A NEW STATE report on public-assistance debit cards is disturbing for a number of reasons and cries out for serious, sustained follow-up.
State Auditor General Jack Wagner says the Department of Public Welfare "roadblocked" an audit of a program that permits those on welfare to access money for food stamps and other aid.
Electronic Benefits Transfer (EBT) cards, a/k/a ACCESS cards, are used by roughly 750,000 needy Pennsylvanians to get about $200 million a month in support.
Even if the vast majority of such expenditure is done as the law intends - to help individuals and families truly in need - there are enough red flags here to suggest a video: Credit Cards Gone Wild!
Wagner found state cards used for $5.2 million in transactions or cash withdrawals in all 50 states, Puerto Rico and the Virgin Islands. This includes 797 transactions in California, 59 in Puerto Rico, 27 in Alaska and 21 in Hawaii.
And that was just in one month, May 2010.
Wagner can't find what all this was for, whether Internet buys or road trips.
But he notes one case of obvious fraud: This May 17, someone used an EBT card to withdraw $147,525 from a welfare account in installments of $1,500.
Think the system has some vulnerability?
Wagner says department management is so lax (his report refers to it as "an attitude of indifference"), there's no way to tell what's going on, how money's spent or even if residents of other states are using our cards.
Welfare officials claim no responsibility to control spending and "no authority to place restrictions on the use" of cards.
Wagner, sensibly, disagrees. He calls for better monitoring, internal reviews and banning purchases "inconsistent with the intent of social-service programs."
California last year banned assistance cards at spas, massage parlors, strip clubs, tattoo shops, casinos, bail-bond agencies and cruise ships.
Cruise ships? Really? You'd think certain prohibitions would be in place Day One.
But the only restriction in Pennsylvania (enacted in December '09) is no booze buys. And because cards can be used to get cash, how exactly is that enforced?
This isn't about politics. Democrat Wagner has been stonewalled by the administrations of Democrat Ed Rendell and Republican Tom Corbett. And, remember, the GOP budget calls for $400 million in welfare savings. Why aren't the administration, the department and the Legislature begging for this audit?
Wagner tells me he met with Welfare Secretary Gary Alexander and was told the department was looking into his request.
"That was four months ago," Wagner says. "We hope by releasing this report we might get cooperation. If not, we'll look at legal steps, including subpoenas."
My attempts to talk with Alexander were unsuccessful. His press office e-mailed this: "Secretary Alexander is very interested in open and transparent government." [There was no little emoticon, so I assume this was emailed with a straight face.] "We will be working with the Auditor General's office on their [sic] request in short course . . .. We plan to accommodate the Auditor General to the fullest extent permitted by law."
Sounds promising, but it likely opens the door to debate. "Permitted by law" suggests privacy issues, as in, "The department would love to help but protects the confidentiality of those we serve and, because this involves individuals' specific use of our services, blah, blah, blah."
Still, there's no excuse for not fully auditing a system spending $2 billion a year in tax money that clearly holds a potential for massive fraud. There's no reason it can't be done while protecting the privacy of individuals legitimately using cards.
It's time to set aside politics, ideology and bureaucracy, and lay out some facts.
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philly.com/JohnBaer. Read his blog at philly.com/BaerGrowls.