Reed Helps to Unveil Welfare Reform Bill
Legislation would fix fraud and abuses detailed in auditor general’s report
At a Capitol news conference today, Rep. Dave Reed (R-Indiana) helped to unveil a bill he co-sponsored that seeks to reform a segment of Pennsylvania’s welfare system and reduce the waste, fraud and abuse outlined in a recent auditor general report.
“This bill is about protecting tax dollars from those who want to cheat the welfare system,” Reed said. “As a compassionate society, we have a responsibility to help those truly in need. But, we also have a responsibility to the taxpayers who foot the bills.”
The issue surrounds an August report released by Auditor General Jack Wagner that showed the state Department of Public Welfare’s (DPW) special allowance program is susceptible to fraud. Special allowances are granted to welfare recipients to pay for education and training-related expenses – including transportation, automobile purchases or repairs, textbooks and educational supplies, clothing, tools or equipment, union dues or professional fees, child care, lodging or food – as they attempt to re-enter the workforce.
The auditor general’s report noted that “the organizational culture within DPW adheres to a philosophy of issuing special allowances based on entitlement, rather than based on the recipients’ actual needs.”
Specific examples of fraud and abuse detailed in the report included:
- In Philadelphia, a woman was receiving a special allowance to pay for child care for 10 children. She was using the money to pay the father of five of her children to babysit his own kids. Together, they used this system to collect more than $7,000.
- In Pittsburgh, the report noted that one welfare recipient reportedly received a total of 99 ACCESS cards – the Electronic Benefits Transfer (EBT) cards issued to those on public assistance.
- Payments were made to welfare recipients for the purchase of books and other educational supplies without any documentation or receipts showing how the money was spent.
- Recipients received excessive payments to purchase cars or pay for car repairs.
The bill Reed helped to introduce today would reform the state’s special allowance program by reducing fraud, enhancing oversight, promoting accountability, streamlining services and avoiding overpayments.
Through its various reforms, the bill has the potential to save Pennsylvania taxpayers millions of dollars.
“Every dollar we save by eliminating waste, fraud and abuse in the welfare system is another dollar we can use to help someone truly in need,” Reed said. “Pennsylvanians are inherently generous people who are willing to help our neediest residents. However, folks get mad when they feel like they’re being taken advantage of.”
The legislation would:
- Reduce fraud by making special allowance payments directly to the service provider, instead of providing the money to the welfare recipient in the hopes it will be used for its intended purpose.
- Enhance oversight by requiring county assistance offices (CAOs) to retain documentation of payments made under the special allowances program. According to the auditor general’s report, approximately 45 percent of payments made under the special allowance program lacked proper documentation.
- Promote accountability by requiring DPW to submit an annual report to legislators showing the reforms in the legislation are being implemented.
- Streamline services by eliminating the redundant child care special allowances program. DPW already has a Child Care Works program that provides subsidized child care for parents who are either working or enrolled in a job training program, making unnecessary the child care special allowances.
- Avoid overpayments by prohibiting DPW from paying for the same item more than once in the same year under the special allowance program. The auditor general’s report documented cases where DPW paid several times for welfare recipients to purchase the same goods or pay for the same services during the same year.
“We owe these reforms to the working families that pay their taxes, which are used to fund the special allowance program,” Reed said. “Taxpayers deserve to know that their hard-earned money is not being wasted by an inefficient and out-of-touch bureaucracy. Government has a responsibility, not only to those who use its services, but also to those who pay for them.”
Rep. Dave Reed
62nd District
Pennsylvania House of Representatives
(717) 705-7173
Contact: Dan Massing
House Republican Public Relations
(717) 772-9845