|
AND PREVENTION PROGRAMS |
STATE DIRECTORY
To add to the understanding of American Early Fraud Detection and Prevention (EDP) Programs, each of the states was contacted for information about their EDP program where one had been implemented. Details on program design, organization, referral processes, accompanying staff training, supporting computer and information systems, and cost-benefits analysis, where available, were requested of the State contact. Some states also provided information about other fraud control programs that are in place.
Details of responses from the 27 States which sent material are outlined in this supplementary document, along with contact names and a brief description of the Social Services delivery structure. For those States that did not respond with detailed information or that did not yet have an EDP program implemented, the contact names and numbers are provided at the end of this document.
TABLE OF CONTENTS
TABLE OF CONTENTS iii
ALASKA 1
ARIZONA 3
CALIFORNIA 5
COLORADO 19
CONNECTICUT 21
FLORIDA 24
GEORGIA 27
IDAHO 30
IOWA 32
KENTUCKY 35
LOUISIANA 37
MAINE 38
MINNESOTA 39
MISSOURI 43
MONTANA 44
NEW HAMPSHIRE 45
NEW JERSEY 47
NEW YORK 51
OHIO 52
PENNSYLVANIA 55
SOUTH DAKOTA 58
TENNESSEE 61
TEXAS 62
VERMONT 65
WASHINGTON 67
WEST VIRGINIA 71
WISCONSIN 73
LIST OF STATE CONTACTS 77
CONTACT PERSONS
Ivie Hall
Manager, Fraud Control Unit
Department of Health and Social Services
619 E. Ship Creek Avenue,
5-220 Anchorage, Alaska, 99501
TEL: (907) 277-3338
FAX: (907) 277-33399
DELIVERY STRUCTURE
The Department of Health and Social Services is responsible for financial
assistance and service programs in Alaska. Programs are delivered through
35 field offices.
APPROACH TO EARLY DETECTION/PREVENTION
OVERVIEW: Alaska has had an EDP Program since 1987 for Aid to Families
with Dependent Children (AFDC) and Food Stamps cases. The program was modelled
on the San Diego County experience. The program operates in the greater
Anchorage area which contains 50% of States public assistance caseload.
ORGANIZATIONAL STRUCTURE/REFERRAL PROCESS: Investigations are handled
by two early fraud investigators in the Fraud Control Unit, Division of
Public Assistance. Referrals are made to the early fraud investigators
by Eligibility Technicians intake.
HIGH RISK PROFILING: A high risk profile is used to identify suspect
cases but this doesn't exclude other referrals from Eligibility Technicians.
MOST FREQUENT TYPES OF REFERRALS:
young mothers who allege putative father is unknown
unreported resources (vehicles, bank accounts)
recent arrivals in State
absent father cases
unreported income
TIME FRAMES FOR INVESTIGATION: The early fraud investigators have five days to make recommendations to the Eligibility Technicians regarding eligibility. The cheque usually goes out within five to ten working days if applicant is determined to be eligible. Federal Regulations stipulate payments must be made within 60 days from application for Food Stamp cases and 45 days for AFDC cases.
TRAINING: There is no formal training program in place for early fraud investigators. New investigators are paired with an experienced investigator during initial period of employment.
SUPPORTING COMPUTER SYSTEMS/INTERFACE: The Eligibility Information System (EIS) is used to track all public assistance cases. The Fraud Control Unit has a LAN System to track all investigation cases and cost benefit information. There are established interfaces with Department of Motor Vehicles, Department of Labour, property records, fishing and business licenses, and on-line birth certificate information. Inter-state sharing of client information is done on a case by case basis.
PROBLEMS EXPERIENCED WITH EDP PROGRAM: Alaska reports that insufficient staffing for the program is the biggest concern.
EVALUATION/COST-BENEFIT: The EDP Program has proven to be a highly
effective cost-containment measure. From July, 1993 to June, 1994, a $2
million dollar savings was recorded - a $1 to $5 dollar cost-benefit ratio.
OTHER FRAUD CONTROL PROGRAMS
There are three recipient fraud investigators within the Fraud Control Unit (along with the two EDP investigators, one manager and two administrative support staff). There is a fraud hot line in place for the reporting of suspected recipient fraud.
ARIZONA
CONTACT PERSON
Mr. Ed Rana
Chief, Fraud and Abuse Investigations
Department of Economic Security
1301 E. Washington Street,
Phoenix, AZ 85034
TEL: (602) 255-0098 Ext 30
FAX: (602) 254-8568
DELIVERY STRUCTURE
Assistance programs in Arizona are administered by the Department
of Economic Security through six District Offices and their 77 suboffices.
APPROACH TO EARLY DETECTION/PREVENTION
OVERVIEW: Arizona deals with pre-certification investigations as part of the Fraud Detection Investigation Program. The program is based on the Orange County, California model, with adaptations.
ORGANIZATIONAL STRUCTURE/REFERRAL PROCESS: Fraud Detection Investigations (FDI) Units operate as part of the Office of Special Investigations, Department of Economic Security.
There are 49 Investigators assigned to Family Assistance Administration local offices. These investigators may have either a law enforcement or eligibility worker background. The FDI Investigators handle both pre-certification (prior to benefit issue) and post-certification (on-going cases) investigations in all the Program areas: AFDC, Food Stamps, and General Assistance. Pre-certification referrals are received from Eligibility Interviewers in the local Family Assistance Administration offices.
HIGH RISK PROFILING: Eligibility Interviewers (EI) may refer cases for investigation on the basis of:
frequent household composition changes
TIMEFRAMES: Investigators have five working days to complete investigation on pre-certification referrals.
EVALUATION/COST-BENEFIT: A general rate of 40% denials for cases
referred is thought to reflect an effective referral system in which a
minimum of unnecessary investigations are being conducted.
OTHER FRAUD PROGRAMS
The Office of Special Investigations also has two other units of Investigators:
1) the Forgery Unit which investigates incidents of suspected fraud involving false warrant replacements or forgery of warrants issued from entitlement or benefit programs, and
2) the Fraud Prosecution Unit which investigates allegations of fraud in entitlement or benefit programs. Cases appropriate for criminal prosecution are referred to the Attorney General's Office for prosecution.
3) the State runs a toll-free Hot line in three locations of the office of Special Investigations.
Tax refund intercept processes, both for Federal and State taxes, aid in the recovery of overpayments. Some interstate matches have been done with California and Oregon but it was determined that the amount of abuse was insufficient to warrant monthly runs. Matches will be done on a quarterly basis.
CALIFORNIA
CONTACT PERSONS
California Department of Social Services Fraud Bureau
744 P Street
M.S. 19-26
Sacramento, CA 95814
TEL: (916) 263-5700.
Information provided by:
Mr. Dick Ebel
Assistant Chief, Fraud Bureau
Department of Social Services
744 P Street
Sacramento, CA 95814
TEL: (916) 445-0031
FAX: (916) 445-1053
Mr. Tony Rodriquez
Senior Investigator, Fraud Bureau
Department of Social Services
744 P Street
Sacramento, California
TEL: (916) 445-0031
FAX: (916) 445-1053
DELIVERY STRUCTURE
Public Assistance, Social Services and Health Programs are administered
by 58 Counties and supervised by the Department of Social Services at the
state level.
APPROACH TO EARLY DETECTION/PREVENTION
OVERVIEW: In 1981, Orange County, California, initiated the first program in the country to utilize trained investigators to help establish eligibility for assistance in the Aid to Families with Dependant Children (AFDC), and Food Stamp Programs. The 1983/84 Governor's Budget established Early Fraud Prevention and Detection Programs as a priority for California.
The Orange County pilot was so successful, with a savings of $33 dollars for every dollar spent, that the Federal Government passed legislation in 1988 recommending all counties, nationwide, begin early fraud prevention programs using the Orange County model.
The Early Fraud Prevention Program consists of a coordinated effort between Eligibility Workers and Welfare Fraud Investigators in the early identification of fraudulent applications. Investigators are physically located with Eligibility Workers in order to:
1) generate immediate investigative referrals
2) provide for completion of investigation within application processing time frames
3) encourage prompt feedback from the Investigator to the Eligibility Worker.
Effective July, 1991, 100% California state and federal funding was provided to counties who presented an operating plan (subject to approval of the Department of Social Services) for an Early Fraud Detection/Prevention Program. Guidelines for the Programs are provided by the Department.
ORGANIZATIONAL STRUCTURE/REFERRAL PROCESS: Fraud Prevention Programs are administered locally by each of the 58 County Welfare Offices, in cooperation with the local District Attorneys' Offices. The Department of Social Services supervises County activities through regulations and through the Fraud Bureau, which is responsible for facilitating policies relevant to Fraud Investigations.
All Welfare Fraud Investigators have Peace Officer status under the Penal Code.
Referrals for front-end investigations are made directly to the Investigators by Eligibility Workers.
HIGH RISK PROFILING: Referral Criteria for use of County Eligibility Workers when determining which cases should be referred for investigation are provided by the Department of Social Services.
MOST FREQUENT TYPES OF REFERRALS: Current information on referral types was not provided.
TIME FRAMES FOR INVESTIGATION: A five day turnaround time frame for investigations is the established standard.
TRAINING: Investigators and Eligibility Workers receive training from both the County and State levels. A Fraud Prevention Training Program has been developed.
SUPPORTING COMPUTER SYSTEMS/INTERFACE: See "Other Fraud/Control Programs" below.
PROBLEMS EXPERIENCED WITH EDP PROGRAM: See California's Strategic Plan, outlined following the section on Other Fraud Control Programs for information on intended improvements and enhancements of the current program.
EVALUATION/COST-BENEFIT: The success of California's Early Fraud Prevention Program is primarily attributed to:
1) The high level of cooperation and teamwork between Eligibility Workers and Investigators.
2) The simplicity of the referral process and the timeliness of Investigator's reports.
3) The model encourages Eligibility Workers to maintain a high degree of confidence in the investigative process, which in turn promotes additional referrals.
In 1992/93, Orange County reported a 67% denial rate for cases referred for investigation. Twenty-one percent of applicants for AFDC/Food Stamps were referred for investigation in that year.
Due to the success of the Early Fraud Detection Program, Orange County
expanded it, in 1994, into the General Relief Program and into the Orange
County Housing Assistance Program.
OTHER FRAUD CONTROL PROGRAMS
California has a number of other fraud control-related initiatives:
FINGER-IMAGING - AUTOMATED FINGERPRINT IMAGE REPORTING AND MATCH (AFIRM) SYSTEM: Los Angeles County has, since 1986, been fingerprinting and photographing homeless applicants for General Assistance who were without proper identification. After much study, the County introduced an automated finger image process in three pilot test sites in June 1991. Shortly after, all 14 General Assistance offices were provided with remote work stations with access to a main confidential data base to allow matching of applicants' fingerprint images with all prints already entered into the system. This has proven to be a cost effective system for preventing payment of duplicate benefits to clients attempting to collect assistance using more than one name. In the first six months of operation, the savings attributed to AFIRM were $5.4 million dollars. In this time, 3,021 approved cases were terminated and 242 cases were denied due to failure to comply with finger-imaging requirements. The system was well received by both staff and the public. Clients also accepted the system and generally were very cooperative.
Los Angeles County is presently piloting finger-imaging for the AFDC caseload as well, as part of California's Strategic Plan for Eliminating Fraud, Waste and Abuse.
ADMINISTRATIVE DISQUALIFICATION SYSTEM: This reporting system, which is available on a monthly basis, identifies individuals disqualified from either the AFDC or Food Stamp program due to fraud. The disqualification period is based on the number of offenses:
1st offense - 6 months
2nd offense - 12 months
3rd offense - disqualified for life
The Food Stamps Program includes a National Data Base that is updated every month, while the AFDC Program currently contains information only on disqualified individuals within the State.
