MONTPELIER — The Shumlin administration says it’s working hard to rectify accounting errors in the food stamps program that are on pace to cost the state nearly $800,000 in federal penalties by June.
The state has for two straight years exceeded the federal government’s allowable error rate in the payments it makes to recipients and has been assessed more than $400,000 in penalties.
The commissioner of the Department for Children and Families, David Yacovone, told lawmakers Thursday that Vermont will almost certainly miss its federal benchmarks for the third straight year and that he’s bracing for an additional $370,000 penalty in June.
State budgets aren’t the only casualties of the accounting errors, which have also affected the household finances of food stamps beneficiaries. That’s because when overpayments are flagged, the state requires families to pay back the excess. In instances where small monthly overpayments have accumulated for years, the amount due can run into the thousands.
In fiscal year 2012, the state sent overpayment bills to more than 200 households. The average bill was for $983.
Yacovone, however, assured lawmakers the problem is being solved and that, in the meantime, the state is looking for solutions to cushion the financial blow on both the state and the families it serves.
“Those words may fall shallow on the ears of people who have had errors,” Yacovone said. “But I take very seriously the performance of this program and am committed very seriously to fixing it on my watch.”
The Supplemental Nutrition Assistance Program, formerly called food stamps and now named 3SquaresVT, supplies cash benefits to more than 100,000 lower-income Vermonters. While the program is administered by the state Department for Children and Families, the benefits are funded by the federal government, and state operations are monitored by the U.S. Department of Agriculture.
An error rate of nearly 7 percent in fiscal year 2012 was better than the rate of 8.5 percent Vermont had the year before, but it’s still above the 5 percent threshold after which the federal government begins assessing sanctions.
Yacovone told the Legislature’s Committee on Health Care Oversight that the recent resurrection of a training office gutted during a governmentwide personnel reduction in 2008 will go a long way toward solving the problems that gave rise to the high error rates.
“We lost our training unit in the last fiscal downsizing,” Yacovone said. “This is complicated work … and we were using the buddy system for training, and we had staff that didn’t have the proper foundation using buddy training.”
Yacovone said a more intensive focus on eligibility operations has also begun to yield results, as evidenced by a reduction in error rates four months running. He said the department has identified the most common sources of accounting errors and initiated interventions with eligibility officers responsible for the mistakes.
Yacovone said the state is also looking for ways to ease the effect of the errors. Right now, the federal government demands compensation for overpayments in excess of $400; Yacovone said the state is trying to raise the amount to $600.
He said the state is also trying to make affected beneficiaries automatically receive a hardship “compromise.” Beneficiaries who can prove that paying back the full amount would result in financial hardship are eligible for a reduction in their bill, but only if they fill out paperwork, something Yacovone said doesn’t always happen. He said the state will not only look to make the compromise provision automatic but to increase the portion of the bill forgiven by the federal government.
“If someone is eligible for the program I think we can pretty well assume there’s going to be hardship paying the money back,” Yacovone said.
Finally, Yacovone said he’ll ask the federal government to allow Vermont to invest next year’s penalty into rectifying shortcomings in the program, instead of sending it to Washington. Right now, only half the amount of the penalty can be reinvested into the program. But Yacovone said he believes he’ll get clearance to put the full amount of the penalty back into the food stamps program.
Lawmakers Thursday questioned the fairness of requiring beneficiaries to cover the cost of overpayments resulting from errors by the state. Their concerns echo those of advocates for low-income Vermonters.
“We are asking people ... to pay us back for mistakes they didn’t make,” said Sen. Sally Fox, a Chittenden County Democrat. “We should come up with the money to pay back the federal government.”
Rep. Chris Pearson, a Burlington Progressive, said he wonders whether the repayment plans negotiated by the state would be more easily, and cheaply, solved by simply paying the money back on behalf of recipients. Yacovone said the state negotiates repayment plans with monthly installments of as little as $5. Pearson said the administrative headaches involved in collecting $5 a month, potentially for years on end, might end up costing more than what is collected.
Yacovone said no other state covers overpayments on behalf of food stamp beneficiaries.
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