Virginia Department of Social Services pays feds over $7 million over food stamps funds fraud allegations

The Virginia Department of Social Services is paying the United States $7,150,436 to resolve allegations that it violated the False Claims Act in its use of the Supplemental Nutrition Assistance Program (SNAP), the Department of Justice announced today. SNAP was formerly known as the Food Stamp Program. Under SNAP, the U.S. Department of Agriculture (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 million annually.

The federal government funds SNAP benefits, it relies on the states to determine whether applicants are eligible for benefits. to administer those benefits. However, USDA requires that the quality control processes the states use ensure that benefits are correctly awardedand accurately report states’ error rates in making eligibility decisions, according to the Justice Department.

VDSS admitted that, beginning in 2010, it retained Julie Osnes Consulting, a quality control consultant, to reduce its SNAP benefits determination error rate by training VDSS quality control workers to “use whatever means necessary” to find a benefits decision “correct” rather than finding an error. VDSS also admitted that if its quality control staff “could not find a way to make a benefits decision correct,” they were instructed to “find a reason to “Ödrop’ the case, or eliminate it from the sample.” VDSS acknowledged that this outcome-driven method, as implemented by VDSS between 2010 and 2015, “injected bias into the case review process” because it was designed to lower VDSS’s reported error rate by falsely reporting errors as “correct” or eliminating them from the sample. Through its use of these biased methods, VDSS was improperly awarded USDA performance bonuses for 2011, 2012, and 2013.

VDSS further admitted that VDSS quality control workers did not want to use the methods proposed by Julie Osnes Consulting because they believed the methods lacked integrity, injected bias into the quality control process, and violated USDA requirements, and that they communicated these concerns to their supervisors. VDSS admitted that the former VDSS quality control manager pressured and intimidated these employees to force them to adopt these methods, including, according to these employees, threatening termination, providing negative performance reviews, taking away teleworking and flexible scheduling privileges, and engaging in other forms of harassment and retaliation.

Jeffrey Newman represents whistleblowers