Mississippi gave contract to welfare consultant under federal investigation
A quality control consultant whose work has resulted in several states being investigated by the U.S. Department of Justice has a sole source consulting contract with Mississippi, according to an analysis of records by the Mississippi Independent.
Julie Osnes Consulting has been contracted by the Mississippi Department of Human Services since 2011 to assist with improving error rates with the Supplemental Nutrition Assistance Program administered by the agency.
While the federal government is responsible for the more than $71 billion annually paid in benefits under the SNAP program, states administer the program locally by determining eligibility, calculating and then issuing benefits. States are supposed to use quality control procedures to review their programs and can receive bonuses for the most improvements in the error rate and having the lowest error rate nationally.
States can also be penalized by fines for having high error rates that don't show improvement.
An investigation by the Department of Justice found that Osnes — who was paid by the state of Wisconsin to consult on their SNAP program — used "several improper and biased quality control practices" to lower its error rate and qualify for bonuses to which it hadn't earned.
Three states — Alaska, Virginia and Wisconsin — that employed Osnes as a consultant reached settlements with the DOJ. Virginia and Wisconsin paid $7 million apiece, while Alaska had to pay back $2.5 million.
According to an archive of Osnes' now-shuttered website, Mississippi received $1.18 million in bonuses for fiscal 2013 for having the lowest payment error rate and $2.7 million in fiscal 2012 for lowest case and procedural error rates.
Mississippi's first contract with Osnes was a two-year pact that began on October 1, 2011. She received $62,307 for her services in fiscal 2012. In fiscal 2013, her contract netted her consultancy firm $17,900.
The state and Osnes entered another contract starting April 1, 2015 and ended on February 1, 2016, with Osnes paid $45,000 for her services. The department and Osnes reached terms on an extension that started when the first expired and won't end until 2020. The state has already paid Osnes $284,937 under the latest contract, which has a maximum value of $515,625.
The last payment of $29,541 was made on June 1 and the DHS has the option to extend Osnes' deal for one more year.
The state continued the deal despite the U.S. Department of Agriculture's Office of Inspector General releasing a report on September 2015 that decried the use of consultants such as Osnes to help with quality control over household eligibility.