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California State Auditor Report Number : 2015-503

Follow-Up—California Department of Social Services
It Has Not Corrected Previously Recognized Deficiencies in Its Oversight of Counties’ Antifraud Efforts for the CalWORKs and CalFresh Programs

Responses to the Audit

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California Department of Social Services

California State Auditor’s Comments on the Response From the California Department of Social Services



Response From the California Department of Social Services

California Department of Social Services (CDSS)
RESPONSES TO AUDIT RECOMMENDATIONS

California State Auditor (CSA)

Audit #:   2015-503

Audit Title:   California Department of Social Services: It Has Not Corrected Previously Recognized Deficiencies in the Oversight of Counties’ Antifraud Efforts for the CalWORKs and CalFresh Programs

Recommendations for Social Services:

Recommendation 1:

To ensure that staff monitors both counties’ processing of match lists and counties’ reporting of investigation activity in a consistent and effective manner, Social Services should develop and document formal procedures for the Income Eligibility and Verification System (IEVS) and Special Investigations Unit (SIU) review processes.

CDSS Response:

Social Services will develop and implement formal procedures for the IEVS and SIU review processes by April 2016.

Recommendation 2:

Because Social Services will not implement our recommendation to gauge the cost-effectiveness of Statewide Fingerprint Imaging System (SFIS), the Legislature should require Social Services to annually report on the cost of SFIS and the fraud that it detects. Specifically, the Legislature should require Social Services to annually report the following metrics:

The Legislature should require Social Services to determine the cost-effectiveness of any proposed alternative to SFIS in advance of Social Services adopting any such alternative method or tool to detect and prevent duplicate-aid fraud.

CDSS Response:

1

Social Services largely concurs that the SFIS has limited utility, and effective 2012, discontinued its use in the CalFresh Program. With the SFIS nearing the end of its contract term and technology life cycle, Social Services is in the process of identifying alternative approaches for identity verification and preventing and detecting duplicate aid. As with any major information technology solution, Social Services will assess the cost-effectiveness of any new approach to fraud prevention and detection. Such cost-effectiveness estimates will be shared with the Legislature during the budget approval process.

Recommendation 3:

To ensure that counties’ efforts to combat fraud in the CalWORKs and CalFresh Programs are effective, Social Services should address our recommendations from our 2009 audit report. The following are the parts of the recommendations from our 2009 report that we determined Social Services has not implemented:

To ensure that all counties consistently gauge the cost-effectiveness of their early fraud activities and ongoing investigation efforts for the CalWORKs and CalFresh Programs, Social Services should develop a formula to regularly perform a cost-effectiveness analysis using information that the counties currently submit. Specifically, this formula should measure the savings that a county achieves for each $1 spent on antifraud efforts.

CDSS Response:

2

Cost is only one aspect of the effectiveness of anti-fraud efforts. A more important aspect may be deterrence, which is often unquantifiable. Social Services will review available county data to provide updated cost-effectiveness formula to address the CSA recommendations. Social Services anticipates completing this assessment by June 2016.

Recommendation 4:

To make certain that counties receive the greatest benefit from the resources they spend on antifraud efforts related to CalWORKs and CalFresh cases, Social Services should, using the results from the recommended cost-effectiveness analysis, determine why some counties’ efforts to combat welfare fraud are more cost-effective than others.

CDSS Response:

The second of the State Auditor’s comments on the response from Social Services applies to the following statement.

As noted in Recommendation 3, Social Services will determine by June 2016 whether the current cost-effectiveness formula will be revised. Although it should be noted that what might be a best practice in one county may not work for another county for a variety of reasons, Social Services will collect, disseminate and encourage best practices from those identified cost-effective counties.

Recommendation 5:

To make certain that counties receive the greatest benefit from the resources they spend on antifraud efforts related to CalWORKs and CalFresh cases, Social Services should seek to replicate the most cost-effective practices among the counties. Social Services should work with its legal counsel to determine whether to withhold information about these practices from public disclosure.

CDSS Response:

The second of the State Auditor’s comments on the response from Social Services applies to the following statement.

See response to Recommendation 4.

Recommendation 6:

Social Services should track counties’ prosecution thresholds for welfare fraud cases and determine whether they impacted counties’ decisions to investigate potential fraud, with a focus on determining best practices and cost-effective thresholds. If Social Services’ analysis determines that varying prosecution thresholds do impact counties’ decisions, it should then work with counties to implement the consistent use of these cost-effective methods.

CDSS Response:

3

Social Services reasserts its position that there is no direct relationship between a prosecution threshold and counties’ decision to investigate welfare fraud. As the Department has explained previously, counties have an obligation to make a fraud referral for investigation regardless of any prosecution threshold.

Recommendation 7:

Social Services should continue its efforts to ensure that more counties follow state regulations regarding the use of administrative disqualification hearings process until all counties have adopted the process.

CDSS Response:

4

Social Services conducted statewide training to provide counties guidance on the process. As of June 4, 2015, these trainings have successfully led five more counties to use the administrative disqualification hearing (ADH) process. Five additional counties are in the process of establishing their policies and procedures with the intention of implementing the county use of the ADH process. Social Services will issue an All County Letter by December 2015 to remind the counties of the ADH process requirements. Finally, the procedures referenced in Recommendation 1 will include instructions of actions to take with the counties to provide reasons and recommendations for the appropriate use of the ADH process.

