The federal government placed state Human Services Department on a “detailed corrective action plan,” mandating it correct its many problems with administering the Supplemental Assistance Nutrition Program (SNAP), the food benefits program formerly known as food stamps.
In a May 27 letter to HSD Secretary Brent Earnest, U.S. Department of Agriculture Food and Nutrition Service Southwest Regional Administrator William Ludwig warned that failure to submit a plan “within 14 days of receipt of this letter” could lead to “further escalation.”
The potential fallout for New Mexico, according to the letter, includes “the possible suspension or disallowance of Federal funding for State administrative expenses.”
“It is imperative that HSD understand the severity and consequences outlined in this letter,” Ludwig wrote.
On the surface, Ludwig’s letter faults HSD for giving SNAP benefits to people that it shouldn’t be.
He details eight “severe compliance issues” where HSD broke federal regulations in its processing of SNAP applications. They include the department’s practice of keeping pending SNAP applications open for more than the required 60 days, approving applications without interviewing or determining a person’s eligibility for SNAP and failing to keep accurate records of clients.
These findings came from a one-week onsite review by federal officials in Santa Fe in early May.
“HSD may be liable for incorrectly issuing millions of dollars of SNAP benefits,” Ludwig wrote.
Both HSD Secretary Earnest and his spokesman, Kyler Nerison, did not respond to requests for comment for this story. The department has generally avoided answering questions or commenting on stories by NM Political Report.
Sovereign Hager, an attorney with the New Mexico Center on Law and Poverty, explained that these problems came after a May 2014 court order barred HSD from closing pending SNAP applications for procedural reasons.
This meant that the state would have to give out SNAP benefits without receiving full documentation from applicants, going against federal regulations. In his letter to HSD, Ludwig notes that the state’s SNAP certification process has been in violation of federal requirements “since at least June 2014,” or one month after the court order was issued.
The 2014 court order came as part of a long-running lawsuit alleging HSD of systematically mishandling its SNAP and Medicaid processing. The order was a result of, among other issues, the state department’s switch to a new IT system in 2013, which led to the automatic denial of food assistance to between 10,000 and 30,000 applicants.
“It was really a protective order to make sure people weren’t being wrongly denied benefits,” Hager said in an interview.
The order was only supposed to last for six months. Continued problems at HSD prompted the state to operate under it for much longer.
As part of a legal agreement, the Center on Law on Poverty reviewed random samples of SNAP cases twice since May 2014 to see if HSD was coming into compliance. The first came at the beginning of 2015, when the Center on Law and Poverty reviewed 120 SNAP cases.
The group found many problems remained.
HSD consistently sent wrong documents to clients, didn’t give clients eligibility reviews they needed to recertify their food benefits and didn’t accept verification documents through its IT system, according to Hager.
“And the state agreed, ‘Yes, there are big issues and we will keep operating under that [May 2014] protective order,’” Hager said.
Last February, the Center on Law and Poverty reviewed another random sample of 120 SNAP cases and again found similar problems.
By April, Hager and her colleagues began arguing in court for the need of a federal appointment of an independent monitor to direct SNAP and Medicaid processing, which they contended was needed to bring HSD’s practices into compliance with federal law.
Another part of Ludwig’s letter faults HSD for approving SNAP applications for three months at a time. Most SNAP applications are approved for 12 to 24 months of payouts, Hager said, and three months means beneficiaries must go through the bureaucratic process of reapplying much more frequently.
Hager characterized Ludwig’s letter as further showing “an immediate need” for an independent monitor into HSD.
During the April court hearing, five HSD employees made explosive allegations of an institutional practice at the department of faking assets to emergency SNAP cases to cut down a backlog of overdue applications.
The allegations of fraud, which grew to four more testimonies the following month, generated the most attention on the department, prompting the State Auditor to open an investigation and a prominent state senator to call for Earnest’s resignation. During the latest court hearing, three HSD officials pleaded their Fifth Amendment rights and refused to answer questions from the Center on Law and Poverty’s attorneys.
HSD is conducting an internal investigation into the matter, the results of which it will submit to the court at the end of the month.
NM’s SNAP program ‘most fouled-up’
U.S. Rep Michelle Lujan Grisham, D-N.M., expressed displeasure with the situation to a USDA official last week during a Congressional committee.
“I don’t believe that the federal government has been providing sufficient oversight [of New Mexico’s SNAP processing],” Lujan Grisham said. “And the results are that many eligible New Mexicans who need emergency benefits are not getting them. And the overall result, of course, is that they’re going hungry, which is why New Mexico has some of the hungriest children and families in the country still.”
She expressed frustration to Kevin Concannon, the USDA undersecretary for Food, Nutrition and Consumer Services, for previous inquiries for a federal investigation into New Mexico’s SNAP processing going unheeded. Lujan Grisham also noted how the federal government hadn’t caught wind of the state’s fake asset practice, which one employee testified has been going on for well over a decade.
“Basically the state is lying to you, Mr. Concannon, and it is also clear to me that we haven’t been holding them accountable since July 2014,” she said.
Concannon told the Congressional Oversight and Government Reform Committee that New Mexico’s inspector general was performing an investigation. Concannon statement was an apparent confusion over HSD’s internal inspector general conducting the investigation.
When pressed at the committee meeting, Concannon said he would be willing to recommend a federal investigation into New Mexico’s SNAP program.
He also coined a phrase that made its way into local headlines: “I believe New Mexico is probably the most fouled-up SNAP system in the United States right now and has been unfortunately, I think, for years.”
Read the USDA letter to HSD below: