CBS46 Investigates: Privacy laws block state investigators - CBS46 News

CBS46 Investigates: Privacy laws block state investigators from identifying welfare cheats

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A CBS46 investigation has found federal privacy laws prevent investigators with Georgia's Department of Human Services from identifying those who misuse welfare money.

"I don't disagree that it's become more difficult," said Maurice Ingram about the DHS inspector general's efforts to determine who's wasting welfare funds intended to help low-income Georgia families.

According to documents CBS46 investigative reporter Jeff Chirico obtained through an open records request, more than 1,200 potentially fraudulent transactions were made from December 2013 through June using funds from the federal Temporary Cash Assistance for Needy Families program.

CBS46 News found TANF funds were used at liquor stores, tobacco shops and night clubs across Georgia. Several transactions showed payments to dating websites as well. Federal and state law prevent the use of TANF funds at those types of establishments and others. 

The documents show where and when each questionable transaction was made but federal laws prevent the release of data about who made those transactions.    

Last year, DHS, which oversees the TANF program in Georgia, began distributing funds on prepaid debit cards to approximately 15,000 families. A DHS spokesperson said the new distribution method allows recipients quicker and easier access to funds and saved taxpayers approximately $4.3 million.

But the debit cards are subject to federal banking and privacy laws, which prevent the release of cardholder information - even to a state entity like DHS.

Xerox, which is contracted to handle TANF operations in Georgia, issued a statement to CBS46 News which reads in part, "the 'Right to Financial Privacy Act' and other federal laws restrict the information that can be provided about any individual cardholder, including account transaction history."

Longtime State Sen. Don Balfour, of Gwinnett County, said he's concerned the restrictions will give welfare cheats a free pass. 

"If it's a federal banking regulation then maybe we need to go to the feds and ask them to give us a waiver on this regulation," said Balfour, who lost his senate seat in this spring's primary. 

Ingram pointed out that less than 1 percent of all transactions are potentially fraudulent, which means the vast majority are using the funds appropriately.

In a statement, DHS underscored its commitment to working with Xerox to get the information it needs to hold those who misuse welfare funds accountable. 

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