Audit finds limited TANF misuse at impermissible ATM locations; auditors and DCF urge data and system improvements
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Summary
LPA's TANF Part 1 audit found about $23,000 in TANF cash withdrawals at ATMs located at impermissible locations (casinos, liquor stores, tattoo parlors) across FY2023–24 and identified controls and data limitations that likely understate misuse; auditors recommended DCF offer photos on EBT cards and follow up on flagged transactions.
Legislative Post Audit presented findings from the TANF Part 1 audit to the committee, reporting limited evidence of impermissible cash withdrawals and urging stronger controls and data processes.
Heidi, the auditor, told the committee LPA reviewed roughly 660,000 TANF transactions between Oct. 1, 2022 and Sept. 30, 2024 and used keyword searches to identify transactions at locations associated with prohibited purchases or locations for TANF cash (for example, casinos and liquor stores). "We found 122 EBT cards, out of a total of about 11,000, that successfully completed an ATM transaction at a Kansas location associated with alcohol, casinos, tobacco, racing, and tattoo parlors," Heidi reported, and said the total of those transactions was about $23,000 across the two‑year window.
Auditors noted caveats: the keyword approach likely misses some impermissible retailers because merchant names do not always reveal store type; merchant location codes can be inaccurate if an ATM has been moved; and the analysis focused on transactions and could not track how withdrawn cash was ultimately spent. LPA sent identified card numbers to DCF for agency review.
Heidi said DCF complied with most federal and state fraud‑prevention requirements examined, but — as with SNAP — does not currently offer to place recipient photos on EBT cards as state law requires. LPA recommended the agency offer photos and follow up on the questionable transactions it had flagged.
In discussion, committee members asked for additional totals and proportional context; Heidi said the auditors could calculate total transaction amounts and the share of withdrawals that were TANF cash and promised to provide that follow‑up to the committee. DCF's Dr. Hicks described operational constraints and monitoring steps: she said the agency monitors out‑of‑state transactions, runs social security verifications for every application, investigates skimming reports and can work with law enforcement on criminal referrals.
Why it matters: the auditors characterized the identified misuse as a very small share of TANF cash benefits across the examined period (about $23,000 out of roughly $18,000,000 in two years of cash benefits), but recommended procedural and data improvements to reduce unknown risk and ensure program integrity.
The committee accepted the TANF Part 1 audit and LPA will provide requested follow‑up calculations by email.
