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Food and Nutrition Service

Southeast Region

ROBIN D. BAILEY
Regional Administrator
Supplemental Nutrition Assistance
Program (SNAP)
Sam Nunn Atlanta Federal Center
61 Forsyth Street, S.W. Room 8T36
Atlanta, GA 30303

Phone: 404-562-7030
Fax: 404-527-4508







Supplemental Nutrition Assistance Program
Management Evaluation Report

Fiscal Year 2014



North Carolina Department of Social Services





On-site Review Conducted: May 5 June 23, 2014
Follow-up Review Work Completed: July 18, 2014

Report Date: September 10, 2014

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Executive Summary
North Carolina Supplemental Nutrition Assistance Program
Management Evaluation Fiscal Year 2014
During the weeks of May 5, May 19, June 2, and June 16, representatives from the Food and Nutrition
Service, Southeast Regional Office, conducted a Management Evaluation (ME) of the Supplemental
Nutrition Assistance Program (SNAP). Several modules of the evaluation required additional follow-
up work that continued until July 18, 2014. The ME assessed the States performance in the National
priority areas. These include:
Program Access (State Level) Program Access (Local Level)
State ME System Recipient Claims/Treasury Offset Program (TOP)
Employment and Training (E&T) Electronic Benefit Transfer (EBT)
Recipient Integrity Statistical Review
SNAP Education (SNAP-Ed)
The evaluation assessed North Carolinas Department of Health and Human Services (DHHS)
compliance with responsibilities for the administration of the SNAP as outlined in the Code of
Federal Regulations (CFR) and FNS Instructions and Policies. The information in this report is the
result of ongoing exchanges between FNS and State staff, observation of operations, on-site review
of files, reviews of FNS and DHHS management reports, and interviews with staff in the State office
and in Guilford, Pitt, and Wake Counties.
This report is written on an exception basis and contains regulatory findings that require corrective
action. A written response addressing the required corrective actions must be submitted within
60 days from the receipt of this report, and must include documentation for actions taken or specific
timeframes for implementing procedures to resolve the deficiencies cited.
The ME identified these major findings:

There are critical findings in the Claims/TOP area that are related to a lack of State
oversight and monitoring. The State is submitting claims for offset 30 days too early,
resulting in households being offset in error. In addition, the State is not monitoring the
claim management process in local offices to ensure that policy and procedures are being
followed and reports reconciled in order to verify that claim balances are correct.

The lack of State oversight in Recipient Integrity has resulted in multiple findings,
including instances of potential fraud not being referred for disqualification or
prosecution, as well as deficiencies in data reporting and record keeping.

The review found instances of households participating more than once in a month. The State
must take steps to identify the cause and onset of the issue and take immediate steps to prevent
future occurrences.

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There are a significant number of findings related to program access. The States application
process does not provide applicants with the proper access to application materials. The
States SNAP application and notices do not contain the appropriate regulatory language.

There are serious findings in the States Employment and Training Program, including
improper coding of work registrants, inaccurate data reporting, and a lack of supporting
documentation to verify financial claims.

The full report details findings and required corrective actions for compliance issues.
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SNAP Management Evaluation Fiscal Year 2014
North Carolina Supplemental Nutrition Assistance Program

Table of Contents
Executive Summary 2
Acronyms 5
1. Program Access (State Level) .6-8
.................................................................................................................................................................
2. Program Access (Local Level)
.9
3. State Management Evaluation System 9-10
4. Recipient Claims Management/Treasury Offset Program (TOP) 10-11
5. Employment and Training ...12-13
6. Electronic Benefit Transfer ..13
7. Recipient Program Integrity . 14-15
8. Statistical Review ...15-16
9. Appendix A ..17-19













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Acronyms

Term Definition
ADH Administrative Disqualification Hearing
CAP Corrective Action Plan
CFR Code of Federal Regulations
DHHS Department of Health and Human Services
DIR Department of Industrial Relations
EBT Electronic Benefit Transfer
eDRS Electronic Disqualified Recipient System
E&T Employment and Training
FH Fair Hearing
FNS Food and Nutrition Service
FY Fiscal Year
ME Management Evaluation
QC Quality Control
SA State Agency
SERO Southeast Regional Office
SNAP Supplemental Nutrition Assistance Program
SNAP-Ed SNAP Education
TOP Treasury Offset Program

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Scope of Management Evaluation
The ME process is designed to assess the State Agencys compliance with its responsibilities for
administration of the SNAP as outlined in the applicable CFR, FNS instructions, and policies. This
review was conducted at the State DSS office in Raleigh and local offices in Pitt, Guilford, and Wake
Counties.

