BILL ANALYSIS
AB 2504
Page 1
Date of Hearing: April 13, 2010
ASSEMBLY COMMITTEE ON HUMAN SERVICES
Jim Beall, Jr., Chair
AB 2504 (Audra Strickland) - As Amended: April 5, 2010
SUBJECT : CalWORKs: fraud fines
SUMMARY : Doubles fines for families of the California Work and
Responsibility to Kids Program (CALWORKS) that are found to have
made fraudulent claims and diverts the funds to county district
attorneys offices and special investigative units for the
benefit of county general funds, the district attorneys, and the
hiring of more welfare fraud investigators, as specified.
Specifically, this bill :
1)Doubles the fines for CalWORKs families who have been found to
make fraudulent claims, as specified in existing law.
2)Directs a county treasurer to split the additional fine amount
between the county general fund and the district attorney's
office or special investigative unit.
EXISTING LAW :
1)Establishes the following penalties for a person making
fraudulent claims within the CalWORKs program:
2)Any person who, willfully and knowingly, with the intent to
deceive, makes a false statement or representation or
knowingly fails to disclose a material fact in order to obtain
aid under the provisions of this division or who, knowing he
or she is not entitled thereto, attempts to obtain aid or to
continue to receive aid to which he or she is not entitled, or
to receive a larger amount than that to which he or she is
legally entitled, is guilty of a misdemeanor, punishable by
imprisonment in the county jail for a period of not more than
six months, by a fine of not more than five hundred dollars
($500), or by both imprisonment and fine.
3)Any person who knowingly makes more than one application for
aid under the provisions of this division with the intent of
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establishing multiple entitlements for any person for the same
period or who makes an application for that aid for a
fictitious or nonexistent person or by claiming a false
identity for any person is guilty of a felony, punishable by
imprisonment in the state prison for a period of 16 months,
two years, or three years, by a fine of not more than five
thousand dollars ($5,000), or by both imprisonment and fine;
or by imprisonment in the county jail for a period of not more
than one year, or by a fine of not more than one thousand
dollars ($1,000), or by both imprisonment and fine.
4)Whenever any person has, willfully and knowingly, with the
intent to deceive, by means of false statement or
representation, or by failing to disclose a material fact, or
by impersonation or other fraudulent device, obtained or
retained aid under the provisions of this division for himself
or herself or for a child not in fact entitled thereto, the
person obtaining this aid shall be punished, as specified.
FISCAL EFFECT : Unknown
COMMENTS : According to the author, existing law allows counties
to contract with the district attorney for investigative
services to detect fraud in the application for and continuing
receipt of funds administered through the CalWORKS program. The
law does not currently designate a funding floor or minimum
staffing levels. However, state guidelines recommend staffing
in the ratio of one investigator for every 1,000 CalWORKs cases
(California Department of Social Services (DSS) Manual of
Policies and Procedures 20-007.113). In Ventura, the Government
Fraud investigation unit is currently staffed at less than half
of that recommendation. Even so, the funding provided by the
county is insufficient and thus they have been forced to reduce
staffing in that unit. According to the California State
Auditor, three of the six counties they visited, budgeted fewer
than the ratio recommended by DSS.
This bill, which doubles the CalWORKs fine and divides the
increased portion of the fine between the county, District
Attorney's office and special investigative units, will give
welfare investigative units much-needed assistance for reaching
the DSS recommended staffing ratio.
CalWORKs
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Also known as the welfare-to-work program, CalWORKs is the
State's version of the federal Temporary Assistance to Needy
Families program. CalWORKs provides cash assistance for living
expenses to families with eligible children in the household.
Eligibility is based on need according to age, citizenship,
deprivation, income, resources, and residency. Unless they are
declared exempt for such reasons as permanent or temporary
disabilities, adult members of the household must meet work or
vocational training requirements to maintain eligibility. In
addition, individuals who have been convicted of drug-related
felonies are ineligible to receive aid under this program. The
amount of cash assistance decreases as family income increases.
Adults may not receive CalWORKs cash assistance for more than 60
months.
Fraud infrastructure
DSS is the state agency responsible for supervising the
administration of the CalWORKs program. Through policy memos
and regulations, DSS provides guidance and oversight to
counties. It also requires counties to submit data related to
their antifraud activities each month and is charged with
coordinating the counties' efforts to combat welfare fraud by
providing guidance, technical assistance, and information on
fraud prevention and detection.
State regulations require counties to maintain a special
investigation unit (SIUs) to investigate potential welfare fraud
and to refer substantiated fraud either for prosecution or for
administrative settlement. SIUs are located in each of the 58
counties as follows: a) Two in sheriff's offices; b) 25 in
county welfare offices; c) 25 in district attorneys offices; and
d) six in a county welfare office and district attorney office.
Recent Fraud Audit
In November of 2009, the Bureau of State Audits (BSA) published
a report entitled, Department of Social Services: For the
CalWORKs and Food Stamp Programs, It Lacks Assessments of
Cost-Effectiveness and Misses Opportunities to Improve Counties'
Antifraud Efforts. The author cites a BSA statement that, "In
response to workload and staffing issues, counties have
developed prosecution thresholds below which the district
attorney's office will generally not accept cases referred for
prosecution." Through this bill, the author hopes to increase
revenues by raising fines on CalWORKs applicants or recipients
who are found to have made fraudulent claims and use those
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revenues to fund anti-fraud efforts such as hiring more
investigators.
The Coalition of California Welfare Rights Organizations, Inc
(CCWRO) is opposed to this bill and raising fines because it
believes that most of the fines would not be collected and
therefore no revenue would be raised. Rather, CCRWO believes
the bill will cost the state more money. It explains that
welfare parents would have to do more time in prison or county
jails for not paying the fine. Meanwhile, in their absence, the
children will become part of the foster care system at a cost of
$2,500 per child per month and adds that the additional cost of
incarcerating the parents comes at a substantial cost as well.
CCWRO adds that there is no appropriation in the bill covering
for these unintended consequences of the bill.
The Western Center on Law & Poverty (WCLP) is opposed to this
bill as well. WCLP states that the author will argue that to
prevent welfare fraud we must increase penalties and give county
government more incentive to prosecute. The truth is that
welfare fraud is a far smaller problem than the author suggests.
According to DSS data, from October to December of 2007, it
found that in the CalWORKs program that only 2.44 percent of
CalWORKs cases monthly were submitted for investigation and that
of that amount 65% was thrown out for insufficient evidence.
This resulted in less than one percent of all cases submitted
for investigation were referred for prosecution.
DOUBLE REFERRAL . This bill has been double-referred. Should
this bill pass out of this committee, it will be referred to the
Assembly Public Safety Committee.
REGISTERED SUPPORT / OPPOSITION :
Support
None on file.
Opposition
Coalition of California Welfare Rights Organizations, Inc.
(CCWRO)
Western Center on Law & Poverty
Analysis Prepared by : Frances Chacon / HUM. S. / (916)
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