UCOWF Child Care Survey 10-24-2002

STATE

Is CCA Fraud a problem?

What types of CCA Fraud do you have?

Do You have CCA Statistics?

Do you recoup CCA overpayments?

Do you impose penalties for CCA Fraud?

Do you have state laws relating to CCA?

Do you have regulations relating to CCA Fraud?

Do you prosecute CCA Fraud?

Do you think Federal Laws/Regulations Should be enacted?

Is CCA Fraud a Political Issue In Your State?

Miscellaneous Comments:

CONTACT NAME AND PHONE NUMBER

ALABAMA

Client Fraud, parents fail to report employed/unemp. Spouse or change in income

Yes, parents make payment to agency.No recopument is done. Provider recoupment is made from next check/or by monthly payments

Yes

Yes,they can be, but to date, none have

Yes, Current Regs address fraud collections. Regs could address more specific guidance on collection methods, ie CCA fraud subject to fed tax offset

The child care subsidy Program has established policy for dealing with CCA Fraud. This policy is under review for possible revisions

Jeanetta Green, Program Manager 334-242-1427

ALASKA

Yes

Overcapacity issues, charging for children not in attendance, charging for additional hours

Yes, wrongfully obtained benefits process

Yes, letter of reprimand; suspension from subsidy and/or grant program; permanent termination from program; repyament at all levels

Yes

Yes, small claims court (rare occurance)

No, not federal, but Yes to State laws and regulations

Regulations/policy and procedures are needed to monitor childcare funds fraudulently spent and/or received

Claire Sigurdsson, Fraud Control Manager 907-269-1050

ARIZONA

Yes

Traditional provider & recipient fraud. Failure to report changes, under or over reporting, etc

7/1999 thru 6/2000=4 investigations, 4 established fraud, $3343.00 and $558 in cost avoidance; 7/2000-6/2001=33 investigations, 27 established fraud with $3,092.00 in cost avoidance; 7/2001-3/2002=58 investigations, 36 established fraud(13 pending) with cost avoidance of $16, 541.00

Yes, Collections and recoupment are made by court orders and thru our collections unit

Yes, fines, administrative sanctions and IPV's

Yes

Jim Toth, Deputy Chief, Office of Special Investigations 602-255-0098 x201

ARKANSAS

Yes

Yes, over $100.00

Yes, Disqualifications or IPV

Yes

Ann Ruffin, Director Fraud Investigations 501-682-8849

CALIFORNIA

Yes

CCA not provided by listed person;Falsification of CCA App.; Staff/Internal Fraud, client/provider colusion, fictious children and children not in the home

No statewide database. A few counties keep limited statistical data. Other counties have forwarded to the state summary data on individual cases after judication.

County by county-if cost effective; can't force recipients to repay. No statutory authority to recover overpayments by grant adjustment. Some counties prosecute and recover funds thru restitution

No, using existing laws

Yes

No, it is not mandated by State, but is done county by county

Yes, it's the only way to maintain integrity and ensure funds will be available and to show consistency

We hope to propose language mandating regulations, recoupment and penalties

Gale Wright, Chief Fraud Bureau 916-263-5700

COLORADO

Yes

Counties in Colorado experience both client & provider fraud. Client fraud may include misreporting and/or providing falsified documents. Provider fraud may include fraudulent billing practices and/or double charging programs. Fraudulent billing practices include billing for children when they are not in attendence, billing for care not used.

No, we do not have current statistical information but could easily collect it.

Yes, client recoveries are entered into the state's automated recovery system. The parent is mailed a demand letter, which includes appeal information. Provider recoveries are handled as adjustments in the CCA automated tracking system unless individual providers are no longer providing care. The recovery is then entered as a client recovery in the states automated recovery system

Yes

Yes, Prosecution is handled by each individual county. The amount required for prosecution is defined by each county

Yes, if the regulations are general giving the States responsibility for defining the state regulation

Yes, as budgets tighten, programs are implenting strategies to prevent, identify and recover any fraudulent payments

Education to states would be a powerful tool. I would like to see training which includes information, discussion and definate tools for implementation.

Anne Keire, CCAP Program Specialist 303-866-3960

CONNECTICUT

Yes

Absent Parent in home;Provider listed not providing the care; Parent/Provider collusion

6 AP cases = $89,423; 12 no care provided = $122,413;7 unreported income = $82,651;9 others =$76,900 + 2 Provider

Yes, Private contractor administers program; Department investigates; open cases thru contractor; closed thru Department

Currently, no disqualification penalties, new regulation effective 01-02 have IPV disqualifications

Yes

Yes, 39 cases = $431.00, 34 of those pled guilty

We are not in favor of more Fed. Legislation as it would result in QC audits and $ sanctions against states Would favor SSN' for all HH members required and federal $ to states to enhance fraud detection

Not currently, but several years ago; then developed procedures and tracking; made CCA fraud referrals a top department priority

New Regulations effective 01-01-02 were sent in.

