81 FR 14823 - Agency Information Collection Activities: Proposed Collection; Comment Request-Understanding the Anti-Fraud Measures of Large SNAP Retailers

DEPARTMENT OF AGRICULTURE
Food and Nutrition Service

Federal Register Volume 81, Issue 53 (March 18, 2016)

In accordance with the Paperwork Reduction Act of 1995, the USDA Food and Nutrition Service (FNS) invites the general public and other public agencies to comment on this proposed information collection. This is a new collection for the purpose of learning about the types of Supplemental Nutrition Assistance Program (SNAP) related fraud activity observed by large retailers and the methods they use to prevent fraud and minimize their losses. The goal of the information collection is to learn more about the types of SNAP fraud that occur in large retailer settings; document retailer practices to detect, deter, and deal with fraud (collectively known as loss prevention or loss prevention practices); and determine which practices could provide information that would help FNS in detecting and preventing SNAP fraud.

[Federal Register Volume 81, Number 53 (Friday, March 18, 2016)]
[Notices]
[Pages 14823-14826]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-05896]


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DEPARTMENT OF AGRICULTURE

Food and Nutrition Service


Agency Information Collection Activities: Proposed Collection; 
Comment Request--Understanding the Anti-Fraud Measures of Large SNAP 
Retailers

AGENCY: Food and Nutrition Service (FNS), USDA.

ACTION: Notice.

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SUMMARY: In accordance with the Paperwork Reduction Act of 1995, the 
USDA Food and Nutrition Service (FNS) invites the general public and 
other public agencies to comment on this proposed information 
collection. This is a new collection for the purpose of learning about 
the types of Supplemental Nutrition Assistance Program (SNAP) related 
fraud activity observed by large retailers and the methods they use to 
prevent fraud and minimize their losses. The goal of the information 
collection is to learn more about the types of SNAP fraud that occur in 
large retailer settings; document retailer practices to detect, deter, 
and deal with fraud (collectively known as loss prevention or loss 
prevention practices); and determine which practices could provide 
information that would help FNS in detecting and preventing SNAP fraud.

DATES: Written comments must be received by May 17, 2016.

ADDRESSES: Comments are invited on: (a) Whether the proposed collection 
of information is necessary for the proper performance of the functions 
of the agency, including whether the information shall have practical 
utility; (b) the accuracy of the agency's estimate of the time and cost 
burden for this proposed collection, including the validity of the 
methodology and assumptions used; (c) ways to enhance the quality, 
utility, and clarity of the information to be collected; (d) ways to 
minimize the reporting burden on those who are asked to respond, 
including the use of appropriate automated, electronic, mechanical, or 
other technological collection techniques or other forms of information 
technology.
    Comments may be sent to Eric Sean Williams, Food and Nutrition 
Service, USDA, 3101 Park Center Drive, Room 1014, Alexandria, VA 22312. 
Comments may also be submitted via fax to the attention of Eric Sean 
Williams at (703) 305-2576 or via email to [email protected].
    Comments will also be accepted through the Federal eRulemaking 
Portal. Go to http://www.regulations.gov and follow the online 
instructions for submitting comments electronically.
    All written comments will be open for public inspection at the 
office of FNS during regular business hours (8:30 a.m. to 5:00 p.m., 
Monday through Friday) located at 3101 Park Center Drive, Room 1014, 
Alexandria, Virginia 22312.
    All responses to this notice will be summarized and included in the 
request for OMB approval. All comments will be a matter of public 
record.

FOR FURTHER INFORMATION CONTACT: Requests for additional information or 
copies of this information collected should be directed to Eric Sean 
Williams, Office of Policy Support, Food and Nutrition Service, USDA, 
3101 Park Center Drive, Room 1014, Alexandria, VA 22302.

