Digging deep
The Atlanta Journal-Constitution has been tracking waste in federal benefit programs for the poor administered by the state.
In February 2013, the AJC reported exclusively about widespread problems with WIC, the benefit program for poor women and children. The story noted that the state could face a penalty for up to $20 million for chronic mismanagement of federal dollars.
In May, the newspaper reported on problems in the state’s oversight of food stamps. Federal authorities were threatening to penalize the state millions of dollars over a backlog of applicants for the aid. Additionally, the AJC has reported on a standoff over Georgia’s new law requiring drug testing of food stamp applicants. Federal officials have ordered the state not to enforce the law.
Log on to MyAJC.com, our premium website for subscribers, to read the AJC’s coverage of mismanagement of the WIC and food stamp programs administered by the state.
Log on to MyAJC.com, our premium website for subscribers, to read the AJC’s coverage of mismanagement of the WIC and food stamp programs administered by the state.
The alleged crooks behind a massive scheme to defraud the Women, Infants and Children program for poor mothers and children concocted a brazen version of the WIC acronym for their malfeasance, according to prosecutors: “We In Control”.
U.S. attorneys indicted 88 people in the scheme, which set up bogus storefronts in metro Atlanta and other Georgia locations to pocket $18 million worth of food benefits intended for the poor.
The indictments, unsealed Tuesday, are the latest indication of fraud in Georgia’s benefits programs, and come as the state faces ongoing problems with its administration of both WIC and the much larger federal food stamp program.
Georgia must reimburse federal officials at least $2 million over the next four years for chronic mismanagement of the WIC program that resulted in huge over payments to some stores accepting WIC vouchers, according to new records reviewed by The Atlanta Journal-Constitution Wednesday.
The Department of Public Health (DPH), which administers the WIC program, on Wednesday signed a $1 million contract with a technology consultant that is intended to address some of the problems.
“It’s something we just have to do,” said DPH attorney Sid Barrett. “We inherited such a mess three years ago with our computer infrastructure. Commissioner (Brenda) Fitzgerald had a standing order to bring us into the 21st Century.”
At one time, the problems in Georgia’s WIC program were so widespread that the state was barred from certifying any new stores to accept the vouchers until it got its act together. Georgia had been paying the highest monthly food cost per beneficiary of any state in the nation.
Separately, to address problems in the food stamp program, Georgia is also required to file weekly progress reports to the feds over how it’s managing the call-in center applicants use to obtain food stamp benefits. The state had been facing the loss of $76 million in federal food stamp money because of a massive backlog of overdue cases, but averted that threat by making progress clearing the backlog. That program is administered by the Department of Family and Children Services under the Department of Human Services.
On Tuesday, after the indictments in the WIC case were unsealed, U.S. Attorney Edward J. Tarver in the Southern District of Georgia detailed what he labeled “massive fraud.” Tarver said owners of phony storefronts in eight counties sought out food stamp and WIC recipients, paid cash for the vouchers and EBT cards at a fraction of their value and then cashed them in with the government for the full amount, pocketing the profit.
Fifty-four of those indicted were store owners or employees and the other 34 were recipients who allegedly sold their benefits. Eight of the fake stores were in metro Atlanta, three each in Macon and Savannah and two in LaGrange.
WIC provides paper vouchers that can be used for infant formula, juice, eggs, fresh fruits and vegetables and other healthy foods for low-income pregnant women and for infants and children up to age 5 who are nutritionally at risk.
The WIC program is administered by the state but funded by the United States Department of Agriculture (USDA). The USDA had slammed Georgia’s management of WIC dollars in an audit. Among other problems it found that WIC was paying up to $7 for a gallon of milk in Georgia because the state wasn’t doing enough to keep costs down at stores approved to accept WIC vouchers.
The state appears to have made some progress holding down costs. In 2012, the average monthly cost of food for a beneficiary was $56.06 — the highest of any state. In 2013, that figure dropped to $45.47, according to federal data.
Earlier this year, USDA ordered the state to pay back $10.6 million but said most of it will be waived if Georgia makes certain improvements by the end of September 2018. Those improvements include spending at least $1.2 million in state money to upgrade its technology.
Barrett, the DPH attorney, said the agency has also tightened the policies to be approved as a WIC vendor, which has made it more difficult for smaller businesses to get into the program.
“The vast majority of our vendors are Piggly Wiggly and Food Giant and such,” Barrett said. “It has made it tougher for small businesses to get in (the WIC program). But unfortunately our fraud problem was almost entirely from small businesses. We’re probably going to be spending more time policing participant fraud, which we believe is a smaller problem.”
Georgia still uses paper vouchers in the WIC program, instead of electronic transfers loaded on to debit-like cards that the Supplemental Nutrition Assistance Program, once called Food Stamps, employ. But spokeswoman Nancy Nydam said the paper vouchers had been changed so they are harder to counterfeit.
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