GAO, Improper Payments: USDA's Oversight of the Supplemental Nutrition Assistance Program (GAO-24-107461, 2024)

Summary

GAO-24-107461, a GAO Q&A report titled Improper Payments: USDA's Oversight of the Supplemental Nutrition Assistance Program, addressed to the Subcommittee on Legislative Branch, Committee on Appropriations, House of Representatives, and dated September 26, 2024. It describes USDA's improper payment estimation process for SNAP as a two-tiered process in which state agencies review household eligibility and benefit amounts and USDA's Food and Nutrition Service reviews states' data. The report states that USDA reported in June 2024 an estimated 11.7 percent of SNAP benefits paid in fiscal year 2023 were improper, compared with 11.5 percent in the prior year estimate. It also covers regional offices, corrective action plans and state audits of SNAP.

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U.S. Government Accountability Office

Improper Payments: USDA’s Oversight of the
Supplemental Nutrition Assistance Program
GAO-24-107461
Q&A Report to the Subcommittee on Legislative Branch, Committee on Appropriations, House of
Representatives
September 26, 2024

Why This Matters Improper payments—those that should not have been made or were made in an
incorrect amount, including overpayments and underpayments—are an area of
persistent concern in the federal government. Since fiscal year 2003, cumulative
executive agency improper payment estimates have totaled almost $2.7 trillion.
In fiscal year 2023 alone, estimates of improper payments totaled almost $236
billion government-wide. While this total represented a decrease of about $11
billion from the prior fiscal year, certain federal agencies continue to report high
estimated improper payment rates of 10 percent or more for certain programs.
The U.S. Department of Agriculture’s (USDA) Supplemental Nutrition Assistance
Program (SNAP) is the largest federally funded nutrition assistance program. In
June 2024, USDA reported that an estimated 11.7 percent (or about $10.5 billion
of $90.1 billion in outlays not including disaster benefits, such as emergency
allotments from the pandemic) of SNAP benefits paid in fiscal year 2023 were
improper. This was an increase from the prior year estimate of 11.5 percent (or
about $8.8 billion of $76.0 billion in outlays not including disaster benefits, such
as emergency allotments from the pandemic) as reported on
PaymentAccuracy.gov. During the COVID-19 pandemic, Congress granted
states the option to suspend certain quality control regulatory requirements,
including those used to track and report improper payments. As a result, USDA
had incomplete datasets for fiscal years 2020 and 2021 and was unable to
estimate and report improper payment rates for SNAP for those years.
House Report 117-389, which accompanied the Legislative Branch
Appropriations Act, 2023 (Pub. L. No. 117-328, div. I, 136 Stat. 4459, 4913),
includes a provision for GAO to provide quarterly and annual reports through
fiscal year 2025 on its ongoing oversight of improper payments and
recommendations for legislative action or technical opportunities to improve
payment integrity. In this seventh quarterly report, we provide information on
USDA’s improper payment estimation process for SNAP and the guidance and
assistance it provides to state agencies. In addition, we describe oversight that
USDA and other entities provide related to states’ efforts to reduce improper
payments for SNAP.

Key Takeaways • Developing and reporting improper payment estimates for SNAP involves a
two-tiered process. In the first tier, state agencies review household eligibility
determinations and benefit amounts to gather data on improper payments to
provide to USDA. In the second tier, USDA’s Food and Nutrition Service
(FNS) reviews states’ data to ensure that quality control regulatory
requirements were met.

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• FNS has regional offices that play a key role in helping state agencies that
administer SNAP address the root causes of deficiencies that led to improper
payments.
• Corrective action plans are key tools for addressing the root causes of SNAP
improper payments at the state level.
• USDA has made recent efforts to help states reduce improper payments.

What is SNAP and who SNAP is a federal program intended to help low-income individuals and families
administers it? obtain a more nutritious diet by supplementing their income with benefits to
purchase food. According to FNS data, SNAP provided approximately $107
billion in benefits, including disaster benefits, such as emergency allotments from
the pandemic, to about 42 million people across the nation in fiscal year 2023. 1
The federal government pays the full cost of SNAP benefits to states, and state
agencies are responsible for administrating and monitoring the program within
their states. State agencies determine whether individuals and households are
eligible to receive SNAP benefits based on program requirements.

USDA’s FNS is responsible for overseeing SNAP at the federal level, including
reviewing states’ administration of the program in accordance with program
requirements. FNS is also responsible for reporting required improper payment
information to the Office of Management and Budget (OMB). 2 This includes
improper payment estimates, the root causes of deficiencies resulting in improper
payments, and any actions taken or planned to mitigate those causes. 3 FNS
divides the 50 states, the District of Columbia, and two territories that administer
SNAP into seven regions, each with its own regional office. 4 These regional
offices provide guidance and technical assistance to the states and territories.