Karen Law 860-424-5971

DELAWARE

Yes

Client-failure to report; Provider fraud

Yes, we use all the usual means to do so, tax intercept, civil dept action in court wage attachments

Yes, states on their own willnot do this. It does not matter if it's a clock grant or not. It's not in the nature of Welfare Depts not to give tax $ away without concern for program integrity

No. The truth about CCA has not been available to the public and the Social Services people certainly will not tell them

Wm. T. Garfinkel, Dir. Audit & Recovery 302-577-4564

D.C.

FLORIDA

Yes

Recipient Fraud, Service Provider Fraud and Internal (employee) Fraud

Yes

No, the state agency responsible for the adm of the program attempts to collect overpayments. The Public Assistance Fraud units only does the investigation

Yes

Chris Tolia, Director Department of Law Enforcement 580-410-7500

GEORGIA

Yes

Recipient fraud, Provider Fraud and Internal employee

Yes, over $1 million in claims established in FY 2002

Yes, the state DFCS office recops via automatic recoupment & monthly cash payments

No disqualification penalties; criminal prosecution pursued on large $ overpayments

No Prosecute under welfare fraud statues/false statements & etc

Yes

Judy Bullard, Chief Investigator 404-352-6026

HAWAII

Yes

Phoney computer generated documents; dummy jobs; sisters "trading" kids; kick backs from providers

No, only the growing number of CCA fraud cases, one recent CCA case was $46,000

Yes, but only if the case is open; once close there isn't a repayment system

Yes, we criminally prosecute

Yes, 20 cases in 2001. Hawaii has never lost a CCA fraud case

Yes, anything would be preferable to the vacuum. The Feds are throwing money around

No, politicians are too busy trying to get re-elected

Eric Weyenberg, Special Investigator 808-586-7137

IDAHO

Yes

Billing for services not provided-provider. Failure to report job-end and continuing to receive & use childcare funds. Forgery of warrants by parents and providers.

Yes

Yes, through repayment agreements and promissory notes. If fail to make payments, parents are suspended from the program until they get current with payments. We also get court judgements

Yes, On intentional violations. 12 months 1st offense, 24 months 2nd offense and life on 3rd offense.

Yes

No, our state seems to be implementing rules as necessary. However, I would not object to it, if other states find it a necessity.

Idaho has been fairly pro-active in dealing with this program.

Lynnette Porter, Supervisor Fraud Unit 208-334-0610

ILLINOIS

Yes

Client-not working or going to school; provider not providing care; Provider-billing for full time when part time; charging a higher rate; not providing care

Yes, 45 cases = $478.078 +

Repayment to DHS is voluntary. Overpayment may be taken by offset or thru private collection agencies

No, vendor fraud or mail fraud statutes are used for CCA fraud

Yes, 2 CCA cases = $11,939

No, state regulation should mandate recoupment & convicted providers should be barred from program for a time period

Mickey Tinder, Assistant Chief 217-524-5106

INDIANA

IOWA

Yes

Client, Provider & Joint Fraud

Yes, as of 9/7/01, 121 investigations; 69 close cases, resulting in $207,118 in ovpayments; with 8 crminal convictions; 22 Judgements & Agreements; 9 paid in full; 3 Dhs agency error, 9 Administratively closed and 18 others

Civil Judgements, Confessions and Repayment Agreements are signed; Criminal restitution orders are instituted

Providers only

No, working to obtain in 2002

Yes, DHS revised and adopted as of 7-1-02

Yes

Yes, then states would be uniform with disqualifications for both the parent and providers; also $ could be available to fight the fraud.

Yes

It would be nice to be able to use the federal intercept program to pay for CCA overpayments

Tom Bowe, Division Administrator-DIA 515-281-6377

KANSAS

KENTUCKY

Yes

Recipient fraud-pertaining to their failure to report the facts of eligibility and failure to report changes; no longer attending school or employed; correct houshold income and composition. Provider fraud entails splitting the CCA monies received with the client

Yes, since 02-2001 progress has been made in dealing with this fraud. Policies and procedures should be incorporated, implemented & strengthened for program integrity. From 07-01-01 thru 01-31-02, 44 investigation into recipient eligibility allegations, 24 cases with a claim of $98,879 were referred to the Atty General. 20 cases ($24,968 were returned for administrative action. We look at all programs (FS, TANF, Medicaid along with CCA) for eligibility.

