CLAMPING DOWN: Through its third-party vendor, Kansas has implemented measures to prevent TANF welfare dollars from being used in electronic transactions at casinos, strip clubs and liquor stores, among other prohibited locations.
By Travis Perry │ Kansas Watchdog
OSAWATOMIE, Kan. — After a Kansas Watchdog investigation last year uncovered public welfare dollars ending up at strip clubs, casinos and liquor stores, the Sunflower State has finally put some bite into its once-weak welfare restrictions.
During the course of three months during 2012, Kansas Watchdog discovered that state aid recipients withdrew more than $43,000 in Temporary Assistance for Needy Families benefits from ATMs at places like Golden Eagle Casino in Horton, Vegas Video Adult Superstore in Wichita and G Spot, a Junction City strip club, among others.
But as of Feb. 1, all that has come to a screeching halt, according to the Kansas Department for Children and Families, which administers TANF cash distribution in the state.
Theresa Freed, director of communications for DCF, told Kansas Watchdog the state agency flipped the switch a week ago on a new program that will halt all unauthorized spending of welfare dollars — as much as the state can.
The solution comes in the form of Fraud Navigator, a payment-processing program offered by the state’s third-party vendor, FIS Government Solutions. The vendor manages the actual transactions of Kansas’ Electronic Benefit Transfer cards, also known as Vision cards.
Freed said that Fraud Navigator not only will block inappropriate TANF electronic transactions at the cash register, but also will prevent recipients from withdrawing cash from ATMs at specific locations.
That last part is crucial, as it closes a loophole that was about a mile wide.
Before Fraud Navigator, a Kansas welfare recipient with a fully loaded EBT card could grab some fast cash from an onsite ATM to sidestep state regulations that forbid government assistance dollars from being used to purchase alcohol, tobacco or lottery tickets.
The move also aligns Kansas with federal welfare requirements. As part of the Middle Class Tax Relief and Job Creation Act of 2012, all states are required to implement measures to prevent TANF funds from being used at strip clubs, liquor stores and casinos by Feb. 22.
But DCF is keeping a tight lid on exactly how the program works.
“To ensure the integrity and effectiveness of our anti-fraud efforts, the specifics on the operational aspects of the product cannot be shared,” Freed said.
And that includes the price, too. Freed would only say the state is billed monthly based on the volume of transactions Fraud Navigator blocks. Freed added that “any information beyond this point is proprietary due to the cost arrangements Kansas made with our contractor.”
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