Audit finds some welfare recipients earn too much



Posted on May 31, 2014 at 9:02 AM

Updated Saturday, May 31 at 3:53 PM

State auditors have found potentially thousands of Washington state welfare recipients who may be earning too much money to qualify for state assistance.

RELATED: Audit identifies more problems in WA's food stamp program

Investigators from the office of Washington Auditor Troy Kelley identified a large pool of recipients whose income may disqualify them from the food stamp program. From that pool, auditors selected 67 people for a detailed review. Of those they found:

* Seven cases where the beneficiary was earning $100,000 over the state income limit;

* 30 cases where the beneficiary was earning between $10,000 and $99,000 over the limit;

* And 30 others who were earning up to $1,000 to $10,000 over the limit.

The auditors found the cases during a review of changes that the Department of Social and health Services made to its fraud detection program in the wake of an investigation by KREM 2's sister station KING 5 three years ago that revealed widespread abuses in programs aimed at helping Washington's poorest residents.

DSHS official said they have been reviewing the auditors' preliminary findings. Late today, the department issued a statement saying it disagrees with the auditors' initial findings and said the agency has been "unable to substantiate" the auditors' findings about income ineligible beneficiaries.

The department also responded to KING 5's recent report about another finding made by the state auditors -- that more than 4,000 food stamp recipients continued to receive benefits after they died.

MORE: Audit finds Wash. welfare benefits going to dead people

According to DSHS, the auditors used flawed Social Security data to reach that conclusion. The agency said it had found no instances of benefits being paid to deceased clients.

DSHS said it has a zero-tolerance policy for fraud. Read the agency's statement in full below:

The Department of Social and Health Services has significant concerns with information aired by KING TV during the past week regarding public assistance benefits for needy families.

KING TV leaves viewers with the impression that thousands of welfare recipients in Washington State continue to get excessive replacements of their EBT cards, and millions of dollars in welfare benefits are being paid by DSHS to people who are either dead or using invalid Social Security numbers.   As its source, KING TV relied on preliminary results contained in state auditor working papers as opposed to a final or even draft audit report.  

Eligibility and Wages

The Department is still reviewing the preliminary exceptions identified by the auditor related to income that exceeds program eligibility.  The Department has reviewed the seven cases with income identified of more than $100,000 over the limit.  We are unable to substantiate the auditors’ preliminary results and, therefore, disagree with their initial findings. 

Deceased Persons’ Social Security Numbers

Much of the information presented by KING TV cannot be validated.   For example, the working papers identified some clients as using the Social Security number of a dead person.  DSHS reviewed the cases in the working papers and found no instances of benefits being issued under such circumstances.     

The allegation of using invalid Social Security numbers was based on a flawed data exchange, which resulted in the transmission and identification of incorrect SSNs for a small group of clients.   At DSHS, it is standard practice to verify all Social Security numbers with its federal source, the Social Security Administration. 

Federal and state laws require 10 day advance notice to a household before closing their case. The advance notice allows for due process.  It also allows DSHS to assist bereaved, surviving household members to ensure they are able to properly access benefits that were appropriately issued prior to death, and determine continued household eligibility.

Replacement Cards

Contrary to KING TV’s misleading report, the Department has implemented several strategies that have greatly reduced the potential for misuse.  The number of clients receiving more than four replacement cards in a 12-month period has dropped markedly, from 11,691 in 2011 to 1,870 in the last 12 months — a 625% decrease.

Beginning this year, any client receiving more than four EBT replacement cards receives a warning letter from DSHS, advising the client that excessive replacement card issuance can trigger a referral to a fraud investigator.   It is important to note here that federal SNAP regulations do not allow states to deny a replacement card to an eligible client.  When a card is lost or stolen, DSHS replaces only the card and not the benefits. Most EBT cards can now only be replaced by mail from the state’s EBT vendor, JP Morgan Chase.

For DSHS, program integrity is a core value and priority.  DSHS employees routinely audit applications for public assistance benefits, match records with the Employment Security Department (and other state agencies), use an electronic data matching system called PARIS (Public Assistance Reporting Information System) to determine whether people are getting benefits in more than one state at a time, and perform a number of other matches and data mining queries to identify fraudulent applications and the misuse of public assistance benefits.