Usda Sept 2014 Report

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Food and Nutrition ServiceSoutheast Region

ROBIN D. BAILEY

Regional Administrator

Supplemental Nutrition Assistance

Program (SNAP)Sam Nunn Atlanta Federal Center61 Forsyth Street, S.W. Room 8T36Atlanta, GA 30303

Phone:404-562-7030

Fax:404-527-4508

Supplemental Nutrition Assistance ProgramManagement Evaluation Report

Fiscal Year2014

North Carolina Department of Social Services

On-site Review Conducted: May 5 June 23, 2014Follow-up Review Work Completed: July 18, 2014

Report Date: September 10, 2014


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Executive Summary

North CarolinaSupplemental Nutrition Assistance Program

Management Evaluation Fiscal Year 2014

During the weeks of May 5, May 19, June 2, and June 16, representatives from the Food and Nutrition

Service, Southeast Regional Office, conducted a Management Evaluation (ME) of the SupplementalNutrition Assistance Program (SNAP). Several modules of the evaluation required additional follow-up work that continued until July 18, 2014. The ME assessed the States performance in the Nationalpriority areas. These include:

Program Access (State Level) Program Access (Local Level)State ME System Recipient Claims/Treasury Offset Program (TOP)Employment and Training (E&T) Electronic Benefit Transfer (EBT)Recipient Integrity Statistical ReviewSNAP Education (SNAP-Ed)

The evaluation assessed North Carolinas Department of Health and Human Services (DHHS)compliance with responsibilities for the administration of the SNAP as outlined in the Code ofFederal Regulations (CFR) and FNS Instructions and Policies. The information in this report is theresult of ongoing exchanges between FNS and State staff, observation of operations, on-site reviewof files, reviews of FNS and DHHS management reports, and interviews with staff in the State officeand in Guilford, Pitt, and Wake Counties.

This report is written on an exception basis and contains regulatory findings that require correctiveaction. A written response addressing the required corrective actions must be submitted within60 days from the receipt of this report, and must include documentation for actions taken or specifictimeframes for implementing procedures to resolve the deficiencies cited.

The ME identified these major findings:

There are critical findings in the Claims/TOP area that are related to a lack of Stateoversight and monitoring. The State is submitting claims for offset 30 days too early,resulting in households being offset in error. In addition, the State is not monitoring theclaim management process in local offices to ensure that policy and procedures are beingfollowed and reports reconciled in order to verify that claim balances are correct.

The lack of State oversight in Recipient Integrity has resulted in multiple findings,including instances of potential fraud not being referred for disqualification orprosecution, as well as deficiencies in data reporting and record keeping.

The review found instances of households participating more than once in a month. The Statemust take steps to identify the cause and onset of the issue and take immediate steps to preventfuture occurrences.


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There are a significant number of findings related to program access. The States application

process does not provide applicants with the proper access to application materials. TheStates SNAP application and notices do not contain the appropriate regulatory language.

There are serious findings in the States Employment and Training Program, including

improper coding of work registrants, inaccurate data reporting, and a lack of supportingdocumentation to verify financial claims.

The full report details findings and required corrective actions for compliance issues.


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SNAP Management Evaluation Fiscal Year 2014

North Carolina Supplemental Nutrition Assistance Program

Table of Contents

Executive Summary 2

Acronyms 5

1.Program Access (State Level) .6-8

.................................................................................................................................................................

2. Program Access (Local Level).9

3. State Management Evaluation System 9-10

4. Recipient Claims Management/Treasury Offset Program (TOP) 10-11

5. Employment and Training ...12-13

6. Electronic Benefit Transfer ..13

7. Recipient Program Integrity . 14-15

8. Statistical Review ...15-16

9. Appendix A ..17-19


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Acronyms

Term Definition

ADH Administrative Disqualification Hearing

CAP Corrective Action Plan

CFR Code of Federal Regulations

DHHS Department of Health and Human Services

DIR Department of Industrial Relations

EBT Electronic Benefit Transfer

eDRS Electronic Disqualified Recipient System

E&T Employment and TrainingFH Fair Hearing

FNS Food and Nutrition Service

FY Fiscal Year

ME Management Evaluation

QC Quality Control

SA State Agency

SERO Southeast Regional Office

SNAP Supplemental Nutrition Assistance Program

SNAP-Ed SNAP Education

TOP Treasury Offset Program


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Scope of Management Evaluation

The ME process is designed to assess the State Agencys compliance with its responsibilities foradministration of the SNAP as outlined in the applicable CFR, FNS instructions, and policies. Thisreview was conducted at the State DSSoffice in Raleighand local offices in Pitt, Guilford, and Wake

Counties.