The areas with findings are:
Program Access, State and Local
Management Evaluations
Claims/TOP
E&T
EBT
Recipient Integrity
Statistical Review

The area without findings is:
SNAP-ED

Findings and Required Corrective Actions

1. Program Access (State Level)
Scope/Purpose
The objective of the program access review is to examine State level efforts to promote program
access, improve customer service, and eliminate barriers to program participation.

Finding 1.1: 7 CFR 273.10(g)(1)(ii) requires the SA to ask households on the Notice of Denial of
Initial Application to inform the SA if it is approved to receive Public Assistance (PA), Supplemental
Security Income (SSI) benefits, and/or benefits from a State or local program. The States application
denial notice is missing this statement in both the English and Spanish notices. The Spanish notice
does not explain the basis for the denial. It only has a general statement that the household does not
meet the household definition as it is defined by the Food and Nutrition Services. Additionally, the
notice does not advise the household of the action it must take to reopen its application.

Required Corrective Action 1.1: The State must revise the Notice of Denial of Initial Application in
both English and Spanish to include the required statement. The Spanish version of the notice must
also be revised to reflect the specific reason for the denial. The notice should advise the household of
the action it must take to reopen its application.

Finding 1.2: 7 CFR 273.10(g)(1)(iii) requires that the Notice of Pending Application Status explain
what action the household must take and that its application will be denied if the household fails to
take the required action 30 days following the date verification was first requested. The English and
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Spanish Notice of Pending Application only state the client needs to contact the caseworker if the
client does not know what is needed.

Required Corrective Action 1.2: The State must revise the Notice of Pending Application Status to
reflect what action the client must take and that failure to take the specific action will result in denial
of the application.

Finding 1.3: 7CFR 273.14(b)(1)(ii) requires that the Notice of Expiration and Interview
Recertification Form be accepted with only name, address, and signature. The English and Spanish
notices state that clients or their authorized representative must complete the form, sign, and date.

Required Corrective Action 1.3: The State must revise the Notice of Expiration and Interview
Recertification Form to reflect the right of a client or authorized representative to submit the Notice of
Expiration of Benefits with only name, address and signature.

Finding 1.4: 7 CFR 271.6 (a) provides requirements for SA responsibilities for complaint procedures
and analyzing complaints. When appropriate, the results of this review shall be included in the State
CAP. Currently, (1) the local county offices are not logging and tracking client complaints, (2) the
State has not publicized how participants, potential participants, and other interested persons can file a
complaint, (3) the complaint analysis report only reflects complaints received from the EBT Call
Center and State Policy Help Desk, and (4) the State does not include any trends identified through the
analysis in its semiannual corrective action plan.

Required Corrective Action 1.4: The State must ensure that all county offices log and track all
customer complaints, that local county complaints are incorporated into the periodic analysis, and the
results of this periodic analysis are included the State CAP when appropriate. The State must also
ensure that information regarding how to file program complaints is made available to participants,
potential participants, and other interested persons through written materials or other appropriate
means.

Finding 1.5: 7 CFR 272.2(c) requires that each SA report annually to FNS concerning program
activity statistics, including fair hearings. The review found that the fair hearing data provided on the
FNS-366B report for FY 2013 was incorrect.

Required Corrective Action 1.5: The State must revise its procedures for submitting the FNS-366B
information in order to ensure the validity of the data and submit a revised report for FY 2013.


