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In Louisiana, more than 600,000 residents have been receiving food stamps each month, at a cost of $600 million annually to the federal government.
In the wake of hurricanes Katrina and Rita in 2005, that figure swelled by an additional 500,000 households, which received more than $368 million in benefits—bringing the total outlay closer to $1 billion. But although most food stamp recipients are in legitimate need, the state of Louisianas Department of Social Services estimates that approximately 4 percent of the funds—a total of $40 million—is fraudulently received or trafficked each year.
Looking to cut its losses, the state enlisted the help of Information Builders, which specializes in business intelligence solutions, and ESRI, which focuses on GIS (geographic information systems), to work together to create a solution dubbed TINA-GIS that would help the Louisiana DSS spot, and in effect eradicate, misuse of the Food Stamp Program.
“We purchased the best commercial products available and hired a great team of contractors,” said Sherwood Lemoine, internal management consultant for the Louisiana Department of Social Services in Baton Rouge.
“Using the DSS project plan proved to be a very cost-effective new way of doing business; it was as simple as getting good contractors that had proven project management skills and who know how to communicate with the DSS project team and PMO [project management office] at [the] DSS.”
The Food Stamp Program, which is administered by each state individually, is funded through the U.S. Department of Agricultures Food and Nutrition Service. The funds allow recipients to purchase staples—bread, milk, meat, vegetables, canned goods and other food—but may not be used for items such as cleaning supplies, luxury items, or alcohol and tobacco. In Louisiana, recipients are given Louisiana Purchase Cards, a debit card that allows recipients to access their monthly benefits at point-of-sale machines.
In an illegal activity called trafficking or discounting, customers sometimes sell their food stamp benefits to a store for cash, often receiving only half of the face value of the benefits. The retailer buying the food stamps, meanwhile, redeems them for the full value and pockets the difference.
In the past, investigators had few tools at their disposal—relying heavily on tips called in to their office that would identify potentially thieving retailers. So, Louisianas Fraud and Recovery Section began exploring technological solutions that would lower the odds of successful swindles.
To achieve its goals, the Louisiana DSS gathered an array of technological partners to help.
“The state of Louisiana purchased a software upgrade from Information Builders that included our WebFocus software and ESRIs products,” said Michael Corcoran, vice president of corporate strategies at Information Builders, based in New York.
“For the services portion of the contract, Information Builders partnered with IBM in response to the states RFP,” Corcoran said. “Our consulting staff was able to develop the system, and we turned to IBM because of their strategic relationship with the state and their ability to manage the overall project. This was a perfect example of several vendors working synergistically to deliver the best possible solution for the customer.”
As the DSS confronted the fraud problem, and it became clear that the project demanded business intelligence expertise, Big Blue subcontracted the job of creating and implementing the TINA-GIS application to IBI. The DSS implemented IBIs WebFocus application, which combined data from multiple sources across the enterprise and allowed users to quickly write reports and access information.
In 2004, though, the DSS took a giant step in stopping food stamp scams by asking ESRI to work with IBI to add a geographic dimension to its analytical arsenal. The two companies only had worked together once prior to helping the state of Louisiana.
“We were aware of Information Builders and of where our technologies intersected,” said Trammell. “We wanted to get our hands around a real live opportunity [to collaborate].”
ESRI and IBI both recognized the inherent value of geographic information being added to the system, said Corcoran.
“When we were talking to the state of Louisiana, we learned early that this is a classic business problem that is difficult to analyze and solve until you map it out,” said Corcoran. “When you try to spot fraudulent transactions, you can look at dozens of reports, but you dont get to see trends until you plot it out with visual capabilities.”
Initially, the two companies worked together to create a proof of concept to present to the DSS, said Steve Trammell, corporate alliance representative for ESRI, in Redlands, Calif. He said the two companies mapped the locations of the stores accepting food stamps and the locations of those receiving food stamps, examining trends in where the credit was being redeemed.
Next Page: Drilling down data.
Drilling down data
The system also used geocodes (which are an exact map location) from TeleAtlas in Lebanon, N.H., to allow the system to map each of the 165,000 retailers in the program. Further data for the system came from available census information.
To achieve success, IBI took the lead on the necessary integration work, while ESRI offered a strong lead with mapping expertise.
Together, the two companies developed an interface that enabled WebFocus and the mapping program to communicate with each other.
The system layers different types of information, including the location of stores, the location of recipients, dates and times of purchases, and more, on the map. It allows users to quickly drill down to specific pieces of information or view relationships between data points. From the map, users can “lasso” areas that present red flags and drill down into the data to identify the trends.
“We went from looking for food stamp fraud on the back end to using the TINA-GIS application on the front end to provide better business intelligence and information to DSS management that could be used to not only track potential patterns of fraud, but improve our service delivery to the people we serve,” said Lemoine.
Typically, the state had been processing 80,000 food stamp transactions per day. During and after the hurricanes, the figure grew exponentially to half a million purchases daily. Using the system, the state was able to quickly create daily reports that mapped the status of both residents and retailers for the USDA based on purchases using food stamps. State officials could tell which stores were still operational, as well as where disenfranchised residents had moved.
“In the past, we had information, but we never had the tools, resources and technology to pull it together fast,” said Lemoine.
Both ESRI and IBI had done work with the DSS prior to this project. The two companies worked together closely to enhance the existing system with mapping capabilities. ESRI trained IBI staff on the intricacies of GIS technology, while IBI handled the integration between its business intelligence software and ESRIs GIS technology.
The state of Louisiana is still waiting to see the results of its ability to identify fraud and theft trends, but justice is slow and the actual return on investment on the system is still unclear.
“Unfortunately, we can see some patterns that appear to be fraud, but it takes several years to process cases through the courts,” said Lemoine. Today, the system allows investigators to spot potential fraud and to use their investigative time more wisely.
In addition to identifying fraud that has already occurred, though, the system could be used to help prevent future cons, the DSS hopes.
“TINA-GIS was developed to detect patterns of fraud in millions of rows of available food stamp transaction data, something not possible using individual reviews of transaction logs,” said Lemoine. “[The system allows] us to scan multiple areas for potential fraud within minutes versus hours or days for one location using previous standards of review and to display the results on a map or report.”
For ESRI and IBI, this project is the start of what both companies anticipate to be a long-term and growing partnership, said ESRIs Trammell. Already, new customers are asking them to implement similar solutions in their own programs.
“We really got together and started to understand each others technology and started to build tight integration between our products,” said Corcoran. “Now, we can go out and pre-sent each others products and its entirely seamless. Its given us a unique and substantial competitive advantage.”
Hailey Lynne McKeefry is a freelance writer in Belmont, Calif. Contact her at hailey@cyberdeacon.com.
Editors Note: This story was updated to correct the spelling of Michael Corcorans name.
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