DHS conducted the report in response to a new law requiring the agency to cross-reference names of people who won more than $1,000 in the lottery with those on the dole.
"This report by the DHS shows that too many of our state and federal assistance programs lack the correct amount of oversight to prevent fraud and abuse," Republican state Rep. Kenneth Kurtz said in a statement to MLive.com.
“State and federal assistance programs were made to help individuals in tough times get back on their feet and become self-sufficient again. Legislation passed last year was an important first step, but more must be done as DHS has said," Kurtz added.
Though DHS found 19 people with lottery winners of more than $100,000, 83 percent of lottery winners on welfare rolls won less than $5,000. Democratic state Rep. Fashida Tlaib accused the agency of being too harsh on people with small lottery winnings.
"I just think Director [Maura] Corrigan is more passionate about kicking people off the system than preventing fraud," Tlaib told the Detroit News.
Corrigan advocated for a law to "intercept" lottery winnings from those on welfare.
A similar proposal has been controversial in North Carolina, where Republican state Rep. Paul Stam called the lottery a "scam."
In January, he advocated for legislation prohibiting welfare recipients from playing the lottery at all.
"We're giving them welfare to help them live, and yet by selling them a ticket, we're taking away their money that is there to provide them the barest of necessities," Stam said.