New Jersey Inmates Improperly Received At Least $23 Million

May 29, 2013— -- Prisoners are not supposed to receive unemployment benefits, Medicaid coverage, food stamps or sick pay, but New Jersey inmates collected at least $23 million in state benefits, according to scathing audit released today.

"Whenever you've got thousands of inmates collecting unemployment checks from behind bars obviously there's a serious gap in oversight," New Jersey State Comptroller Matthew Boxer, who conducted the audit, told ABC News.

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 audit spanned from July 2009 to April 2011.

The root 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.

The 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."

"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," Boxer said.

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

"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, and officials told the comptroller's office that that process is already under way.