The purpose of this section is to provide:
· definitions of fraud;
· criteria for fraud referrals; and
· procedural instructions on when and how to initiate a fraud referral, including necessary actions before and after a referral is made.
Definition of Fraud
Fraud exists when a person, on behalf of him/herself or others, has knowingly and with intent to deceive or defraud:
· made a false statement or representation to obtain benefits, obtain a continuance or increase of benefits, or avoid a reduction of benefits;
· failed to disclose a fact, which, if disclosed, could have resulted in a denial, reduction or discontinuance of benefits; or
· accepted benefits to which he/she was not entitled, or accepted an amount of benefits knowing it is greater than the amount to which he/she is entitled.
Fraud also exists when a person, on behalf of him/herself or others, has made statements that he/she knew to be untrue for the purpose of obtaining benefits, continuing to obtain benefits or avoiding a reduction or denial of benefits.
FRC Manager Responsibility in Fraud Prevention/ Detection
Family Resource Center (FRC) Managers are responsible for:
· Ensuring that maximum time is given for an accurate evaluation of these determinations. Managers must apply necessary resources to ensure that IN/FSES appointments are scheduled for the same day as the request or no later than the next work day; and
· Ensuring that staff are aware of and use all automated information systems appropriate in the eligibility determination process.
FRC SHSS Responsibility in Fraud Prevention/ Detection
Supervising Human Services Specialists (SHSS) are responsible for:
· Reviewing with the Human Services Specialist (HSS), the usage of the web based and automated system tools to ensure they use the information available;
· Ensuring that HSS comply with current IN/FSES requirements, utilizing, maximum timeframe allowances for an accurate result; and
· Assisting the HSS in clarifying questionable information and, if applicable, ensuring denial or discontinuance action is taken within mandated time lines
Responsibility in Fraud
HSS staff are responsible for:
· Ensuring that the applicant/recipient understands their responsibility to provide accurate information and report any changes within five days that may affect their eligibility and/or grant amount. These responsibilities, as well as the penalties for failing to meet them, must be reviewed with the applicant/recipient at each application and renewal
· Documenting the case record on the Orientation form 07-33 and case narrative to reflect whether the applicant/recipient appeared to fully understand the reporting responsibilities
· Gathering accurate information and obtaining verifications mandated by the program that are necessary to ensure accuracy
· Utilizing automated information systems
· Determining whether the information/verification provided is inconsistent or questionable
· Attempting to resolve any conflicting, inconsistent, or incomplete information/verification with the applicant/recipient to the fullest extent possible
· Documenting all contacts, responses from the applicant/recipient, and any additional information received as a result of the contacts in the case record
· Requesting that the Public Assistance Fraud Investigator (PAFI) interview the applicant if fraud is suspected. If the HSS has not been able to resolve any inconsistent or questionable information, initiating a referral to the Public Assistance Fraud (PAF)
· Making an Early Fraud Prevention Home Call referral to PAF on all new CalWORKs applications.
· Completing the verification process before issuing aid payments or allowing aid payments to continue
· Authorizing accurate aid payments for eligible applicant/ recipients.
Emergency Application Processing
HSS staff must make every effort to evaluate Immediate Need requests based on accuracy, before a case is determined eligible for an emergency payment. The information systems listed in this chapter will be used. For example, if all conditions of eligibility are met and a vehicle discrepancy exists, HSS’s will obtain the necessary verification through DMV Clearance procedures.
Fraud Related Allegations
The following are examples of allegations that are considered fraud-related and may require a fraud referral:
· Residency is questionable (i.e., living out of state or country);
· Child out of home;
· Unreported income;
· Unreported property;
· Expenses exceed income (How does the applicant/recipient meet his/her needs?);
· Documentation submitted appears to have been altered or counterfeit;
· Duplicate aid;
· The deprivation for the case is "Absent Parent" and it is suspected that the absent parent is in the home.
