Feds want NM to pay $164 million - Albuquerque Journal

Feds want NM to pay $164 million

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Copyright © 2018 Albuquerque Journal

SANTA FE – The U.S. Department of Agriculture sent New Mexico a bill for $164 million this week, alleging the state mishandled a program that helps needy families buy groceries.

The state overpaid benefits to a “substantial number of households,” the federal government said, because of “improper administration” of the Supplemental Nutrition Assistance Program.

Furthermore, New Mexico cannot try to get the money back from the affected households, the USDA said, because the overpayment is a result of a “major systemic error by the state agency.”

The state Human Services Department, in turn, denied that it had provided too many benefits.

“The program has been administered consistent with applicable regulations, court orders and the federal guidance in place at the time decisions were made,” spokeswoman Mary Elizabeth Robertson said. “We will appeal the bill.”

The allegation centers on a 2½-year period from 2014-16 – when the state Human Services Department failed to properly verify that the households were eligible, among other problems, according to the USDA.

It’s the latest blow to fall on New Mexico’s program for providing food aid through SNAP.

A class-action lawsuit filed in 1988 – and still pending today – accused the state of violating people’s rights by imposing inconsistent and excessive requirements on applicants seeking benefits, delaying eligibility decisions and failing to provide emergency food assistance in time.

Earlier this year, U.S. District Judge Kenneth Gonzales issued a blunt opinion outlining “a lack of accountability” in the state agency and pointing to the “woefully inadequate testimony” by a key manager in the department. He noted that two other managers had, at one point, “instructed staff to fraudulently” change income information on food applications as a way to deny benefits.

Sovereign Hager, legal director of the New Mexico Center on Law and Poverty, which is representing the plaintiffs in the class-action lawsuit, said Friday that the benefits in question probably went to eligible families, because they’d been ruled eligible before. But poor administration by the state meant that the agency didn’t ask for or collect the documents it needed, she said.

“New Mexico families deserve to have their food benefit cases processed accurately,” she said in a written statement. “Instead of reforming their systems and processing cases according to the law, HSD took short cuts that hurt families, both by issuing benefits without asking for required information and in fraudulently changing applicant information to cover up late processing.”

In a letter Tuesday, William Ludwig of the USDA’s Food and Nutrition Service said his agency understands that New Mexico is committed “to improving program administration, customer service, and program integrity.”

But the state’s improper administration of SNAP had resulted in “overissuances of benefits,” Ludwig said.

His letter alleges that the state certified applicants as eligible without proper verification, incorrectly kept applications pending beyond a deadline and improperly paid retroactive benefits.

The state Human Services Department contends that its handling of applications matched court orders issued in the 30-year lawsuit.

The state “disagrees that we have over-issued benefits or provided too many benefits to thousands of New Mexicans who were eligible for services,” Robertson said.

Hager said court orders weren’t too blame.

“HSD’s poor administration of the program created this problem and unless they make management changes and create a policy manual for workers, this will continue to happen in the future,” she said.

A court-appointed special master this year recommended the removal of five administrators in the Human Services Department.

Judge Gonzales didn’t order anyone’s removal, but he did impose a series of deadlines aimed at ensuring the department improves its performance.

He also approved a settlement that could result in the dismissal of the litigation, if the state meets a variety of performance standards centered on how long it take to handle applications for food and medical help.

Nonetheless, the federal government issued a “bill for collection” of nearly $164 million this week, due in about 30 days.

But the USDA said it was open to negotiating a repayment plan that would take care of the debt “over multiple fiscal years.”

The bill comes as an oil boom in southeastern New Mexico is expected to help provide about $1.2 billion in new revenue beyond this year’s spending levels for the next fiscal year. But state lawmakers are facing a broad range of funding requests, including proposals to boost education funding in the wake of a landmark court ruling.

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