Application Process

Finding 1.6: 7 CFR 273.2(a) and (b), and other related regulations list a number of requirements for
SNAP program applications, which are applicable in both the paper and online environment. During
the ME, FNS reviewed forms DSS-8207 (Revised 12-13, Application for Food and Nutrition
Services), NCFAST-20009 (NC Public Assistance Rights and Responsibilities), DSS-8550 (Change
Report Form), and the NC Electronic Pre-Assessment Screening Service tool (ePASS). Both the paper
application and online application are inconsistent with Federal requirements. There are two repeat
findings on the application (Revised 12-13) from FY 2013. Please see Appendix A for details.

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Required Corrective Action 1.6: The State must revise its paper and online application to ensure
compliance with Federal regulations.

Finding 1.7: 7 CFR 273.2(c)(3) states the SA shall make application forms readily accessible to
potentially eligible households. FNS Reviewers found that the NC DHHS-ePASS site offered
applicants form DSS-8207 (Revised 10-12), for download and print. The form offered is not the
current revised application.

Required Corrective Action 1.7: The SA must ensure that the revised application is available on the
NC DHHS-ePASS site.

Finding 1.8: 7 CFR 273.14(b)(2) requires the State Agency to develop a recertification application to
be used by SNAP households during the recertification process. FNS reviewed the Notice of
Expiration and Interview Recertification Form, DSS-2435, the Rights and Responsibilities Form,
DSS-2435SRi, and identified several issues to be noncompliant as indicated in the attached chart.
Please see Appendix A for details.

Required Action 1.8: The State must revise the Renewal Form to ensure Federal compliance.

Finding 1.9: 7 CFR 273.2(c)(3) states that the SA shall make application forms readily
accessible to potentially eligible households. The links to the language versions of the online
application are broken, and do not direct applicants to the application process, or to print Forms
DSS-8207 or NCFAST-20009.

Required Corrective Action 1.9: The SA must correct online application deficiencies in order to
provide applicants the access to receive the various languages of the application forms and
process.

Finding 1.10: 7 CFR 273.2(a)(1), states that the SA cannot, as a condition of eligibility, impose
additional application or application processing requirements. The NC Identity Management
(NCID) system, which leads to ePASS, requires applicants to obtain an e-mail address to apply
for SNAP benefits.

Required Corrective Action 1.10: The SA cannot require applicants to supply an email address
in order to apply for SNAP benefits.


2. Program Access (Local Level)

Finding 2.1: 7 CFR 273.2(e)(3) requires the SA to schedule an interview for all applicant
households who are not interviewed on the day they apply for SNAP benefits. During the review,
FNS observed Application Processing staff advising households to expect an interview within 3 - 5
business days. However, no official appointment date and time was provided. An interview
appointment is not scheduled for Wake County applicants until there is an unsuccessful attempt to
contact the household by telephone, which could be several days after the submission of the
application.
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Required Corrective Action 2.1: The SA must schedule an interview date and time for all applicants
who are not interviewed on the day they apply.

Finding 2.2: 7 CFR 273.2(c) requires the SA to provide households that complete an online
application in a SNAP office the opportunity to review the information entered and must provide them
with a copy of the application for their records. FNS reviewers observed SNAP applicants in the
Wake County Self Service Center who were not provided a copy of their electronic SNAP application
for review.

Required Corrective Action 2.2: The SA must ensure applicants submitting electronic SNAP
applications in local offices are able to review the information submitted and are provided with a
copy.

3. State Management Evaluation Systems
The Federal review of the State ME System assesses the adequacy of the States review process and
methodology. It determines if the State ME review process covers all national target program areas,
plus any additional areas of potential weakness added to the States ME guidance.

Finding 3.1: 7CFR 275.20(a) requires the State to submit its review schedule to FNS and ensure that
all project areas/management units will be reviewed within the required time limits. An assessment of
the list of completed project area ME reviews for FY 2013 found that the State did not conduct
reviews in accordance with the timeframes established by the regulatory guidelines. In FY 2013, 62
county reviews were scheduled, but 18 county reviews were not completed until FY 2014. In
addition, the required case reviews were not completed in 10 of the scheduled county reviews:
Cherokee, Cleveland, Graham, Guilford, Lee, Lincoln, Martin, Randolph, Robeson, and Wake
Counties.

