Audit Blasts California|on Welfare Fraud

     SACRAMENTO (CN) – California ignores recommendations from a 6-year-old audit of its Department of Social Services and does not efficiently monitor and prosecute welfare fraud, costing taxpayers millions, the state auditor said Tuesday.
     The follow-up investigation by the California State Auditor revealed that just one of its initial 15 recommendations have been implemented by Social Services, which continues to lack oversight of counties’ management of welfare fraud investigations.
     The auditor says welfare programs, including CalFresh and CalWORKS, are not properly monitored and that Social Services has not corrected problems with the way counties determine eligibility for social programs.
     “The weaknesses we identified in our 2009 audit and that we determined still continue during this follow-up audit diminish the efficiency and effectiveness of Social Services’ guidance and oversight of counties’ antifraud efforts,” State Auditor Elaine Howle wrote.
     The 54-page audit criticizes Social Services for failing to improve fraud monitoring nearly six years after the initial audit.
     “This report concludes that Social Services’ oversight of counties’ antifraud efforts has fallen short,” the audit states.
     The audit found that while some counties are successful and thrifty with their investigations of welfare fraud, Social Services gives no advice to counties looking for ways to save money fighting fraudulent claims.
     “Because Social Services is not providing guidance to counties in these areas, counties may continue to use inconsistent fraud investigation practices that vary in their effectiveness and thus the state may not maximize the amount of prevented overpayments,” Howle wrote.
     Howle questioned the cost effectiveness of the Statewide Fingerprint Imaging System (SFIS) for applicants who apply for housing and food assistance. In 2014, operating SFIS cost taxpayers $12 million and identified only 57 cases of welfare fraud: a cost of $215,000 per case.
     The audit says Social Services refuses to evaluate the program and prove it’s worth the high cost to operate it, and that it is struggling to close cases identified by SFIS.
     More than 8,500 SFIS cases are backlogged and Social Services hasn’t helped counties categorize the cases as administrative error or possible fraud.
     Since 2009, several states have dropped the expensive fingerprint system, including New York and California, for its Supplemental Nutrition Assistance Program.
     Howle recommends Social Services be forced to report to the Legislature the cost of SFIS and the actual amount of fraud it prevents.
     Howle reiterates the recommendations from the 2009 audit, including developing a formula for counties to analyze the amount of fraud saved against the resources used to prevent it, and to study why some counties are more efficient in monitoring fraud than others.
     Social Services could not be reached for comment Tuesday, but its director, Will Lightbourne, issued a response letter to the audit agreeing with most of Howle’s recommendations.
     “The CDSS believes that early fraud prevention is the most effective tool in promoting program integrity,” Lightbourne wrote. “Effective fraud prevention saves taxpayer dollars by preventing payments to ineligible claimants, reduces over issuances and the costs to investigate and prosecute fraud. In this time of limited resources, the CDSS is mindful of focusing our efforts where they can be most cost-effective and integrity-intensive.”

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