Press Release

June 29, 2005

Food Stamp Program Continues to Improve

Preliminary data for 2005 to date shows that Maine’s Food Stamp Program continues to improve an error rate that caused a financial penalty last year.

The preliminary information shows Maine among the top states in improving accuracy in Food Stamp eligibility determinations. If this trend continues, Maine could cut its error rate by half since the 2004 final data reported last week. The change is important because a higher than average error rate in 2004 exposed Maine to financial penalties. Maine would face an additional sanction in 2005 without the improvement.

“Maine continues to take important steps to improve program operations. Current data show the state moving in the direction we all want to see,” said Bob Canavan, acting regional administrator with USDA’s Food and Nutrition Service in Boston.

USDA released final state performance data for federal fiscal year 2004 last week, including information on expected sanctions for states with higher than average error rates for the fiscal year ending Sept. 30, 2004. Maine would have to pay $693,906, but the state is considering an option that would reduce that amount by half.

“The full sanction amount is in line with what we expected when the error rate issue emerged more than a year ago,” said Jack Nicholas, Maine Commissioner of Health and Human Services. “We are strongly considering an option that would allow us to reduce that amount by $347,000 if we reinvest the dollars in continued program improvement and continue to see the declining error rate. If we go that direction, the amount will be substantially less than we expected.”

“We are eager to listen to proposals that would reinvest these sanction funds to continue operational improvements in Maine,” Canavan said.

Food Stamps are a nutrition assistance benefit that varies based on household need. States measure the accuracy of benefits continually to ensure accountability. When the benefit amounts are either too low or too high it is reflected in the error rates released this week by USDA. This error rate is not a measure of program fraud

At this time last year, Maine’s accuracy was declining rather than improving and ranked among the poorest performing States nationally.

“We have turned last year’s issues around and now we want to continue improving the quality of our processes and our accuracy,” Nicholas said.

Food Stamp benefits are paid 100 percent by USDA and bring $12 million dollars of grocery purchasing power into the state each month. Studies show that each Food Stamp benefit dollar actually brings $1.84 into a State’s economy because of the ripple effect of jobs and business generated in the food industry. Benefits are redeemed electronically by recipients who use a debit card at approved food retailers. Food Stamps supplement household food budgets for elderly and disabled individuals and low income individuals and families. These benefits are particularly important for working poor households, helping them to maintain financial independence.

The Food Stamp program is administered in Maine by the Department of Health and Human Services, which works to enhance the health, safety and independence of all Maine people. The Department’s MaineCare program provides health insurance to more than 260,000 people. Other program initiatives protect public health, advance social and economic independence, and support preventative, protective, and public health services for children, families, Maine’s seniors, and adults, including those with cognitive and physical disabilities.