The areas with findings are:Program Access, State and LocalManagement EvaluationsClaims/TOPE&TEBTRecipient IntegrityStatistical Review

The area without findings is:SNAP-ED

Findings and Required Corrective Actions

1. Program Access (State Level)

Scope/Purpose

The objective of the program access review is to examine State level efforts to promote program

access, improve customer service, and eliminate barriers to program participation.

Finding 1.1:7 CFR 273.10(g)(1)(ii) requires the SA to ask households on the Notice of Denial ofInitial Application to inform the SA if it is approved to receive Public Assistance (PA), SupplementalSecurity Income (SSI) benefits, and/or benefits from a State or local program. The States applicationdenial notice is missing this statement in both the English and Spanish notices. The Spanish noticedoes not explain the basis for the denial. It only has a general statement that the household does notmeet the household definition as it is defined by the Food and Nutrition Services. Additionally, thenotice does not advise the household of the action it must take to reopen its application.

Required Corrective Action 1.1:The State must revise the Notice of Denial of Initial Application in

both English and Spanish to include the required statement. The Spanish version of the notice mustalso be revised to reflect the specific reason for the denial. The notice should advise the household ofthe action it must take to reopen its application.

Finding 1.2: 7 CFR 273.10(g)(1)(iii) requires that the Notice of Pending Application Status explainwhat action the household must take and that its application will be denied if the household fails totake the required action 30 days following the date verification was first requested. The English and


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Spanish Notice of Pending Application only state the client needs to contact the caseworker if theclient does not know what is needed.

Required Corrective Action 1.2: The State must revise the Notice of Pending Application Status toreflect what action the client must take and that failure to take the specific action will result in denialof the application.

Finding 1.3:7CFR 273.14(b)(1)(ii) requires that the Notice of Expiration and InterviewRecertification Form be accepted with only name, address, and signature. The English and Spanishnotices state that clients or their authorized representative must complete the form, sign, and date.

Required Corrective Action 1.3: The State must revise the Notice of Expiration and InterviewRecertification Form to reflect the right of a client or authorized representative to submit the Notice ofExpiration of Benefits with only name, address and signature.

Finding 1.4:7 CFR 271.6 (a) provides requirements for SA responsibilities for complaint proceduresand analyzing complaints. When appropriate, the results of this review shall be included in the StateCAP. Currently, (1) the local county offices are not logging and tracking client complaints, (2) the

State has not publicized how participants, potential participants, and other interested persons can file acomplaint, (3) the complaint analysis report only reflects complaints received from the EBT CallCenter and State Policy Help Desk, and (4) the State does not include any trends identified through theanalysis in its semiannual corrective action plan.

Required Corrective Action 1.4:The State must ensure that all county offices log and track allcustomer complaints, that local county complaints are incorporated into the periodic analysis, and theresults of this periodic analysis are included the State CAP when appropriate. The State must alsoensure that information regarding how to file program complaints is made available to participants,potential participants, and other interested persons through written materials or other appropriatemeans.

Finding 1.5: 7 CFR 272.2(c) requires that each SA report annually to FNS concerning programactivity statistics, including fair hearings. The review found that the fair hearing data provided on theFNS-366B report for FY 2013 was incorrect.

Required Corrective Action 1.5: The State must revise its procedures for submitting the FNS-366Binformation in order to ensure the validity of the data and submit a revised report for FY 2013.