What causes states to According to information that USDA reported on PaymentAccuracy.gov, in fiscal
make improper year 2023 states made improper payments related to SNAP mainly because they
payments related to did not verify recipients’ eligibility for program benefits. 5 For example, states did
SNAP? not always verify certain program eligibility requirements, including:
• Citizenship. Recipient is a U.S. citizen through birth or naturalization, or is a
lawfully present non-citizen.
• Education. Education level or enrollment status of a student recipient.
• Employment. Employment status of a recipient.
• Finances. Financial position or status of a recipient, applicant, or their family.
• Household size. Number of family members in a household.
• Identity. Recipient is who they claim to be.
• Residency. Status of recipient’s living location or arrangement.

How does FNS develop FNS uses a two-tiered quality control process to develop and report the national
and report SNAP SNAP improper payment estimate. 6 The process involves both state and federal
improper payment reviews to assess the accuracy of household eligibility determinations and benefit
estimates? amounts nationwide.
First, each state develops a sampling and estimation methodology plan and
submits it to FNS for approval in accordance with FNS regulations and
guidance. 7 Second, FNS reviews states’ plans and either approves them or
returns them for revision in accordance with FNS regulations and guidance. 8

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Once states obtain FNS’s final approval of their sampling and estimation
methodology plans, they conduct monthly quality control reviews of a statistical
sample of households participating in SNAP. States use these reviews to
measure the accuracy of their household eligibility determinations and benefit
amounts. States conduct quality control reviews throughout the year.
States then use the data collected during the quality control reviews to calculate
their SNAP improper payment rates, including rates for (1) overpayments, when
households receive more benefits than they are entitled to, and (2)
underpayments, when households receive less benefits than they are entitled to. 9
States must submit their improper payment estimates to FNS no later than 115
days after the end of the sampled month. Every year, states select and review a
total of about 50,000 SNAP cases of households participating in SNAP
nationwide and submit them to FNS for review.
According to FNS officials, FNS’s regional offices are responsible for selecting a
sub-sample of the SNAP cases sampled by the states and reviewing about half
of the cases, or about 25,000 cases each year. To ensure the accuracy of states’
data, regional offices conduct independent reviews of state agencies’ quality
control cases. FNS’s regional offices (1) review records submitted for each
subsampled case; (2) ensure that states’ reviews comply with federal regulations
concerning certification processes and all required quality control procedures;
and (3) resolve any discrepancies found.
If FNS’s regional offices identify a discrepancy in either the disposition or finding
of the case, they send the corrected case to the state along with its explanation
for the corrected information. The state agency may elect to (1) request informal
resolution and discuss disputes directly with regional office staff; (2) request
formal arbitration through the USDA-FNS arbitrator, a neutral third party whose
decision is final; or (3) do nothing if the state agrees with the revised information
and the regional offices’ findings will be used as the final determination. 10 If
regional offices determine that states’ data are accurate and correct, as verified
and documented in the case record, the case is validated and used to calculate
each state’s improper payment rates. 11
Once FNS’s regional offices calculate each state’s improper payment rates, they
send the result to FNS’s national office for review. After this review, FNS
determines the national improper payment rate by calculating the average of all
state improper payment rates, weighted according to each state’s proportion of
total SNAP benefits issued in a fiscal year. 12
FNS reports states’ SNAP improper payment rates and the weighted national
improper payment rate for the previous year by June 30 of each year. 13 In
addition, USDA publishes the national estimate in its annual agency financial
report and on PaymentAccuracy.gov. Figure 1 shows FNS’s process for
estimating SNAP improper payments.

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Figure 1: Food and Nutrition Service’s (FNS) Process for Estimating Supplemental Nutrition
Assistance Program (SNAP) Improper Payments

What are the Each fiscal year, USDA is responsible for estimating improper payments for
responsibilities of certain susceptible programs, including SNAP, and reporting those estimates
USDA under the with specified supporting information. Further, if USDA’s Office of Inspector
Payment Integrity General (OIG) determines that the agency is not in compliance with any
applicable PIIA criteria and related OMB guidance, additional reporting and other
Information Act of 2019
requirements apply. 14 Figure 2 shows PIIA compliance criteria and related OMB
(PIIA)? guidance.

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Figure 2: Compliance with Payment Integrity Information Act of 2019 Criteria and Related
Office of Management and Budget (OMB) Guidance

Specifically, OMB instructs inspectors general to report on whether their
agencies are compliant with the following 10 criteria:
1a. publish payment integrity information with their annual financial statements,
1b. post their annual financial statements and accompanying materials on their
websites,
2a. conduct improper payment risk assessments for each program with annual
outlays greater than $10 million at least once in the last 3 fiscal years,
2b. adequately conclude whether each program is likely to make improper
payments and unknown payments above or below the statutory threshold (either
$100 million or both 1.5 percent of program outlays and $10 million),
3. publish improper payment and unknown payment estimates for programs
susceptible to significant improper payments and unknown payments in the
accompanying materials to the annual financial statements,
4. publish corrective action plans for each program for which an estimate above
the statutory threshold was published in the accompanying materials to the
annual financial statements,
5a. publish an improper payment and unknown payment reduction target for
each program for which an estimate above the statutory threshold was published
in the accompanying materials to the annual financial statements,