FRAUD PREVENTION ALERT SYSTEM: Formerly known as "County Hoppers", the system provides local Welfare Departments and neighbouring states with confidential bulletins which identify persons with outstanding warrants for past welfare abuses and persons attempting to receive aid in more than one jurisdiction simultaneously.
TAX INTERCEPT PROGRAM:
a) State Tax Refund Intercept
Once a case is investigated and an overpayment is positively identified, it is often difficult to secure financial restitution. To facilitate the collection of AFDC overpayments and Food Stamps overissuances, a state tax intercept system was developed in 1982 and beginning with Tax Year 1985, cases with lottery winnings of $100 dollars or more are also subject to tax refund intercept.
Total overpayments and overissuances collected since the inception
of the state tax intercept program is approximately $31 million dollars.
b) Federal Tax Refund Intercept
In 1991, the system was further enhanced by intercepting federal
tax refunds of recipients with Food Stamps overissuances. The program is
authorized to intercept federal tax refunds of recipients committing Intentional
Program Violations (IPV) or Inadvertent Household Errors (IHE). To date,
over $1 million dollars have been intercepted through the program.
COMPUTER MATCHING SYSTEMS:
a) Income and Eligibility Verification System (IEVS)
As part of the Federal Deficit Reduction Act (DEFRA) Public Law 98-369, which was passed in 1984, State agencies that administer AFDC, Food Stamp, and Medi-cal were required to develop and implement an Income and Eligibility Verification System (IEVS) for applicants and recipients of those Programs. The System involves computer matching of applicant/recipient names and Social Security Numbers (SSN) with the following income and benefit files from four Government agencies:
State Welfare files
wage, unemployment and disability files from the State Employment Development Department (EED)
interest and dividend income files from the State Franchise Tax Board (FTB) and the Internal Revenue Services (IRS)
Social Security benefit, wage information, SSN validation from the Social Security Administration (SSA).
IEVS is divided into two distinct components, the Applicant System and the Recipient System. The following is an overview of both systems:
Applicant System (IEVS)
The Applicant System was developed utilizing the existing statewide Medi-cal Eligibility Data Systems (MEDS) network. When an individual applies for assistance, the County Welfare Department submits all the necessary identifying information; i.e., name, Social Security Number (SSN), sex, date of birth (DOB), via computer for matching with the income and benefit sources listed above.
The results of the matches, which will be available within 3 to 5 working days, will then be used to verify eligibility and/or identify potential fraud. The SSN will also be validated through the Wire to Wire Third Party Query System (WTPY) which became operational December 1991. Any discrepancy will require follow-up and resolution before eligibility can be established. However, initial aid cannot be delayed while the County is waiting to obtain results of the match.
Prior to submission of application data into IEVS, Counties are required to inform the applicant in writing that certain information provided will be verified through IEVS and how the information will be used.
Recipient System (IEVS)
This system provides income information at different times of the year depending on the match type. Various threshold levels are used to ensure that only information that could impact eligibility or benefit amount is sent to the Counties. Matches currently in place are:
Payment Verification System (PVS): PVS provides information on recipients that receive, or will receive Retirement Survivors Disability Insurance (RSDI), State Unemployment Insurance (UI), or State Disability (DI). The Counties receive PVS information every month for each case that had a match. Since it began in 1983, a total of $8.4 million dollars in overpayments have been identified.
Integrated Fraud Detection System (IFD): IFD identifies unreported
wages and duplicate aid for AFDC, Food Stamps and Supplemental Security
Income/State Supplementary Program (SSI/SSP) recipients through a quarterly
match that detects cases where a recipient failed to report employment,
under reported the amount of income earned, is receiving duplicate aid,
or SSI recipients erroneously receiving Food Stamps and/or AFDC.
b) FTB (State Franchise Tax Board) Asset Match
This is a Statewide automated system that matches the welfare recipient file against FTB's interest and dividend file. FTB's file contains information from financial/investment institutions based in California or which have offices in California. Matched cases in which the asset which generated the interest had not been previously reported by the recipient are referred to the County Special Investigative Unit for further investigation.
The Counties receive FTB information on an annual basis and only for those cases with interest and dividend income which exceeds specified levels.
c) IRS Asset Match System
The IRS Asset Match is an automated system that matches the welfare file against the IRS Unearned Income File. The annual match is sent to the Counties on cases with interest and dividend income which exceeds specified levels. IRS information is subject to strict confidentiality requirements that the information must be kept in a locked area.
d) Beneficiary Earnings Exchange Record (BEER)
BEER reports contain wage information from the Social Security Administration
(SSA) which includes self-employment, out-of-state wages, military wages,
and Federal wages. They may also include California wages not previously
reported to the Economic Development Department. The Counties sometimes
receive cases where another SSN and/or name is being used by the recipient.
The monthly match is sent to the Counties on cases where the total BEER
annual wages exceed specified levels. Like the IRS information, BEER is
subject to strict confidentiality requirements. Since its inception in
1988, a total of $1.1 million dollars have been identified in overpayments.
WELFARE FRAUD "HOT LINE": In accordance with state legislation, the California Department of Social Services (CDSS) established a Welfare Fraud Hot line in 1985.
This Hot line, maintained by the Fraud Bureau, is designed to promote public participation in reporting situations of potential fraud. Upon receipt of an allegation or citizen complaint, a referral is forwarded to the County in which the alleged offense is occurring. Since its inception, more that $1.7 million dollars have been identified as overpayments and overissuances in the AFDC and Food Stamp Programs.
MISCELLANEOUS: The Department of Social Services also conducts the following computer matches on an experimental or "as-needed" basis:
Prison Matches - a match comparing the Welfare recipient file against the prison inmate file from the State Department of Corrections in order to identify AFDC or Food Stamp recipients who are incarcerated and therefore not eligible for benefits.
IHSS Match - a match in which the In-Home Supportive Services (IHSS) payroll data is matched against the Welfare recipient file to alert Welfare Departments of provider/recipients income and, thus, avoid large overpayments and promote better recoveries.
Veteran Affairs Match - a match is done between the Welfare applicant file and the Veteran Affairs file to identify any existing or potential benefits an applicant may be eligible for.
Duplicate Aid Detection System (DADS) - a match in which the Welfare
recipient files from other States are compared with California's recipient
file in an effort to detect duplicate or multiple aid payments between
States.
CALIFORNIA'S STRATEGIC PLAN - January 1994
In January, 1994, California's Department of Social Services released a report called Bringing Integrity to Welfare in California - A Strategic Plan for Eliminating Fraud, Waste and Abuse.
Background: Estimates of fraud rates in the welfare system in 1993 were 4% to 62% (at 4%, the cost of fraud in the Assistance to Families with Dependant Children (AFDC) program alone is $75 million dollars annually). In response the State introduced major reforms to the AFDC program to reward work and reduce the "need" to conceal earnings. A high level Task Force was set up to recommend ways to improve the integrity of welfare through fraud deterrence, prevention, detection and better overpayments recovery. The Task Force came up with 85 action steps centering around these five areas:
a) Emphasize prevention
b) Improve tools and techniques to detect fraud
c) Increase accountability through effective penalties and recovery methods
d) Crack down on program abuse
e) Refocus program management on integrity, quality and efficiency
The action plan was expected to save $169.4 million dollars in the first year alone. Details of the plans within each of these areas are outlined below:
a) EMPHASIZE PREVENTION
Emphasizing prevention is recognized as the most cost-effective way to reduce fraud: California's Early Fraud Program has become a model for the rest of the country and saves $46 dollars in AFDC grant and administrative costs for every $1 dollar of investigative costs.
The State plans to expand the program staffing level to 1 investigator for every 300 applicants by the end of 1994/95 and Counties will begin to investigate cases transferred from other Countries and those where recipient provides questionable or suspicious information regarding an absent parent.
The department will pilot an early fraud program to investigate questionable applications for disability benefits.
Los Angeles will also pilot AFDC finger imaging beginning July 1994 - if successful, the program will be implemented State-wide. (The General Assistance caseload in Los Angeles County was reduced by 1.5% when finger imaging was introduced).
The first $50 dollar exemption for Child Support payments will be eliminated where non-reporting is discovered.
The department will develop a campaign targeted at recipients to discourage fraud.
b) IMPROVING TOOLS AND TECHNIQUES TO DETECT FRAUD
Several new computer-aided matches at State, Federal, Local and Internal levels will be developed. As well, initiatives will be implemented aimed at:
a) Improving the effectiveness of Investigators:
Enact legislation to enable investigators to subpoena eligibility-related information from employers, landlords, etc. (used effectively in other States).
Re-instate legislation requiring Government agencies to co-operate with Fraud Investigators.
Participate as a Department in the Governor's Underground Economy Task Force.
Increase co-operation with and co-ordination of US Postal Services to identify mail drops.
Employ recipients in clerical/research tasks in support of Investigators.
Improve linkages between Medi-Cal fraud Investigators and County Welfare Investigators.
b) SSI/SSP Post-Eligibility Fraud Pilot Program:
Establish a new Post-Eligibility Fraud Unit (a 3 year pilot) - to identify cases of double-claiming between Supplemental Security Income/State Supplementary Program (SSI/SSP) and Medi-Cal.
c) Increasing Fraud Referrals:
Instruct State and County Quality Control staff to refer suspect cases for fraud investigation.
Work toward allowing investigators to report back to informants to let them know the case has been investigated.
Develop a secret witness (reward) program similar to Crime Stoppers to encourage welfare fraud reporting.
d) Improving Verification Techniques:
A pilot project in San Diego County will require residency verification, to be implemented State-wide if successful.
Regulation will be enacted requiring workers to view all children prior to granting aid and at annual redetermination.
Excluded Parents (where parents for one reason or another are collecting assistance for their children) will be required to provide verification of their own identity (will require Federal waiver and State law change).
Proposals will be developed requiring actual documented verification rather than allowing applicants to provide Sworn Statements (of income, work history, etc.).
c) INCREASING ACCOUNTABILITY THROUGH MORE EFFECTIVE PENALTIES AND BETTER COLLECTION OF OVERPAYMENTS:
a) Improve Collections:
Uncollected overpayments (1992/93) totalled $553 million dollars.
Plans:
eliminate County share of costs of collection if they have a cost effective collection program.
enact legislation to intercept UI or Disability Insurance payments for money owing to the Welfare system.