Application Process

Finding 1.6: 7 CFR 273.2(a) and (b), and other related regulations list a number of requirements forSNAP program applications, which are applicable in both the paper and online environment. Duringthe ME, FNS reviewed forms DSS-8207 (Revised 12-13, Application for Food and NutritionServices), NCFAST-20009 (NC Public Assistance Rights and Responsibilities), DSS-8550 (ChangeReport Form), and the NC Electronic Pre-Assessment Screening Service tool (ePASS). Both the paperapplication and online application are inconsistent with Federal requirements. There are two repeatfindings on the application (Revised 12-13) from FY 2013. Please see Appendix A for details.


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Required Corrective Action 1.6: The State must revise its paper and online application to ensurecompliance with Federal regulations.

Finding 1.7: 7 CFR 273.2(c)(3) states the SA shall make application forms readily accessible topotentially eligible households. FNS Reviewers found that the NC DHHS-ePASS site offeredapplicants form DSS-8207 (Revised 10-12), for download and print. The form offered is not thecurrent revised application.

Required Corrective Action 1.7: The SA must ensure that the revised application is available on theNC DHHS-ePASS site.

Finding 1.8: 7 CFR 273.14(b)(2)requires the State Agency to develop a recertification application tobe used by SNAP households during the recertification process. FNS reviewed the Notice ofExpiration and Interview Recertification Form, DSS-2435, the Rights and Responsibilities Form,DSS-2435SRi, and identified several issues to be noncompliant as indicated in the attached chart.Please see Appendix A for details.

Required Action 1.8: The State must revise the Renewal Form to ensure Federal compliance.

Finding 1.9: 7 CFR 273.2(c)(3) states that the SA shall make application forms readilyaccessible to potentially eligible households. The links to the language versions of the onlineapplication are broken, and do not direct applicants to the application process, or to print FormsDSS-8207 or NCFAST-20009.

Required Corrective Action 1.9: The SA must correct online application deficiencies in order toprovide applicants the access to receive the various languages of the application forms andprocess.

Finding 1.10:7 CFR 273.2(a)(1), states that the SA cannot, as a condition of eligibility, impose

additional application or application processing requirements. The NC Identity Management(NCID) system, which leads to ePASS, requires applicants to obtain an e-mail address to applyfor SNAP benefits.

Required Corrective Action 1.10:The SA cannot require applicants to supply an email addressin order to apply for SNAP benefits.

2. Program Access (Local Level)

Finding 2.1: 7 CFR 273.2(e)(3) requires the SA to schedule an interview for all applicanthouseholds who are not interviewed on the day they apply for SNAP benefits. During the review,FNS observed Application Processing staff advising households to expect an interview within 3 - 5business days. However, no official appointment date and time was provided. An interviewappointment is not scheduled for Wake County applicants until there is an unsuccessful attempt tocontact the household by telephone, which could be several days after the submission of theapplication.


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Required Corrective Action 2.1: The SA must schedule an interview date and time for all applicantswho are not interviewed on the day they apply.

Finding 2.2: 7 CFR 273.2(c) requires the SA to provide households that complete an onlineapplication in a SNAP office the opportunity to review the information entered and must provide themwith a copy of the application for their records. FNS reviewers observed SNAP applicants in theWake County Self Service Center who were not provided a copy of their electronic SNAP applicationfor review.

Required Corrective Action 2.2: The SA must ensure applicants submitting electronic SNAPapplications in local offices are able to review the information submitted and are provided with acopy.

3. State Management Evaluation Systems

The Federal review of the State ME System assesses the adequacy of the States review process and

methodology. It determines if the State ME review process covers all national target program areas,plus any additional areas of potential weakness added to the States ME guidance.

Finding 3.1:7CFR 275.20(a) requires the State to submit its review schedule to FNS and ensure thatall project areas/management units will be reviewed within the required time limits. An assessment ofthe list of completed project area ME reviews for FY 2013 found that the State did not conductreviews in accordance with the timeframes established by the regulatory guidelines. In FY 2013, 62county reviews were scheduled, but 18 county reviews were not completed until FY 2014. Inaddition, the required case reviews were not completed in 10 of the scheduled county reviews:Cherokee, Cleveland, Graham, Guilford, Lee, Lincoln, Martin, Randolph, Robeson, and WakeCounties.

