‘Downright sinful’: As Mississippi is mired in welfare scandal, advocates say the state still isn’t aiding the poor

This story was originally published by Mississippi Today

Nearly three years after arrests in the largest public embezzlement scheme in state history, exposing systemic corruption and negligence within Mississippi’s federal safety net grants, advocates and clients say the state’s welfare program still contains widespread flaws.

On Tuesday morning, the Mississippi Legislative Democratic Caucus held the first of several planned hearings to address how the state administers its Temporary Assistance for Needy Families (TANF) program.

"My hope is that the tragedy of the scandal behind this program leads to changes to how much money families receive to help with everyday expenses, who is eligible for the program, and how families are prepared for their exit from the program,” Brandy Nichols, a working mother of four and TANF client, said during her testimony.

The hearing, held by the minority party and not an official legislative committee, was the first legislative hearing about the corruption or the TANF program specifically since the scandal broke three years ago. No legislative leader has called a similar hearing.

First, some statistics on Mississippi’s TANF program currently:

• Mississippi Department of Human Services is still approving less than 10% of poor families who apply for cash welfare assistance.
• Of the $86.5 million in federal funds allocated each year, it spends roughly $4 million on direct payments to poor families and leaves roughly $20 million unused.
• Of roughly 190,000 children living in poverty in the state, just 2,600 receive the monthly aid.
• The state is using around $30 million of the grant to plug budget holes at the child protection agency.
• The state isn’t using any of the money to increase the availability of the child care voucher, which is regarded as one of the most meaningful work supports and is reaching a fraction of the families that qualify for the assistance.
• The state is still spending around $35 million in TANF funds per year on subgrants to private organizations to provide services like workforce training, after school programs and mentorship. But MDHS Director Bob Anderson confirmed Tuesday that the agency isn’t tracking outcomes of the programs — though it hopes to start doing so soon.
• MDHS has successfully lobbied for legislation to increase the monthly TANF cash assistance amount from $170 to $260 for a family of three.
• MDHS has lobbied unsuccessfully for legislation to roll back some provisions of the 2017 HOPE Act (Act to Restore Hope, Opportunity and Prosperity for Everyone). The act imposed some of the strictest eligibility restrictions in the nation, primarily for clients of the Supplemental Nutrition Assistance Program (SNAP), or food stamps, creating maze of bureaucratic red tape that burdens the department and arbitrarily kicks people off the programs. Anderson said the state should repeal the HOPE Act.
• Mississippi could be on the hook to pay back $75 million to $95 million, depending on how much spending the U.S. Department of Health and Human Services deems impermissible, plus additional penalties if the federal government finds the misspending was intentional. The money would have to come from state coffers, HHS told Mississippi Today in 2020.

The known TANF corruption scandal — in which forensic auditors say state and nonprofit officials misspent $77 million — occurred from 2016 to 2020, but the state’s decision not to use much of the money on evidenced-based methods to reduce or prevent poverty began long before, and it has continued since.

“That we have had nearly $100 million per year for 26 years in welfare funds and that we still have the highest poverty rate of any state is, in my opinion, downright sinful,” Carol Burnett, founder of the Mississippi Low-Income Child Care Initiative, said at the hearing.

The Mississippi Department of Human Services has increased internal controls to address fraud with the TANF program. Currently, Mississippi does not appear to be spending TANF money on things like volleyball stadiums or contracts with former NFL quarterback Brett Favre — two 2017 TANF purchases that have made national headlines.

But that doesn’t mean the state is using the money in the wisest ways to meet the needs of poor families.

“There’s two parts to this, one is the part that’s in the headlines, which needs to be in the headlines, and that is the scandal and the illegal activity. The harder work for us is going to be to fix the program going forward. Just because something is legal doesn’t mean it’s smart,” Sen. David Blount, D-Jackson, said.

During her testimony, Nichols, who has held jobs as a waitress, a receptionist, a housekeeper, and a cashier, explained the barriers she faced in receiving government assistance.

“What may seem like an easy handout program is not. It’s work. And sometimes work that takes away from my ability to find a true stable job,” Nichols said. “TANF is supposed to help us find jobs, but if you don’t find a job within a week of being in the program, you’re stuck spending hours at DHS offices to fulfill volunteer hours. You’re basically exchanging your body to sit or file papers at the office for less than minimum wage. That’s not career development. That’s called being stuck in limbo.”

“When you apply for TANF, it takes nearly a month for your application to be processed. But when you need money in hand immediately, waiting a month for help only digs you further into the ground,” she continued. “Communication with the office is poor. You can’t directly contact your caseworker. And your caseworker is often changed without you knowing. It hurts to know that this program was taken advantage of by people who already make more money than I could ever imagine. A former quarterback received in a lump sum, over 300 times what I have ever received from TANF.”

