Report 2015-503 All Recommendation Responses

Report 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 (Release Date: June 2015)

Recommendation #1 To: Social Services, Department of

To ensure that staff monitor both counties' processing of match lists and counties' reporting of investigation activity in a consistent and effective manner, Social Services should develop and document formal procedures for the IEVS and SIU review processes.

Annual Follow-Up Agency Response From November 2016

Attached are the completed Special Investigations Unit (SIU) and Income Eligibility and Verification System (IEVS) review manuals that will be used to ensure consistency on IEVS and SIU reviews.

California State Auditor's Assessment of Annual Follow-Up Status: Fully Implemented

1-Year Agency Response

A draft of the Special Investigations Unit (SIU) and Income Eligibility and Verification System (IEVS) formal procedures was revised to incorporate peer review edits and comments and is currently undergoing final review. The IEVS and SIU manuals are both comprehensive tools that have taken an extensive amount of time to develop and review. Additionally, the Department wants to ensure that the manuals and tools actually are helpful to new and existing staff; therefore, CDSS is piloting both manuals on current and upcoming reviews.

California State Auditor's Assessment of 1-Year Status: Pending

6-Month Agency Response

A draft of the Income Eligibility and Verification System and Special Investigations Unit formal procedures is undergoing peer review.

California State Auditor's Assessment of 6-Month Status: Pending

60-Day Agency Response

Draft of the Income Eligibility and Verification System and Special Investigations Unit formal procedures is in progress.

California State Auditor's Assessment of 60-Day Status: Pending

Recommendation for Legislative Action

Because Social Services will not implement our recommendation to gauge the cost-effectiveness of SFIS, the Legislature should require Social Services to annually report on the cost of SFIS and the fraud that it helps detect. Specifically, the Legislature should require Social Services to annually report to the Legislature the following metrics:
- The annual cost to maintain and operate SFIS
- The total instances of duplicate-aid fraud that counties detect as a result of SFIS and the total amount of overpayments that they recover
- The total backlog of unprocessed SFIS matches as of December 31 of each year

Description of Legislative Action

Senate Bill 89 (Chapter 24, Statutes of 2017), in part, requires Social Services to implement and maintain an automated, nonbiometric identity verification method for the CalWORKs program and report to the Legislature no later than November 1, 2017, regarding options for the design, implementation, and maintenance of the verification method and prescribed criteria. The statute makes SFIS inoperative upon implementation of the nonbiometric identity verification method, if that implementation occurs prior to April 1, 2018, or, if the director of Social Services requires additional time for implementation of that method, upon implementation of that method, or June 30, 2018, whichever is sooner. Because this statute would render SFIS inoperative, this recommendation is no longer necessary.

California State Auditor's Assessment of Annual Follow-Up Status: No Longer Necessary

Description of Legislative Action

Senate Bill 89 (Chapter 24, Statutes of 2017), in part, requires Social Services to implement and maintain an automated, nonbiometric identity verification method for the CalWORKs program and report to the Legislature no later than November 1, 2017, regarding options for the design, implementation, and maintenance of the verification method and prescribed criteria. The statute makes SFIS inoperative upon implementation of the nonbiometric identity verification method, if that implementation occurs prior to April 1, 2018, or, if the director of Social Services requires additional time for implementation of that method, upon implementation of that method, or June 30, 2018, whichever is sooner. Because this statute would render SFIS inoperative, this recommendation is no longer necessary.

California State Auditor's Assessment of Annual Follow-Up Status: No Longer Necessary

Description of Legislative Action

Legislation has not been introduced to address this recommendation.

California State Auditor's Assessment of 6-Month Status: No Action Taken

Recommendation for Legislative Action

The Legislature should require Social Services to determine the cost-effectiveness of any proposed alternative to SFIS in advance of Social Services adopting any such alternative method or tool to detect and prevent duplicate-aid fraud.

Description of Legislative Action

Senate Bill 89 (Chapter 24, Statutes of 2017), in part, requires Social Services to implement and maintain an automated, nonbiometric identity verification method for the CalWORKs program and report to the Legislature no later than November 1, 2017, regarding options for the design, implementation, and maintenance of the verification method and prescribed criteria. The statute makes SFIS inoperative upon implementation of the nonbiometric identity verification method if that implementation occurs prior to April 1, 2018, or if the director of Social Services requires additional time for implementation of that method, upon implementation of that method, or June 30, 2018, whichever is sooner. Because this statute would render SFIS inoperative, this recommendation is no longer necessary.

California State Auditor's Assessment of Annual Follow-Up Status: No Longer Necessary

Description of Legislative Action

Senate Bill 89 (Chapter 24, Statutes of 2017), in part, requires Social Services to implement and maintain an automated, nonbiometric identity verification method for the CalWORKs program and report to the Legislature no later than November 1, 2017, regarding options for the design, implementation, and maintenance of the verification method and prescribed criteria. The statute makes SFIS inoperative upon implementation of the nonbiometric identity verification method if that implementation occurs prior to April 1, 2018, or if the director of Social Services requires additional time for implementation of that method, upon implementation of that method, or June 30, 2018, whichever is sooner. Because this statute would render SFIS inoperative, this recommendation is no longer necessary.

California State Auditor's Assessment of Annual Follow-Up Status: No Longer Necessary

Description of Legislative Action

Legislation has not been introduced to address this recommendation.

California State Auditor's Assessment of 6-Month Status: No Action Taken

Recommendation #4 To: Social Services, Department of

To ensure that all counties consistently gauge the cost-effectiveness of their early fraud detection activities and ongoing investigation efforts for the CalWORKs and CalFresh programs, Social Services should develop a formula to regularly perform a cost-effectiveness analysis using information that the counties currently submit. Specifically, this formula should measure the savings that a county achieves for each dollar spent on antifraud efforts.

