Pennsylvania Department of Human Services Responds to Electronic Benefits Transfer Usage Audit

HARRISBURG, Pa., Sept. 29, 2016 /PRNewswire-USNewswire/ -- Today, Department of Human Services (DHS) Secretary Ted Dallas responded to the Auditor General's (AG) audit of Electronic Benefits Transfer (EBT) usage: 

"DHS agrees with the AG's desire to ensure only those who are eligible receive benefits and we take very seriously our obligation to ensure program integrity. We would like to note the following:

A significant part of the audit covers a period prior to the Wolf Administration and many of the findings and recommendations noted in the audit report were addressed well before the audit report was issued. 

• The original audit opened seven years ago in September 2009 and the AG issued a special report in September 2011 regarding the need for DHS to provide better oversight and monitoring to prevent the misuse of EBT cards.
• Since the time period covered includes dates prior to the current administration, several of the steps mentioned in response to the findings were implemented by the prior administration, have addressed the issues raised in this audit and have been in place for several years.

Under the Wolf Administration, DHS has significantly improved virtually every aspect of program integrity.

• In the first full year of the Administration, DHS increased recoveries and cost avoidance of improper payments to $648 million - an increase of $65 million and the highest level in five years
• DHS improved the accuracy of payments in the SNAP program (formerly known as food stamps) to over 98.2% -- one of the largest one-year increases in the nation, and well above the national average of 96.3%. The improvement, measured by the federal government, has allowed DHS to avoid approximately $45 million in improper payments in SNAP payments.
• DHS has increased the number of individuals in the recipient restriction program to 2,362 which keeps individuals from inappropriately receiving services, especially seeking prescription pills from multiple locations. Not only does the program help stop individuals from drug abuse, it has also helped the state save over $55 million in prescription pill costs.

The finding that DHS made approximately $693,000 in improper payments is incorrect and should be deleted from the audit report.

• The AG's Office was unable to provide us with the exact methodology or data analysis that was used to arrive this finding despite a request from DHS for that information.
• When DHS applied the purported methodology, we found that DHS had initially made approximately $331,432 in incorrect payments to the EBT cards sampled in the audit during the time period of the audit. The Department, however, subsequently expunged $681,660 in unspent funds from those same EBT cards for inactivity. 
• We would like to note that even the $331,432 in incorrect payments noted above represents approximately 0.01 percent all payments made under the program – an accuracy rate of approximately 99.99 percent.

The audit report notes concern relating to out-of-state use of EBT cards, despite being unable to find evidence of any inappropriate payments.

• The federal government, which oversees the SNAP and TANF programs, requires the ability for EBT cards to be used out-of-state.
• Out-of-state usage represent only 2.7 percent of all EBT transactions. That percentage falls to approximately 0.6 percent of all usage when bordering states are excluded.
• The average amount used out-of-state is approximately $36, and the three most common locations are Wal-Mart, Save-A-Lot, and Shop Rite.
• DHS has an extensive process in place to monitor out-of-state use. Each year, that process avoids an average of $5.8 million in inappropriate out-of-state usage – a total of approximately $26.9 million since the process was implemented over four years ago.

While DHS has addressed many of the issues in the audit prior to its release and even prior to this Administration, we did make a policy change in response to this audit.

• Because of this audit, DHS changed how it handles single person household redeterminations when we receive a death notification. We previously processed, per approved federal policy, at the time of redetermination, but now immediately process a case like this once we verify the death notification. The policy also requires that the EBT card be inactivated upon verification of the death of all household members."

Media Contact: Kait Gillis, 717.425.7606 

SOURCE Pennsylvania Department of Human Services

Related Links

http://dhs.pa.gov/