Audit questions use of some Missouri welfare benefits

Tuesday, December 17, 2013 | 4:43 p.m. CST; updated 9:24 a.m. CST, Wednesday, December 18, 2013

JEFFERSON CITY — A state audit released Tuesday raised questions about whether hundreds of Missouri welfare recipients actually are living out of state or using their benefits for alcohol, tobacco and gambling instead of their children.

Missouri Auditor Tom Schweich identified about $722,000 of what he called "questionable transactions" out of $96 million in electronic card transactions in 2012 for the Temporary Assistance for Needy Families program.

That amounts to a mere fraction of a percent of the total dollar value of benefits examined by the auditor's office, and Schweich said there's no way of knowing for sure that the benefits were misused. But he said the questionable expenses "could be much more widespread," because auditors also had no way of catching people who cashed benefits at a Missouri bank and then spent it on inappropriate things.

"When you're talking about at least $700,000 a year in questionable transactions that really adds up over the years," Schweich said. State officials need "better procedures in place to identify these, to follow up and then to collect the money back if they need to."

The Missouri Department of Social Services said in a written response included in the audit that it is working with state computer personnel to develop an electronic system to identify potentially inappropriate or extended out-of-state use of welfare benefits. In the meantime, the department said it is performing manual reviews of transactions.

A department spokeswoman declined to make additional comments Tuesday beyond what was included in the audit.

House Speaker Tim Jones described the audit's findings as "simply shocking."

"Clearly, more must be done to prevent fraud and abuse in the TANF system, and we will make this a priority during the upcoming session," Jones, R-Eureka, said in a written statement.

The joint federal and state program provided monthly payments to about 40,000 low-income Missouri families in the 2012 fiscal year.

The audit found 366 cases in which recipients used a total of $461,000 of benefits exclusively out of state for at least three months. Although nothing prohibits out-of-state use, the audit said that may indicate the recipients no longer lived in Missouri and thus should not have been getting the benefits.

The audit also found 1,615 cases in which recipients used a total of $261,000 of benefits at locations appearing to be associated with alcohol, tobacco, gambling or adult entertainment. Although not illegal at the time, new federal and state laws now prohibit the electronic benefit cards from being used at those places.

Schweich cited several "egregious" cases of transactions that occurred over extended periods in states far from Missouri, thus appearing unlikely to involve Missouri border city residents simply shopping at stores across the state line. The audit cited cases where someone used $4,276 of welfare benefits over nine months in Texas, $1,972 of benefits over 11 months in California and $1,191 of benefits over five months in the Virgin Islands.

Most of the potentially inappropriate places where the audit said electronic welfare benefit cards were used were at establishments with words such as "liquor," ''beer," ''spirits," ''lounge," ''pub" or "tavern" in their names. The audit cited 1,334 of those cases totaling $204,198 of expenditures.

The audit also identified 148 cases totaling $34,357 of expenditures at what appeared to be tobacco establishments, 135 cases totaling $21,399 of expenditures at what appeared to be gambling or bingo establishments and 16 cases with $1,101 of expenditures at what appeared to be adult entertainment businesses.

The Department of Social Services noted in its audit response that it had reviewed 1,300 cases in 2012 for potentially inappropriate out-of-state transactions. The department sought to recoup $47,887 from 36 of those cases, the audit said.

Schweich said the department didn't adequately identify questionable transactions and "didn't follow up very well" on potential problems.

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Richard Saunders December 17, 2013 | 4:57 p.m.

Try all you want to eliminate "questionable transactions" and you'll soon discover that you can only move them into the black market, where the beneficiary now has to pay a higher cost for a transaction that they freely chose to make.

Lesson learned? Money is fungible, and prohibition is impossible.

(Report Comment)
Kenny Honse December 17, 2013 | 7:44 p.m.

The poor are easy to audit; they are numerous and fully enrolled in government programs that help with basic survival.
Why don't we read about 'auditor finds state payroll rife with overblown paychecks in every state department-many have no responsibility to report to anyone' or, 'auditor lists payroll recipients who are paid $80K or more, full benefits that work less than 200 hours annually' or, simply, 'auditor finds less than 1% welfare abuse among the poor, while a large percentage of state agencies pay large salaries to absentee workers'
Where is Poor Richard?

