Improper Payments Information Survey for the TANF Program

State of Arizona

Instructions

In accordance with the Paperwork Reduction Act of 1995, collection of this information has been approved by the Office of Management and Budget (OMB) under OMB Control Number 0970-0290, expiration date 10-31-2008.  Submission of this information, however, is voluntary.  The public reporting burden for this collection of information is estimated to average 24 hours per response, including the time for reviewing instructions, gathering and maintaining the data needed, and reviewing the collection of information.  An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number.

Please enter the following information for the individual(s) completing this questionnaire and attachments, so we may contact them to clarify information, if necessary.

Date :   December 28, 2005                                                                                                      

Name:  Greg Wetz                                                                                                                   

Title:     Policy Chief                                                                                                                 

State Agency:   Arizona Department of Economic Security                                                                     

(Area Code) Phone Number:     (602) 542-0212                                                                                     

E-mail Address:             gwetz@azdes.gov                                                                                            

Please return the completed questionnaire and attachments in the enclosed business reply envelope.  Alternatively, you may fax your completed questionnaire and brief attachments to the attention of Dennis Poe at 202-205-5887, or preferably email an electronic copy of the questionnaire and any attachments to him at dspoe@acf.hhs.gov.

If you have any questions or comments regarding your submissions, please contact Dennis Poe at 202-401-4053, or at dspoe@acf.hhs.gov.

Please return the questionnaire and attachments by December 30, 2005.

General Overview:  Policies and Infrastructure

1.       How does the TANF Lead Agency define improper payments?

Improper payments are those payments that are issued to a participant when they receive more than they are entitled to receive due to various reasons such as unreported changes, system errors, client fraud and agency errors.

 

2.       Provide a description (electronic copy, if available) of the organizational structure of the agency in your State that handles improper payments in the TANF program.  If available, please submit an organizational chart, or provide the web site address where it can be found.

Two charts attached

 

3.       Please check all of the topics or activities listed below for which your State has policies or regulations in place for the program. (Please check all that apply.)

X    Steps involved in identifying a potential improper payment

X    Steps involved in verifying an improper payment

X    Establishing claims for improper payments

X    Collecting improper payments, including, for example, the authority to reduce payments to recover overpayments

X    Distribution of recovered improper payments

X    Sources of funding for addressing improper payments

q   Other (please specify : )                                                                                              

 

Identification and Assessment of Improper Payments

4.       Has your State performed an assessment or analysis to determine whether the program is at risk of improper payments?

X    Yes. 

For which of the following uses of program funds did your state perform an assessment or analysis to determine whether the program is at risk of improper payments? (Please check all that apply.)

X a.   Monthly cash assistance payments

X b.   “Nonassistance” benefits or services, for example, one-time cash payments designed to
divert a family from welfare or payments for car repairs or rental assistance

q c.  Other types of benefits and services for families not receiving cash assistance

q d.  Payments to service providers

q e.  Other (Please specify:) ________________________________________________________

q No.

 

5.       Please describe your process for identifying and handling improper payments.

Family Assistance Administration Local Offices, Management Evaluation, Quality Control and Office of Special Investigations identify potential overpayments.  These are forwarded to the overpayment writers in the Family Assistance Administration who determine if an overpayment exists.  Verified overpayments are calculated and sent to Office of Accounts Receivable and Collections (OARC) to establish the claims.  OARC sends the notice of overpayment to participants and collects the monies.  These monies are then distributed back to the various programs.

6.       Which methods, if any, did your state use to identify a total amount of improper payments for the program? (Please check all that apply.)

Calculation based on:

q Findings from the state’s Single Audit

q Other audit findings from state auditors

q Findings from other state or local auditors, including legislative review entities (Please specify :) ______________________________________________________________________________

q Findings from state or local fraud units (Please specify :) ______________________________________________________________________________

q Reviews of service providers and/or contractors

X Reviews of sampled cases, although not statistically representative of all program payments

X Statistically representative sample of payments

X Other (Please specify :)

Root cause analysis of error trends.___________________________

 

7.       Does your State calculate an improper payments (including fraudulent payments) rate, that is, a measure of the percentage of total payments that are determined to be improper? (Please check one response and provide the appropriate data.)

X Yes.  Please describe the methodology used to arrive at the error rate.

q No 

q Information not available.

