Martian

Assuming this is true, then this most definitely is not kosher. I don't know anything about this program other than what's covered in the Wikipedia article, so I'm going to trust StellaLuna's assertion that this constitutes fraud; if that is the case, then your employee is not only committing fraud herself, but also involving your organization in it as well, which could potentially have very serious repercussions for you.

A question: When the employee submitted a receipt previously, was she reimbursed?

And How I Would Handle This:

Ask the employee to submit the receipt for the food items purchased (naturally). If it is again torn, follow the actions you took last time. Follow this up by taking this employee aside and explaining that in the future, she needs to submit the full undamaged receipt in order to be reimbursed. Present this as a method to prevent fraud and pitch it as a change in policy.

In fact, I would strongly encourage you to actually change the policy to reflect this. If you don't have the power to do so, talk to the people who do. Explain your concerns and why the change is necessary. Don't name names, but do make sure to outline the possible repercussions for your organization if something like this is in fact taking place.

Accusations are rarely productive, unless your goal is to get rid of the employee. Assuming you want to keep her, I'd avoid that route.

__________________
I wake up in the morning more tired than before I slept
I get through cryin' and I'm sadder than before I wept
I get through thinkin' now, and the thoughts have left my head
I get through speakin' and I can't remember, not a word that I said

- Ben Harper, Show Me A Little Shame