The South Carolina Department of Social Services is not new to electronic benefits transfer (EBT). In 1994, South Carolina became just the fourth state in the country to fully implement EBT for its Supplemental Nutrition Assistance Program (SNAP). But technology has changed over the years, and the Department of Social Services wanted to take advantage of new capabilities – particularly those that could help them combat program waste, fraud and abuse.
“We wanted to improve service delivery, to provide more flexibility, and to access analytical opportunities that would help us ensure tighter integrity with our SNAP program,” said Robin Verenes, program manager for the South Carolina Economic Services Division of Administrative Services. “We wanted a more uniform, stronger way to be proactive on potential issues rather than being as reactive as unfortunately we’ve had to be in the past.”
In June, the department contracted with Xerox to help it accomplish that goal. Under a $51 million, seven-year contract, Xerox will provide 420,000 South Carolina residents access to SNAP benefits via new EBT cards. Additionally, Xerox will provide a Web-based data warehouse to aid the state’s SNAP fraud unit in detecting suspicious and fraudulent activities.
“We issue $100 million in benefits each month, and pretty much $100 million in benefits is redeemed each month,” said Verenes. “Most of that is used as it was intended. But we do have situations where that is not the case. The analytics Xerox will put in place will give our investigative team data they can use to ensure our clients are getting the best bang for the buck, and that benefits are being used as they were intended to be used.”
According to Xerox, state benefit disbursement fraud is estimated to be between $6 billion and $10 billion annually, and is expected to double over the next five years. The company's data warehouse comes programmed with 70 pre-written reports, which were developed based on its experience working with state EBT programs. Utilizing this warehouse, South Carolina can begin tracking suspicious behavior right away, without having to customize or create the required reports.
“The data warehouse solution -- which is virtually brand new to the space -- has an extensive array of reporting capabilities that will help the state target and manage fraud, waste and abuse more effectively,” said Mike Cerone, senior vice president and managing director for Xerox’s State Enterprise Solutions group. “Containing that waste, fraud and abuse ultimately preserves more resources for constituents and for legitimate use of those funds.”
Under the contract, Xerox will also supply new reloadable debit cards to SNAP recipients, who can use them for approved purchases or cash withdrawals at authorized retailers and ATMs. Xerox will process transactions, manage interactions with retailers and ATM networks, and offer customer support.
In addition to SNAP, Xerox will also implement an electronic payment card solution for 20,000 state residents enrolled in the Temporary Assistance for Needy Families (TANF) program. The solution will accelerate payments to recipients such as child care providers, foster board payments, and adoption subsidy recipients using a reloadable MasterCard debit card. Recipients can access the funds anywhere MasterCard is accepted.
The system's TANF component will be implemented in October, and the SNAP conversion will take place in January 2015.
The new TANF EBT system will also allow the state to analyze where benefit recipients are redeeming their benefits. The federal Middle Class Tax Relief and Job Creation Act of 2012 requires states to prevent TANF recipients from accessing their benefits in liquor stores, casinos and adult-oriented entertainment businesses.
“Xerox has a strong component on their cash side to make sure that we’re complying with the Congressional mandates in terms of allowing transactions to occur in certain areas, or not to occur at certain types of retail establishments,” said Verenes. “We’re looking forward to having that in place. We’ve done the best we can up to this point to comply with the mandate, but Xerox capabilities are very good in this area, and we’re delighted that when we convert the debit cards this October, those blocks will be in place.”
“We combined the procurement to benefit both agencies," she said. "Once the Department of Health and Environmental Control implements EBT for WIC, it will be a significant improvement to the citizens of South Carolina that participate in that program as well.”