Louisiana pays more than $3.9 to resolve false claims allegations concerning its SNAP program oversight

by Ben Vernia | April 12th, 2020

On April 10, the Department of Justice announced that the Louisiana Department of Children and Family Services – which administers the federally-funded SNAP children nutrition program in the state – has agreed to pay more than $3.9 million to settle allegations that it failed to meet quality control requirements. The case arose from an investigation by the Department of Agriculture into the methods of a consultant, a former South Dakota food stamp official, to lower error rates and obtain performance awards. According to DOJ’s press release:

The Louisiana Department of Children and Family Services (DCFS) has agreed to pay the United States $3,984,254 to resolve allegations that it violated the False Claims Act in its administration of the U.S. Department of Agriculture’s (USDA) Supplemental Nutrition Assistance Program (SNAP), the Department of Justice announced today.  Until 2008, SNAP was known as the Food Stamp Program.  

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Under SNAP, the USDA provides eligible low-income individuals and families with financial assistance to buy nutritious food.  Since 2010, SNAP has served on average more than 45 million Americans per month and provided more than $71 billion annually. 

Although the federal government funds SNAP benefits, it relies on the states to determine whether applicants are eligible for benefits, to administer those benefits, and to perform quality control to ensure that eligibility decisions are accurate.  The USDA requires that the states’ quality control processes ensure that benefits are correctly awarded, are free from bias, and accurately report states’ error rates in making eligibility decisions. 

The USDA reimburses states for a portion of their administrative expenses in administering SNAP, including expenses for providing quality control.  It also pays performance bonuses to states that report the lowest and the most improved error rates each year, and can impose monetary sanctions on states with high error rates that do not show improvement. 

The settlement resolves allegations that beginning in 2011, DCFS contracted with a consultant known as Julie Osnes Consulting LLC (Osnes Consulting) to provide advice and recommendations designed to lower its SNAP quality control error rate.  The United States alleged that Osnes Consulting’s recommendations, as implemented by DCFS, injected bias into DCFS’s quality control process and resulted in DCFS submitting false quality control data and information to USDA, for which it received unentitled performance bonuses for fiscal years 2012 and 2013.  

This is the sixth settlement in this matter, and the fifth settlement with a state agency for manipulating its SNAP quality control findings.  The United States has reached previous settlements with state agencies in Virginia, Wisconsin, Texas, and Alaska, as well as with Osnes Consulting and its owner, Julie Osnes.  Including this settlement, the United States has now recovered over $36 million in connection with this investigation.  

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