Required Corrective Action 3.1: The State must ensure that project area reviews are completed in
accordance with the schedule established by regulatory guidelines. In addition, the State must adhere
to the FNS-approved State ME Plan, and notify the FNS regional office of all changes in review
schedules. The State must provide assurance that the FY 2014 ME reviews are on schedule.

Finding 3.2: 7 CFR 275.2 requires the SA to establish a continuous performance reporting system to
monitor program administration and operations, including corrective action implementation and
monitoring. Twenty-one of the 62 reviews in the FY2013 ME Schedule lacked completion dates for
the 6-month follow-up reviews for counties requiring corrective action or Program Improvement
Plans (PIP).

Required Corrective Action 3.2: The State must ensure the monitoring of the counties corrective
action (or PIPs) by completing the remaining 6-month follow-up reviews for the FY2013 ME
Schedule by 9/30/2014 and submit a revised spreadsheet showing the completion dates for FNS
review.


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4. Recipient Claims Management/Treasury Offset Program (TOP)
Scope/Purpose
The objective of the Recipient Claims/TOP review is to assess State level performance in establishing
and collecting claims for overissuance and referring delinquent debts to TOP.

Finding 4.1: 7 CFR 274.18(e)(6)(i) and (ii) states that a claim awaiting a fair hearing must not be
considered delinquent. It also requires the SA to re-notify the household of the claim due date if the
hearing official determines that the claim exists. It further states that any delinquency must be based
on the due date of this subsequent notice and not on the initial pre-hearing demand letter sent to the
household. The State is not re-notifying the client and changing the due date/response time period as a
result of a timely fair hearing. The due date/ time period to respond to the demand letter must be
changed as a result of a timely fair hearing. Of the 17 timely fair hearing cases reviewed, the client
had not been re-notified in 13 cases and no new due date/time period was entered into EPICS. This is
a repeat finding from FY 2012.

Also, the State is making changes to claim cases as a result of untimely fair hearings. Regulations state
that a fair hearing must be requested within 90 days of an adverse action. During the review, it was
observed that changes were being made to claim cases as a result of untimely fair hearings that have
occurred up to six months past the 90-day limit.

Required Corrective Action 4.1: The State Agency must not change claim cases as a result of an
untimely fair hearing decision. Clients whose claims are upheld as a result of a timely fair hearing
must be re-noticed and a new due date/response time period provided.

Finding 4.2: 7 CFR 274.18(e)(2): requires the State to establish a claim if the overpayment was
discovered in a quality control review. During our review of overissuances discovered in the 2013
quality control period, 211 (88%) of the 240 error cases did not have the claim referred/established.
This is a repeat finding from FY 2012.

Required Corrective Action 4.2: Claims discovered in a quality control review must be established
within the regulatory timeframe.

Finding 4.3: 7 CFR 274.18 (d)(1) requires the State to establish a claim before the last day of the
quarter following the quarter in which the overpayment or trafficking incident was discovered and you
will ensure that no less than 90 percent of all claim referrals are either established or disposed of
according to this time frame. Currently, the State has a claim backlog of 33 percent. This is a repeat
finding from FY 2012.

Required Corrective Action 4.3: The State must develop a process to ensure that no less than 90% of
all claims are established within the regulatory time frame.

Finding 4.4: 7 CFR 274.18 (f)(1) requires the State to automatically collect payments for any claim
by reducing the amount of monthly benefits that a household receives unless the claim is being
collected at regular intervals at a higher amount or another household is already having its allotment
reduced for the same claim. Currently, when a client is being recouped and recertifies, EPICS is not
recouping after the household is recertified. This occurred in 10 (67%) of the 15 cases that were
reviewed.
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Required Corrective Action 4.4: The State agency must ensure that all recoupment collection
continues after recertification.

Finding 4.5: 7 CFR 274.18(e) (5) (i) (B) states, a claim must be considered delinquent, if a payment
arrangement has been established and a scheduled payment has not been made by the due date. The
States system is not capturing the arranged repayment agreement amount and it is accepting any
amount received as a payment. The amount and the due date agreed upon must both be met or the
claim becomes delinquent.

Required Corrective Action 4.5: The State agency must ensure that the claim repayment agreement
amount and due date are captured in its system and that missed payments are acted upon.

