How Much Welfare Budget Lost to Fraud?

November 7, 2013:

Pennsylvania’s Department of Public Welfare (DPW) has an almost $11 billion budget for 2013-2014. A recent report by CBS 21 (video here) should prompt close scrutiny regarding whom taxpayers are actually "helping". The account offered by one former DPW employee suggests a culture that accepts rampant fraud as part of the job:

"The people who have worked there forever will tell you things like, ‘Close your eyes and authorize’ and ‘When in doubt, give it out,’ she recalled… ‘There’s only so much of this you can take….’

"The whistleblower who talked to CBS 21 News said the rules are not enforced and information is not checked for truth. ‘I would always joke you could have the family dog write the statement and stamp his paw on it and we would accept it,’ she said.

"But what might surprise you most is how the system handles fraud. This woman says she was encouraged to look the other way. She remembered a time when she caught a client lying and her supervisor reprimanded her, saying that it wasn’t her job to catch fraud.

"That supervisor wrote on my first EPR (employee performance review) that ‘[she] needs to work more on finding more people eligible instead of not eligible,’"…. (Emphasis added)

Just how much of DPW’s $11 Billion budget is lost to fraud?

According to a 2010 Auditor General’s report there auditors found a 14 percent error rate in approving Medicaid applications, and that is just one DPW program. Even if the losses due to fraud for all DPW programs are only 5 percent of the budget that would reach $550 million.

Not having or not enforcing strict anti-fraud measures is a disservice to taxpayers and the people who are supposed to be served by these programs.