Report 2001-015 Summary - January 2003

Statewide Fingerprint Imaging System:

The State Must Weigh Factors Other Than Need and Cost-Effectiveness When Determining Future Funding for the System

HIGHLIGHTS

Our review of the California Department of Social Services' (Social Services) Statewide Fingerprint Imaging System (SFIS) revealed:

  • Social Services implemented SFIS without determining the extent of duplicate-aid fraud throughout the State.

  • It based its estimate of the savings that SFIS would produce on an evaluation of Los Angeles County's fingerprint imaging system, rather than conducting its own statewide study.

  • Because Social Services did not collect key statewide data during its implementation of SFIS, we are not able to determine whether SFIS generates enough savings to cover the estimated $31 million the State has paid for SFIS or the estimated $11.4 million the State will likely pay each year to operate it.

  • In deciding whether to continue SFIS, the Legislature should consider the benefits SFIS provides as well as what appears to be valid concerns regarding the system, such as the fear it may provoke in immigrant populations eligible for the Food Stamp program.

RESULTS IN BRIEF

The California Department of Social Services (Social Services) began rolling out its Statewide Fingerprint Imaging System (SFIS) to the 58 counties in March 2000 to detect duplicate-aid fraud in the State's California Work Opportunity and Responsibility to Kids (CalWORKs) and Food Stamp programs. Duplicate-aid fraud occurs when an individual is receiving aid under two or more active accounts. SFIS prevents duplicate participation by matching fingerprint images of program applicants against a database containing the fingerprint images of existing program participants. These welfare programs provide benefits to roughly 1.2 million CalWORKs recipients and 1.8 million food stamp recipients.

Federal regulations require states to implement a system to detect duplicate aid using, at a minimum, Social Security numbers, birth dates, or addresses. Moreover, these regulations require states that detect a large number of duplicates to implement other measures, such as more frequent checks or an increased emphasis on prevention. These regulations do not require the use of fingerprint imaging technology. Most states use computer matching against existing databases to verify applicants' information.

Before it implemented SFIS, Social Services did not determine the extent of duplicate-aid fraud throughout the State, and therefore it did not properly establish the State's need for a fingerprint imaging system. Prior to SFIS, most of the State's counties relied on computer matching and tips received on fraud hotlines to identify duplicate-aid recipients. When we surveyed counties regarding the number of duplicate-aid fraud cases they identified prior to SFIS, the data did not suggest that duplicate-aid fraud was a serious problem in the majority of counties. Only Los Angeles and a few other counties told us that they used their own countywide fingerprint imaging systems to detect duplicate-aid fraud.

In its eagerness to implement SFIS, Social Services based its estimates of the savings that SFIS would produce on an evaluation of Los Angeles County's fingerprint imaging system rather than conducting its own statewide study. In doing so, it was remiss in not heeding advice it received from the federal government. Specifically, the federal Department of Health and Human Services' Office of Inspector General questioned whether Los Angeles County's fingerprint imaging system was a cost-effective tool to prevent, detect, and deter duplicate-aid fraud. Additionally, in 1998 the United States Department of Agriculture expressed concern about Social Services' inability to identify the extent of duplicate-aid fraud throughout the State and about its decision to use Los Angeles County's evaluation to substantiate the savings that SFIS would produce. In fact, Social Services decided not to use federal funds to implement SFIS and instead to proceed using only state funds, in part because the federal government was requiring it to perform a cost-benefit analysis as a condition of using federal funds. We also have concerns that the methods Los Angeles County used to develop its savings estimate do not allow for the results to be extrapolated statewide. Further, Social Services' use of this data assumes that conditions in Los Angeles County hold true in other counties.

Despite these concerns, Social Services did not implement SFIS in a manner that would allow it to collect key statewide data during its implementation of SFIS, such as the number of applicants the counties denied or the number of recipients who are no longer receiving aid because they chose not to comply with the State's fingerprint imaging requirements. These data would have allowed Social Services to quantify the amount of savings SFIS was generating. According to Social Services, it did not require the counties to collect these data because the Legislature did not provide it with the authority or the resources to require counties to collect data during implementation. However, state laws and policies establish the State's expectations for implementing information technology (IT) systems, including the need to justify proposed projects' costs and benefits. Therefore, Social Services was remiss in not bringing its concerns with the lack of authority and resources to the Legislature's attention so that Social Services could effectively implement SFIS. Due to Social Services' decision not to collect pertinent data during the implementation of SFIS, we were not able to determine whether SFIS generates enough savings from deterring individuals from obtaining duplicate aid to cover the estimated $31 million the State has paid for SFIS or the estimated $11.4 million the State will likely pay each year to operate it. Further, the exact cost of SFIS is unknown because Social Services does not track the counties' administrative costs.

The primary benefits that the State derives from continuing to use SFIS are the proven effectiveness of fingerprint imaging technology to identify duplicate fingerprints and its ability to identify applicants who may travel from county to county seeking duplicate aid. On the other hand, most of the matches that SFIS identified have turned out to be administrative errors made by county staff, and the level of detected duplicate-aid fraud has been small. Furthermore, opponents of SFIS raise what may be valid concerns. For example, they question whether the benefits of SFIS outweigh its potential negative effects on the Food Stamp program, such as the fear it may provoke in immigrant populations. Both the federal government and the Legislature have expressed a desire to increase participation in the Food Stamp program among persons eligible to receive benefits. The Legislature recently required Social Services to develop a community outreach and education campaign to help eligible families learn about and apply for the Food Stamp program. The use of SFIS may run counter to these efforts. Therefore, the State must weigh these factors in deciding whether to continue funding SFIS.

RECOMMENDATIONS

To ensure that its implementation of future IT projects meets State expectations, Social Services should do the following:

  • Collect sufficient data to measure the benefits and costs against the project objectives.

  • Identify promptly any obstacles that may prevent it from implementing the project effectively.
Additionally, to improve its management of SFIS, Social Services should identify the full costs of operating SFIS by requiring counties to track their administrative costs separately.

To ensure that its estimates are representative of the entire state and its key assumptions are defensible, Social Services should study the conditions of a sample of counties instead of assuming that conditions in one county hold true in other counties.

The Legislature should consider the pros and cons of repealing state law requiring fingerprint imaging, including whether SFIS is consistent with the State's community outreach and education campaign efforts for the Food Stamp program.

AGENCY COMMENTS

Although Social Services agrees with most of our recommendations, it disagrees with many of the report's findings and conclusions. Social Services' strongest concern is that the report gives the reader the impression that Social Services made the decision on its own to implement fingerprint imaging using unreliable data. Rather, Social Services points out that the decision to implement fingerprint imaging was the result of legislation, after extensive analysis, discussion, and debate among stakeholders.


Report type

Report type
















© 2013, California State Auditor | Privacy Policy | Conditions of Use | Download Adobe PDF Reader