Panel examines bill to give Inspector General contract role for SNAP fraud detection

The Committee on Welfare Reform examined a proposal to shift responsibility for SNAP fraud detection to the Office of Inspector General under a contractual arrangement that would restrict the Secretary for Children and Families from hiring other fraud investigators after Jan. 1, 2027.

Jenna Moyer of the Office of Statutes told the committee that House Bill 2,731 would require the Secretary to enter a contract with the Office of Inspector General (OIG) to establish and operate a fraud-detection unit for the food assistance program on or before Jan. 1, 2027 and that the unit would be required to conform to federal regulations (7 CFR) governing fraud detection units. Moyer said the bill would take effect upon publication in the statute book (07/01/2026).

Mark Altenburnt, general counsel for the Kansas Department for Children and Families, opposed the measure and described multiple legal and operational problems. He said the statute as drafted looks ambiguous about whether the OIG would be independent or subordinate if contracted, and he warned that key federal partners — including the USDA Food and Nutrition Service and Social Security Administration — might refuse to share necessary data with an agency that is not the state administering agency. Altenburnt said that if the federal agencies would not approve the arrangement, Kansas risks having no authorized fraud investigators under the bill's prohibition on other investigators.

Steve Anderson, the Inspector General, gave neutral testimony acknowledging the potential benefits of consolidating audits and investigations under OIG but also noting coordination challenges. Committee members discussed funding and workforce questions: the reviser's fiscal note indicated the OIG estimates about 10 positions with roughly $763,000 in salary and infrastructure costs, and a total beginning-year estimate of about $1.1 million.

Members asked whether any states use an independent agency in a comparable contracted role and raised concerns about data sharing, duplication of effort and office space. DCF counsel and OIG testified that federal rules are specific about what data can be shared and that Social Security has previously declined to share individual-level data with entities that are not the administering agency.

No vote occurred at the hearing. Committee members asked staff to gather further information on how other states structure fraud-detection functions, the specifics of federal data-sharing rules and how federal partners would respond to the proposed contracting arrangement.

Next steps: committee will request additional legal and federal-approval information and may revisit HB 2,731 at a subsequent meeting.