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Federal government investigating Mississippi's SNAP food aid program

The Mississippi Department of Human Services is under an "ongoing investigation" over its management of the Supplemental Nutritional Assistance Program (SNAP), according to a demand letter uncovered by the Mississippi Independent.

The state could have to pay back more than $5.7 million in bonuses it received because of improvements in the error rate for the SNAP program from 2011 until 2015.

The letter was dated February 15 and DHS spokesman Paul Nelson says the agency is under an ongoing investigation, which stemmed from multiple contracts between the DHS and Julie Osnes Consulting, which netted her firm more than $463,000.

Nelson says the DHS has terminated the contract with Osnes, which was supposed to run through 2020, has been terminated.

The firm was 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.

Three other states that hired Osnes to help improve the error rates for their SNAP programs — Alaska, Virginia and Wisconsin — reached settlements with the U.S. Department of Justice.

While the U.S. Department of Agriculture 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.

The DOJ has said in settlements with the states that Osnes advised them to use "improper and biased quality control practices" to improve their error rates and qualify for monetary bonuses — a program instituted in 2005 — given for low error rates and for annual improvements in error rates.

States can also be penalized by fines for having high error rates that don't show improvement.

In their settlements with the DOJ, Virginia and Wisconsin paid $7 million apiece, while Alaska had to pay back $2.5 million.

Mississippi received more than $2.7 million in fiscal 2012 in bonuses, $1.1 million in 2013, $1.3 million in 2014 and $653,000 in 2015.

The state gave Osnes an extension on her deal that expired in February 2016 despite the release of a September 2015 report by the U.S. Department of Agriculture's Office of Inspector General that decried the use of consultants such as Osnes to help with quality control over household eligibility.

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 reached an agreement on a new contract that started on February 2, 2014 and the firm received $53,152 for its work.

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.

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