Required Corrective Action 3.1:The State must ensure that project area reviews are completed inaccordance with the schedule established by regulatory guidelines. In addition, the State must adhereto the FNS-approved State ME Plan, and notify the FNS regional office of all changes in reviewschedules. The State must provide assurance that the FY 2014 ME reviews are on schedule.

Finding 3.2: 7 CFR 275.2 requires the SA to establish a continuous performance reporting system tomonitor program administration and operations, including corrective action implementation andmonitoring. Twenty-one of the 62 reviews in the FY2013 ME Schedule lacked completion dates forthe 6-month follow-up reviews for counties requiring corrective action or Program ImprovementPlans (PIP).

Required Corrective Action 3.2: The State must ensure the monitoring of the counties correctiveaction (or PIPs) by completing the remaining 6-month follow-up reviews for the FY2013 MESchedule by 9/30/2014 and submit a revised spreadsheet showing the completion dates for FNSreview.


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4. Recipient Claims Management/Treasury Offset Program (TOP)

Scope/Purpose

The objective of the Recipient Claims/TOP review is to assess State level performance in establishingand collecting claims for overissuance and referring delinquent debts to TOP.

Finding 4.1: 7 CFR 274.18(e)(6)(i) and (ii) states that a claim awaiting a fair hearing must not be

considered delinquent. It also requires the SA to re-notify the household of the claim due date if thehearing official determines that the claim exists. It further states that any delinquency must be basedon the due date of this subsequent notice and not on the initial pre-hearing demand letter sent to thehousehold. The State is not re-notifying the client and changing the due date/response time period as aresult of a timely fair hearing. The due date/ time period to respond to the demand letter must bechanged as a result of a timely fair hearing. Of the 17 timely fair hearing cases reviewed, the clienthad not been re-notified in 13 cases and no new due date/time period was entered into EPICS. This isa repeat finding from FY 2012.

Also, the State is making changes to claim cases as a result of untimelyfair hearings. Regulations statethat a fair hearing must be requested within 90 days of an adverse action. During the review, it was

observed that changes were being made to claim cases as a result of untimely fair hearings that haveoccurred up to six months past the 90-day limit.

Required Corrective Action 4.1: The State Agency must not change claim cases as a result of anuntimely fair hearing decision. Clients whose claims are upheld as a result of a timely fair hearingmust be re-noticed and a new due date/response time period provided.

Finding 4.2:7 CFR 274.18(e)(2): requires the State to establish a claim if the overpayment wasdiscovered in a quality control review. During our review of overissuances discovered in the 2013quality control period, 211 (88%) of the 240 error cases did not have the claim referred/established.This is a repeat finding from FY 2012.

Required Corrective Action 4.2:Claims discovered in a quality control review must be establishedwithin the regulatory timeframe.

Finding 4.3: 7 CFR 274.18 (d)(1) requires the State to establish a claim before the last day of thequarter following the quarter in which the overpayment or trafficking incident was discovered and youwill ensure that no less than 90 percent of all claim referrals are either established or disposed ofaccording to this time frame. Currently, the State has a claim backlog of 33 percent. This is a repeatfinding from FY 2012.

Required Corrective Action4.3: The State must develop a process to ensure that no less than 90% of

all claims are established within the regulatory time frame.

Finding 4.4: 7 CFR 274.18 (f)(1) requires the State to automatically collect payments for any claimby reducing the amount of monthly benefits that a household receives unless the claim is beingcollected at regular intervals at a higher amount or another household is already having its allotmentreduced for the same claim. Currently, when a client is being recouped and recertifies, EPICS is notrecouping after the household is recertified. This occurred in 10 (67%) of the 15 cases that werereviewed.


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Required Corrective Action 4.4:The State agency must ensure that all recoupment collectioncontinues after recertification.

Finding 4.5: 7 CFR 274.18(e) (5) (i) (B) states, a claim must be considered delinquent, if a paymentarrangement has been established and a scheduled payment has not been made by the due date. TheStates system is not capturing the arranged repayment agreement amount and it is accepting anyamount received as a payment. The amount and the due date agreed upon must both be met or theclaim becomes delinquent.

Required Corrective Action 4.5:The State agency must ensure that the claim repayment agreementamount and due date are captured in its system and that missed payments are acted upon.

