News
The Journal Sentinel (Wisconsin) - by Jason Stein
A new audit has found more than $300,000 in suspicious out-of-state spending in the state's food assistance program for the poor.
Most out-of-state spending was found in neighboring states. But the audit also found purchases made in every state in the country and other U.S. territories such as $515 spent in the Pacific island of Guam.
The state's $1.1 billion a year FoodShare program is required by federal rules to allow recipients to use their benefits to buy food in other states, and the audit notes that in many cases that can be for legitimate reasons such as a recipient who lives near the state line or who takes a trip.
But the Legislative Audit Bureau report found $324,200 in spending by FoodShare recipients that was done in other states. That included $151,500 that was spent in states that have no border with Wisconsin.
"My constituents first alerted me to potential inappropriate use of FoodShare benefits in other states," said Rep. Samantha Kerkman (R-Randall), who requested the review as the co-chairwoman of the Legislature's Joint Audit Committee. "These results make it clear that reforms are needed in the program."
For the past year, the Milwaukee Journal Sentinel has been reporting on fraud in FoodShare, which is run by the state and almost entirely paid for by the federal government. The program is meant to help needy individuals and families purchase food.
A June review by the newspaper found nine Facebook users in Milwaukee and about 70 altogether nationwide who posted on Facebook seeking to either buy or sell food assistance benefits illegally or help others do so. In April, the newspaper also reported that nearly 2,000 FoodShare recipients claimed they lost their card six or more times in 2010 and requested replacements - a sign that investigators said could indicate fraud.
The latest audit noted that out-of-state spending in FoodShare amounted to about $32.9 million, or 3% of the total spending in the program. The suspicious out-of-state spending was done by an extremely small group - about 0.04% of the 382,449 groups of individuals and families receiving FoodShare benefits.
The state Department of Health Services appreciates the work done by the auditors and will take it seriously, spokeswoman Stephanie Smiley said. Gov. Scott Walker's administration has put more resources and emphasis on tracking fraud in FoodShare over the last year.
"The department is currently investigating every case and will take appropriate action against those individuals who have intentionally violated the rules of the program and recover any unallowable benefits," Smiley said.
The audit found that most of the out-of-state spending occurred in Minnesota, Illinois and Michigan. The report gave examples of FoodShare recipients who lived near the state line and who lawfully did their shopping at large grocery stores just across the border.
But the report also noted 334 cases last year where a FoodShare debit card was used to make a purchase in Wisconsin on the same day that the card's account number was used to make a purchase in another state that doesn't border Wisconsin. Those transactions accounted for $23,600.
FoodShare accounts are supposed to provide help only to a family or group living together, not to groups of people divided among different states.
Auditors also found 731 cases of FoodShare recipients who live outside Wisconsin. Some recipients don't appear to have been state residents at the time they applied and some received benefits in multiple states, the report found.
Jon Peacock, research director of the Wisconsin Council on Children and Families, said that because the fraud appeared to be relatively small, the state should be able to deal with it without imposing an undue burden on law-abiding FoodShare recipients.
"I'm happy to see that it's less than one-tenth of one percent of FoodShare recipients," Peacock said. "It enables the department to zero in on those very suspect cases and weed out the fraud."
Peacock noted that because FoodShare benefits are paid by the federal government, if recipients move to another state, they are allowed to keep them for a short period while they apply for benefits in their new state.
"It's a national program. There's nothing inherently wrong with people doing it, but it is a flag," Peacock said.
Though the suspicious out-of-state cases represented only a small share of the overall FoodShare cases, they weren't the only area of problems that were detected. Fraud in the program also has turned up among Milwaukee County workers, inmates in the Milwaukee County Jail and a backlog of suspicious county cases that were investigated by a private detective agency running a new pilot project.