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Auditors claim Idaho misspent $2.5 million in welfare funds

Rebecca Boone Associated Press

BOISE – State auditors say the Idaho Department of Health and Welfare misspent $2.5 million in federal welfare funding on salaries instead of using it to help pay for food, housing and other benefits provided to Idaho’s poorest residents.

But department officials say the money was used properly to help keep extremely low-income children out of foster care.

The finding by the Legislative Services Office’s Audits Division was part of the state’s annual audit of how federal cash is used by Idaho agencies.

The $2.5 million used for salaries and other non-assistance costs in 2013 was left over from the Temporary Assistance for Needy Families budget from 2008. In the report released Wednesday, the auditors said federal rules required that any carry-over funds be spent directly on benefits like cash or vouchers for food, housing, utilities or other basic needs for low-income Idaho families.

The Department of Health and Welfare disagrees with the auditors, saying that the federal rule changed on Oct. 1, 2008 – the start of fiscal year 2009 – to allow unobligated balances to be spent on any benefit or service provided under the program, so the money was used appropriately. But the auditors noted that the unused balance was from fiscal year 2008, and so they maintain the rule change for 2009 couldn’t be retroactively applied.

Very few families qualify for the program, Idaho Department of Health and Welfare spokesman Tom Shanahan said. “No one who qualified for the assistance has been denied,” Shanahan said.

In Idaho, Temporary Assistance to Needy Families money is typically used to provide a $309-per-month cash payment given to families with incomes below 32 percent of the federal poverty level. That means that they must have a monthly income of less than $309, Shanahan said, and any monthly income they receive is subtracted from the $309 payment.

The goal of the program is to keep families together, Shanahan said, and to help parents find work. To that end, the program also provides funds for things like appropriate clothing for job interviews or transportation to a workplace.

The federal rule change allowed states to also use the money to help keep children from those extremely poor families with relatives instead of putting them in foster care when their parents are unable to care for them, Shanahan said. Idaho currently averages about 2,900 people on the program a month, and 80 percent of them were children in “kinship care,” he said. The kinship care money is used to help cover the living costs of a child staying with a relative if the relative wouldn’t otherwise be able to pay for the child’s care.

“Prior to 2008, TANF funds could only be used for cash assistance or work-support activities. In other words, services to get people in families working,” Shanahan said. “We covered all the costs that we could cover, and we didn’t deny anyone who qualified.”

That left a $2.5 million balance that had to be spent within five years, he said. When the rules changed, the department decided to use that money to help pay social workers for the time they spent helping children in the program stay with extended family members when their parents were sent to jail or otherwise deemed unable to care for them.

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