Potential Fraud Indicators
The following are POTENTIAL Fraud Indicators for cash aid programs, except General Relief. When any of these situations exist, review the case file information with what the applicant/recipient has provided. The HSS must contact the applicant/recipient in the attempt to resolve inconsistencies or concerns. After this, if it appears there is still potential fraud alleged, a referral to PAF will be initiated and the HSS should continue to attempt to resolve inconsistent information to establish that the eligibility and benefit level is correct.
QUESTIONABLE DEPRIVATION/LINKAGE: Evaluate
· No deprivation at application, PE fully employed. Reapplication PE is now absent.
· Absent parent claimed to be in and out of home. Applicant/recipient unable to give clear explanation, or changes explanation, on relationship of adults living in home.
· Same absent parent claimed on additional (new) children to AU.
· Applicant/recipient is residing with absent parent's family.
· Absent parent visits frequently, answers early morning phone calls, sleeps in garage or on site.
· Absence deprivation claimed on a parent out of the home on military duty.
· Applicant/recipient is seen being dropped off by possible absent parent.
· Custody issues. Confusion on who has care and control majority of time.
· UAM issues, unreported pregnancies, possible father.
UNREPORTED INCOME/QUESTIONABLE DEDUCTIONS: Evaluate
· Self-employment income, tips and expenses that are difficult to verify.
· Unverifiable sworn statement employment verifications.
· Inkind income received until aided by Public Assistance.
· Entire pay stub is not received, questionable employment verification provided.
· Bank account deposit activity unexplained.
· Caretaker relative payee, absent parent living elsewhere could be receiving aid.
· Applicant/recipients who are consistently unable to explain how needs, which exceed grant, are met.
· Sanctioned persons removed without questioning or cure, still meeting needs.
· Out-of-state applicants receiving public assistance in other state(s).
UNREPORTED PROPERTY: Evaluate
· Working in relative-owned business, access to vehicles, possible ownership.
· Applicants who still own out-of-state property or vehicles.
· Applicant/recipient observed with unreported vehicles.
· Bank account balance verification (e.g., ATM slip) instead of actual bank statement.
· Vehicles with out-of-state registration.
· Applicants still maintaining a residence out-of-state.
· Applicant/recipient involvement in relative-owned business out-of-state/country.
· Foreign currency/coins seen in applicant/recipient's possession.
· Never at home when called, uses paging device, answering service or cellular phone.
· Verification of "shared housing" received at intake, however, unable to verify same residence once in granted.
· QR7 not computer generated completes a blank QR7 at office visit, often late.
· Homeless, no income/property, clean, well dressed, or supplies new CDL as I.D.
· Applicant claiming to stay at multiple locations; moves frequently, returned mail received.
· School verifications showing different address.
· Name on utility bills different than applicant/recipient's.
· Multiple Fraud Hotline referrals.
· Prior fraud found.
· Applicant/recipient's prior application withdrawn, done to avoid investigation or QC review.
· Cases containing questionable or conflicting information.
· Previous case discontinued or application denied due to PAF investigation findings. Investigation issues still exist at reapplication.
· The custodial parent has property that is jointly owned with the absent parent (home, car, etc.). Potential impact on deprivation and property.
· Volunteers services to others, which is not paid but could be.
· Change/reduction in hours of employment when grant decreases.
· Aged benefits on EBT cards. Potential indicator of non-county residence or unreported income.
Non-Fraud Related Allegations
The following examples of allegations are not considered fraud-related and therefore a fraud referral to PAF will not be made (neither will such a referral be accepted by PAF). In some instances, a referral to another responsible agency, such as Child Protective Services, may be appropriate and necessary:
· Child abuse/neglect;
· Drug/Alcohol abuse;
· Non-payment of rent obligation;
· Unrelated Adult (UA) in the home/misuse of funds (misuse means improper use and is different from fraud);
· Paternity is at issue
Note: Establishment of paternity is the function of Local Child Support Agency (LCSA), not PAF);
· Unreported income from illegal sources, such as drug trade, prostitution, etc.