Long Term Plans:
develop IRS tax refund intercept for AFDC Program.
allow greater reduction of benefits for repayment.
ensure Federal Government re-establishes collection incentives for Food Stamp Program.
b) Increase Costs of Fraud to Recipient:
instruct Counties not to increase Food Stamp benefits to compensate for AFDC grant reductions to recover overpayments.
enact legislation to allow collection of overpayments from anyone in the original case who benefited from the overpayment.
work with Federal and other State agencies to allow recovery of fraudulent overpayments made in one type of case (e.g., AFDC) by reducing other benefits (e.g., Food Stamps).
c) Streamline Disqualification Process:
add AFDC to Intentional Program Violation disqualification process (now only in place for Food Stamps).
add 10 State hearing staff.
develop a process for Investigators to offer clients a waiver of the hearing if they agree to disqualification.
d) CRACKING DOWN ON PROGRAM ABUSE (AS OPPOSED TO OUTRIGHT FRAUD)
a) Continue campaign to inform recipients of benefits of "Work Pays"
Welfare reforms.
b) Reform Homeless Assistance Program:
program now provides relatively generous benefits to persons for temporary housing, often followed by additional grant for first month's rent when permanent housing is found.
proposal to limit access to program to once per lifetime (from once to 2 years).
payments to be made by voucher and direct payments to landlord.
c) Treatment of Income of "Excluded Parents":
enact legislation and seek Federal waiver to equalize treatment of income of excluded parents (where only the children receive assistance as parents may be disqualified due to fraudulent activities, or maybe undocumented aliens, etc.).
d) Require School Attendance (16-18 years old):
enact pilot program to require and monitor actual attendance.
if pilot successful, make verification of attendance a State-wide requirement.
e) Reducing Food Stamps Abuse:
pilot projects to fund a County District Attorney to investigate and prosecute Food Stamp trafficking.
pilot EBT (electronic benefit transfer) in two Counties to help reduce trafficking.
if pilot is successful, implement State-wide.
f) Welfare Abuse Workshop:
Department will convene a welfare abuse work group of State and County
staff to analyze options for further reducing abuse.
e) IMPROVING QUALITY THROUGH BETTER MANAGEMENT
a) Increase Administrative Efficiency:
continue development of State-wide automated welfare system.
continue work towards simplification of system, particularly, the AFDC/Food Stamp Programs Compatibility Proposal.
simplify procedures and statistical reports for inter-County transfers of AFDC and Food Stamp cases.
b) Training and Motivating Staff:
develop training videos, e.g.:
-instruction on false documents
-interviewing techniques
-use of fraud profiles.
encourage Counties to cross-train Investigators and Eligibility Workers.
improve working relationship between the Department's Administrative Adjudications Division and County Fraud Investigators.
develop bonus system to reward County staff who make exemplary contributions toward improving Welfare Program Integrity.
c) Commit to Integrity at State Level:
Department is revising processes to ensure all new policies and regulations are reviewed early by State and County Fraud Quality Control and corrective action staff.
d) Measuring Quality:
Department will work with the County Welfare Directors' Association to seek legislation to restructure the current Quality Control system to provide reliable estimates of each County's accuracy rates.
the Department will conduct four fraud incidence studies to assess the overall incidence of fraud.
e) Making Cost-effective Funding Decisions:
The California State budget proposes to replace lost enhanced Federal funding (from 75% to 50%) to Counties for Fraud Investigation Program administration.
f) Building in Incentives to Achieve Quality and Integrity:
improve Management incentives and accountability by giving Counties an equal share of non-Federal costs of AFDC Program.
provide fiscal incentive for Counties to increase collection of overpayments.
explore performance-based funding incentives to increase Med-Cal
Fraud referrals to Health Services for investigation.
COLORADO
CONTACT PERSONS
Ms. Joan Baldwin
Director Fraud Control Program
1575 Sherman 3rd Floor
Denver, CO 80022
TEL: (303) 866-5973
FAX: (303) 866-5098
Information to be provided by:
Mr. Richard Rowe
Director Fraud Investigations
Weld County
P.O. Box A
Greely, CO 80631
TEL: ( 303) 353-1551
FAX: (303) 353-5215
DELIVERY STRUCTURE
Supervised by the State Department of Social Services and locally
administered by the 63 County Departments of Social Services.
APPROACH TO EARLY DETECTION/PREVENTION
There is no formal requirement by the State to establish early detection
and prevention programs. It is left to the discretion of each local County.
Ms. Baldwin indicated that it was being undertaken by several urban areas
and suggested Weld County as being representative of Colorado's system.
OTHER FRAUD CONTROL PROGRAMS
Colorado faced a class action suit when they introduced Administrative Disqualification but the state won the case.
There was a special project conducted in Denver County to determine whether it was more cost efficient to do extensive file reviews after the third month on assistance instead of during intake. Reports of results were not received.
CONNECTICUT
CONTACT PERSONS
Mr. James Wietrak
Director of Quality Assurance
Department of Social Services
110 Bartholomew Avenue
Hartford, CT 06106
TEL: (203) 424-5903
FAX: (203) 424-4945
DELIVERY STRUCTURE
Public assistance is administered by the Department of Income Maintenance
through six district offices.
APPROACH TO EARLY DETECTION/PREVENTION
OVERVIEW: The Connecticut Department of Social Service piloted a
Fraud Early Detection (FRED) program in one district office in January
1993. After the pilot project, officials concluded FRED was a highly effective
fraud prevention tool and is now expanding it to other countries. The program
covers AFDC (Aid to Families with Dependent Children), Food Stamp and Medicaid
cases.
ORGANIZATIONAL STRUCTURE/REFERRAL PROCESS: The Investigators are
part of Program Integrity (Office of Quality Assurance), but are physically
located in the six district offices. Investigation Supervisors approve
FRED referrals. The Investigators perform a preliminary office review of
the referred cases and follow with applicant interviews in their homes.
HIGH RISK PROFILING: Cases meeting an error-prone profile are referred by Intake Eligibility Workers. These are cases where questionable or inconsistent information cannot be resolved without further investigation. Clear referral guidelines are provided for the Intake Workers.
MOST FREQUENT TYPES OF REFERRALS:
applicants who do not have the number of children claimed
applicants who do not live at reported address
where the "absent" parent is in the home
applicants who are collecting in another State
applicants who are employed and are not reporting the income
TIME FRAMES FOR INVESTIGATION: A five day turn around from referral to report from Investigator is standard. However, the Investigators use a technique called the Ten Day Letter, which is left at the applicant's home if applicant is not at home. The letter details information required or a date by which the Investigator must be contacted. If no response is received within ten days, the case is closed.
TRAINING: No specific information on training of FRED Investigators was provided. A Fraud Early Detection Handbook provides instruction on referral guidelines, investigation techniques, a check list and copies of and instruction for all forms and reports used.
SUPPORTING COMPUTER SYSTEMS/INTERFACE:
Eligibility Management System (on line) - the EMS was designed to perform numerous matches on applicants for general state assistance to verify that Social Security Numbers match those issued by the Social Security Administration and that there is no duplication of cases (matched by Social Security Number and address).
Beneficiary and Earnings Data (on line/at application) - determines any Social Security claim information, earnings information that may be on Social Security files, and possible assistance paid by other states.
Department of Labour Matches (on line/at application) - determines possible undeclared earnings and/or Unemployment Compensation Benefits.
Internal Revenue Service (at application) - determines possible unearned income: unemployment benefits, interest income, dividends, royalties, gambling winnings, etc..
Department of Motor Vehicles (on line access) - provides motor vehicle
registrations and address information.
PROBLEMS EXPERIENCED WITH EDP PROGRAM: There were none enumerated in the information provided, likely due to the very recent implementation of the program.
EVALUATION/COST BENEFIT: Of the 900 cases referred during the one-year
pilot project, one-third were "positive hits" (case denied, case withdrawn
or benefits reduced). In just the one pilot office, the cost-avoidance
was $1,230,666.00 over one year.
OTHER FRAUD CONTROL PROGRAMS
The Client Fraud Investigation Unit (Office of Quality Assurance, Department of Social Services) formed in 1990, now has 30 investigators along with support and supervisory staff. The staff are located in the district offices but report centrally. The unit is self-supporting with a cost-benefit ratio of $1 to $4.46 dollars in 1992/93. Prosecution is done by State Police. Recently, the Client Fraud Investigation Unit was amalgamated with Recoveries and Third Party Liability Units*, forming the Fraud and Recoveries Unit.
*Third Party Liability Unit's function: to ensure the State Medicaid Program is the payer of last resort for Medicaid recipients who have other health insurance or benefit plans in addition to Medicaid benefits.
OTHER INITIATIVES:
beginning January, 1995, a magnetic stripe identification card will be issued to Medicaid recipients. This will allow medical providers access to the Department's Eligibility Management System to confirm eligibility. As well, cash assistance benefits will be issued via the card using existing ATM machines, and for Food Stamp benefits, through point-of-sale devices at retail stores.
plans are underway to use the digitized photo system now used by Department of Motor Vehicles for the Electronic Benefits System.
FLORIDA
CONTACT PERSONS
Billy G. Davis
Director, Division of Public Assistance Fraud
Office of the Auditor General
P.O. Box 1735
Tallahassee,
Florida 32302
TEL: (904) 488-0620
FAX: (904) 488-6975
Information supplied by:
Christo M. Tolia
Assistant Director
Division of Public Assistance Fraud
Office of the Auditor General
FAX: (904) 488-6975
DELIVERY STRUCTURE
Public Assistance and Social Services are administered by the Department
of Health and Rehabilitative Services through eleven District Offices.
APPROACH TO EARLY DETECTION/PREVENTION
OVERVIEW: Florida began fraud prevention investigations in the mid
1980's, and modeled upon the success of California's Orange County Early
Detection/Prevention initiatives. The goal of the Fraud Prevention Investigation
Program is to utilize staff with investigative skills to provide assistance
to public assistance specialists in eligibility determination for benefits
under the Aid to Families with Dependent Children (AFDC) and Food Stamp
programs.
ORGANIZATIONAL STRUCTURE/REFERRAL PROCESS: The Division of Public Assistance Fraud conducts both post-fraud and fraud prevention investigations. The Division of Public Assistance Fraud is in the Office of the Auditor General, and works on a contractual basis with the Department of Health and Rehabilitative Services.
Referrals for fraud prevention investigations are made directly to the Investigator by Public Assistance Specialists, after all possible attempts have been made to verify and document questionable eligibility factors.
HIGH RISK PROFILING: Referrals for investigation are based on pre-established criteria.
MOST FREQUENT TYPES OF REFERRALS:
Household Composition
Non-reported income
TIME FRAMES FOR INVESTIGATION: The Fraud Prevention Investigator has five days to complete the investigation.
TRAINING: Investigators are trained within the Division of Public Assistance Fraud. As well, the Division of Public Assistance Fraud also participates in the training of Public Assistance office personnel on how to utilize the program.
SUPPORTING COMPUTER SYSTEMS/INTERFACE: Investigators have access to computer-assisted investigation case tracking and reporting, wage matching, data bases such as motor vehicle registration, property records and have access to all Social Services records.
Some data matching has been done with other States to determine duplicate cases of assistance.
PROBLEMS EXPERIENCED WITH EDP PROGRAM:
acceptance and use of the program by Public Assistance office personnel.
use and follow through of investigation results by Public Assistance staff
field work is very intensive in lower socio-economic areas
difficulty in completing field work within a five day time frame in large volume Metropolitan areas
EVALUATION/COST-BENEFIT: Of the 7668 referrals investigated in 1994, Florida found:
34.15% of cases were approved for benefit issue
11.69% of cases had a reduction made in benefit level
48.31% of cases were denied benefits
5.73% of cases were voluntarily withdrawn by applicant
The total savings attributed to the Fraud Prevention Program (in both AFDC and Food Stamps) was $9,478,076 dollars.
This Program is considered very cost effective.
OTHER FRAUD CONTROL PROGRAMS
Specific information was not provided on other fraud control programs.
GEORGIA
CONTACT PERSONS
John Hunsucker
Director Fraud and Abuse
Department of Human Resources
878 Peachtree St. N.E.
Atlanta, GA30309
TEL: (404) 352-6040
Information to be provided by:
Ms Peggy Peters
877 Battlecreek Rd.
Jonesboro, GA30236
TEL: (404) 473-2317
DELIVERY STRUCTURE
Public assistance and social service programs are administered by
the Department of Human Resources' Division of Family and Children Services
through the 159 County Departments of Family and Children Services and
supervised by six field managers and ten urban county directors.
APPROACH TO EARLY DETECTION/PREVENTION
OVERVIEW: Georgia's Early Detection and Prevention Fraud Program
is referred to as the Intake Eligibility Investigation (I.E.I.) and has
been in place for ten years. The program goal is to provide investigation
of applicants or recipients referred by eligibility workers to reconcile
discrepancies and inconsistencies in household circumstances. I.E.I. operates
in AFDC, Food Stamps and Medicaid programs.
ORGANIZATIONAL STRUCTURE/REFERRAL PROCESS: The I.E.I. program was designed at the State level for the sake of consistency among County offices. However, each County has flexibility in determining how investigations are referred and completed. The local Investigators are assigned to Quality Assurance Units.
Referrals for investigation may be made by Eligibility Workers, supervisors or through a Statewide fraud hot line or community complaints. Once the investigation is completed, referrals are returned to the caseworkers with recommendation for action. Referrals may be made at initial application, redetermination/recertification or at any time the Eligibility Worker notes discrepancies which can not be resolved by normal eligibility determination procedures.