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5b. demonstrate improvements to payment integrity or reach a tolerable improper
payment and unknown payment rate,
5c. develop a plan to meet their improper payment and unknown payment
reduction targets, 15 and
6. report improper payment and unknown payment estimates of less than 10
percent for each program for which they published estimates in the
accompanying materials to their annual financial statements.
The criteria described above do not apply to all programs or agencies. For
example, if an agency determines through its risk assessment that none of its
programs or activities are susceptible to significant improper payments, criteria
three through six would not be applicable. If an inspector general concludes that
any of the agency’s programs or activities fail to meet any of the applicable
criteria, the agency is considered noncompliant under PIIA for that fiscal year and
is required to take additional actions for each year it is noncompliant, such as
providing OMB with a description of the actions that the agency will take to come
into compliance.
In its fiscal year 2023 agency financial report, USDA reported a SNAP improper
payment estimate of 11.5 percent. Since this rate exceeded the 10 percent
threshold, the OIG determined that USDA was not compliant with applicable PIIA
criteria for SNAP. Because of this, USDA is required to take specific actions,
such as submitting an action plan to Congress describing steps it will take to
bring SNAP into compliance. 16 OMB guidance directs agencies to provide
information describing the actions that the agency will take to come into
compliance in the annual OMB data call. 17 According to OMB guidance, the
information will be published on PaymentAccuracy.gov and serve as the plan that
agencies are required to submit to Congress. FNS commented it would provide a
plan describing actions to bring SNAP into compliance as part of the upcoming
OMB data call for fiscal year 2024.

What are the Under PIIA and OMB guidance, USDA’s OIG is responsible for (1) reviewing the
responsibilities of improper payment reporting in the agency’s annual financial statements and
USDA’s OIG under PIIA accompanying materials to determine whether USDA is compliant with PIIA
and OMB guidance? criteria, and (2) issuing an annual report on USDA’s compliance with applicable
PIIA criteria. 18
According to OMB guidance, the OIG report must include an evaluation of
USDA’s efforts to prevent and reduce improper payments. In addition, for
programs with estimated improper payment rates of 10 percent or more, such as
SNAP, the OIG must include recommendations for actions the agency can take
to prevent and reduce improper payments. 19
USDA’s OIG reported in July 2024 that USDA was not compliant with certain
PIIA criteria for fiscal year 2023. Specific to SNAP, USDA reported an estimated
improper payment rate exceeding 10 percent. 20 USDA OIG recommended that
FNS provide information describing the actions the agency will take to come into
compliance for SNAP in the annual OMB data call, which is used to update
information on PaymentAccuracy.gov. 21 In response, FNS plans to take
necessary actions by December 31, 2024.

What roles do state In addition to USDA’s FNS and OIG, state and independent auditors also play a
audits and single audits key role in overseeing SNAP.
have in SNAP
oversight?

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State audits

State auditors are responsible for overseeing how their respective state agencies
administer SNAP and for reporting any findings in their state audits of the
program. For example, in October 2022, the state auditor of Maryland reported
that the Family Investment Administration inadvertently disabled a critical system
control, which led to overpayments. 22 Specifically, 86,479 of the 465,038
households that received SNAP benefits had incomes that exceeded the
federally established maximum limits, and the state auditor reported that the
administration was unable to determine if the 86,479 households were exempt
from the SNAP income thresholds. The state auditor recommended that the
administration establish sufficient procedures to (1) ensure that critical
programming changes are subject to independent review and approval, (2)
respond to federal granting agency requests for overpayment information, and
(3) collect overpayments unless USDA provides written guidance stating that
reimbursement of amounts improperly paid is not required. A subsequent May
2024 report provided no update on the status of these recommendations. 23

Single audits

State auditors or independent auditors conduct single audits and publish any
findings on their respective state agencies’ administration of SNAP in single audit
reports. 24 Single audits are an important oversight tool to help ensure that an
award recipient has adequate internal controls in place over federal programs
and is complying with relevant program requirements. 25 Single audits are
required for recipients of certain federal awards, including the 50 states, the
District of Columbia, and two territories that administer SNAP. Based on our
review of single audit findings, SNAP improper payments were attributed to root
causes, such as a state agency’s (1) lack of policies and procedures to ensure
safeguarding and documentation of benefit card issuance, (2) inability to maintain
adequate supporting records due to outdated legacy eligibility systems, and (3)
lack of appropriate supervisory oversight, which resulted in unauthorized benefit
card issuance.
For example, in September 2023, the District of Columbia’s single audit reported
that the District’s Department of Human Services did not effectively design and
operate its automated data processing system for SNAP. This resulted in an
estimated $454,951 of overpayments and an unknown additional amount of over-
and underpayments for SNAP. 26 The auditor recommended that the department
continue to evaluate and improve its automated data processing system to
ensure that it complies with all SNAP administration requirements. In a
subsequent June 2024 report, the department noted it plans to take necessary
actions by September 30, 2025. 27

How does FNS use FNS uses external audit reports as part of its evaluation of states’ management
external audit reports of SNAP to help ensure that state agencies are administering the program in
as part of its oversight compliance with federal regulations. FNS’s regional offices obtain and review
of SNAP? relevant OIG reports, GAO reports, and state single audit reports to identify any
SNAP deficiencies or issues they need to address.

