INDIANAPOLIS (December 4, 2006) - More than one thousand convicted drug felons are receiving state welfare benefits illegally, according to initial findings of a state and federal investigation, and will be removed from the state's welfare rolls as individual findings are confirmed, Governor Mitch Daniels said today.

Daniels lauded state and federal agents who recently uncovered the problem, and presented awards to several state fraud investigators at the second Governor's Public Integrity Summit, hosted by Inspector General David Thomas. Family and Social Services Administration (FSSA) investigator Kim Devoy, U.S. Department of Agriculture agent Lisa Nelson, and FSSA auditor Deb Currey received medals of commendation for the drug felon cross-match investigation. Mike Hoose, Patti Serbus, John Rihm and Al Marshal, all from the State Board of Accounts, were recognized for their efforts in ferreting out government inefficiency, waste, fraud and abuse. Their audits recovered $1.8 million from BMV accounts, and an additional $98,000 in State Police Pension funds.

The governor said the discoveries further illustrate the need for Family and Social Services Administration (FSSA) reforms he announced last week that will include upgrading the state's antiquated procedures to give investigators better tools for determining recipients' eligibility.

"These investigators have found another example of the errors, waste and fraud rampant in our current system. Just the cases found so far by our fraud fighters cost taxpayers millions of dollars a year," Daniels said.

A recent joint investigation by FSSA investigators and the USDA Office of Inspector General compared local welfare rolls with criminal history databases. In Marion County alone, more than 1,000 recipients of food stamps and Temporary Assistance to Needy Families (TANF) were shown to have felony drug convictions. Further investigation is needed to confirm identities and receipt of benefits before any criminal referrals to local law enforcement authorities may occur, but Thomas said the ongoing investigation soon will be expanded statewide. That will likely result in further substantial savings as more ineligible recipients are identified.

FSSA has initiated steps to remove those ineligible from Marion County welfare rolls as a result of the investigation to date, said FSSA Secretary Mitch Roob.

Last week, the governor announced plans to contract with a consortium led by IBM to modernize FSSA eligibility processes to improve customer service, reduce waste and fraud and improve Indiana's worst-in-the-nation welfare-to-work record. The move would save taxpayers at least $500 million over the next 10 years.

"Fraud-fighting efforts more than pay for themselves. That's why we created the Inspector General and why we're giving clean up efforts the resources they need," said the governor.

Daniels proposed and signed legislation in 2005 creating an Office of Inspector General to investigate wrongdoing and reduce waste in state government. At the governor's direction, Thomas brings investigators from numerous state agencies together with his team for an annual meeting each December.