“The Food and Nutrition Service (FNS) was recently informed by a major provider of mobile EBT technology for farmers markets and farm stands that it will discontinue this service. With few providers in this marketplace, this is of great concern.

Farmers markets play an important role in providing Americans with access to nutritious foods. FNS is committed to encouraging farmers market participation in SNAP, to improve access for low income Americans while supporting economic opportunities for farmers and producers.

Since being notified of the provider’s decision to discontinue service, USDA has been exploring all available options in an attempt to avoid a service disruption. Our number one goal is to mitigate the impact on our program participants as well as farmers and producers.”

Here are some facts you should know about SNAP and farmers markets:

• By law, states are required to provide no-cost options for farmers markets and certain other retailers to accept SNAP. USDA reimburses states for 50 percent of these costs, like most other administrative expenses. The law does not require those solutions to be wireless, but FNS strongly encourages states to support wireless options.
• If state options are not feasible for a particular market, impacted markets and farmers may opt to seek their own wireless point-of-sale equipment or accept payment from SNAP participants by using paper vouchers.
• Recognizing that using traditional wired systems can be challenging for farmers markets and farm stands, Congress has approved $4 million each year in the President’s annual budget requests to allow USDA to provide EBT equipment to eligible markets and farmers.
• When the funding became available in 2012, FNS provided the funding to states as grants to provide wireless EBT equipment to eligible markets and farmers, but found that states were not using the funding, though it was available for up to 5 years.
• Because of lack of interest from the states, FNS opted to provide wireless equipment grants directly to markets and farmers beginning in 2013. The grant funding does not cover long-term costs of operating the mobile equipment or subsidize the service provider. The grant funding is sufficient to cover start-up costs for markets and farmers who are not currently accepting SNAP, so that they can expand their customer base to a level that will support the ongoing business costs associated with mobile transactions.
• Throughout the program, FNS has worked with three different contractors; the National Association of Farmers’ Market Nutrition Programs (also known as MarketLink), the Farmers Market Coalition (FMC), and most recently, Financial Transaction Management (FTM). All three contracts were awarded through an open, competitive process that complied with federal contracting law, and the companies were chosen because they were both technically acceptable and the best value. The most recent contract was awarded to FTM in March, and they are required to begin processing applications for wireless equipment from new markets and farmers this month.
• FNS will continue to work with FTM to ensure that markets and farmers have access to this important program. Like previous contracts, it is intended to help new markets get equipment and begin processing SNAP transactions – not serve as a permanent support. FTM has no role in supporting those markets equipped under previous contracts.

Moving forward, FNS will continue to work with interested mobile payments providers, while seeking to modernize the approach by employing a bring-your-own-device model for accepting SNAP EBT transactions, Food Insecurity Nutrition Incentive (FINI), and electronic payments from the Special Supplemental Nutrition Program for Women, Infants and Children (eWIC). Under this approach, business operators would purchase their own-point-of sale-equipment such as mobile phones and/or transaction terminals.

USDA is committed to providing excellent customer service to all of our diverse stakeholders, including those who operate our programs and those whom our programs serve. Our partners include program participants, state agencies, local operators, Congress, national and regional partners, local leaders and elected officials, retailers, and the American taxpayer. Together, we must ensure that our programs serve participants well.

USDA’s Food and Nutrition Service administers 15 nutrition assistance programs. In addition to the Supplemental Nutrition Assistance Program, these programs include Special Supplemental Nutrition Program for Women, Infants and Children, the National School Lunch Program, and the Summer Food Service Program which together comprise America’s nutrition safety net. For more information, visit www.fns.usda.gov.

WASHINGTON, June 28, 2018 – For the first time in three years, the U.S. Department of Agriculture (USDA) today released new data on improper payments in the Supplemental Nutrition Assistance Program (SNAP). This data reflects an improved reporting process that will better enable USDA and its state partners to make informed, data-driven decisions to improve program integrity. The national SNAP benefit payment error rate – a measure of both overpayments and underpayments made by all states nationwide – in fiscal year 2017 was 6.3 percent. This is an apparent increase over the 3.66 percent reported for fiscal year 2014, believed to be largely the result of the improved measurement procedures implemented by the Food and Nutrition Service (FNS) to improve the accuracy of the data, rather than an actual increase in improper payments.

“USDA is committed to program integrity and transparency,” said Brandon Lipps, USDA’s Acting Deputy Under Secretary for Food, Nutrition and Consumer Services. “The performance rates released today reflect an improved reporting process designed to provide an accurate measure of errors that can be identified and corrected to ensure taxpayer dollars are invested wisely and decisions are made based on solid facts.”

In 2014, USDA identified inconsistencies in quality control data that raised concerns about the presence of statistical bias in the system across the country. A thorough examination of each state’s quality control system and subsequent significant process improvement efforts have resulted in the more accurate payment error rates presented today. Due to the data quality issues uncovered in FNS’s extensive reviews, the agency declined to report a national payment error rate for fiscal years 2015 or 2016 until the problems could be resolved, and the agency could ensure the data presented were accurate. USDA implemented new oversight controls to correct data quality issues and prevent them from reoccurring, which included providing training to state and federal staff, updating guidance and manuals, and working with states to update their procedures to ensure consistency with federal guidelines.

“The majority of improper payments are due to human errors,” Lipps said. Improper payments occur when the state certifies someone who is not eligible; denies someone who is eligible; or calculates the benefit amount incorrectly such that the individual receives too much or too little benefits. This can occur for a variety of reasons including a data entry error, or improper information provided by the recipient. Approximately 60 percent of errors are a result of actions by state agencies, while 40 percent are caused by program participants.

The rates – which are assessed at the state level and analyzed to determine a national rate –measure state agencies’ accuracy in issuing SNAP benefit payments to program participants. They reflect the sum total of underpayments and overpayments by states and do not necessarily represent fraud by program recipients.

“Nutrition assistance programs work best when federal and state partners work together,” Lipps said. “Everyone involved in nutrition assistance programs – at the federal, state and local level – are rightly accountable for good stewardship of tax dollars, ensuring that those most in need are well-served.”

Under federal law, each state agency is responsible for monitoring its administration of SNAP, including payment accuracy. As part of the quality control process, states collectively review about 50,000 cases each year. FNS, which administers the program at the federal level, then double checks a sampling of those cases to ensure payment accuracy and compliance with program eligibility requirements. For more information on SNAP Quality Control , see also the SNAP Payment Error Rates fact sheet.

Any amount of error can have a significant impact on the program. Lipps said, “USDA remains committed to ensuring taxpayer dollars are used wisely and will continue to work with its state partners and Congress to identify ways to enhance integrity in all of its critical nutrition assistance programs. Where protection of taxpayer dollars is concerned, the job is never done.”

USDA’s Food and Nutrition Service administers 15 nutrition assistance programs. In addition to the Supplemental Nutrition Assistance Program, these programs include Special Supplemental Nutrition Program for Women, Infants and Children, the National School Lunch Program, and the Summer Food Service Program which together comprise America’s nutrition safety net. For more information, visit www.fns.usda.gov.

Additional Resources

— Fact Sheet
— Infographic
— State-by-State Rates

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