Improper Payments Information Survey for the TANF Program

State of Maryland

 

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 :   12/23/05                                                                                 

Name:  Vesta Kimble                                                                                                                           

Title:     Chief, Bureau of Quality Control                                                                               

State Agency:   Maryland Department of Human Resources                           

(Area Code) Phone Number:     (410) 767-7947                                                                      

E-mail Address:             vkimble@dhr.state.md.us                                                          

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? Any overpayment or agency-caused underpayment to a Temporary Cash Assistance recipient.

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.

Please see www.dhr.state.md.us  Click on “Administrations” and then click on “Family Investment Administration” and “Office of Inspector General”

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

x d.    Payments to service providers

q e.  Other (Please specify:) ________________________________________________________
___________________________________________________________________________

q No.

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

For 4a., a random sample of paid cases is selected each month for review as well as a random sample of denied and closed cases. Findings include Overpayments and agency-caused Underpayments, as well as Invalid closures and denials.   For 4b.,an examination of each Welfare Avoidance Grant issued is conducted by headquarters staff.  For 4d., contracts with Work Program vendors are examined and reviewed before award, and activities/outcomes are monitored post-award.

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:

x Findings from the state’s Single Audit

x Other audit findings from state auditors

x Findings from other state or local auditors, including legislative review entities (Please specify :) __Department of Legislative Services; DHR’s Office of Inspector General__________

x Findings from state or local fraud units (Please specify :) ____DHR’s Office of Inspector General____________________________________________________

x 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

q Other (Please specify :) ____________________________________________________________________

 

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. 

      A monthly random sample of paid cases is selected for review by a centralized, State-level Bureau of Quality Control; interviews with customers, audits of the local agency’s case record, examination of the State’s eligibility data base as well as several on-line systems, and examination of the Work Programs database and work program record are used to derive the correct benefit amounts.  Local offices are instructed to correct the historical and on-going months based on the information.  Headquarters staff monitor completion of the actions.

q No 

q Information not available.

 

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.)

_1_ Client error

_N/A__ Provider error

_2_ Agency error

_3_ Client fraud

_N/A__ Provider fraud

_N/A__ 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                     93        %

Underpayments                    7         %

 

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			X
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		X
g. Other (Please specify):  direct child support payments not reported or not calculated correctly		X
Related to providers
h. Overstating performance			X
i. Claiming for services not rendered			X
j. Other (Please specify):

 

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) On-line access to verify and query for sources of income and factors of eligibility (wages, unemployment benefits, Federal disability and survivors’ benefits, motor vehicles administration for address check, Federal queries for Social Security Numbers, immigration status, as well as automated adjustments to grants (e.g. COLA for Federal disability and survivors’ benefits), and periodic matches of data with the State’s eligibility database (lottery, PARIS, prisons, death index, etc.)

2) Training front-line staff about monitoring compliance with Work Programs, as well as sanctioning procedures regarding Work Programs and Substance Abuse requirements.

3) Automated interface to capture  any child support payments made by non-custodial parents, as well as monitor cooperation with paternity establishment, enforcement and collection.

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	Pre-approval and at 6-mo. redet.; also during Quality Control audits and Fraud investigations	ß
b. Fingerprint clients	q Yes   x No
c. Access online databases	x Yes   q No	Pre-approval and at 6-mo. redet.; also during Quality Control audits and Fraud investigations; and at reported interim changes	ß
d. Match automated computer files	x Yes   q No	Pre-approval, at regularly scheduled intervals depending on the computer file	ß
e. Conduct telephone, fax, or email contacts	x Yes   q No	Pre-approval and at 6-mo. redet.; also during Quality Control audits and Fraud investigations	ß
f. Conduct home visits	x Yes   q No	Office of Inspector General during course of Fraud investigations; also by Quality Control when appropriate	ß
g. Initiate a fraud investigation if warranted	x Yes   q No	On-line fraud referral available for local agencies, general public; Welfare Fraud  Hotline phone number; and as a result of a Quality Control audit	ß
h. Conduct program integrity/quality control review	x Yes   q No	Post-approval; post-denial and post-closure; Supervisory reviews and pre-issuance reviews are also conducted in local offices; and, 2nd-level reviews are conducted by headquarters staff	ß
i. Other (Please specify :)	q Yes   q No

 

