House taking action to stop welfare, EBT card abuses

I am appalled at the disturbing revelations of waste, fraud and abuse associated with the state's welfare / EBT program.  I share your frustration and anger at the numerous examples highlighted in Auditor Suzanne Bump's report.  There is no acceptable excuse for the type of mismanagement and lack of enforcement which has allowed these abuses to occur, and I am committed to taking action and finding tangible and immediate solutions.

           Not only do these practices waste taxpayer dollars, but they also harm those who have a legitimate and documented need for welfare benefits.  I commend the Auditor for her efforts, and believe that the report has stimulated a real and long overdue discussion of the issue. I am actively working to find the best means to address the issues raised in the audit report.

           The past several years have seen increasing efforts to confront instances of waste and corruption within the EBT program. Both Chapter 219 of the Acts of 2011 and Chapter 161 of the Acts of 2012, which I supported, created the Cashless System Commission. The task of this commission was to develop recommendations on the implementation of a cashless payment system and also explore its feasibility for welfare recipients' utility and rent payments. The report was released on December 31, 2012 and included a range of proposals covering increased education, enforcement and increased use of technology.

           A number of pieces of legislation were filed as a result of this report at the beginning of this year. Some have already received a committee hearing while others are currently awaiting ahearing date.

These bills seek to address the issue of fraud by:

*  Phasing in a system of online rent and utility payments over a three-year period.

*  Including a photo of the cash recipient on the EBT card itself  

*  Immediately terminating benefits to those who fail to notify the department of a change of address

*  Renewing benefits annually only after the department is able to verify the recipient's continued financial eligibility

          On July 27, 2012 the Governor signed into law new Electronic Benefit Card (EBT) restrictions which had been adopted by the House and Senate.  These new restrictions will help prevent the use of EBT cash benefits to purchase unapproved goods. This law makes it illegal to use or accept Department of Transitional Assistance (DTA) cash assistance funds held on EBT cards for purchase or sale of the following services or products: alcoholic beverages, tobacco products, lottery tickets, gambling, firearms and ammunition, vacation services, tattoos, jewelry, pornographic material or performances, and court ordered fees, fines, bail or bail bonds.

          Establishments or businesses providing these products or services who knowingly accept cash assistance used in EBT transactions will be fined and could face possible disciplinary action.  The law requires businesses that accept EBT cards to post a sign with DTA's fraud hotline and to list the categories of prohibited product next to each cash register. In addition, this reform also bans the use of direct cash assistance outside of the Commonwealth except for emergency purposes.

            The House of Representatives has already taken significant steps to reform and improve the program.  In the final house budget, passed in April, funding for the Department of Transitional Assistance (DTA) was increased by $2M ensuring program integrity and more manageable caseloads.  Additionally, the following legislative directives were included to improve the operations of the Department:

      *  Mandating photo IDs on all EBT cards, so that monies are used only by the named recipient.

      *  Provides for the creation of a Bureau of Integrity to monitor waste in public benefit programs.  The Bureau shall review the management and operations of DTA, while developing regulations to improve the process of determining who is eligible to receive an EBT card.

      *  The establishment of an Eligibility Verification Task Force to make sure the people who are receiving benefits are the truly needy. This institutionalizes a permanent and ongoing involvement of government watchdogs, such as the Auditor, the Inspector General and the Attorney General.

      *  Requires the Commissioner of the Department of Transitional Assistance to submit annually, a report to the House and Senate Committees on Ways and Means of the previous fiscal year, and its recommendations.

      *  Instructs DTA and the Department of Elementary and Secondary Education (DESE) to develop a program to verify school attendance for beneficiaries.

      *  Requires DTA to enter into an agreement with the US Department of Agriculture to become a State Law Enforcement Bureau to conduct investigations into fraudulent SNAP activities.

            We need to do more, and we will. I am working to draft legislation that seeks to address a number of issues that raise a red flag and need immediate attention. These measures include:

      *  An annual eligibility assessment, which will verify any changes to a recipient's income and other finances, before any continuation of benefits.

      *  Setting a limit of 3 replacement cards per year. Instances where dozens of replacement cards were sent to recipients each year are outrageous and firm limits on this practice need to be codified.

      *  As part of the goal of establishing a cashless system, as in some other states, modifying the EBT system to block all cash back and cash withdrawals from ATMs.

      *  Instituting an intensive monitoring program, on a weekly basis, of ATM and point of sale withdrawals to identify prohibited purchases made at prohibited establishments.

      *  Disallowing the purchase of non-nutritious foods (e.g. soda, chips/snacks, candy, etc.) with an EBT card.

      *  Ceasing benefits immediately pending an investigation if less than 50 percent of deposited funds have been used within any 2 month period. This would address the issue of rolling over funds indefinitely and the question of need since little of the benefit is being used by the recipient(s).

          I remain committed to ensuring that your tax dollars are being spent wisely.  Only those individuals and families who actually need assistance should receive it, if they are eligible, and the agencies responsible for administering those programs must be held accountable to the voters and taxpayers.