Mo. auditor's report examines welfare benefits abuse

JEFFERSON CITY, Mo. - Missouri State Auditor Tom Schweich issued his report on welfare benefits, examining how often the funds are being abused on inappropriate purchases or by people who no longer live in the state.

Schweich's audit also looked at prevention and detection measures being used by the Missouri Department of Social Services (DSS), the state agency charged with distributing funds to recipients and investigating potential misuse.

The issue has attracted attention in recent years, thanks to media reports about questionable use of welfare benefits. The coverage has also led to new federal and state laws intended to limit inappropriate transactions.

In May of 2011, a 41 Action News investigation examined welfare data from Kansas and Missouri. The report found benefits used in vacation destinations like California, Florida and Hawaii. It also identified apparent cash withdrawals at liquor stores, adult entertainment venues and gambling establishments in Las Vegas.

Schweich's audit found similar questionable examples from the year ending in June 30, 2012, including cash benefits withdrawn over a 153-day period in the Virgin Islands.

However, the audit noted a very small percentage of the reviewed transactions were considered "questionable." The majority of the out-of-state usage also occurred in bordering states.

About 40,000 Missouri families receive Temporary Assistance for Needy Families (TANF), a mix of federal and state funds that provides an average of $240 per month. The benefits are typically loaded onto electronic debit cards and can be withdrawn as cash at ATMs.

A new federal law requires states to have measures in place to prevent benefits from being used in liquor stores, casinos or other inappropriate establishments by February 2014. A Missouri state law that took effect last August had already sought to accomplish that goal.

Schweich's audit noted the difficulty of completely eliminating questionable purchases, especially since the funds can be withdrawn from ATMs at banks.

"If you go into a casino to cash the money, it looks like you're not helping children," Schweich told 41 Action News. "On the other hand, you can go to the bank across the street and then walk over to the casino. There's no way to track that. We were only able to track the most egregious and questionable expenses."

The audit recommended DSS develop policies and procedures about how often investigators should review transaction data. It also suggested working with the department's vendor on getting more usable data that will make it easier to detect misuse of funds.

In a written response, DSS officials said they are working with the state's IT department to get a user-friendly database of welfare transactions. They also said they have informed recipients and retailers about what constitutes inappropriate purchases under new federal and state laws.

"The takeaway is there was a problem, but it was a relatively small percentage of the total," Schweich said. "There are new processes and procedures in place to identify a problem. And there's a commitment from DSS to follow up and terminate the benefits of people who abuse the system."

Ryan Kath can be reached at ryan.kath@kshb.com. You can also follow him on Twitter or join the conversation on his Facebook page.

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