Annual Follow-Up Agency Response From November 2020

At the recommendation of the California State Auditor (CSA), CDSS published a revised cost-effectiveness analysis formula to all California County Welfare Departments (CWDs) on December 11, 2019. The cost savings and effectiveness formula and guidance were issued via an All County Information Notice (ACIN) ACIN I-75-19. The guidance, as recommended by CSA, specifically included a formula that measures the savings that a county achieves for each dollar spent on antifraud efforts. Additionally, the newly revised formula provides a statistical formula to derive cost savings and effectiveness in the CalFresh program.

California State Auditor's Assessment of Annual Follow-Up Status: Fully Implemented

Annual Follow-Up Agency Response From November 2019

CDSS has disseminated a draft Fraud Cost Savings and Effectiveness ACIN to stakeholders. A final letter will be published by March 2020.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Annual Follow-Up Agency Response From November 2018

To ensure the accuracy of overpayments that counties have collected for the CalFresh program, the Program Integrity Bureau/IEVS Review Unit has developed a series of scenarios that counties must show from the time an overpayment/overissuance was calculated, collection efforts, and the reporting of such activities. Counties are now required as part of their routine IEVS review to provide cases in the following scenarios:

1. Cases that have been terminated or previously reactivated terminated debt (debt previously written as uncollectable).

2. Cases that posted as "closed" when a final payment is received.

3. Cases that a previously established claim was changed from one category to another because of a hearing or court determination.

4. Cases that had Treasury Offset Program (TOP) reversals.

5. Cases with repayments due to bankruptcy notification.

6. Cases where a refund was made due to overcollection.

7. Cases where EBT benefits are returned as payment and credited to the client's account.

IEVS reviews with this component began in October 2018.

California State Auditor's Assessment of Annual Follow-Up Status: No Action Taken

This recommendation has been outstanding since the release of the original audit in November 2009. The response that Social Services provided is unrelated to our recommendation.

Annual Follow-Up Agency Response From November 2018

CDSS' Program Integrity Bureau is working closely with fiscal staff to examine savings assumptions and county cost data. County cost codes are currently under evaluation to determine if they can be used in a cost-savings methodology or if changes are needed. CDSS is also analyzing the ongoing CalWORKs and CalFresh benefits and county administrative savings part of the cost-savings methodology to determine if and how the methodology should change. Anticipated completion date of the analysis is March 31, 2019. If the analysis determines new savings assumptions should be used, CDSS will revise the methodology and disseminate to all counties via an All County Information Notice by June 2019.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

This recommendation has been outstanding since the release of the original audit in November 2009. We are hopeful that Social Services is serious in its stated intent to address this recommendation by June 2019.

Annual Follow-Up Agency Response From December 2017

Due to 1) limited resources and Federal changes in reporting, 2) much more time being needed than originally estimated for the county cost code analysis, and 3) validating the current savings formula distributed in All County Information Notice (ACIN) I-81-09, the Anticipated Implementation Date has been changed from March 2017 to June 2019. CDSS will analyze the ongoing CalWORKs and CalFresh benefits and county administrative savings part of the cost-savings methodology to determine if and how the methodology should change. County cost codes also will be further evaluated to determine if they can be used in a cost-savings methodology or if changes are needed. This analysis should be complete by December 2018. If the analysis determines new savings assumptions should be used, CDSS will revise the methodology and disseminate to all counties via an ACIN by June 2019.

In 2017, CDSS implemented a change in the Department's reporting of fraud activities to meet the new requirements of its Federal partners. CDSS will be analyzing the newly required information, which includes hours spent on investigating, prosecuting, and conducting administrative hearings regarding potential fraud and the service dollars associated with these activities. CDSS will identify county cost codes along with its new data and convene a statewide workgroup by July 2018 to develop a formula to measure the savings that a county receives for the dollars spent in fraud detection and prevention. In addition, CDSS is decommissioning the Statewide Fingerprint Imaging System no later than June 30, 2018. The Department's future plans include use of a Knowledge Based Authentication (KBA) service to ensure the identity of people applying remotely for benefits. This service is expected to facilitate client applications while also streamlining administration of additional notes the CalFresh program will be evaluating the overpayment collection threshold during 2018.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Annual Follow-Up Agency Response From November 2016

CDSS will convene a work group no later than January 30, 2017, in order to improve the accuracy of county codes (CCs). The work group can improve the accuracy of CCs by developing a better definition for each one, ensure CCs address early fraud or ongoing fraud for one program, and develop new CCs for unrelated activities currently claimed with one CC. CDSS also intends to revisit the savings formula distributed in All County Information Notice (ACIN) I-81-09. If, based on the assessment of CDSS staff that the assumptions of time on aid and other parts of the savings formula have to change, then the new assumptions will be used and new savings formula will be shared with the counties through a new ACIN.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

1-Year Agency Response

The California Department of Social Services (CDSS) is completing its assessment of cost data to determine if it is sufficient for inclusion in the cost savings methodology. The assessment includes a recommendation on how to use the cost data to update the cost savings methodology. The proposed revised methodology will be shared with stakeholders for review and comment and formally transmitted in an All County Letter (ACL). This process will take approximately three months.

California State Auditor's Assessment of 1-Year Status: Pending

6-Month Agency Response

CDSS gathered sample counties available cost data and is analyzing the data to determine if it is sufficient for inclusion in the cost savings methodology.

California State Auditor's Assessment of 6-Month Status: Partially Implemented

60-Day Agency Response

CDSS has selected sample counties whose available data will be reviewed to initiate the Departments' assessment.

California State Auditor's Assessment of 60-Day Status: Pending

Recommendation #5 To: Social Services, Department of

To make certain that counties receive the greatest benefit from the resources they spend on antifraud efforts related to CalWORKs and CalFresh cases, Social Services should, using the results from the recommended cost-effectiveness analysis, determine why some counties' efforts to combat welfare fraud are more cost-effective than others.

