WASHINGTON – While efforts to stamp out the illegal use of food stamps have saved millions of dollars in benefits during the past five years, small grocery and convenience stores in low-income areas continue to experience food stamp fraud, according to the Government Accountability Office (GAO), USA Today reports.

The GAO recommends that the U.S. Department of Agriculture focus on finding stores that violate federal rules and increase penalties for trafficking in misused stamps. In a report released in October, the GAO's recommendations come as Congress is preparing to revisit the $29 billion-a-year food stamp program in 2007 as part of a farm bill.

One recommendation is for the Food and Nutrition Service (FNS) – the agency within the USDA that manages the food stamp program – to look over the 160,000 stores authorized to receive stamps to see which are most likely to engage in fraud and to target them for enforcement, the newspaper reports.

Households with a gross monthly income of 130 percent or less of the federal poverty level, or less than about $1,799 a month for a family of three, qualify for food stamps. Food stamp recipients have discovered many ways to receive cash instead of food for their benefits. For example, a grocer or store owner willing to take part in fraud will give the food stamp recipient about 50 cents in exchange for $1 in stamp payments, the GAO found. The retailer then claims the $1 was used for groceries and seek reimbursement from the government, the newspaper reports.

The GAO found that the selling of food benefits for cash at small groceries and convenience stores is 38 times the rate of fraud at large supermarkets. The FNS estimates that about $241 million in food stamp benefits were stolen last year, with small stores redeeming less than 15 percent of the food stamp benefits but accounting for 79 percent of the fraud, or $190 million.