Investigation tracks local welfare money spent all over the country, including Vegas and Hawaii

KANSAS CITY, Mo. - At a time when the number of people relying on public assistance continues to grow, millions of dollars worth of Missouri and Kansas welfare money is being spent all over the country, including states like California and Florida, and even as far away as Hawaii and Alaska.

An NBC Action News investigation is asking: How big of a problem is abusive use of the taxpayer-funded programs?

Crunching the numbers

NBC Action News requested several months of out-of-state transaction data from the Missouri Department of Social Services (DSS) and the Kansas Department of Social and Rehabilitation Services (SRS), which oversee the distribution of welfare funds.

The numbers showed people used their electronic benefits transfer (EBT) to make purchases in all 50 states. A majority of the money comes from the federally-funded food stamps—or SNAP—program.

Some recipients also have a monthly cash grant under the Temporary Assistance for Needy Families (TANF) program. These funds are a mix of federal and state money and be accessed through many ATMs.

Data on specific food stamp transactions, including items purchased, location of retailer, and amount of purchase are not public records. State departments like SRS say even they are not able to review the records kept by the US Department of Agriculture.

However, NBC Action News also requested the locations of ATM withdrawals (TANF funds) in three states: California, Florida and Nevada.

Numbers reveal millions spent out of state

From January thru March, Missouri EBT card holders spent about $11.8 million dollars in other states. During the same time period, Kansas recipients spent $3.6 million.

By far, the most out-of-state transactions using Kansas funds occur across the state line in Missouri, and vice versa. In fact, about 99 percent of Kansas out-of-state transactions take place in bordering states (Missouri, Oklahoma, Colorado and Nebraska). Missouri follows essentially the same pattern.

It's the remaining one percent of transactions that can raise eyebrows.

INTERACTIVE FEATURE | How much welfare cash is being spent in other states?

Places like California, Florida and Texas represented a significant amount of the remaining out-of-state funds.

From January thru March, Kansas welfare recipients spent:

• $294,920.08 in Texas
• $81,105.26 in California
• $80,157.32 in Florida

From January thru March, Missouri welfare recipients spent:

• $456,040.22 in Texas
• $251,063.70 in California
• $348,220.40 in Florida

Occasionally, funds are even accessed in the most distant states. In Hawaii, Missouri recipients spent $9,239.92 and Kansas recipients racked up $2,908.62.
 

Analyzing ATM withdrawals suggest gambling, vacation spots

Earl Glynn, director of government money-tracking Kansas Watchdog , studied the numbers with NBC Action News.

"I was surprised that people go as many places as they do with their EBT cards," said Glynn. "There doesn't seem to be any place they don't go."

Glynn plotted the ATM withdrawals on Google maps to give a better sense of where the cash is being spent.

BE THE INVESTIGATOR | Analyze the ATM withdrawls

Among some of the transactions with Kansas money:

• A $202.95 withdrawal from the Las Vegas Short Line Express Market, advertising beer, snacks and video poker
• A $123 withdrawal at 11:20 p.m. at a Walgreen's on the Las Vegas Strip
• A $202 withdrawal from a 7-11 near the Strip
• Back-to-back withdrawals totaling $363 at a Disney World gift shop

And here are some of the questionable transactions with Missouri dollars:

• A $203 withdrawal at Walgreen's on the Strip
• A $208.85 withdrawal outside the Sands Expo and Convention Center
• A $234 withdrawal at Big City Liquor in San Diego
• A $202 withdrawal at Coast Liquor in Laguna Beach, CA
• A $102 withdrawal at Dotty's, advertised for gaming and spirits
• A $82.85 withdrawal on Disney World property

Reaction from state departments

NBC Action News spoke with Rob Siedlecki, Secretary of the SRS Department in Kansas, to find out why there are so many out-of-state transactions.

"The first time I looked at the amounts, I said, ‘Wow, that is a lot of money," said Siedlecki, who was nominated for position in January by Gov. Sam Brownback. "But then I looked at the percentages and it's about 1 percent going to states that are not on our borders. When I put it in perspective, it wasn't as bad, but even that number can be too high if there is fraud or waste involved."

Since it is a federally-funded program, it is perfectly legal for food stamp recipients to use the benefits in any state. Siedlecki said there are legitimate reasons why the funds might be accessed in distant locations. Someone might be taking care of a sick family member, attending a funeral, or searching for employment, he said.

"We want to make sure cheats aren't taking money away from those who truly need it," he said. "If you're going to states like Alaska, Florida and Hawaii, we're definitely taking a bigger look

at it."

Siedlecki added he is in the process of hiring a fraud chief whose sole responsibility will be to coordinate all anti-fraud and abuse efforts. He also wants to add fraud investigators to each of the state's six regional offices.

What are the restrictions?

Food stamps can only be used for government-approved purchases. People are restricted from buying things like alcohol, cigarettes, toilet paper and pet food. Food stamp funds also cannot be withdrawn for cash at ATMs.

On the other hand, TANF funds do not have any restrictions. The cash can be used to buy virtually anything and can be withdrawn all over the country.

Siedlecki said there is talk of adding restrictions to TANF purchases to prevent people from buying certain items like liquor. However, he acknowledges those restrictions would not prevent people from taking out cash, and then buying a restricted item.

In Missouri, lawmakers pursued legislation that would prohibit use of TANF benefits for out-of-state transactions. There are also bills moving forward that would permit drug-testing of welfare recipients and add photo ID to EBT cards.

In Kansas, Olathe Republican Sen. Julia Lynn favors giving more resources to fraud investigators as opposed to adding another layer of bureaucracy to an already massive taxpayer-funded system.

"The question is: What do you do? What do you put in place to prevent that from happening without creating even bigger government trying to track those transactions?" Lynn said.

Taking away from those who need it most

Kansas City resident Tearice Moses has been receiving welfare benefits since 2004, when a brain aneurism nearly took her life. Since then, she has regained her ability to walk and talk. However, she still is unable to control several parts of her body, including her left arm.

She takes care of her two grandchildren and says the food and cash assistance is a lifeline.

That is why it's frustrating for her to hear about the misuse of the program in places like Las Vegas. She worries the abuse of a few recipients ruins the perception of the program for the many who use it the right way.

"A lot of people use it wisely," Moses said. "If someone is in Vegas using it, don't blame us for it. It's tough hearing those stories when so many people need that money. A lot of people need it more than I do."

Moses, who worked at bakery before her near-death experience, said it is her goal to work again.

Welfare stats in Kansas and Missouri

  • In the past 12 months, there was an average of 423,205 families participating in the food stamp program, according to the Missouri DSS. During the same period, there was an average of about 43,012 families receiving TANF
  •  In Kansas, there are about 300,000 people getting food stamp benefits and about 40,000 getting TANF
  • Last year, the Welfare Investigations Unit opened 2,027 cases of alleged fraud, targeting more than $5.5 million. They also closed 3,025 older cases of alleged fraud, representing $7.6 million, according to the DSS
  • In Kansas, nine dedicated fraud investigators investigated 2,054 cases last year
  • Suspect fraud or abuse? Call 1-800-432-3913 in Kansas and 1-877-770-8055 in Missouri or email DLS.ReportFraud@dss.mo.gov

Ryan Kath can be reached at kath@nbcactionnews.com . You can also follow him on Twitter and Facebook .

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