Hawai’i is currently facing a considerable financial penalty of nearly $11 million from the federal government due to a substantial increase in its payment error rate for the Supplemental Nutrition Assistance Program (SNAP) over the past two years.
In response, the state’s Department of Human Services is seeking to implement technological upgrades in hopes of mitigating the fine.
To address this issue, the department is requesting approximately $5.46 million from lawmakers to fund a new computerized system.
This system aims to enhance the accuracy in determining eligibility and benefit amounts for SNAP participants.
The proposal suggests that if the state invests in this technological improvement, the federal authorities might forgive half of the fine.
SNAP, formerly recognized as food stamps, is a federal food aid program managed by the U.S. Department of Agriculture’s Food and Nutrition Service.
In the 2022 and 2023 fiscal years, Hawai’i recorded a payment error rate of approximately 21%, which is nearly twice the national average for those periods.
Scott Morishige, the administrator overseeing the Benefit, Employment and Support Services Division of the state Human Services, explained that these errors included both underpayments and overpayments.
This led to the imposition of a $10.93 million fine by the federal service last June.
The surge in error rates is partly attributed to an influx of SNAP applications during the pandemic.
At that time, federal waivers temporarily relaxed certain regulatory requirements, leading Hawai’i to adapt to these changes.
However, as the federal rules were reintroduced, the state experienced increased error rates.
Factors that compounded the situation included a hiring freeze implemented by the state in 2020 under then-Governor David Ige, significant staff turnover, and overwhelming caseloads.
The payment errors were identified through audits conducted on selected samples of SNAP cases in Hawai’i.
Governor Josh Green’s administration has proposed House Bill 1099, requesting a $5.46 million emergency appropriation to facilitate what is described as a “reinvestment option” aimed at resolving the penalty.
Furthermore, a new computer system known as Benefits Eligibility Solution is under development with an investment of $68 million to replace the existing system, which has been in use for nearly four decades.
This new system is anticipated to be operational statewide by the fall of 2026.
According to DHS Director Ryan Yamane, if this reinvestment results in the payment error rate falling below the national average of 11.68%, the state would not be obliged to pay the remaining fine.
Currently, around 83,000 households in Hawai’i receive SNAP benefits, which amount to over $60 million each month.
The Hawai’i Appleseed Center for Law and Economic Justice supports the push for emergency funding, noting that changes in state eligibility requirements could see an additional 14,000 families enrolling in SNAP.
The House Finance Committee has initially approved HB 1099, while the Senate Ways and Means Committee is slated to review a similar proposal in Senate Bill 1418 later this week.