Yes, we adm. Recoup overpayments.If it exceeds $1,000 they are forwared to OOIG for review & investigation. If over $3,000 in CCA or combined with other PA benefits, they are forwarded to Atty General for prosecution. Agency errors are returned for adm. action

No, unless penalties are imposed by the court of law. Recipient ovpys handled amd. Are required to make restitution to continue participating. There are no adm disqualifications for providing false or misleading info or report changes timely. There are no adm sanctions or disqualifications on providers who defraud or abuse the CCA program and can continue to participate.

Yes, attached

Yes, we refer cases to the the Atty General. We have not received any statistical info, but are aware of cases succesfully prosecuted

Yes, it appears that the intent of Welfare Reform has been redirected at the state level. Since the initiation of state block grants, we have experienced more and more policies & procedures that are conductive to program fraud & abuse and the general lack of program integrity. TANF roles have decreased, while programs to chld care, childrens health insurance & others have increased. With the increased spending in these programs came a decrease in policies & procedures to assure that non-eligible participants were not put on the roles & appropriate negative actions (prosecution, disqualification) could transpire when fraud is detected

No, while child care is an issue in Kentucky, it appears that the public is unaware of the amount of waste in the CCA program, as well as other assistance programs, due to the amount of fraud & abuse that is committed.

Many of the major problems e have dealt with regarding fraud in the CCA program stem from cases that have bee approved for the purpose of child protection or the prevention of child protective services cases. Unfortunately, recipients who defraud the program have obtained this assistance by stating that they need CCA for the protection or safety of their children. Using this as their factor for eligibility (instead of the need for CCA to attend school or work) normal verification requirements are waived. In addition in these circumstances the agency doen't require that signed contracts by the recipient and the provider, prior to approval or at a later date be maintained or kept. Individuals have been able to circumvent the normal eligibility process for which they would have been ineligible for otherwise. The lack of socumentation hinders efforts to take negative action, when fraud is detected.

Charles Cain, Assistant Director, Special Investigations, OIG 502-564-2815

LOUISIANA

Yes

Client fraud, unreporte/under-reported income; bogus employment, household composition, requests for care when none is needed; Provider fraud, billing for children not in care, unreported absences, billing for full time care when part time is provided and repair & imporovement grants; Employee fraud

Yes, policy is attached

Yes, see attached CCA and fraud policy

No, we prosecute in state court under Theft by fraud and in Federal court, under conspiracy, mail fraud, theft of governtment funds, etc

Yes, see attached policy

Yes, currently in the process of shifting the LA OFS Fraud & Recovery Section's focus to handle CCA fraud, consequently the number of prosecutions is small. We have prosecuted in both state & Fed courts

No, current Federal and LA State lasw should be sufficient for the future, however USHHS should raise its awareness of this problem. HHS could possibly attach conditions to the block grants for states to address fraud in CCA programs and provide part of the block grant for fraud detection & prevention efforts

Yes and No. If you mean that Legislators are keenly aware that there is fraud in this program, the answer is no. If you mean that CCA providers routinely contact their legislator regarding payments or when they are under investigation, then the answer is yes.

We are currently developing training for all investigators to investigate CCA Fraud. We also have nottticed that Adult and Child Feeding Program fraud goes hand in hand with provider fraud. In LA this program is USDA, administered by the Dept of Education

Christine Comeau, Director Fraud & Recovery Section 225-342-3970

MAINE

Not available

Yes, Under standard TANF rules for recoup and sanction

Yes, sanctions

No, Standard Theft laws

Yes, if appropriate

R. H. Stillings, Director Fraud, Investigation & Recovery-DHS 207-287-2409

MARYLAND

Yes

Provider-false invoices, child not in care; not reporting income; Client, false household composition; not reporting income, child not in home or ap in home

Yes, 235 investigations, 103 were fraud, cost avoidance = $679,000; overpayment to date + 7 @ $79,197

Yes

Yes, sanctions up to 1 year

Yes

Yes, requires Fraud Investigations be paid out of block grant funds and for frud detection & investigations

Cathy Calimer, Asst. Inspector General 410-767-7918

MASSACHUSETTS

MICHIGAN

WILL RESPOND SOON

MINNESOTA

Yes

Providers billing for children not there; billing for time when prividers are working somewhere else; Clients creating fictitious providers, not reporting income, failure to report marriage or AP in the home, fictitious employers, multiple providers for same child and multi families using each other as provider and client and no one providing care

The collection data for savings has been very rewarding & cost effective. Since 5/2000 the rate of discovery of discrepancies in CCA investigations was 69%. Cases with negative actions were 41%. Of all investigations completed, 23% resulted in overpayment, 8% in Adm Disqualifications and 12% were criminal referrals. Investigations were 109-AP; 31 for assets; 147 Household Comp; 147 for income; 69 were residency issues and 194 were others. 766 completed CCA investigations in fiscal 2001, cost savings was $4.62 vs $3.47 in other programs. CCA referrals one month savings were $691; average ovpy was $2,367, with total amount of ovpy at $411,848.

