Implementing Information and Instructions: Food Stamp High Performance Bonuses

Subject:  Implementing Information and Instructions: Food Stamp High Performance Bonuses
To:          Regional Administrators / All Regions

On May 13, 2002, President Bush signed into law the Farm Security and Rural Investment Act of 2002 (Pub. L. 107-171). Section 4120 of this Act authorized $48 million each fiscal year to be awarded to States with high or improved performance in the administration of the Food Stamp Program (FSP). The Food and Nutrition Service (FNS) is authorized to set the criteria for the performance measures in guidance for fiscal years (FY) 2003 and 2004. We will publish a regulation codifying the performance measures for FY 2005 and beyond.

FNS has met with representatives of State agencies and advocate groups to get their input on what the performance measures should be and how the money should be divided among the measures. We recognize that there are many ways of doing this; but believe the following structure strikes a good balance between payment accuracy and access, as well as recognizing both improvement and high performance. We believe it reflects FSP values, rewards a sufficient number of States, and uses data that is available and timely.

Performance Measures for FY 2003 High Performance Bonuses

Payment Accuracy

• $24 million total
• Divided among the 7 States with the lowest and the 3 States with the most improved combined payment error rate
• Measured by quality control (QC) data.

Negative Error Rate

• $6 million total
• Divided among the 4 States with the lowest and the 2 States with the most improved negative error rate
• Measured by QC data.

Participation Rate

• $12 million total
• Divided among the 4 States with the highest and the 4 States with the most improved participation rate
• We are planning on using census data. The numerator will be the average monthly State participation as reported to FNS. The denominator will be the number of people below the poverty line in each State. We recognize that this data yields a less precise measure of the participation rate than we would prefer. However, data that we normally use to determine participation rates is not available until after we are required to award the bonuses. The statute requires the bonuses to be awarded the year following the performance year.

Application Processing Timeliness

• $6 million total
• Divided among the 6 States with the highest percentage of timely processed applications
• We are planning on using QC data. This measure will be based on new applications certified during the measurement year. The effort and difficulty of determining whether a late determination was client caused or State caused is too problematic. Therefore, new applications that are processed outside the Federal-processing standards will be considered untimely for this measure, even though some may have met the regulatory timeliness standard.

As noted above, these measures are for FY 2003 only. The measures for FY 2004, which will be announced prior to the beginning of next fiscal year, may be different. We will be publishing a rulemaking in the coming year proposing the performance measures for FY 2005 and beyond. While we have had many discussions with our stakeholders to this point concerning performance measures, we would be happy to entertain your comments and suggestions about ways to improve the bonus system for FY 2004 and beyond.

We are very pleased to have this opportunity to award States for high and improved performance, and believe that the bonuses advance our goals for both improving and balancing program access and integrity. In the event you have any questions, or need more information, you may contact John Knaus at 305- 2098, or Moira Johnston at 703-305-2515.

Please notify your States of the above criteria as soon as possible and share a copy of your notification letter with us.

Kate Coler
Deputy Administrator
Food Stamp Program

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