HIGH RISK PROFILING: A guideline is provided to assist Eligibility Workers in making appropriate referrals.
MOST FREQUENT TYPES OF REFERRALS:
Household composition
Unreported income
TIMEFRAMES: The "standard of promptness" for I.E.I. investigations is seven days. Because of a high rate of referrals, a 14 day period is usually assigned, however, Eligibility Workers do not delay benefit issue beyond the seven day standard of promptness pending investigation results.
TRAINING: Counties have in-house training for investigators and materials for training are provided from the State level.
SUPPORTING COMPUTER SYSTEMS/INTERFACES: The Department of Family and Children Services' computer system interfaces with Child Support Enforcement, Department of Labour, Social Security administration and the Federal Disqualified Recipient system (Food Stamp cases).
PROBLEMS EXPERIENCED WITH EDP PROGRAM: None are noted.
EVALUATION/COST-BENEFIT: No specific information is provided as to
cost-benefit.
OTHER FRAUD CONTROL PROGRAMS
Georgia also has a Full Field Investigation Program for on going or closed cases for which an estimated overissuance has been established and which are suspected of fraud. Once fraud is determined, the investigator will make the determination as to whether or not to prosecute the case or will attempt to obtain a Disqualification Consent Agreement and Repayment Agreement.
IDAHO
CONTACT PERSONS
Ms. Judy Brooks
Chief, Bureau of Welfare Programs
Division of Welfare
Department of Health and Welfare
450 W. State St. , 6th Floor
Boise, ID 83720
DELIVERY STRUCTURE
Public assistance and social services are administered by six Divisions
of the Department of Health and Welfare through seven regional offices.
APPROACH TO EARLY DETECTION/PREVENTION
Idaho does not have a formal Fraud Prevention Program, but utilizes a number of measures to prevent and detect welfare fraud:
initial training of all new eligibility examiners (Intake workers) includes training on pre-eligible verification measures, investigative interview techniques, and guidance for verifying information required by policy or by questionable circumstances which may exist in a case.
computer matches with the following sources:
- Social Security records (monthly)
- State Unemployment Benefits records (weekly/monthly)
- Department of Motor Vehicles (as needed)
- Idaho Employment Agency (semi-monthly on new applicants and quarterly for all recipients)
- IRS (monthly)
- State Data Exchange (weekly/monthly).
OTHER FRAUD CONTROL PROGRAMS
Administrative Disqualification Program for both Food Stamps and AFDC -allows the State to pursue cases of fraud and to impose disqualification periods for those found to have committed an Intentional Program Violation. This process is also used for individuals attempting to secure benefits fraudulently.
A Welfare Fraud Investigator is assigned to each region to assist
staff on cases involving possible fraud. Prosecutions are undertaken by
State prosecuting attorneys.
IOWA
CONTACT PERSONS
Jeff Voskans
Administrator, Investigations Division
Department of Inspections and Appeals
Lucas Building
Des Moines, IA 50319
TEL: (515) 281-6377
FAX: (515) 242-5022
DELIVERY STRUCTURE
Income maintenance and service programs are administered under the
supervision of the Department of Human Services' Office of the Deputy Director
for Services. There is at least one county office in each of the 99 counties
within the state.
APPROACH TO EARLY/PREVENTION DETECTION
OVERVIEW: Iowa established a Front-End or Pre-certification Unit in 1986 for Food Stamps and this Unit's success prompted expansion of Pre-certification into the Aid to Dependent Children Program (AFDC).
The Front-End investigation process is completed prior to certification, for AFDC, Food Stamps, and Medicaid cases which also involve AFDC or Food Stamp benefits.
The specific goals of the Front-End investigation program are:
a) to assist the local County Income Maintenance worker in the verification of information
b) to reduce the Food Stamp error rate as determined by Human Services Program evaluation
c) to identify misspent dollars for collection activity and/or Fraud
investigations
ORGANIZATIONAL STRUCTURE/REFERRAL PROCESS: Front-End investigations are handled by the Fraud Investigations Bureau, Investigations Division, Department of Inspections and Appeals. Referrals are made by Income Maintenance Intake workers to the Investigators. A letter is sent immediately from the Investigator to the applicant, informing applicant that an investigation or verification is being undertaken and what the issue is. The letter informs the applicant that refusal to cooperate will result in the application for assistance being denied or cancelled.
HIGH RISK PROFILING: An error-prone profile is used by County Income Maintenance Intake workers in determining which cases are appropriate for referral to investigations. One or more indicators on the error-prone profile must be present to justify a referral.
MOST FREQUENT TYPES OF REFERRALS:
Household Composition
Unreported Earned Income
Unreported Unearned Income
TIME FRAMES FOR INVESTIGATION: From the date of referral, the assigned Investigator has 24 days to complete the investigation and report the findings to the Intake worker. The applicant will received benefits (if eligible) after the 24th day.
TRAINING: All Investigative staff are trained. Training is provided by:
Iowa Department of Personnel
Iowa Law Enforcement Agency
Iowa Department of Human Services
SUPPORTING COMPUTER SYSTEMS/INTERFACES: Investigators have access to:
Iowa Department of Employment Services
Iowa Department of Transportation
County Treasurer for real estate property and vehicle ownership records.
Information on clients may be shared with other States on a case by case basis, and a data-matching system is in place with Missouri, Wisconsin, Illinois, Minnesota and South Dakota.
PROBLEMS EXPERIENCED WITH EDP PROGRAM: None were noted.
EVALUATION/COST-BENEFIT: For 1994, the cost avoidance figure was $8.2 million dollars, with a cost of $850,000 dollars, a cost-benefit ratio of 1 to 9.6. No information was provided on how the cost-benefit calculations are done.
As of June, 1994, statistics show that in 65% of referred cases,
benefits are cancelled, denied or reduced, as a result of Front-End Investigations.
OTHER FRAUD CONTROL PROGRAMS
The Investigations Branch of the Iowa Department of Inspections and
Appeals also handles Medicaid Fraud Investigations, (on going) Welfare
Fraud Investigations, overpayment collections and special (Internal or
other types) investigations.
KENTUCKY
CONTACT PERSONS
Jim Lemaster
Director, Special Investigations
Office of Inspector General
Cabinet for Human Resources
275 E. Main Street
Frankfort, KY 40621
TEL: (502) 564-2815
FAX: (502) 564-6546
DELIVERY STRUCTURE
Assistance and services programs are provided by the Cabinet for
Human Resources through six departments.
APPROACH TO EARLY DETECTION/PREVENTION
OVERVIEW: Kentucky has had a CORE (Cooperative Review of Eligibility) program on a limited basis since 1986, as part of the Special Investigations program. The CORE Program is presently being expanded to the ten geographical areas with the heaviest Welfare recipient population.
The purpose of the CORE Program is to prevent person(s) from fraudulently obtaining benefits from AFDC, Medical Assistance and Food Stamps programs before the case is approved or during the course of a client's receipt of benefits.
ORGANIZATIONAL STRUCTURE/REFERRAL PROCESS: The CORE Program operates from the Special Investigation Division, Office of Auditor General (OIG) in cooperation with the Department for Social Insurance (Division of Field Services).
Referrals are made by Department of Social Insurance (DSI) caseworkers to OIG Investigators on pending or active cases only after the caseworker has verified and documented all eligibility factors as set forth in the operations manual. CORE referrals are not made for cases that have been discontinued or where current factors of eligibility are not in question.
The CORE Investigator merely reports findings and does not give advice as to whether or not a person should be declared eligible for program benefits.
HIGH RISK PROFILING: Referral criteria have been established which outline situations that might result in an appropriate referral.
TIMEFRAMES: CORE investigations are to be completed within fifteen calendar days of receipt of referral. The caseworker then has fifteen calendar days after the investigation report is received to take appropriate action and report back to the Special Investigation Division.
TRAINING: The Division of Special Investigations trains Department of Social Insurance staff who will be making referrals for investigation.
SUPPORTING COMPUTER SYSTEMS/INTERFACE: No information was provided in this regard.
PROBLEMS EXPERIENCED WITH EDP PROGRAM: The expanded program is just being implemented so it is too soon to determine what problems may arise.
EVALUATION/COST-BENEFIT: It is expected that at least six months
time will be needed to determine the cost-benefit and to evaluate the program.
OTHER FRAUD CONTROL PROGRAMS
No information was provided in this regard.
LOUISIANA
CONTACT PERSONS
Ms. Christine Comeaux
Director, Fraud and Recovery Section
Office of Family Support
P. O. Box 94065
Baton Rouge, LA 70804-4065
TEL: (504) 342-4112
Fax : (504) 342-2047
DELIVERY STRUCTURE
Assistance programs are administered by the Department of Social
Services' Office of Family Support through Local Offices under the supervision
of nine Regional Offices.
APPROACH TO EARLY DETECTION/PREVENTION
There is no formal early detection/prevention program.
OTHER FRAUD CONTROL PROGRAMS
Louisiana has a post-certification Investigation program with 14 Investigators.
MAINE
CONTACT PERSONS
Robert Stillings
Director, Fraud Investigations and Recovery
Department of Human Services
Whitten Rd. Station # 11
Augusta, ME 04333
DELIVERY STRUCTURE
Income maintenance and services are delivered by several bureaus
of the Department of Human Services.
APPROACH TO EARLY DETECTION/PREVENTION
There is no formal early prevention/detection program in place at
this time, however they are hoping to start pilot testing a program in
April, 1995.
OTHER FRAUD CONTROL PROGRAMS
Mr Stillings indicated that they can reduce assistance by 10% for agency overpayments but they could reduce assistance by 30% to recover client "error" overpayments.
MINNESOTA
CONTACT PERSONS
Daniel Haley
Fraud Consultant, Assistance Payments Division
Department of Human Services
444 Lafayette Road
St. Paul, MN 55155-3834
TEL: (612) 296-4699
FAX: (612) 282-6120
DELIVERY STRUCTURE
Assistance programs are supervised by the Department of Human Services
and administered by the County Departments of Human Services.
APPROACH TO EARLY DETECTION/PREVENTION
OVERVIEW: Minnesota commenced a 13-month pilot Fraud Prevention investigation (FPI) program in June, 1990, in seven Counties. The success of the pilot program led to the State legislature requiring its expansion to 13 more Counties and presently, the Department of Human Services is pursuing legislation to permit expansion State-wide on a multi-County, regional model.
The FPI program is premised on the philosophy that it is as important (and more cost beneficial) to prevent fraud and abuse as it is to prosecute offenders of public assistance programs.
The Program Integrity Unit, Minnesota Department of Human Services, develops guidelines including Referral Criteria, for the participating Counties.
Minnesota's Fraud Prevention Investigation Program demonstrates effective methods for "cutting red tape" and "empowering employees to get results" by developing specific referral criteria, eliminating time-consuming administrative and supervisory procedures, and ensuring quick resolution of eligibility questions. These practices assist in putting the customer first by assuring that individuals only receive benefits to which they are entitled.
The Minnesota FPI Program was recognized as a "best methods" example of reinventing government by the US Department of Health and of Human Services in 1993.
ORGANIZATIONAL STRUCTURE/REFERRAL PROCESS: Minnesota Human Services is a State-supervised, County administered system with County-based personnel and locally-based investigative control. Because each County adapts the program, Investigator's backgrounds vary:
may be Agency Staff with either investigative or program backgrounds,
may be Contracted, either Peace Officers or Investigators attached to County Attorney's offices,
may be Private Investigators under contract.
Contracting agencies become agency personnel within the context of their contracts.
Minnesota has noted and substantiated that experienced financial workers can make excellent FPI Investigators.
A clear distinction is made between the duties of the financial worker in eligibility verifications and the investigator who conducts the Fraud Prevention Investigation, to ensure the FPI process is an investigation activity and not part of the Eligibility Verification process.
