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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

June 23, 2015 2015-503

The Governor of California
President pro Tempore of the Senate
Speaker of the Assembly
State Capitol
Sacramento, California 95814

Dear Governor and Legislative Leaders:

This report presents the results of a follow-up audit of the California Department of Social Services (Social Services) subsequent to recommendations made in 2009 by the California State Auditor (state auditor). In November 2009 the state auditor issued a report titled Department of Social Services: For the CalWORKs and Food Stamp Programs, It Lacks Assessments of Cost‑Effectiveness and Misses Opportunities to Improve Counties’ Antifraud Efforts, Report 2009‑101. The 2009 audit included recommendations aimed at improving Social Services’ oversight of counties’ antifraud efforts for the California Work Opportunities and Responsibility to Kids (CalWORKs) and CalFresh programs.

This report concludes that Social Services’ oversight of counties’ antifraud efforts has fallen short. More than five years later Social Services has fully implemented only one of the 15 recommendations in our 2009 audit, and has either not fully implemented, taken no action, or decided that it will not implement the other 14 recommendations. For example, Social Services has either not fully implemented or taken no action regarding all six of our recommendations aimed at ensuring that counties receive the greatest benefit from the resources they spend on their antifraud efforts such as investigations. In addition, in the absence of effective, documented procedures, Social Services has not consistently monitored or corrected problems with counties’ processing of information that may affect CalWORKs and CalFresh recipients’ eligibility, nor has it sufficiently monitored counties’ reporting of important information regarding their investigation activities and their overpayment collection efforts. Social Services also has not determined whether the Statewide Fingerprint Imaging System (SFIS) is cost-effective, even though SFIS produces limited measurable results at a high cost. Specifically, in 2014 SFIS cost $12 million to maintain and resulted in only 57 instances of fraud being detected. As a result of the weaknesses we identified in our 2009 audit, and that we determined during this follow-up audit still continue, Social Services diminishes the efficiency and effectiveness of its guidance and oversight of counties’ antifraud efforts.

Respectfully submitted,

State Auditor

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