In a recent report by the Arizona Auditor General of the Department of Economic Security, which focused on identifying ineligible participants in the SNAP and TANF programs, auditors found that SNAP and/or TANF program benefits payments had been made to dead people and some inmates at the time they were incarcerated.
Participants in both programs must be residents of the state authorizing benefits and must not be incarcerated in a correctional institution when receiving benefits.
Auditors noted that while the Division of Benefits and Medical Eligibility has a process in place to ensure individuals incarcerated in facilities run by Maricopa County are not obtaining SNAP and/or TANF program benefits, it lacks a process to ensure it is not authorizing benefits to DOC inmates.
The Division has procedures to cross-match participants to inmate listings provided by Maricopa County, however it “does not use DOC data or data from other Arizona counties for similar matches.”
Auditors found that “one participant received benefits for 48 days totaling $200 during incarceration at the DOC, and the Division stopped the participant’s benefits when it received notification of an active warrant for the participant from the Department of Economic Security’s Office of Special Investigations. However, the Division did not attempt to recover the overpayments.”
“Three participants appeared to have received SNAP and/or TANF program benefits during some or all of their incarceration at the DOC. Since the Division had not matched against DOC data, it did not identify these potentially incarcerated participants. However, auditors were unable to determine if the participants were inmates or may have been a victim of identity theft by an inmate,” according to auditors.
Auditors also found that “procedures did not always prevent SNAP and/or TANF program benefit authorizations to deceased participants or charges incurred on deceased participants’ assigned EBT cards after their dates of death.”
Of the 11 participants who were authorized benefits after their dates of death, auditors found that 2 participants were in a multi-participant household, and the Division took between 64 and 152 days to detect that the participant was deceased.
Once the death was detected, the Division properly reduced the household’s future benefits, the report found.
The remaining 9 deceased participants were the sole participants in the household, and the Division authorized benefits totaling $3,153 after the dates of death because it did not detect that the participants were deceased. However, because the participants did not initiate a benefit renewal, the Division eventually closed these 9 cases and deactivated their EBT cards.
For the 11 participants who were authorized benefits after their dates of death, auditors were unable to determine why the Division’s matching process did not identify these participants. For the remaining 49 participants evaluated, the Division had not authorized benefits after the dates of death and followed its policies and procedures to cancel the deceased participants’ benefits after detecting the deaths.
Five participants from the nine sole-participant households had $992 in charges on their EBT cards after their dates of death. According to division policy, it does not attempt to recover overpayments when the participant is deceased. In addition, two participants from multi-participant households had $701 in charges on their EBT cards for the households after their dates of death. This occurred because multi-participant households can spend the authorized benefits of the remaining eligible household participants.
Auditors determined that about $53 million, or 3 percent of total EBT card transactions, was spent in a state other than Arizona during calendar year 2012. Of the $53 million, $37.9 million, or 2.2 percent of total EBT card transactions, was spent in Arizona’s bordering states, including California, Colorado, New Mexico, Nevada, and Utah, and dollars spent in these bordering states were primarily from households located in cities on Arizona’s outside borders.
Although not prohibited in calendar year 2012, auditors evaluated how many liquor stores, casinos, gaming, and adult-oriented establishments were accepting Arizona TANF EBT cards during that year. Even though the data did not provide complete vendor names, auditors found 1,447 transactions totaling $43,092 at what appeared to be liquor stores.
Audit details and highlights:
In 2012, the Division authorized benefits totaling $1.75 billion.
In 2012, the Division authorized SNAP benefits to an average of 484,010 households per month and authorized TANF program benefits to an average of 17,729 house¬holds per month. However, approximately 93 percent of the households receiving TANF program benefits also received SNAP benefits and are included in the average monthly households for both programs.
The SNAP program is administered through a federal-state partnership in which the federal government pays the full cost of recipient benefits and half of the state program’s administrative costs. In 2012, the average benefit that the Division authorized to all households under SNAP was $278 per month, or $3,336 annually.
