Michigan spends $37.5M to lower SNAP payment error rate

The state of Michigan is spending $37.5 million in an effort to reduce its payment error rate for the Supplemental Nutrition Assistance Program.

Michigan’s payment error rate for fiscal year 2024 is about 9.53%, which could trigger a $300 million fine from the federal government in fiscal year 2028. That error rate increased to 9.89% in fiscal year 2025, according to figures released by the U.S. Department of Agriculture on June 24.

The federal government wants states to target a six percent payment error rate to avoid absorbing a larger share of the costs. The Department of Agriculture wants the state to pay the mistake costs because the state administers the program.

Snap Qcfy25 Per by mcclallen

The fiscal year 2026 budget included more than $30 million “for Food Assistance Reinvestment to help reduce SNAP error rates,” according to a 2025 press release. “This funding will allow the department to continue making significant strides to reduce its payment error rate.”

The press release did not specify how that spending would drop the state’s payment error rate for 1.4 million residents who rely on the program.

Michigan Capitol Confidential obtained the spending breakdown via a records request.

The spending plan by category is:

• Ad campaign: $5 million

• IT: $12 million

• Staff/OT: $10 million

• McKinsey: $6 million

• Prior Year Food stamp reinvestment work project: $4.5 million

The federal government works with neighboring states like Ohio to lower the payment error rate and even catch alleged SNAP criminals who spend benefits out-of-state, but Michigan has refused to share SNAP data with the federal government.

Michigan needs the help of the federal government because a majority of the SNAP fraud in Michigan involves spending of benefits out of state, according to more than 500 pages of SNAP fraud police reports obtained by CapCon.

Criminals steal SNAP benefits and spend them in New York, Maryland, Florida, Texas, and other states. Michigan residents have no recourse. Local governments can’t chase this crime, but the federal government could – if Michigan would provide the needed information.

This week, Gov. Gretchen Whitmer announced that MDHHS Director Elizabeth Hertel will be leaving the agency June 30. Hertel will be replaced by Amy Epkey, who has worked in the Michigan Department of Environment, Great Lakes, and Energy, as well as the Michigan Department of Agriculture and Rural Development.

House Oversight Chairman Jason Woolford, R-Howell, welcomed the change.

“For too long, bureaucrats operated without meaningful accountability while hardworking Michigan families paid the price,” Woolford said in a news release. “Seniors, parents, and vulnerable residents were forced to navigate broken systems, while taxpayers watched billions of dollars flow through programs riddled with waste, fraud risks, and administrative failures.”