Referrals for investigation may be made by financial workers when eligibility factors (in AFDC or Food Stamp cases) exhibit characteristics of potential fraud, during:
a) application process,
b) recertification process,
c) whenever a reported change results in a review of eligibility factors - i.e., monthly household report forms, Income Eligibility Verification System matches, public or hot line complaints.
Minnesota's FPI Program encompasses cases other than strictly Intake or Recertification cases.
Referrals for investigation are sent directly to the Investigator and results returned directly to the financial worker. Supervisory reviews occur after the findings are reported and case action determined. The FPI referral form allows documentation of the referral, investigation and action to be reported on a single document to simplify administration.
The FPI program also takes proactive steps in fraud control by having Investigators randomly select open cases, especially newly opened ones, for review. The review identifies cases which meet the FPI referral criteria but which were not referred.
HIGH RISK PROFILING: Referral criteria for the FPI Program were developed at the State level, and any changes to the referral criteria must be approved in writing by the Department before County implementation.
MOST FREQUENT TYPES OF REFERRALS:
undeclared income,
residence and household composition are an unexpectedly large component of the investigative caseload.
TIME FRAMES FOR INVESTIGATION: For cases referred from Intake, there is a five-day turnaround time expectation, but it is noted that a ten-day time line would be more realistic.
TRAINING: The Department of Human Services trains Investigators and Financial Supervisors. Financial workers are trained by the County agencies. For the Investigators, a five-day preliminary course has been developed, with two days involving FPI and three days of a course on interviewing and interrogation. A one-week Financial Crimes course (through IRS) has been used as well. The Department supports two annual conferences via the Minnesota Fraud Investigators Association and sends 10 Investigators to the annual United Council on Welfare Fraud (National) Conference.
SUPPORTING COMPUTER SYSTEMS/INTERFACES: All Investigators have access to the Department's State-wide computer system as well as on-line access to Wage and Unemployment Compensation, Licensing and Assets information and the major Credit Bureau.
Intermittent data matches are done with adjoining States and the Metropolitan Counties match with Illinois and Indiana. Lottery matches are done for winnings over $1,000 dollars and the federally mandated IEVS System for matching wages, UI compensation, Social Security and interest income is used.
PROBLEMS EXPERIENCED WITH EDP PROGRAM: Present concerns with the FPI Program are:
a) establishing appropriate investigative caseload levels,
b) adequate staffing in large areas with concentrated public assistance caseloads,
c) whether FPI will be successful in Counties with small caseloads,
d) the impact of Electronics Benefits Transfer on the investigative process,
e) maintaining separation of the verification and investigation functions,
f) ensuring that home contacts are not at risk of becoming "warrantless searches".
EVALUATION/COST BENEFIT: The initial commitment for the Program was to reach a 1 to 1.5 cost-benefit level and this has been exceeded (1 to 3 in 1993). This is based on a three month benefit calculation:
65.5% of referred cases were found to have discrepancies,
49.1% of referred cases resulted in negative actions being taken.
FPI has also helped to:
a) increase Financial Workers' awareness of potential fraud,
b) identify overpayments which increased County collection efforts,
c) increase compliance with voluntary reporting requirements (deterrent effect),
d) increase Public and Financial Workers confidence in Public Assistance Program administration,
e) impact questionable cases that would otherwise not be investigated,
f) gather statistical data in order to identify program weaknesses for policy and rule changes,
g) realize collateral savings in medical and general assistance cases
as well.
OTHER FRAUD CONTROL PROGRAMS
Minnesota utilizes an integrated model of prevention and control
programs, with the Investigators being responsible for front-end investigations,
overpayment calculation and collection, fraud investigations and random
case audits.
MISSOURI
CONTACT PERSONS
Larry Dickerson
Deputy Director, Investigations Section
Division of Legal Services
Broadway State Office Building
221 W. High St.
P.O. Box 527
Jefferson City, MO 65102
TEL: (314) 751-0903
FAX: (314) 751-0196
DELIVERY STRUCTURE
Public assistance and service programs are administered through the Department of Social Services' Division of Family Services. The division operates through 114 County Offices and an office in the City of St. Louis.
APPROACH TO EARLY DETECTION/PREVENTION
There is no formal early detection/prevention program. This program was tried in several areas and discontinued because of the lack of quality referrals from intake workers. It is emphasised that in order to be effective, this program must invest in substantial training for intake workers.
OTHER FRAUD CONTROL PROGRAMS
The fraud unit handles approximately 4000 referrals a year from the Division of Family Services. Due to limited resources and staffing, common-law is seldom investigated as it is very difficult to prove and a more efficient use of resources is the investigation of unreported income and excess assets where there is verifiable physical evidence. Hot line referrals are not thought to be productive.
MONTANA
CONTACT PERSONS
Erich Murdinger
Chief, Audit and Compliance Bureau
P.O. Box 4210
Helena, MT 59604
TEL: (406) 444-4120
FAX: (406) 444-1970
DELIVERY STRUCTURE
The Department of Social and Rehabilitative Services has responsibility
for assistance programs that are administered by the State in 12 counties
and under State supervision by County Departments of Public Welfare in
44 counties.
APPROACH TO EARLY DETECTION/PREVENTION
There is no formal early detection/prevention program. The program
was discontinued when the federal government cut cost sharing from 75%
to 50%. The state felt a more efficient use of resources was to concentrate
investigations on post-certification clients.
OTHER FRAUD CONTROL PROGRAMS
Clients are restricted to one doctor, of their choice, and must be referred to a specialist.
Clients are restricted to the use of one pharmacy.
NEW HAMPSHIRE
CONTACT PERSONS
Ms. Linda Capuchino-Davidson
Attorney Supervisor
Department of Health and Human Services
6 Hazen Drive
Concord, NH 03301
TEL: (603) 271-4392
FAX: (602) 271-2896
DELIVERY STRUCTURE
Public Assistance and Social Services are administered by the Department
of Health and Human Services' Division of Human Services through 13 District
Offices.
APPROACH TO EARLY DETECTION/PREVENTION
There is no formal early prevention/detection program, however, a pilot program is now underway.
While New Hampshire does not presently have a specific unit dedicated only to Front-End detection as a means of combating welfare fraud, the following methods are utilized in its pursuit to combat welfare fraud and to ensure recovery of overissued benefits:
1) Department of Employment Security Crossmatch: Case Technicians in the Special Investigations Unit review cross match data and follow up by checking case files for unreported income on applications. This is a very effective means of establishing claims as well as detecting potential fraud cases.
2) Interstate matches: New Hampshire currently engages in a monthly cross match with Massachusetts. This has resulted in closure of cases where subsequent verification has not been provided by the client.
3) Administrative Disqualification: New Hampshire has implemented a Food Stamp Administrative Disqualification process and is in the midst of legislative approval to commence AFDC administrative disqualifications.
4) Hot line: New Hampshire has just recently established a 24 hour fraud Hot line.
5) Recovery of overpayments: There is a staff person in the Special Investigations Unit responsible for following up on unpaid balances, including claims and court-ordered restitution payments.
6) Federal Tax Refund Offset Program (FTROP): New Hampshire utilizes
FTROP as a means of recovering unpaid balances on overissued Food Stamp
benefits.
OTHER FRAUD CONTROL PROGRAMS
Currently, the process implemented by Special Investigations is that all allegations in which the information is not known to the District Office/caseworker is assigned to an Investigator for follow up. In general, the Investigators do a preliminary review and schedule a meeting with the individual against whom the allegation is made. In the vast majority of cases the individual admits to the facts alleged and the Special Investigator recommends repayment in lieu of prosecution of the case. This approach has been extremely effective and this past fiscal year the Special Investigations Unit recovered $629,000 dollars in overpaid or illegally received benefits.
New Hampshire is constantly looking to expand its methods of recovery to utilize means which may be more cost effective and efficient.
NEW JERSEY
CONTACT PERSONS
Mr. Dennis Micai
Chief Investigator
Mercer County Bureau of Social Services
200 Wolverton Street
CN-01450
Trenton, NJ 08650
TEL: ( 609) 989-4370
FAX: ( 609) 396-3276
Mr. Richard Bakley
Chief Investigator
Camden County Bureau of Social Services
600 Market Street
Camden, NJ 08102
TEL: ( 609) 225-8942
FAX: ( 609) 225 8944
Ms. Elaine Minkler
Chief Investigator
Middlesex County Bureau of Social Services
181 How Lane
P.O. Box 509
New Brunswick, NJ 08903
TEL: ( 908 ) 745-3774
FAX: ( 908 ) 745-4558
DELIVERY STRUCTURE
Public Assistance and Social Services are administered through three
divisions of the Department of Human Services. The Division of Economic
Assistance supervises the 21 County Welfare Agencies.
APPROACH TO EARLY DETECTION/PREVENTION
OVERVIEW: Early detection and prevention of overpayments is an integral part of New Jersey's management of Public Assistance Programs, for both Aid to Families with Dependant Children (AFDC) and Food Stamp Programs.
EDP Programs have been in place since May, 1985. In developing the Program, New Jersey adapted the Orange County, California model of Early Fraud Detection/Prevention (EDP). Each of the 21 Counties operate Front-End Detection Programs but they may vary slightly from County to County.
Goals of the EDP Program are:
improve the referral system and working relationship between program and investigative staff.
immediate investigation and determination of the eligibility factors and accelerated feedback between Investigators and Eligibility Workers.
grant reductions and closing/denials leading to a reduced error rate and cost avoidance as opposed to costly overpayment recovery and prosecutions.
ORGANIZATIONAL STRUCTURE/REFERRAL PROCESS: Front-End investigations are handled by experienced Investigators in the Investigation Unit of the Board of Social Services. Cases are referred to Front-End Investigators by Eligibility Workers
HIGH RISK PROFILING: Referral criteria are provided for Eligibility Workers to assist in the determination of which cases should be referred to Front-End Investigators.
MOST FREQUENT TYPES OF REFERRALS:
residency verification/household size
absent parent in home
Unreported income is not a significant problem as the Eligibility Workers, with on-line access to State wages, and unemployment benefits, verify much of this information at Intake.
TIME FRAMES FOR INVESTIGATION: Investigations are generally completed within one week, however, a maximum of 30 days is allowed if necessary. The goal is always to resolve the questionable situation prior to issuance of a cheque on an initial application, or for active cases, before the next cheque is issued.
SUPPORTING COMPUTER SYSTEMS/INTERFACES: Each County Welfare agency within New Jersey is on-line and Investigators have access to all agency client records. Investigators also have on-line access to New Jersey Wage and Unemployment records and can obtain information from Social Security, Internal Revenue Service and Motor Vehicles.
Inter-jurisdictional data matches are completed with New York, Pennsylvania, and Delaware (border States).
PROBLEMS EXPERIENCED WITH EDP PROGRAM: The most problematic area is the degree of cooperation of Eligibility Workers "who are either reluctant to refer cases or want to refer everything". There is also a problem with having the Eligibility Workers respond to investigation information in a timely way.
EVALUATION/COST-BENEFIT: A cost-benefit ratio of 1 to 12 is reported (calculation based on projection of 12 months). This calculation is considered conservative as the average length of time on AFDC and Food Stamp benefits is usually greater than two years.
Mercer County reports that 25% of total intakes are referred, including reapplications with a prior history of overpayment, while Middlesex County reports that 4% of intakes are referred.
Mercer County, Jersey recommends that a successful Early Detection and Prevention Program should have the following characteristics:
the closer the physical location of the Early Detection and Prevention Unit to the eligibility units the more it will be used as a working tool.
referrals must be easy to make to avoid unnecessary roadblocks for Eligibility Workers. This results in higher quality and increased referrals to Investigators.
feedback on findings must be done as quickly as possible.
daily contact between Eligibility Workers and Investigators results in an efficient working team with a knowledge and awareness of each other's responsibilities.
a close working relationship will produce an avoidance by the client with involvement in the criminal justice system and its repercussions.
successful operation will result in an overall drop in client overpayments and a considerable savings in taxpayers' monies.
long term effect is the agency will be recognized as more professional by both the taxpayer it represents and the clientele it serves.
