For Immediate Release - June 03, 2013

Grossman Pushes New EBT Technology to Combat Fraud and Abuse

Will Accept Contract Recommendation but Emphasizes Strong Oversight in Implementation

          Noting that the Treasury “had insisted on providing Massachusetts with new and dramatically enhanced technologies to guard against fraud,” Treasurer Steven Grossman today announced that, when presented, he would accept a joint Treasury-Department of Transitional Assistance (DTA) selection committee’s recommendation to choose the Xerox Corporation as the vendor for a pending contract to manage DTA’s electronic benefits card (EBT) program. The Treasurer warned, however, that “technology is only as effective as the people who use it. The taxpayers demand a firm commitment to proper oversight and implementation.”

          The Treasurer said, “I am prepared to be a strong partner with Governor Deval Patrick, Health and Human Services Secretary John Polanowicz, and interim DTA director Stacey Monahan in their ongoing reform initiatives. The new technology will provide them with the tools they need to succeed.” The Treasurer’s Office had pushed for changes to the bidding specifications that would require state-of-the-art anti-fraud safeguards as well as compliance with new restrictions on card use enacted by the Legislature.

         The Treasurer’s Office and DTA jointly oversee the procurement for the EBT program – ATM and credit card-like cards that provide recipients of transitional assistance with Supplemental Nutrition Assistance Program (SNAP – also known as Food Stamps) and cash benefits. Reports by the Inspector General, State Auditor, and news organizations have uncovered alleged abuse of the cards – such as ineligible persons receiving aid or funds being spent on unauthorized products and services.

         “Fraud and abuse take money away from taxpayers, and they divert precious resources away from those who really need it,” Treasurer Grossman said. “No one who legitimately needs transitional benefits should be denied this vital assistance, which is intended to ensure that families including children have food, clothing, shelter, and other necessities of life. Fraud hurts all of us, whatever our income level.”

         Xerox currently provides the EBT infrastructure to Massachusetts and other states. The proposed multimillion dollar agreement is tentatively set to run for seven years. The final terms of the contract will be negotiated with Xerox by Treasury and DTA officials, and the choice of the vendor is subject to successful completion of those negotiations.

         Grossman said his approval was conditioned on Xerox’s agreement to brief legislators and the media on the new technologies. “There is a crisis of confidence with respect to transitional benefits. This crisis demands the highest degree of transparency and disclosure about the steps being taken to implement overdue reforms and the ways in which they will improve DTA’s ability to manage the EBT program.”

     Under the new contract Xerox will roll out new technologies that:

  • Provide a more comprehensive and sophisticated data management system for tracking the benefits program.
  • Applies modern data mining techniques to the SNAP and cash benefit programs.
  • Allow DTA officials to closely monitor benefits and expenditures on a nearly real-time basis.
  • Offer analytical tools that will enable officials to track patterns that have been shown to be indicative of fraudulent activities.
  • Give Massachusetts access to best practices used by other states to oversee their SNAP and cash assistance programs.

         “I am particularly pleased that the improved technologies will include a full range of potential enforcement techniques including the ability to flag suspicious activities such as unusually large EBT withdrawals or heavy clustering of transactions at particular locations,” Grossman said.

          He added that as a businessman he believes that solutions need to meet the tests of feasibility and cost-effectiveness. “No doubt technology will improve over time and we will upgrade our systems accordingly,” he said, “however we cannot implement proposed measures that are neither available nor affordable. And we should not impose undue burdens on merchants and their employees to act as enforcement agents for the state. We must be willing to provide sufficient funding and staffing for DTA to effectively implement this new technology.”

 

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