The U.S. Department of Agriculture (USDA) improperly spent $6.2 billion in taxpayer funds in 2013 including $2.6 billion erroneously spent on Food Stamp benefits, according to its latest agency financial report.
USDA’s improper payments amount to the same amount that House Budget Committee Chairman Rep. Paul Ryan (R-WI) cut from military pensions in Congress’s recently-passed budget legislation.
There were more improper payments made under the Supplemental Nutrition Assistance Program (SNAP), commonly known as food stamps, than under any other USDA program, according to the USDA FY 2013 Agency Financial report released at the end of last month.
According to the federal government, a payment is considered improper when either “federal funds go to the wrong recipient, the recipient receives the incorrect amount of funds (either an underpayment or overpayment), documentation is not available to support a payment, or the recipient uses federal funds in an improper manner.”
The majority of food stamp funds improperly spent came in the form of overpayments.
Of the $2.6 billion improper payments under SNAP, $2.1 billion were overpayments. The remainder amount was doled out as underpayments.
USDA spent a total of $74.6 billion on food stamp benefits in FY 2013. Improper payments make up about 3.4 percent of that amount.
The total $6.2 billion in USDA improper payments this year marked an estimated 10 percent increase from the $5.5 billion in 2012.
However, the SNAP program payment error decreased from $2.7 billion in 2012 to $2.6 billion this year.
The top-three USDA agencies with the highest amount of improper payments in 2013 were SNAP ($2.6 billion), the National School Lunch Program ($1.8 billion), School Breakfast Program ($831 million), Federal Crop Insurance Corporation Program Fund ($566 million), and Women, Infants, and Children food program ($198 million).
That means improper payments under the federal food assistance programs administered by USDA’s Food and Nutrition Assistance (FNS) component made up the bulk of erroneous payments in 2013.
The top-three USDA agencies with the highest amount of overpayments in 2013 were all food assistance programs as well.
USDA spent a total of $4.1 billion on food nutrition erroneous overpayments.
Overpayments in the form of farms subsidies were much lower at $682 million.
“Incorrect disbursement” was the primary reason for the $2.6 billion improperly spent on food stamp benefits, revealed the report.
All SNAP improper payments “were attributable to administrative and documentation error,” according to USDA.
In describing the causes driving SNAP program payment errors, the USDA stated:
[A]n improper payment occurs when a participating household is certified for too many or too few benefits compared to the level for which they are eligible. This can result from incomplete or inaccurate reporting of income and/or assets by participants at the time of certification and from changes subsequent to certification, or errors in determining eligibility or benefits by caseworkers.
Of the estimated $6.2 billion in improper payments by the USDA, the majority were overpayments.
U.S. agencies are required by law to identify programs “susceptible to significant improper payments” and report their findings.
Federal law defines “significant” improper payments as either those that amount to $100 million or those that equal $10 million of all program payments and 2.5 percent of program spending together.
The $6.2 billion in USDA improper payments could be slightly higher since the agency is not required to report all improperly spent funds.
According to the USDA finance report, “the Food and Nutrition Service, the Farm Service Agency, the Risk Management Agency, and the Natural Resources Conservation Service are noncompliant with laws and regulations related to the Improper Payments Information Act of 2002, and the Improper Payments Elimination and Recovery Act of 2010.”
In March, the USDA inspector general reported that “officials with FNS are aware that its baseline for estimates of improper payments may be unreliable.”