Yes, It is added/taken from the parents copayment. The state is currently completing a daycare computer system that would tract/collect overpayments

Yes, currently the only remedy against the provider is criminal court. For the parent we have Adm Hearings/Disqualificatins and criminal court. Disqualifications for parents are:, 3 months for a first offense; 6 months for a second offense and 2 years for a third offense and permanent disqualification for a fourth offense. Mn is currently attempting to pass legislation to have provider disqualification also.

Yes, see attachments

Yes, see attached policy

Yes, there is no state wide statistic on prosecuted cases. We do prosecute child care fraud

Yes, More universal regulations on provider qualifications/provider fraud and penalties. That states not be alloweed to fund non legal citizens child care needs

Yes, many hearings have been conducted on child care fraud at the capitol. There is currently a bill in the house attempting to get provider issues delt with. Also a legislative task force is being formed to deal with the issue of child care fraud.

It is our belief that there is at least a 10% fraud rate in child care. We have a child care budget of $470 million + and serve a total of +/- 26,555 families

Marque Nelson, Fraud Investigator 612-348-3150

MISSISSIPPI

Some

There is a very limited number of child care fraud cases reported to the OCY Designated Agents unsolved

Yes, recoupment of overpayments are through the OCY Designated Agents

Yes, parents do not receive child care assistance for the year, once child care fraud has been substantiated

No, we use the OCY Child Care Policy Manual & the subgrantee Manual

Yes, the OCY Child Care Policy Manual

Yes, the OCY CCA Polich Manual states tat if the amount is $500.00 it is considered a misdemeanor and if the amount is above $500 it is considered a felony. These persons may be subject to criminal prosecution by the county courts

No, not aware of any changes

A copy of proceedings, if any, held in the Justice of the Peace or Coun ty Courts will be forwarded to the lead agency and maintained on file. The Court's decisions rendered to resolve these issues shall be deemed final

Edna Watts, Interim Director 601-359-4528

MISSOURI

Yes

Provider, request payment for child not longer attending; Incorrect invoices, forged sign in sheets, dead providers. Client forgets to report they no longer work, false/incorrect information provided to determine eligibility, relatives providing care and household composition.

Missouri doesn't keep state statistics, but by region. 1 region stated in 2001, 63 clients @ $73,962.22, 6 providers @ $3,023.41, another region reported 14 completed @ $32,863; one region has 5 cases pending, 2 possible prosecution (no amount) and 3 eligibility @ $3,725.

Recoupment is handled thru Division of Family Services. It is done thru promissory notes, payback agreements and deferred prosecutions

Consider prosecution; report providers to licensing units; There are no sanctions imposed on the recipient for defrauding the state other than repayment of the loss

Yes, losses over $750 are class C Felony's

Yes

Some regions stated "yes" some said "no"

Some said yes, others no

One of the easiest programs to fraud. Large dollar amounts expended in CCA Programs with too little oversight in the program;

Lisa A. Hume, Division of Legal Services 573-751-0803

MONTANA

UNKNOWN

Agency referring cases, doesn't think there is a problem

NEBRASKA

Yes

Providers-billing, children not there; hours not attended; forging clients signatures

Yes, 7 cases referred; 4 found guilty 2 pending; 1 dismissed

Yes, With providers, a reduction is taken until paid; or they sign a repay agrement, or they can't be a provider until they repay

Yes, we cancel the provider's Service Agreement

Yes, 7 cases, 4 found guilty, 2 pending, 1 dismissed

Yes, disqualification hearing, mirroring the Food Stamp Disqualification process

Yes, legislation pending which would mirror the FS disqualification process

Lynda Brown, Fraud Investigator 402-471-9375

NEVADA

NEW HAMPSHIRE

Yes

Provider Fraud: overbilling hours/days or billings for children not attending Client fraud: Unreported or under reported income, provider is a household member; using an innocent third party as a bogus provider on vouchers. This is usually discovered when the 3rd party receives a 1099 for IRS purposes

Yes, cash payments, IRS refunds along with wage assignments. In addition we can recoup TANF grants w/clients permission.

