BILL ANALYSIS �
AB 949
Page 1
Date of Hearing: April 5, 2011
ASSEMBLY COMMITTEE ON HUMAN SERVICES
Jim Beall Jr., Chair
AB 949 (Gorell) - As Introduced: February 18, 2011
SUBJECT : CalWORKs eligibility: fraudulent representations:
fines
SUMMARY : Doubles the fines on individuals convicted of fraud
committed to obtain or retain aid under the California Work and
Responsibility to Kids (CalWORKs) program. Specifically, this
bill :
1)Provides that the amount of a fine imposed for conviction of
specified offenses involving fraud with respect to CalWORKs
benefits shall be doubled.
2)Directs the county treasurer in the county in which the
judgment is entered to deposit half of the additional fine
into the county general fund, and half into the appropriate
account or fund for the benefit of the county district
attorney's office or county Special Investigative Unit (SIU)
established for the purpose of investigating welfare fraud.
EXISTING LAW
1)Establishes the following penalties and fines for a person
convicted of fraudulent aid claims:
a) 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 6 months, by a fine of not
more than $500, or by both imprisonment and fine.
b) Any person who knowingly makes more than one application
for aid under the provisions of this division with the
intent of establishing multiple entitlements for any person
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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, 2 years, or 3 years, by a fine of not more
than $5,000, or by both that imprisonment and fine; or by
imprisonment in the county jail for a period of not more
than 1 year, or by a fine of not more than $1,000, or by
both imprisonment and fine.
c) 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
follows:
i) If the total amount of the aid obtained or retained
is $950 or less, by imprisonment in the county jail for a
period of not more than 6 months, by a fine of not more
than $500, or by both imprisonment and fine.
ii) If the total amount of the aid obtained or retained
is more than $950, by imprisonment in the state prison
for a period of 16 months, 2 years, or 3 years, by a fine
of not more than $5,000, or by both that imprisonment and
fine; or by imprisonment in the county jail for a period
of not more than 1 year, by a fine of not more than
$1,000, or by both imprisonment and fine.
2)Establishes the CalWORKs program under which each county
provides cash assistance, employment and other supportive
services to needy families.
FISCAL EFFECT : Unknown
COMMENTS : According to the author, "State guidelines recommend
staffing in the ratio of one investigator for every 1000
CalWORKs cases. ? The California State Auditor reported in 2009
that half of the counties they visited budgeted fewer than the
ratio recommended by �DSS]." This bill, the author says, "will
provide much-needed assistance to District Attorneys and welfare
investigative units that are falling short of minimum staffing
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levels."
CalWORKs : 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 (48 months, effective June 1,
2011).
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 (SIU) 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 to 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
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to increase revenues by raising fines on CalWORKs applicants or
recipients who are found to have made fraudulent claims and use
those revenues to fund anti-fraud efforts such as hiring more
investigators.
Arguments in Opposition : The Western Center on Law & Poverty
(WCLP) says that California, "more than any other state in the
nation, has made heavy-duty investments in reducing and
protecting against misuse in all of its public benefits
programs." WCLP points out that California's public benefit
recipients are currently subjected to various forms of data
matching for both positive and negative verification, which are
completed through some 15 state and federal electronic systems
listed in WCLP's opposition letter. While agreeing that "the
theft of state, federal and local funds meant to support the
basic needs of low-income families, disabled and the elderly is
something that should be prevented," WCLP also says that "�t]oo
often, these kinds of policies that seek to increase the bounty
secured by fraud investigators encourage current practices which
are not cost effective" and that this bill "misses the
opportunity to find cost-effectiveness in our existing fraud
detection and prevention system."
This bill would impose greater maximum fines on CalWORKs
applicants or recipients than are imposed on applicants or
recipients in other aid programs. A policy consideration is
whether there is a significantly greater incidence of
substantiated fraud in the CalWORKs program warranting this
disparate treatment. The most recent quarterly Fraud
Investigation Report posted on DSS' website (October through
December 2007), for example, shows that 2.44% of CalWORKs cases
were submitted for investigation and, of 30,868 completed
investigations during that quarter, 65% did not have evidence
sufficient to support an allegation of fraud, and that only 1%
of cases submitted for investigation were referred for
prosecution. The same quarterly report shows similar statistics
for the Food Stamp (now CalFresh) program, with 2.03% of cases
submitted for investigation, and 1% of the cases submitted for
investigation referred for prosecution.
Prior bill : AB 2504 (A. Strickland 2010) was identical to this
bill. AB 2504 was heard but failed passage by this committee in
April 2010.
DOUBLE REFERRAL . This bill has been double-referred. Should
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this bill pass out of this committee, it will be referred to the
Assembly Committee on Public Safety.
REGISTERED SUPPORT / OPPOSITION :
Support
None on file.
Opposition
Legal Services for Prisoners with Children
Western Center on Law & Poverty (WCLP)
Analysis Prepared by : Eric Gelber / HUM. S. / (916) 319-2089