Finding 4.6: 7 CFR 274.18(n)(1)(ii) states that claims submitted to the Treasury Offset Program(TOP) must be at least 180 days delinquent. The 180-day clock starts when the claim becomesdelinquent. In North Carolina, the 180-day clock starts with the date of the Notice of Overissuance.Subsequently, claims are being submitted to TOP 30 days too early. This occurred in 5 (33%) of the15 cases reviewed.

Required Corrective Action 4.6:The State must identify the individuals who were incorrectly offsetby TOP in their first 30 days and refund those offsets. The State must also ensure that claims sent toTOP are at least 180 days delinquent.

Finding 4.7:The Collecting Food Stamp Program Recipient Claims through the Treasury OffsetProgram (TOP) Manualincludes a signed agreement between the State and the Treasury Departmentin which the State certifies that claim balances in EPICS and TOP agree. EPICS and TOP balancesdid not agree in 5 (33%) of the 15 cases reviewed.

Required Corrective Action 4.7:The State must ensure claim balances in TOP and EPICS match.

Finding 4.8: 7 CFR 274.18(a)(3) requires the State to develop a plan for establishing and collectingclaims that provides orderly claims processing. In North Carolina, there is no central oversight formonitoring (1) how, when, and by whom claim balances are changed, (2) that compromise policy isbeing followed, and (3) the application of bypass indicators (blocks). Improperly applied blocks canprevent a claim from being sent to TOP.

Required Corrective Action 4.8:The State must monitor the claim management process in thecounties to ensure that claims policy and procedures are being followed.

5. Employment and Training

Scope/PurposeThe objective of the review is to determine if the SNAP Employment & Training (E&T) program isbeing conducted according to FNS guidance and the State plan.

The E&T review determines if the State work program conforms to Federal regulations; whether theState adequately reviews local operations; and whether Federal reports are accurate. FNS reviewed


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eligibility reports and reports from contractors, and interviewed staff in the State office. FNS alsovisited Wake County to review records with the State staff in order to obtain an understanding of howthe State E&T program functions.

Finding 5.1:7 CFR 273.7(c)(1) states the SA must register for work each household member notexempted by the provisions of paragraph (b)(1) of 273.7. In Wake County, caseworkers work registerall adults between the ages of 18 to 59, regardless of Federal exemption status, in order to avoid thepossibility of the NC FAST excluding the needs of the individual for SNAP benefits. It is unclear ifcase workers do this because of a system defect, a miscommunication, or if the system is notappropriately applying the applicable work exemptions.

Required Corrective Action 5.1:The SA must ensure that the NC FAST eligibility system accuratelyrecognizes federal work exemptions as non-work registrants. The SA must also ensure that staff in allcounties are informed of the correct way to code adults between the ages of 18 and 59 so that the workregistration and work exemption information entered into the system accurately reflects householdcircumstances.

Finding 5.2:7 CFR 273.7(d)(1)(i)(B)(1) states that 90 percent of the annual 100 percent Federal E&T

grant will be allocated based on the number of work registrants in each State as a percentage of workregistrants nationwide. FNS will use work registrant data reported by each State agency on the FNS-583, Employment and Training Program Activity Report, from the most recent Federal fiscal year.NC is currently including those who meet federal exemptions and do not request to volunteer as workregistrants in the Work Registrant count reported on the FNS-583 quarterly reports.

Required Corrective Action 5.2:The State must ensure that the FNS-583 does not include federallyexempt SNAP household members as work registrants who do not volunteer to work register. TheState must correct the FNS-583 for FY 2013 and FY 2014 to-date. The State must ensure that futuresubmissions of the FNS-583 accurately report only mandatory and voluntary work registrants.

Finding 5.3:7 CFR 273.7 (c )(2) states that the SA is responsible for screening each work registrantto determine whether or not it is appropriate, based on the State agency's criteria, to refer theindividual to an E&T program, and if appropriate, referring the individual to an E&T programcomponent. Work registrants are not referred to the Department of Workforce Services forparticipation in program components listed in the State Plan.

Required Corrective Action 5.3:The SA must refer work registrants to the Department of WorkforceServices for participation in program components listed in the State Plan.

