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Posted: Wednesday, 29 May 2013 3:40PM

Millions of Dollars Mistakenly Doled Out to Prisoners, NJ Audit Finds



Kevin Horan/Stone(NEW YORK) -- Prisoners are not supposed to receive unemployment benefits, Medicaid coverage, food stamps or sick pay. But that’s just what’s been happening in New Jersey, according to a scathing new report.

New Jersey State Comptroller Matthew Boxer, in an audit released Wednesday, found at least $23 million was paid out to inmates who are legally prohibited from receiving the money.

“Whenever you've got thousands of inmates collecting unemployment checks from behind bars obviously there's a serious gap in oversight,” Boxer told ABC News.  

The route of the problem is a breakdown in the internal checking and cross-checking systems state agencies are supposed to use to verify whether someone is eligible for payment.

Auditors found one person received more than $39,000 in unemployment payments while serving a year for a drug offense. Another inmate pulled down $25,000, starting three months after going to jail for a gun charge. And more than $37,000 was sent to a man serving time for sexually assaulting a child.

The internal safeguards had broken down so badly, the comptroller found, that “one agency…relied on a review of New Jersey newspapers to determine if any of its thousands of program participants had been arrested or convicted of a crime.”

Boxer also said, “There were some departments that were checking state prison data and not county prison data and there were other departments that weren’t performing screens on any of this data.”

While his audit only covers New Jersey, Boxer said he wouldn’t be surprised if other states had cross-checking systems that are equally lacking.

“We would encourage governments and audit offices in other states to make these kinds of checks to ensure that we’re not sending tax dollars to people who are locked up for having committed crimes,” Boxer said.  

The goal now is to recover misspent money. Officials told the comptroller’s office that that process is already under way.

Copyright 2013 ABC News Radio