Audit shows possible fraud in Wis. food program

By BARBARA RODRIGUEZ
Associated Press

MADISON, Wis. (AP) — A nonpartisan audit raised questions Friday about unusual out-of-state spending in Wisconsin's food stamp program, finding some of the almost $33 million dozens of recipients spent outside the state last year showed evidence of possible fraud.

About 382,000 households spent $1.1 billion last fiscal year as part of the FoodShare Wisconsin program, which helps low-income households buy food. The Legislative Audit Bureau report flagged about 330 purchases by about 150 recipients, noting their cards were used in Wisconsin on the same day their account numbers were manually entered for purchases in another state.

The program run by the state Department of Health Services receives federal funds, and federal law allows participants to buy food anywhere in the country, since some live on state borders and others may travel. But the unusual pattern of same-day purchases in two states raise concerns about how many households are sharing or possibly selling their benefits. Manual entries are only allowed when an electronic reader is malfunctioning.

The report showed recipients spent more than $22 million in the bordering states of Illinois, Minnesota and Michigan. Another $10.9 million was spent in other states and locations that included Guam, Puerto Rico and the Virgin Islands. There's about $147,000 listed as unknown in origin, but Department of Health Services spokeswoman Stephanie Smiley said that's because of an internal computer conversion problem and it has been accounted for.

"I'm glad it's not worse than it is. But $32.9 million is not chump change. It's still something we need to be concerned about," said Sen. Robert Crowles, a Green Bay Republican who co-chairs the Joint Audit Committee.

Rep. Samantha Kerkman, the committee's other co-chair, asked the bureau to conduct the report after hearing concerns from constituents. The Republican from Powers Lake said she's alarmed by the thousands of dollars spent in states like California, Florida and Texas.

Kerkman said the report is a wake-up call and shows the need for more scrutiny of recipients who move out of the state and may be collecting similar benefits elsewhere. She said the information is available and it's matter of state officials checking it regularly.

"It's a lot of data that we have and now it's time that we use it," she said. "To make sure people who are receiving benefits should be receiving the benefits."

Smiley said there were inconsistencies in the past with how local agencies handled possible fraud but restructuring that went into effect this year addressed that and will start to move things in the right direction.

"This is an important opportunity to train counties and local agencies on how to use the best practices when looking at these out-of-state transactions and investigating fraud," she said.

FoodShare has faced criticism in the past. In August, three DHS employees in Milwaukee County and two others were charged with defrauding the program of more than $350,000. Investigators said they opened and renewed accounts in the names of former clients and people who didn't exist, were in prison or were financially ineligible.

The charges were filed shortly after Gov. Scott Walker's waste and fraud commission released a report that said $177 million per year could be saved by cracking down on fraud in assistance programs like FoodShare.

The audit bureau is expected to release a more comprehensive report on the program this spring. (Copyright 2012 by The Associated Press. All Rights Reserved.)