Administrative Review Investigations Internal Audit Security & Emergency Management

Transcription

1 2014 Annual Report Administrative Review Investigations Internal Audit Security & Emergency Management 1 OFFICE OF INSPECTOR GENERAL 2013 ANNUAL REPORT

2 Inspector General s Letter Welcome! It is my pleasure to present the annual report of the DHS Office of Inspector General. This reporting period covers July 1, 2013, through June 30, The information in this report provides an overview of the work done this year by the four different units Internal Audit Unit, Administrative Review Unit, Investigations Unit, and Security & Emergency Management Unit that make up the Office of Inspector General. These four units work to maintain DHS accountability by identifying contract non-compliance and questioned costs, verifying accuracy in programs administration, conducting both administrative and criminal investigations of fraud and misconduct, and managing information security risks and emergency situations. The Office of Inspector General oversees and preserves the integrity of DHS programs and services through prevention, detection and prosecution of fraud, waste or abuse by DHS clients, vendors, employees or the general public. The employees of OIG work hard each and every day to uphold the integrity of DHS. I would like to thank you in advance for reading our annual report and hope it provides you with valuable information. Sincerely, Tony Bryan Inspector General OIG Annual Report

3 Mission The Office of Inspector General oversees and preserves the integrity of DHS programs and services through prevention, detection and prosecution of fraud, waste or abuse by DHS clients, vendors, employees or the general public. 3 OFFICE OF INSPECTOR GENERAL 2013 ANNUAL REPORT 2014 OIG Annual Report 3

4 ORGANIZATIONAL STRUCTURE Administrative Review Unit The Administrative Review Unit is responsible for performing quality control reviews on sampled cases from the assistance programs administered by DHS. Investigations Unit The Investigations Unit is responsible for detecting and investigating fraud and employee misconduct. This unit is also responsible for submitting reports to the district attorney for prosecution. Internal Audit Unit The Internal Audit Unit oversees and preserves the integrity of DHS programs and services and helps ensure administration of public resources in a fiscally responsible and ethical manner. Security & Emergency Management Unit The Security & Emergency Management Unit identifies, assesses and manages information security risks to DHS business processes, assets and information systems. This unit also assists offices with emergency management, including the development and management of continuity of operations and disaster recovery plans OIG Annual Report

5 BACKGROUND In 1962, the DHS director formed the Special Investigation Unit to work with federal auditors in prosecuting client fraud and reducing error rates. In 1979, the Special Investigation Unit was reorganized to form a new division of DHS called the Office of Inspector General. In 1985, an Internal Audit Unit was added to enable the division to review, coordinate, and oversee audits of DHS contractors. In 1993, the Oklahoma Legislature authorized the DHS director to commission OIG investigative agents as peace officers. In 1996, the Administrative Review Unit was added to ensure quality control in DHS assistance programs. Most recently, a reorganization in 2012 added the Security & Emergency Management Unit to identify and manage information security risks to the agency and to assist offices with emergency operations. 5 OFFICE OF INSPECTOR GENERAL 2013 ANNUAL REPORT 2014 OIG Annual Report 5

6 ADMINISTRATIVE REVIEW UNIT T he Administrative Review Unit conducts mandated quality control reviews in the Supplemental Nutrition Assistance Program (SNAP), Medicaid, and Child Care Subsidy programs. The unit is also participating in a new pilot program to conduct Payment Error Rate Measurement (PERM) reviews of Oklahoma Health Care Authority (OHCA) SoonerCare program cases. By the Numbers for SFY 2014: 1,915 SNAP quality control case reviews were processed.* 611 Medicaid quality control reviews were processed.* 276 Child care quality control reviews were processed. * Includes active and negative action reviews BEST PRACTICES IDENTIFIED AND DEPLOYED SFY 2014 Cost savings through the use of technology In SFY 2014, the Administrative Review Unit initiated monthly teleconferencing with out-stationed staff. Staff previously traveled from across the state to the OIG office each month for these conferences at an average annual travel cost of $21, By reducing the number of conferences held in-person at the OIG office from 12 per year to four, the Administrative Review Unit reduced annual travel costs and saved approximately $14, Promoting efficiency and accountability In SFY 2014, the Administrative Review Unit began scanning and uploading SNAP documents into the federal reporting system each day rather than loading information onto discs monthly and mailing them to the regional office of the United States Department of Agriculture (USDA) Food and Nutrition Service (FNS). This has resulted in time saved when preparing the cases for the required federal sub-sample and has removed the possibility of delayed submission or security breaches due to lost or misdirected mail OIG Annual Report