Finding 4.6: 7 CFR 274.18(n)(1)(ii) states that claims submitted to the Treasury Offset Program
(TOP) must be at least 180 days delinquent. The 180-day clock starts when the claim becomes
delinquent. In North Carolina, the 180-day clock starts with the date of the Notice of Overissuance.
Subsequently, claims are being submitted to TOP 30 days too early. This occurred in 5 (33%) of the
15 cases reviewed.

Required Corrective Action 4.6: The State must identify the individuals who were incorrectly offset
by TOP in their first 30 days and refund those offsets. The State must also ensure that claims sent to
TOP are at least 180 days delinquent.

Finding 4.7: The Collecting Food Stamp Program Recipient Claims through the Treasury Offset
Program (TOP) Manual includes a signed agreement between the State and the Treasury Department
in which the State certifies that claim balances in EPICS and TOP agree. EPICS and TOP balances
did not agree in 5 (33%) of the 15 cases reviewed.

Required Corrective Action 4.7: The State must ensure claim balances in TOP and EPICS match.

Finding 4.8: 7 CFR 274.18(a)(3) requires the State to develop a plan for establishing and collecting
claims that provides orderly claims processing. In North Carolina, there is no central oversight for
monitoring (1) how, when, and by whom claim balances are changed, (2) that compromise policy is
being followed, and (3) the application of bypass indicators (blocks). Improperly applied blocks can
prevent a claim from being sent to TOP.

Required Corrective Action 4.8: The State must monitor the claim management process in the
counties to ensure that claims policy and procedures are being followed.

5. Employment and Training
Scope/Purpose
The objective of the review is to determine if the SNAP Employment & Training (E&T) program is
being conducted according to FNS guidance and the State plan.

The E&T review determines if the State work program conforms to Federal regulations; whether the
State adequately reviews local operations; and whether Federal reports are accurate. FNS reviewed
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eligibility reports and reports from contractors, and interviewed staff in the State office. FNS also
visited Wake County to review records with the State staff in order to obtain an understanding of how
the State E&T program functions.

Finding 5.1: 7 CFR 273.7(c)(1) states the SA must register for work each household member not
exempted by the provisions of paragraph (b)(1) of 273.7. In Wake County, caseworkers work register
all adults between the ages of 18 to 59, regardless of Federal exemption status, in order to avoid the
possibility of the NC FAST excluding the needs of the individual for SNAP benefits. It is unclear if
case workers do this because of a system defect, a miscommunication, or if the system is not
appropriately applying the applicable work exemptions.

Required Corrective Action 5.1: The SA must ensure that the NC FAST eligibility system accurately
recognizes federal work exemptions as non-work registrants. The SA must also ensure that staff in all
counties are informed of the correct way to code adults between the ages of 18 and 59 so that the work
registration and work exemption information entered into the system accurately reflects household
circumstances.

Finding 5.2: 7 CFR 273.7(d)(1)(i)(B)(1) states that 90 percent of the annual 100 percent Federal E&T
grant will be allocated based on the number of work registrants in each State as a percentage of work
registrants nationwide. FNS will use work registrant data reported by each State agency on the FNS-
583, Employment and Training Program Activity Report, from the most recent Federal fiscal year.
NC is currently including those who meet federal exemptions and do not request to volunteer as work
registrants in the Work Registrant count reported on the FNS-583 quarterly reports.

Required Corrective Action 5.2: The State must ensure that the FNS-583 does not include federally
exempt SNAP household members as work registrants who do not volunteer to work register. The
State must correct the FNS-583 for FY 2013 and FY 2014 to-date. The State must ensure that future
submissions of the FNS-583 accurately report only mandatory and voluntary work registrants.

Finding 5.3: 7 CFR 273.7 (c )(2) states that the SA is responsible for screening each work registrant
to determine whether or not it is appropriate, based on the State agency's criteria, to refer the
individual to an E&T program, and if appropriate, referring the individual to an E&T program
component. Work registrants are not referred to the Department of Workforce Services for
participation in program components listed in the State Plan.

Required Corrective Action 5.3: The SA must refer work registrants to the Department of Workforce
Services for participation in program components listed in the State Plan.

