State Survey Analysis Report
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APPENDIX 21. PENALTIES DUE TO FRAUD
21. What penalties does your program mandate for clients, providers, or the agency for those who commit a fraud leading to improper payments?
| 24 State agencies responded to Question 21 (Appendix 21: pp. 127–133) | ||
| State | Error Committed By | Penalties |
|---|---|---|
| Alabama | Agency | Prosecution |
| Clients/Parents | Prosecution; sanction from program participation | |
| Providers | Prosecution; sanction from program participation | |
| County/Local Agency | Prosecution | |
| Arizona | Agency | Overpayments resulting from the intentional action of an employee would be followed by an Internal affairs investigation; repayment of all monies paid out; administrative action, up to and including termination; and potential for prosecution (the decision to prosecute is made by the Arizona Attorney General). |
| Clients/Parents | Overpayments resulting from the intentional action of a client to defraud the Child Care Administration would be referred to the Arizona Attorney General for prosecution. Sentencing can include (but is not limited to): restitution, community service, incarceration, court ordered probation, and court ordered counseling. If the Attorney General declines to prosecute, the monies paid are still collected. | |
| Providers | Overpayments resulting from the intentional action of a provider to defraud the Child Care Administration would be referred to the Arizona Attorney General for prosecution. Sentencing can include (but is not limited to): restitution, community service, incarceration, court ordered probation, and court ordered counseling. The provider’s contract is also terminated. If the Attorney General declines to prosecute, the monies paid are still collected. | |
| County/Local Agency | Not applicable | |
| California (DE) | Agency | |
| Clients/Parents | Termination of services. Referral to local fraud investigation agency for families on cash aid. | |
| Providers | Termination of contract. Referral to local law enforcement agency. | |
| County/Local Agency | Referral to local law enforcement agency. | |
| California (DSS) | Agency | In Stage One, there are two ‘agencies:’ The CWD is responsible for their employees who commit fraud, and the APP is responsible for their employees who commit fraud. In both agencies, those who commit fraud can be referred to the local law enforcement agency and can be prosecuted criminally or through the administrative process. |
| Clients/Parents | Stage One clients/parents committing fraud are referred to fraud investigation and may be prosecuted criminally or through the administrative process. | |
| Providers | Stage One providers committing fraud are referred to fraud investigation and may be criminally prosecuted. | |
| County/Local Agency | County officials can be prosecuted under various Penal Code sections including, but not limited to, the following: 72, 118, 133, 186, 424, 470, and 487. Please go to http://www.leginfo.ca.gov and click on “California Law” to access the code section. | |
| Connecticut | Agency | Contract Compliance |
| Clients/Parents | Mandatory repayment of the overpayment. Progressive disqualification penalties in fraud cases. | |
| Providers | Mandatory repayment of the overpayment. Lifetime disqualification and State license forfeiture in fraud cases. | |
| County/Local Agency | N/A | |
| Georgia | Agency | Staff guilty of fraudulent behavior have disciplinary action, usually termination. |
| Clients/Parents | The county DFCS office refers all clients and all providers who are suspected of Intentional Program Violations (IPV) to the Office of Investigative Services (OIS). When findings are returned from OIS, the agency will follow OIS instructions. When OIS established claims as suspected fraud, the claims are not terminated after four years of inactivity. Client claims negotiated by OIS will be returned to DFCS for collection. | |
| Providers | The county DFCS office refers all clients and all providers who are suspected of Intentional Program Violations (IPV) to the Office of Investigative Services (OIS). MAXIMUS (contractor) may refer providers suspected of IPV to OIS. When OIS established claims as suspected fraud, the claims are not terminated after four years of inactivity. OIS have two avenues open: prosecution, when the claims identified by OIS as suspected IPVs have been accepted by the local prosecutor for further legal action and repayment agreements, established when claims identified by OIS as suspected IPVs are inappropriate for legal action. If a provider fails to comply with a claim negotiated by Office of Investigative Services (OIS), the county must notify OIS. The county’s obligation ends after reporting to OIS. When findings are returned from OIS, the agency will follow OIS instructions. OIS is responsible for notifying the prosecutor of the delinquent payments for a possible contempt action. | |
| County/Local Agency | Staff guilty of fraudulent behavior have disciplinary action, usually termination. | |