Finding 5.4:7CFR 273.7(d)(6) states the SA must ensure that records are maintained that support thefinancial claims being made to FNS. Neither vouchers nor supporting documentation were obtained

by the state agency to verify financial claims presented by contractors for reimbursement funds fromFNS. The contractors statement is accepted as verification of expenditures.

Required Corrective Action 5.4:The SA must ensure that records are maintained that support thefinancial claims being made to FNS. The SA must review expenditures for FY 2014 year-to-date toensure that the vouchers and supporting documentation validate the financial claims presented bycontractors. If appropriate, the SA must implement recoupment procedures for overpayments to thecontractors.


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6. Electronic Benefit Transfer

Scope/Purpose

The objective of the Electronic Benefits Transfer (EBT) review is to examine the States compliancewith regulations regarding the operation of the EBT system.

Finding 6.1:7 CFR 274.1(h)(2) requires SA to divide issuance responsibilities between at least two

persons to prevent any single individual from having complete control over the benefit award and theissuances themselves. These are commonly referred to as the separation of duties requirements.Security records indicated that some county staff that authorizes benefits also have the ability tochange addresses and perform other administrative functions in the EBT system.

Required Corrective Action 6.1: The SA must revise their current written procedures and securityprotocols to prevent a person involved in the authorization of benefits from having any access to theEBT system other than inquiry. These procedures should be monitored during the State ME process.

Finding 6.2:7 CFR 274.2(g)(ii) requires the SA to notify the client of a Retailer Initiated Adjustment

and give them 90 days to request a fair hearing prior to processing the adjustment. The SA could notdocument that this notice is being sent.

Required Corrective Action 6.2: The SA must properly notify clients of proposed Retailer InitiatedAdjustments and provide a fair hearing if requested.

7. Recipient Program Integrity

Scope/Purpose

The Recipient Integrity Review examines SA and/or local SNAP offices to determine compliancewith Federal requirements governing recipient and benefit integrity in the SNAP. The purpose of thisreview determines how waste, fraud, and abuse are handled in each State. Staff examined thefollowing areas: organizational structure and work flow, fraud referrals, fraud detections,investigations, computer matches, the Administration Disqualification Hearing (ADH) process,prosecutions, the Electronic Disqualified Recipient System (eDRS), and the process for collecting datafor FNS reports.

Finding 7.1:7 CFR 273.16 (a)(1) requires that the State be responsible for investigating any case ofalleged IPV and ensuring that appropriate cases are acted upon either through ADHs or referral forprosecution.

FNS shares information with States regarding retail stores that have been permanently disqualifieddue to being found guilty of trafficking. The data and other information shared contains householdtransactions that FNS has determined to meet patterns indicative of trafficking. The transactionsconstitute alleged IPVs and should be further investigated by the State. Currently, counties are notconsistently taking action on the FNS disqualified retailer referrals.


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FNS has also provided the State with tools to monitor social media sites for clients attempting to saleEBT benefits. Interviews of county staff confirm that social media sites are not being monitored.

Required Corrective Action 7.1:The State must ensure that the client transactions provided in FNSdisqualified retailer referrals are investigated. The State must also ensure that social media sites aremonitored. In both cases, the State must ensure that suspected IPVs are referred for ADH orprosecution.

Finding 7.2:7 CFR 273.16(f)(3) requires that the State agency shall provide written notice to thehousehold member prior to disqualification. Case file reviews revealed that counties are notconsistently noticing the client prior to implementing disqualifications.

Required Corrective Action 7.2:The State must ensure that all clients are provided written noticeprior to implementing disqualifications.

Finding 7.3: 7 CFR 272.2(c) and 7CFR 273.16 (i)(1) requires that each SA report annually to FNSconcerning program activity statistics, including disqualifications for IPV. Our review found that theprosecution data provided on the FNS-366B report for FY 2013 was incorrect.

Required Corrective Action 7.3: The State must revise its procedures for submitting the FNS-366Binformation in order to ensure the validity of the data and submit a revised report for FY 2013.

Finding 7.4:7 CFR 272.1 (f)(2) state that case records relating to Intentional Program Violation (IPV)disqualifications and related notices to the household shall be retained indefinitely until the SA obtainsreliable information of death or that the individual has turned 80 years old. Case file reviews confirmthat signed court orders are not being scanned into the official case files.