SUPPLEMENTARY INFORMATION: 
    Title: Understanding the Anti-Fraud Measures of Large SNAP 
Retailers.
    OMB Number: 0584--NEW.
    Expiration Date: Not Yet Determined.
    Abstract: FNS is responsible for authorizing retailers for 
participation in SNAP as well as monitoring their compliance with 
applicable regulations. Fraud in the context of SNAP can come from 
client-level program violations or retailer-level fraud. The latter, 
which is the focus of this study, can involve different actions such as 
the buying and selling of benefits or selling ineligible items like 
alcohol and tobacco. FNS believes that any type of fraud in SNAP 
weakens the program by diverting benefits from the intended purpose of 
helping low-income Americans purchase food and undermining the public 
confidence in the program. Thus, the Agency continually seeks new ways 
to detect and prevent fraud.
    Research has consistently demonstrated that fraud rates are lowest 
among large retailers. There are several theories for why this may be 
true, one of which is that large regional or national retail chains of 
stores have sophisticated loss prevention systems that prevent or 
detect numerous types of fraud. Thus, a loss prevention system built to 
discover an employee engaging in credit card fraud could easily be 
modified to detect an employee engaging in SNAP benefit fraud. 
Similarly, a system built to prevent internal theft may be able to 
detect the sale of ineligible items.
    Despite theories as to why large stores have low SNAP fraud rates, 
there is limited understanding of how they prevent SNAP fraud. If 
internal loss prevention systems prevent SNAP fraud, then it is 
possible that a better understanding of large store procedures could 
help FNS refine its procedures for detecting and reducing retailer-
level fraud. Thus, FNS desires to understand more about the steps large 
retailers take to protect themselves from fraud in general and SNAP 
fraud specifically.
    The information collection activities to be undertaken subject to 
this notice include: Survey of Companies that own/franchise large SNAP 
authorized retail chains: Surveys will be administered to company SNAP 
representatives in companies that own, franchise and/or have 
cooperative agreements with the largest chains of SNAP-authorized 
stores. These include super store chains, large supermarket chains, 
convenience store chains, and other chain stores that sell a 
combination of food and other products, such as household products, 
pharmaceuticals, or gasoline. The surveys will address the loss 
prevention systems used by these companies.
    Survey of SNAP Authorized Stores owned/franchised/affiliated with 
large retail chains: Surveys will be administered to managers of super 
stores, large supermarkets, convenience stores and other chain stores 
that sell a combination of food and other products. The surveys will 
address fraud detection and prevention policies and practices.
    This study does not seek to represent all SNAP retailers. It 
targets the practices of one segment of the SNAP authorized retailer 
population--the largest retail chains. These chains are likely to have 
the most sophisticated loss prevention systems. Therefore, the study 
includes the large national and regional chain retailers responsible 
for transacting about half of all SNAP redemptions. A total of the 35 
largest retail corporations and a sample of 2,000 of their store 
outlets are expected to respond to surveys.

[[Page 14824]]

    Company SNAP representatives and store managers will be asked 
questions regarding organizational structure, roles and 
responsibilities, and tactics used to limit or eliminate fraud in 
general and SNAP fraud in particular. At a minimum the following fraud 
abatement methods will be studied at the corporate and store levels: 
Point of sale systems, analytics, training, surveillance, 
investigation, and liaison with law enforcement. The surveys will be 
administered using a web-based survey tool.
    Companies and SNAP authorized stores that do not respond to the 
web-based surveys will receive internet reminders. Those that still do 
not respond will receive a telephone call through a Computer Aided 
Telephone Interviewing (CATI) system where trained interviewers will 
prompt the participant to respond to the survey online or to complete 
the survey by telephone via CATI.
    Affected Public: Businesses-for-and-not-for-profit (4,054):
    A total of 45 large companies with stores participating in SNAP, 
and 4,000 SNAP authorized company owned and operate stores, franchised 
stores or affiliated stores and 5 pretest companies.
    Estimated Number of Respondents: 4,054.
    Estimated Number of Responses per Respondent: 2.4430.
    Estimated Number of Annual Responses: 9,904.
    Estimated Time per Response: 0.11378.
    Pretesting the company surveys will take a total of 10 hours (four 
2.5-hour interviews), and pretesting the store surveys will take 5 
hours (five 1-hour interviews).
    FNS plans to contact 45 companies. We anticipate the SNAP 
representative at 35 companies will respond and spend 1.65 hours 
identifying key informants and compiling information from various 
organizational units involved in SNAP. They are likely to include human 
resources (for training), loss prevention (for loss prevention 
management and loss prevention procedures used), point of sale 
management and analytics. The company SNAP representative will spend 
between .25 (web-based response) to .33 (CATI survey response) hours 
completing the survey, including time to report on SNAP-specific 
activities and policies carried out by the SNAP representative and 
information compiled from other units involved in SNAP. Managers of 
2,000 stores will spend an average of .4 hours each to respond to the 
Store Manager Survey.
    Estimated Total Annual Burden on Respondents: 1,126.9 hours.
    See the burden table below for estimated total burden for each type 
of business respondent and non-respondents.

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[[Page 14826]]


    Dated: March 8, 2016.
Audrey Rowe,
Administrator, Food and Nutrition Service.
[FR Doc. 2016-05896 Filed 3-17-16; 8:45 am]
BILLING CODE 3410-30-P