Recommendation 8:

To make certain that counties receive the greatest benefit from the resources they spend on antifraud efforts related to CalWORKs and CalFresh cases, Social Services should address and promptly act on the four remaining recommendations that its steering committee provided in 2009.

CDSS Response:

Four Remaining Recommendations - Outstanding Steering Committee items:

CDSS/Fraud Bureau should:

1. Revise its county reports to include additional data on the # of investigations in the various types of welfare programs,

5

Response: The current State Fraud Investigation Activity Report (Department of Public Assistance [DPA] 266) does capture fraud investigation activities for the CalWORKs and CalFresh Programs, and it also has provisions for counties to report investigation activity for all other aid programs administered under the California Department of Social Services (see Attachment A).

2. Review the cost effectiveness of various data match systems along with county feedback on the usefulness of each type of match,

Response: Social Services will revisit prior recommendations for match improvements with county staff. The outcome will guide Social Services to prioritize what match improvements to focus on with the appropriate state departments and federal agencies. Social Services will convene a county workgroup by October 2015.

3. Provide regular reports for counties to use in monitoring the cost-effectiveness of their program integrity efforts, and

The second of the State Auditor’s comments on the response from Social Services applies to the following statement.

Response: Cost is only one aspect of the effectiveness of anti-fraud efforts. A more important aspect may be deterrence, which is often unquantifiable. Social Services will review available county data to provide an updated cost-effectiveness formula to address the CSA recommendations. Social Services anticipates completing this assessment by June 2016.

4. Maintain a central repository of fraud training ideas and materials created by counties and accessible to other counties via the Fraud Bureau.

Response: We anticipate staff will be available to implement the recommendation within 2015.

Recommendation 9:

To ensure that counties are consistently following up on all match lists, Social Services should better enforce the counties’ implementation of its recommendations from the IEVS reviews and verify implementation of the corrective action plans that counties submit.

CDSS Response:

Social Services will include processes in the IEVS review procedures that will address county match list follow-up and verification of the implementation of the county-submitted corrective action plans. Refer to Recommendation 1.

Recommendation 10:

To ensure that counties are consistently following up on all match lists, Social Services should remind counties of their responsibility under state regulations to follow up diligently on all match lists. Further, it should work with counties to determine why poor follow-up exists and address those reasons.

CDSS Response:

Social Services will issue an All County Letter by April 2016, to remind counties of the requirements to process the IEVS matches. The IEVS review procedures, which are being developed and implemented by April 2016 (as noted in Recommendation 1), will include instructions regarding actions to take with the counties to identify reasons and recommendations for timely processing of IEVS matches.

Recommendation 11:

To make counties’ review of match lists more efficient, Social Services should revive its efforts to work with the state and federal agencies that prepare the match list to address the counties’ concerns about match list formats, content, and criteria.

CDSS Response:

Social Services will revisit prior recommendations for match improvements with county staff. The outcome will guide Social Services to prioritize what match improvements to focus on with the appropriate state departments and federal agencies. Social Services will convene a county workgroup by October 2015.

Recommendation 12:

To ensure the accuracy of the overpayments that counties collect and report for CalFresh Program, Social Services should verify the counties’ overpayment collection reports.

CDSS Response:

Social Services will create a process to verify on a rotational basis the counties’ overpayment collection reports by July 2016.

Recommendation 13:

To ensure the accuracy and consistency of the information on welfare fraud activities that counties report and that Social Services subsequently reports to the federal government, the Legislature, and internal users, Social Services should perform more diligent reviews of the counties’ investigation activity reports to verify the accuracy of the information submitted.

CDSS Response:

Social Services will include instructions on the validation of the DPA 266 and corrective actions, if needed, as part of the IEVS review procedure manual. Refer to Recommendation 1.

Recommendation 14:

To ensure the accuracy and consistency of the information on welfare fraud activities that counties report and that Social Services subsequently reports to the federal government, the Legislature, and internal users, Social Services should provide counties with feedback on how to correct and prevent errors that it detects while reviewing counties’ investigation activity reports.

CDSS Response:

Social Services agrees; the IEVS review procedures, which are being developed and implemented by April 2016 (as noted in Recommendation 1), will include processes in the SIU review procedures that will address county investigations activity report accuracy.

Recommendation 15:

To ensure the accuracy and consistency of the information on welfare fraud activities that counties report and that Social Services subsequently reports to the federal government, the Legislature, and internal users, Social Services should incorporate the upcoming federal changes to the revision of its instructions for completing the counties’ investigation activity reports. In the interim, Social Services should issue clarifications for the most common errors Social Services observes counties make in reporting their investigations activities.

CDSS Response:

The Department concurs, and Social Services will advise the counties of the most common errors and instructions on how to prevent and correct errors by December 2015.