In addition, FNS’s regional offices are responsible for overseeing state actions to
address reported single audit findings. Specifically, their responsibilities include:
• ensuring that single audits are completed and reports are received in a timely
manner;
• examining the reports and identifying any findings requiring corrective action,
including those findings identified as high-risk and recurring;
Page 7 GAO-24-107461 Improper Payments
• working with states to determine appropriate corrective actions and to
negotiate management decisions; and
• monitoring the implementation of corrective actions and determining whether
they are sufficient prior to the close of the related audit finding.

What responsibilities FNS requires states with SNAP improper payment rates exceeding certain
do states have to thresholds to (1) identify the root causes of deficiencies leading to improper
reduce improper payments, and (2) develop corrective action plans (CAP) in accordance with FNS
payment rates? regulations and guidance to address root causes. 28 FNS’s national office issues a
memorandum, within 10 days of release of the improper payment rates, that
identifies all state agencies exceeding certain improper payment rate thresholds
to its regional offices and states. 29 Table 1 shows SNAP improper payment rates
for states, the District of Columbia and two territories.

Table 1: Food and Nutrition Service’s (FNS) Supplemental Nutrition Assistance Program
Estimated Improper Payment Rates for States, the District of Columbia, and Territories for
Fiscal Year 2023
State/District of Columbia/Territory Fiscal year 2023
estimated improper
payment rate (percent)
Alabama 7.07
Alaska 60.37
Arizona 11.39
Arkansas 9.57
California 13.40
Colorado 8.61
Connecticut 8.91
Delaware 22.80
District of Columbia 20.26
Florida 12.60
Georgia 12.07
Guam 18.01
Hawaii 20.94
Idaho 3.42
Illinois 9.91
Indiana 10.46
Iowa 5.19
Kansas 12.07
Kentucky 7.27
Louisiana 6.65
Maine 13.48
Maryland 18.98
Massachusetts 9.86
Michigan 10.72
Minnesota 6.40
Mississippi 10.15
Missouri 10.54
Montana 6.04

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State/District of Columbia/Territory Fiscal year 2023
estimated improper
payment rate (percent)
Nebraska 7.06
Nevada 6.71
New Hampshire 12.53
New Jersey 35.70
New Mexico 14.40
New York 12.68
North Carolina 9.72
North Dakota 9.51
Ohio 7.01
Oklahoma 10.64
Oregon 16.76
Pennsylvania 16.61
Rhode Island 12.40
South Carolina 22.57
South Dakota 3.27
Tennessee 12.56
Texas 6.70
Utah 5.09
Vermont 3.45
Virgin Islands 10.29
Virginia 9.86
Washington 6.74
West Virginia 10.98
Wisconsin 5.15
Wyoming 5.19
Source: GAO analysis of FNS information. | GAO-24-107461

To develop improper payment CAPs, state agencies follow FNS guidance and
conduct root cause analyses. As states do so, FNS encourages them to request
technical assistance from FNS’s regional offices in interpreting data and
identifying root causes.
FNS regulations and guidance require that state CAPs include the following for
each deficiency identified: 30
• A specific description.
• The method of detection.
• The magnitude.
• The causal or contributing factors.
• Any corrective actions already taken.
• An outline of planned actions and the expected outcome of each.
• The target date for each action and the projected dates for eliminating each
deficiency.
• A description of the state agency’s plan for monitoring and evaluating the
effectiveness of corrective actions.

Page 9 GAO-24-107461 Improper Payments
After states develop CAPs, they are required to submit them to FNS’s regional
offices for review and approval.

How does FNS help FNS’s regional offices play a key role in helping states develop and implement
states develop and their CAPs, from reviewing and approving plans to monitoring and validating their
implement their CAPs? implementation.
After the regional offices approve states’ CAPs, states implement them and
provide semiannual updates on corrective actions taken to FNS’s regional offices
in May and November. These updates include the status of the CAP, any
additional deficiencies identified since the previous update, and any changes to
the planned corrective actions. FNS’s standard operating procedures strongly
encourage regional offices to provide technical assistance to states to help them
implement their CAPs. 31
FNS’s regional offices monitor states’ progress in implementing CAPs and
validate whether actions have been implemented when states submit their
semiannual updates.
Regional offices send written reminders to state agencies that fail to provide
semiannual updates, including all required components, by the deadlines. If a
state agency were to fail to respond to the reminder by providing an update, FNS
would begin an escalation process, and the state agency would be at risk of
suspension or disallowance of federal funds.
Once FNS’s regional offices validate and determine that states’ corrective actions
have been appropriately implemented, they notify states that corrective actions
can be removed from the states’ CAPs. Figure 3 shows FNS’s process for
overseeing state CAPs.

