PROGRAM SHOULD CUT WELFARE CHEATING (LAST OF THREE PARTS)

Electronic transfers will replace paper food stamps and checks Monday as the Missouri Department of Social Services begins its newest effort to eliminate its No. 1 enemy: fraud.

Sept. 1 marks the statewide distribution of benefits by the Electronic Benefits Transfer system. Welfare recipients have been issued debit cards that they can use to deduct purchases from a food-stamp or cash-benefits account.

Melba L. Price, Department of Social Services associate director for policy coordination, said the EBT system will make it much harder for recipients and retailers to defraud the state. About one-third of the $426,325,627 in food stamps disbursed by the state last year were cashed by the recipients and not used to buy food, she said.

A recent report by the U.S. Department of Agriculture -- the regulating agency for the food stamps program -- also found that over 40 percent of retailers behave in a fraudulent manner, she said.

"The No. 1 reason Missouri got into EBT is fraud reduction," she said. "With paper, it's very hard to find fraud patterns. With EBT, every time the card is used we know the retailer where the card was used, the amount of the purchase, the time of day, everything all the way down to the lane it was used in."

Each recipient's EBT card is protected by a four-digit security number issued by the state. Every card also contains a photo of the recipient, although homebound persons and those with religious grounds are exempt from the photo identification.

Price said a team of experts will analyze transactions to look for fraud patterns in the new system. If retailers are caught defrauding the system, the USDA will revoke their licenses, she said. State agencies will take action against clients found to have fraudulently used the system.

Recipients will have to be careful about who they give their personal identification number to, said Linda Jones, income maintenance supervisor at the Cape Girardeau Division of Family Services. If a card is stolen, it isn't likely the thief will have the number, she said. But if a recipient gives someone their number and that person steals benefits, she said, the recipient is at fault in the state's eyes.

"There will be no replacement of benefits," Jones said. "They need to be sure who they're giving their card to."

John Morrison, director of the Missouri Grocers Association, said retailers will benefit from the reduced likelihood of receiving a fraudulent check. More forged checks have been received by retailers over the years, he said, and the result has been that fewer grocers want to handle government checks.