Fingerprint Program to Target Aid Fraud : Welfare: Critics say there are already elaborate security measures and the three-year experiment will cost more than it saves.

State and county officials say that an experimental program to fingerprint welfare recipients ensures the virtual elimination of fraud, but questions are being raised about whether the program will cost more than it saves.

Gov. Pete Wilson last week authorized Los Angeles County to begin fingerprinting about 400,000 adult applicants for Aid to Families With Dependent Children. County officials estimate a savings of $49 million over the life of the three-year pilot project.

But critics of the plan, including legislative analysts, maintain that the savings estimate is based on dubious assumptions and say the state and county may spend $20 million to run the high-tech program while rooting out much less in fraud.

The concerns about the program come at a time when the state and county are anticipating severe budget shortfalls, with expected cuts in social welfare services at both levels.

County officials are counting on the state and federal government to pick up much of the tab for the project, but some key legislators say that unless local officials present more convincing evidence of the need for the program, the money might be better spent elsewhere.

“L.A. County has not provided us with any new information that would change the analysis . . . that this is a risky investment,” said Sara McCarthy, a consultant to state Sen. Diane Watson (D-Los Angeles), who is chairwoman of the Senate’s Health and Welfare Committee.

The new tracking system is designed to thwart welfare recipients who try to collect extra checks by using false identification and Social Security cards to file multiple claims.

Using new fingerprinting technology, prints of the index fingers of aid applicants will be scanned electronically. A computer will compare the prints to those of people already receiving assistance. Applicants who refuse to cooperate will be denied aid.

Los Angeles County will be the first in the nation to fingerprint aid recipients, most of whom are impoverished single-parent families or families in which parents are unemployed or disabled. More than 850,000 adults and children in the county receive about $2 billion a year in benefits.

The Board of Supervisors unanimously approved the pilot project, which they say will reduce welfare costs by weeding out and deterring fraud.

They based their optimism on their experience with a similar fingerprinting program used in the county General Relief program, which serves mostly single adults.

Officials say that since fingerprinting of General Relief recipients began in June, 1991, they have saved about $11 million.

About 1.2% of General Relief cases are terminated for filing duplicate applications.

Others who were unwilling to be fingerprinted also were terminated. According to a 1992 fingerprinting proposal by the county’s Department of Public Social Services, 3,000 people were terminated for this reason during the first six months of the program. “This translates into aid savings of $5.4 million,” according to the proposal.

But critics counter that the county has presented no proof that those who were unwilling to be fingerprinted represented actual instances of fraud. They say that many of the General Relief recipients may simply have been intimidated by the fingerprinting plan.

“We kept asking them why people didn’t show up to be fingerprinted and they said they didn’t look into that aspect of it,” said Kim Flores, a senior consultant to the Assembly’s Ways and Means Committee, which refused to appropriate state funds for the welfare fingerprinting project last year.

Critics of the fingerprinting plan also question whether such fraud is rampant enough to warrant implementation of the costly detection system.

Flores said Aid to Families With Dependent Children already has an extensive computer-based fraud detection system. Investigators can tap into databases to compare information on bank accounts, employment earnings, Social Security income, addresses and phone numbers, for example.

State officials estimate that 1.5% of aid recipients will be caught trying to file a second application. Most of the estimated savings are based on the assumption that the fingerprinting will deter fraud, which officials concede is difficult to calculate.

Mike Genest, the state Department of Social Services’ deputy director for welfare programs, said the state has contracted with an independent accounting firm to make a thorough evaluation of the Los Angeles project to determine how many cases are terminated and why.

Still, many analysts remain skeptical and contend that the money could be better spent.

“Right now the state spends about $72 million for welfare fraud programs, and with this program we’re increasing that about 13% in one fell swoop, but I doubt whether we’re going to be doing a 13% better job,” said Keith Umemoto, a consultant to the state Senate’s Budget Committee. “I think ultimately we’d be much better off spending that money on something that reduces the AFDC population, like . . . collecting child support.”

County officials said the fingerprinting system could be in place within a month and it will take five to six months to get all current aid recipients processed.

The county has spent about $3 million for installation of equipment, hardware and programming, said Lisa Nunez, the county’s project director for the fingerprinting program. That will cover operation of the project through the current fiscal year.

The governor is seeking an appropriation from the Legislature to fund the program in the next fiscal year, and his proposal is scheduled to be taken up by Assembly budget committees this month.

However, state and local officials are so sure of the program’s success that they say it can be funded through expected savings.