New DHS Front-End Eligibility Program Saving State Millions

The Office of Inspector General FEE program (front end eligibility) went statewide in fiscal year 2011, and already the positive results in weeding out both fraud and ineligible applicants are getting noticed by the media and by the public. This week, see the below stories done by Gongwer News and Lansing State Journal.

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Gongwer Michigan

Volume #51, Report #89--Monday, May 7, 2012

D.H.S.: New Investigative Program Saving State Millions On Front End

After piloting the program for several years, the Department of Human Services went statewide last year with an effort to no longer wait to find if someone is receiving welfare benefits fraudulently, but to catch him or her before ever sending a single tax dollar.

The department says the program has been a major success, and the savings it's achieving are set to double again this year.

In the past three years, the investigations have resulted in more than $52 million in savings. Projections for this year alone are about $60 million.

The front-end eligibility, or FEE program, is a way for Human Services caseworkers to flag an application if, after meeting with the new client, something doesn't seem right. That can come based on either the interview or something that doesn't add up in the application.

When caseworkers are juggling hundreds of cases, they do not have the time to spend looking into the claims made in every application, but if something really stands out, they can now have agents from the department's Office of Inspector General investigate.

Alan Kimichik, director of the OIG at the department, said about half his staff is dedicated to addressing fraud at the front end, rather than relying on the old "pay and chase" model.

This began as a pilot program in Oakland County in 2007 and from there it expanded to Wayne and Macomb counties, he said.

"The outcomes were so positive that we gradually expanded to other high volume counties," he said.

By 2011, he had requested and received funds in the budget to add dozens of new agents and, in 2011, expanded the program statewide.

Now, an OIG agent covers every county. There are about 60 agents who conduct FEE investigations, some of whom do nothing but that, and others who have other investigatory assignments.

Mr. Kimichik said for every $1 he spends on agents to do the investigations, the state sees a savings of $28.

In 2010, when the program was still in just a few large counties, there were 2,152 investigations started and 1,717, resulted in applications being denied, the amount of benefits reduced or the person withdrawing the application.

That year, there were $12 million in savings recorded as a result of those investigations. The previous year, the investigations resulted in $9.3 million in savings.

In 2011, when it went statewide and there were more agents, there were 6,832 investigations launched and 5,414 resulted in findings of error or fraud or the person withdrew the application. Those cases resulted in a savings of $30.32 million.

So far this year, Mr. Kimichik said his agents have already surpassed last year and have achieved savings of $35 million.

If a client is investigated and nothing is found to be wrong, the person may not know he or she was investigated. But, sometimes the agents will knock on that person's door, talk to neighbors or family members or visit their place of employment, in which case the client would be aware, Mr. Kimichik said.

The program results in caseworkers having more time to focus on their clients who are truly in need and keeps more money in the program for those who need it, he said.

Mr. Kimichik said agents try to complete their investigations within 10 days, and also within the time the caseworker has to determine eligibility. People would not lose out on assistance because an investigation was ongoing, because it typically takes the caseworkers several weeks to get someone receiving assistance into the system and approved.

The OIG conducts training sessions with caseworkers on things to look for, and as the program as gone along, both the caseworkers and the agents have gotten better at finding potential abuses, Mr. Kimichik said.

Mr. Kimichik's 2011 annual report gives several examples of the type of fraud his agents have uncovered.

In one case, a woman sought public assistance claiming she was unemployed and her husband worked at a local market and earned less than $10,000. After a caseworker had doubts about the story, an OIG agent discovered the couple actually owned the market, which had grossed nearly $800,000 in 2010. As a result of the investigation, benefits were denied, for a total cost savings of almost $88,000.

In another case, a woman was investigated for not reporting her husband's income from his job. The OIG agent discovered the husband was an illegal immigrant who had been using a false name and Social Security number. According to the report, the client confessed to welfare fraud and the investigation resulted in a cost savings of $3,388 per month.

In several other cases, the investigation was ultimately forwarded to the local county prosecutor's office for criminal charges.

One of those involved a woman who claimed she needed assistance for her and her four children who lived in the state. An OIG agent discovered the woman was actually living in another state with her new husband and one of her children. Two of her other children lived with other family members and had never lived with her.

Several years ago, the department made it easier for people seeking assistance, giving them the ability to file their application online. Eventually they have to have a face-to-face meeting with a caseworker.

But this has also led to some people in other states filing out the application to fraudulently receive money from the state.

"That's where this program becomes more important," Mr. Kimichik said.

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LSJ.com

May 11, 2012

Fraud Investigations Are Paying Off

One of the most disturbing problems following the state's economic difficulties in 2008 was the discovery of lax policies in the Department of Human Services that let money be squandered on individuals who weren't truly needy. Problems with policies that let college students and lottery winners receive food assistance have been remedied by DHS Director Maura Corrigan since she took the post in 2011.

Now taxpayers can celebrate another victory as officials reveal that a fraud investigation program focused on catching potential abuses before any payments are made is, in fact, a success.

DHS reported this week that, in the past three years, its front-end eligibility program has saved $52 million. Projections for this year are for about $60 million in additional savings. The program started in Oakland County in 2007 and became statewide in 2011. It works by assigning Office of Inspector General investigators for every county and urging caseworkers to forward applications that raise a flag. In 2011, some 6,832 investigations were launched and 5,414 resulted in either withdrawal of the application or a finding of error or fraud.

Michigan should help its neediest residents, but it must be vigilant about protecting funds for those who truly need the help.