Legislative Audit Finds Welfare Benefits Paid To Deceased Clients, Some Funds Spent After Death

CARSON CITY – A legislative audit released today says that the state Welfare Division needs to do a better job of identifying when clients receiving benefits have passed away.

The audit, reviewed today by the Legislative Commission’s Audit Subcommittee, found 189 instances of people listed by a separate state agency as having passed away between July 1, 2007 and Dec. 31, 2009 that were listed by the division as still living.

Legislative auditors tested Electronic Benefits Transfer (EBT) cards used to provide benefits in 50 of the cases. They found that the division paid more than $11,500 in benefits to 27 of the 50 clients after their dates of death.

Benefits were paid by the agency up to 10 months after the clients died. The state’s vendor for the EBT program later removed $7,225 of unused benefits from the accounts.

Benefits provided to Nevadans include food stamps, now called the Supplemental Nutrition Assistance Program (SNAP), and a cash grant program called Temporary Assistance for Needy Families (TANF).

Auditors also found that EBT cards in some cases were used after the dates of death of the clients.

Of the 50 cases tested, 13 were found where SNAP transactions using the cards had occurred after the clients’ dates of death. The transactions totaled $6,502 and took place from 13 to 247 days after the clients’ dates of death.

The audit made five recommendations to correct the issues found in the review, and all were accepted by the Division of Welfare and Supportive Services.

Lawmakers serving on the subcommittee noted that the amounts involved in such cases were small compared to the nearly $500 million in SNAP benefits provided to Nevadans in federal fiscal year 2011. The SNAP program is entirely federally funded.

Assemblywoman Maggie Carlton, D-Las Vegas, said no one should take money that is not due to them, but the incidents of potential abuse found in the audit appear to be few.

“If we’re talking $497 million in SNAP monies in the year 2011, and we’re looking at the possibility of it might be $6,000 worth of problems, it just seems like such a small amount and such a small problem compared to all the benefits that are being paid out here,” she said.

Legislative Auditor Paul Townsend said auditors also identified potential fraudulent activity during the review.

“It does point out there is a problem there,” he said. “It’s not a huge problem but the problem does exist. And along the way we also found some instances where there’s possibly some fraudulent activity taking place where someone is actually getting a card issued after their date of death.”

Steve Fisher, acting administrator of the division, said the flaws found in the review are serious and need to be addressed. He noted, however, that the benefits are available to an entire household, so even if a client passes away, other family members might use the EBT cards to access the benefits.

The agency is actively working on implementing all five of the recommendations, Fisher said.

The agency has an investigative unit to look for instances of fraud to recover benefits paid inappropriately, and criminal prosecutions can occur as well.

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Audio clips:

Assemblywoman Maggie Carlton says the incidents of potential abuse are few compared to the amount of benefits provided:

091912Carlton :26 paid out here.”

Legislative Auditor Paul Townsend says some evidence of fraudulent activity was uncovered during the review:

091912Townsend :16 date of death.”