A University of Alabama researcher has found a way to turn the state’s $420-million-ayear food stamp program into money for the University and save the state money at the same time.
Dr. Jay Sterling, senior research scholar in the Center for Business and Economic Research, under a $275,700 state contract, was asked by the Department of Human Resources to assist in the selection of a new processor of the state’s Electronic Benefits Transfer program, as well as find a way to reduce costs.
The EBT program allows food stamp recipients to use a special ATM card to obtain and pay for food products. The food stamp program in Alabama processes multiple transactions from 176,000 clients (recipients) each month, and disburses $420 million a year in benefits.
A team consisting of DHR representatives, Sterling and an outside consultant examined the old contract, developed and issued a Request for Proposal, and selected a new “low cost provider” who also proposed significant upgrades to the level of services currently provided to food stamp recipients.
The re-bid process and selection of a new supplier will save the state of Alabama between $12 million and $15 million over the life of the three-year contract. Sterling also noted that “we implemented the contract 2 1/2 months early and, as a result, saved the state an additional $2 million.”
The Alabama Department of Human Resources began phasing in a debit card system to issue and process Food Stamp Program benefits in April 1997. By October 1997, all food stamps in Alabama were being issued through the EBT system. Alabama was the first state in the nation to include federal (Social Security and Supplementary Security Income) as well as state programs (Family Assistance and Food Stamps) in an electronic issuance system.
Contact
Chris Bryant, Assistant Director of Media Relations, 205/348-8323, cbryant@ur.ua.edu