ATTACHMENT A TABLE

The California Department of Social Services provided a PDF of their Fraud Investigation Activity Report form DPA 266 (7/04). This original form exists in Excel format and can be found on the California Department of Social Services website at www.cdss.ca.gov/dssdb/res/Fraud/DPA266.xls



FRAUD INVESTIGATION ACTIVITY REPORT
DPA 266 (7/04)

INSTRUCTIONS

CONTENT

The monthly DPA 266 report contains statistical information on cases where reasonable grounds to suspect fraud have resulted in a request for investigation to the Special Investigative Unit (SIU) or the person designated to coordinate such referrals with the District Attorney (DA) or prosecuting authority, as well as cases independently acted upon by Investigating Units. The DPA 266 covers case investigations in all California Work Opportunity and Responsibility to Kids (CalWORKs) cases, including those cases in the Two Parent separate state program; Public Assistance (PA) and Nonassistance (NA) Food Stamps; and other aid programs. The report provides data on requests for investigation; disposition of investigations by County Welfare Departments (CWDs) and County DAs; fraud overpayments/overissuances identified and collected; dollar amounts of fines and forfeitures imposed; criminal complaints filed by prosecutors; and cases referred for Administrative Disqualification Hearings (ADH) and their dispositions.

Copies of the report form and instructions can be viewed (in Adobe Acrobat PDF format) or printed from the California Department of Social Services (CDSS), Research and Data Reports website at http://www.dss.cahwnet.gov/research/. The report’s released monthly statewide and county-specific data is also available on the website.

PURPOSE

The DPA 266 provides the CDSS with welfare fraud investigation and prosecution activity information. In California these activities are conducted by CWDs, Sheriffs Offices and County DAs. To measure these efforts, the DPA 266 displays the amount of activity in each county’s operation unit and is used to (a) evaluate the effectiveness of fraud prevention/detection programs; (b) evaluate the effectiveness of local agencies in applying fraud prevention/detection policies; and (c) plan with local agencies on any needed changes.

Information collected on the DPA 266 is used to prepare the federally required annual United States Department of Agriculture (USDA) Program and Budget Summary Statement Part B - Program Activity Statement (FNS 366B). In addition, this data is used in the CDSS Fraud Investigation Report, published quarterly, and other special reports for CDSS administration and the State Legislature. The DPA 266 also provides county, state and federal entities with information needed for budgeting, staffing, program planning, and other purposes.

COMPLETION AND SUBMISSION

The CWD is responsible for ensuring that this report is fully and accurately completed. If portions of the report are completed by more than one entity within the CWD and/or outside agencies, the contact person responsible for submitting the report to the state shall review the report for completeness and accuracy prior to submittal. Reports are to be received on or before the 12th working day of the month following the report month. This report may be submitted either via email or in hard copy:

Email submission. Download an Excel version of the report form from http://www.dss.cahwnet.gov/dssdb/ to your PC desktop. Complete the downloaded report form and email to the CDSS, Data Systems and Survey Design Bureau (DSSDB). This email submission process contains automatic computation of some cells and easy email transmission of completed report forms to DSSDB. The website contains specific instructions and guidance.

COMPLETION AND SUBMISSION CONTINUED

Hard copy submission: If email submission is not possible, complete a paper copy of the report form and fax or mail to:

California Department of Social Services
Data Systems and Survey Design Bureau, M.S. 9-081
P.O. Box 944243
Sacramento, CA 94244-2430

FAX: (916) 657-2074

If you have questions regarding this report, contact DSSDB at (916) 651-8269.

GENERAL INSTRUCTIONS

Enter in the boxes provided near the top of the form the county name and the report month and year. Enter the data required for each item. If there is nothing to report for an item, enter “0”. Do not leave any items blank.

Enter in the boxes at the end of the form the name, job title or classification, telephone, fax and email address of the person to contact if there are questions about the report. This person may or may not be the person who completed the report. Enter the date the report was completed.

COLUMN INSTRUCTIONS

Part A, Sections I and II: When reporting suspected fraud for a combined aid case (i.e. CalWORKs/PAFS case), report one case in each affected aid category. See Section I and II instructions for further details.

Part A, Section III: This section tracks the results of cases in Section II; however, the numbers will not necessarily be the same. A completed investigation may result in fraud being identified in multiple aid categories. These are not always the same categories that were originally identified when cases were accepted as investigation requests. See instructions in Section III for further details.

CalWORKs, Column (1): Report activity for all CalWORKs cases, including those cases in the state funded Two Parent separate state program. In those instances where the suspected fraud affects both a CalWORKs cash grant case and a Food Stamp case, the activity shall be reported as one case in the CalWORKs column and one case in the PA Food Stamp column.

PA Food Stamps, Column (2): Report activity on federal-only or combined federal/state Food Stamp cases where the suspected fraud affects Public Assistance (PA) Food Stamps. Per ACIN I-79-03 dated November 13, 2003, a PA Food Stamp household is defined as a household in which all members are receiving or authorized to receive CalWORKs benefits, including two-parent family benefits [Section 63- 102(p) (12) (a) and (b)].

Activity in California Food Assistance Program (CFAP) only cases should NOT be reported here, but reported instead in Column (5) All Other Programs. General Assistance/General Relief Food Stamp cases should NOT be reported here, but reported instead in the NA Food Stamp column.

