USDA and FNS Crack Down Against Abusive SNAP Retailers

The U.S. Department of Agriculture’s Food and Nutrition Service (FNS) can now quickly sanction and, when necessary, remove retailers from the Supplemental Nutrition Assistance Program (SNAP) for engaging in fraudulent activity. This comes as a result of a cooperative agreement with USDA’s Office of Inspector General (OIG).

“This interagency agreement with the Inspector General is an important step forward that allows us to take action against the truly bad actors in nearly half the time,” said USDA Deputy Under Secretary for Food, Nutrition and Consumer Services Brandon Lipps. “USDA will not tolerate retailers abusing this vital program that helps millions of Americans put food on the table.”

“USDA-OIG conducts exhaustive financial investigations of retail food stores suspected of exchanging Supplemental Nutrition Assistance Program (SNAP) benefits for U.S. currency or other things of value, oftentimes resulting in criminal prosecution of store owners and/or employees,” said USDA-OIG Acting Assistant Inspector General for Investigations Peter P. Paradis, Sr. “When FNS levies administrative action to ensure store owners who violate SNAP rules and regulations can no longer participate in the program, our agencies illustrate that even though our missions differ, this interagency agreement serves to ensure we succeed collectively when we work together to protect the interests of the U.S. Government.”

The FNS/OIG memorandum of understanding finalized last year streamlined the administrative action process for sanctioning SNAP retailers – which previously could drag on for years – by improving communication and accountability between the Inspector General and FNS’ Office of Retailer Operations and Compliance. The vast majority of sanctions are related to SNAP trafficking – the illegal exchange of SNAP benefits for cash.

This interagency cooperation has sharply reduced the time spent determining whether FNS could take action against SNAP retailers who abuse program rules and allow taxpayer dollars to be used illegally. In Fiscal Year 2018, the year prior to the interagency agreement, sanctions and administrative actions took an average of 231 days to implement. Since then, turnaround time has been reduced to 121 days, a reduction of nearly 48%.

The agreement also improved accountability. In line with the agreement, agency representatives now meet twice a year to track and reconcile active cases each agency is working on to ensure that wayward retailers are not overlooked. During the July 2020 update meeting, for example, the OIG returned 30 cases to FNS for administrative action. Of these, FNS has since permanently disqualified four retailers that had collectively redeemed more than $9.9 million in SNAP benefits pending administrative action from FNS.

All told, in Fiscal Year 2020, FNS implemented 1,959 administrative sanction actions against SNAP retailers. These actions stem from findings of program violations and include 1,040 retailers being permanently disqualified for trafficking.

USDA’s Food and Nutrition Service administers 15 nutrition assistance programs that leverage American agricultural abundance to ensure children and low-income individuals and families have nutritious food to eat. FNS also co-develops the Dietary Guidelines for Americans, which provide science-based nutrition recommendations and serve as the cornerstone of federal nutrition policy.