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Figure 3: Food and Nutrition Service’s (FNS) Oversight of States’ Improper Payment
Corrective Action Plans (CAP)

What challenges have States may experience challenges in identifying the root causes of improper
states experienced in payments. According to FNS officials, each state’s skills and experience with
implementing data analysis varies depending on program structure, staff expertise, and state
corrective actions and agency priorities. As a result of differences in these factors, some states have
limited resources to perform thorough analysis of root causes, according to FNS
what has FNS done to
officials. For example, some states do not employ statisticians. To address this
address them? challenge, FNS officials stated that they prioritized providing improved tools and
technical assistance to support states in performing these analyses.

What recent steps has FNS officials we spoke with reported recent efforts the agency has taken to help
FNS taken to help states reduce improper payment rates, including the following:
states reduce improper • New tools. In June 2024, FNS published two dashboards for states to use to
payments? analyze root causes of improper payments and trends over time. According to
FNS officials, these dashboards are designed to allow state users to perform
in-depth data analysis—using factors such as time periods, types of
household characteristics, or error amounts—on root causes of improper
payments. The dashboards integrate data daily from the SNAP quality control
system, allowing state agencies to perform up-to-date analyses on their root
causes of improper payments. Additionally, FNS indicated in its fiscal year
2023 agency financial report that it issued grants to state agencies to help

Page 11 GAO-24-107461 Improper Payments
them verify household earnings and employment via third-party income
databases.
• Guidance. FNS awarded a contract to update its guidance on key strategies
for improving and maintaining payment accuracy, which was released in June
2024. Under this contract, FNS hosted a series of listening sessions with
states focused on understanding their successes and challenges in reducing
SNAP improper payments.
• Training. In May 2024, FNS began holding office hours to train regional
office staff on its updated guidance for improving and maintaining payment
accuracy. The first office hour session focused on improving states’ root
cause analysis and corrective action planning through technical assistance.
FNS also plans to hold office hours for states to help equip states with the
knowledge and resources to conduct individualized root cause analyses and
develop appropriate corrective actions. In addition, FNS conducted two
training events on the new dashboards for both state and federal users in
June 2024.
• Technical assistance. FNS provides state-specific technical assistance to
ensure states’ CAPs meet statutory and regulatory requirements and address
the root causes of improper payments. In July 2024, FNS has also updated
standard operating procedures for state agencies to use when developing
their CAPs.

Does FNS plan to FNS officials told us that there were no significant changes planned for the
change its improper agency’s SNAP improper payment estimation process. In September 2023,
payment estimation USDA proposed a rule aimed at simplifying and improving the quality control
process? system for identifying SNAP improper payments. 32 However, FNS does not have
a timeline for finalizing and implementing the rule and anticipates a long-term
implementation period for this effort.

Agency Comments We provided a draft of this report to USDA for review and comment. USDA did
not have any comments on the report.

How GAO Did This To describe steps USDA’s FNS has taken to develop and report improper
Study payment estimates for SNAP, we obtained and reviewed relevant information
from the agency’s website, guidance, and agency reports. In addition, we
interviewed USDA officials to understand the agency’s processes for developing
and reporting SNAP improper payment estimates, as well as any plans to change
its processes in the future. We also reviewed USDA’s instructions to states
regarding selecting and reviewing SNAP improper payment samples. We also
obtained and reviewed documentation, data, and computer codes supporting
USDA’s testing and aggregating of state sample results into the national
improper payment estimate for SNAP.
To understand USDA’s oversight of states’ efforts to develop and implement
CAPs, we reviewed and summarized applicable laws and OMB guidance, as well
as information from the agency’s website, internal guidance, and agency reports.
We also interviewed FNS officials from the national office to understand their
state oversight activities.
To summarize key oversight activities of other entities, including state and
independent auditors, we selected states and territories with SNAP improper
payment rates of 10 percent or greater in fiscal year 2022. We then selected (1)
states’ audit reports issued from fiscal year 2018 through fiscal year 2023 and (2)
the most recent single audit reports available. We reviewed this information to
Page 12 GAO-24-107461 Improper Payments
identify key audit findings related to SNAP improper payments. Additionally, we
reviewed USDA OIG reports on the agency’s compliance with applicable
statutory criteria issued from fiscal year 2016 through fiscal year 2023, and
interviewed USDA OIG staff to understand their oversight roles and ongoing
activities over SNAP.
To describe the guidance and technical assistance that USDA provides to states
to help reduce improper payments, we reviewed and summarized relevant
agency documents and interviewed FNS officials from the national office.
We conducted this performance audit from March 2024 to September 2024 in
accordance with generally accepted government auditing standards. Those
standards require that we plan and perform the audit to obtain sufficient,
appropriate evidence to provide a reasonable basis for our findings and
conclusions based on our audit objectives. We believe that the evidence
obtained provides a reasonable basis for our findings and conclusions based on
our audit objectives.