NA Food Stamps, Column (3): Report activity on federal-only or combined federal/state Food Stamp cases where the suspected fraud affects Nonassistance (NA) Food Stamps. Per ACIN I-79-03 dated November 13, 2003, a NA Food Stamp household is defined as a household in which all members are receiving food stamp benefits but none of the members are receiving or authorized to receive CalWORKs, including two-parent family benefits [Section 63-102(n) (1)]. A mixed household is a household in which not all members are receiving or authorized to receive CalWORKs, including two- parent family benefits; at least one member is receiving NA food stamp benefits. However, for reporting purposes, mixed households are considered NA households [Section 63-102(m) (9)]. If the suspected fraud affects a case in another program, the activity shall be reported as one case in the NA Food Stamp column and one case in the All Other Programs column.

Activity in California Food Assistance Program (CFAP) only cases should NOT be reported here, but reported instead in Column (5) All Other Programs

Total, Column (4): Skip this column if completing the Excel version; it will be automatically calculated. Enter the sum of columns (1), (2), and (3) for each item for Parts A through F or explain in Comments.

All Other Programs, Column (5): Report activity on investigations into any other aid programs administered under the California Department of Social Services including, but not limited to:

In those instances where the suspected fraud affects another program and Nonassistance Food Stamps report one case in the All Other Programs column and one in the NA Food Stamps column. All entries in this column must be explained in Comments.

ITEM INSTRUCTIONS

PART A. INVESTIGATION ACTIVITY

This part of the report provides information on requests for investigation. An allegation of fraud is not a request for investigation until an authorized official accepts the request with the intent of assigning it for investigative activity. Do not include match processing activity, clearing a case through the Department of Justice, or preliminary review prior to requesting an investigation.

PART A. Section I. Investigation Requests

This section provides information on the volume of requests for investigation received, rejected or accepted. It provides data for the FNS 366B, a required Food Stamp federal report.

  1. Total requests received during month (Item 2 plus 3): Skip this item if completing the Excel version; it will be automatically calculated. Enter the total number of requests for investigation received during the report month for each aid program. For example, an investigation into a case with CalWORKs and PA Food Stamps will be counted as one case in Column (1) and one case in Column (2). [Cells 1-5]
  2. Total requests rejected during month: Enter the total number of requests for investigation that were rejected during the report month. “Rejected” means that the request was received, reviewed, and will not be assigned for investigation. [Cells 6-10]
  3. Total requests accepted during month (Item 3a through 3r): Skip this item if completing the Excel version; it will be automatically calculated. Enter the total number of requests for investigation that were accepted during the report month. “Accepted” means those requests that are retained in the SIU or its equivalent with the intent of assignment for investigative activity. [Cells 11-15]
    Sub-items 3a through 3r break out the total investigation requests by primary element of fraud. Multiple element requests shall be counted only once and should be coded by the element potentially causing the largest overpayment/overissuance. Elements affecting eligibility receive priority over elements affecting grant levels.
    1. Early Fraud Prevention/Detection (EFP/D): Enter the total number of requests during the report month to the early Fraud Prevention/Detection program. Include those for both investigator and eligibility worker (EW) staffed EFP/D programs. [Cells 16-20]
    2. Income and Eligibility Verification System (IEVS): Enter the total number of requests during the report month to the SIU emanating from an IEVS 155 or equivalent documents. Include requests from other automated matches such as Payment Verification System (PVS), Franchise Tax Board (FTB), Internal Revenue Service (IRS), etc. [Cells 21-25]
    3. Other unreported income: Enter the total number of unreported income requests during the report month not initiated by IEVS. [Cells 26-30]
    4. Homeless assistance: Enter the total number of requests during the report month based on false claims of homelessness. [Cells 31-33]
    5. Unreported resources/assets: Enter the total number of non-IEVS requests during the report month concerning concealed or misreported assets/resources, such as real/personal property, bank resources, cash, stocks, bonds, vehicles, etc. [Cells 34-38]
    6. Family (household) composition: Enter the total number of requests during the report month based on allegations that the Assistance Unit (household) members are not in the home or are in the home but not eligible for inclusion in the grant. For example, a CalWORKs child is not in the home or not a full-time student or the household is receiving Food Stamps for three when the Food Stamp household is two. Requests alleging the absent parent is in the home should also be reported under this category. [Cells 39-43]
    7. Duplicate/replaced warrants/lost Food Stamps: Enter the total number of requests during the report month based on duplicate/replaced warrants and/or lost Food Stamp benefits. [Cells 44-48]
    8. Duplicate (multiple) aid: Enter the total number of requests during the report month for an investigation alleging that an individual, or groups of individuals, are receiving aid under two or more case numbers, in one or more districts, counties and/or states. This includes any requests resulting from the Statewide Fingerprint Imaging System (SFIS). [Cells 49-53]
    9. Forgery: Enter the total number of forgery investigation reports during the report month. [Cells 54-58]
    10. Residence: Enter the total number of requests during the report month based on false residency. [Cells 59-63]
    11. Fictitious identity: Enter the total number of requests during the report month based on fictitious identity. [Cells 64-68]
    12. Food Stamp trafficking: Enter the total number of requests during the report month alleging the illegal sale, purchase or bartering of Food Stamp benefits. [Cells 69-71]
    13. Internal affairs: Enter the total number of internal affairs investigation requests during the report month. If you are able to link the investigation to a specific program, report it in the applicable program. If not, report it in Column (5) All Other Programs. [Cells 72-76]
    14. Child Care: Enter the total number of child care investigation requests during the report month. [Cells 77-81]
    15. Drug Felon: Enter the total number of drug felon investigation requests during the report month. [Cells 82-86]
    16. Fleeing Felon: Enter the total number of investigation requests during the report month emanating from a fleeing felon match, self declaration, or other sources alleging these violations. [Cells 87-91]
    17. Probation/Parole Violators: Enter the total number of probation/parole violator investigation requests during the report month emanating from a fleeing felon match, self-declaration, or other sources. [Cells 92-96]
    18. Other (Explain in Comments): Enter the total number of other requests during the report month. Explain the allegations in Comments. Cases alleging that the deprivation or incapacity does not exist should be reported here. [Cells 97-101]

