The state of Mississippi will have to pay back $5 million to the federal government over its administration of the Supplemental Nutrition Assistance Program over undeserved bonuses.
From 2011 to 2017, the state employed the services of Julie Osnes, a quality control consultant, to lower the error rate on SNAP eligibility and benefits calculations. Taxpayers paid $463,000 for her services.
Osnes’ recommendations resulted in the Mississippi Department of Human Services submitting false quality control numbers and other information to the U.S. Department of Agriculture, which administers the SNAP (once known as the food stamp program).
Six other states that employed Osnes have paid $41 million back to the federal government over similar claims. Osnes’ consulting firm will have to pay more than $751,000 to settle claims with the federal government over the advice she gave states concerning their SNAP programs.
“Although it is appalling that these actions occurred within a state agency entrusted with assisting vulnerable and needy residents, I am heartened that MDHS has resolved its liability and cooperated with our investigation,” said William D. Hyslop, U.S. Attorney for the Eastern District of Washington, in a news release. “Together with our partners in the Justice Department’s Civil Division and the USDA, we will continue to investigate and hold accountable those who misuse and wrongfully obtain SNAP funding.”
While the USDA is responsible for the more than $71 billion annually paid in benefits under the SNAP program, states administer the program locally by determining eligibility, calculating and then issuing benefits. States are supposed to use quality control procedures to review their programs and can receive bonuses for the most improvements in the error rate and having the lowest error rate nationally.
States can also be penalized by fines for having high error rates that don't show improvement.
Mississippi received more than $2.7 million in fiscal 2012 in bonuses, $1.1 million in 2013, $1.3 million in 2014 and $653,000 in 2015.
Taxpayers spent more than $716 million on the SNAP program for fiscal 2020, which ends June 30. SNAP recipients represent 22.51 percent of the state's population.
According to the latest numbers from the USDA, Mississippi had the fourth-lowest payment error rate nationally with its SNAP program. Mississippi’s payment error rate was 2.43 percent on overpayments and 0.49 percent for a total error rate of 2.92.
The state gave Osnes an extension on her deal that expired in February 2016 despite the release of a September 2015 report by the U.S. Department of Agriculture's Office of Inspector General that decried the use of consultants such as Osnes to help with quality control over household eligibility.
Mississippi's first contract with Osnes was a two-year pact that began on October 1, 2011. She received $62,307 for her services in fiscal 2012. In fiscal 2013, her contract netted her consultancy firm $17,900.
The state and Osnes reached an agreement on a new contract that started on February 2, 2014 and the firm received $53,152 for its work.
The state and Osnes entered another contract starting April 1, 2015 and ended on February 1, 2016, with Osnes paid $45,000 for her services. The department and Osnes reached terms on an extension that started when the first expired and wasn’t supposed to end until this year.
The state paid Osnes $284,937 under the last contract, which has a maximum value of $515,625.
The last payment of $29,541 was made on June 1 and the DHS had the option to extend Osnes' deal for one more year.
