The California Department of Social Services (Social Services) is responsible for managing the California Work Opportunities and Responsibility to Kids (CalWORKs) program and CalFresh.1 CalWORKs is a welfare program that provides cash assistance for living expenses to families with eligible children in the household, and families receiving cash assistance under CalWORKs are eligible for the CalFresh program. Families and individuals who do not qualify for CalWORKs may be eligible to receive CalFresh benefits based on income and other factors. CalWORKs is the State’s version of the federal Temporary Assistance to Needy Families program, while CalFresh is the State’s version of the federal Supplemental Nutrition Assistance Program.
Because of the potential for fraud in these programs, federal law requires that states develop ways to detect, for example, when a welfare recipient knowingly signs up for assistance but is ineligible, or intentionally attempts to obtain aid in two counties at the same time. Under Social Services’ oversight, the counties are responsible for detecting, preventing, and prosecuting such fraud.
Social Services coordinates the counties’ efforts to combat welfare fraud by providing guidance, technical assistance, and information on fraud prevention and detection. For example, Social Services provides a list of CalWORKs applicants and recipients to certain state and federal agencies that maintain information about individuals, such as their employment status, income, and outstanding felony warrants. When these state or federal agencies have information about an applicant or recipient, a match occurs and they create a match list that they send to Social Services. A discrepancy between information reported by the applicant or recipient to the CalWORKs or CalFresh programs and information about him or her as reported by state and federal agencies on a match list could result in his or her aid amount being reduced or could make the applicant or recipient ineligible for aid. For match lists containing financial and employment information, federal regulations require states to follow up within 45 days on matches related to recipients in their jurisdictions to determine whether the recipients’ eligibility has changed. Social Services performs on-site Income Eligibility and Verification System reviews at each of the counties once every three years—and Los Angeles County every year—to assess whether counties are processing match lists accurately and promptly.
In addition, Social Services implemented the Statewide Fingerprint Imaging System (SFIS) in 2000 to help prevent fraud involving duplicate aid. In 2011 the Legislature repealed the fingerprint imaging requirement as a condition for receiving CalFresh benefits, but state law continues to require fingerprint imaging for CalWORKs. A fingerprint image and photograph for each eligible adult and each parent and caretaker relative of an eligible child in a CalWORKs case is required through SFIS. According to Social Services, the system enables counties to identify individuals applying for and potentially receiving aid in multiple jurisdictions and to identify individuals using falsified or fraudulently obtained documents to assume multiple identities for the purpose of receiving aid.
Further, state regulations require the counties to maintain a special investigation unit (SIU) to investigate potential welfare fraud and to refer substantiated cases of fraud either for prosecution or for administrative settlement. In compliance with federal regulations, Social Services requires counties to report their welfare fraud investigation and prosecution activities each month. Social Services currently verifies the reports’ accuracy during its SIU reviews, which occur once every three years, except for Los Angeles County, which receives a review every year.
Scope and Methodology
The California State Auditor’s practice is to occasionally follow up on past audit reports to verify the agency’s assertions regarding its implementation of our recommendations. For this follow-up audit we assessed Social Services’ progress in implementing the recommendations from our 2009 audit regarding public assistance antifraud efforts—report 2009-101—which fall into six areas: cost-effectiveness of antifraud investigation and prosecution best practices, oversight of counties’ match list processing efforts, county concerns regarding match list formats and criteria, accuracy of overpayment collections, oversight of counties’ investigation activity reporting, and cost-effectiveness of SFIS. We interviewed Social Services staff and reviewed documentation supporting its implementation of our recommendations specific to these areas.
1 When we performed our 2009 audit, CalFresh was known as the food stamp program. Go back to text