Annual Follow-Up Agency Response From November 2020

As recommended by the CSA, CDSS has made certain that counties have received the greatest benefit from the resources spent on antifraud efforts related to CalWORKs and CalFresh cases. Subsequent to the guidance issued in the I-75-19 ACIN, CDSS has followed up with each county to recommend they use an additional spreadsheet calculator, so they can expedite and automate cost savings and effectiveness calculations. The spreadsheet calculator, provided to counties on March 17, 2020, also is included with this response. Our Data Integrity and Stewardship Bureau (DISB), also conducts onsite SIU Reviews to document progress made with the cost savings and effectiveness analysis. Several of our counties were involved in the stakeholder review of the guidance issued on December 11, 2019 and were eager and thankful to receive the completed guidance. Some counties use the analysis to bargain for additional staff. We are still in the process of gathering and comparing county results. Counties with designated early fraud staff have more cost savings, as expected, and the accurate determination of benefits still is our highest priority.

California State Auditor's Assessment of Annual Follow-Up Status: Partially Implemented

Social Services has taken the first step to implement a tool to calculate the cost effectiveness efforts of fraud efforts as referred to in recommendation 4, but the point of this recommendation was the sharing of best practices among counties to ensure that they receive the greatest benefit from the resources they spend on anti-fraud efforts.

Annual Follow-Up Agency Response From November 2019

CDSS has disseminated a draft Fraud Cost Savings and Effectiveness ACIN to stakeholders. A final letter will be published by March 2020.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Annual Follow-Up Agency Response From November 2018

As stated in the response to Recommendation 4, CDSS' Program Integrity Bureau is working closely with fiscal staff to examine savings assumptions and county cost data. County cost codes are currently under evaluation to determine if they can be used in a cost-savings methodology or if changes are needed. CDSS is also analyzing the ongoing CalWORKs and CalFresh benefits and county administrative savings part of the cost-savings methodology to determine if and how the methodology should change. Anticipated completion date of the analysis is March 31, 2019. If the analysis determines new savings assumptions should be used, CDSS will revise the methodology and disseminate to all counties via an All County Information Notice by June 2019.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

This recommendation has been outstanding since the release of the original audit in November 2009. We are hopeful that Social Services is serious in its stated intent to address this recommendation by June 2019.

Annual Follow-Up Agency Response From December 2017

See response to Recommendation 4. If the cost-effectiveness analysis reveals specific county efforts to combat welfare fraud are more cost-effective than others, CDSS will work with counties to identify best practices that may be replicated.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Annual Follow-Up Agency Response From November 2016

See response to Recommendation 4.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

1-Year Agency Response

CDSS is completing its assessment of cost data to determine if it is sufficient for inclusion in the cost savings methodology.

California State Auditor's Assessment of 1-Year Status: Pending

6-Month Agency Response

See response to Recommendation 4.

California State Auditor's Assessment of 6-Month Status: Partially Implemented

60-Day Agency Response

CDSS has selected sample counties whose available data will be reviewed to initiate our assessment.

California State Auditor's Assessment of 60-Day Status: Pending

Recommendation #6 To: Social Services, Department of

To make certain that counties receive the greatest benefit from the resources they spend on antifraud efforts related to CalWORKs and CalFresh cases, Social Services should seek to replicate the most cost-effective practices among all counties. Social Services should work with its legal counsel to determine whether to withhold information about these practices from public disclosure.

Annual Follow-Up Agency Response From November 2020

CDSS has only begun to sample counties in the months of January and February, September and October 2020. This so far has only been achieved during onsite reviews, that we are ourselves have been limited to conduct during COVID-19 restrictions. Since the publication of the provided guidance, CDSS has not been able to mandate that counties submit their cost effectiveness analysis to the State. Also, this has not been the ideal sample period to make assessments or cost savings as most of our counties have been short staffed during the lockdowns since March of 2020 due to COVID-19. We have resumed onsite reviews as of September 2020; however, we do not have a sample size large enough to replicate or draw conclusions that other counties should follow. We also see a disparity in staffing that may pose an issue with flawed interpretations of the data being used to assess cost savings and effectiveness. Moreover, we have similar sized counties with varying staff sizes that makes a single statewide cost effectiveness formula challenging.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Annual Follow-Up Agency Response From November 2019

CDSS has disseminated a draft Fraud Cost Savings and Effectiveness ACIN to stakeholders. A final letter will be published by March 2020.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Annual Follow-Up Agency Response From November 2018

As stated in the response to Recommendation 4, CDSS' Program Integrity Bureau is working closely with fiscal staff to examine savings assumptions and county cost data. County cost codes are currently under evaluation to determine if they can be used in a cost-savings methodology or if changes are needed. CDSS is also analyzing the ongoing CalWORKs and CalFresh benefits and county administrative savings part of the cost-savings methodology to determine if and how the methodology should change. Anticipated completion date of the analysis is March 31, 2019. If the analysis determines new savings assumptions should be used, CDSS will revise the methodology and disseminate to all counties via an All County Information Notice by June 2019.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

This recommendation has been outstanding since the release of the original audit in November 2009. We are hopeful that Social Services is serious in its stated intent to address this recommendation by June 2019.

Annual Follow-Up Agency Response From December 2017

The CDSS Fraud Bureau has established an active website where we share best practices from other counties, recently posted All County Letters (ACLs) and other types of communications accessible to the counties. In addition, updated copies of different User Manuals for the different CDSS systems that the Department maintains can also be found in this site, including contact information for our various programs.

http://www.cdss.ca.gov/inforesources/Fraud/Regulations-and-Policy

Furthermore, CDSS regularly attends California Welfare Fraud Investigators Association (CWFIA) regional meetings and provides its members updates on statewide fraud activities. CDSS also attends the annual statewide CWFIA Training Conference and participates in and/or conducts training on fraud issues. CDSS also hosts an annual CDSS/CWFIA Program Integrity Conference covering program integrity topics in CalWORKs and CalFresh.

Any specific investigation-related information would not be appropriate for the CDSS Fraud Bureau website as this information would be confidential. The CWFIA maintains a website where members are able to post information only available to its members. Specific investigative techniques are not subject to release under the Public Records Act.