    PART A. Section II. Investigation Caseload

    This section provides information on the volume of investigations available and completed and provides required data for the FNS 366B, a required Food Stamp federal report.

  4. Investigations pending beginning this month (Item 7 last month or explain in Comments): Enter the total number of accepted investigations pending from the prior month. This item should agree with Item 7, Investigations pending at end of month, of the prior month's report. If not, enter the correct data here and provide the reason for the adjustment in Comments. [Cells 102-106]
  5. Total investigations available during month (Item 3 plus 4): Skip this item if completing the Excel version; it will be automatically calculated. Enter the sum of Item 3 plus Item 4. [Cells 107-111]
  6. Total Investigations completed during month (Item 6a plus 6b): Skip this item if completing the Excel version; it will be automatically calculated. Enter the total number of investigations completed during the report month. This is the sum of Item 6a and Item 6b. [Cells 112-116]
    1. Evidence sufficient to support an allegation of fraud (6a1 plus 6a2): Skip this item if completing the Excel version; it will be automatically calculated. Enter the number of cases during the report month for which there was sufficient evidence to support a question of fraud. This is the sum of Item 6a1) and Item 6a2). Since multiple dispositions will not be reported in this section, the numbers will not be the same as in Part A. Section III, Investigation Results. For example, one or more entries in Section III, Items 8 -16 will result in one case count in this item. [Cells 117-121]
      1. ) Cases referred for prosecution: Enter the total number of cases during the report month referred to the agency empowered to prosecute. Report Disqualification Consent Agreements (DCAs) here. This number should be the same as the number in Item 11, Referred for prosecution. [Cells 122-126]
      2. ) Cases not referred for prosecution: Enter the number of cases during the report month not referred to the agency empowered to prosecute. A case should be reported here if it was reported as a disposition(s) in Items 8 - 10 and 12 - 16. In other words, each case counted in Item 6a2 must have at least one disposition (result) counted in Section III. Since a case can have more than one result, Item 6a2 must be less than or equal to the sum of Items 8, 9, 10, 12, 13, 14, 15 and 16. [Cells 127-131]
    2. Evidence not sufficient to support an allegation of fraud: Enter the total number of cases during the report month for which a decision was made that the evidence was insufficient to support a question of fraud. A case should be reported here if it was reported as a disposition in 17, 18 and 19. In other words, each case counted in Item 6b must have at least one disposition (result) counted in Section III. Since a case can have more than one result, Item 6b must be less than or equal to the sum of Items 17, 18 and 19. [Cells 132-136]
  7. Investigations pending at end of month (Item 5 minus 6): Skip this item if completing the Excel version; it will be automatically calculated. Enter the total number of investigations pending at the end of the report month. [Cells 137-141]

    8. PART A. Section III. Investigation Results

    Report the results of all SIU investigations closed during the report month. This section tracks the results of the cases in Section II. However, the numbers in Section III will not be the same as the numbers in Section II, as a case in Section II may have multiple results in Section III. Example: A case resulting in a restitution action, and in which benefits are reduced, would be reported in Item 13, Restitution action and Item 9, Benefits reduced (Early Fraud) or Item 14, Benefits reduced (not Early Fraud).

    “Fraud” results: Items 8, 9, 10, 12, 13, 14, 15 and 16 are the investigation results for cases that have been determined to have fraud. For each case counted in Item 6a2, there must be at least one “fraud related” disposition (result) counted in Section III. Since a case can have more than one result, Item 6a2 must be less than or equal to the sum of Items 8, 9, 10, 12, 13, 14, 15 and 16.

    “No Fraud” results: Items 17, 18, and 19 are the investigation results for cases that have not been determined to have fraud. For each case counted in Item 6b, there must be at least one “no fraud” disposition (result) counted in Section III. Since a case can have more than one result, Item 6b must be less than or equal to the sum of Items 17, 18 and 19.

    “Other” results: Item 20 is the investigation result used when Items 8-19 do not apply. “Other” results can be either “fraud” related or “no fraud” related. Each case that has an Item 20 Other result must be counted in either Item 6a2 or 6b, but cannot be counted in both Item 6a2 and 6b.

