Welfare benefits audit shows purchases made on accounts of 27 dead people

CARSON CITY - An audit that found debit cards issued by the state to 27 dead people were used last year to buy food and other items valued at $6,000 angered legislators Wednesday.

The anger dissipated after an administrator with the Division of Welfare and Supportive Services said that electronic benefits transfer, or EBT, cards are issued for entire households and that he believes in most cases family members of the deceased legally used the cards.

Assemblywoman Maggie Carlton, D-Las Vegas, said that fraud was "a small problem" because $497 million in purchases were made by users of the Supplemental Nutrition Assistance Program, SNAP, in 2011.

More than 300,000 people in Nevada receive what used to be called food stamps.

Auditors never said during a legislative audit subcommittee meeting that qualified family members could use the cards issued to the cardholder.

The audit itself noted that dependents could qualify for benefits, but the amounts they receive should have been reviewed and adjusted after the cardholder's death. They noted money still was placed in these accounts three days to 10 months after the primary cardholder died.

In one case, auditors even found that a card was issued to a third-party representing a client who had died eight days earlier.

Because EBT card fraud is increasing, Congress approved a measure that was signed by President Barack Obama in February to prohibit cardholders from spending the money on tattoos and at strip clubs, liquor stores and casinos. All funds for SNAP come from the federal government. A set amount determined by the Welfare Division is placed in each cardholders' account every month. As is the case with a debit card, users must key in a PIN number when making a purchase.

Acting administrator Steve Fisher said the Welfare Division accepts the criticism in the audit and will strive to make sure the cards are not fraudulently used. In some cases, the division will seek the return of illegally obtained funds or pursue criminal prosecutions.

He said his agency has acquired a Nevada Office of Vital Statistics database showing people who died in recent years. They will compare those names with people listed in databases for the Temporary Assistance for Needy Families, TANF, and Supplemental Nutrition Assistance programs.

That is what auditors did. They received a Vital Statistics database of people who died in Nevada and matched those names with about one-third of the heads of households in the SNAP and TANF databases.

About 2,400 people were in both databases, and 749 of the deceased were not shown as deceased in the Welfare Division database.

Auditors then reviewed 50 of these cases and found that 27 cards had been used after the cardholder had died.

Because the sampling number was so low, it is likely that far more than the 27 cards of dead people still are being used.

In a lengthy discussion, legislators questioned the welfare officials about what other steps they take to ensure cards are properly used.

Officials said each month they review where card purchases are made. If participants makes most of their purchases in California or other states for months at a time, then officials check to see if they have moved out of Nevada and seek restitution.

Participants' accounts also are closed if they do not make food or product purchases in 180 days or take out permitted cash within one year.

Contact Capital Bureau Chief Ed Vogel at evogel@reviewjournal.com or 775-687-3900.