More oversight needed at USDA to combat waste, fraud, Fong tells lawmakers

By Derrick Cain

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WASHINGTON, March 6, 2014 - While USDA's Office of Inspector General has made recent progress in addressing waste, fraud, and abuse among programs administered by the department's agencies, more attention needs to be paid to oversight in most USDA agencies, Inspector General Phyllis Fong told a House panel Wednesday.

Fong told the House Appropriations Committee's Subcommittee on Agriculture, Rural Development, Food and Drug Administration, and Related Agencies has had to streamline its operations and investigations while functioning at the lowest level of staff in its history. Still, Fong told lawmakers that OIG “continues to achieve substantial and far-reaching results that serve American taxpayers' interest in more effective government.” She said in fiscal year 2013, audit and investigative work obtained potential monetary results totaling more than $1.2 billion. From fiscal year 2006 to fiscal year 2013, the potential dollar impact of OIG audits and investigations has totaled $8.5 billion, while appropriations for OIG have been $670 million, Fong said.

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“For every dollar invested [in OIG], we have realized potential cost savings and recoveries of about $12.62,” Fong testified. “This figure does not capture the significant, but less easily quantified, results of our efforts to improve public safety or implement program investments.”

Several lawmakers asked Fong about her office's efforts to ferret out abuse of the Supplemental Nutrition Assistance Program (SNAP). She said more than half of her staff is involved in combatting the trafficking of SNAP benefits, which represents about 56 percent of USDA's budget, and that efforts are continuing to target retailers involved in SNAP fraud. “SNAP poses challenges for everyone at the local, state and federal level,” Fong said. “We're working with [USDA's Food and Nutrition Service] to proactively get the message out that SNAP fraud will lead to penalties.”

Rep. Chellie Pingree, D-Maine, said 99 percent of people receiving SNAP benefits are eligible to do so, and that in Maine, the average benefits pay about $120 per week. “If there is fraud, it's not a lot of money,” Pingree said.

Rep. Jeff Fortenberry, R-Neb., said that given the magnitude of the SNAP program even a small amount of fraud adds up. Fortenberry asked Fong if SNAP fraud is concentrated in certain areas of the nation and what is the major method of the fraud.

Fong said OIG has major investigations in cities across the nation. She told Fortenberry the most common form of SNAP fraud involves a retailer purchasing a SNAP benefits card for 50 cents on the dollar, allowing the recipient to spend cash on whatever they want and the retailer to “get all the money on the card.”

Besides SNAP fraud, Fong said her agency is focused on fraud and abuse in the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), payment limitations to producers, as well as payment “schemes” involving misuse of being an “actively engaged” farmer.

Further, Fong told lawmakers her agency is pressing the National Agricultural Statistics Service to improve how it releases sensitive information, and is working with the entire department to tighten information technology security.  

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