Reginald Buckley, senior pastor of Cade Chapel Missionary Baptist Church in Jackson, provided more anecdotal evidence of the impact the scandal had on needy families in Mississippi. Buckley’s church noticed in 2019 that the number of people seeking their help for things like food, rent, and electricity was increasing, week by week. The congregation supplies a benevolent fund to pay these costs, and while members were continuing to give, it wasn’t enough anymore to cover the need.

“We speculated that the sharp increase for assistance was due to just the economy, inflation, stagnation – the standard culprits,” Buckley told lawmakers. “But later that year, when State Auditor Shad White announced the largest fraud case in state history due to the improper use of TANF funds, things became much clearer. It was not just hard times. It was not just fewer jobs. The sharp increase of need was largely a result of support for the needy being siphoned from the less fortunate and poured into the coffers of the connected and put into the financing of pet projects. We have all seen and read the reports that implicate some of the state’s highest public officials and their connection to what has happened here. And if it is true, the stench of hypocrisy is pungent and repugnant.”

While federal criminal investigations and a state civil case are ongoing to address the illegal spending, Anderson acknowledged that, at a less than 10% TANF approval rate, the funds still aren't being pushed out to families that need the aid. Many people who apply for TANF abandon their application before the process is complete, contributing to the low approval rate.

“I told my staff when I arrived that I thought we were doing a woefully inadequate job at providing basic assistance to families. And that is something I have a plan for,” Anderson said at the hearing. “I want to get to the individual answers about why families either don’t feel comfortable coming to us to apply or what figures into their decision to abandon their application. Are they fearful of sanctions? I don’t know. Are the eligibility guidelines too harsh? Could be. We’re looking at all of those things.”

Mississippi currently imposes a drug screening requirement on welfare applicants, a significant barrier to eligibility, even for people who don’t abuse substances, because applicants must find transportation to the testing clinic. Yet, during the scandal, TANF funds were used to pay for drug treatment at a luxury rehab facility for former professional wrestler Brett DiBiase. Former Gov. Phil Bryant even enlisted the help of his welfare director to try to get his nephew into treatment, according to text messages Mississippi Today obtained.

"So in effect, if you’re poor and in many cases a person of color - the use of drugs could disqualify you from receiving assistance. But if you’re rich and in many cases not of color - then the funds that were not intended for you that were restricted to others based on drug usage, can be yours. Mississippi, you have to make this right," Buckley said in the hearing.

The most recent federal TANF financial report from 2020 shows that Mississippi had piled up an unused balance of TANF funds totaling nearly $50 million. That number has likely grown significantly, as the state is currently leaving $20 million on the table annually.

In explaining why the state has such a large unobligated TANF balance, Anderson explained that the state may be required to return those funds — but federal law requires Mississippi to use state funds to pay back the misspent money, so federal penalties should not impact the state's existing TANF fund.

Anderson also told lawmakers that MDHS could not provide outcome data for programmatic grants issued under TANF — something Mississippi Today has been requesting since 2018 — because the agency is still not tracking the efficacy of the programs at lifting families out of poverty. "You’re asking me for information that doesn’t exist," he said.

In limited output reports Mississippi Today has retrieved in the past, the documents contained nonsensical figures, such as the number of clients served year-to-date declining in certain months. In 2019, Mississippi Today reported that MDHS was not even maintaining a list of organization to which it was awarding grants.

“There’s not really a culture of keeping documentation at DHS,” Stephanie Palmertree, financial and compliance audit director for the state auditor’s office, said at the time.

MDHS began maintaining a list of subgrantees, which it has provided to Mississippi Today multiple times, most recently in September.

Anderson said the agency is working on a strategic plan that will dictate how the TANF program is administered going forward. One concept the agency is mulling is hiring navigators who can help MDHS clients apply for and maintain assistance.

Elizabeth Lower-Basch, deputy director for policy for the Center for Law and Social Policy (CLASP) and national TANF expert, noted a navigator program would be MDHS creating extra programming to “navigate the obstacles you created.”

“Remove the barrier,” she suggested.

Asked whether Mississippi should repeal the 2017 HOPE Act, Anderson said yes.

The hearing, which took place in the Senate committee room, was not live-streamed as some lawmakers expected. The Senate denied the caucus’ request for to use the Senate infrastructure for live-streaming since it was party-affiliated and not an official committee hearing, lawmakers told Mississippi Today. The Democratic Caucus is expected to schedule more hearings to discuss TANF in coming months.

This article first appeared on Mississippi Today and is republished here under a Creative Commons license.