Watching over welfare

In a series of articles in June and July, The Times reported that California welfare recipients were able to use their state-issued ATM cards to get cash benefits at casinos, strip clubs and massage parlors. Gov. Arnold Schwarzenegger moved swiftly to make sure the cards were no longer valid in those places. Some lawmakers urged the administration to track down people who withdrew money at such locales and get it back.

Last week, The Times reported that more than $69 million in welfare money had been spent out of state, including in Las Vegas and on cruise ships, from 2007 to May of this year. The Schwarzenegger administration again moved quickly to cut off the use of the state cards in vacation spots.

It’s gratifying to see Sacramento respond with such alacrity to Times reporting, especially when it involved such painstaking collection and tabulation of data. And the administration’s action no doubt will win the approval of many Californians who struggle to make a living, play by the rules and pay their taxes, only to read how millions of their tax dollars are being retrieved on gambling floors or spent in locations that they themselves might not be able to afford to visit.

But we still wonder whether Schwarzenegger and the state Department of Social Services have missed the point.

The Times reports presented data that ought to ring alarm bells and spur the state to study, or help counties study, whether federal and state benefits passed through the CalWorks program are being used as intended, and whether the electronic benefits transfer cards are being abused. The data suggest that in at least some cases, there could be abuse or even fraud. But the information about expenditures in unexpected places is just that — information — and should not be confused with, or substituted for, conclusions about whether California’s welfare program is cost-effective.

The millions of dollars in welfare money that The Times’ analysis showed had been spent out of state, while a sizable figure, represent only one-half of 1% of the state’s CalWorks benefits. Even if every penny of that money represents fraud or abuse, such a loss rate is to be expected in any government contract or benefits program. That’s not to say that the loss is acceptable; the state must always police against fraud and abuse to ensure that taxpayer money is being spent appropriately. But such policing also comes with a cost.

In repeatedly slashing the budgets that counties rely on to administer state welfare programs, Sacramento has decimated many fraud and abuse detection programs. County officials work on the ground level with welfare recipients and, despite repeated state cuts to their programs, try to help mothers get job training and work placement, while also doing everything possible within their limited budgets to guard against misappropriations. They know that many recipients, especially those who try to make ends meet by living in far-flung desert and rural locations, go where goods are cheapest.

Sometimes that means feeding the family at an Indian casino’s buffet, and sometimes it means shopping at the nearest Wal-Mart, which may be across the state line. It’s noteworthy that of the $11 million in welfare money reported to have been spent in Las Vegas, only $1 million was spent near the Strip. Was the other $10 million spent in warehouse stores for school clothes and bulk food items? The state should find out before issuing a blanket ban on the use of ATM cards outside of California.

If the data suggest there are decisions to be made or holes to be plugged in the welfare system, they also suggest that the vast majority of recipients comply with program requirements and are doing their best to move themselves and their children out of poverty.

Of course, the state is out of money and must make many deep and painful cuts. Counties will have to get by — this year, next year and perhaps for several years to come — without the budgets they once had for rooting out public assistance fraud. But when money is in short supply, thinking must be stepped up. The state should avoid slashing access to benefits simply because there are aspects of the program that, on first blush, may look bad.