In 2012, the Division authorized an average benefit of $214 per month to all households under TANF, or $2,568 annually. Most families in the TANF program must participate in Arizona’s Jobs Program, an employment and training program that helps them prepare for and find work and may also help with housing, childcare, alcohol or drug addictions, domestic violence, and other factors that affect family stability.
In their analysis, auditors matched and compared information about Arizona’s calendar year 2012 SNAP and TANF program participants with external information to identify whether benefits were provided to Department of Corrections (DOC) inmates, participants with invalid social security numbers, and deceased participants. Auditors also analyzed SNAP and TANF program data to determine whether any households received any unusually large benefit authorizations during the calendar year. In addition, auditors obtained the State’s EBT card data and performed analysis to identify indicators of participant fraud, such as making large dollar purchases or purchasing outside of Arizona. Auditors also analyzed whether there were unusual businesses accepting TANF program EBT cards. Finally, overall, auditors evaluated whether there were areas for improvement in the Division’s eligibility determination procedures.
To help ensure SNAP and/or TANF program benefits are not authorized to incarcerated individuals, the Division should develop and implement a process to work with the DOC and the other counties to obtain incarceration information and match that information against its SNAP and TANF program participant data. When it determines it is paying benefits to incarcerated individuals, it should cease paying of those benefits. Further, when the Division discovers overpayments it should follow its procedures to recover the overpaid amount.
All participants receiving SNAP and TANF benefits must have their benefits relinquished upon death. To help ensure deceased participants were not receiving benefits, the Division has procedures in place to compare SNAP and TANF data to the Arizona Department of Health Services (ADHS), Office of Vital Records’, monthly death database. Monthly, the Division’s eligibility system cross-matches eligible participants to the ADHS’ vital records file containing registered deaths for the prior month. If a match is identified, the eligibility system automatically sends a notification letter to the household and creates an alert for the Division’s eligibility interviewer responsible for the household’s case. The eligibility interviewer has 10 business days to remove the deceased participant and reevaluate the household’s benefits.
Using data obtained from the ADHS’ death database, auditors compared the social security numbers for all SNAP and TANF participants to the record of all deaths reported in Arizona from 1969 through December 31, 2012.1 The comparison identified benefit authorizations that were potentially made after the ADHS’ recorded date of death for 9,711 participants. Auditors randomly selected 60 of these matched participants; 27 were from sole-participant households and 33 were from multi-participant households. Of the 60 participants selected, auditors examined their files and found that 11 participants were authorized benefits after their date of death, and 7 participants had charges incurred on their assigned EBT cards after their dates of death.
To help ensure benefits are not provided to deceased participants, the Division should evaluate its matching process to ensure that it identifies all matches and the Division should follow up on social security numbers matched with the death database in a timely manner. In addition, to help prevent the fraudulent use of benefits, the Division should promptly cancel EBT cards when the sole participant is determined to be deceased.
The Division verified the validity of social security numbers for the SNAP and/or TANF program participants or conducted additional follow-up activities once initial information indicated the numbers were invalid. All partici¬pants who receive SNAP and TANF program benefits must provide a valid social security number or be in the process of applying for a social security number. The Division has policies and procedures that require each applicant to provide valid social security documentation and has an eligibility system in place that is used to electronically verify participants’ social security numbers with the federal Social Security Administration. If the Division is notified that a social security number is invalid, the responsible eligibility interviewer must follow up to determine whether the Division had the correct social security number. If a participant’s social security number cannot be validated, the participant is disqualified, and the household’s benefits are adjusted.
To analyze the validity of participants’ social security numbers and test whether the Division’s procedures were effective, auditors compared the Division’s calendar year 2012 SNAP and TANF participants’ records to Social Security Administration data. Auditors identified 12,071 participants who potentially had invalid social security numbers. However, because of some limitations with the data-matching process, some of these identified par-ticipants may have actually had valid numbers. Auditors randomly sampled 60 of the identified participants, examined their files, and found that the Division followed its policies and procedures to ensure valid social security numbers.