State officials given broad discretion in welfare spending oversight

DES MOINES – Iowa Department of Human Services officials will have broad discretion in how the state complies with a federal law requiring it to prevent welfare money from being used at certain locales.

Lawmakers passed a bill this session that gives the department authority to implement the new rules, which take effect Jan. 1. It fails to address the fact the program currently lacks state oversight and claims from department officials that they don’t have access to debit card transaction information because of federal banking laws.

Iowa currently contracts with Xerox to provide more than 90 percent of those who qualify for welfare benefits under the state’s Family Investment Program.

Lawmakers pass welfare bill giving the Iowa Department of Human Services broad discretion in tracking how welfare dollars are spent.

At least one lawmaker has voiced concerns about lagging oversight of the program, which doles out millions of dollars to Iowans each year. State Sen. Brad Zaun, R-Des Moines, has been trying to set up a meeting with Charles Palmer, the head of the department, to discuss the issue. His emails and phone calls, however, have gone unreturned, he told Iowa Watchdog Friday.

Iowa Watchdog has requested a month’s worth of transactions, including when and where they took place, as well as how much was spent or withdrawn. It did not request the personal information of those who receive benefits.

Tom Miller, Iowa attorney general, wrote in a letter to Iowa Watchdog that it was not the department’s job to oversee how the money was spent because it wasn’t considered a government function.

Watchdog.org has obtained similar data in other states, including New Mexico, Kansas and Pennsylvania. The information showed numerous transactions and withdrawals at liquor stores, strip clubs, bars and casinos. Media in other states, such as New York, turned up similar findings, which prompted the federal legislation.

The new rules require states to pass legislation that prevents welfare recipients from using the money at those establishments. Those who fail to comply risk losing 5 percent of the federal funds they receive for the program. In Iowa, that amounts to $6 million a year.

“The legislation (in Iowa) enables us to start the rules process that will be needed in order to make this effective by next year,” said Roger Munns, spokesman for the department. “The legislation also authorizes the department to take additional measures as may be required by the pending federal regulations.”

Contact Sheena Dooley at dooley@iowawatchdog.org. Sheena Dooley is the Iowa bureau chief for Watchdog.org, where this story first appeared.