Total error amount of the sample reviewed divided by the allotment of the sample reviewed.

 

Describing Improper Payments:  Sources, Types, Causes

8.       Please rank the following sources of improper payments (1 to 7) for the program in your State over the past two fiscal years, beginning with one (1) indicating the primary source of improper payments.  Error is defined as an inadvertent mistake whereas fraud is defined as a willful misrepresentation. (Please rank each source below.)

_2_ Client error

___ Provider error

_1__ Agency error

___ Client fraud

___ Provider fraud

___ Agency fraud

___ Other (Please specify)_________________________

 

9.       Of all improper payments in your State, what proportion of those payments would you estimate are overpayments, and what proportion would you estimate are underpayments?  An overpayment is defined as a payment larger than what should have been made/received or any payment that is received when none should have been received.  An underpayment is defined as a payment smaller than what should have been made/received or no payment was received when there should have been one.

Overpayments                     82.85%

Underpayments                   17.15%

Percents represent the error rates of the total sample. 

 

10.   To what extent, if any, have the following factors contributed to improper payments in your State over the past two fiscal years?  (Please check one answer in each row.)

TABLE 10

Factors contributing to improper payments	Great extent	Moderate extent	Little extent	No extent	Don’t know
Related to clients
a. Nonreporting/underreporting of income	X
b. Client receiving payment in more than one jurisdiction
d. Incorrect reporting of household size	X
e. Incorrect citizenship or immigration status			X
f. Incorrect information on client’s compliance with program requirements, such as participating in required activity
g. Other (Please specify):
Related to providers
h. Overstating performance
i. Claiming for services not rendered
j. Other (Please specify): shelter cost (Arizona has two grant rates, dependent upon whether the assistance unit has shelter costs.)	X

 

Prevention of Improper Payments

11.   Please describe your top 3 priorities for preventing and reducing improper payments (e.g., training/meetings for providers on rules and responsibilities; training for agency staff on correct implementation of rules and responsibilities; clear communication with parents on rules and responsibilities; use of information technology.)

1)                   Local office case reads done by direct line supervisors.

2)                   Quarterly Root Cause Analysis sessions with field office leadership and Administration management.

3)                   Management Evaluation reviews.  Although the focus of these reviews are on food stamp cases, the reviews also identify TANF-related errors as well. 

12.   For each activity listed below, indicate whether or not your State performs it to verify the accuracy of information needed to determine eligibility for and/or proper amount of a program payment.  If yes, indicate when in the process the step or activity is performed and how often it is performed.

TABLE 12

Steps or activities  performed	Is the step/activity performed?	If yes, at what stage in the process (e.g., pre-approval/approval; redetermination at  3 mos., 6 mos. or 12 mos. ;etc.)?	If yes, how often?	Please insert a checkmark by the 3 items you consider the most effective.
a. Require documentation from client	X Yes   q No	Approval and all periodic reviews		2
b. Fingerprint clients	X Yes   q No	Approval and 12 month intervals
c. Access online databases	X Yes   q No	Quarterly
d. Match automated computer files	X Yes   q No	Monthly		3
e. Conduct telephone, fax, or email contacts	X Yes   q No	Approval and all periodic reviews
f. Conduct home visits	X Yes   q No	As needed at application and periodic reviews
g. Initiate a fraud investigation if warranted	X Yes   q No	As needed at periodic reviews
h. Conduct program integrity/quality control review	X Yes   q No	Based upon monthly sampling
i. Other (Please specify) :Supervisory case reads	X Yes   q No	Approval and all periodic reviews based upon sampling		1

 

13.   Data sharing is a method used to obtain and disclose information about individuals from within your agency, from other agencies and/or from independent, third party sources, including federal and State agencies or private companies.  These activities can be conducted before an initial payment is made to an individual or provider (pre-payment) and also after payment is made (post-payment) to verify eligibility and payment accuracy.   For each source listed below:

Indicate whether or not your agency or State utilizes this data source to better ensure accurate payments under the program.  If your State utilizes the source, indicate when in the process the source is used (before the payment is issued or at some point after the payment is issued), and/or indicate how often that source is used. (Please check all appropriate responses for each row.)

