The Department of Social and Rehabilitation Services Secretary Rochelle Chronister announced the state has issued a letter of intent to award a seven-year, $11.6 million contract to Deluxe Data Systems, Milwaukee, Wi., to set up an electronic benefit transfer system for food stamp recipients in Kansas.

Electronic benefit transfer (EBT) will allow persons eligible for food stamps to use a plastic card to purchase food at participating stores. Persons eligible for the Aid to Families with Dependent Children (AFDC) program or the General Assistance (GA) program will also use the EBT card to access cash assistance benefits.

The new EBT system will begin July 1, 1996 in the Wichita SRS area, which includes all of Sedgwick County. Two months later the system will begin operating in the Hutchinson SRS area, which includes Kingman, Harper, Harvey, McPherson, Rice, Reno and Sumner counties. The system then will be gradually introduced across the rest of the state.

Under the contract with Deluxe Data Systems, the EBT system is scheduled to be operating statewide by April, 1997.

The EBT card works similar to cards used to access automatic teller machine used by bank customers.

The food stamp recipient will hand the EBT card to the cashier at participating food stores who runs the card through a point-of-sale terminal after ringing up the groceries purchased. Then the cashier will hand a 'pin pad' to the recipient, who will key in a four-digit personal identification number (PIN), known only to the recipient. The dollar amount of purchased food will automatically be deducted from the recipient's monthly food stamp benefit.

Secretary Chronister said moving to EBT has many advantages over the present paper food stamp distribution system. She said fraud will be much more easily detected, the agency will save on postage costs and be better able to predict administrative costs in running the food stamp program, and the problem of lost food stamps will be eliminated.

In state fiscal year 1995, which runs from July 1, 1994 to June 30, 1995, a total of $378,587 in food stamps were lost in the mail and were replaced. SRS was liable to the federal government for a small portion of these losses.

The amount of the EBT contract is somewhat dependent upon

the number of persons receiving food stamps in Kansas. The vendor will be paid by the number of food stamp and other cases processed per month.

Half the administrative costs of the food stamp program is paid by the federal government. So of the estimated $11.6 million contact, $5.8 million will be paid by federal funds.

SRS has been researching EBT systems since early this decade in preparation for the contract award. Secretary Chronister said Deluxe has more experience in setting up EBT than any other company in the country. She said the company has designed systems in Maryland, Utah, Massachusetts and New Jersey. Maryland had the first statewide EBT system in the country, which has been operating statewide about two years.

During state fiscal year 1995, which ended June 30, an average of 41,287 people in Wichita received food stamps, while an average of 19,626 received AFDC and 1,628 qualified for General Assistance. Statewide, the average monthly total of persons receiving food stamps was 186,599 during fiscal year 1995. An average of 81,618 persons a month received AFDC statewide, while a monthly average of 5,262 received General Assistance.

Page Last Updated: May 29, 2001