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Auditors: Income verification spotty in Irene scandal

  • by Keith M. Phaneuf
  • October 11, 2012
  • View as "Clean Read" "Exit Clean Read"

A new analysis of the food stamps fraud scandal following last year’s Tropical Storm Irene found state social services workers weren’t instructed to ask applicants to verify income information.

State Auditors John Geragosian and Robert Ward also concluded Thursday that the administration failed to review more than 110 government workers who received benefits, and that the relief program also was hindered by incomplete applications and flawed eligibility rulings.

The Department of Social Services “did not train eligibility workers to request verification of income during the application interview process,” the auditors wrote in their report.  “If DSS caseworkers had requested verification of assets from all (food stamps assistance) applicants, the number of approved cases which were later determined to be ineligible, and the amount of fraud associated with the program could potentially have been lessened.”

Though the federal government doesn’t allow states to deny applicants who fail to provide verification of income, the state auditors recommended improving training for DSS staff to at least request this information.

“We appreciate the Auditors’ review,” Social Services Commissioner Roderick Bremby responded Thursday in a written statement. “Clearly, we all share the goal of efficient management of taxpayer dollars.”

Bremby added that “DSS has already proposed tougher oversight measures to the federal government.  The most critical area is verification of applicants’ financial information.”

Geragosian and Ward’s office also ran into trouble when it tried to examine about 1/12th of the more than 23,000 approved household applications in the emergency program.

But of the 219 cases randomly selected for review, the auditors found 25 that were missing entirely, or had portions that couldn’t be found.

A review of the remaining 194 approved applications found:

  • 29 that had an incomplete listing of the household’s disaster-related expenses, 10 that only listed food loss, and three that reported no disaster expenses.
  • 26 that had erroneous disaster-related expenses.
  • eight that had not been signed by a DSS caseworker.
  • And four that either had no eligibility computation, or included a calculation error.

The state received federal approval on Sept. 16, 2011 to offer a Disaster Supplemental Nutrition Assistance Program, commonly referred to as D-SNAP, about three weeks after Tropical Storm Irene struck the state leaving hundreds of thousands of households without power for more than a week.

More than 25,000 households applied for assistance, and the 23,000 that were awarded emergency food stamps received about $12.5 million in total aid, the auditors wrote.

Shortly thereafter, Gov. Dannel P. Malloy’s administration confirmed allegations of widespread fraud involving state employees who may have obtained food stamps despite not meeting income and other eligibility guidelines.

A departmental consultant found that 913 state workers received benefits; and, after a review, referred 171 to the chief state’s attorney’s office for possible prosecution.

The administration identified the 913 state employees who received benefits by matching the Social Security numbers of all recipients against the Department of Labor’s wage inquiry system, the auditors wrote.

But Geragosian and Ward’s office found another 131 state employees who received emergency food stamps by cross-referencing Social Security numbers with CORE-CT, state government’s employee payroll database.

The auditors recommended that the Social Services Department “consider all sources of information and all methods possible” when conducting future investigations.

The state ultimately accused 103 state employees of falsifying their personal financial information, and those workers either were dismissed, retired or resigned.

The state rehired about 80 of them last summer after an arbitrator concluded that the firing was too severe. Many of the rehired workers were instead given unpaid suspensions ranging from 15 to 60 days.

The Social Services Department has recommended to the U.S. Department of Agriculture’s Food and Nutrition Service, which administers the food stamps program, that states be allowed to require verification of applicants’ financial information.

“This would give Connecticut and other states more tools to prevent and root out abuse when operating a D-SNAP program,” Bremby said.

The commissioner added that states administer D-SNAP benefits according to federal eligibility and verification requirements.  “Our understanding from (federal Food and Nutrition Service) is that Connecticut conducted a greater level of post-disaster reviews and investigations than any other state in the Northeast region.”

Sen. Joseph Markley of Southington, ranking Republican senator on the legislature’s Human Services Committee, said “what this report shows is the Department of Social Services was overwhelmed and never stopped to take a step back and review what it was doing in order to get control over the situation.”

Markley also said the administration was more focused on demonstrating it was responding to the scandal than it was on setting up the program carefully from the start, thereby discouraging fraud.

“The focus should never have been about catching people,” he said. “I’m not condoning breaking the law, but let’s set up a system that works better. … Workers could have simply asked questions about proper verification and that alone might have given people pause.”

“We’ve been at the legislature every year for the past 10 years asking, urging for more staff, more resources, better training, and the auditors report certainly brings that home,” said Larry Dorman, spokesman for Council 4 of the American Federation of State, County and Municipal Employees, which represents DSS caseworkers.

 

 

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