“We looked at 817,000 transactions totaling $96 million for a one year period in fiscal year 2012,” Schweich said, “and the total percentage of questionable transactions we found was relatively low, but the dollar value was still over $700,000 people using electronic benefits transactions cards for out-of-state transactions for over 90 days, which makes it look like they’re not a Missouri resident, and we found over 16 hundred cases of people using EBT cards at inappropriate establishments such as liquor stores, tobacco stores, gambling locations, places like that.”
He says the fact that TANF and SNAP (Supplemental Nutrition Assistance Program) benefits exist to help children makes some of the locations where people are spending them inappropriate.
Schweich says new federal regulations mandate that Missouri tighten its regulations on electronic benefits transfers, and that the Department of Social Services is implementing a system that will better track where people are withdrawing and spending their welfare benefits.
The audit shows that out-of-state transactions totaled $3.4 million from about 9,300 cases. At least 366 of those cases showed welfare benefits were accessed exclusively for out-of-state purchases or withdrawals for more than 90 days. About 68 percent of those transactions happened in bordering states.
Schweich points to a couple of cases where people were spending all of their benefits for an extended period in farther away locations such as Texas, California, and the Virgin Islands.
“We had one person using their benefits in California for almost an entire year,” he said. “We had somebody who had spent 338 days in California and was still getting Missouri benefits.”
In June of this year, the Department of Social Services initiated a limited merchant awareness law that restricts usage of Temporary Aid for Needy Families (TANF) money in accordance with a state law passed earlier this year.
“For example,” the audits says, “five states prohibit TANF cash from being used for certain items like alcohol, seven states have disabled TANF EBT access at ATMs or terminals at casinos, and two states prohibit using the cards for alcohol by prohibiting non-SNAP authorized business to participate in the TANF EBT program.”
Schweich says the new system at Social Services should allow employees to better track welfare recipients who are using that money exclusively out-of-state for extended periods, and then will need to follow up with those recipients to determine if they are no longer a Missouri resident, in which case their benefits would be terminated.
He admits that the money in question is a very small percentage of the Department of Social Services program, but says because that program is so large, it adds up to a lot of money.
Schweich wouldn’t comment on his personal reaction to the audit’s findings, but House Speaker Tim Jones called the findings “shocking.”
“The information Auditor Schweich uncovered will be extremely useful to the House as we work to formulate our legislative priorities for the upcoming session,” Jones said. “The facts are simply shocking. More than $260,000 was spent at businesses like liquor stores, casinos, and smoke shops, in violation of current law. Additionally, nearly $129,000 was spent by people who had been out-of-state for more than 180 days, indicating they likely no longer live in Missouri yet were still using Missouri taxpayer dollars. 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.”