| Kansas | Agency | Recovery action will be initiated to collect the overpayment. If fraud committed by an agency employee, the employee may be terminated. |
| Clients/Parents | Recovery action will be initiated to collect the overpayment. This may occur through civil or criminal proceedings. | |
| Providers | The provider may also be terminated from contracting further with the agency. http://www.srskansas.org/KEESM/keesm10400.htm | |
| County/Local Agency | Recovery action will be initiated. If fraud committed by an agency employee, the employee may be terminated. | |
| Kentucky | Agency | Administrative Action, Repayment of Fraudulent funds |
| Clients/Parents | Repayment of Fraudulent funds | |
| Providers | Repayment of Fraudulent funds | |
| County/Local Agency | Administrative Action, Repayment of Fraudulent funds | |
| Maryland | Agency | none |
| Clients/Parents | Levels of sanction for customer: 1st – 6 months and repay 2nd – 12 months and repay 3rd – permanent and repay Can repay early and have sanction lifted |
|
| Providers | Levels of sanction for provider: 1st – 6 months and repay 2nd – 12 months and repay 3rd – permanent and repay Can repay early and have sanction lifted |
|
| County/Local Agency | none | |
| Massachusetts | Agency | Staff termination or probation |
| Clients/Parents | Parents may be barred from receiving subsidized child care services for up to three (3) years. Parents may be required to repay the Commonwealth. Parents may also face criminal prosecution. | |
| Providers | Repayment of funds and possible contract termination. Contracted providers may be debarred from contracting with the Commonwealth in the future. Providers may be pursued civilly and/or criminally by the State Attorney General’s Office. | |
| County/Local Agency | Child Care Resource and Referral Agencies may face repayment of funds and possible contract termination. | |
| Minnesota | Agency | None |
| Clients/Parents | disqualification period 1st 3 months 2nd 6 mos, 3rd 1 year, thereafter permanently disqualified from child care assistance. | |
| Providers | disqualification period 1st – 3 months, 2nd 6 months, 3rd and after permanently disqualified from receiving payment through the child care assistance program | |
| County/Local Agency | None | |
| Mississippi | Agency | No incidents to report from. |
| Clients/Parents | Recovery efforts as administered through MDHS and County/Local Agencies. | |
| Providers | Recovery efforts as administered through MDHS and County/Local Agencies. | |
| County/Local Agency | Recovery efforts and/or suspension/termination of related benefits. | |
| Missouri | Agency | |
| Clients/Parents | Termination of benefits; repayment; possible criminal prosecution. | |
| Providers | Termination of contract or provider agreement; repayment; possible criminal prosecution. | |
| County/Local Agency | Repayment; disciplinary action (including termination of employment); possible criminal conviction. | |
| Montana | Agency | 0% |
| Clients/Parents | 10 % & 25% | |
| Providers | 10 % & 25% | |
| County/Local Agency | 0% | |
| Nebraska | Agency | N/A We don't contract out any functions regarding payment |
| Clients/Parents | If the client/parent is found to have committed Intentional Program Violation, s/he is ineligible for up to a year for the first violation; up to two years for the second violation; and permanently for a third violation. The individual may also be civilly or criminally prosecuted. | |
| Providers | The Provider Agreement is terminated; an attempt is made to collect overpayments. | |
| County/Local Agency | After an internal investigation indicates fraud, Human Resource policies are applied for employees who are found to have committed fraud. The employee is likely terminated and may be turned over to the legal system. | |
| New Hampshire | Agency | Agency Staff are subject to review, which can include progressive discipline and may end in termination of employment. |
| Clients/Parents | When the DFA programs suspect error or fraud, they refer the information to Special Investigations. DFA does not conduct investigations, or levy penalties | |
| Providers | If, after investigation, a provider is found to have committed fraud, the money will be recouped and the provider will either be prosecuted criminally, and/or their billing privileges will be revoked for an agreed upon time period. | |
| County/Local Agency | If a Contract Center were found to have committed fraud that lead to improper child care payments, the Department would terminate their agreement, recoup the money and prosecute those responsible for the fraudulent billing. | |
| North Carolina | Agency | |
| Clients/Parents | the LPA’s can request that the Division impose a sanction against a client when the amount of fraud is more than one thousand dollars ($1,000). Sanctions may be imposed in addition to requiring repayment of the amount of fraud for which they were ineligible. With the first incidence, the client is ineligible to receive services for twelve (12) months statewide with the exception of child care to support child welfare or protective services cases. With the second incidence, the client is permanently ineligible statewide with the exception of child welfare or protective services situations. We also have laws defining fraud as a misdemeanor or felony based on the amount of the improper payment which allows the LPA to pursue criminal court action. | |
