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Food-stamp computer problems may cost state millions more

Tuesday, February 8, 2000

By Judy Putnam Grand Rapids Press Bureau LANSING -- New estimates have Michigan forking over $50.7 million in federal penalties over three years -- and possibly losing millions more -- if it does not bring food-stamp errors under control and get a statewide child-support computer system to work.

Michigan had the highest food-stamp error rate in the country in 1998, but it spiked even higher after a $113 million computer system called ASSIST went online in August 1998.

In addition, Michigan is one of only nine states failing to meet a 1997 deadline to have a statewide child-support computer system up and running. That system has cost $212 million and still does not have the state's largest county, Wayne, connected.

The fines are starting to add up.

"I'm troubled by it, very troubled by it. There's nothing like dumping the hard-earned taxpayer money down the drain," said Sen. Mike Goschka, R-Brant, chairman of the Senate subcommittee on Family Independence Agency spending.

Among the penalties:

In the next fiscal year, FIA is expected to pay $17.5 million in child-support computer fines if the system is not ready to go by Sept. 30. Although officials had hoped to avoid the penalties, FIA Deputy Director Mark Jasonowicz says chances are "very slim" that the system will be ready. The penalties will double for 2002.

In the current budget year, Gov. John Engler this month proposed a supplemental budget setting aside $18.8 million to cover food stamp errors, a portion of which must be spent on improving Michigan's food stamp system. In addition, $1.6 million must be paid for a missed 1997 deadline to have a statewide child-support computer system. Last year, FIA paid $12.8 million to cover the first two years of child- support computer penalties.

Jasonowicz said the penalties hurt, but the agency has done well in reducing welfare dependency.

Food stamp errors, he said, are partly the result of welfare reform. As more people go to work, the family's income -- used to determine food- stamp eligibility -- fluctuates, leading to mistakes. Anything over or under $25 of what a client was supposed to receive is considered an error.

"Our argument would be that we saved much more money than what the penalties cost," Jasonowicz said. "Overall, we're still very pleased with our effort."

State Rep. Mark Jansen, R-Grand Rapids, chairman of the House subcommittee on FIA spending, said because Michigan will spend a portion of food stamp penalties on improvements, it is not lost money.

"I would call it more of a financial kick in the pants," he said.

In 1998, Michigan's food stamp error rate was 17.7 percent -- the highest in the county. FIA records show it was coming down, then jumped to 19 percent in the six months following the start of ASSIST. For the year ending Sept. 30, 1999, it averaged about 17 percent, according to the FIA. Michigan could lead the states again when the final error rates are calculated in June, Jasonowicz said.

"If Michigan's looking at a 17-percent error rate, that's still pretty high," said Phil Shanholtzer, spokesman for the Food and Nutrition Service of U.S. Department of Agriculture.

Jasonowicz said the $18.8 million will be spent on penalties and "reinvestment," including worker training and teams of workers to target and fix problems in counties with high error rates. It is not known how much will be penalties vs. reinvestment, Jasonowicz said.

Sharon Parks, spokeswoman for the Michigan League for Human Services, said the $50 million could instead provide health care to 125,000 working poor adults for a year.

"That's a significant sum of money, and it's very disturbing that so much money has to be spent on this type of thing when we have so many other needs," she said.

Engler hired FIA Director Doug Howard last March and put technology at the top of his agenda.

"I wouldn't lay this at his feet. He's inherited it," Goschka said. "But I hope this is a real wake-up call to the department that it really needs to be done as soon as possible, so there are no more penalties."


-- Carl Jenkins (, February 08, 2000

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