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State officials are considering whether to bring in outside help to reduce an error rate that could carry a stiff price tag due to a provision in the tax reconciliation bill approved by Congress in July.
"For the first time ever, the [Supplemental Nutrition Assistance Program] error rate will determine how much a state contributes to the cost of SNAP benefits -- previously those benefits were 100% federally funded. The Congressional Republicans' Budget Reconciliation Bill cuts federal funding to states for SNAP and requires states to pay for a portion of the cost of benefits based on its SNAP error rate if the rate is above six percent," Ali Fogarty, a Department of Human Services spokeswoman, said in an email.
She added that the error rate is "not a measurement of fraud or intentional misuse -- but rather a measure of minor paperwork errors."
Data from the U.S. Department of Agriculture shows that Pennsylvania's error rate of 10.76% in 2024 was slightly below the national average of 10.9% and the error rate is down from 16.6% in 2023.
Despite the improvement, because the state's error rate exceeds 10%, the federal government will charge Pennsylvania about $645 million a year, the state Independent Fiscal Office said in an analysis released earlier this summer. This extra cost will occur in FY2027/28 and possibly later, the office said.
In 2024, only Idaho, Nebraska, Nevada, South Dakota, Utah, Vermont, Wisconsin and Wyoming were below the 6% threshold. The highest error rate in 2024 was Alaska's 24.66%.
"Pennsylvania has made substantial progress lowering our error rate below the national average," Fogarty said. "To continue lowering our error rate, Pennsylvania will ramp up efforts to continue that progress. We are evaluating additional opportunities to improve case processing and lower the rate."
Outside help?
The Office of Administration earlier this month filed paperwork for a plan to use an emergency contract to hire Amazon Web Services to begin immediately working with state agencies on the issue while a long-term contract was completed. That contract was to help state agencies, "analyze, adapt and implement compliance strategies -- particularly focused on income verification and eligibility accuracy."
In those documents, agency officials noted that if the state doesn't improve its error rate, the federal government could withhold more than $56 million per month.
Administration officials cancelled the emergency procurement but are still considering whether to use one or more traditional contracts to hire vendors to help prepare, said Dan Egan, an Office of Administration spokesman.
"The Commonwealth continues to review all procurement options to ensure the necessary services are available, but no award has been made yet," he said.
Concerns about the SNAP error rate were raised by House Republicans in June, before the passage of the federal bill and the USDA's release of the 2024 rates.
When the House was considering a bill to allow SNAP benefits to be used to purchase menstrual products, Republicans sought to amend the bill to include language requiring the Department of Human Services to submit a report to lawmakers explaining what the agency is doing to improve the error rate.
"This amendment is about preserving the ability to fund these important programs. If they are that important, which we believe they are, then we need to make sure they are managed correctly. These benefit integrity measures do that. I don't see a path to sustainability without them," House Republican Leader Jesse Topper, R-Bedford, said on the House floor.
But Democrats used their 102-101 advantage in the chamber to table the amendment rather than having a vote on it.