California State Auditor's Assessment of Annual Follow-Up Status: No Action Taken

The department's response does not indicate an effort to implement our recommendation. Specifically, the webpage it mentions does not include any current best practices, but rather a historical record of the department's guidance dated between August 2008 and January 2016. Further, the department's attendance at the CWFIA regional meetings is an ongoing activity rather than a new activity resulting from our recommendation.

Annual Follow-Up Agency Response From November 2016

See response to Recommendation 4.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

1-Year Agency Response

CDSS is completing its assessment of cost data to determine if it is sufficient for inclusion in the cost savings methodology. The assessment includes a recommendation on how to use the cost data to update the cost savings methodology. The proposed revised methodology will be shared with stakeholders for review and comment and formally transmitted in an ACL. This process will take approximately three months.

California State Auditor's Assessment of 1-Year Status: Pending

6-Month Agency Response

CDSS gathered sample counties available cost data and is analyzing the data to determine if it is sufficient for inclusion in the cost savings methodology.

California State Auditor's Assessment of 6-Month Status: Partially Implemented

60-Day Agency Response

See response to Recommendation 5.

California State Auditor's Assessment of 60-Day Status: Pending

Recommendation #7 To: Social Services, Department of

Social Services should track counties' prosecution thresholds for welfare fraud cases and determine whether they affect counties' decisions to investigate potential fraud, with a focus on determining best practices and cost-effective thresholds. If Social Services' analysis determines that varying prosecution thresholds do affect counties' decisions, it should then work with counties to implement the consistent use of these cost-effective prosecution thresholds.

Annual Follow-Up Agency Response From November 2020

Will not implement, and recommend closure of the issue for the following reasons:

CDSS has always valued and respected CSA's recommendation to focus on mandated processes to investigate potential fraud and agrees processes should be in place to ensure welfare fraud is pursued if there is a failure to meet prosecution thresholds. CDSS has not been able to use prosecution thresholds alone as a mechanism to make sure all cases are prosecuted or routed through the Administrative Disqualification Hearing (ADH) process. Instead our focus has been to expand the use of the ADH process for counties to use when a case does not meet prosecution thresholds or evidentiary standards. This has been achieved through a combination of county letter guidance, ADH training, and regular SIU Reviews. Our most recent efforts include the attached Separation of Duties guidance letter which strongly suggests that all cases be prosecuted or referred for administrative disqualification. In addition, and also included, our training in schedule in 2019 which included ADH training in Asilomar, August 7-9. 2019. During our SIU review process, if a county is found not to be utilizing the ADH process when necessary, a finding is issued to the County's Director, and corrective action is mandated. CDSS has chosen these methods versus focusing our efforts on prosecution thresholds as it serves the same purpose that all cases should either be prosecuted or sent for an administrative disqualification hearing if evidence of fraud has been determined.

California State Auditor's Assessment of Annual Follow-Up Status: Will Not Implement

Social Services' response essentially describes its existing practices, rather than practices that would alleviate the need for our recommended change.

Annual Follow-Up Agency Response From November 2019

Will not implement. No change to previous response.

California State Auditor's Assessment of Annual Follow-Up Status: Will Not Implement

Annual Follow-Up Agency Response From November 2018

CDSS' system for tracking county prosecution thresholds for welfare fraud cases is in full compliance with a federally mandated process that requires all cases either be prosecuted, and if not prosecuted, routed through the Administrative Disqualification Hearing (ADH) process (Title 7, California Code of Regulations (CFR) 7CFR 273.16.

California State Auditor's Assessment of Annual Follow-Up Status: Will Not Implement

This recommendation has been outstanding since the release of the original audit in November 2009. We are disappointed that Social Services has chosen not take our recommendation seriously and use it to improve its oversight of counties' anti-fraud efforts.

Annual Follow-Up Agency Response From December 2017

Disagree with recommendation.

California State Auditor's Assessment of Annual Follow-Up Status: Will Not Implement

Annual Follow-Up Agency Response From November 2016

See response to Recommendation 4.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

1-Year Agency Response

Counties are mandated to make a fraud referral for investigation regardless of any prosecution threshold (MPP Section 20-005.1). Therefore, counties' prosecution thresholds cannot affect counties' decisions to investigate potential fraud.

California State Auditor's Assessment of 1-Year Status: Will Not Implement

Social Services cites its own policy manual when indicating that counties are mandated to make a fraud referral regardless of any prosecution threshold. Our recommendation is asking Social Services to re-evaluate this policy and potentially establish prosecution thresholds based on fraud totals that are cost effective to pursue. Instead of gathering information to evaluate the feasibility of this potential approach, Social Services simply reiterates its existing policy.

6-Month Agency Response

Social Services reasserts its position that there is no direct relationship between a prosecution threshold and counties' decision to investigate welfare fraud. As the Department has explained previously, counties have an obligation to make a fraud referral for investigation regardless of any prosecution threshold.

California State Auditor's Assessment of 6-Month Status: Will Not Implement

Similar to its previous response, this response by Social Services is supposition. Our recommendation is for Social Services to analyze actual county practices in order to determine whether or not counties' prosecution thresholds affect counties' decisions to investigate potential fraud.

60-Day Agency Response

See initial response.

California State Auditor's Assessment of 60-Day Status: Will Not Implement

Social Services reasserts that there is no direct relationship between prosecution thresholds and counties' decisions to investigate welfare fraud. However, and as we explained in our comments on the initial response that Social Services provided in the follow-up audit report, Social Services has not taken any action to track how counties determine prosecution thresholds and the effects those thresholds on counties' decisions to investigate potential welfare fraud. We continue to expect Social Services to demonstrate the presence or absence of this effect through an analysis of actual county practices, rather than through supposition.

Recommendation #8 To: Social Services, Department of

Social Services should continue its efforts to ensure that counties follow state regulations regarding the use of the administrative disqualification hearings process until all counties have adopted the process.