7 Reviewing the Reviewers The USDA FNS collects a sub-sample of Administrative Review Unit SNAP quality control reviews processed and conducts an audit of those reviews to ensure their accuracy. FNS sub-samples approximately one-third of the cases pulled for quality control review annually. By the Numbers for SFY 2014: 1,915 SNAP quality control case reviews were processed.* 722 SNAP quality control cases were sub-sampled by FNS.* There were no federal difference cases accepted due to state reviewer or supervisor error. 100 percent was the rate of accuracy. * Includes active and negative action reviews Reviewers in the OIG Administrative Review Unit have maintained a rate of accuracy of above 99 percent on these FNS sub-sampled SNAP reviews over the last five years. Administrative Review Unit Percentage Rate of Accuracy % 99.80% 99.60% 99.40% 99.20% 99.00% 98.80% 99.88% % % % % Special Recognition In FFY 2013, Oklahoma was one of only nine states in the nation to have quality control completion rates above 98 percent. Oklahoma s rate was percent. This accomplishment received recognition at this last year s annual conference of the National Association for Program Information and Performance Management. Completing the maximum number of reviews possible ensures the integrity of the review process and the validity of the statistics OIG Annual Report 7

8 INVESTIGATIONS UNIT T he Investigations Unit primarily conducts client-centered benefits fraud investigations. Benefits programs investigated most often include the SNAP, Medicaid, Child Care, and Temporary Assistance to Needy Families (TANF) programs. This unit also conducts SNAP trafficking investigations of clients and retailers and DHS employee misconduct internal investigations. The Investigations Unit is comprised of three sub-units all with distinct responsibilities but also with overlapping functions that work together toward the mission of fraud detection and investigation. These sub-units are called Referral Management, Fraud Investigations and Trafficking Investigations. Referral Management The Referral Management sub-unit receives new fraud and employee misconduct complaints from various sources and conducts a preliminary investigation to determine if formal investigation is warranted. This sub-unit also works the Public Assistance Reporting Information System (PARIS) interstate match report to locate instances of multi-state concurrent receipt of assistance by a client. By the Numbers for SFY 2014: 6,276 new complaints were recieved and reviewed percent of new complaints referred to fraud units after preliminary investigation percent of new complaints closed for cause after preliminary investigation. Sources of Referrals 23% Anonymous 49% Data Matches 22% 6% Known DHS Source Known Outside Source OIG Annual Report

9 Fraud Investigations and Trafficking Investigations The Fraud Investigations sub-unit conducts formal criminal and administrative investigations of cases involving potential client benefits fraud and internal investigations of DHS employee misconduct. The Trafficking Investigations sub-unit conducts investigations including undercover investigations of both clients and retail stores who are allegedly involved in the trafficking of SNAP benefits. Investigative Agents in the Fraud Investigations and Trafficking Investigations sub-units are commissioned peace officers with authority to serve warrants, make full custody arrests, and conduct protection detail when requested. By the Numbers for SFY 2014: 675 cases were presented for overpayment calculation. 104 cases were presented for administrative disqualification. 89 cases were presented for prosecution. 2,361 cases were closed after investigation. 106 of those cases were prosecuted. 79 of those cases had an administrative disqualification hearing. 496 of those cases had a voluntary repayment agreement or disqualification. 74 of those cases had recoupment. 1,624 of those cases had another cause. 28 internal investigations were closed percent of cases closed had overpayments. Closed case restitution/reimbursements amounted to $485, Closed case recoupments amounted to $1,600, Closed case projected savings amounted to $1,531, The USDA savings from closed SNAP trafficking retailer investigations only* was $4,376,066. *Savings to the USDA SNAP program in Oklahoma 2014 OIG Annual Report 9

