The Hagstrom Report

Agriculture News As It Happens

OMB: Improper payments cut by $17.6 billion

The White House Office of Management and Budget announced today that the Obama administration has cut wasteful improper payments by $17.6 billion dollars in 2011, partly because the error rate on supplemental nutrition assistance or SNAP payments is at an all-time low.

OMB said the error rate for the SNAP program fell to 3.8 percent this year, avoiding $800 million in payment errors that were projected before President Barack Obama issued a directive to cut $50 billion in improper payments by 2012.

Agriculture Deputy Secretary Kathleen Merrigan said in a White House call to reporters that, with more than 45 million people now on food stamps, payments must be accurate.

Merrigan said she prefers to look at the food stamp payment rate as “96.19 percent accurate,” although she also noted that USDA has put in place document imaging, interviews with individuals and other practices to ferret out inaccuracy and fraud.

While the error rate is usually associated with overpayments, the error rate actually includes underpayments as well.

The 3.8 percent SNAP error rate has been known before, but OMB included it in an announcement that said the government has also reduced erroneous Medicare, Medicaid and Pell grants payments.

The SNAP program has decreased its error rate every year of the Obama administration, OMB said.

USDA also reduced the prevalence of trafficking to 1 percent due to “USDA’s work with states reducing fraud and holding bad actors accountable,” the agency said. The prevalence in trafficking had started to decline before Obama took office, however.

Through improved technology and investigations, USDA has permanently disqualified more than 8,300 retail stores over the last 10 years. In fiscal year 2011, USDA conducted nearly 5,000 undercover investigations to counter fraud. In fiscal year 2010 alone, states conducted 847,000 fraud investigations, disqualified 44,000 individuals, and recovered $287 million in recipient claims, OMB said.