Annual Follow-Up Agency Response From November 2018

ACL 17-118 was released on November 21, 2017, reiterating to counties the Administrative Disqualification Hearing (ADH) requirements for the CalWORKs and CalFresh programs. Additionally, ACL 18-116 was released on September 20, 2018 providing counties with clarifying guidance on the use of ADH process. Lastly, in addition to the statewide regional training that was provided to all 58 counties in 2017, the Program Integrity Bureau continuously performs periodic county Special Investigative Unit Reviews to ensure compliance with statutory requirements. Additional technical assistance on the ADH process is done in conjunction with CDSS' State Hearings Division on an as-needed basis.

California State Auditor's Assessment of Annual Follow-Up Status: Fully Implemented

Annual Follow-Up Agency Response From December 2017

A draft of the All County Letter (ACL) reminding counties of the requirement to follow state regulations for the administrative disqualification hearing (ADH) process was provided for stakeholder review. The delay in releasing the final ACL was due to a high volume of input from stakeholders in response to the draft ACL, requiring further research for both the CDSS Fraud Bureau and State Hearings Division. A final draft is scheduled to be released in December 2017.

Statewide ADH training was provided to counties in August and September 2017. Two additional ADH training workshops were provided to counties during the 2017 State Hearings Division Statewide Training Conference on November 2, 2017.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Annual Follow-Up Agency Response From November 2016

The All County Letter (ACL) has been reviewed by stakeholders and the final letter is due out by the end of December 2016.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

1-Year Agency Response

Due to competing priorities, including continued development of the eIEVS project, and participation in the Food and Nutrition Service (FNS) Treasury Offset Program review and training, the internal review of the draft ACL was delayed. CDSS anticipates releasing the ACL for stakeholder review and comment by August 2016. CDSS anticipates final release of the ACL in September 2016.

California State Auditor's Assessment of 1-Year Status: Pending

6-Month Agency Response

In order to complete the internal review of the All County Letter (ACL), CDSS is rescheduling the release date of the ACL to stakeholders for feedback to January 2016.

California State Auditor's Assessment of 6-Month Status: Partially Implemented

60-Day Agency Response

Draft of the All County Letter is in progress.

California State Auditor's Assessment of 60-Day Status: Pending

Recommendation #9 To: Social Services, Department of

To make certain that counties receive the greatest benefit from the resources they spend on antifraud efforts related to CalWORKs and CalFresh cases, Social Services should address and promptly act on the four remaining recommendations that its steering committee provided in 2008.

Annual Follow-Up Agency Response From November 2020

The Department has refocused its efforts into the development of a Statewide Verification Hub that will house all of the Recipient IVES matches. This multi-agency project will create a more streamlined approach to verification of eligibility for social service programs. The estimated implementation of this new Hub is 2024. However, work continues to refine IEVS matches. In the last year, we have implemented filters on several of the matches to provide only the most critical information needed to confirm eligibility in the CalWORKs and CalFresh programs.

The cost savings and effectiveness formula and guidance was issued via ACIN I-75-19.

California State Auditor's Assessment of Annual Follow-Up Status: Partially Implemented

Social Services' response indicates that its efforts are ongoing to implement three of the four remaining recommendations that its steering committee provided in 2008. Further, in its previous response, Social Services indicated that it would not implement the steering committee's fourth recommendation.

Annual Follow-Up Agency Response From November 2019

1. Will not implement.

2. CDSS is continuing work on eIEVS and expects to have the system fully implemented, pending approval by IRS and SSA, by summer of 2020.

3. CDSS has disseminated a draft Fraud Cost Savings and Effectiveness ACIN to stakeholders. A final letter will be published by March 2020.

4. Fully implemented as of 2018 update.

California State Auditor's Assessment of Annual Follow-Up Status: Partially Implemented

Annual Follow-Up Agency Response From November 2018

See emailed response.

California State Auditor's Assessment of Annual Follow-Up Status: Partially Implemented

This recommendation has been outstanding since the release of the original audit in November 2009. Social Services indicated in its emailed response the following as the status of the four recommendations that its steering committee issued in 2008:

-Fully implemented: 1 recommendation

-Partially implemented: 2 recommendations, with estimated full implementation in summer 2019

-Will not implement: 1 recommendation

We are disappointed that Social Services has chosen not to implement one of the steering committee's recommendations, but we are hopeful that Social Services is serious in its stated intent to address the remaining two recommendations by summer 2019.

Annual Follow-Up Agency Response From December 2017

See emailed response.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

In response to our inquiry, the department provided additional information that shows it now disagrees with one of the four recommendations from 2008 and that its efforts to implement the other three recommendations are pending. However, it is troubling that the department has taken nearly 10 years to determine how it will implement these four recommendations.

Annual Follow-Up Agency Response From November 2016

The Outstanding Steering Committee items are in progress and should be completed by the end of December 2016, with the exception of number three. The CDSS Program Integrity Branch (PIB) and Fraud Bureau are under new leadership as of October 2016. CDSS does not plan to implement this recommendation at this time. Once the new leadership team has evaluated all the priorities of PIB, CDSS will reassess the efficacy for the recommendation to develop a formula to regularly perform a cost-effectiveness analysis.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

1-Year Agency Response

Four Remaining Recommendations - Outstanding Steering Committee items:

CDSS/Fraud Bureau should:

1. Revise its county reports to include additional data on the number of investigations in the various types of welfare programs.

CDSS reviewed the Steering Committee's report and documents on file and has not found any specific additional data.

2. Review the cost effectiveness of various data match systems along with county feedback on the usefulness of each type of match.

CDSS conducted bi-weekly meetings with the Recipient IEVS workgroup from December 2015 through May of 2016. County participants identified policy and processing challenges associated with the ten IEVS matches. CDSS will identify and prioritize potential solutions.

3. Provide regular reports for counties to use in monitoring the cost-effectiveness of their program integrity efforts.

CDSS is completing its assessment of cost data to determine if it is sufficient for inclusion in the cost savings methodology.

4. Maintain a central repository of fraud training ideas and materials created by counties and accessible to other counties via the Fraud Bureau.

