The state of Georgia did not properly manage its vendors in a key federal food program, resulting in estimated over-payments to vendors of about $115 million, according to a new federal audit.
The state’s Women, Infants and Children program, which provides a low-income population with food benefits, did not place its vendors into appropriate categories and did not always identify the vendors that received more than half their annual revenue from the program. Both factors can impact payment levels.
That ongoing noncompliance resulted in estimated over-payments to vendors such as grocery stores of more than $65 million in fiscal 2011 and nearly $50 million in fiscal 2012, according to an audit by the inspector general of the U.S. Department of Agriculture.
The Department of Agriculture oversees the Women, Infants and Children program, known as WIC, which provides grants to states for supplemental foods, health care referrals and nutrition education for low-income women who are pregnant or with young children, as well as to infants and children up to age 5 who are found to be at nutritional risk.
The inspector general report, completed at the end of September, focused on more than just Georgia, finding that the Department of Agriculture’s food program didn’t have a good system for monitoring state agencies’ food costs to ensure “federal resources are being used efficiently” in the WIC program.
The department did not always identify problems at state agencies that run the program on the local level, the audit said. When it did identify problems, federal officials didn’t always follow up to make sure corrective action was taken, the audit said.
That led to “missed cost-saving opportunities,” the inspector general concluded, adding that if the department managed its resources better it “could generate savings it could use to provide benefits to more participants and help further the program’s mission.”
In the report, officials from the U.S. Department of Agriculture highlighted many of the efforts they already undertake to keep costs down, and said they were addressing other issues identified by the inspector general. In Georgia, the state agency responsible for running WIC said fixes had long been underway.
Brenda Fitzgerald, commissioner of the Georgia Department of Public Health, said in an interview that Georgia had been doing a poor job managing its WIC program.
At the time she came into office, “WIC was indeed a problem,” Fitzgerald said, adding that, “We absolutely acknowledge that Georgia had not been doing well. We set about to fix it.”
Among the main fixes was to hire inspectors to crack down on fraudulent vendors.
“WIC was broken,” she said. “It was broken for a long time.”
The program in Georgia has been under the microscope and in the public eye in recent months for widespread problems with fraud and mismanagement.
The inspector general began its review of the WIC program in an attempt to understand wide variations in the WIC food costs per recipient. It reviewed the program in eight states and reviewed fiscal 2012 funding.
Georgia was one of the states and had the highest food cost per participant of the 50 states and District of Columbia, the report said.
According to federal data, Georgia was tops among states in spending per participant in fiscal 2011 and 2012, but costs dropped significantly in 2013, when the state ranked 17th.
Average monthly costs per recipient were nearly $62 in fiscal 2011, but down to $45 in fiscal 2013.
The audit identified several problems, some that went back several years.
As early as 2008, for example, the federal government found that Georgia did not effectively identify stores that got more than half of their sales from the WIC program; the program requires that states make sure that such vendors, heavily dependent on the WIC program, don’t cause higher food costs for the program in general.
But, according to the audit, that issue was still unresolved during reviews in 2010 and 2012. After a threat from the federal government to recover some of the money, and subsequent negotiations between the state and federal governments, the two sides agreed on a settlement in 2014 – six years after the issue was identified.
The state also was slow to disqualify certain vendors from the program. Even after receiving notification that a vendor had been disqualified from the separately managed food stamp program – formally known as Supplemental Nutrition Assistance Program, or SNAP – Georgia took between five and eight months to disqualify some vendors from WIC.
In all, nine vendors were able to redeem $1.8 million in WIC benefits after they had been disqualified from the food stamp program, the audit said.