The Virginia Department of Social Services will be penalized more than $3.8 million by the federal government because of its high rate of payment errors in the state’s Supplemental Nutrition Assistance Program over the past two fiscal years.
Virginia DSS had a 9.6% payment error rate in 2018, compared with the national average rate of 6.5%, according to DSS Commissioner Duke Storen in a report to the General Assembly’s Joint Subcommittee for Health and Human Resources Oversight on Tuesday. Payment errors are counted in the rate only when the mistake is worth more than $37.
The rate triggered the penalty because it was more than 5% higher than the national average. Virginia’s rate landed it in 44th place in the nation, Storen said.
In Virginia, about 698,000 people receive SNAP benefits, previously called food stamps. That’s down from nearly 760,000 people in June 2017.
“The member base continues to shrink as unemployment and poverty goes down,” Storen said.
DSS’ preliminary analysis of the high error rate identifies several causes, including high turnover and unfilled positions, local government budget cuts, a need for training and technical assistance, and high caseloads for local DSS workers.
Many localities have high vacancy rates, including Richmond at 33% and Norfolk at 35%. Departments also struggle with high turnover, with a statewide average of 17%, Storen said.
“We have a lot of churn among our eligibility workers who are working SNAP cases,” Storen said. “The more churn you have in your workforce, the more errors you’re going to have.”
Storen said the errors, which generally are honest mistakes rather than fraud, could happen if a caseworker failed to ask the proper questions to fully assess the recipient’s eligibility or if a recipient failed to inform DSS of a life event such as having a child or securing a better job that could change their eligibility.
Virginia will have the opportunity to enter into a settlement agreement with the federal government that will allow DSS to keep half of the payment error penalty and put it into improving the SNAP program.
DSS will have to submit a plan for how it will use the $1.9 million penalty reinvestment, but since it is a one-time payment, it will most likely not be put toward recurring expenses, like salaries for more workers, Storen said.
“The turnover rate and the training — which is the other side of that coin — those are the two biggest drivers,” Storen said. “If we are able to stabilize our workforce and make sure that they’re trained, then we would be below the national average.”
Del. Chris Jones, R-Suffolk, the subcommittee chairman, told Storen he would like to see the department determine how much funding it needs to make the changes required to reduce the payment error rate.
Sen. Siobhan Dunnavant, R-Henrico, expressed frustration that the federal penalty could have been avoided.
“We could have measured that ourselves and had systems in place to correct before we were in jeopardy of penalty,” Dunnavant said.
She also recommended the department look into a regional approach to social services, as opposed to separating offices by local jurisdictions, in case that could be a more efficient and effective approach.
Storen said that DSS is looking into strategies in other states that have lower error rates and is working on a plan to improve Virginia’s rate.
“I feel confident,” Storen said. “When I come before you next year and have this conversation, it will be much better.”