10 Benefits Fraud Case Highlights SFY 2014 Pottawatomie County An investigation was conducted regarding a client who allegedly failed to properly report her household composition and income. The investigation revealed that the client had failed to report that her husband lived in the home and was employed. This incorrectly reported household composition and unreported income led to the client receiving SNAP benefits that she was not eligible to receive. The AFS Benefit Integrity and Recovery Section calculated that the client had received $33, in SNAP assistance that she was not eligible to receive. A report was submitted to the Pottawatomie County District Attorney s Office and charges of Obtaining Food Stamps by Fraud and False Claim Against a State Agency were filed against the client. In June 2014, she received two seven-year deferred sentences to run concurrently and was ordered to pay $33, in restitution to DHS. Oklahoma County An investigation was conducted regarding a client who allegedly failed to properly report household income. The investigation revealed that the client had failed to report that she was employed. The AFS Benefit Integrity and Recovery Section calculated that she had received $8, in SNAP assistance that she was not eligible to receive. A report was submitted to the Oklahoma County District Attorney s Office, and three counts of Obtaining Food Stamps by False Representation were filed against the client. In May 2014, she received a one-year suspended sentence on each count to run consecutively, and she was ordered to pay $8, in restitution to DHS. Kingfisher County An investigation was conducted regarding a client who allegedly failed to properly report her household composition and income. The investigation revealed that the client failed to report that she and the father of her child lived together. She also failed to report that her child s father was employed. The AFS Benefit Integrity and Recovery Section calculated that she had received $9, in SNAP assistance that she was not eligible to receive. A report was submitted to the Kingfisher County District Attorney s Office, and charges of Obtaining Food Stamps by Fraud were filed against the client. In June 2014, she received a 10-year deferred sentence and was ordered to pay $9, in restitution to DHS. Tulsa County An investigation was conducted regarding a client who allegedly failed to properly report household income. The investigation revealed that the client had failed to report that he was employed. The AFS Benefit Integrity and Recovery Section calculated that the client received $5, in SNAP assistance that he was not eligible to receive. A report was submitted to the Tulsa County District Attorney s Office, and one count of Obtaining Welfare Assistance by Fraud was filed against the client. In November 2013, he received a two-year suspended sentence and was ordered to pay $5, in restitution to DHS OIG Annual Report

11 Trafficking Case Highlights SFY 2014 Oklahoma County Using fraud analytic software, OIG investigators identified a small convenience store whose SNAP transactions were indicative of SNAP trafficking. OIG identified approximately 30 SNAP recipients whose transactions were indicative of SNAP trafficking at the store. OIG agents interviewed many of these recipients, and several of them admitted to trading their SNAP benefits to the manager of the store in exchange for cash. A report was submitted to the Oklahoma County District Attorney s Office, and three counts of Trafficking in Food Stamps were filed against the manager. In June 2014, the manager received a twoyear suspended sentence for each count and was ordered to pay $7, in restitution to DHS. This investigation further led to 29 individuals being disqualified from the SNAP program for trafficking. Additional SNAP program savings of $99, was identified as a result of these disqualifications. Oklahoma County OIG agents conducted an investigation involving allegations of SNAP recipients trading benefits to a local convenience store in exchange for cash. During the course of the investigation, OIG discovered that this client s SNAP EBT transactions at the convenience store under investigation appeared to suspiciously large. OIG agents located and interviewed the recipient. She admitted to trading approximately $ in SNAP benefits in exchange for cash over the course of eight separate illegal transactions. The case was submitted for prosecution by the Oklahoma County District Attorney s Office. In October 2013, the client pled guilty to three counts of Trafficking in Food Stamp Benefits and received a seven-year suspended sentence on each count. She was ordered to pay $ in restitution to DHS. As a result of the criminal conviction of Trafficking in Food Stamp Benefits in excess of $500.00, she was administratively disqualified from the SNAP program for life. Internal Investigation Case Highlights SFY 2014 Oklahoma County An investigation was conducted into a CWS case worker who allegedly used a state-issued fuel card to purchase fuel for her personal vehicle while she was out on extended leave. A report was submitted to the Oklahoma County District Attorney s Office, and four counts of Embezzlement By Public Employee were filed against the employee. In March 2014, the employee pled no contest to one count and guilty to three counts. She was given a three-year deferred sentence on all four counts, was ordered to perform 50 hours of community service, and was ordered to make restitution of $ The employee was also terminated from employment OIG Annual Report 11

