Target Welfare Fraud

The 1996-1997 Los Angeles County Grand Jury had strong recommendations on how to improve the county’s performance in ferreting out welfare fraud by both employees and recipients. But the jury’s advice was largely ignored and in some cases vehemently rejected. A follow-up committee of the 1998-1999 grand jury returned to the issue, and not surprisingly found a mess. The county could save hundreds of millions of dollars, the grand jury said, if it ran a tighter ship.

“The potential for fraud” in the Los Angeles County Department of Public Social Services “is enormous,” says the jury’s report.

Los Angeles investigates only 5% of its welfare caseload for fraud. That’s well below the state average of 7.9% and even further behind Riverside (23.8%) and Orange counties (14.2%).

Moreover, when Los Angeles County does investigate it finds fraud only 34% of the time. Again, that is below a state average of 41.1% and far short of Orange County’s record of finding fraud in 71.3% of the cases it investigates.

The sheer volume of Los Angeles County’s average monthly welfare caseload of 242,220 is part of the problem. That’s more than one-third of the state’s overall caseload and more than twice the size of all other Southern California county caseloads combined. But the depth of the Los Angeles County welfare system’s troubles can hardly be blamed on caseload alone.

Consider that about 15% of county fraud cases are dropped because of missing case file information, an unacceptable clerical standard. Overpayments are also a problem, as well as a record of ineffectual investigations even when case file documents haven’t been lost.

Further, the median time between a case categorized as “high priority fraud” and the start of the investigation is 361 days; it has taken as long as 605 days to get started on a case.

The 1996-1997 grand jury cited the woefully small internal investigations staff of just three, with one manager, to oversee a department of 10,000 employees. The supervisors’ rejoinder to this was to add one investigator, a hardly realistic response.

The latest grand jury to consider the problem suggests starting an incentive program to motivate employees to report cases of suspected fraud by their colleagues; more training to recognize the signs of potential fraud; a task force of senior investigators from the welfare fraud prevention and investigation section of the district attorney’s office to review the high number of dismissed cases.

And here’s the muscle part: Retain an outside consultant or private management firm to oversee the the implementation of the recommendations and report directly to the Board of Supervisors. These are solid recommendations. No foot-dragging should be tolerated.