A federal appeals board says Colorado must refund $11.2 million in overpaid food- stamp benefits caused by a new state-of-the-art computer system that was intended to streamline the welfare process.
Colorado will appeal the decision in federal court, officials said.
The state improperly paid the money to welfare clients in the months after the unveiling of its Colorado Benefits Management System in September 2004, according to the federal State Food Stamp Appeals Board.
In a letter to state officials last week, the board rejected Colorado’s assertion that the benefit system was so complicated that it confused federal regulators and caused them to miscalculate the overpayments.
“We are deeply disappointed with the ruling and plan to take this to the U.S. District Court,” said Liz McDonough, spokeswoman for the Colorado Department of Human Services, which oversees CBMS.
The $11 million “is a significant amount, and we will do everything we can do to get it reduced or eliminated,” McDonough said.
The three-person board is part of the U.S. Department of Agriculture.
The reimbursement amount was calculated in two parts: a $10.8 million assessment from food stamp overpayments and $359,760 for cost-of-living adjustment overpayments to other welfare clients.
“We were disappointed the board didn’t look any deeper at our contentions, and the assessment significantly overstates the problem,” said Nate Strauch, spokesman for Attorney General John Suthers, whose office handled the board appeal.
The state has until May 1 to pay the money or ask a federal court to stay the collection, pending a review.
Anticipating the decision, legislators last week set aside a portion of the state’s annual share of tobacco settlement funds, which arrived about two weeks ago.
“We anticipated some obligation and set aside well in excess of this, so we should be OK,” said Rep. Bernie Buescher, D- Grand Junction, vice chairman of the Joint Budget Committee.
CBMS processed more than 575,000 welfare cases last year, totaling $2.9 billion in benefits.
While both state and federal governments blamed CBMS for the problems that led to the overpayments, they differ sharply on the amount and cause.
Federal officials with the Food and Nutrition Service, where food-stamp benefits originate, said the overpayment was the result of CBMS glitches and human errors.
Colorado said the federal government’s numbers were wrong because officials misinterpreted CBMS data.
Colorado has not said what it thinks is the correct amount, but state officials recently learned CBMS has so many errors – up to 11,000 a month – that overpayments might actually have reached past $100 million.
Staff writer David Migoya can be reached at 303-954-1506 or dmigoya@denverpost.com.