  8. Denials (Early Fraud): Enter the total number of completed Early Fraud investigations during the report month (by an investigator or an EFP/D EW) resulting in a denial of the application. In these cases, no benefits have been issued. [Cells 142-146]
  9. Benefits reduced (Early Fraud): Enter the total number of completed Early Fraud investigations during the report month (by an investigator or an EFP/D EW) resulting in a reduction of benefits. Example: The investigation determined that the AU (household) was two not three because a child was not living in the home. [Cells 147-151]
  10. Discontinuances (Early Fraud): Enter the total number of completed Early Fraud investigations during the report month (by an investigator or an EFP/D EW) resulting in a discontinuance of benefits. These occur, particularly in the Homeless Assistance, Emergency Assistance, and Expedited Food Stamp programs, when an entitlement is issued prior to completion of the Early Fraud investigation. [Cells 152-156]
  11. Referred for prosecution: Enter the total number of cases during the report month referred to the agency empowered to prosecute. This number must be the same as the number in Part A, Section II, Item 6a1), Cases referred for prosecution. [Cells 157-161]
  12. Referred to Administrative Disqualification Hearing (ADH): Enter the total number of cases referred for an ADH during the report month. [Cells 162-166]
  13. Restitution action: Enter the total number of cases during the report month in which a restitution action is taken, i.e., agreement to repay. [Cells 167-171]
  14. Benefits reduced (not Early Fraud): Enter the total number of cases during the report month resulting in a reduction of benefits that are not the result of Early Fraud Detection. [Cells 172-176]
  15. Benefits discontinued (not Early Fraud): Enter the total number of cases during the report month resulting in benefits being discontinued that are not the result of Early Fraud Detection. [Cells 177-181]
  16. Fraud found, no adverse financial impact: Enter the total number of cases during the report month in which the investigation found that information had been withheld or facts misrepresented, but the withheld or misrepresented information resulted in no adverse financial impact. Example: The investigation found unreported assets; however, these assets did not result in the AU (household) having their benefits reduced or being ineligible. [Cells 182-186]
  17. Allegation unfounded: Enter the total number of cases during the report month where the investigation found there was no fraud. [Cells 187-191]
  18. Insufficient evidence: Enter the total number of cases during the report month where the investigation failed to determine whether a violation occurred. [Cells 192-196]
  19. Expiration of statutes: Enter the total number of cases during the report month where the investigation is terminated as a result of the expiration of the statute of limitation. [Cells 197-201]
  20. Other (Explain in Comments): Enter the total number of completed investigations during the report month disposed of for reasons other than listed in Items 8 through 19. Internal affairs dispositions shall also be reported here. Case dispositions in this item shall be explained in Comments. [Cells 202-206]

    21. PART A. Section IV. Overpayments

  21. Total fraud overpayments/overissuances identified (dollar amounts): Enter the total dollar amount of fraud overpayments (OPs) and overissuances (OIs) during the report month identified due to completed investigation activity. Do not include IEVS-identified OPs/OIs unless they meet county criteria for fraud investigation and adjudication, or have been investigated. Any adjustments to this item should be entered in the month that the information was received. Example: A $200 overpayment was reported in January and the county was informed that the overpayment was reduced to $150 in March. The amount that was increased or decreased should be reported on the March DPA 266 report with an explanation in Comments. In this case, the total identified overpayment/overissuance amount would be reduced by $50 in the March report month. [Cells 207-211]
  22. Fines/forfeitures (dollar amounts): Report the total dollar amount of fines/forfeitures levied through civil or criminal prosecution activity during the report month in Column (4) Total. [Cell 212]

    23. PART B. PROSECTUTION ACTIVITY

    This part of the report provides information on fraud referrals received by the DA and the dispositions of those referrals.

    PART B. Section I. Prosecution Activity

  23. Referrals pending beginning of month (Item 27 last month or explain in Comments): Enter the total number of cases pending dispositions from last month. This item should agree with Item 27, Referrals pending end of month, of the prior month's report. If not, enter the correct data here and note the reason for the adjustment in Comments. [Cells 213-217]
  24. Referrals received during month: Enter the total number of cases received during the report month. [Cells 218-222]
  25. Total referrals available during month (Items 23 plus 24): Skip this item if completing the Excel version; it will be automatically calculated. Enter the sum of Item 23 plus Item 24. [Cells 223-227]
  26. Total referrals processed during month (Item 26a plus 26b): Skip this item if completing the Excel version; it will be automatically calculated. Enter the total number of cases for which a criminal complaint or indictment was filed during the report month or for which a decision was made not to prosecute. This is the sum of Item 26a and Item 26b. [Cells 228-232]
    1. Prosecutions filed: Enter the total number of cases for which a criminal complaint or indictment or other actions (e.g., diversions, citation hearings) were filed during the report month. This number may differ from the number of cases referred to the DA as reported in Item 11, Referred for prosecution. [Cells 233-237]
    2. Decision made not to prosecute: Enter the total number of cases during the report month in which the prosecuting authority decided not to prosecute. Include in this category all those cases in which there were a failure to indict. [Cells 238-242]
  27. Referrals pending end of month (Item 25 minus 26): Skip this item if completing the Excel version; it will be automatically calculated. Enter the total number of referrals pending at the end of the report month. This is Item 25 minus Item 26. [Cells 243-247]

    28. PART B. Section II. Prosecution Outcomes

    This part of the report provides information on the outcomes of the prosecutions filed. If the prosecution results in more than one outcome, all outcomes should be reported. Because multiple dispositions will be reported in Part B, Section II, the numbers will not be the same as in Part B, Section I above.

