Thursday, July 01, 2010

Texas hit with fine for food stamp errors

Corrie MacLaggan
Austin American Statesman
Monday, June 28, 2010
Federal officials have fined Texas $3.96 million for errors in issuing food stamp benefits, according to a letter to House Speaker Joe Straus.
The penalty is for a high rate of overpayments or underpayments two years in a row, said the letter from U.S. Department of Agriculture Undersecretary Kevin Concannon.
Among the four states hit with penalties, Texas was fined the most. Also fined were Indiana ($1.2 million), Maryland ($742,238) and Iowa ($205,730), federal officials said.
Texas plans to appeal, said Geoff Wool, a spokesman for the state Health and Human Services Commission. He said the commission learned of the fine on Friday.
Wool said Texas' appeal will focus on the fact that the number of food stamp recipients in Texas spiked after Hurricane Ike in 2008, increasing 26 percent in the year that followed.
"The effect of the hurricane is certainly something that has disrupted our ability to process applications," Wool said. "We've also seen an increase overall in the number of applications and recipients" because of the economic downturn.
There are 3.56 million Texans now on food stamps. The federal government pays for the food, and federal and state governments split administrative costs.
Wool said that Louisiana successfully appealed a fine after Hurricane Katrina. "We feel like that's a precedent," he said.
In 2009, Texas' "payment error rate," based on overpayments and underpayments, was 6.9 percent, compared with a national average of 4.36 percent, the letter said.
That's the type of error that triggered the fine. The letter also said that Texas performed worse than the national average on a measurement called the "negative error rate," which measures the frequency of improper denials. Texas' negative error rate in 2009 was 14.82 percent, compared with the national average of 9.41 percent.
Wool said that Texas' payment error rate and negative error rate are now below the national average.
Texas has the option of investing half the amount of the fine to improve its food stamp system, the letter said. If the state were to improve, it wouldn't have to pay the other half.
Texas also may pay the fine in full, the letter said.
Meanwhile, federal officials are distributing $30 million to 10 states (plus Guam) for excellence in administering the food stamp program, Agriculture Secretary Tom Vilsack announced last week.
Texas received such awards for years. From 1998 through 2004, the state got a bonus each year, Wool said. In 2004, Texas' $7.4 million bonus for accuracy was more than any other state's, according to a commission news release from the time.
The most recent fine the commission has a record of is from 1994, when the agency was fined about $10 million, Wool said.
In recent years, the state has struggled to process applications because the commission lost workers in advance of an outsourcing effort and then was hit with Hurricane Ike and the economic downturn, state officials have said.
Celia Hagert, a senior policy analyst at the Center for Public Policy Priorities, said the recent fine should concern lawmakers "because we used to do a really good job in this area."
"The message this should send to the Legislature is it's important to have an adequately funded and staffed system," said Hagert, whose organization is an advocate for middle- and low-income Texans. "Otherwise, you're going to make mistakes and waste taxpayer money."
In addition to miscalculating benefits, the state has had trouble processing applications within the 30 days required by the federal and state governments. To address an application backlog that hit 42,000 applications last fall, the state has added 850 workers since September.
In December, Texas RioGrande Legal Aid sued the commission in state district court in Travis County over the backlog. The group expanded its lawsuit in June, adding more plaintiffs and arguing that the entire food stamp system is purposely dissuading people from participating.
But Wool said, "We feel that because this is a federal program governed by federal rules, the state court is limited in its ability to provide relief." The state is seeking to get the case dismissed, arguing in a June 22 court filing that food stamp processing deadlines aren't mandatory.
"That," said Cynthia Martinez of Texas RioGrande Legal Aid, "is about as ridiculous as it sounds. This is an attempt for them to avoid accountability by making the argument that the king can do no wrong because he is the king."

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