The Associated Press is reporting that the US Department of Agriculture (USDA) “is warning states about potential problems with outsourcing food stamp operations.”Though the letter to the states from the USDA does not call any states out by name, it does state that private endeavors have encountered serious difficulties in meeting performance standards, and this causes eligible applicants to suffer.
Corrie MacLaggan of the News-Journal online writes that the November 20, 2009 letter states ‘“We do not support furtherance of such projects, and believe that they put public funds and our clientele at risk.”’
For their part, the state of Texas hired Accenture LLP in 2005 to operate call centers that dealt with both food stamp enrollment and Medicaid. However, in the 2007 the project was ditched, citing training and technology problems. Currently, Texas was in negotiations with another private company “already doing some aspects of enrollment.” Texas said they do not expect the contract to be affected by the letter.
Another example of where privatization did not work well is in Indiana. As MacLaggan writes, “In October, Indiana ended a more than $1 billion welfare eligibility deal with IBM Corp. because of problems ‘including lost documents, delays in benefit approvals and poor service,’ according to an Associated Press report.”
At this point in time the food stamp program is experiencing “a recession-related surge across the country [.]” From August 2008 to August 2009 food stamp rolls increased nationwide by 7 million people, making the number of recipients 36.5 million.
To read the AP article click here.
To read the MacLaggan article click here.
Posted: 12/01/09