  28. Convictions: Enter the total number of filed complaints/indictments during the report month where there was a criminal conviction, from either a guilty plea, nolo plea, diversion, or trial. Include complaints/indictments convicted in part and acquitted in part. [Cells 248-252]
  29. Administrative action: Enter the number of filed complaints/indictments during the report month disposed of through a restitution agreement arranged as approved by the DA and disposed of in lieu of criminal indictment other than those reported in Item 30, Disqualification Consent Agreements. Include final dispositions through grant adjustments, agreements to repay, citation hearings, civil and small claims court judgments, full cash restitution made, court diversion programs, etc. [Cells 253-257]
  30. Disqualification Consent Agreements (DCA): Enter the total number of filed complaints during the report month disposed of through a DCA. [Cells 258-262]
  31. Charge pleaded: Enter the total number of filed complaints/indictments during the report month disposed of through a charge pleaded. A charge pleaded exists when more than one filed complaint/indictment against a person/defendant is accepted by the DA and the DA agrees to drop one or more welfare charges in order to obtain a guilty plea on the other charge. The program in which the charge is dropped during the report month will be reported as “Charge pleaded.” [Cells 263-267]
  32. Dismissals: Enter the total number of filed complaints/indictments disposed of during the report month by dismissal after issuance of a complaint, including those dismissed by motion of the court, either prior to or at the trial, but only if the complaint is not remanded for administrative disposition. [Cells 268-272]
  33. Acquittals: Enter the total number of filed complaints/indictments disposed of by an acquittal during the report month. [Cells 273-277]
  34. Declinations: Enter the total number of filed complaints/indictments during the report month declined by the DA and on which no other action will be taken. A preliminary decision not to prosecute pending further investigation is not a declination. Such complaints shall be carried pending until further investigation is completed and a final disposition made. However, if the DA declines to take legal action on a complaint/indictment after accepting the referral, and the investigation unit has included a valid and acceptable restitution arrangement in the investigation report, the disposition of the complaint/indictment should be reported as an approved restitution arrangement in Item 29, Administrative action and not as disposed of through a declination to take legal action. [Cells 278-282]
  35. Expiration of statutes: Enter the number of filed complaints/indictments disposed of during the report month because the statute of limitations has expired or will soon expire. [Cells 283-287]
  36. Other (Explain in Comments): Enter the number of filed complaints/indictments disposed of during the report month for reasons other than Items 28 through 35. Specify “Other” case dispositions by type in Comments. [Cells 288-292]

    37. PART C. ADMINISTRATIVE DISQUALIFICATION HEARING ACTIVITY

    This part of the report provides information on referrals for Administrative Disqualification Hearings(ADH). Include referrals for all ADHs.

  37. Referred for Administrative Disqualification Hearing (ADH): Enter the total number of persons referred, by program, for an Administrative Disqualification Hearing that was requested during the report month. Include state and local level ADH referrals. [Cells 293-297]
  38. Waivers: Enter the total number of ADH waivers signed during the report month. [Cells 298-302]
  39. Upheld convictions: Enter the total number of cases found guilty of Intentional Program Violation(s) (IPVs) during the report month. Upheld means the ADH found in favor of the requesting agency. [Cells 303-307]
  40. Acquittals: Enter the total number of cases found not guilty of committing an IPV during the report month. Acquittal means the ADH found in favor of the defendant. [Cells 308-312]
  41. Decisions pending: Enter the total number of cases for which the cases were heard but the court’s decision was not formally rendered before the end of the report month. [Cells 313-317]
  42. Program dollars: Enter the estimated dollar value of program loss that may be recovered in Item 39, Upheld convictions. Program loss means the associated overpayment/overissuance for each conviction. [Cells 318-322]

    43. PART D. PERSONS DISQUALIFIED

    This part of the report provides information on persons disqualified as a result of court prosecutions or Administrative Disqualification Hearings.

  43. Persons disqualified during month as a result of court prosecutions: Enter the total number of people who were disqualified during the report month, by program, through court action. Disqualification Consent Agreements are considered court actions as are civil and federal court findings. [Cells 323-327]
  44. Administrative Disqualification Hearings: Enter the total number of people who were disqualified during the report month, by program, as a result of an ADH. All “waiver of hearing” disqualifications should also be recorded here. [Cells 328-332]

    45. PART E. COLLECTIONS

  45. Total collected during prior report month (dollar amounts): Enter the total dollar amount of fraud overpayments/overissuances collected by or for the CWD during the prior month. Report only those dollar amounts that reflect collections for fraud overpayments or overissuances. Grant adjustments should be included in this amount if they are for fraud overpayments or overissuances. For the purposes of this report, a fraud collection is an overpayment/overissuance collection that resulted from an investigation in which fraud was found. [Cells 333-337]

    NOTE: In a combined CalWORKs/Food Stamp investigation where the investigation is tracked in both the CalWORKs and Food Stamp columns, the restitution agreed to or ordered is to be reported in applicable columns where the CalWORKs overpayment and the Food Stamp overissuance amounts are separately identified.

