- Associated Press - Wednesday, August 5, 2015

TOPEKA, Kan. (AP) - Kansas faced pointed questions from U.S. officials about its since-dropped $25-a-day limit on ATM withdrawals by poor families using cash assistance cards, according to documents released Wednesday by the state Department for Children and Families.

The state agency eliminated the cap on ATM withdrawals Tuesday, a day after receiving an email from a regional U.S. Department of Health and Human Services official. The HHS official attached a list of questions containing a statement that the $25 limit appeared to violate federal law.

The Republican-dominated Legislature approved the cap in April as part of broader efforts to ensure that poor families use their benefits for necessities and don’t convert them to cash for alcohol, gambling or luxuries such as concerts and tattoos.

But, because Kansas officials said their state was the first to limit ATM withdrawals, lawmakers later worried the U.S. government might withhold more than $100 million in welfare dollars. Lawmakers in June authorized DCF Secretary Phyllis Gilmore to increase or eliminate the cap to prevent a loss of federal funds, but the agency said it couldn’t act without guidance from federal officials.

Agency spokeswoman Theresa Freed said rescinding the cap was the best option because HHS officials did not suggest an alternative figure.

“We would be left to guess what an appropriate amount would be,” Freed said.

The cap took effect July 1, but DCF anticipated needing up to a year to make technical changes with benefit cards to enforce it. About 15,000 Kansas residents a month receive cash assistance, almost 74 percent of them children.

Emails obtained previously by The Associated Press through an open records request show federal officials began asking about the ATM cap within days of Republican Gov. Sam Brownback signing the welfare measure in April. Their questions still hadn’t been fully answered as of this week, the latest documents showed.

DCF released an email sent Monday to five of its officials by Gary Allen, a regional program manager in Kansas City, Missouri, for HHS’ Administration for Children and Families. Allen’s follow-up questions ran almost a full page.

“What is the anticipated goal or outcome of reducing the daily withdrawal amount to $25?” Allen’s attachment said. “Was there an empirical basis for setting a withdrawal limit of $25 per day?”

Allen referred questions about his email to HHS officials in Washington. A spokesman there noted that Kansas submitted proposed changes for its cash assistance program - including the ATM rule - to Allen’s division last week and said it asked the state to explain how the cap was consistent with providing adequate access to assistance, a requirement in federal law.

Gilmore noted Tuesday that her agency did not propose the cap. State senators added it to the welfare legislation during a debate.

“The amendment was to address fraud and abuse,” said Republican Sen. Caryn Tyson, of Parker, the proposal’s sponsor. “We don’t want to put the program in jeopardy.”

Critics said the cap would force poor families to make multiple trips to ATMs and incur fees each time to get cash for expenses such as rent or utilities.

In a May 19 email, with Allen copied in, a Kansas official told another regional HHS official that poor families still could use their cards at more than 1,100 stores that would allow them get cash back and at least one in each county. Allen’s attachment pushed for more details - including what options Kansas would offer poor families if access is inadequate.

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Online:

Kansas Department for Children and Families: https://www.dcf.ks.gov/

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Follow John Hanna on Twitter at https://twitter.com/apjdhanna .

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