State Tightening Loopholes after Millions Lost in Welfare Fraud
State records show that 2013 is not off to a better start. From MassHealth to cash assistance, State Auditor Suzanne Bump has uncovered more than 200 cases of abuse this year alone.
Interim Commissioner of Transitional Assistance Stacey Monahan is taking the reports personally.
With an unassuming presence, most people don’t know that when she visits a liquor store, she’s not a regular customer.
“I’m on a mission to restore credibility with the public and with the legislature about this agency,” Monahan said.
She’s in just her fourth month as the top welfare boss. Between January 1st and April 1st this year, the state auditor says just less than half of the $1.4 million in welfare fraud was found in the food assistance program.
Clients enrolled in SNAP, a federally funded program, are given a food allowance that is spent using an EBT card. State funded programs include TAFDC and EAEDC, which are the cash assistance programs. Both state and federal funds are controlled through EBT cards.
“It’s the same card and the same amount of benefits and the same benefit program,” Monahan said. “But you can use it either as a ATM card to make a cash withdrawal or like a debit card.”
The problem? A client can take out cash, and then spend it on prohibited items like beer, lottery tickets, or cigarettes, frustrating even the most diligent store clerks.
“We can’t tell what they are doing with it, so, unfortunately,” Ruggeri’s Liquor Store clerk Diane Santaniello said.
Monahan says a cashless commission last year questioned if the cash component of welfare should be eliminated, but instead opted to keep it.
“We don’t live in a cashless system,” Monahan explained. “So for example, you can’t take a bus without cash to get to work or pay a baby-sitter or go to a yard sale so to purchase things that are lower cost to meet your basic monthly needs.”
Some direct sale transactions are made at places like liquor stores. Monahan confirmed in her inspection that popular Greenfield liquor store Ruggeri’s Liquors does in fact sell critical ingredients like milk and bread, so it’s legal for clients to shop there, although not ideal.
“Unfortunately, I’m finding personally that the EBT cards are a little abused with energy drinks, candy bars, chips that aren’t particularly what I think they were meant to be for,” Santaniello said.
With so many transactions at thousands of locations, it’s not cost effective for the state to receive reports on what individual items clients buy. However, Monahan says other loopholes are being closed.
“It’s a three prong approach. You know educating the clients, educating the retailers, and working with law enforcement,” she said.
Coming soon: ATM machines at places like liquor stores or bars won’t distribute cash for those with EBT cards. A new data system will quickly halt someone’s state funds if they are put in jail, and local police departments will have the tools to investigate local stores that knowingly sell prohibited items to clients.
“No amount of fraud is going to be tolerated in this agency,” Monahan pledged.
She feels that millions of dollars in fraud is alarming, but believes continuing to catch it is the key.
90,000 direct sale and cash withdrawals are tracked at 7,000 locations statewide every two weeks. To install itemizing technology would cost each location up to $300,000.