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COVID-19—Supplemental Nutrition Assistance Program Online Purchasing in Response to the Coronavirus Disease 2019

OIG reviewed FNS’ controls over the SNAP Online Purchasing Pilot in response to the COVID 19 pandemic.

Inspection Report: 27801-0003-22
Published: 08/25/2021
View Report PDF
Fast Facts

Background

The Supplemental Nutrition Assistance Program (SNAP), administered by the United States Department of Agriculture’s (USDA) Food and Nutrition Service (FNS), provides nutrition benefits to supplement the food budgets of needy families so they can purchase healthy food and move towards self-sufficiency. The 2014 Farm Bill mandated a demonstration project to test the feasibility and implications of allowing retail food stores (retailers) to accept SNAP through online transactions. In 2014, FNS initiated a SNAP Online Purchasing Pilot (pilot), which would allow households to make online purchases using SNAP electronic benefits transaction (EBT) cards. The pilot requires these transactions to be secure, private, easy to use, and provide similar support to that found for SNAP transactions in a retail store. The use of SNAP benefits to pay fees of any type—such as delivery, service, or convenience fees—is not allowed.

On September 15, 2016, FNS released a request for retailer volunteers to solicit applications for a 2-year SNAP Online Purchasing Pilot. On January 5, 2017, FNS announced the selection of eight pilot States and seven retailers for the initial pilot launch. As of March 2020, six States and four retailers were participating in the pilot program.

In March 2020, due to the coronavirus disease 2019 (COVID-19) pandemic, health officials recommended limiting visits to grocery stores and ordering food online for home delivery or curbside pickup if possible. Other factors, such as limited or halted public transportation and increased warnings for high-risk individuals, also impeded some SNAP recipients’ ability or willingness to visit supermarkets. In response to the pandemic, FNS approved in quick succession other States to participate in the SNAP Online Purchasing Pilot, and there was a steep rise in online SNAP monthly transactions. By the end of December 2020, online SNAP benefits were expanded to 46 States and Washington, D.C. Therefore, participating households and online SNAP benefits redeemed increased greatly. 

Objectives
Our objectives were to address the following questions:

  1. What criteria did FNS use to approve States and retail food stores to accept SNAP benefits through online transactions during COVID-19?
    a. How were FNS criteria different from the criteria used for approving the original              demonstration projects?
    b. What impact, if any, could changes to the criteria have on the integrity of the program
  2. What risks has FNS identified during the transition to allow SNAP benefits online?
    a. What risks did FNS accept without implementing an internal control?
    b. What controls did FNS establish to manage those risks it did not accept?
  3. What controls does FNS have to ensure retail food stores meet online transaction program requirements?

What OIG Found

In 2014, the United States Department of Agriculture’s (USDA) Food and Nutrition Service (FNS) initiated a Supplemental Nutrition Assistance Program (SNAP) Online Purchasing Pilot (pilot), which would allow households to make online purchases using SNAP benefits. The pilot requires online transactions to be secure, private, easy to use, and provide similar support to that found for SNAP transactions in a retail store. In response to the coronavirus disease 2019 (COVID-19) pandemic, FNS expanded the pilot from 6 States in March 2020 to 46 States by the end of December 2020. Between March and December 2020, the total value of online SNAP purchase transactions increased from more than $18.9 million to more than $1.5 billion cumulatively.

We found that FNS used the same approval criteria it used for the original pilot selections when adding additional States and retailers. We also identified that FNS has not updated its risk assessment of the SNAP Online Purchasing Pilot since creating the pilot in 2014. Without updating its risk assessment to assess new risks in the rapidly evolving e-commerce market, the pilot could be susceptible to fraud and abuse—particularly as FNS rapidly expanded the pilot between March and December 2020.

Finally, although we found FNS had established criteria and program requirements for retailers to be eligible to participate in the pilot, FNS did not establish controls to effectively monitor, evaluate, or document how participating retailers protect SNAP participants’ online personal information. Instead, the agency relied on retailers’ assurance and attestation that online retailers will protect the privacy of SNAP participants’ information. In order to proactively ensure that SNAP participants’ personal information is not compromised, sold, shared, or given to any third party without authorization, FNS needs to better monitor, evaluate, and document retailers’ compliance with safeguarding participants’ personal information.

FNS generally concurred with our findings and recommendations, and we accepted management decision on all recommendations.