Thursday, September 1, 2011

Welfare Fraud

Welfare fraud is a problem. A number of individuals spend their government assistance money on inappropriate activities and then complain that they don't have money for their kids, school, housing, and food. I've had the misfortune to hear a few of these people complain about it in person. This fraud is both stealing as well as depriving those in real need of the aid they need.

The solution is to audit recipients, either at scheduled times or randomly several times a year. The recipient will need to present receipts (or other proof) detailing their expenditures. Any income unaccounted for will be considered inappropriate. Failure to show appropriate handling of assistance money will result in a probationary period of reduced aid with improvement required to remain on assistance.

Not only may this encourage responsibility and frugality, the auditing system will root fraud and inappropriate use of aid in ways that drug testing welfare recipients won't. For one, drug testing doesn't show who spent the money on the drugs. Two, 98% of welfare recipients passed their drug screenings when it was implemented in Florida, meaning that the tests wasted the time of 98% of those involved. Three, although there will be a cost to the auditing, just like there is for drug screening, this will employ auditors willing to work for the fees that welfare recipients can afford. Also, I'm suggesting a quick and expedient audit of monthly income and spending, not an in-depth tax year audit that you may get from the IRS.

While I will admit that random drug testing of welfare recipients may be beneficial in fighting fraud, I'm opposed to the up front drug testing of those who apply, just as I am to drug testing job applicants. It all comes down to accusing people of being addicts and criminals without cause. However, Florida's implementation of drug testing welfare applicants has resulted in 98% of the people passing and will cost the state $178 million over the year in the form reimbursing those who passed. That's a lot more than the $1.5 million Fox News report said welfare recipients in Florida spent on trips to Disney.

All in all, auditing those on welfare to make sure they actually need the help and aren't spending money meant for their kids on booze seems like common sense. In addition, knowing audits will happen can encourage people who may not be good at handling money to become better at keeping track of their spending. It seems like common sense, but we'll need someone (or some people) who can implement it fairly and effectively. It does little good (or more harm than good) if the cost of fighting fraud is more than the actual cost of fraud.

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