12 INTERNAL AUDIT UNIT T he Internal Audit Unit is comprised of two sub-units with different auditing functions. The Internal Audit sub-unit focuses on audits of DHS programs, processes and contractors, while the Child Care Audit & Investigations sub-unit conducts both investigative and random sample audits of child care providers to determine compliance with subsidy contracts. Internal Audit The Internal Audit sub-unit provides independent, objective assurance and consulting services designed to add value and improve operations. It helps DHS accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of management controls and processes. The Internal Audit sub-unit conducts audits of DHS programs, processes and contractors to help ensure accountability and compliance with state and federal regulations. The audit plan is developed using a risk-based methodology and may include special requests by management. The Internal Audit sub-unit also reviews independent audit reports of DHS contractors to track audit findings, evaluate solvency and determine compliance with contract requirements and technical standards. By the Numbers for SFY 2014: 98.7 percent of audit recommendations were accepted. 254 audits and desk reviews were completed. The cost savings identified by audits and desk reviews was $36, Desk Reviews by Division 24% 9% 1% 66% Community Living and Support Services Child Welfare Services Adult and Family Services Other OIG Annual Report

13 Internal Audit Highlights SFY 2014 Aging Services Older Americans Act (OAA)/Senior Nutrition Project Upon management request, the Internal Audit Unit completed a compliance audit of the Northern Oklahoma Development Authority Area Agency on Aging. Auditors reviewed internal controls, program income, and program expenditures including payroll and equipment. Auditors found that the OAA was overcharged for services provided. Questioned costs totaled $25, Fair Labor Standards Act (FLSA) The Internal Audit Unit performed an audit of FLSA in a county office to determine if policies and procedures were followed regarding hours worked, leave claimed, and overtime and compensatory time earned. Auditors identified non-compliance in the areas of leave and compensatory time reporting, which resulted in adjustments to employee leave and compensatory time balances. The Internal Audit Unit will continue to perform FLSA audits in SFY Supplemental Nutrition Assistance Program (SNAP) The Internal Audit Unit performed audits of SNAP benefits for two drug and alcohol treatment facilities to determine if client benefits were handled in accordance with policy and procedures. Recommendations were made and accepted regarding benefit withdrawals. Auditors identified $3, that was reimbursed to client benefit accounts. Child Care Services A compliance audit of the contract with Oklahoma Child Care Resource and Referral Association Inc. and three subcontracted agencies was conducted. Auditors found unallowable expenses of $3, % Internal Audits by Division 11% Community Living and Support Services Child Welfare Services 21% 16% 47% Adult and Family Services Office of Planning Research and Statistics Finance & Administration 2014 OIG Annual Report 13

14 Child Care Audit & Investigations The Child Care Audit & Investigations Unit helps ensure that child care providers are paid correctly according to their contracts with DHS and are maintaining a drug-free workplace. The unit also helps ensure that families receiving program benefits have met eligibility requirements. The Child Care Audit & Investigations Unit makes recommendations to Adult and Family Services (AFS) to cancel contracts based on audit findings. Additionally, licensing violations discovered during an audit are reported to Child Care Services (CCS) for further review and action. When overpayments are discovered and require collection, the unit reports provider overpayments to Financial Services and client overpayments to AFS. An investigative agent in the Child Care Audit & Investigations Unit conducts criminal investigations of complaints alleging drug use at child care facilities. The investigative agent is a commissioned peace officer with authority to serve warrants and make full custody arrests. Investigation results and contract cancellation recommendations are provided to AFS and CCS. By the Numbers for SFY 2014: 71 new child care referrals were received. 54 investigative child care audits were completed. The amount of provider overpayments from investigative audits was $110, random child care audits were completed. The amount of provider overpayments from random audits was $25, The total amount of child care provider overpayments was $136, client overpayments were discovered during audits. The amount of client overpayments discovered during audits was $72, The total child care audits with overcapacity was 8.26 percent. The total child care audits with card or PIN violations was 9.09 percent. The number of child care drug investigations was percent of drug investigations had confirmed findings OIG Annual Report