Finding 5.4: 7CFR 273.7(d)(6) states the SA must ensure that records are maintained that support the
financial claims being made to FNS. Neither vouchers nor supporting documentation were obtained
by the state agency to verify financial claims presented by contractors for reimbursement funds from
FNS. The contractors statement is accepted as verification of expenditures.

Required Corrective Action 5.4: The SA must ensure that records are maintained that support the
financial claims being made to FNS. The SA must review expenditures for FY 2014 year-to-date to
ensure that the vouchers and supporting documentation validate the financial claims presented by
contractors. If appropriate, the SA must implement recoupment procedures for overpayments to the
contractors.
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6. Electronic Benefit Transfer
Scope/Purpose
The objective of the Electronic Benefits Transfer (EBT) review is to examine the States compliance
with regulations regarding the operation of the EBT system.

Finding 6.1: 7 CFR 274.1(h)(2) requires SA to divide issuance responsibilities between at least two
persons to prevent any single individual from having complete control over the benefit award and the
issuances themselves. These are commonly referred to as the separation of duties requirements.
Security records indicated that some county staff that authorizes benefits also have the ability to
change addresses and perform other administrative functions in the EBT system.

Required Corrective Action 6.1: The SA must revise their current written procedures and security
protocols to prevent a person involved in the authorization of benefits from having any access to the
EBT system other than inquiry. These procedures should be monitored during the State ME process.


Finding 6.2: 7 CFR 274.2(g)(ii) requires the SA to notify the client of a Retailer Initiated Adjustment
and give them 90 days to request a fair hearing prior to processing the adjustment. The SA could not
document that this notice is being sent.

Required Corrective Action 6.2: The SA must properly notify clients of proposed Retailer Initiated
Adjustments and provide a fair hearing if requested.


7. Recipient Program Integrity
Scope/Purpose
The Recipient Integrity Review examines SA and/or local SNAP offices to determine compliance
with Federal requirements governing recipient and benefit integrity in the SNAP. The purpose of this
review determines how waste, fraud, and abuse are handled in each State. Staff examined the
following areas: organizational structure and work flow, fraud referrals, fraud detections,
investigations, computer matches, the Administration Disqualification Hearing (ADH) process,
prosecutions, the Electronic Disqualified Recipient System (eDRS), and the process for collecting data
for FNS reports.

Finding 7.1: 7 CFR 273.16 (a)(1) requires that the State be responsible for investigating any case of
alleged IPV and ensuring that appropriate cases are acted upon either through ADHs or referral for
prosecution.

FNS shares information with States regarding retail stores that have been permanently disqualified
due to being found guilty of trafficking. The data and other information shared contains household
transactions that FNS has determined to meet patterns indicative of trafficking. The transactions
constitute alleged IPVs and should be further investigated by the State. Currently, counties are not
consistently taking action on the FNS disqualified retailer referrals.

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FNS has also provided the State with tools to monitor social media sites for clients attempting to sale
EBT benefits. Interviews of county staff confirm that social media sites are not being monitored.

Required Corrective Action 7.1: The State must ensure that the client transactions provided in FNS
disqualified retailer referrals are investigated. The State must also ensure that social media sites are
monitored. In both cases, the State must ensure that suspected IPVs are referred for ADH or
prosecution.

Finding 7.2: 7 CFR 273.16(f)(3) requires that the State agency shall provide written notice to the
household member prior to disqualification. Case file reviews revealed that counties are not
consistently noticing the client prior to implementing disqualifications.

Required Corrective Action 7.2: The State must ensure that all clients are provided written notice
prior to implementing disqualifications.

Finding 7.3: 7 CFR 272.2(c) and 7CFR 273.16 (i)(1) requires that each SA report annually to FNS
concerning program activity statistics, including disqualifications for IPV. Our review found that the
prosecution data provided on the FNS-366B report for FY 2013 was incorrect.

Required Corrective Action 7.3: The State must revise its procedures for submitting the FNS-366B
information in order to ensure the validity of the data and submit a revised report for FY 2013.

