07/16/2024 - Jefferson City, MO
A dramatic increase in
the amount the state owes and is paying out for "outlawed checks"
each year has caught the attention of Missouri State Auditor Scott Fitzpatrick
and prompted him to more closely examine the issue. Fitzpatrick announced today
his office has started a state audit that will look for the underlying causes
that have resulted in outlawed check expenditures increasing by 406% in the
last five years.
Under Missouri law, an
individual who has received a check from the state has a period of 12 months to
cash it. If not redeemed during that period, the check is deemed
"outlawed" and is no longer valid unless the individual files a
request with the Missouri State Treasurer's Office for a replacement check. The
sudden surge in the overall amount the state owes and has been paying out in
outlawed checks each year has caused Fitzpatrick to want to dig deeper to guard
against inefficiency and waste, fraud, or abuse.
"We've seen not
only a 186% increase in the state's liability over the last five years, but
also a 406% increase in the actual amount the state has paid out in replacement
checks," said Fitzpatrick, who noted the state issued nearly $1.9 million
in duplicate checks in Fiscal Year 2019 and more than $9.5 million in Fiscal
Year 2023. During that same period of time, the state's liability related to
outlawed checks increased from approximately $8 million to nearly $23 million.
Fitzpatrick added,
"In an era when more and more payments are completed electronically, this
sudden increase in replacement checks is unexpected. Since no one has a good
explanation for this activity, we're going to go in and see if we can figure
out what's going on for the taxpayers."
Fitzpatrick's team of
auditors began their audit of the outlawed checks on Monday,
June 17.
