July 9, 2016

Incomplete SNAP report finds possible internal falsifications

The results of a state investigation into allegations of falsified food aid applications at the Human Services Department leave several questions unanswered.

But they do acknowledge cases that should have qualified for emergency food aide “showed the potential falsification of assets” that caused benefits to be denied or delayed to people who should have received it.

As both HSD officials and attorneys for the Center on Law and Poverty said this week in federal court, HSD’s investigation into the issue that has rocked the agency since April isn’t finished.

HSD Inspector General Adrian Gallegos’ written report reflects this.

“Until the investigation is complete and all facts are known, a determination of whether the allegations have been substantiated or not cannot be drawn,” he writes.

Related: Read the unfinished HSD report

At issue are allegations of a department-wide practice to add fake resources to emergency applications for the Supplemental Nutrition Assistance Program (SNAP), formerly known as food stamps. Only extreme low income people qualify for emergency SNAP aid, and federal law says they must receive these benefits within seven days of applying.

But according to testimony from several employees, HSD engaged in the practice of adding fake assets on emergency applications that hadn’t been processed within the seven-day requirement. The impetus, they said, was to avoid penalties and sanctions from the federal government.

The names of all those interviewed are identified by gender and first- and last-name initials.

‘Code red’

Released belatedly Friday night to attorneys at the Center and media and lacking complete documents, HSD’s investigation interviewed 17 employees and analyzed three months of online applications for the Supplemental Nutrition Assistance Program.

Seven employees told HSD investigators the bombshell allegations were true. One of them, a case processor in Albuquerque referred to as “JK” in the report, said the practice is known as “Code Red.” She told investigators that the phrase is a reference to the film A Few Good Men, in which it means unlawful violent punishment.

“Management staff know what a Code Red signifies and how to take care of it,” notes from her interview read.

But seven others told investigators that they weren’t directed to add fake assets and had never practiced it.

Another employee, a line manager in Albuquerque identified as “JS,” told investigators she wasn’t comfortable answering questions about whether she was ever directed to add fake assets, whether employees at her office know about it, or whether the practice is wrong.

Yet another employee said she had never been instructed to add false assets to SNAP cases but told investigators she had heard of the policy.

‘Potential false statements’

HSD investigators also took what they called an “in-depth” look at nine cases. All but one of these cases, according to the report, featured falsely added resources.

One, for example, concerned someone who reported $150 in income and less than $100 in assets on top of that. Case processors changed the person’s resources to $1,000 in income and $200 in assets without supporting documentation, according to the report.

Investigators also took a broader look at three months worth of cases filed. In all, investigators found 284 changes in those three months, out of 13,009 applications. Out of these, 285 had what investigators called “potential false statements.” Still, these only reflected online applications and not the many more handed in physically.

For January of this year, they flagged 57 of 6,314 SNAP applications filed online “where changes were made that were not initially reported.” Forty-five of those have “potential false statements.”

For February of 2016, investigators flagged 111 cases out of 3,284 where changes had been made. Seventy-five of those had false statements, according to the report.

In April of this year, 117 of 3,409 were flagged for changes, with 86 marked with “potential false statements.”

All of these months featured cases where fake assets were added to applications that wouldn’t have qualified for emergency SNAP aid anyway, according to investigators.

HSD Secretary Brent Earnest ordered the investigation shortly after five employees made the SNAP fraud allegations in federal court in late April. Four more employees made similar allegations under oath in May.

Managers called to the stand invoked their Fifth Amendment right that protects them from potential self-incrimination.

None of these managers were interviewed for the report, Gallegos said in federal court earlier this week, nor were additional managers that had since been implicated in the practice.

This came despite a judge’s order to submit the full investigation to federal court by the end of June.