As material is developed or becomes available it will be posted to the website, including but not limited to, best practices from peer counties, links to other states' anti-fraud initiatives, and pertinent reports on program integrity from federal partners.

California State Auditor's Assessment of 1-Year Status: Pending

6-Month Agency Response

Four Remaining Recommendations - Outstanding Steering Committee items:

CDSS/Fraud Bureau should:

1. Revise its county reports to include additional data on the number of investigations in the various types of welfare programs.

CDSS continues to review the Steering Committee's proposed additional data.

2. Review the cost effectiveness of various data match systems along with county feedback on the usefulness of each type of match.

On October 28, 2015, CDSS convened the first meeting of Recipient IEVS workgroup. This was a kick-off meeting to assemble the county participants and discuss participants' roles and responsibilities. The purpose of the workgroup is to gather and identify policy and processing challenges associated with the ten Income Eligibility and Verification System matches, and identify and prioritize potential solutions. The workgroup will meet twice a month and review one IEVS match per meeting. The workgroup will develop a list of prioritized solutions for each IEVS match by June 2016.

3. Provide regular reports for counties to use in monitoring the cost-effectiveness of their program integrity efforts.

CDSS gathered sample counties available cost data and is analyzing the data to determine if it is sufficient for inclusion in the cost savings methodology.

4. Maintain a central repository of fraud training ideas and materials created by counties and accessible to other counties via the Fraud Bureau.

A best practices link has been added to the CDSS Fraud Bureau website and the statewide ADH training PowerPoint is posted at http://www.cdss.ca.gov/fraud/res/pdf/ ADH_Training.pdf. Additional materials will be added on a flow basis as they become available. Estimated Completion Date: June 30, 2016.

California State Auditor's Assessment of 6-Month Status: Partially Implemented

60-Day Agency Response

Four Remaining Recommendations - Outstanding Steering Committee items:

CDSS/Fraud Bureau should:

1. Revise its county reports to include additional data on the number of investigations in the various types of welfare programs.

CDSS has begun to review the remaining Steering Committee's proposed additional data.

2. Review the cost effectiveness of various data match systems along with county feedback on the usefulness of each type of match.

CDSS has solicited county representatives to participate in the workgroup.

3. Provide regular reports for counties to use in monitoring the cost-effectiveness of their program integrity efforts.

CDSS has selected sample counties whose available data will be reviewed to initiate our assessment.

4. Maintain a central repository of fraud training ideas and materials created by counties and accessible to other counties via the Fraud Bureau.

The staff person assigned to this project will return from a leave of absence in October 2015. As a result, CDSS reassessed the workload necessary to complete the central repository and is extending the completion date until June 2016. The extension is needed in order to fully implement the central repository and meet current and new work priorities. However, CDSS will post material in the central repository on a flow basis, as it becomes available.

California State Auditor's Assessment of 60-Day Status: Partially Implemented

Recommendation #10 To: Social Services, Department of

To ensure that counties are consistently following up on all match lists, Social Services should better enforce the counties' implementation of its recommendations from the IEVS reviews and verify implementation of the corrective action plans that counties submit.

Annual Follow-Up Agency Response From November 2016

Attached are the completed Special Investigations Unit (SIU) and Income Eligibility and Verification System (IEVS) review manuals that will be used to ensure consistency on IEVS and SIU reviews.

California State Auditor's Assessment of Annual Follow-Up Status: Fully Implemented

1-Year Agency Response

A draft of the SIU and IEVS formal procedures was revised to incorporate peer review edits and comments and is currently undergoing final review. The IEVS and SIU manuals are both comprehensive tools that have taken an extensive amount of time to develop and review. Additionally, to ensure that the manuals are helpful, CDSS staff will be using them on current and upcoming IEVS and SIU reviews over the next three months.

California State Auditor's Assessment of 1-Year Status: Pending

6-Month Agency Response

See response to Recommendation 1.

California State Auditor's Assessment of 6-Month Status: Partially Implemented

60-Day Agency Response

Draft of the Income Eligibility and Verification System and Special Investigations Unit formal procedures is in progress. The draft will include county match list follow-up and verification of the implementation of the county submitted corrective action plans.

California State Auditor's Assessment of 60-Day Status: Pending

Recommendation #11 To: Social Services, Department of

To ensure that counties are consistently following up on all match lists, Social Services should remind counties of their responsibility under state regulations to follow up diligently on all match lists. Further, it should work with counties to determine why poor follow-up exists and address those reasons.

Annual Follow-Up Agency Response From December 2017

The Recipient Income and Eligibility Verification System (R-IEVS) Processing Timeframes All County Letter (ACL) 17-41 was released on June 6, 2017. ACL 17-41 link http://cdssdnn.dss.ca.gov/Portals/9/ACL/2017/17-41.pdf?ver=2017-06-08-091640-630. CDSS conducts periodic county IEVS compliance reviews. If the review determines that the county is out of compliance, a report of findings is issued and the county is required to submit a corrective action plan.

California State Auditor's Assessment of Annual Follow-Up Status: Fully Implemented

Annual Follow-Up Agency Response From November 2016

The All County Letter (ACL) regarding the processing timeframes for the Income Eligibility and Verification System (IEVS) matches will be released in January 2017.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

1-Year Agency Response

Due to competing priorities, including continued development of the eIEVS project, and participation in the FNS Treasury Offset Program review and training, the internal review of the draft ACL was delayed. CDSS anticipates releasing the ACL for stakeholder review and comment by August 2016. CDSS anticipates final release of the ACL in September 2016.

California State Auditor's Assessment of 1-Year Status: Pending

6-Month Agency Response

In order to complete the internal review of the All County Letter (ACL), CDSS is rescheduling the release date of the ACL to stakeholders for feedback to January 2016.

California State Auditor's Assessment of 6-Month Status: Partially Implemented

60-Day Agency Response

Draft All County Letter is in progress.

