Boston — When the Massachusetts Public Welfare Department ran computer checks last month on the bank accounts of state welfare recipients, officials say they suspected some recipients might be disqualified.
But when the printouts came, ''we were overwhelmed by the numbers,'' says Harry Shea, the department's assistant commissioner for program auditing. Some 3 ,345 individuals had a total of $25 million in undisclosed assets, including six with bank accounts in excess of $100,000.
With 63 of Massachusetts' 1,013 banks checked so far, officials estimate the state may eventually save $100 million by removing at least 6,000 people from welfare rolls, and may recoup another $100 million in benefits paid to those recipients.
The plan's success has brought immediate response from federal, state, and local governments. US Reps. Barney Frank (D) and Margaret Heckler (R), both of Massachusetts, have introduced bills that would implement the Massachusetts plan nationally. Representative Frank introduced the legislation that led to the Massachusetts program while he served in the state Legislature.
Based on the results in Massachusetts, officials estimate a national computer cross-checking could uncover $7 billion to $16 billion in undisclosed assets, and save the US government $3.85 billion to $8.8 billion.
Several states, including New Jersey, Virginia, and Florida, are now toying with the idea of adopting similar programs because of the results here.
California is trying a similar program. It began to compare interest and dividend payments with welfare recipients' social security numbers at all financial institutions in four counties. First results on the three-year program are expected in November, and officials say they foresee dramatic results.
Civil libertarians say they are concerned that the cross-checking programs invade the privacy of welfare recipients. ''Federal legislation explicitly forbids federal officials from doing what state officials are doing without the consent of the depositor,'' says John Shattuck of the American Civil Liberties Union.
California has bypassed the privacy laws by enacting legislation that allows the state to search the financial records of welfare recipients in the four targeted counties. Massachusetts banks are protected from privacy laws because the only information they give the state is whether the social security numbers match, and the status of the account. No names are exchanged.
In Massachusetts, the state set up a master list of the social security numbers of residents on Aid to Families with Dependent Children, medicaid, general relief, food stamps, and supplemental security income. The list was turned over to the first group of banks which, under state law, must cooperate in matching the social security numbers. If numbers match, the bank advises the state of the amount of money in the account and other essential data. The welfare department then checks its files for the names and addresses of those exceeding the legal limit for assets. Where legal levels have been exceeded, the state has filed civil charges to freeze the assets - with the intent of eventually recovering from each account the benefits paid out.
But the procedure is cumbersome: Only 6.2 percent of all Massachusetts banks have been checked. And it places a burden on banks, which may seek compensation if the program continues.
Additional dissent on the program centers on how it's administered. Mary Gallagher, an attorney with the Massachusetts Law Reform Institute, says up to 30 percent of accounts labeled illegal may be in error. An example includes a grandmother who set up an account in a child's name without the parents' knowing it, and the parents' benefits were being terminated as a result.
Larry Harrison, who heads the California program, says at least 10 percent of the social security numbers he is using will prove inaccurate in the first cross-check.