As TANF remains a mystery, VA aims for more accountability with WIC

By Kathryn Watson | Watchdog.org, Virginia Bureau

ALEXANDRIA — Virginia has no way to track whether citizens and retailers are following the law when it comes to keeping the most basic form of welfare benefits out of casinos and strip clubs.

That hasn’t prevented Virginia’s Department of Health from adding a little more accountability to the Women, Infant and Children, or WIC, nutrition benefits program in Virginia. After launching a pilot program that transferred benefits from paper cards to electronic benefits cards in one health district in southern Virginia, the department will be rolling out its EBT cards for WIC statewide in March.

It’s something the federal government is requiring of states by 2020, but only a handful of other states have taken the initiative so far. Officials say the switch will go far in helping them track benefit usage.

“It’s called increasing integrity in the program, making sure only the approved products are being purchased,” said Michael Welch, director of the division of community nutrition with the Virginia Department of Health.

State lawmakers revised a bill this session that would have made the transaction process for Temporary Assistance for Needy Families more transparent by putting benefits on EBT cards, reviewable by the state and possibly the public, instead of the current, closed-off MasterCard debit cards, as Watchdog.org previously reported.

Of course, WIC is a very different program from TANF, or even the Supplemental Nutrition Assistance Program. Whereas TANF debit cards are cash assistance for virtually any use, and SNAP benefits allow almost any purchases at any approved vendors, WIC authorizes only specific products for mothers, infants and children up to 5 years of age. With WIC, a nutritionist sits down with the mother every three months and determines the family’s dietary needs, and then approves specific products.

“The major difference between WIC and all these others is it’s a discretionary and not an entitlement (mandatory spending), and secondly, we don’t give them cash benefits,” Welch said. “We give them products. And the costs of those products has to be converted to money. And then obviously the third thing … is that you have to come in for nutrition education every three months,” Welch said.

Welch said the switch to EBT will make sure cashiers can only ring up approved products.

“The product, if it’s a WIC-approved product, the electronic cash register will recognize it by the UPC code,” Welch added. “If it’s not, then it won’t let the cashier ring it up. So that’s going to significantly improve our ability to make sure they’re only buying what’s approved.”

Not only will health department employees be able to track individual transactions, but nutritionists will too.

“For a nutritionist to be able to pull up what you spent in the last three months, it will be very enlightening for them to say, ‘You had all these benefits. You didn’t buy them. Why not?’” Welch said.

Of course, there’s no way to track whether those benefits are being used — only purchased.

While state officials will have more access with the WIC switch to EBT, it’s almost certain that the public won’t have legal access to that database, Welch said.

“To answer your question, I don’t see how people could go in and see what’s been purchased.”

Benefits for low-income families and individuals vary greatly in how they’re restricted, used and monitored. Therein lies the difficulty, said Bob Schmitt, manager of banking services with Virginia’s Department of the Treasury. The department holds a contract with Xerox to handle the TANF debit card process, but can’t view purchases because of consumer protection laws with banking accounts.

“It’s always a challenge when dealing with electronic benefits, or actually, distribution of any benefits, and how one is addressed versus the other in terms of restrictions, or what you can use or what you can’t use the benefits for,” Schmitt said.

And if we issue a check, a person can take the check and cash it and use those funds wherever. If we do it through direct deposit, once the funds are in the person’s account, obviously they can use those funds to purchase whatever goods they are looking to use them for. Unless you are duplicating a closed system like SNAP has, which has a lot of cost and expenses associated with it, you can’t really restrict the way funds are being used.”

State officials worry that switching TANF from debit cards to EBT cards could be costly, since putting SNAP on EBT cards cost roughly $3.5 million. That’s why the bill proposing the switch this year was so drastically amended to forgo that provision.

The federal government and state government spent a total of $106 million on basic cash assistance for poor families through TANF in fiscal year 2012, according to federal data.

“With the budget times we’re in, who’s going to be willing to step forward with $3 million or $3.5 to implement a program that may only find a small percentage of abuse?” asked Delegate Tony Wilt, a Republican from Harrisonburg who filed the bill to put TANF benefits on EBT cards this year.

But at least in WIC’s case, Welch said the cost impact will be minimal. There’s an 88-cent charge per participant per month to manage the EBT system.

“We now have to pay a banking system to do the paper checks, so it’s pretty much a wash. You’re not paying the banking system to process paper checks,” Welch said. “Now, we’re going to be paying Xerox for the EBT process.”

— Kathryn Watson is an investigative reporter for Watchdog.org’s Virginia Bureau, and can be reached at kwatson@watchdog.org.

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