California State Auditor's Assessment of 60-Day Status: Pending

Recommendation #12 To: Social Services, Department of

To make counties' review of match lists more efficient, Social Services should revive its efforts to work with the state and federal agencies that prepare the match lists to address the counties' concerns about match list formats, content, and criteria.

Annual Follow-Up Agency Response From November 2020

There are several letters in draft regarding IEVS match processing. CDSS is continuing to refine the draft ACL providing prioritization of the IEVS matches to the counties which will be published by the end of 2020. Counties have already been advised via ACL 17-41 that open cases have a statutory requirement to be reviewed within 45 days while closed cases must be reviewed as soon as administratively possible which allows for some flexibility in the prioritization of IEVS match processing.

There is also Another draft ACL providing match processing requirements for the Integrated Fraud Detection (IFD) match that will be published by the end of 2020.

It should also be noted that on June 5, 2020 the Department issued and ACWDL advising counties of the temporary suspension of RIEVS IEVS due to the impact of COVID-19.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

As indicated in Social Services' response, its efforts are still in progress.

Annual Follow-Up Agency Response From November 2019

CDSS has published ACLs 19-52 and 19-33 that provided clarifying instructions on the processing of the New Hire Registry, Deceased Persons, and Nationwide Prisoners Matches to ensure accurate and timely processing of these IEVS matches. In addition, another draft ACL that will be published in November 2019 will provide a process prioritization of IEVS matches.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Annual Follow-Up Agency Response From November 2018

CDSS continues its regular communication with the counties via the Recipient IEVS workgroup (R-IEVS). The R-IEVS workgroup meets quarterly to discuss ongoing efforts to improve the process and quality of the data and matches, as well as clarify instructions for the counties to follow. As a result, changes to the thresholds of some of the IEVS matches are being implemented to reduce the volume of insignificant data being provided to counties so that work can be done on more impactful data being provided.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

This recommendation has been outstanding since the release of the original audit in November 2009. We are hopeful that Social Services is serious in its stated intent to address this recommendation by June 2019.

Annual Follow-Up Agency Response From December 2017

See response to Recommendation 9.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

See our comment on recommendation 9.

Annual Follow-Up Agency Response From November 2016

CDSS is still meeting with the Recipient Income Eligibility and Verification System (R-IEVS) workgroup to improve the quality of the matches. The estimated completion date for changes to the matches is April 2017, with the implementation of the eIEVS portal.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

1-Year Agency Response

CDSS conducted bi-weekly meetings with the Recipient IEVS workgroup from December 2015 through May of 2016. County participants identified policy and processing challenges associated with the ten IEVS matches. CDSS will identify and prioritize potential solutions.

California State Auditor's Assessment of 1-Year Status: Pending

6-Month Agency Response

On October 28, 2015, CDSS convened the first meeting of Recipient Income Eligibility and Verification System (IEVS) workgroup. This was a kick-off meeting to assemble the county participants and discuss participants' roles and responsibilities. The purpose of the workgroup is to gather and identify policy and processing challenges associated with the ten IEVS matches, and identify and prioritize potential solutions. The workgroup will meet twice a month and review one IEVS match per meeting. The workgroup will develop a list of prioritized solutions for each IEVS match by June 2016.

California State Auditor's Assessment of 6-Month Status: Partially Implemented

60-Day Agency Response

CDSS has solicited county representatives to participate in the workgroup.

California State Auditor's Assessment of 60-Day Status: Partially Implemented

Recommendation #13 To: Social Services, Department of

To ensure the accuracy of the overpayments that counties collect and report for the CalFresh program, Social Services should create a process to verify on a rotational basis the counties' overpayment collection reports.

Annual Follow-Up Agency Response From November 2018

To ensure the accuracy of overpayments that counties have collected for the CalFresh program, the Program Integrity Bureau/IEVS Review Unit has developed a series of scenarios that counties must show from the time an overpayment/overissuance was calculated, collection efforts, and the reporting of such activities. Counties are now required as part of their routine IEVS review to provide cases in the following scenarios:

1. Cases that have been terminated or previously reactivated terminated debt (debt previously written as uncollectable).

2. Cases that posted as "closed" when a final payment is received.

3. Cases that a previously established claim was changed from one category to another because of a hearing or court determination.

4. Cases that had Treasury Offset Program (TOP) reversals.

5. Cases with repayments due to bankruptcy notification.

6. Cases where a refund was made due to overcollection.

7. Cases where EBT benefits are returned as payment and credited to the client's account.

IEVS reviews with this component began in October 2018.

California State Auditor's Assessment of Annual Follow-Up Status: Fully Implemented

Annual Follow-Up Agency Response From December 2017

In December 2016, CDSS began a series of meetings with the 19 largest counties to discuss and begin to resolve overpayment collection report (Food and Nutrition Services [FNS] 209) issues. CDSS is finalizing the procedures for monitoring and verifying the data reported on the FNS 209 by all 58 counties. This review process will begin before the end of the 2017 calendar year.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Annual Follow-Up Agency Response From November 2016

A county visit is planned for November 2016 to begin developing the process to include review of the counties' overpayment collection reports in the Income Eligibility and Verification System (IEVS) review in the 2016-17 year cycle.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

1-Year Agency Response

This is now part of an overall effort to leverage existing divisional program compliance reviews to maximize current staffing resources and reduce disruptions in county operations. This will require the development of a new module to be included as part of the existing county IEVS reviews, in collaboration with CalFresh and the Accounting Branches along with FNS Western Region Office staff.

California State Auditor's Assessment of 1-Year Status: Pending

6-Month Agency Response

CDSS is continuing internal discussions to develop the verification process.

California State Auditor's Assessment of 6-Month Status: Partially Implemented

60-Day Agency Response

CDSS has begun internal discussions to develop the verification process.

California State Auditor's Assessment of 60-Day Status: Pending

Recommendation #14 To: Social Services, Department of

To ensure the accuracy and consistency of the information on welfare fraud activities that counties report and that Social Services subsequently reports to the federal government, the Legislature, and internal users, Social Services should perform more diligent reviews of the counties' investigation activity reports to verify the accuracy of the information submitted.