15 SECURITY & EMERGENCY MANAGEMENT UNIT T he Security & Emergency Management Unit performs two different, yet related, functions for DHS. The information security function identifies, assesses and manages information security risks to DHS business processes, assets and information systems. The emergency management function assists offices with emergency management, including the development and management of continuity of operations and disaster recovery plans. By the Numbers for SFY 2014: 146 security incidents were reported. 23 of those security incidents were for system misuse. 30 of those security incidents were for breach of confidence. 27 of those security incidents were security breaches. 54 of those security incidents were for stolen or missing assets. 0 of those security incidents were for emergency management. 12 of those security incidents were for general concerns. 53 contracts had information security language indexed. 28 contractually required risk assessments were reviewed. 135 continuity of operations plans were reviewed. In SFY 2014, this unit continued to focus most of its efforts on developing agency information security policies and formalizing unit procedures. The unit also worked on a standard process for addressing the increase in stolen or missing assets resulting from the deployment of a large number of smartphones to agency employees. Finally, in addition to working with DHS offices and divisions on developing and updating continuity of operations plans, this unit began auditing those plans to ensure their completeness and, hopefully, their usefulness should they need to be activated OIG Annual Report 15

16 PROFESSIONALISM AND NETWORKING OIG employees understand the value of networking with like-minded professionals who are committed to the prevention, detection and prosecution of fraud, waste or abuse. As a result, many OIG employees are actively involved in professional organizations that promote continuous learning and innovative approaches to achievement of the OIG mission. United Council on Welfare Fraud (UCOWF): Several OIG investigators are members of this organization of investigators, administrators, prosecutors, eligibility workers and claims writers from agencies across the United States and Canada who have combined their efforts to fight fraud, waste and abuse in social service programs. Public Assistance Reporting Information System (PARIS): OIG is a participating member of this data matching system, and the Chief Investigative Administrator is on the PARIS Board of Directors. Certified Public Manager (CPM): Two OIG child care audit and investigations staff are graduates of this nationally-accredited comprehensive management development program whose primary goal is to improve the performance of public sector managers and the organizational performance of state, local and federal government. Institute of Internal Auditors (IIA): All OIG auditors are members of this international organization that is recognized as the internal audit profession s leader in certification, education, research and technical guidance. The Internal Audit Administrator and one Internal Audit Manager are certified internal auditors the hallmark designation of internal audit granted by the IIA. Oklahoma County Coalition Against Financial Exploitation of the Elderly (CAFEE): One of the OIG auditors represents the division in this coalition of organizations dedicated to protecting Oklahoma County s most vulnerable citizens while respecting their rights as adults. Certified Public Accountant (CPA): The internal audit administrator is a CPA, which is the most widely accepted designation for financial accounting and auditing professionals. National Association for Program Information and Performance Measurement (NAPIPM): OIG is a member of this national organization that is an affiliate of the American Public Human Services Association (APHSA). The organization provides policy and practice leadership on a variety of human service issues OIG Annual Report

17 HUMAN RESOURCES OIG staffing distribution at end of SFY 2014 There are 17 Internal Audit Unit employees. There are 28 Administrative Review Unit employees. There are 28 Investigations Unit employees. There are 3 Security & Emergency Management Unit employees. There are 77 total OIG employees.* *Includes Inspector General FINANCIAL RESOURCES OIG financial resources SFY 2014 The total dollar amount of OIG expenditures* was $5,614, OIG expenditures were less than 1 percent of DHS expenditures.* *Source: DHS Financial Services Report Ending June 30,

18 CONTACTING OIG Reports of suspected DHS benefits fraud, employee misconduct, child care facility contract violations, and drug use specifically by a child care facility or home can always be made anonymously. When making a report, please provide as much information as you can about the allegation and the persons you are reporting. Reports can be made in several ways: By phone to By to OIGFraud2@okdhs.org By mail to Office of Inspector General PO BOX Oklahoma City, OK OIG Annual Report

19 S15005 OKDHS Issued 1/2015 This publication is authorized by Oklahoma Department of Human Services Director Ed Lake and printed by DHS in accordance with state and federal regulations at a cost of $29.11 for 100 copies. Copies have been deposited with the Publications Clearinghouse of the Oklahoma Department of Libraries OIG Annual Report 19

20 20 OFFICE OF INSPECTOR GENERAL 2013 ANNUAL REPORT OKDHS.org