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Food Stamp Errors Cost State Dearly

Sanctions: The federal government likely will fine California at least $46 million because of rampant problems.


WASHINGTON — The Bush administration on Friday scolded California for operating the most error-plagued food stamp program in the nation and disclosed that the state faces a likely penalty of tens of millions of dollars, the largest such sanction imposed in the history of the program.

The California problems, centered in Los Angeles County, stood out even among big urban states with large populations of immigrants and the poor. The state's rate of incorrect food stamp allocations was twice the U.S. average and contrasted with a trend of improvement in states including New York, Texas and Illinois.

"It's something I'm very, very, very concerned about," Eric Bost, the U.S. Agriculture Department's undersecretary for nutrition programs, said in an interview. He added that he has made five visits to California to help fix the problem. "At some point in time, I've got to say, 'OK guys, I've met you more than halfway--it's time for you to start to produce.' I believe I'm at that point."

According to federal data released Friday, California awarded the wrong amount of food stamps in 17.4% of its cases last year. An estimated 124,520 households received overpayments for food stamps, with 68,486 getting less than they were eligible for.

The errors were blamed mostly on a new computer system that has proved troublesome in Los Angeles County and the state's demanding paperwork requirements.

The Department of Agriculture, relying on a formula, assessed the state a $115.8-million "liability" for the problems and soon will begin negotiating repayment from California for a substantial part of that money as a sanction.

In the interview, Bost said the state will end up paying "more than 40%" of its liability to Washington. That would come to more than $46 million, an unprecedented sanction in the food stamp program, which dates to the 1960s. State officials will be required to spend much of the remainder on improving management of the food aid.

California officials were chagrined Friday at the size of the sanction, urging the federal government to give them more time to work out the difficulties.

"Just looking at the gross figure, the magnitude of these sanctions [is] much too large by any standard," said Glen Rosselli, undersecretary of the California Health and Human Services Agency.

"California simply has to hope--L.A. County has to hope--that the feds do the right thing now and do not pull money out of the program in lean times when there's almost a nationwide consensus that the system doesn't work."

To qualify for food stamps, the gross monthly income for most families must be 130% or less of the federal poverty guideline, or about $1,533 per month for a family of three.

California, which provides more than 1.7 million residents with food stamp benefits averaging $75 every month, has long struggled to improve the quality of its program.

Critics contend that the state's filing system is too strict, requiring recipients to submit monthly income reports that flood county offices with paperwork and increase the chances of mistakes. Most states require recipients to fill out applications quarterly, or even less often.

Still, error rates have declined in such counties as San Francisco, Santa Clara, Alameda and Riverside, noted Bruce Wagstaff, deputy director of the California Department of Social Services' welfare-to-work division. By all accounts, the problems are centered in Los Angeles County, where a new computer system that was supposed to improve matters has instead created bureaucratic headaches.

Critics also say the system is bug-ridden and overly complex. The county and the state say workers had not been sufficiently trained to use the system, which helps determine food stamp allocations for 40% of California recipients. In 1998, the county's error rate was 15%. As late as December 2001, Wagstaff said, it was 21%.

In the past, the federal government has typically allowed states to plow money into their own programs rather than sending fines to Washington. But a high-level budget official in the Bush administration sent a strong signal Friday that the White House approves of a hefty fine for California.

Mark Everson, controller of the Office of Management and Budget, described California's continuing problems as "unconscionable," considering that other large states with diverse populations have been improving their food stamp efforts.

"We applaud the enforcement of the statutory sanctions by the Agriculture Department and believe that over time this will lead to better management of the food stamp program in California and elsewhere," Everson said.

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