| Providers | the LPA’s can impose a sanction against providers when the amount of fraud is more than one thousand dollars ($1,000). Sanctions may be imposed in addition to requiring repayment of the amount of fraud for which they were ineligible. With the first incidence, the provider can not receive subsidy funds from any county for any new children who enroll in the provider’s program for 12 months. With the second incidence, the provider is permanently ineligible statewide to participate in the Subsidy Program. We also have laws defining fraud as a misdemeanor or felony based on the amount of the improper payment which allows the LPA to pursue criminal court action. | |
| County/Local Agency | if an LPA employee commits fraud, the LPA typically takes appropriate action such as dismissing the employee, seeking recoupment of the funds and /or pursing criminal court action. | |
| Ohio | Agency | None |
| Clients/Parents | Pursuant to Ohio Administrative Code Section 5101:2-16-73 “(E) Failure of the child care recipient to repay in full a child care overpayment made by the CDJFS as a result of recipient fraud, or failure of the recipient to enter into or comply with an agreement with the CDJFS to repay a child care overpayment caused by recipient error or agency error, shall result in the termination of child care benefits after provision of appropriate hearing notice pursuant to division-level designation 5101:6 of the Administrative Code. Ineligibility for child care benefits shall continue as long as: (1) Repayment of a child care overpayment is owed to the CDJFS as a result of recipient fraud; …” In addition, cases of alleged recipient fraud are referred by the CDJFS to the local county prosecutor for court action. |
|
| Providers | Pursuant to Ohio Administrative Code Section 5101:2-16-73 “(F) Failure of the child care provider to repay a child care overpayment made by the CDJFS as a result of provider error, provider fraud or agency error, shall result in the revocation of the type B family child care home or in-home aide certificate. Denial for certification shall continue until repayment is made to the CDJFS” In addition, cases of alleged provider fraud are referred by the CDJFS to the local county prosecutor for court action. |
|
| County/Local Agency | None. This would be a matter for the courts. | |
| Oklahoma | Agency | Terminate and prosecute |
| Clients/Parents | Recoup & prosecute | |
| Providers | Recoup or collect overpayment, cancel Child Care Provider Contract, prosecution | |
| County/Local Agency | ||
| Puerto Rico | Agency | |
| Clients/Parents | Remove Child of Center | |
| Providers | No Agreement Renewal | |
| County/Local Agency | ||
| Utah | Agency | If it is determined that a worker has fraudulently obtained child care funds, they are terminated and criminal penalties will be pursued. |
| Clients/Parents | They are disqualified from the program for a period of 12 months for their 1st occurrence, 24 months for the 2nd occurrence, and permanent disqualification for the 3rd occurrence. | |
| Providers | ||
| County/Local Agency | N/A | |
| Washington | Agency | The Division of Fraud Investigations (DFI) determines whether there is reason to believe fraud occurred. If they determine this to be the case, they prosecute the individual, agency or other entity which according to the investigation committed the fraud. |
| Clients/Parents | The Division of Fraud Investigations (DFI) determines whether there is reason to believe fraud occurred. If they determine this to be the case, they prosecute the individual, agency or other entity which according to the investigation committed the fraud. | |
| Providers | The Division of Fraud Investigations (DFI) determines whether there is reason to believe fraud occurred. If they determine this to be the case, they prosecute the individual, agency or other entity which according to the investigation committed the fraud. | |
| County/Local Agency | The Division of Fraud Investigations (DFI) determines whether there is reason to believe fraud occurred. If they determine this to be the case, they prosecute the individual, agency or other entity which according to the investigation committed the fraud. | |
| West Virginia | Agency | Termination and prosecution |
| Clients/Parents | Repayment and prosecution | |
| Providers | Repayment and prosecution | |
| County/Local Agency | Depending upon the number of employees involved, see answer in 17D | |
| Wisconsin | Agency | Terminate employment and prosecution in criminal court. |
| Clients/Parents | After 3 IPVs (Intentional Program Violations) the parent/family could be permanently banned from the child care subsidy program. | |
| Providers | prosecution in criminal court. | |
| County/Local Agency | terminate employment and prosecution in criminal court. | |
| Those that did not provide an answer: | ||
| District of Columbia | ||
Appendix 22 >>