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Auditor Recommends Improvements to Quickly Identify Improper Transactions in Low-Income Assistance Program

Department of Social Services did not consistently complete timely reviews of inappropriate transactions

JEFFERSON CITY, Mo (Oct. 2, 2018) State Auditor Nicole Galloway recently released a report of the Temporary Assistance for Needy Families (TANF) program, which found more could be done to ensure quick detection of improper activity. Changes to the program in 2014 resulted in the implementation of policies and practices to prevent inappropriate transactions, but the audit found several specific circumstances where these processes can be improved.   

“This report includes specific recommendations to address concerns and improve processes within the TANF program to better protect taxpayer dollars,” Auditor Galloway said. “I’m encouraged to see changes already underway to promptly detect and address misuse.”

The TANF program provides cash to eligible low-income families for clothing, utilities and other services for the household’s children by loading them on to electronic benefits transfer (EBT) cards. The federal program is administered through the Missouri Department of Social Services (DSS). During 2016 and 2017, the state provided more than $73.7 million in TANF benefits to Missouri residents. On average, TANF households in Missouri receive about $211 a month.    

Under state law, TANF benefits cannot be used at liquor stores and casinos or to purchase alcohol, lottery tickets or tobacco products. There is a system to review transactions and block prohibited venues, but the audit found these reviews were not performed from Oct. 1, 2016-Dec. 31, 2017. During that time, approximately 1,400 transactions totaling $62,400 took place at about 100 venues later identified as prohibited. If reviews had been conducted during that time, some of these transactions would have been blocked.

The audit also identified 595 recipients whose transactions took place exclusively out of state for 90 consecutive days or more. While some out-of-state use is permitted under federal guidelines, it is also an indication that a recipient may no longer be a Missouri resident and no longer eligible for benefits through the state. In some cases, the DSS ultimately detected the out-of-state activity and took action, but the audit found these situations could have been addressed more quickly with better data analytics.

In those cases that improper payments are identified, the DSS has a process to close the case. Under federal guidelines, a recipient can once again become eligible to receive benefits, but the DSS can file a claim to recover overpayments over time. The audit found several instances where the DSS discovered incarcerated individuals receiving benefits. Their cases were closed, but the DSS did not always establish claims to recoup overpayments that had occurred if the cases reopened.

The audit, which was performed by the Auditor’s data analytics team, reviewed transactions from 2016 and 2017. In several specific cases, the DSS took action after auditors brought forward concerns.

The full data analytics report on Temporary Assistance for Needy Families may be found on the Missouri State Auditor’s website.