(Report Comment)
Michael Williams December 17, 2013 | 9:06 p.m.

"...auditors also had no way of catching people who cashed benefits at a Missouri bank and then spent it on inappropriate things."

Cash in benefits AT A BANK? For greenbacks? You can DO this?

Why on earth is this allowed? What is the reason?

(Report Comment)
Kenny Honse December 17, 2013 | 10:39 p.m.

Auditing reveals the programs are effective. Please don't encourage reparations-what is the cost of sending warnings and threats to people who aren't exactly worried about the daily ticker or the price of Berkshire Hathaway stock.
They are mostly you and me-if not today, maybe tomorrow. We have no control of the economy and it's condition largely controls us.
What is the benefit (and cost) of pursuing these alleged offenders?

There are audits I am interested in and they would reveal how state agencies dole money to the untouchables.
Be thankful, leaders, many of those on entitlement programs will be contributing to your spending sprees-that is if you are PUTTING THE WELFARE OF THE PEOPLE FIRST. Those payments are not yours to take away.

(Report Comment)
Michael Williams December 18, 2013 | 8:03 a.m.

The definition of "entitlement": "Those payments are not yours to take away."

(Report Comment)
Ellis Smith December 18, 2013 | 8:14 a.m.

@ Kenny Honse:

I'm a bit confused by your comments. I'm certain the confusion is entirely mine, as I am an elderly person and we all know that the elderly are easily confused. Responders such as Michael Williams and Richard Saunders are familiar with my frequent bouts of confusion.

If you are suggesting that the first priority is cleaning up the workings of government (both federal and state) I am with you 100%.

As to whether or not some programs, aimed at the poor (but at the same time creating an ever expanding bureaucracy - which aids no one other than the bureaucrats), I believe that subject should be addressed on a program-by-program basis, not "grouped" as a whole.

Now I come to what REALLY prompted me to write this. Some persons delight in bad-mouthing private investment in the United States. Why? Private investment has been absolutely necessary in the development of our country and remains so to this day. Of course investors make profits from putting their own (rather than taxpayers') funds at risk. Do you think they would assume such risks if there were no possibility of financial reward?

I'd certainly agree that there can be a much smaller distance between being financially "well off" or financially "down and out" than what we'd like to acknowledge, but does that justify making everyone financially "equal" at the expense of those willing to assume personal financial risk?

(Report Comment)
Michael Williams December 18, 2013 | 9:19 a.m.

Ellis: "...but does that justify making everyone financially "equal" at the expense of those willing to assume personal financial risk?"

It's not about equal's about equal outcome.

Once....just once....I wish a liberal would give a number for "net profit as a % of sales" that is considered acceptable to them. I'd even accept a value for "maximum allowable annual income (in dollars)" or even "maximum allowable net worth (in dollars)."

But, I'm always disappointed. Seems to me if one wishes to argue about inequality, there should at least be some notion of what inequality is and to what level you have to go before things are no longer unequal.

"Vague" works better politically, I suppose. Why try to sell a program with specifics when you can sell it with vagueness?

(Report Comment)
Kenny Honse December 18, 2013 | 11:04 a.m.

Ellis Smith, you are giving out information about yourself that I did not solicit. Sorry you are confused.
Every man should recieve all he can earn. Some just cannot get any financial traction and need help. If an entitlement asset was parlayed into a financial empire, books would sing of praise "rags to riches" however reality is real and squalor is a growing commodity.
I'm saying audit the payroll of the agencies on every level-and I am not talking about the rank and file 40 hour week, vacation accumulating, sick leave accountable work force; I'm talking the dark offices at the end of the hallway. Or, believe they don't exist.

(Report Comment)
Ellis Smith December 18, 2013 | 11:28 a.m.

"Why try to sell a program with specifics when you can sell it with vagueness?"

Perhaps because it's the ONLY way you can hope to sell the program.

Some folks internationally as well as domestically did a fine job of doing just that during the 20th century, but do we need to repeat the same mistakes in the present century?

"We become too soon old but too late wise." [Literal English translation of an old German proverb.]

(Report Comment)

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