3SquaresVT faces more federal fines

Vermont’s food stamp program could face a fine of as much as $1 million for failing to adhere to federal rules — this time for neglecting to enforce work requirements, according to an email obtained from the Vermont Department of Children and Families.

The department is attempting to negotiate with federal officials to lower or eliminate the penalty, and federal and state officials won’t release a firm number at this time. DCF officials are confident the federal government will forgive the fine, if it is imposed.

The state has already been fined $500,000 for “error rates,” or miscalculations in the amounts beneficiaries are eligible for, over the past two years. Another $370,000 will be assessed next year, based on current error rates. Vermont has one of the highest payment error rates in the nation.

The Department for Children and Families operates 3SquaresVT, the state branch of SNAP (Supplemental Nutrition Assistance Program), a federally funded food benefits program. Roughly 100,000 Vermonters receive the benefits.

Adults who are considered “able-bodied” and who don’t have children, must spend 20 hours a week working at a job or in a program, or participate in community service in order to receive benefits. The state is supposed to terminate benefits if recipients don’t comply.

That requirement was temporarily lifted in April 2009 — at the height of the recession — and was reinstated this August.

But Vermont hasn’t begun enforcing it. In fact, it has yet to tell people that they’ll have to start working in order to hold on to their benefits.

Federal officials have been prodding the state to come into compliance; in the meantime, a financial penalty accumulates.

In a Nov. 18 email from Pat Duda, director of Food and Nutrition Services for Vermont, to DCF Deputy Commissioner Richard Giddings, Duda estimated that the fine would be $960,000.

Giddings forwarded the email to DCF Commissioner Dave Yacovone later that day, writing, “Heads up. We need to discuss today.”

Now officials seem to be shying away from that figure. Neither Giddings nor Yacovone said they had an estimate.

Asked whether the figure was still accurate, Duda provided the following response, via email: “We do not have an estimate of the fiscal sanction, if any, at this time.”

Yacovone said the department will send a letter in mid-December to notify beneficiaries of the requirement.

Many participants in the 3SquaresVT program are working, and the majority of them have dependents, meaning the new rule won’t affect them. (There are also exemptions for pregnant women and those under 18 or over 50.)

State officials estimate there are roughly 5,000 people who fall in the Able Bodied Adult Without Dependents category.

Most other states offer vocational programs and job search assistance to help participants meet this requirement. Vermont used to do something similar, through a partnership with the Department of Labor, according to Yacovone.

Because Vermont is under the gun, it will start enforcing the requirement without a program in place. “If they need help they can come into the office, and we can give ideas,” Yacovone said.

The USDA warned DCF back in 2012 that Vermont might have to start enforcing the requirement, and it issued an official notice on Aug. 2, 2013, informing the state that it would indeed need to reinstall the rule.

So why didn’t the department act?

Federal officials alluded to that question in email exchange with DCF staff.

In an Aug. 29 email to the USDA, Duda, asks, “Any decision as to whether we have a period of ‘forgiveness’ from ABAWD implementation given we did not receive our target letter until 8/2/2013?”

The response from the USDA official, Alison Mickiewicz, was not heartening: “Again, we will check but it is highly unlikely given VT has already had a year to plan and implement qualifying ABAWD components.”

Yacovone said the department had hoped Vermont would get another waiver. Giddings said IT work associated with Vermont Health Connect constrained their ability to prepare.

The state was trying to decouple the health care component from the rest of the department’s IT system, which prevented DCF staff from keeping track of whether people are meeting the requirement, according to Giddings.

The problem has been fixed, according to Giddings — “There was a meeting last week where we revised the last code, and everything looked very positive” — and staff have been trained to enforce the rule.

Giddings and Yacovone both say they’re confident that the necessary pieces will be in place by January, and they are optimistic that the federal government will forgive all or part of the fine.

States are permitted to offer exemptions to up to 15 percent of ABAWDs, and Vermont officials are trying to finagle a way to avoid sanctions by stockpiling those exemptions in future months, and applying them retroactively to people who weren’t exempted in previous months.

Yacovone, who said Maine has received permission to do this in the past, explained how he envisions it working: “We hoard them up and then we say to the federal government, ‘You know when we weren’t compliant? We are going to use these exemptions to buy back the sanctions.”

“I keep thinking it’s manageable,” Yacovone said. “I have not been persuaded that this is an inordinate challenge on our staffing.”

But the situation appears less placid in the email back-and-forth between federal and state officials. Communications from federal officials have an unyielding bent, and communications from the latter show state officials groping for a way out.

The department was looking for possible escape routes, before the Aug. 2 letter, by trying to winnow down the group of people required to work. People who lack housing or transportation, for example, don’t have to comply with the work requirement. Duda asks the USDA if Vermont could “expand the definition of employment barriers” to encompass other reasons, such as “lack of personal hygiene, language (English as a second language), cultural and or citizenship.”

The USDA indicated there wasn’t much leeway. The only exception where states have “some latitude,” an official responsed, is in cases where the person “is obviously mentally or physically unfit for employment as determined by the State agency.” It suggests that if DCF can verify, during a face-to-face interview, that the person is unhygienic due to a mental or physical disability, it could exempt them, but that would count towards the 15 percent cap.

Editor’s note: This story was updated at 5:45 a.m. and 6:14 a.m. Dec. 16.