Important SNAP EBT Updates: What Your Market Needs to Know
Posted On: June 25, 2018
SNAP EBT Equipment Program
When FMC’s SNAP EBT Equipment Program closed in November 2017, FMC had proudly approved 1,771 applicants to receive equipment of their choice: 1,005 farmers markets and 744 direct marketing farmers. FMC’s contract with the USDA Food and Nutrition Service (FNS) to administer the SNAP EBT Equipment Program ended in November of 2017, and after putting the contract through the government’s standard competitive bid process, a new contractor, Financial Transaction Management (FTM), was chosen to take over the program in April. FTM plans to open up an application portal for interested farmers markets and farmers by July 14th.
In the meantime, you can still be placed on the waitlist for equipment by emailing the USDA FNS at FarmersMarket@fns.usda.gov. Applicants will be addressed on a first-come first served basis, so adding yourself to the waitlist may help expedite the process when the program opens. For more information, see the FAQ document that FNS released on their most recent SNAP at Farmers Market WorkGroup Call on June 12th. FMC is no longer involved in the administration of the SNAP EBT Equipment Program, but we will continue to share updates on the program as they’re released.
Legislative Changes in the Senate Farm Bill: One-Machine-per-Location
On June 11th, the Senate Agriculture Committee released a draft of their Farm Bill, which included language to address the one-machine-per-location policy that has prevented farmers market operators from using mobile SNAP EBT equipment at more than one market. While the existing policy is intended to ensure integrity of the program and provide FNS with accurate data about SNAP redemptions at individual markets, the unintended consequence has been to increase costs and limit the growth of SNAP at farmers markets. The language in the Senate Farm Bill states that farmers markets:
“shall be allowed to operate an individual electronic benefit transfer point of sale device at more than 1 location under the same supplemental nutrition assistance program authorization , if—
‘‘(i) the farmers’ market or direct marketing farmer provides to the Secretary information on location and hours of operation at each location; and
‘‘(ii)(I) the point of sale device used by the farmers’ market or direct marketing farmer is capable of providing location information of the device through the electronic benefit transfer system; or
‘‘(II) if the Secretary determines that the technology is not available for a point of sale device to meet the requirement under subclause (I), the farmers’ market or direct marketing farmer provides to the Secretary any other information, as determined by the Secretary, necessary to ensure the integrity of transactions processed using the point of sale device.’’
The proposed change to this rule is cause for celebration, however, the farm bill process is ongoing and unpredictable at this point. While the process plays out, farmers markets should continue to adhere to the one-machine-per-location policy.
SNAP Reauthorization Site Visits
The USDA FNS is now requiring a site visit to farmers markets in order to complete SNAP reauthorization. This is a requirement of all other SNAP retailers that had been waived for markets until this year. FNS is working on releasing guidance to markets on the site visits – we’ll let you know when it’s available. In the meantime, FNS has assured us that waiting on a site visit will not delay a firm’s authorization to participate in SNAP, and has provided FMC with the following information:
- Why was this new requirement created, and why is it necessary?
While markets were not generally visited, this is not a new requirement. A store visit is generally required as part of the SNAP authorization/reauthorization process. Most SNAP authorized firms are visited in advance of authorization and may be visited as part of reauthorization or at any other time such a visit is deemed necessary. Markets will be visited when they are open for business; the visit will not necessarily be conducted in advance of authorization and therefore will not delay the process. The visit has no impact on the farmers market’s responsibilities for completing reauthorization; it is an FNS operational step in the reauthorization process. This visit should be largely transparent to operating markets. Store visits are an important part of FNS’ integrity responsibilities and ensure that FNS has a view of the businesses that are accepting SNAP.
- How will markets be alerted, and where can they find information on the new requirement?
The SNAP Retailer Training Guide at https://www.fns.usda.gov/snap/retailers-store-training-information (page 6) and FM guidance at: https://fns-prod.azureedge.net/sites/default/files/snap/Farmers-Market-Application-Guidance.pdf (page 13) explains that a store visit is a normal part of the SNAP participation process. Visits are not generally scheduled in advance. Store visit contractors visiting farmers markets will seek out the market manager as they would any store owner when they arrive, and identify themselves to that manager. The manager will sign a letter of consent for the visit and has the opportunity to contact the SNAP Retailer Service Center if s/he has questions or is uncertain about the visit.
- What does a site visit entail?
Deliverables from a site visit include a sketch of the market, photos, product inventory, and a series of questions about the location. With the exception of a limited number of questions about the location, this visit will be completed by the contractor without assistance from market staff.
- Who will be completing the site visits?
Contracted staff on behalf of FNS.
- How are market managers to prepare and what can they expect?
Other than ensuring their market is operational at the location specified, there is nothing the market needs to do to prepare for a visit. The owner or person responsible on site will need to sign a store visit consent form.
- In what timeframe can the site visit be expected to be completed?
Generally visits take less than an hour. Again, this should be transparent to the market and should have no impact on its operation.
SNAP Token Liability
FMC regularly receives questions from market managers seeking guidance on how to manage funds from unredeemed SNAP tokens. The USDA Food and Nutrition Service (FNS) had not offered formal guidance on this issue in the past, but they recently clarified their position on the FNS SNAP at Farmers Markets Workgroup call:
SNAP-authorized markets and farmers cannot put expiration dates on their tokens, because SNAP customers must be able to redeem tokens purchased with SNAP benefits at any time that the market is open for business. The market may reallocate unredeemed token funds for administrative expenses at the market, with the understanding that they must still honor that token if it is redeemed in the future.
The full notes from the call can be viewed at this link. Based on this info, if your market wishes to reallocate unredeemed SNAP funds for administrative purposes, it’s up to each individual market to come up with an accounting policy that ensures you can comfortably do so while maintaining the ability to redeem the flow of SNAP tokens presented for payment at your market.
Here’s the recommendation from the Farmers Market Legal Toolkit:
When a SNAP customer purchases SNAP tokens from the market, the value of the tokens becomes an accounting “liability.” That is, the market must treat these funds as money that the market owes to third parties, as token recipients are entitled to either:
- Spend those tokens at vendors selling SNAP-eligible food items (in which case the market must be prepared to reimburse the vendors); or
- Seek and receive a refund from the market for unspent token amounts.
The market should respond accordingly by keeping sufficient financial reserves to cover these anticipated redemptions and refunds.
If, based on their experience, markets reasonably expect that a given percentage of outstanding tokens will never be redeemed (or submitted for a refund) and wish to reduce the amount of financial reserves they hold for these potential redemptions/refunds, the market may make an annual “allowance” for these “doubtful tokens,” count their value as revenue for tax purposes, and reduce their reserve for SNAP redemption and refund accordingly. (Ideally, markets should consult with an accountant before taking such actions.)
All of this information is available online on FMC’s SNAP Accounting & Taxes page.