Finding 7.4: 7 CFR 272.1 (f)(2) state that case records relating to Intentional Program Violation (IPV)
disqualifications and related notices to the household shall be retained indefinitely until the SA obtains
reliable information of death or that the individual has turned 80 years old. Case file reviews confirm
that signed court orders are not being scanned into the official case files.

Required Corrective Action 7.4: The State must establish procedures to ensure that IPV case records
are complete with appropriate signed documents.

Finding 7.5: 7 CFR 273.16 (g)(2) (i) and (ii) requires disqualifications as a result of a court order to
be imposed within 45 days of the date of the order and in some cases, within 45 days of the date the
individual was found guilty. It further requires that once a disqualification has been imposed against a
currently participating household member, the period of disqualification shall continue uninterrupted
until completed regardless of the eligibility of the disqualified members household. Currently, if a
client is serving a disqualification period and is found guilty of a subsequent violation, the State is not
imposing the disqualification period until the first disqualification period has been served.

Required Corrective Action 7.5: The State must ensure that disqualification periods are imposed in
accordance with Federal Regulations.


8. Statistical Review

The objective of the statistical review is to validate the States active and negative sampling plan
implementations for the months under review, determine if duplicate participation occurred within the
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sample universe, determine if EBT issuance files were in agreement with authorized allotments, and
ensure accurate data management procedures are in place to manage the quality control process.

Finding 8.1: 7 CFR 272.4(e), states that each SA shall establish a system to assure that no individual
participates more than once in a month, in more than one jurisdiction, or in more than one household
within the State in the Food Stamp Program. During the review, a comparison was made between the
active frame and the EBT issuance file. The Federal reviewer found occurrences of households
participating more than once in a month on the EBT issuance file.

Required Corrective Action 8.1: The SA is required to identify the cause and onset of the variance
and implement measures to prevent future occurrences.

Finding 8.2: Federal regulations at 7 CFR 275.4 requires the SA to maintain Performance Reporting
System records which include QC sampling frames and lists. During the 2014 Management
Evaluation review, the State was not able to provide the QC sampling frame as ordered and used for
the March and April 2014 active and negative sample selection process.

Required Corrective Action 8.2: The SA must retain a snapshot of the QC sampling frames and cases
selected as is at the time of sample selection each month the required record retention period.

Finding 8.3: Federal regulations at 7 CFR 274.1(a) requires the SA to establish issuance and
accountability systems to ensure benefit issuance and reconciliation activities are properly conducted
and accurately reported to FNS. During the FNS 2014 Management Evaluation review, it was
discovered that proper accountability systems were not in place to ensure issuances were accurately
reported to FNS. A selection of 25 cases with multiple issuances in April 2014 yielded four cases that
contained replacements or restorations that were not for the benefit month recorded.

Required Corrective Action 8.3: The State must establish proper accountability of issuance systems
to ensure that benefits are recorded appropriately.

Finding 8.4: 7 CFR 275.11, states that each SA shall develop a quality control sampling plan which
demonstrates the integrity of its sampling procedures. During the 2014 Management Evaluation, it
was discovered that case structure and ordering procedures used by the State are not the procedures
described in the States approved FY 2014 sampling plan.

Required Corrective Action 8.4: The SA is required to complete the FY 2015 sampling plan request
that accurately describes the procedures that will be utilized in sample selection. The SA must adhere
to the procedures as described in the approved sampling plan, beginning with FY 2015.

Finding 8.5: 7 CFR 275.11(b)(2)(ii) and the States approved sampling plan require the State to
complete a minimum sample size of 680 based upon the States average monthly reviewable negative
caseload. The State completed 440 negative reviews for FY 2013 and did not meet the required
minimum negative reviews.

Required Corrective Action 8.5: The SA is required to complete system fixes necessary to eliminate
the excessive amount of negative case selections that are not subject to review. In addition, the SA is
required to complete the minimum required negative reviews, beginning with FY 2014.

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Attachment A

Review of North Carolina SNAP Application, and Recertification

DSS-8240 Application for Food and Nutrition Services
NCFAST-20009 Public Assistance Rights and Responsibilities
ePASS
Regulation Finding Application Type


7 CFR
273.2(b)(1)(iii)

The paper application includes a Penalty and
Perjury statement which requires the household
to inaccurately attest to the receipt of the Rights
and Responsibilities form at application. The
Rights and Responsibilities form was not
included with the application. This is a repeat
finding. Also, the statement online needs to
include information concerning citizenship and
alien status.


