoring tool for states similar to USDA's state-of-the-art Anti-fraud Locator using EBT Retailer Transactions (ALERT) system.

Data sharing program with states another step to reducing fraud
Data sharing program with states another step to reducing fraud

USDA uses its ALERT system to closely monitor the 2.5 million electronic retailer transactions that happen daily. ALERT helps USDA identify suspicious stores for analysis and investigation, better target high risk areas, and quickly implement fraud detection scans as new schemes are identified.

"We have a lot of experience in identifying and pursuing retailer fraud through data mining, which we can use to help arm states with sharper tools to ensure integrity on the recipient side," Concannon said. "These MOUs are just the latest in what we call our SNAP Stewardship Solutions Project—our ongoing work to ensure SNAP integrity."

In the coming months, USDA will announce a series of additional steps to strengthen regulations that prohibit SNAP trafficking. Trafficking, an illegal activity, is the exchange of SNAP benefits for cash.

USDA continues to crack down on individuals who violate the program and misuse taxpayer dollars.

SNAP supplements monthly food budget of more than 47 million low-income individuals. Nearly half of SNAP participants are children and more than 40% of recipients live in households with earnings.