    46. PART F. COMPUTER MATCH ACTIVITY

    This part of the report provides information on computer matching activities that occur prior to requests for investigation. Requests for investigation resulting from match activity are to be reported in Part A, Section I, Item 3 (e.g. Item 3f or Item 3p).

    PART F. Section I. Matches Received

  46. California Youth Authority: Enter the total number of records received during the report month for the California Youth Authority (CYA) computer match. [Cells 338-342]
  47. Nationwide Prisoner Match: Enter the total number of records received during the report month for the Nationwide Prisoner Match (NPM).
    Note: From October 1999 through June 2004 report months, this item was used to provide Jail Reporting System (JRS) data. Beginning with July 2004 report month, this item collects Nationwide Prisoner Match data. [Cells 343-347]
  48. Fleeing Felon: Enter the total number of new records received during the report month for the Fleeing Felon computer match (FFM). [Cells 348-352]
  49. Reserved: This item is reserved for future use.

    50. PART F. Section II. Results: Benefits Reduced

  50. California Youth Authority: Enter the total number of completed CYA matches during the report month resulting in a reduction of benefits. [Cells 353-357]
  51. Nationwide Prisoner Match: Enter the total number of completed matches of the Nationwide Prisoner Match during the report month resulting in a reduction of benefits.
    Note: From October 1999 through June 2004 report months, this item was used to provide Jail Reporting System (JRS) data. Beginning with July 2004 report month, this item collects Nationwide Prisoner Match data. [Cells 358-362]
  52. Fleeing Felon: Enter the total number of completed Fleeing Felon matches during the report month resulting in a reduction of benefits. [Cells 363-367]
  53. Reserved: This item is reserved for future use.

    54. PART F. Section III. Results: Discontinuances

  54. California Youth Authority: Enter the total number of completed CYA matches during the report month resulting in a case discontinuance of benefits. [Cells 368-372]
  55. Nationwide Prisoner Match: Enter the total number of completed matches for Nationwide Prisoner Match during the report month resulting in a case discontinuance of benefits.
    Note: From October 1999 through June 2004 report months, this item was used to provide Jail Reporting System (JRS) data. Beginning with July 2004 report month, this item collects Nationwide Prisoner Match data. [Cells 373-377]
  56. Fleeing Felon: Enter the total number of completed Fleeing Felon matches during the report month resulting in a case discontinuance of benefits. [Cells 378-382]
  57. Reserved: This item is reserved for future use.

COMMENTS

Use the Comments section to:



California State Auditors Comments on the Response From the California Department of Social Services

To provide clarity and perspective, we are commenting on the California Department of Social Services’ (Social Services) response to our audit. The numbers below correspond to the numbers we have placed in the margins of Social Services’ response.

1

Social Services’ statement implies it took action to discontinue the use of the Statewide Fingerprint Imaging System (SFIS) for the CalFresh program. To clarify, the Legislature repealed the use of SFIS for CalFresh (Chapter 501, Statutes of 2011).

2

It concerns us that Social Services indicates in its response that it plans to wait until June 2016, or nearly a year after the release of our follow-up audit—and more than six years after our original recommendation—before deciding whether it will implement our recommendation to develop a formula for evaluating the cost‑effectiveness of counties’ antifraud activities. As we state in our report, although Social Services claimed it had fully implemented our 2009 recommendation to develop a cost-effectiveness formula to measure savings that a county achieves for each dollar spent on antifraud activities, our follow-up audit found that the cost-savings formula that Social Services uses includes only the savings and not the counties’ costs to perform antifraud activities—rendering it nearly useless for its intended purpose.

3

Social Services asserts that there is no direct relationship between prosecution thresholds and counties’ decisions to investigate welfare fraud. However, as we state in our report, Social Services has not taken action to implement our recommendation to track how counties determine prosecution thresholds and the effects of those thresholds on counties’ decisions to investigate potential welfare fraud. We expect Social Services to demonstrate the presence or absence of this effect through an analysis of actual county practices, rather than through supposition.

4

Although Social Services asserts that its administrative disqualification hearing (ADH) training has led five additional counties to begin using the ADH process, Social Services did not provide evidence to fully support this claim. As we state in our report, Social Services was able to demonstrate that it conducted statewide ADH trainings between June and October 2014, and these trainings successfully led to three more counties using the ADH process. The two additional counties to which Social Services refers began using ADH before June 2014.

5

Contrary to Social Services’ statement, our analysis found that it did not revise the investigation activity report to include additional data as the steering committee had recommended in 2008. We compared a version of the investigation activity report used in July 2014 to a version used in July 2004 and also to the version that Social Services provided as Attachment A to its response to our follow‑up audit. We found no difference between these three versions of the investigation activity report. Moreover, all three versions of the investigation activity report indicate that the last revision date was “7/04” (July 2004)—four years before the steering committee’s recommendation. Thus, we expect Social Services to identify the additional data that its steering committee expected it to include, and then revise its investigation activity report accordingly.


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