Paper
Online

7 CFR 273.2(b)(1)(ii)
7 CFR 271.5(b)
7 CFR 273.16(b)(1),
(2), (3), (4)


Does not include the description of the civil and
criminal provisions and penalties for violations
of the program.

Paper
Online

7 CFR
273.2(b)(1)(viii)


Does not include the complete posting of the
Non-Discrimination Statement.

Paper
Online

7 CFR
273.2(b)(1)(ix)

The application must contain language which
clearly affords applicants the option of answering
only those questions relevant to the SNAP. This
is a repeat finding.

Paper
Online


7 CFR 273.2(b)(2)



The forms do not notify all applicants through a
written statement that information available
through IEVS will be requested, used, and may
be verified through collateral contacts when
discrepancies are found by the SA, and that such
information may affect the eligibility and level of
benefits.


Paper




7 CFR 272.6(g)

The forms do not indicate that obtaining racial
and ethnic data is voluntary. Also, the forms do
not explain the reasons for the data, and that not
submitting the data will not affect the eligibility
or level of benefits.



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18

Sec. 115 of
PRWORA
and
Food and Nutrition
Act of
2008 Sec.6(b)(1), (j)

Does not list specific behaviors that took place after
August 22, 1996.


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Online

7 CFR 273.2(b)(3)

The HH must be notified that the State must process
applications for SNAP in accordance with SNAP
procedures, including timeliness, notice, and FH
requirements regardless of whether the application is for
SNAP and other programs. Also, a HH may not be
denied SNAP benefits solely because it has been denied
benefits from other programs.

Paper
Online


7 CFR 273.2(b)(4) (ii)

The forms do not explain that information collected
may be disclosed to other Federal and State agencies
for official examination, and to law enforcement
officials for the purpose of apprehending persons
fleeing to avoid the law.


Paper


7 CFR 273.2(b)(4) (iii)

The forms do not explain that if a SNAP claim arises
against your HH, the information on the application,
including all SSNs, may be referred to Federal and State
agencies, as well as private claims collection agencies, for
claims collection action.


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7 CFR 273.2(c)(1)

Does not explain the filing date. It should state that the
filing date is different if the HH is in an institution and
applying for SNAP and SSI at the same time. In this
case, the filing date is the date of release from the
institution.


Paper
Online


7 CFR 273.16(d)

Does not notify applicants of the disqualification penalties
for intentional program violations. Should include a
statement that informs HHs that paying for food
purchased on credit with SNAP benefits is not allowed,
and that doing so could result in disqualification.

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19


DSS-2435 Notice of Expiration and Recertification Form
DSS-2435SRi Rights and Responsibilities Form
Regulation Finding
7 CFR 271.5(b)
The application does not include notification that household members in
violation of SNAP policies may be barred for an additional 18 months if
court.
273.14(1)(ii)(D)

Language does not notify household of their right to file an incomplete
application as long as it contains the applicants name, address, and
signature.
272.6(g)

Notification does not advise household of the purpose for collecting racial
and ethnic identity information and that failure to do so will not affect
eligibility or benefit level.
Food and Nutrition Act of
2008 Sec. 6(b)(1), (j)

Penalty questions related to the conviction of household members for
trading SNAP benefits for drugs, buying or selling SNAP benefits over
$500, fraudulently receiving duplicate SNAP benefits in any State, and
trading SNAP benefits for guns, ammunitions, or explosives were not
included on the application or addendum.
271.5(b)

Application or addendum does not advise household members not to use
SNAP benefits to pay credit accounts or to purchase nonfood items; use or
possess someones EBT card without authorization and not to let someone
else use yours; trade or sell SNAP benefits.
273.2(b)(1)(viii)

Rights and Responsibilities (DSS-2435SRi) form does not include the
complete Non-Discrimination Statement.
Privacy Act Statement
273.2(b)(4)(iii)

Application or addendum does not include notification to household that
application information may be forwarded to State, Federal, or private
claims agencies for claims collection.