List of Addressees The Honorable David Valadao
Chairman
The Honorable Adriano Espaillat
Ranking Member
Subcommittee on Legislative Branch
Committee on Appropriations
House of Representatives
We are sending copies of this report to the appropriate congressional committees
and the Secretary of Agriculture. In addition, the report is available at no charge
on the GAO website at https://www.gao.gov.

GAO Contact For more information, contact: M. Hannah Padilla, Director, Financial
Information Management and Assurance, PadillaH@gao.gov, (202) 512-5683.
Sarah Kaczmarek, Managing Director, Public Affairs, KaczmarekS@gao.gov,
(202) 512-4800.
A. Nicole Clowers, Managing Director, Congressional Relations,
ClowersA@gao.gov, (202) 512-4400.
Staff Acknowledgments: Daniel Flavin (Assistant Director), Jeremy Choi
(Auditor-in-Charge), Seth Brewington, Courtney Cox, Anita Lee, Courtney Paz,
Jared Smith, and Amanda Stogsdill made key contributions to this report.
Connect with GAO on Facebook, Flickr, Twitter, and YouTube. Subscribe to our
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Page 13 GAO-24-107461 Improper Payments
Endnotes
1According to FNS, this benefit amount includes disaster benefits, such as emergency allotments

from the pandemic. Thus, it differs from the total SNAP outlays reported on PaymentAccuracy.gov,
which only include regular, ongoing SNAP benefits.
2For purposes of executive agency reporting, the law defines an improper payment as any payment

that should not have been made or that was made in an incorrect amount (including overpayments
and underpayments) under statutory, contractual, administrative, or other legally applicable
requirements. It includes any payment to an ineligible recipient, any payment for an ineligible good
or service, any duplicate payment, any payment for a good or service not received (except for such
payments where authorized by law), and any payment that does not account for credit for
applicable discounts. 31 U.S.C. § 3351(4). When an executive agency’s review is unable to discern
whether a payment was proper because of insufficient or lack of documentation, this payment is
also considered an improper payment. 31 U.S.C. § 3352(c)(2). Reported improper payment
estimates are subject to uncertainty, meaning the actual amounts may differ from the reported
estimates. More information on the margins of error associated with these estimates can be found
in the annual improper payment data sets available on PaymentAccuracy.gov. For fiscal year 2023,
USDA reported a confidence interval of 95 percent to less than 100 percent, and a margin of error
of +/-0.49 percentage point for SNAP on PaymentAccuracy.gov. OMB guidance does not prescribe
specific margins of error or confidence intervals. Instead, OMB specifies that agencies must work
with their statisticians to determine the appropriate confidence interval given program
characteristics, available resources, and whether the estimates are reliable. Office of Management
and Budget, Requirements for Payment Integrity Improvement, Circular No. A-123, Appendix C,
OMB M-21-19 (Mar. 5, 2021).
3Improper payments and fraud involving federal funds are two distinct concepts that are related, but

not interchangeable. FNS officials told us that they track fraud—which involves obtaining something
of value through willful misrepresentation or making false or misleading statements in order to
obtain benefits—separately from improper payment estimation quality control review. One type of
SNAP fraud is retailer trafficking, in which a retailer exchanges recipients’ SNAP benefits for cash
instead of food. Since 1995, FNS has published periodic reports estimating the extent of trafficking
in SNAP as part of its efforts to monitor program integrity. We reported in December 2018 that
FNS’s estimates of retailer trafficking are uncertain and have limitations, though such estimates
suggest trafficking increased to about $1 billion each year from 2012 to 2014. We also reported that
one key limitation of the estimates is FNS has not evaluated the accuracy of its assumption about
the percentage of SNAP benefits trafficked. There are options available for evaluating this
assumption, such as reviewing SNAP transaction data from stores that are known to have
trafficked. FNS has taken steps to include more information about the uncertainty around its retailer
trafficking in its latest report on retailer trafficking, but has not conducted the evaluation of its
assumptions we recommended. FNS also has not yet implemented our recommendations to
assess the benefits and costs of reauthorizing a sample of high-risk stores more frequently than
other stores and to move forward with plans to increase penalties for retailer trafficking. See GAO,
Supplemental Nutrition Assistance Program: Actions Needed to Better Measure and Address
Retailer Trafficking, GAO-19-167 (Washington, D.C.: Dec. 14, 2018).
4The two territories are Guam, and the U.S. Virgin Islands. The seven regional offices are the (1)

Mid-Atlantic Regional Office, (2) Midwest Regional Office, (3) Mountain Plains Regional Office, (4)
Northeast Regional Office, (5) Southeast Regional Office, (6) Southwest Regional Office, and (7)
Western Regional Office.
5PaymentAccuracy.gov is an official U.S. government website that OMB manages. It contains

information, including current and historical estimated improper payment rates (i.e., agency-
reported improper payment amounts as a percentage of outlays), amounts of estimated improper
payments, root causes of monetary loss and improper payments, and monetary-loss recovery
efforts.
6FNS developed its original quality control process for SNAP in 1977 to track and measure errors in

both eligibility and benefit determinations for the program.