Paramount to this concept of Early Detection and Prevention is the
assurance that at all stages of the investigation, the rights of the applicants/recipients
are maintained.
OTHER FRAUD CONTROL PROGRAMS
Mercer County has created a special screening unit, the role of which is to verify information, coordinate grant adjustments, calculate overpayments and make referrals to the Claims Determination Unit for recovery. This Unit deals largely with information from computer matching:
Social Security income,
resources - bank accounts, assets,
unemployment insurance benefits,
unreported wage income.
The Special Investigation Units are involved in investigating and prosecuting complaints of fraud. Cases where fraud is determined are referred to County Prosecutors for follow up.
Most New Jersey County Welfare Agencies have hot lines to encourage
reporting of fraud. Middlesex County refers public complaints relating
to residency or household size to the Front-End Investigators to handle
when they are doing field visits.
NEW YORK
CONTACT PERSONS
Mr. John Wrafter
Director
Bureau of Provider Audit
Office of Audit and Quality Control
40 North Pearl Street
Albany, NY 12243
TEL: (518) 474-9727
FAX: (518)
DELIVERY STRUCTURE
Public Assistance and Social Services are provided by the 58 Local
Departments of Social Services under the supervision of the State Department
of Social Services.
APPROACH TO EARLY DETECTION/PREVENTION
Early fraud detection/prevention programs are left to the local Departments
of Social Services.
OTHER FRAUD CONTROL PROGRAMS
Fingerprinting was introduced in Rockland and Onondaga Counties in
October 1992. This resulted in an estimated cost avoidance of $678,960
and the program is to be expanded State wide by order of the Governor.
OHIO
CONTACT PERSONS
Ms. Darlene Hawkins
Chief, Bureau of Fraud Prevention and Detection
Department of Human Services
30 E. Broad Street, 31st Floor
Columbus, 0H 43266-0423
TEL: (614) 445-5800
Information provided by:
Ms. Jane Wasman
Bureau of Fraud Control
Department of Human Services
30 E. Broad Street, 31st Floor
Columbus, 0H 43266-0423
TEL: (614) 742-4240
FAX: (614) 444-8021
DELIVERY STRUCTURE
Public assistance and social services are supervised by the Department
of Human Services District Offices and administered by the 88 County Departments
of Human Services.
APPROACH TO EARLY DETECTION/PREVENTION
OVERVIEW: Ohio began an Early Fraud Detection and Prevention (EDP) Program in 1991. The EDP Program is a pre-eligibility verification activity which identifies potential fraud and overpayment in public assistance before applications are approved. Eligibility Workers are trained to recognize signs of possible client error or abuse through the use of in-depth interviewing skills and an Error-Prone Profile. Suspicious cases are referred to an EDP Investigator for a quick, focused investigation.
Nine Counties piloted the Program, initially, and since 1991, nearly all Counties have joined the Program.
Early Fraud Detection and Prevention is utilized in AFDC, Food Stamps and General Assistance Programs.
ORGANIZATIONAL STRUCTURE/REFERRAL PROCESS: The EDP Program is supervised by the Bureau of Fraud Control, Department of Human Services, at the State level, and administered by the Counties. The Investigators take referrals from Income Maintenance Workers in cases with suspicious circumstances which the Income Maintenance Worker has not been able to resolve.
HIGH RISK PROFILING: Referral Criteria to help Income Maintenance Workers identify error-prone cases have been developed by the State, but each county has adapted the criteria to suit particular needs.
Before cases can be referred for investigation they must meet all of these three criteria:
1) case has a questionable situation,
2) Eligibility Worker is unable to resolve the issue using normal case work methods,
3) case must meet the Error-Prone Profile (EPP).
MOST FREQUENT TYPES OF REFERRALS: This information was not provided.
TIME FRAMES FOR INVESTIGATION: The Investigators have a 5 day limit to complete the investigation. If the time limit cannot be met, the case is returned to the caseworker. During the pilot study, the average working time, per case, was 1.6 hours.
TRAINING: A detailed Fraud and Overpayment Recovery Investigator's Handbook has been prepared for use of Investigators. Eligibility Workers are trained to recognize signs of client error or abuse through the use of in-depth interviewing skills and an Error-Prone Profile.
SUPPORTING COMPUTER SYSTEMS/INTERFACES: The Income Eligibility Verification System (IEVS), a federally mandated program, provides information on income and other benefits clients may be receiving, by matching Social Security numbers with:
Bureau of Employment Services (quarterly earnings of most Ohio employees and unemployment compensation benefits).
Social Security Administration (SSA) - information about Social Security benefits paid to an individual, and annual wage earnings reported to SSA by IRS.
Internal Revenue Services (IRS) - information is reported on unearned income on an annual tax year basis.
EVALUATION/COST-BENEFIT: In 1994, the cost avoidance (one-month calculation) was $2,215,187 dollars with labour costs of $333,766 dollars, a cost-benefit ratio of 6.6 to 1. Projected cost-benefit (using a six-month calculation) is much higher at 36 to 1.
About 50% of applications referred to the EDP Program were found to contain false information.
The EDP Program was found to:
improve Program integrity
improve worker morale
improve working relationship between Income Maintenance workers and Investigators
reduce error rate
reduce caseloads
"save the client from himself".
OTHER FRAUD CONTROL PROGRAMS
All Counties have Fraud Investigators (usually combined with overpayment
and/or EDP responsibilities) to handle referrals for on-going, active cases.
PENNSYLVANIA
CONTACT PERSONS
Mr. Donald McCarthy
Chief, Department of Special Investigations
Office of Fraud and Abuse
P.O. Box 2675
Harrisburg, PA 17101-2675
TEL: (717) 783-3709
FAX: (717) 772-4986
DELIVERY STRUCTURE
Public assistance and social services are administered by the
Department of Public Welfare through Assistance Offices in 67 counties.
APPROACH TO EARLY DETECTION/PREVENTION
OVERVIEW: Pennsylvania piloted its Front-End Investigation, Prevention and Detection Program in five offices within one County in 1988. There are now 30 Units established across the State, with another 7 to be established in 1995.
The Program was based upon information received from several States, including California, New York, Virginia, Arizona, and New Jersey.
All Assistance Programs, AFDC, Food Stamps, Medicaid, and General Assistance, are subject to Front-End Investigation.
ORGANIZATIONAL STRUCTURE/REFERRAL PROCESS: The Front-End Investigation
Program operates within the Division of Special Investigations, Office
of Inspector General, Department of Health and Human Services.
The Division of Special Investigations has four Area offices through which the Program is supervised, however, the Investigators are physically located in the County Assistance Offices which operate Front-End Programs.
Referrals are initiated by Pre-Screen or Intake Workers in the local Assistance Offices, and forwarded directly to the Fraud Investigator. The completed investigation report with factual summary (and no recommendation as to eligibility) is sent back to the Pre-Screen Intake Supervisor for one of the following actions:
a) case authorized (no reduction in grant)
b) case not authorized/rejected
c) case voluntary withdrawal
d) case authorized (with reduced benefits)
e) case fair hearing pending
f) case not authorized - based on factors other than the investigation
g) other actions
HIGH RISK PROFILING: Referral Criteria have been developed to be used as a guideline - they are presently being revised and updated.
MOST FREQUENT TYPES OF REFERRALS:
a) incorrect address
b) incorrect Household Composition
c) undeclared Income/Resources
TIME FRAMES FOR INVESTIGATION: The goal for completing a Front-End Investigation is within 5 days of referral from Pre Screen/Intake worker.
TRAINING: Newly-hired Welfare Fraud Investigators are given a two-week training course covering use of computer systems, Front-End Investigation criteria, administrative policies and procedures, etc..
Division of Special Investigations Regional Managers conduct one-day training sessions with all Pre Screen/Intake staff at each office. The local Investigators are also present for this training so they can answer questions and begin to establish a good rapport with office staff.
SUPPORTING COMPUTER SYSTEMS/INTERFACES: Investigators have access to the Department of Public Welfare's database systems. The Investigators also have access to the following (on-line or through documented requests):
Bureau of Motor Vehicles
Credit Bureau Reports
Metro Net (address searches)
Unemployment Compensation benefits
Bureau of Labour and Industry Employment Data
Voter's Registration Records
Dun and Bradstreet Business Information Reports
Information regarding clients can be shared with other States/jurisdictions on a case by case basis.
PROBLEMS EXPERIENCED WITH EDP PROGRAM: The major problem to date is a shortage of referrals from the Pre Screen/Intake worker to Investigators. There may be several reasons:
philosophical disagreement with the concept of the Program
fear of possible lay off due to reduced caseloads
Union concerns regarding transfer of work responsibilities
lack of understanding of referral criteria.
EVALUATION/COST-BENEFIT: The cost-benefit ratio is 1 to 8.4 (a six-month calculation for AFDC, Food Stamps, and Medicaid in calculating savings). Either a six-month calculation or a two-month calculation is used for General Assistance Programs, depending upon the Program involved.
The benefits of having the Investigation Unit physically located near the Benefit Payments eligibility staff have been:
effective communication
timely referral of cases
speedy resolution of cases
feedback on cases
accessibility to case files.
OTHER FRAUD CONTROL PROGRAMS
The Division of Special Investigations also maintains a "tipline" and does complete Fraud Investigations on on-going cases. These investigations may result in criminal charges being filed with the District Attorney's Office or in the establishment of an overpayment. The State is currently conducting a client data-match with New Jersey.
SOUTH DAKOTA
CONTACT PERSONS
Ms. Martha Armstrong
Assistant Program Administrator, Recoveries
Department of Social Services
700 Governors Drive
Pierre, South Dakota 57501
TEL: (605) 773-3508
FAX: (605) 8666-5098
DELIVERY STRUCTURE
Public Assistance and Social Services are administered by the
Department of Social Services and are delivered through local offices and
districts under the supervision of four District Managers.
APPROACH TO EARLY DETECTION/PREVENTION
OVERVIEW: South Dakota has Early Fraud Prevention Programs for both AFDC and Food Stamps cases. Their program was modelled after Florida's design. Program goals are:
to provide investigative resources for workers
to facilitate expeditious determination of eligibility
to reduce State and Federal fund expenditures
to reduce fraud
ORGANIZATIONAL STRUCTURE/REFERRAL PROCESS: The Fraud Prevention Investigators are located within the Office of Recoveries and Investigations, Department of Social Services. Referrals for up-front investigations are routed from the caseworker via the casework Supervisor, based on pre-established criteria and are made only after the caseworker has attempted to verify and document all eligibility factors that are, by policy, their responsibility. Upon acceptance of the referral, the Investigator attempts to verify and document questionable eligibility factors by use of resources not available to the caseworker. Once the investigation is complete, and the finding recorded, the decisions regarding disposition of the case are made by the caseworker. The Investigator does not make recommendations regarding eligibility, however, the Investigator may refer cases for Administrative Disqualification Hearings where appropriate.
HIGH RISK PROFILING: Referral criteria are used by the caseworker in referring suspect cases to the Investigator. While 17 criteria have been established, the caseworker can refer any case on which he believes eligibility information is being withheld or is inaccurate.
MOST FREQUENT TYPES OF REFERRALS: The most commonly referred cases are:
Deprivation - 51% (involves an alleged absent parent either being in the home or providing sufficient guidance and support to the children that there is no deprivation for purposes of eligibility for AFDC benefits).
Household Composition Issues - 12.5% (unreported adults in the home or children not in the home).
Failure to report assets or other resources - 19%.
Unreported income cases - 11% (this number is relatively small due to up-front computer matching with Department of Labour records).