Yes, perhaps a dozen cases per year

Yes, sanctions are worthy of debate, but the double edged sword is that we do not want to stop people from working and child care is critical for work.

Martin F. Laughlin, Supervisor Special Investigations 603-271-4392

NEW JERSEY

Yes

Client has paramour, who applys & receives childcare, when he is living there and working a different shift than the client

2 cases so far in the year 2002

No, Tri-county handles childcare & they do not recoup or have not at this point. This is a separate agency

I recommend that childcare not be seperated from Welfare as a separate agency. It would make it hard to keep up with the niss-use of childcare

Not that I am aware of

Child care fraud has just started to become an issue. Before when childcare was "in house" we had better control of any such problem. In NJ the state has contracted with various community agencies to provide CCA to our clients Each county has a different agency handling this service. In Middlesex County, CCA is handled by Catholic Charities. We do NO investigation of these cases.

Patricia Livesay, Fraud Investigator 856-299-7200 x244

NEW MEXICO

NEW YORK

Yes

2 Main issures-1. When client has been receiving childcare funds, then continues to collect even though they are no longer eligible & 2., Childcare providers overbill

No, there is little if any tracking done in this area

Yes, action is taken against providers when they are overpaid and clients are approached to "voluntarily" make repayments

Yes, there needs to be specific penalties established for fraud. We would suggest a progressive process of witholding childcare payment from allotments. Ie, 1st offense=10% reduction, etc. This would be applied against the overgrant, however the 10% reduction would continue beyond repayment

No, Fraud has not been identified as a specific problem politically, but we are now seeing the issue of available funding being raised. This could be tied into the cost effectiveness of pursueing fraud issues.

Frank Decarlo, Director of Investigations, Erie County 716-858-1604

NORTH CAROLINA

Yes

Provider and recipient/ these would include failure of providers to sumit accurate attendance reports and parents failing to report all changes

Each county runs their own. During the 1999-2000 year, counties reporte $22,250.84 of fraud

Each county pursues their own investigation of fraud. The county attempts to recoup from the individual who committed the fraud. Deductions can be made from subsidy payments

Yes, penalties for both recipient and providers from ineligibility to receive CCA to permanently ineligible to participate for a 2nd offense

Yes, each local area has its own fraud/ovpayment procedures and prosecuting CCA fraud cases is optional

We do not recommend this be developed unless adm. Funds are provided to support the requirement. We do recommend language in CCDF regs be revised to allow states to recoup funds from parents & providers before paying back the federal funding agency

We are intereste in learning how other states with state supervised locally administered child care subsidy programs handle the repayment of federal funds. Do other states use state funds to cover the unallowable claims for federal funds?

Vimiller Simmons, Program Compliance Supervisor 919-662-4561

NORTH DAKOTA

Yes

Yes, we request a check pay, decrease future payments or allow monthly payment from provider; If parent has been overpaid, we increase their co-pay until the money is recouped

Yes, it is done at the county level, so data is not compiled statewide. The county refers info to the County States Attorney for prosecution

Bobbi Gitter, Child Care Subsidy Adm. 701-258-1994

OHIO

Yes

Parent-leaving kids when not working; Provider, billing for wrong hours; Joint fraud, unreported income and caseworker fraud

Yes,124 cased = $492,175; convictions in all 124; 34 cases + $48,259 pending

Yes, voluntary payments

Yes, recipient must be paid in full before CCA an be received; Provider-license or certificate may be revoked

Yes, were enclosed

Yes

Yes, 124 cases; 34 cases pending

Don't know; Ohio has in place at the state level. Recommends that federal level reg's mirror Ohio's

During the last 3 yrs, Ohio has worked at gaining the understanding and respect of social workers who administer CCA. They have come to understand & are willing partners in this process

Jane Wasman, Chief Fraud Control Section 614-728-7743

OKLAHOMA

Yes

clients using CCA when not working, going to school, any type of employment activity; Vendors claiming kids not in center; employees & vendors working together to cmmit fraud, claiming kids not there & making up cases

Yes

No administrative sanctions

we use the public assistance statute to prosecute

Yes

2 units handle CCA; 1 handles client fraud and 1 handles provider fraud. These responses cover provider fraud

Linda Boyd, OIG Programs Mgr 402-522-4642

OREGON

PENNSYLVANIA

Yes

Client failure to report employment, income household composition. Providers in collusion with clients, claim excess CCA benefits; eligibility workers setting up bogus CCA cases

Yes, OIG investigates CCA referrals. These referrals can be for front end investigations or for criminal/administrative action. Since 1/1/01, 967 front end investigations involving CCA benefits. Total savings of $1,614,822. Also 297 criminal/adm referrals involving CCA benefits