Required Corrective Action 7.4: The State must establish procedures to ensure that IPV case recordsare complete with appropriate signed documents.

Finding 7.5:7 CFR 273.16 (g)(2) (i) and (ii) requires disqualifications as a result of a court order tobe imposed within 45 days of the date of the order and in some cases, within 45 days of the date theindividual was found guilty. It further requires that once a disqualification has been imposed against acurrently participating household member, the period of disqualification shall continue uninterrupteduntil completed regardless of the eligibility of the disqualified members household. Currently, if aclient is serving a disqualification period and is found guilty of a subsequent violation, the State is notimposing the disqualification period until the first disqualification period has been served.

Required Corrective Action 7.5: The State must ensure that disqualification periods are imposed inaccordance with Federal Regulations.

8. Statistical Review

The objective of the statistical review is to validate the States active and negative sampling planimplementations for the months under review, determine if duplicate participation occurred within the


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sample universe, determine if EBT issuance files were in agreement with authorized allotments, andensure accurate data management procedures are in place to manage the quality control process.

Finding 8.1:7 CFR 272.4(e), states that each SA shall establish a system to assure that no individualparticipates more than once in a month, in more than one jurisdiction, or in more than one householdwithin the State in the Food Stamp Program. During the review, a comparison was made between theactive frame and the EBT issuance file. The Federal reviewer found occurrences of householdsparticipating more than once in a month on the EBT issuance file.

Required Corrective Action 8.1: The SA is required to identify the cause and onset of the varianceand implement measures to prevent future occurrences.

Finding 8.2: Federal regulations at 7 CFR 275.4 requires the SA to maintain Performance ReportingSystem records which include QC sampling frames and lists. During the 2014 ManagementEvaluation review, the State was not able to provide the QC sampling frame as ordered and used forthe March and April 2014 active and negative sample selection process.

Required Corrective Action 8.2: The SA must retain a snapshot of the QC sampling frames and cases

selected as is at the time of sample selection each month the required record retention period.

Finding 8.3: Federal regulations at 7 CFR 274.1(a) requires the SA to establish issuance andaccountability systems to ensure benefit issuance and reconciliation activities are properly conductedand accurately reported to FNS. During the FNS 2014 Management Evaluation review, it wasdiscovered that proper accountability systems were not in place to ensure issuances were accuratelyreported to FNS. A selection of 25 cases with multiple issuances in April 2014 yielded four cases thatcontained replacements or restorations that were not for the benefit month recorded.

Required Corrective Action 8.3: The State must establish proper accountability of issuance systemsto ensure that benefits are recorded appropriately.

Finding 8.4: 7 CFR 275.11, states that each SA shall develop a quality control sampling plan whichdemonstrates the integrity of its sampling procedures. During the 2014 Management Evaluation, itwas discovered that case structure and ordering procedures used by the State are not the proceduresdescribed in the States approved FY 2014 sampling plan.

Required Corrective Action 8.4: The SA is required to complete the FY 2015 sampling plan requestthat accurately describes the procedures that will be utilized in sample selection. The SA must adhereto the procedures as described in the approved sampling plan, beginning with FY 2015.

Finding 8.5: 7 CFR 275.11(b)(2)(ii)and the States approved sampling plan require the State to

complete a minimum sample size of 680 based upon the States average monthly reviewable negativecaseload. The State completed 440 negative reviews for FY 2013 and did not meet the requiredminimum negative reviews.

Required Corrective Action 8.5: The SA is required to complete system fixes necessary to eliminatethe excessive amount of negative case selections that are not subject to review. In addition, the SA isrequired to complete the minimum required negative reviews, beginning with FY 2014.


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Attachment A

Review of North Carolina SNAP Application, and Recertification

DSS-8240 Application for Food and Nutrition Services

NCFAST-20009 Public Assistance Rights and Responsibilities

ePASSRegulation Finding Application Type

7 CFR273.2(b)(1)(iii)

The paper application includes a Penalty andPerjury statement which requires the householdto inaccurately attest to the receipt of the Rightsand Responsibilities form at application. TheRights and Responsibilities form was notincluded with the application. This is a repeatfinding. Also, the statement online needs toinclude information concerning citizenship andalien status.