TIME FRAME FOR INVESTIGATION: The investigation must be completed within 5 days from the date received. Investigation results are recorded as:
"S" (Substantiated) - substantive evidence which can be documented was found to support the allegation of fraud.
"U" (Groundless) - no substantive evidence was found to support the allegation of fraud, or evidence was found to indicate fraud was not being committed.
"I" (Interrupted) - investigation was interrupted by client withdrawal of application, or, in the case of expedited Food Stamps, case closure resulting from client failure to complete monthly report or client's withdrawal from the program before investigation was completed.
TRAINING: A Training Guide has been developed for the use of both
the Investigators and Eligibility Workers.
SUPPORTING COMPUTER SYSTEMS/INTERFACES: Wage matching with Department of Labour and other matches are automatically made upon application.
PROBLEMS EXPERIENCED WITH EDP PROGRAM: None were noted.
EVALUATION/COST-BENEFIT: No specific information in this regard
was provided.
OTHER FRAUD CONTROL PROGRAMS
No specific information was provided relating to other fraud control programs.
TENNESSEE
CONTACT PERSONS
Mr. Robert Bumbalough
Assistant Commissioner, Administrative Services
Department of Human Services
Citizens Plaza, 400 Deaderick Street
Nashville, TN 37248-0080
TEL: (615) 741-6982
DELIVERY STRUCTURE
Tennessee is a State administered system.
APPROACH TO EARLY DETECTION/PREVENTION
The EDR program in Tennessee is based entirely on the program developed by Florida, so no material was forwarded.
Early fraud prevention is in place in the four major urban centres. The biggest hurdle they had to overcome in implementing Early Fraud Prevention was the resistance of front line workers. "Without the referrals, you can't do the investigations." Many assistance workers felt that the error rate was a reflection on their abilities and tried to minimize referrals for Early Fraud Prevention. This has been overcome by active management practices and education of front line workers that everybody is on the same team.
OTHER FRAUD CONTROL PROGRAMS
Administrative Disqualification is seen as a very effective tool in deterring welfare fraud. Tennessee faces the same problem as many other states and provinces in that the court system is overloaded and there is no high priority for welfare fraud cases and the difficulty of proving intent is much harder in the criminal court system. It is very hard for a person to plead ignorance, at an administrative hearing, if they have a prior record of fraud.
TEXAS
CONTACT PERSONS
Mr. Gordon Hardy
Inspector General
Department of Human Services
Mail Code E-201
P. O. Box 149030
Austin, TX 78714-9030
TEL: (512) 450-4217
FAX: (512) 450-
DELIVERY STRUCTURE
Public Assistance and Social Services are administered by the Department of Human Services, and delivered through 10 Regional Offices and local offices in 254 Counties.
APPROACH TO EARLY DETECTION/PREVENTION
OVERVIEW: Texas has had a Fraud Prevention Investigation Program for three years, the principal concept of which is to provide timely investigative assistance to delivery staff during the eligibility determination process. The goal is to prevent benefits or services from being obtained as a result of fraudulent acts.
The objective of Fraud Prevention Investigations is to obtain sufficient documentation for program staff to make an accurate eligibility determination and for use in any subsequent Administrative Disqualification Hearings to support eligibility-related decisions.
ORGANIZATIONAL STRUCTURE/REFERRAL PROCESS: The Fraud Prevention Investigation Program is managed by the Office of Inspector General, Department of Human Services. In the early stages of the program, 24 of the 80 Investigators were assigned specifically to fraud prevention cases. However, at this time all 80 Investigators are involved in prevention investigations 30% of the time. It was found this process was most effective, especially in terms of building rapport with the Income Assistance delivery staff.
Referrals for investigation are based on a pre-established criteria and are made directly to the Investigator by Program staff after attempts have been made to verify and document the suspect eligibility factors as directed by Program policy. For those cases referred but not accepted for investigation, notification on non-approval must be given to Delivery staff with 24 hours.
Investigators do not make recommendations regarding eligibility of applicant when reporting outcome of investigation - eligibility determination is the responsibility of Program Delivery staff.
HIGH RISK PROFILING: Pre-established referral criteria are used, based on unresolved eligibility factors.
TIME FRAMES FOR INVESTIGATION: All fraud prevention investigation work must be completed within 5 working days, except for Medicaid cases where an acceptable time frame can be negotiated with Medicaid Eligibility Workers.
A Fraud Prevention Investigator may refer second and subsequent Fraud Prevention Investigations on the same applicant to an Administrative Disqualification Hearing, based on pre-established criteria:
a) Applicant made a false statement documented in the application or by the Eligibility Worker, and
b) the false statement would have resulted in the applicant receiving benefits to which he was not entitled.
c) The applicant has previously been the subject of a Fraud Prevention Investigation that resulted in a benefit reduction or denial because of false information.
d) The applicant has previously been found to have committed an intentional Program Violation by an Administrative Disqualification Hearing.
e) The applicant has previously been found guilty by a Court or had adjudication deferred as a result of a Fraud Investigation.
TRAINING: No specific information was received regarding training. Investigation guidelines are provided for the Investigators.
SUPPORTING COMPUTER SYSTEMS/INTERFACES:
Interfaces: Wage Matching Report
Computer inquiring of Unemployment Benefits information
Fraud Prevention Investigations are tracked at each stage for administrative information and cost-benefit calculations on the case management system.
PROBLEMS EXPERIENCED WITH EDP PROGRAM: There were no problems noted.
EVALUATION/COST BENEFIT: In 1994, 4157 Fraud Prevention Investigations
were completed, resulting in a savings of $11.5 million dollars.
OTHER FRAUD CONTROL PROGRAMS
There is a Post-Certification Fraud Investigation Program, also within the Office of Inspector General, Department of Human Services.
VERMONT
CONTACT PERSONS
Mr. Bert Smith
Director, Division of Fraud
Department of Social Welfare
Agency of Human Services
103 S. Main Street
Waterbury, VT 05676
TEL: (801) 242-2860
FAX: (801) 241-2830
DELIVERY STRUCTURE
Income maintenance programs are provided through 12 Department
of Social Welfare District Offices. Social Services are provided through
12 District Offices of the Division of Social Services.
APPROACH TO EARLY DETECTION/PREVENTION
OVERVIEW: Vermont has had a Front-End Verification Program since March, 1990, within the Fraud Division of the Department of Social Welfare. The Program operates informally, with no formal policies or procedures, and covers all Programs administered by the Department of Social Welfare. The Program was designed in-house, in conjunction with the Federal Income and Employment Verification System (IEVS) initiative.
ORGANIZATIONAL STRUCTURE/REFERRAL PROCESS: Eligibility Workers
make referrals to Fraud Investigators via the Fraud Director after all
steps, as required by policy, have been taken to verify the questionable
information.
MOST FREQUENT TYPES OF REFERRALS:
Household Composition
TIME FRAMES FOR INVESTIGATION: The Investigator is required to report back to the Eligibility Worker within 3 to 5 days of receiving the request for investigation. The worker must make a decision regarding eligibility within 30 days of application date.
TRAINING: There is no training specific to the Front-End Verification Program.
SUPPORTING COMPUTER SYSTEMS/INTERFACES: Vermont Department of Social Welfare has a State-wide computer system to manage the Welfare Program. Information on clients may be shared on a case-by-case basis and some caseload matches have been done with other States from time to time.
PROBLEMS EXPERIENCED WITH EDP PROGRAM:
workers appear reluctant to use the system (less than 1% of Intake cases are referred for investigation)
Timeliness of Investigator's reports.
EVALUATION/COST-BENEFIT: No evaluation has been done. Case by
case results show the Program is an effective use of Investigator's time.
OTHER FRAUD CONTROL PROGRAMS
No specific information was provided on Vermont's other fraud control programs.
WASHINGTON
CONTACT PERSONS
Mr. Mike Smith
Chief, Office of Special Investigations
Department of Social and Health Services
P. O. Box 45817
Olympia, WA 98504-5817
TEL: (206) 438-8118
FAX: (206) 438-7172
Information provided by:
Mr. Bruce Hume
Regional Manager
Office of Special Investigations
Department of Social and Health Services
5520 - 840 N. Broadway
Everett, WA 98201-1293
DELIVERY STRUCTURE
Public Assistance and Social Services are administered by the
Department of Social and Health Services. Service is provided through local
offices under the supervision of six Regional Offices.
APPROACH TO EARLY DETECTION/PREVENTION
OVERVIEW: The Department of Social and Health Services began a Fraud Early Detection/Prevention Program (FRED) pilot project in September, 1987, after meeting with staff from several other States already operating successful EDP Programs. The Department's Office of Special Investigations, which implemented and monitored the pilot project in two Community Services offices, found that when the pilot was concluded in June, 1989, the results were sufficiently impressive to convince the State legislature to provide funds for State wide implementation of the FRED Program.
Purposes of FRED:
a) save benefits for families requiring assistance
b) reduce investigations of cases where fraud is found after assistance is authorized
c) reduce prosecution of recipients
d) provide a cost effective measure for error reduction and eliminate need to recover overpayments.
ORGANIZATIONAL STRUCTURE/REFERRAL PROCESS: The FRED Program staff are located in Community Service offices, but the Office of Special Investigation (OSI) administers and staffs the program. The FRED Unit functions as a separate unit within OSI with 62 positions, including supervisory and administrative staff. The FRED Investigators, trained criminal investigators, are assigned cases (referrals) involving new applications, eligibility reviews and recertification for AFDC, Food Stamps, Medical and General Assistance Programs.
The Office of Special Investigations is not part of the welfare office chain of command, rather it has a reporting channel to a high level within the department. This provides "divisional neutrality" and allows OSI staff to serve all agency divisions with investigative services. It also prevents OSI staff from being diverted to Intake or other special needs areas, thus preserving the integrity and viability of the Program.
Referrals for FRED investigations are made by the Financial Service Specialist (FSS) on cases where information provided by clients is suspected to be fraudulent and where the FSS has been unable to verify the information. Upon completion of the investigation, findings are reported to the FSS in writing so eligibility determination can be made. The Investigator does not make recommendations in this regard.
HIGH RISK PROFILING: General referral guidelines have been developed but are not considered all-inclusive.
MOST FREQUENT TYPES OF REFERRALS: This information was not provided.
TIME FRAMES FOR INVESTIGATION: The original investigative time frames were 72 hours for expedited Food Stamp cases and 10 days for other referrals. As volume of referrals grew, these time frames were not feasible and it is now hoped referrals can be handled in four to five weeks. The FSS worker make eligibility determination based on available information with necessary benefit adjustments or case closure being effected after the investigation report is received. Overpayments may result.
TRAINING: Newly hired investigators undergo an in-house training program, supervised by the investigator's immediate Manager. The training is expected to take approximately 200 hours and consists of self-study, one-on-one training/observation, small group sessions and field/on the job experience. FRED Investigators also receive 16 hours of specialized Financial Eligibility training.
SUPPORTING COMPUTER SYSTEMS/INTERFACES: Investigators have access to the Department's State wide computer system.
Information on clients is shared with other jurisdictions/agencies on a case by case basis.
PROBLEMS EXPERIENCED WITH EDP PROGRAM:
a) not all workers refer cases (may not agree with Program goals and philosophy)
b) early in the Program, court challenges were made in an attempt to shut down the Program. The only concession gained through these challenges was that FRED Investigators are now required to give a warning before entering a dwelling to interview the client. The client does not have to talk to the Investigator or provide access into the home. The warning states that the client will not be denied benefits just because he refuses entry into the home or refuses to speak to the Investigator. This warning requirement is currently being reviewed by the State legislature and it is hoped the issue will be resolved in favour of the Department.
c) Initially, there was almost universal scepticism and resistance to the Program by Financial Services staff. However, based on the very successful pilot project in two of the offices, other offices demanded their own FRED Program.
