NJ prisoners received more than $23 million in benefits

May 29, 2013: 6:02 PM ET
new jersey prisons
The state of NJ paid more than $10 million in unemployment benefits to more than 7,600 incarcerated individuals.
NEW YORK (CNNMoney)

New Jersey prisoners incorrectly received more than $23 million in unemployment benefits, Medicaid and other public assistance, according to a state audit released Wednesday.

Between July 2009 and April 2011, the state paid out the benefits to or on behalf of more than 20,000 incarcerated individuals who don't appear to be entitled to the payments, according to a press release from State Comptroller Matthew Boxer, who led the audit.

More than $10 million of the payments were unemployment benefits paid out to about 7,600 incarcerated individuals, according to the release. State law requires that only those who are "able" or "available" to work are eligible to receive unemployment.

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One prisoner received more than $39,000 in unemployment payments while behind bars for a drug-related offense, according to the audit. Another, convicted of unlawful possession of a firearm, who took in more than $25,000 in unemployment benefits, didn't start receiving the payments until he'd already been in prison for three months.

"Suffice it to say that when thousands of inmates are collecting unemployment checks from behind bars, there is a serious gap in program oversight," Boxer said in a statement.

The audit found that state agencies failed to review county inmate data, and in some cases state prison data, when awarding government assistance. One agency even told auditors it relied on newspaper reports to determine if program participants had been arrested or convicted of a crime.

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Beyond unemployment, more than $7.1 million was paid in "apparently improper" Medicaid payments on behalf of prisoners, according to the audit. Investigators are looking into whether some of these payments were the result of the fraudulent use of someone else's Medicaid card.

More than $5 million was awarded through the state's SNAP grocery assistance program and the WorkFirst New Jersey cash assistance program, both of which prisoners are expressly prohibited from participating in by state law.

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More than $350,000 represented inappropriate payments from the state's pension system, including $37,000 to a pensioner who had been incarcerated for sexual assault of a minor.

Since some of the benefits were likely secured fraudulently, investigation into possible referrals for criminal charges remains ongoing, according to the audit. The Comptroller's office also plans to ensure that the misspent funds are recovered and stricter oversight measures are implemented, the release said.

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