Two State Social Services Departments Settle FCA Suits over SNAP Funds

By the C|C Whistleblower Lawyer Team

This week, the Virginia Department of Social Services (VDSS) and the Wisconsin Department of Health Services (WDHS) each agreed to pay the United States roughly $7M to settle allegations that they violated the FCA in their administrations of the SNAP program (formerly known as the Food Stamp program). Both VDSS and WDHS used the same consultant, Julie Osnes Consulting, to advise them on quality control (QC) measures while administering the SNAP program.

The SNAP program is federally funded, but states are tasked in determining applicant eligibility, administering benefits, and performing QC. The Federal Government reimburses states for a portion of expenses involved in administering SNAP, including QC expenses. Additionally, the Federal Government pays states bonuses based for low QC error rates.

Both VDSS and WDHS used Julie Osnes Consulting in their QC programs. The consultant trained QC auditors to “use whatever means necessary” to find a benefits decision “correct” rather than finding an error. Additionally, if staff “could not find a way to make a benefits decision correct,” they were instructed to “find a reason to ‘drop’ the case, or eliminate it from the sample.” At VDSS, employees often did not want to use the methods suggested by the consultant and were threatened with termination by their supervisors. The VDSS received improper USDA performance bonuses for 2011, 2012 and 2013. The federal government improperly awarded WDHS the same bonuses at issue for 2009, 2010, and 2011.

Both settlements arose out of a nationwide audit of State SNAP QC processes by the USDA-OIG.

Tagged in: Defendants, FCA Federal, Grant and Research Fraud,