Annual Follow-Up Agency Response From November 2016

Attached are the completed Special Investigations Unit (SIU) and Income Eligibility and Verification System (IEVS) review manuals that will be used to ensure consistency on IEVS and SIU reviews.

California State Auditor's Assessment of Annual Follow-Up Status: Fully Implemented

1-Year Agency Response

A draft of the SIU and IEVS formal procedures was revised to incorporate peer review edits and comments and is currently undergoing final review. The IEVS and SIU manuals are both comprehensive tools that have taken an extensive amount of time to develop and review. Additionally, to ensure that the manuals are helpful, CDSS staff will be using them on current and upcoming IEVS and SIU reviews over the next three months.

California State Auditor's Assessment of 1-Year Status: Pending

6-Month Agency Response

A draft of the Income Eligibility and Verification System and Special Investigations Unit formal procedures is undergoing peer review.

California State Auditor's Assessment of 6-Month Status: Pending

60-Day Agency Response

Draft of the Income Eligibility and Verification System and Special Investigations Unit formal procedures is in progress. The draft will include the validation of the DPA 266 and corrective actions.

California State Auditor's Assessment of 60-Day Status: Pending

Recommendation #15 To: Social Services, Department of

To ensure the accuracy and consistency of the information on welfare fraud activities that counties report and that Social Services subsequently reports to the federal government, the Legislature, and internal users, Social Services should provide counties with feedback on how to correct and prevent errors that it detects while reviewing counties' investigation activity reports.

Annual Follow-Up Agency Response From November 2016

Attached are the completed Special Investigations Unit (SIU) and Income Eligibility and Verification System (IEVS) review manuals that will be used to ensure consistency on IEVS and SIU reviews.

California State Auditor's Assessment of Annual Follow-Up Status: Fully Implemented

1-Year Agency Response

A draft of the SIU and IEVS formal procedures was revised to incorporate peer review edits and comments and is currently undergoing final review. The IEVS and SIU manuals are both comprehensive tools that have taken an extensive amount of time to develop and review. Additionally, the Department wants to ensure that the manuals and tools actually are helpful to new and existing staff, so CDSS is piloting them on current and upcoming reviews.

California State Auditor's Assessment of 1-Year Status: Pending

6-Month Agency Response

A draft of the Income Eligibility and Verification System and Special Investigations Unit formal procedures is undergoing peer review.

California State Auditor's Assessment of 6-Month Status: Pending

60-Day Agency Response

Draft of the Income Eligibility and Verification System and Special Investigations Unit formal procedures is in progress and will include review and feedback on investigation activity report accuracy.

California State Auditor's Assessment of 60-Day Status: Pending

Recommendation #16 To: Social Services, Department of

To ensure the accuracy and consistency of the information on welfare fraud activities that counties report and that Social Services subsequently reports to the federal government, the Legislature, and internal users, Social Services should incorporate the upcoming federal changes to the revision of its instructions for completing the counties' investigation activity reports. In the interim, Social Services should issue clarifications for the most common errors Social Services observes counties make in reporting their investigation activities.

Annual Follow-Up Agency Response From November 2018

The new DSS 466 Fraud Investigation Quarterly Statistical Activity Report was implemented statewide on November 29, 2017. CDSS mirrored all federal changes in the revision, including instructions for completing the county fraud activity reports. CDSS' Program Integrity Bureau conducts routine SIU reviews and provides technical assistance as needed for reporting investigation activities.

California State Auditor's Assessment of Annual Follow-Up Status: Fully Implemented

Annual Follow-Up Agency Response From December 2017

The United States Department of Agriculture Food and Nutrition Service (USDA/FNS) issued Administrative Notice 16-39 informing states of a revised FNS-366B Program Activity Statement. The revised FNS-366B requests SNAP (CalFresh) fraud investigation data not currently captured on the State Fraud Investigation Activity Report (DPA 266) that all counties submit to CDSS monthly. In response to the Administrative Notice, CDSS has been engaged with all 58 counties, established a statewide workgroup and revising the DPA 266 to capture the required data elements needed for the FNS-366B reports. The revised DPA 266 report will be operational by December 31, 2017. CDSS issued a "California Department of Social Services Fraud Investigation Activity Report (DPA 266) Common Reporting Errors, Questions and Answers" report to all counties in March 2016. DPA 266 link: http://www.cdss.ca.gov/Portals/9/DSSDB/AutomatedForms/DPA266.xls?ver=2017-02-28-144047-573

California State Auditor's Assessment of Annual Follow-Up Status: Pending

The USDA/FNS indicates that states should use the revised FNS-366B for the federal fiscal year beginning October 1, 2016. Therefore, to appropriately implement the revised federal reporting, the department should have engaged in an effort to revise the DPA 266 report before the new federal reporting requirements took effect in October 1, 2016.

Annual Follow-Up Agency Response From November 2016

A revised Department of Public Assistance (DPA) 266 form (Fraud Investigation Activity Report) will be completed by January 2017. CDSS will issue new instructions to the counties before counties begin using the new form. Due to county and consortia programming requirements, implementation may take up to 18 months.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

1-Year Agency Response

CDSS notified the counties on March 2, 2016 of common reporting errors and provided Frequently Asked Questions (FAQs) for their use.

California State Auditor's Assessment of 1-Year Status: Partially Implemented

Although Social Services issued clarifications to its reporting instructions as we had recommended, it has not revised its reporting instructions to incorporate clarifications for common reporting errors as well as the new federal reporting instructions.

6-Month Agency Response

In order to complete the internal review of the All County Letter (ACL), CDSS is rescheduling the release date of the ACL to stakeholders for feedback to January 2016.

California State Auditor's Assessment of 6-Month Status: Pending

60-Day Agency Response

CDSS is beginning to identify common errors and will disseminate, via county notification, instruction on how to prevent and correct those errors.

California State Auditor's Assessment of 60-Day Status: Pending

All Recommendations in 2015-503

Agency responses received are posted verbatim.