TABLE 13

Data source	Is the source used?	If yes, when in the process (e.g., pre-approval/approval; redetermination at  3 mos., 6 mos. or 12 mos. ;etc.)?	If yes, how often?	Please insert a checkmark by the 3 items you consider the most effective.
a. Income Eligibility Verification System (IEVS)	X Yes   q No	Redeterminations
b. Other human services programs in your agency/State	X Yes   q No	As needed
c. State department of labor or employment security	X Yes   q No	All redeterminations
d. State directory of new hires	X Yes   q No	All redeterminations
e. State department of motor vehicles	X Yes   q No	Accessed manually – as needed at redetermination
f. Public Assistance Reporting Information System (PARIS)	q Yes   X No
g. State data (from other States) on length of TANF receipt	q Yes   X No
h. State data (from other States) on potential concurrent TANF receipt	q Yes   X No
i.  State data (from other States) on client or provider debarment from benefits, for fraud or other infraction	q Yes   X No
j. Lottery agencies	X Yes   q No	At all redeterminations
k. Prisons and criminal justice agencies at State level	X Yes   q No	As needed
l. National Criminal Information Center (NCIC)	q Yes   X No
m. Local jails	q Yes   X No
n. Credit bureaus	q Yes   X No
o. Financial institutions	q Yes   X No
p. State tax intercepts	q Yes   X No
q. Immigration authorities	X Yes   q No	Approval
r. K-12 school systems	q Yes   X No
s. Community colleges	q Yes   X No
t. Other providers of services, education, training	q Yes   X No
u. Child support	X Yes   q No	Monthly
v. Social Security Administration (SSA) form W-2 (wage statements)	X Yes   q No	As needed for income verification
w. SSA Social Security number verification	X Yes   q No	At approval
x. SSA Supplemental Security Income (SSI) data	X Yes   q No	At approval and all redeterminations
y. SSI death information	X Yes   q No	At approval and all redeterminations
z. Other (Please specify :)	q Yes   q No

 

Recovery of Improper Payments

14.   For the most recently completed fiscal years, how much in program improper payments has your agency, or another agency within your State, recovered? (Please indicate your responses in the space provided below.)

Most recently completed fiscal year  $1,595,000  (Specify ending month/ year)               6/05

X Includes fraudulent improper payments

Next most recently completed fiscal year   $417,000 (Specify ending month/ year)                    6/04

X Includes fraudulent improper payments

q      Not tracked

 

15.   What penalties does your program mandate for clients, agencies, or providers, who commit an error leading to improper payments?

A.  Agency:

B.     Clients/Parents:

Disqualification penalties for cash assistance are 12 months for the first offense, 24 months for the second offense, and permanently for the 3^rd offense.

C.     Providers:

D.     County/Local Agency:

 

Fraud:  Intentional Overpayments

16.   How does the TANF Lead Agency define “fraud”?

Fraud is defined as committing any act intended to mislead, misrepresent, conceal or withhold facts or propound a falsity for the purpose of establishing or maintaining eligibility for benefits or increasing or preventing a reduction in the amount of benefits. 

 

17.   Does your agency maintain data on fraudulent payments in the program as a subset of your improper payments data? (Please check one response.)

q      Yes

If yes, please list the methods you use for finding occurrences of fraud and indicate whether you would rate each method as very effective, somewhat effective, somewhat ineffective, or very ineffective.

X No 

Does any other entity in your State maintain this information, such as a State fraud unit or Inspector General? If yes, please provide us with a contact name and phone number:

 

18.   What steps, if any, beyond improper payments prevention, does your State take to specifically prevent fraud?

o        Penalties for fraud are detailed in written material distributed at the initial eligibility interview. 

o        Information about successful prosecution of fraud is posted in field offices as a deterrent to clients and a reminder to staff that prosecution does occur. 

o        Reporting requirements and penalties for failure to report changes are spelled out in the TANF application form.  

o        The Department maintains a toll-free fraud hotline that facilitates potential fraud reporting to Department staff. 

 

19.   Is your agency required to report, or to have information available, on improper payments to the State legislature, the Governor, or any other higher-level agencies? (Please check one response.)

q      Yes ® Please provide a copy of the report(s), and indicate who received them.

X  No

Other

20.   Describe any other information that may be relevant to improper payments in the program that you wish to share with us.

21.   Please submit copies of pertinent sections of manuals and other State-issued guidance that you would like to make available, or provide the web site address where they can be found.

 

Thank you very much for your time and assistance!