ANNAPOLIS, Md. — A state audit found significant oversight problems within the Maryland Department of Human Services’ Family Investment Administration, including $28 million in SNAP penalties, delayed action on questionable eligibility cases and benefits issued to 1,858 recipients while they were incarcerated.
The Office of Legislative Audits reviewed the administration for the period from June 1, 2021, through Feb. 28, 2025. The agency oversees the Supplemental Nutrition Assistance Program, Temporary Cash Assistance, Temporary Disability Assistance and home energy assistance programs.
Those programs distributed approximately $1.9 billion in benefits during fiscal year 2025 to an average of more than 1 million recipients, according to the audit.
Auditors found the administration lacked comprehensive procedures to ensure local departments of social services properly determined eligibility, maintained required documentation and calculated benefits.
Among the findings, auditors reported that 1,858 people continued receiving SNAP or Temporary Cash Assistance benefits after being incarcerated for at least 30 days.
A review of 20 of those cases found 15 recipients had not been identified through the state’s matching process and received a combined $158,000 after incarceration. Five others were identified but continued receiving approximately $46,000 in benefits.
The audit attributed part of the problem to incomplete incarceration records. Social Security numbers were missing for 11,594 of the 31,290 incarcerated individuals included in Department of Public Safety and Correctional Services records as of May 2025.
Auditors also found local social services offices did not always act promptly on computer alerts involving lottery winnings, death records and possible benefits received in multiple states.
One recipient continued receiving public assistance after winning $2 million in the lottery. The individual received approximately $9,000 after the state received an alert in July 2023, and the case remained open as of February 2026.
The Department of Human Services reported that the case was closed in February 2026 and that it was working to recover the appropriate overpayment.
The audit also found Maryland was assessed $28 million in federal penalties because its SNAP payment error rate remained above the national average.
Maryland’s error rate was 35.6% in federal fiscal year 2022, 19% in 2023 and 13.6% in 2024. Federal officials assessed a $16.6 million penalty for 2022 and 2023 and an additional $11.4 million penalty for 2024.
A 2025 federal law will eventually require states to pay part of the federal cost of SNAP benefits based on their error rates. The Family Investment Administration estimated Maryland’s future contribution could total $240 million annually.
Maryland Freedom Caucus Chair Del. Matt Morgan criticized the findings and accused state leaders of failing to address concerns previously raised about eligibility reviews.
“This is incompetence on a breathtaking scale, and it’s the hardworking families of Maryland who are picking up the tab,” Morgan stated.
Morgan said caucus members had introduced legislation and floor amendments intended to tighten eligibility checks and address the problems.
“Just like the audits, our legislation was ignored,” Morgan stated.
“The Moore administration is treating audit findings like suggestions rather than alarms,” Morgan stated.
Morgan’s statement described the potential $240 million annual contribution as a penalty. The audit identifies the figure as a projected future state contribution toward SNAP costs, separate from the $28 million in penalties already assessed.
Maryland Freedom Caucus Vice Chair Del. Kathy Szeliga also criticized the agency’s handling of the programs.
“This is the same agency whistleblowers said was deliberately leaving food stamp errors uncorrected to dodge hundreds of millions in federal penalties,” Szeliga stated. “Now the official auditors have confirmed the results: thousands of incarcerated people kept collecting benefits, a lottery winner worth millions stayed on food stamps, and Maryland taxpayers are stuck with a multi-million dollar bill.”
Auditors received an allegation through the state’s fraud, waste and abuse hotline that department management may have intentionally manipulated the error rate to delay increased state SNAP costs under the 2025 federal law.
The Office of Legislative Audits reported that it could not substantiate the allegation and found nothing warranting referral to the Maryland Attorney General’s Criminal Division.
However, auditors concluded that the administration had not taken sufficient action to reduce the error rate.
Additional findings included approximately $7.1 million in Medicaid claims paid for 546 recipients after their required eligibility redetermination dates and missing supporting documents in 40 of 90 public-assistance cases reviewed.
Auditors also found that 10 SNAP recipients received a combined $95,434 after their wages were recorded below their actual earnings. In four cases, recipients earning between $4,524 and $13,764 per month had no wages entered into the eligibility system.
The report further found that an improperly awarded Electronic Benefits Transfer services contract delayed the implementation of secure chip technology that could have reduced stolen-benefit claims.
The state paid approximately $12.6 million to replace stolen EBT benefits between February 2025 and January 2026.
The Department of Human Services awarded the contract after the incumbent vendor omitted required pricing information. Auditors found the omission made the vendor’s financial proposal appear $11.1 million lower than the competing bid.
A competing bidder successfully challenged the award before the Maryland State Board of Contract Appeals, and the state later awarded a new $38.4 million contract to that company.
“Governor Moore sat on the Board of Public Works and voted to approve that EBT contract after his administration told everyone it followed the law,” Morgan stated.
DHS disputed the characterization of the procurement issue as evidence of a broader systemic failure, describing it as a single procurement interpretation error.
The audit covered activity extending back to June 2021, including periods under both the Hogan and Moore administrations.
In its formal response, the Department of Human Services generally agreed with the recommendations and outlined corrective measures already completed or underway.
The department reported hiring nearly 200 caseworkers and supervisors since January 2023, automating verification checks and strengthening supervisory reviews.
DHS also reported that Maryland’s SNAP payment error rate had fallen by more than 60%, from 35.56% in federal fiscal year 2022 to 13.08% in 2025. The department acknowledged that the rate remained above the national average.
The department disputed the suggestion that problems involving hardship exemptions necessarily represented fraud or improper payments. DHS stated that its review found the affected recipients qualified but that required forms and plans were not consistently completed, uploaded or properly indexed.
Auditors noted that many of the department’s corrective actions occurred after audit fieldwork ended and were not independently reviewed as part of the report. Those changes are expected to be evaluated during a future audit.
Read the full audit report below:
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