Page 14 GAO-24-107461 Improper Payments
77 C.F.R. § 275.11; FNS’s handbooks for states include: FNS Handbook 310, SNAP Quality

Control Review Handbook (Oct. 2022), and FNS Handbook 311, Food Stamp Program Quality
Control Sampling Handbook (Oct. 1990).
87 C.F.R. § 275.11; FNS regional offices use FNS Handbook 315, SNAP Federal Quality Control

Validation Review Handbook (Sept. 2019).
9States calculate the improper payment rate by dividing the estimated improper payment amount

by program outlays. USDA refers to this amount as the “improper payment error rate.” By law,
states are required to correct payment errors—overpayments must be paid back to the state and
the state must promptly restore any improperly denied benefits—so that each household gets the
correct amount based on its eligibility. (7 U.S.C. §§ 2022(b), 2020(b)).
10For fiscal year 2023, there were 244 informal resolution reviews completed and 20 arbitration

reviews completed, according to FNS officials.
11On an annual basis, FNS’s regional offices estimate the following SNAP improper payment rates

for their respective states: official overpayment rate, official underpayment rate, and official
combined improper payment rate. FNS provides a comparison of state-reported and official
improper payment rates for SNAP in its annual reports on SNAP quality control. The most recent
report covers fiscal year 2019. According to the report, the official fiscal year 2019 improper
payment rates, which were based on FNS regional office subsamples, exceeded the state-reported
rates in all but three cases. USDA, Supplemental Nutrition Assistance Program Quality Control
Annual Report Fiscal Year 2019 (Apr. 2022, revised Mar. 2024).
12According to FNS, the national improper payment rate is a weighted average of all states’ official

improper payment rates, based on each state’s total payments issued for the fiscal year.
13USDA’s reporting of SNAP improper payment data is typically about 6 months after the availability

of data. For example, the fiscal year 2023 SNAP improper payment estimate data reported to OMB
is based on fiscal year 2022 results. FNS reported the fiscal year 2023 improper payment rates
based on the fiscal year 2022 data as of June 30, 2023. Along with data submitted to OMB, the
Chief Financial Officer, within FNS’s Office of Financial Management, certifies that the agency’s
sampling and estimation methodology plan produces an improper payment and unknown payment
estimate that is accurate and appropriate given program characteristics.
14Pub. L. No. 116-117, 134 Stat. 113 (2020) (codified at 31 U.S.C. §§ 3351-58). PIIA includes six

criteria for compliance, which OMB M-21-19 expands to 10 by breaking some criteria into
subcomponents and, in some cases, adding new elements.
15OMB M-21-19’s criteria 5a, 5b, and 5c relate to 31 U.S.C. § 3351(2)(E), which states that

compliance means that the executive agency publishes improper payments reduction targets
prepared under [31 U.S.C. § 3352(d)] that the executive agency may have in the accompanying
materials to the annual financial statement for each program or activity assessed to be at risk, and
has demonstrated improvements and developed a plan to meet the reduction targets.
16Under PIIA, if an executive agency’s OIG determines that the agency is not in compliance with

the applicable PIIA criteria, the head of the agency must submit to the appropriate authorizing and
appropriations committees of Congress a plan describing the actions that the agency will take to
come into compliance. The plan should include the following: (1) measurable milestones to be
accomplished in order to achieve compliance for each program or activity, (2) the designation of a
senior executive agency official who shall be accountable for the progress of the executive agency
in coming into compliance for each program or activity, and (3) the establishment of an
accountability mechanism, such as a performance agreement, with appropriate incentives and
consequences tied to the success of the official designated in leading the efforts of the executive
agency to come into compliance for each program or activity.
17Per OMB M-21-19, agencies have annual reporting responsibilities for each year of non-

compliance with PIIA criteria. The OMB annual data call requires agencies to provide in-depth
payment integrity information to OMB for publication. The data are collected and subsequently
published on PaymentAccuracy.gov.

