County staff warn SNAP payment error rate could expose Colorado and counties to millions in federal penalties

Arapahoe County human-services staff told commissioners that Colorado's recent payment error rate for SNAP pushed the state into a penalty tier that could trigger large reductions in federal allocations, and that counties may be responsible for a share of any state-level penalty.

Presenter Bob Prebble said federal rules require states to keep payment error rates below about 6 percent or face penalties tied to the state's total federal allocation. "Colorado last year came in at 10.9," he said, and under the penalty schedule a 10% penalty would equal roughly $140,000,000 on the state's federal SNAP allocation. He said the state has proposed allocating penalties 60% to the state and 40% to counties; under that split Arapahoe County's share could be in the millions depending on the penalty tier.

County staff described efforts over the past year to dig into the reasons for the error-rate increase, including a review of differences between state policy and state QA practices. They urged the board to support continued meetings with the state and asked commissioners to be alert to potential budgetary exposure as negotiations and pilot requests progress.