EVALUATION: The "go-slow" approach to implementation allowed careful
selection of Investigative staff, with an emphasis on people skills as
well as investigative skills. "The OSI staff are required to build strong
relationships with Financial staff and to act as servants. This is an OSI
"culture" objective. Without good will and excellent relationships between
Investigators and Financial Services staff, the Program would fail. Service,
Service, Service are the three most important items produced by the Program".
OTHER FRAUD CONTROL PROGRAMS
The OSI has General Investigations Units (to conduct in-depth investigations of post and/or current Public Assistance Eligibility, directed towards criminal charges), and Internal Affairs Investigations Units (to conduct investigations into complaints against Departmental staff or vendors).
The Office of Special Investigations maintains a Welfare Fraud hot line at State Headquarters.
WEST VIRGINIA
CONTACT PERSONS
Mr. James Crowder
Director
Investigations and Fraud Management
Bureau of Human Resources
Bldg. 6, State Capitol Complex
Charleston, WV 25305
TEL: (304) 766-2617
FAX: (303) 766-2624
DELIVERY STRUCTURE
Public Assistance and Social Services are administered by the
Department of Health and Human Resources through 27 Regional Offices.
APPROACH TO EARLY DETECTION/PREVENTION
OVERVIEW: A Front-End Fraud Unit was established as a pilot project in three Counties in 1992. The Program was developed after study and research of several other States' Programs, particularly New Jersey and Wisconsin. The Program is now established and operates in nine Counties. Referrals are accepted on Food Stamp and AFDC cases.
ORGANIZATIONAL STRUCTURES/REFERRAL PROCESS: The Front-End Fraud
Unit operates within the Investigations and Fraud Management Branch, Office
of Inspector General, Department of Health and Human Services. There are
six Investigator positions (reclassified Income Maintenance workers) to
take referrals from Income Maintenance workers. Once the investigation
is completed, a report is sent back to the referring worker who then makes
a decision regarding eligibility.
HIGH RISK PROFILING: Referral criteria have been developed for the use of the Income Maintenance Workers.
MOST FREQUENT TYPES OF REFERRALS: The majority of referrals for investigation relate to:
Household Composition
Unreported Income
TIME FRAMES FOR INVESTIGATIONS: There is a five day turnaround time for the investigation to be completed.
TRAINING: Training of the Verification Specialists is handled by the Investigations and Fraud Management Unit staff, and encompasses relevant Income Maintenance policy and in depth field training in the principals of Fraud Investigation.
PROBLEMS EXPERIENCED WITH EDP PROGRAM:
Not all Counties are generating a sufficient number of referrals for investigation. Staff are working on establishing good working relationships within the Counties and it is felt referrals will increase as the Program and its impact become better known.
EVALUATION/COST-BENEFIT: Projected cost-benefit of the Program for
this year is 1 to 5.4 - the Program Director feels this cost-benefit ratio,
though very impressive, will improve as the Program continues to evolve
into a very productive and efficient Fraud Prevention tool.
OTHER FRAUD CONTROL PROGRAMS
No specific information was received relating to other fraud control measures.
WISCONSIN
CONTACT PERSONS
Mr. Tony Welch
Director, Office of Inspector General
Division of Economic Support
1 W. Wilson Street
Madison, WI 53707-7953
TEL: (608) 266-6845
FAX: (608) 267-3240
DELIVERY STRUCTURE
Public Assistance and Social Services are administered by 72 County
Social Service Offices.
APPROACH TO EARLY DETECTION/PREVENTION
OVERVIEW: Wisconsin has had an EDP Program, called Front-End Verification (FEV) for Food Stamps for many years - FEV was added for AFDC and Medicaid as well, in 1988, with the introduction of enhanced Federal funding for such programs.
Front-End Verification is intended to prevent the issue of incorrect benefits through intense scrutiny of cases exhibiting characteristics of potential Program violation.
ORGANIZATIONAL STRUCTURE/REFERRAL PROCESS: The FEV Program is managed through the Office the Inspector General within the Department of Health and Social Services. Programs are administered locally, through the Counties, and supervised by the State. The local agencies may use in-house Investigators, contracted services from local Law Enforcement Officials or Private Investigators.
Normally the referrals are made by the Economic Support Worker to the designated Fraud Investigator via the Fraud Supervisor.
HIGH RISK PROFILING: Each County develops its own error-prone characteristics based on experience and guided by an error-prone case profile included in the State Income Maintenance Manual.
MOST FREQUENT TYPES OF REFERRALS: The most frequently found cases are unreported income, with some Counties reporting Household Composition as their primary problem.
TIME FRAMES FOR INVESTIGATION: The time frame for FEV, from referral to completion, is a maximum of 30 days. The general expectation is that the referral be completed within two weeks. Payments to the client are not delayed beyond the 30 days, even if the investigation outcome is still unknown.
TRAINING:
The State trains Economic Support Specialists (caseworkers) in identifying Fraud and making referrals
The Wisconsin Council on Welfare Fraud provides regional training and an annual training conference
All workers making referrals, FEV Investigators, Fraud Investigators and anyone working in the Program are expected to be trained.
SUPPORTING COMPUTER SYSTEMS/INTERFACES:
The States Fraud Programs are being automated via the Client Assistance Re-employment and Economic Support System now under implementation.
Computer matches are done periodically with other State and Federal data bases where discrepancies indicate a potential eligibility problem.
PROBLEMS EXPERIENCED WITH EDP PROGRAM: Administration costs of the Program, particularly the use of Law Enforcement personnel in the FEV process, is a problem. Home visits in the verification process are also problematic. The client must be notified (verbally or written), that a home visit may be made within 10 working days. Refusal by the client to allow entry to the residence may result in a delay of issue of benefits, but the client cannot be threatened with automatic denial of benefits if permission to enter is not given.
EVALUATION/COST-BENEFIT: Using a one-month calculation of cost savings
due to no benefits being paid, a cost savings of $8 million dollars was
realized in 1993. Administrative costs for the Program were $3 million.
The Program is viewed as being cost effective, despite relatively high
administrative costs.
OTHER FRAUD CONTROL PROGRAMS
The Office of Inspector General, within the Department of Health and Social Services, also carries out Fraud Investigations on active cases upon referral from the ES Worker, hot line tips, or as a result of discrepancies that come out of computer matches with data bases such as Unemployment, Wages, Social Security, Motor Vehicle Registrations, etc..
LIST OF STATE CONTACTS
All states were contacted, although not all states provided information in the form of documents. The name of the contact person in each state is provided in the following chart, which also shows which level of government has primary administrative responsibility for human services in each state or jurisdiction. Also included is the fax and phone number for the contact person who provided information on that state's programs. (S = State; C = County; L = Local; M = Municipal)
| STATE | CONTACT | PHONE | FAX | AFDC | FS | GA | MAP |
| Alabama | Charles Cook | 205-242-1331 | S | S | ....... | S | |
| Alaska | Ivie Hall | 907-277-3338 | 908-277-3339 | S | S | S | S |
| Arizona | Ed Rana | 602-255-0098 | 602-254-8568 | S | S | S | S |
| Arkansas | Chuck Milburn | 501-682-8660 | 501-682-8367 | S | S | S | S |
| California | Dick Ebel | 916-445-0031 | 916-445-1053 | S/C | S/C | C | S |
| Colorado | Richard Rowe | 303-353-1551 | 303-353-5215 | C | S/C | C | S/C |
| Connecticut | James Wietrak | 203-424-5903 | 203-424-4945 | S | S | L | S |
| Delaware | William Garfinkel | 302-577-4564 | 302-577-4790 | S | S | S | S |
| District of Columbia | Larry Morey | 202-619-3208 | 202-401-0502 | L | S | L | L |
| Florida | Christo Tolia | 904-488-0620 | 904-488-6975 | S | S | C | S |
| Georgia | Peggy Peters | 404-473-2317 | 404-473-4204 | S/C | S/C | C | S |
| Hawaii | Richard McDurmin | 808-586-7177 | S | S | S | S | |
| Idaho | Judy Brooks | 208-334-5819 | 208-334-5817 | S | S | C | S |
| Illinois | Sally Ferguson | 217-524-5099 | 217-785-2324 | S | S | S/L | S |
| Indiana | Kevin Reilly | 317-232-4371 | 317-232-1240 | S | S | L | S |
| Iowa | Jeff Voskans | 515-281-6377 | 515-242-5022 | S | S | C | S |
| Kansas | John Maxwell | 316-337-6312 | 913-296-4960 | S | S | S | S |
| Kentucky | Jim Leemaster | 502-564-2815 | 502-564-6546 | S | S | L | S |
| Louisiana | Christine Comeaux | 504-342-4112 | 504-342-2047 | S | S | N/A | S |
| Maine | Robert Stillings | 207-287-2866 | 207-287-5096 | S | S | L | S |
| Maryland | John Murray | 410-767-7069 | S/L | S/L | S/L | S | |
| Massachussets | Glen Fealy | 617-727-6950 | 617-727-5045 | S | S | S | S |
| Michigan | Richard O'Herron | 517-373-8485 | 517-335-6364 | S | S | N/A | S |
| Minnesota | Daniel Haley | 612-296-4699 | 612-282-6120 | C | C | C | C |
| Mississippi | James Giddy | 601-359-4891 | 605-359-4910 | S | C | C | S |
| Missouri | Larry Dickerson | 314-751-0903 | 314-751-0196 | S | S | S | S |
| Montana | Erich Mundinger | 406-444-4120 | 406-444-1970 | S/C | S/C | S/C | S/C |
| Nebraska | Michael Rumbaugh | 402-471-9148 | S | S | C | S | |
| Nevada | Gary Stagliano | 702-687-4746 | 702-687-5080 | S | S | C/L | S |
| New Hampshire | Linda Capuchino-Davidson | 603-271-4392 | 603-271-2896 | S | S | L | S |
| New Jersey | Dennis Micai | 609-989-4370 | 609-396-3276 | C | C | L | S |
| New Jersey | Elaine Minkler | 908-745-3774 | 908-745-4558 | C | C | L | S |
| New Jersey | Richard Bakley | 609-225-8942 | 609-225-8944 | C | C | L | S |
| New Mexico | Joe Chavez | 505-827-7451 | S | S | S | S | |
| New York | John Wrafter | 518-474-9727 | C | C | C | C | |
| North Carolina | Raymond Riddle | 919-733-9889 | C | C | C | C | |
| North Dakota | Raymond Feist | 701-224-4024 | C | C | C | C | |
| Ohio | Jane Wasman | 614-742-4240 | 614-444-8021 | C | C | C | C |
| Oklahoma | Charles Garrett | 405-424-5880 | S | S | N/a | S | |
| Oregon | Art Kapteyn | 503-986-2418 | S | S | S | S | |
| Pennsylvania | Donald McCarthy | 717-783-3709 | 717-772-4986 | S | S | S | S |
| Rhode Island | William Dolan | 401-477-2844 | S | S | S/L | S | |
| South Carolina | Laurel Metzer | 803-737-6010 | S | S | S/C | S | |
| South Dakota | Martha Armstrong | 605-773-3508 | 605-777-6834 | S | S | C | S |
| Tennessee | Robert Bumbalough | 615-741-6982 | S | S | L | S | |
| Texas | Gordon Hardy | 512-450-4217 | S | S | C/M | S | |
| Utah | Brenda Hofer | 801-538-4405 | 801-536-8509 | S | S | S | S |
| Vermont | Bert Smith | 802-242-2860 | 802-241-2830 | S | S | S | S |
| Virginia | Gordon Sheer | 804-692-1842 | L | L | L | S | |
| Washington | Bruce Hume | 206-339-1813 | 206-339-1874 | S | S | S | S |
| West Virginia | James Crowder | 304-766-2617 | 304-766-2624 | S | S | S | S |
| Wisconsin | Tony Welch | 608-266-6845 | 608-267-3240 | C | C | C | S/C |
| Wyoming | Beverley Campbell | 307-777-6963 | 307-777-7747 | S | S | S | S |