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)	q Yes   x No	SVES is used instead (State Verification Exchange System)
b. Other human services programs in your agency/State	x Yes   q No	Child welfare case codes linked in eligibility database	ß
c. State department of labor or employment security	x Yes   q No	Pre-approval and at 6-mo. redet.; also during Quality Control audits	On-line, as needed	Ö
d. State directory of new hires	x Yes   q No	Automated alerts to eligibility database overnight	Whenever case is active	Ö
e. State department of motor vehicles	x Yes   q No	Pre-approval and at 6-mo. redet.; also during Quality Control audits	On-line access, as needed
f. Public Assistance Reporting Information System (PARIS)	x Yes   q No	If case is active	Quarterly
g. State data (from other States) on length of TANF receipt	x Yes   q No	Pre-approval; during Fraud investigations	Worker must call other state’s contact
h. State data (from other States) on potential concurrent TANF receipt Maryland-District of Columbia Online system for  Southern Md. counties	x Yes   q No	Pre-approval and at 6-mo. redet.; also during Quality Control audits and Fraud investigations	On-line access when needed
i.  State data (from other States) on client or provider debarment from benefits, for fraud or other infraction: Disqualified Recipient System (DRS)	q Yes   q No	Pre-approval and at 6-mo. redet.; also during Quality Control audits and Fraud investigations	On-line query, as needed
j. Lottery agencies	x Yes   q No	Tape match	Quarterly
k. Prisons and criminal justice agencies at State level	x Yes   q No	Tape match	Quarterly match and on-line inquiry as needed
l. National Criminal Information Center (NCIC)	q Yes   x No
m. Local jails  Baltimore City Detention Center data match quarterly	x Yes   q No	On-line inquiry as needed; otherwise Worker must call jail	As needed
n. Credit bureaus	x Yes   q No	During Fraud investigation,  with assistance of State police	As needed
o. Financial institutions	x Yes   q No	Pre-approval and at 6-mo. redet.; also during Quality Control audits and Fraud investigations	As needed
p. State tax intercepts	x Yes   q No	Central Collections Unit uses TRIP/TROP for non-custodial parents (obligors)	As needed
q. Immigration authorities Systematic Alien Verification for Entitlement program	x Yes   q No	Pre-approval and at 6-mo. redet.; also during Quality Control audits and Fraud investigations	On-line as needed
r. K-12 school systems	x Yes   q No	Pre-approval and at 6-mo. redet.; also during Quality Control audits and Fraud investigations	As needed
s. Community colleges	x Yes   q No	Pre-approval and at 6-mo. redet.; monthly as needed for Work Program attendance; also during Quality Control audits and Fraud investigations	As needed
t. Other providers of services, education, training	x Yes   q No	Pre-approval and at 6-mo. redet.; monthly as needed for Work Program attendance; also during Quality Control audits and Fraud investigations	As needed
u. Child support	x Yes   q No	Automated and integrated with the TANF eligibility database	Overnight	Ö
v. Social Security Administration (SSA) form W-2 (wage statements)	qYes   x No
w. SSA Social Security number verification	xYes   q No	Pre-approval and at 6-mo. redet.; also during Quality Control audits and Fraud investigations	Overnight on-line query
x. SSA Supplemental Security Income (SSI) data	x Yes   q No	Pre-approval and at 6-mo. redet.; also during Quality Control audits and Fraud investigations	Overnight on-line query
y. SSI death information	x Yes   q No	Tape match	Quarterly
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  SFY 2005                                                                (Specify ending month/ year)  June 30, 2005

q      Includes fraudulent improper payments Yes,     $1,824,867 recoupment and recoveries

Next most recently completed fiscal year                     (Specify ending month/ year)                 

q      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: N/A

B.     Clients/Parents:  Re-payment of over-issuances, Intentional Program Violations for willful misrepresentation (household disqualification for 6 mos. for first finding; 12 mos. for second finding; permanent for third finding; full repayment can shorten duration of first and second finding sanctions

C.     Providers: Pay for performance contracts withhold  payment until objectives are achieved.

D.     County/Local Agency: Corrective action plans are required if the payment accuracy rate is below 94%.

 

Fraud:  Intentional Overpayments

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

Intentional Program Violations are defined as: “Intentionally 1) making false or misleading statements for the purpose of establishing or maintaining eligibility for cash assistance, or to increase the cash assistance grant, or to prevent a reduction in the cash assistance amount; or 2) misrepresenting, concealing, or withholding facts in an attempt to receive benefits to which they are not entitled.” (TCA Manual, Chapter XVI, Sec.1)

 

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.

Office of Inspector General investigations:

   -Welfare Fraud Hotline…Very Effective

   -Fraud referrals on-line…Very Effective

   -Data tape matches

Family Investment Administration:

   -Bureau of Quality Control audits…Very Effective

  -On-line access for front-line staff to databases concerning income and household

       circumstances…Very Effective

 -Automated matches with eligibility database for New Hire, for example…Very Effective

 

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

1)      Make customers aware up-front of the possibility of Fraud investigations and Quality Control audit,

2)      Inform customers of the reporting requirements,

3)      Send systems-generated notices that summarize the income and circumstances that were used to determine the benefit amount,

4)      Send systems-generated redetermination. forms that list household circumstances currently known to the agency.

 

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.

See attached document “Legislative Report on Improper Payments SFY 2005”

 

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.

Please visit www.dhr.state.md.us, click on Administrations, then

1)      Family Investment Administration, then Temporary Cash Assistance, then TCA Manual, then

(a)   #4 Application, then

(1)   Quality Control,

(2)   Fraud,

(3)   Computer Matches

(b)   #16 Intentional Program Violations

(c)    #17 Sanctions

(1) Fraud and Fraudulent Misrepresentation

(d)   #18 Payment Irregularities

(e)    #19 Appeals & Hearings

(1) Intentional Program Violations

2)  Office of Inspector General, then Welfare Fraud Complaints

 

Thank you very much for your time and assistance!