PaperOnline

7 CFR 273.2(b)(1)(ii)7 CFR 271.5(b)

7 CFR 273.16(b)(1),(2), (3), (4)

Does not include the description of the civil andcriminal provisions and penalties for violationsof the program.

PaperOnline

7 CFR273.2(b)(1)(viii)

Does not include the complete posting of theNon-Discrimination Statement.

Paper

Online

7 CFR273.2(b)(1)(ix)

The application must contain language whichclearly affords applicants the option of answeringonly those questions relevant to the SNAP. Thisis a repeat finding.

PaperOnline

7 CFR 273.2(b)(2)The forms do not notify all applicants through awritten statement that information availablethrough IEVS will be requested, used, and maybe verified through collateral contacts whendiscrepancies are found by the SA, and that suchinformation may affect the eligibility and level ofbenefits.

Paper

7 CFR 272.6(g)

The forms do not indicate that obtaining racialand ethnic data is voluntary. Also, the forms donot explain the reasons for the data, and that notsubmitting the data will not affect the eligibilityor level of benefits.

Paper


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Sec. 115 ofPRWORAandFood and NutritionAct of2008 Sec.6(b)(1), (j)

Does not list specific behaviors that took place afterAugust 22, 1996. Paper

Online

7 CFR 273.2(b)(3) The HH mustbe notified that the State must processapplications for SNAP in accordancewith SNAPprocedures, including timeliness, notice, and FHrequirements regardless of whether the application is forSNAP and other programs. Also, a HH may not bedenied SNAP benefits solely because it has beendeniedbenefits from other programs.

PaperOnline

7 CFR 273.2(b)(4) (ii)

The forms do not explain that information collected

may be disclosed to other Federal and State agenciesfor official examination, and to law enforcementofficials for the purpose of apprehending personsfleeing to avoid the law.

Paper

7 CFR 273.2(b)(4) (iii)The forms do not explain that if a SNAP claim arisesagainst your HH, the information on the application,including all SSNs, may be referred to Federal and Stateagencies, as well as private claims collection agencies, forclaims collection action.

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7 CFR 273.2(c)(1)Does not explain the filing date. It should state that thefiling date is different if the HH is in an institution andapplying for SNAP and SSI at the same time. In thiscase, the filing date is the date of release from theinstitution.

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7 CFR 273.16(d)

Does not notify applicants of the disqualification penaltiesfor intentional program violations. Should include astatement that informs HHs that paying for foodpurchased on credit with SNAP benefits is not allowed,and that doing so could result in disqualification.

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DSS-2435 Notice of Expiration and Recertification Form

DSS-2435SRi Rights and Responsibilities Form

Regulation Finding

7 CFR 271.5(b)

The application does not include notification that household members in

violation of SNAP policies may be barred for an additional 18 months ifcourt.

273.14(1)(ii)(D)Language does not notify household of their right to file an incompleteapplication as long as it contains the applicants name, address, andsignature.

272.6(g)Notification does not advise household of the purpose for collecting racialand ethnic identity information and that failure to do so will not affecteligibility or benefit level.

Food and Nutrition Act of2008 Sec. 6(b)(1), (j)

Penalty questions related to the conviction of household members fortrading SNAP benefits for drugs, buying or selling SNAP benefits over$500, fraudulently receiving duplicate SNAP benefits in any State, andtrading SNAP benefits for guns, ammunitions, or explosives were notincluded on the application or addendum.

271.5(b)Application or addendum does not advise household members not to useSNAP benefits to pay credit accounts or to purchase nonfood items; use orpossess someones EBT card without authorization and not to let someoneelse use yours; trade or sell SNAP benefits.

273.2(b)(1)(viii) Rights and Responsibilities (DSS-2435SRi) form does not include thecomplete Non-Discrimination Statement.

Privacy Act Statement273.2(b)(4)(iii)

Application or addendum does not include notification to household thatapplication information may be forwarded to State, Federal, or privateclaims agencies for claims collection.

Documents

Usda Sept 2014 Report