Open up IA: Don’t shield welfare transactions

In 1973, then California Gov. Ronald Reagan said government officials derive their “ultimate authority from the people. And we have an obligation to make sure that in carrying out our responsibilities, we do so at a price they can afford.” Forty years later some in Iowa government are shirking that responsibility.

Iowa issues debit-like cards to 16,000 low-income families receiving $100 million in benefits under the Family Investment Program. These cards are intended to help poor families get the essentials. The Iowa system, however, lacks even the most rudimentary fraud-prevention controls.

LACK OF OVERSIGHT:
Program for the poor faces
no oversight of the
$100 million it receives
in state and federal funding.

After news reports surfaced in other states that such cards were used to withdraw money from ATMs at strip clubs, casinos and hookah lounges, Iowa Watchdog asked the Iowa Department of Human Services in January for a month’s worth of transactions — including dates, locations and amounts, but not any personally identifying information — such as Social Security numbers, names or addresses – made on these debit-like cards. The troubling response did not uncover misuse of the cards, but something potentially worse. The state has either not put the proper controls in place, or they are willfully withholding information from the public.

I am not sure which is more troublesome.

Roger Munns, the Iowa Department of Human Services spokesman, has provided a confounding series of responses since the original request for documents was made some three months ago. He insists federal banking laws prohibit state officials from obtaining data pertaining to recipients’ use of the cards. This seems odd. States need this information to meet federal mandates requiring they prevent recipients from using cash benefits in liquor stores, gambling establishments and adult entertainment businesses.

Munns went on to say, “If someone wants to use government benefits inappropriately this won’t do anything to stop them. It’s a huge waste of time, but we don’t make the rules.”

I think I just heard Reagan scream from the great beyond.

Two months later, in March, Munn’s department evidently decided it could make its own rules. In an apparent response to the Iowa Watchdog request, the Iowa Department of Human Services introduced legislation designed to bar welfare recipients from using taxpayer money they receive at strip clubs, bars and casinos, making the misuse of these funds a fraudulent act.

Yet, it remains unclear how the department plans to enforce this should the bill become law.

When asked again for the spending records of recipients, the department maintained it lacks the ability to access such information. The state contracts with Xerox to administer its welfare program. Munns predicted when speaking to Iowa Watchdog, “I’m guessing (Xerox) will tell us to go fly a kite.”

Munns claims that Iowa turns over the nearly $45 million in federal money it receives for this use and about $48 million of additional state funds each year to Xerox to administer without having any ability to see whether the recipients or Xerox are spending the money as intended. The Iowa Department of Human Services’ complete lack of oversight is shocking.

Because they get state dollars, welfare recipients should have to agree to certain conditions. First among them is they permit the state of Iowa to have access to their welfare card transaction records. Second, recipients should sign a user agreement spelling out the proper use of the funds provided through the debit card program.

Finally, the state needs to immediately review its contract with Xerox. It is unacceptable for the state to turn over close to a $100 million annually to a private firm and blindly trust the money is being used as the taxpayers intended. If Xerox is unwilling to operate under such an agreement, state officials could cite Ronald Reagan’s adage — or they could just tell Xerox to go fly a kite.

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Graham Gillette can be reached at grahamgillette@gmail.com 
This entry was first published as a Iowa Watchdog essay.