Page 15 GAO-24-107461 Improper Payments
18OIGs are required to issue compliance reports under PIIA. 31 U.S.C. § 3353. Per OMB M-21-19,

OIG review typically begins when the agency’s annual financial statements and the accompanying
materials to the annual financial statements are published, which typically occurs in mid-November.
The OIG compliance report should be published within 180 days after the publication date for the
annual financial statements of the agency and the accompanying materials. For example, USDA
issued its fiscal year 2023 agency financial report on January 16, 2024, and USDA’s OIG issued
the compliance report on July 12, 2024.
19OMB M-21-19. If The OIG is unable to provide such recommendations, then the OIG must state

whether it believes that the program has reached a tolerable improper (and unknown) payment
rate.
20The fiscal year 2023 reporting, based on fiscal year 2022 results, was the first year that SNAP

was not compliant with the applicable PIIA criteria. If the program is not compliant with the
applicable PIIA criteria for two consecutive years, the agency must propose to the Director of OMB
in its next budget submission additional program integrity proposals that would help the program
come into compliance. 31 U.S.C. § 3353(b)(2). In addition, states are subject to financial liabilities if
there is a 95 percent statistical probability that their payment error rates exceed 105 percent of the
national performance measure for the second or subsequent consecutive fiscal year. 7 C.F.R §
275.23 (d)(2). Those financial liabilities must be used to invest in activities to improve SNAP
administration, designated as “at-risk” for repayment if a liability is established based on the state’s
payment error rate for the subsequent fiscal year, or some combination of the above. 7 C.F.R §
275.23 (e)(1).
21U.S. Department of Agriculture, Office of Inspector General, USDA’s Compliance with Improper

Payment Requirements Fiscal Year 2023, 50024-0004-24 (Washington, DC.: July 2024).
22Maryland General Assembly, Department of Legislative Services. Department of Human Services

Family Investment Administration. (Oct. 21, 2022).
23Maryland General Assembly, Department of Legislative Services. Review of the Actions Taken by

the Department of Human Services–Family Investment Administration to Resolve Repeat Audit
Findings in Response to the April 2023 Joint Chairmen's Report. (May 14, 2024).
24The Single Audit Act is codified, as amended, at 31 U.S.C. §§ 7501-06, and implementing OMB

guidance is reprinted in 2 C.F.R. part 200 subpart F. The Single Audit Act requires nonfederal
entities that spend a specified amount—currently $750,000 but rising to $1,000,000 effective
October 1, 2024—or more in federal awards in a year to undergo a single audit, which is an audit of
an entity’s financial statements and federal awards, or in select cases a program-specific audit, and
submit the results to the Federal Audit Clearinghouse (FAC). The FAC is maintained by the
General Services Administration.
25Single audit reports are to include (1) the award recipient’s financial statements and schedule of

expenditures of federal awards; (2) a status of all single audit findings included in the prior audit’s
schedule of findings and questioned costs for federal awards; (3) the auditor’s opinions on the
award recipient’s financial statements and schedule of expenditures of federal awards, compliance
with requirements from laws, regulations, and provisions of contracts and grant agreements, and
internal control over compliance; (4) when applicable, a schedule of findings and questioned costs;
and (5) when applicable, a corrective action plan. We refer to these reports as “single audits” for
the purposes of our report.
26Government of the District of Columbia. Schedules of Expenditures of Federal Awards and

Reports Required by the Uniform Guidance (Sept. 29, 2023).
27Government of the District of Columbia. Schedules of Expenditures of Federal Awards and

Reports Required by the Uniform Guidance (June 27, 2024).
287 C.F.R. § 275.17; Food and Nutrition Service, SNAP Corrective Action Plan: Quality Control

Reports State Requirements (July 2024). State CAPs must include a number of items, including an
outline of actions to be taken, the expected outcome of each action, the target date for each action,
and a description of how the state will monitor and evaluate the effectiveness of the corrective
action.

Page 16 GAO-24-107461 Improper Payments
29FNS, Supplemental Nutrition Assistance Program Fiscal Year 2023 Performance Reporting

System Corrective Action Plan Memo (July 1, 2024). The official improper payment error rates for
households that are participating in SNAP (active cases) are based on FNS’s final review of state
agency subsamples. The code of federal regulations, 7 C.F.R. part 275.16, requires a state agency
to implement a CAP in certain circumstances, such as if the error rate for active cases is 6 percent
or greater.
30The CAP must address prioritization and content requirements described in 7 C.F.R. §§ 275.16(c)

and 275.17(b).
31FNS, SNAP Corrective Action Plan: Quality Control Reports Standard Operating Procedures (July

2024). Federal regulations also state that FNS will provide technical assistance in developing
corrective action plans when requested by state agencies. 7 C.F.R. § 275.17(c).
32Provisions to Improve the SNAP Quality Control System 88 Fed. Reg. 64756 (proposed Sept. 19,

2023) (to be codified at 7 C.F.R. parts 271 and 275). USDA stated that it issued this notice of
proposed rulemaking to improve FNS’s SNAP quality control system as required in the Agriculture
Improvement Act of 2018. Pub. L. No. 115-334, § 4013(b), 132 Stat. 4490, 4642. According to
FNS, the proposed changes were intended to strengthen and improve the integrity and accuracy of
the SNAP quality control system and to better align SNAP with PIIA requirements.

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